CanWel Building Materials Income Fund

CanWel Building Materials Income Fund Consolidated Financial Statements December 31, and (in thousands of Canadian dollars)

Consolidated Financial Statements The accompanying notes are an integral part of these consolidated financial statements. Auditors Report To the Unitholders of CanWel Building Materials Income Fund We have audited the consolidated balance sheets of CanWel Building Materials Income Fund as at December 31, and and the consolidated statements of earnings and comprehensive earnings, accumulated earnings and cash flows for the years then ended. These financial statements are the responsibility of the Fund s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Fund as at December 31, and and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants Vancouver, British Columbia March 22, 2010 2

Consolidated Financial Statements The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Balance Sheets As at December 31, and (in thousands of Canadian dollars) Assets Current assets Restricted cash (note 20) 55,630 - Accounts receivable (note 16) Trade 45,884 56,845 Other 436 802 Inventories (note 3) 71,505 87,679 Prepaid expenses 2,656 2,726 Future income taxes (note 13) 6,716 1,385 182,827 149,437 Property, plant and equipment (note 5) 30,074 35,035 Future income taxes (note 13) 1,681 4,900 Intangible assets (note 6) 6,228 7,563 Goodwill (note 2) 28,982 28,982 Pension benefits (note 11) 12,383 11,757 Other assets (note 7) 2,477 1,790 264,652 239,464 Liabilities Current liabilities Bank indebtedness (note 8) 4,107 7,142 Accounts payable and accrued liabilities 42,335 46,203 Subscription receipts held in trust (note 20) 57,500 - Distributions payable (note 12) 1,467 2,033 Current portion of long-term debt (note 9) 97 1,169 105,506 56,547 Deferred gain 449 523 Long-term debt (note 9) 71,706 89,232 Other benefits (note 11) 5,122 5,226 182,783 151,528 Unitholders Equity Unitholders capital (note 12) 148,851 147,594 Contributed surplus (note 12) 4,338 4,901 Accumulated earnings 47,255 33,561 Cumulative distributions on units (note 12) (118,575) (98,120) 81,869 87,936 264,652 239,464 Contingencies and commitments (note 15) Subsequent events (note 20) Approved by the Board of Trustees (signed) Amar S. Doman Trustee (signed) Tom Donaldson Trustee 3

Consolidated Financial Statements The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Statements of Accumulated Earnings For the years ended December 31, and (in thousands of Canadian dollars) Accumulated earnings - Beginning of year 33,561 16,847 Net earnings and comprehensive earnings for the year 13,765 16,896 Accrued distributions on unvested Restricted Equity Units (71) (182) Accumulated earnings - End of year 47,255 33,561 4

Consolidated Financial Statements The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Statements of Earnings and Comprehensive Earnings For the years ended December 31, and (in thousands of Canadian dollars, except per unit amounts) Sales 650,029 803,927 Cost of sales 566,091 703,007 Gross margin 83,938 100,920 Expenses Distribution, selling and administration 59,720 68,875 Acquisition and conversion costs (note 20) 1,904 - Unit-based compensation (note 12) 383 1,163 Depreciation of property, plant and equipment 5,246 5,353 Amortization of intangible assets, other assets and deferred gain 1,514 1,503 Writedown of property, plant and equipment (note 4) - 953 68,767 77,847 Operating earnings before the following items 15,171 23,073 Interest (note 10) 2,890 6,169 Earnings before income taxes 12,281 16,904 (Recovery of) provision for future income taxes (note 13) (1,484) 8 Net earnings and comprehensive earnings for the year 13,765 16,896 Net earnings per unit (note 12) Basic and diluted 0.38 0.48 Weighted average number of units outstanding (note 12) Basic 35,061,385 35,263,507 Diluted 35,104,710 35,405,748 5

