Lise Inge Nelson formerly with a C.P.A. firm joined Aurora in August of 1976. Lise is well qualified to handle our very complex and varied accounting activities. She is a welcome member of our expanding staff. The Board of Directors was increased to five members. Mr. Frank was elected as a director, as was Mr. Kenneth Powlesland, an executive of Standard Oil of California. Mr. Powlesland is an investor in a number of Aurora's partnerships, including several of our early ventures. Mr. Powlesland's appointment is effective as of January 1, 1977. The decision last year to free Marc Peperzak to explore new ventures proved to be a wise move, as the corporation has increased and diversified its activities. With the addition of the dairy the additional apartment complex, and Creative Colors Unlimited, Aurora now has over 70 employees. Looking to 1977, we will continue to operate under our proven philosophy. We will not expose our investors capital to situations which we do not control, and Aurora will always take an equity interest in every venture we undertake. To meet our day to day expenses and to properly manage your properties we must take management and brokerage fees. These are competitive fees needed to cover overhead, with our real profit potential lying in the properties where we share in the profits after our investors have recouped their original capital. We plan to expand our investment in agriculture and related fields. The need for food is basic and the dairy industry and to some extent the whole agricultural industry is at a low ebb having suffered severely during the recession. We feel that there are values and opportunities that can work to our advantage. Certainly there are risks; however, we structure our investments to cushion any reverses by using dollars that would otherwise, in part, be paid for taxes. Thus, in most ventures we are able to measure our downside risks, while the upside gain has virtually unlimited potential. Our program of building luxury homes will be continued. Building sites are difficult to find, however, we have been fortunate to acquire two sites in the Round Hill Country Club, in Alamo. We expect to acquire other building sites in the near future. We are pleased with the performance of our apartment projects in the Dallas/Ft. Worth area of Texas. The properties are improved and some of the complexes are breaking even, or making a positive cash flow. The investors equity is increasing and the situation continues to improve. We will attempt to refinance some of the properties during the next year. New building is still depressed and practically no new apartments are being built in the area in which we operate. We will continue to follow this sensitive business closely. -3-