FOR AGES GAR ANT & FR ` ERES INC. NOTES TO THE FINANCIAL ST A TEMENTS (Continued) 5. C APIT AL AS SETS (Continued) Accumulated Net book value Cost amortization June 30, 2006 $$$ L a n d .............................................. 68,250 — 68,250 P arking ............................................ 33,192 33,192 — Buildings ........................................... 940,465 616,136 324,329 Office equipment ...................................... 102,250 92,358 9,892 Drilling equipment ..................................... 6,346,580 4,270,389 2,076,191 Machinery and equipment ................................ 107,229 85,179 22,050 Computer equipment ................................... 105,285 86,959 18,326 V ehicles ............................................ 1,547,066 899,533 647,533 9,250,317 6,083,746 3,166,571 Accumulated Net book value Cost amortization June 30, 2005 $$$ L a n d .............................................. 68,250 — 68,250 P arking ............................................ 33,192 32,449 743 Buildings ........................................... 811,036 469,950 341,086 L and improvements .................................... 115,681 99,583 16,098 Office equipment ...................................... 100,700 87,722 12,978 Drilling equipment ..................................... 6,092,468 3,804,582 2,287,886 Machinery and equipment ................................ 82,729 82,729 — Computer equipment ................................... 98,982 77,438 21,544 V ehicles ............................................ 1,448,307 738,407 709,900 8,851,345 5,392,860 3,458,485 6. BANK LOAN The company has an authorized line of credit for an amount of $5,000,000 bearing interest at prime rate renewable no later than October, 31 of each year. Any funds advanced pursuant to this line of credit are secured by accounts receivable and inventories under Section 427 of the Bank A ct. On September 30, 2006, the prime rate was 6%. This line of credit is renewable in October 2006. Under the terms of the bank loan, the company must satisfy certain restrictive covenants as to minimum financial ratios. F-51