Annual Report Consolidated Financial Statements The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Statements of Cash Flows For the years ended December 31, and (in thousands of Canadian dollars) Cash flows from operating activities Net earnings for the year 13,765 16,896 Items not affecting cash Depreciation of property, plant and equipment 5,246 5,353 Future income taxes (1,484) 8 Net change in pensions and other post-retirement benefits (730) (2,079) Amortization of intangible assets 1,335 1,336 Amortization of other assets 249 240 Amortization of financing costs 257 257 Amortization of deferred gain (74) (73) Accretion of promissory notes 129 129 Writedown of property, plant and equipment - 953 Unit-based compensation 383 1,163 19,076 24,183 Changes in non-cash working capital items (note 17) 23,703 12,566 42,779 36,749 Cash flows from financing activities Units issued 240 225 Repurchase of units - (3,028) Distributions paid (21,021) (26,473) Net increase in deferred financing costs (note 7) (699) - Net decrease in long-term debt (18,984) (11,098) (40,464) (40,374) Cash flows from investing activities Net decrease (increase) in loans and advances to customers (note 7) 1,005 (274) Purchase of property, plant and equipment (285) (1,342) Proceeds on disposition of property, plant and equipment - 5 720 (1,611) Decrease (increase) in bank indebtedness 3,035 (5,236) Bank indebtedness - Beginning of year (7,142) (1,906) Bank indebtedness - End of year (4,107) (7,142) Supplemental cash flow information Cash paid for interest 2,512 5,783 Non-cash financing activities Deferred financing costs (note 20) 1,870-6

Annual Report 1 Nature of operations and conversion to an income fund CanWel Building Materials Income Fund (the Fund ) is an unincorporated, open-ended, limited purpose trust established under the laws of the Province of Ontario pursuant to a Declaration of Trust dated April 5, 2005. The Fund was established for the purpose of investing in the hardware, building materials and allied products distribution and related businesses of CanWel Building Materials Ltd. ( CanWel ). CanWel operates in Canada as a national distributor of hardware, building materials and allied products. CanWel s principal customers are retailers in the building materials industry and the Fund markets its products primarily in Canada. Pursuant to a Plan of Arrangement (the Arrangement ) that became effective May 18, 2005, the Fund acquired 100% of the shares of CanWel in exchange for units of the Fund and Exchangeable Partnership Units of CanWel Holding Partnership (the Partnership ), a majority owned partnership of the Fund. The common shares of CanWel had previously traded on the Toronto Stock Exchange (the TSX ). On May 18, 2005, units of the Fund commenced trading on the TSX in place of the common shares of CanWel. The transfer of the common shares of CanWel to the Fund was recorded at the carrying values of CanWel s assets and liabilities on May 18, 2005 in accordance with the continuity of interest method of accounting as the Fund is considered to be a continuation of CanWel. On February 1, 2010, the Fund converted to a corporate entity (note 20). 2 Summary of significant accounting policies Basis of presentation The consolidated financial statements are expressed in Canadian dollars and have been prepared in accordance with Canadian generally accepted accounting principles ( GAAP ). Principles of consolidation The consolidated financial statements of the Fund include the accounts of the Fund and its subsidiaries. All significant intercompany transactions and balances have been eliminated. 7

Changes in accounting policies Effective January 1,, the Fund adopted new accounting standards issued by the Canadian Institute of Chartered Accountants (the CICA ) as follows: Section 3064 - Goodwill and Intangible Assets This section replaced Section 3062 of the same name and established revised standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. Concurrent with the effective date of this standard, Emerging Issues Committee ( EIC )-27, Revenues and Expenditures in the Pre-operating Period, was withdrawn. Accordingly, pre-production and start-up costs will be expensed as incurred. Financial Instruments - Disclosures The CICA amended Section 3862 in to include additional disclosure requirements about fair value measurements of financial instruments and to enhance liquidity risk disclosures. EIC-170 - Conversion of an Unincorporated Entity to an Incorporated Entity The EIC clarified certain accounting issues related to conversions, when there is no change in control. In particular, it specifies that such a transaction should be treated as a change in business form and should be accounted for as a continuity of interests; transaction costs should be treated as an expense in the period in which they are incurred; and changes in tax balances would be included in tax expense. Comparative information should be that of the pre-conversion entity, as previously reported. Adoption of these standards had no material impact on the consolidated financial statements. Consolidated Financial Statements and Non-controlling Interests Section 1601, Consolidated Financial Statements, and Section 1602, Non-controlling Interests, together replace Section 1600, Consolidated Financial Statements. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1602 establishes standards for the accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. It is equivalent to the corresponding provisions of International Financial Reporting Standards ( IFRS ) standard, IAS 27 (Revised), Consolidated and Separate Financial Statements. The sections apply to interim and annual consolidated financial statements relating to fiscal years beginning on October 1, 2011. Earlier adoption is permitted as of the beginning of a fiscal year. The Fund adopted these sections in. There was no material impact to the consolidated financial statements on adoption. 8

