FOR AGE ORBIT INC. NOTES TO THE CONSOLID A TED FINANCIAL ST A TEMENTS (Continued) Y ears ended January 31, 2007 and 2006 13. RELA TED P A R TY TR ANSACTIONS (Continued) Amounts receivable resulting from these transactions are disclosed separately in Note 3. During the year, the company acquired a land and a building from its parent company 2867-3820 Qu ? ebec Inc. for a total value of $350,000. This related party transaction has been accounted for at net book value amounting to $199,116. F ollowing this transac tion, an amount of $109,239 (net of future income taxes of $41,645) has been debited, as R elated P arty T ransactions A djustments, in reta ined earnings. Also during the year, the company sold to its parent company 2867-3820 Qu ? ebec Inc. a building for an amount of $45,000. This related party transaction has been accounted for at net book value amounting to $36,042. F ollowing this transaction, an amount of $8,95 8 has been credited, as R elated P arty T ransactions A djustments, in retained earnings. On January 30, 2007, the company acquired, by issuance of 100,000 class F shares (see Note 9), from 2 shareholders of the compa ny an investment in 9161-9254 Qu ? ebec Inc. for a total value of $100,000. This related party transaction has been accounted for at net book value amounting to $28,888. F ollowing this transaction, an amount of $71,112 has been debited as R elated P arty T ransaction A djustment, in retained earnings. 9161-9254 Qu ? ebec Inc. was wound-up in the company and its only asset was a investment in a company subject to significant influence (6483976 Canada Inc.) in an amount of $128,788 and its only liability was an advance p ayable to F orage Orbit Inc. of $100,000. On January 30, 2007, the company transferred to the parent an investment in Eenou Drilling Inc. in the amount of $25,000 as consideration of an advance in the amount of $25,000. 14. FINANCIAL INSTRUMENTS Currency risk The company realizes a part of its activities in U.S. dollars and is thus exposed to foreign exchange fluctuations. The company does not actively manage this risk. As at January 31, 2007, the company has accounts receivable in U.S. dollars for an amount of $155,19 3 (January 31, 2006, $239,234). Credit risk The company provides credit to its customers in the normal course of its operations. It carries out, on a continuing basis, cre dit checks on its customers and maintains provisions for contingent credit losses. One major customer represents 12% (2006, 17%) of the company’s trade accounts receivable and two customers represents 23% of the contract revenue for the year ended January 31, 200 7 (2006, 10%). Interest rate risk A significant part of the long-term debt bears interest at variable rates and was reimbursed immediately after year-end. Conseq uently, the cash flow exposure is not significant. F air value The fair value of cash, accounts receivable, bank overdraft, accounts payable and accrued liabilities and client deposits is ap proximately equal to their carrying values due to their short-term maturity. The fair value of long-term debts bearing interest at prime rate is approximately equal to their carrying value due to their in terest rate based on the market rate. The fair value of the investment in Explorateurs-Innovateurs de Qu ? ebec inc. could not be determined due to the fact that it is a private company. The fair value of the retractable shares could not be determined due to absence of specific terms of redemption. 15. SEGMENTED INFORMA TION The company operates in four geographic segments, Drilling Canada — surface, Drilling Canada — underground, Drilling Central and South America (‘‘other countries’’) — surface and manufacturing. The services provided in each of the reportable drilling segment s are essentially the same. The accounting policies of the segments are the same as those described in Note 3. Management evaluates F-41