Genterra Capital Inc. (“GCI” or the “Company”) is a Canadian management holding company operating in Canada with significant interests in real estate properties located in Ontario, Canada.
The accompanying unaudited interim consolidated financial statements for the nine months ended June 30, 2011 have been prepared by the Company in accordance with accounting principles generally accepted in Canada on a basis consistent with those followed in the most recent audited consolidated financial statements for the period ended September 30, 2010.
These unaudited interim consolidated financial statements do not include all the information and footnotes required by the generally accepted accounting principles for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report for the period ended September 30, 2010.
Amalgamation
On May 10, 2010 Genterra Inc. (“Genterra”) and Consolidated Mercantile Incorporated (“CMI) amalgamated (the "Amalgamation") and continue under the name “Genterra Capital Inc.” with a fiscal year-end of September 30.
The Amalgamation was accounted for as a purchase transaction based on the exchange amount as negotiated between the two companies with CMI identified as the acquirer of Genterra. Accordingly the net assets of CMI were recorded in the accounts of the Company at their carrying values and the net assets of Genterra were recorded at fair value. The results of operations for the three and nine months ended June 30, 2011 include the operations of the combined entity, while the results for the three and nine months ended June 30, 2010 include the results for CMI only.
In the process relating to the Amalgamation, the Company disqualified 612,600 shares from the dissent process where it determined that the dissent in respect of these shares was not registered and pursued in compliance with the requirements of Section 185 of the Ontario Business Corporations Act (“OBCA”). The Company filed a claim with the Superior Court of Justice and amongst other things, requested a declaration that the holder of these shares was not a dissenting shareholder for the purposes of Section 185 of the OBCA and was not entitled to receive fair value for such shares. The claimant in respect of these shares subsequently applied for and was granted partial summary judgement by the Ontario Superior Court of Justice for the Company to pay him an amount of $2.53 per share which is the amount paid to shareholders, who in the opinion of the Company, had complied with the requirements of Section 185 of the OBCA. The Company does not agree with this decision and intends to file an appeal with the Court of Appeal of Ontario.
Transition to International Financial Reporting Standards ("IFRS")
In February 2008, the CICA announced that Canadian generally accepted accounting principles (“GAAP”) for publicly accountable enterprises will be replaced by International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. Accordingly, the conversion from Canadian GAAP to IFRS will be applicable to the Company’s reporting for the first quarter of the year ending September 30, 2012 for which the current and comparative information will be prepared under IFRS.