Section 1582 - Business Combinations This section, which replaces Section 1581 of the same name, establishes standards for the accounting for a business combination. It provides the Canadian equivalent to IFRS 3 (Revised) and requires all business combinations to be accounted for by applying the acquisition method, whereby assets acquired and liabilities assumed are measured at their fair value at the date of acquisition. Acquisition costs associated with a business combination are expensed in the period incurred. The section applies prospectively to business combinations for which the acquisition date is on or after October 1, 2011. Earlier application is permitted. The Company adopted the section in. Adoption of this standard resulted in the Fund recognizing an expense of approximately 1,500 related to costs of an acquisition that was completed subsequent to December 31,. These costs would have previously been accounted for in the purchase cost of the acquisition. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant areas requiring estimates are long-term asset valuation, goodwill and related impairment testing assumptions, inventory valuation and obsolescence, future income taxes, recoverability of accounts receivable, volume rebates and certain actuarial and economic assumptions used in the determination of the cost and accrued benefit obligations of employee future benefits. Management believes the estimates utilized in preparing these consolidated financial statements are reasonable and prudent and are based on management s best knowledge of current events and actions that the Fund may undertake in future. Actual results may differ from those estimates. During the year ended December 31,, the Fund recognized additional net rebate recoveries of 1,001 in respect of the previous year ( - 2,700). Foreign currency translation Purchases and sales in foreign currencies are translated into Canadian dollars at rates of exchange prevailing at transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange in effect at the balance sheet date. Exchange gains or losses resulting from fluctuations in exchange rates between the balance sheet date or date of settlement and the dates of transactions are recorded in the consolidated statements of earnings. Revenue recognition Revenue from the sale of products is recognized, net of discounts and customer rebates, when title passes to customers, which is at the time goods are shipped and the transfer of significant risks and rewards of ownership has taken place, and collectability is reasonably assured. 9

Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method, net of vendor rebates, and includes materials, freight and, where applicable, treatment cost. Vendor rebates The Fund records cash consideration received from vendors as a reduction in the price of vendors products and reflects it as a reduction to cost of sales and related inventory when recognized in the consolidated statements of earnings and consolidated balance sheets. Certain exceptions apply where the cash consideration received is either a reimbursement of incremental selling costs incurred by the reseller or a payment for goods or services delivered to the vendor, in which case the rebate is reflected as a reduction of operating expenses. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is based on the estimated useful lives of assets and is calculated on a straight-line basis at the following annual rates: Buildings 3% Leasehold improvements lease term Machinery and equipment 20% Automotive equipment 30% Computer equipment and systems development 20% to 33-1/3% Computer equipment and systems development include an Enterprise Resource Planning System that comprises various modules. Each module is being amortized on a straight-line basis over 5 years beginning in the period the module is put into service. Intangible assets Intangible assets represent assets acquired that have no physical substance and meet the specified criteria for recognition, other than goodwill. Intangible assets comprise customer relationships, which are amortized on a straight-line basis over 10 years. Impairment of long-lived assets The Fund periodically reviews the useful lives and the carrying values of its long-lived assets. The Fund reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of an asset is less than its carrying amount, it is considered to be impaired. An impairment loss is equal to the amount of the carrying value in excess of the discounted estimated future cash flows expected to be generated by the asset. 10

