BioScience Enterprise
Centre Incorporated
Financial Statements
March 31, 2007
Contents
Page
Auditors’ Report
1
Statements of Earnings and Deficit
2
Balance Sheet
3
Statement of Cash Flows
4
Notes to the Financial Statements
5-7
Grant Thornton LLP
Chartered Accountants
Management Consultants
Auditors' Report
To the Shareholder of
BioScience Enterprise Centre Incorporated
We have audited the balance sheet of BioScience Enterprise Centre Incorporated as at
March 31, 2007 and the statements of earnings and deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Company’s management.
Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable assurance
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial
position of the Company as at March 31, 2007 and the results of its operations and its cash flows
for the year then ended in accordance with Canadian generally accepted accounting principles.
Halifax, Nova Scotia
June 1, 2007
Grant Thornton LLP
Chartered Accountants
Suite 1100, Cogswell Tower
2000 Barrington Street
Halifax, Nova Scotia
B3J 3K1
T (902) 421-1734
F (902) 420-1068
E Halifax@GrantThornton.ca
W www.GrantThornton.ca
Canadian Member of Grant Thornton International
1
BioScience Enterprise Centre Incorporated
Statements of Earnings and Deficit
Year Ended March 31
Revenue
Rent and amortization of deferred leasehold contribution
Amortization of government contributions
Business services
Government assistance
Other
2007
$
Expenses
Advertising and promotion
Communications
Depreciation
Information resources
Interest and bank charges
Materials
Miscellaneous
Outside services
Professional development
Rent
Repairs and maintenance
Salaries and benefits
Travel
Utilities
353,604
309,308
191,470
2,814
857,196
2006
$
1,475
36,828
309,751
611
244
15,420
10,167
21,456
7,145
43,088
24,508
253,727
704
130,916
856,040
287,524
285,922
178,431
41,923
7,458
801,258
1,776
38,013
286,178
604
748
11,919
7,146
57,840
9,785
43,088
35,965
246,047
4,446
117,719
861,274
Net earnings (loss)
$
1,156
$
(60,016)
(Deficit) retained earnings, beginning of the year
$
(54,743)
$
5,273
Net earnings (loss)
Deficit, end of year
1,156
$
(53,587)
(60,016)
$
(54,743)
See accompanying notes to the financial statements.
2
BioScience Enterprise Centre Incorporated
Balance Sheet
March 31
2007
Assets
Cash and cash equivalents
Government assistance receivable
Inventory
Other receivables
Capital assets (Note 3)
Liabilities
Payables and accruals
Deferred leasehold contribution
Deferred government contributions
2006
$
57,988
9,126
47,679
496,350
$
$
611,143
$ 1,041,953
$
158,449
3,766
502,514
664,729
$
Shareholders’ Deficiency
Capital stock (Note 5)
Deficit
1
(53,587)
(53,586)
$
611,143
63,874
131,439
9,126
33,539
803,975
278,481
6,392
811,822
1,096,695
1
(54,743)
(54,742)
$ 1,041,953
Commitments (Note 6)
On behalf of the Board
Director
Director
See accompanying notes to the financial statements.
3
BioScience Enterprise Centre Incorporated
Statement of Cash Flows
Year Ended March 31
2007
2006
(Decrease) increase in cash and cash equivalents
Operating
Net earnings (loss)
Depreciation
Amortization of government contributions
$
Changes in non-cash operating working capital
Receivables
Payables and accruals
Financing
Deferred leasehold contribution
Government assistance to finance capital assets
Investing
Purchase of capital assets
Net (decrease) increase in cash and cash equivalents
1,156
309,751
(309,308)
1,599
$
(60,016)
286,178
(285,922)
(59,760)
117,299
(120,032)
(1,134)
97,759
(21,769)
16,230
(2,626)
(2,626)
(3,025)
160,446
157,421
(2,126)
(161,982)
(5,886)
11,669
63,874
52,205
Cash and cash equivalents
Beginning of year
End of year
$
57,988
$
63,874
See accompanying notes to the financial statements.
4
BioScience Enterprise Centre Incorporated
Notes to the Financial Statements
March 31, 2007
1.
Nature of operations
The Company developed and leases an incubation facility to be a catalyst for the bio-life science
industry sector. The Company is exempt from income taxes under Section 149 of the Income
Tax Act.
2.
Significant accounting policies
(a)
Capital assets
Capital assets are recorded at cost and depreciated as follows:
Computer equipment
Equipment and furniture
Building improvements and leaseholds
(b)
30%, declining balance;
20%, declining balance;
Term of lease, 2.5 years remaining at
beginning of year
Government assistance
The portion of government assistance used for the acquisition of capital assets is recorded as
deferred government contributions and recognized as income on the same basis as the related
assets are amortized. The operating portion of government assistance is recognized as income
in the year received.
(c)
Revenue recognition
Rent revenue is recorded as earned and includes monthly rent from tenants. Business services
revenue includes recoveries from tenants for utilities, photocopies, and other administrative
services which are recorded as earned. Recoveries from tenants for improvements made to
their premises are recorded as deferred leasehold contributions and amortized over the life of
the lease.
(d)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, balances with banks and short term deposits.
Bank borrowings are considered to be financing activities.
(e)
Use of estimates
In preparing these financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and reported amounts of
revenue and expenses during the period. Actual results could differ from these estimates.
5
BioScience Enterprise Centre Incorporated
Notes to the Financial Statements
March 31, 2007
2.
Summary of significant accounting policies (continued)
(f)
Financial instruments
The Company’s financial instruments consist of cash and cash equivalents, receivables, and
payables and accruals. It is management’s opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these financial instruments. The fair
value of these financial instruments approximates their carrying value, except for the payable to
InNOVAcorp for which fair value was not readily determinable.
3.
Capital assets
Cost
Building improvements
Equipment
Computer equipment
Furniture
Leaseholds
4.
$
631,752
65,877
38,772
99,218
1,599,410
$ 2,435,029
2007
2006
Accumulated
Depreciation
Net
Book Value
Net
Book Value
$
$
523,214
52,016
35,709
65,346
1,262,394
$ 1,938,679
108,538
13,861
3,063
33,872
337,016
496,350
$
$
180,895
17,327
4,376
42,340
559,037
803,975
$
Related party transactions
Entity
InNOVAcorp
Waterfront Development
Corporation Limited
Relationship
Sales To
Purchases
From
Year End
Payable
$ 106,578
Sister
$
4,104
$
261,795
Sister
$
-
$
43,088
$
-
Transactions with these companies are measured at the exchange amount, which is the amount
of consideration established and agreed to by the related parties.
The balance payable to InNOVAcorp is non-interest bearing and has arisen from cash advances
to fund company operations.
6
BioScience Enterprise Centre Incorporated
Notes to the Financial Statements
March 31, 2007
5.
Capital stock
Authorized:
100,000 common shares with no par value
Issued and outstanding:
1 common share
6.
2007
$
1
2006
$
1
Commitments
The Company is committed to lease land and buildings from the Waterfront Development
Corporation Limited, a sister company. The lease requires annual minimum rent of $43,088 to
October 2008.
7