AURORA CAPITAL CORPORATION Aurora Plaza 2484 Walnut Boulevard Walnut Creek, California 94596 Telephone (415) 938-1020 December 31, 1976 To Our Investors and Friends: We are pleased to report that 1976 was a successful year for Aurora Capital Corporation and for our Investors. Aurora was 3 years old October 16, 1976. Coincident with that date, the final payment for Chalet Townhouse Associates, our first project, was received and distributed to the Investors. Everyone's original cash was returned with a profit. From a meager beginning in 1973 Aurora and its investor partners now control over $12,000,000 of real estate in the form of apartment buildings, single family residences, an office building, an operating dairy, a 915 acre farm, and a small manufacturing business that produces leather handbags. In 1976 we continued to expand our activity in the ownership of single family residences in Contra Costa County. We formed three additional house funds; Habitat Associates, Kenya Associates, and Contra Costa Associates, in addition to increasing Aurora's ownership of single family residences. The total value of homes owned or managed by Aurora is approximately $1,500,000. During 1976 the assets of East Bay Properties, our first house fund, were distributed to the investors with a profit of 28 percent. Early in 197 6 we became involved with Creative Colors Unlimited (Cre-Col) a manufacturing company producing genuine leather ladies handbags. In addition to providing capital to this Company, Aurora is responsible for the management of its finances and accounting. While Ore Col has unusual potential it is under capitalized and as the year ends, we have plans to recapitalize this operation to increase profits. During 1976 we added an additional activity to Aurora by entering into a Joint Venture with Mr. Terry Benson, who is an excellent builder, and between us have built seven luxury homes, six of which were sold for substantial profits. The seventh is nearing completion. -1-