Goodwill Goodwill represents the excess of the purchase price paid for a business over the fair value of the identifiable net assets acquired. Goodwill at December 31, relates to the Fund s historic acquisition of a pressure treatment business. Goodwill is not amortized, but is tested for impairment annually, or more frequently if changes in circumstances indicate a potential impairment. Goodwill impairment is assessed based on a comparison of the fair value of a reporting unit to the underlying carrying value of that reporting unit s net assets, including goodwill. When the carrying amount of the reporting unit exceeds its fair value, the fair value of goodwill related to the reporting unit is compared to its carrying value and any excess of carrying value is recognized as an impairment loss. Long-term debt The Fund s long-term debt is initially recognized at fair value, net of financing costs incurred. Long-term debt is subsequently stated at amortized cost; any difference between the proceeds (net of financing costs) and the redemption value is recognized in the consolidated statements of earnings over the term of the debt using the effective interest method. Pension and other post-retirement benefit plans The actuarial determination of the accrued benefit obligations for pensions and other post-retirement benefits uses the projected benefit method (which incorporates management s best estimate of future salary levels, health care costs, retirement ages of employees and other actuarial factors). The accrued benefit obligation of the defined benefit pension plans reflects the pension formula applicable to the years up to the measurement date; the current service cost reflects the pension formula in the year following the measurement date. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. Actuarial gains (losses) arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period or from changes in actuarial assumptions used to determine the accrued benefit obligation. The excess of the net accumulated actuarial gain (loss) from the pension plan over 10% of the greater of the accrued benefit obligation and the fair value of plan assets is amortized over the average remaining service period of active employees in the defined benefit pension plans ( - 9.9 years), and actuarial gains (losses) arising from other post-retirement benefits are amortized over the average remaining life expectancy of the former employees ( - 14.8 years). Past service costs arising from plan amendments are deferred and amortized on a straight-line basis over the same periods as for actuarial gains (losses). When the restructuring of a benefit plan gives rise to both a curtailment and a settlement of obligations, the curtailment is accounted for prior to the settlement. 11

Income taxes In June 2007, legislation was substantively enacted to tax distributions of publicly traded income trusts, commencing in 2011. As a result, the Fund is now required to recognize the future income tax assets and liabilities expected to arise when the tax on distributions becomes applicable. The Fund follows the asset and liability method of accounting for income taxes whereby future income tax assets and liabilities are recognized based on differences between the bases of assets and liabilities used for financial reporting and income tax purposes. Future income tax assets are recognized only to the extent that management determines that it is more likely than not that the future income tax assets will be realized. Future income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment or substantive enactment. Unit-based compensation plans The Fund uses a fair value based approach for accounting for unit options and Restricted Equity Units granted to employees and non-employees. For employees, compensation cost is measured at the grant date and recognized over the applicable vesting period with the corresponding credit being recorded as contributed surplus. For non-employees, compensation cost is remeasured at the subsequent vesting date and recognized over the applicable vesting period with the corresponding credit being recorded as contributed surplus. Any consideration received when options are exercised or units are issued is credited to unitholders capital together with the related compensation cost originally recorded as contributed surplus. Financial instruments The Fund accounts for financial assets held for trading or available for sale at fair value. Loans, receivables and investments held to maturity are measured at amortized cost using the effective interest method. Other financial liabilities are measured at fair value or at amortized cost using the effective interest method. Comprehensive earnings Other comprehensive earnings is the method used to record revenues, expenses, gains and losses on net financial assets that are not required to be included in earnings. Comprehensive earnings are the sum of earnings for the year plus the other comprehensive earnings. 12

3 Inventories Inventories held for resale 67,310 80,776 Inventories held for processing 4,195 6,903 71,505 87,679 For the year ended December 31,, 563,139 ( - 670,605) of inventory was expensed as cost of sales. Inventory provision charges/recoveries included in cost of sales are (174) ( - 1,050), which adjust the carrying amount of inventory to its net realizable value. Cost of sales also includes recoveries of shipping expenses. All of the Fund s inventory is pledged as security for the revolving loan facility (note 9). 4 Writedown of property, plant and equipment For the year ended December 31,, the Fund recorded a writedown of 953 on certain production equipment as a result of curtailing operations at one of the treatment plants and consolidating its operations with another of the Fund s treatment plants located nearby in order to reduce overall production and others costs. No such writedowns were recorded in the current year. 5 Property, plant and equipment Cost Accumulated depreciation Net Land 2,092-2,092 Buildings and leasehold improvements 28,607 5,393 23,214 Machinery and equipment 11,335 7,188 4,147 Automotive equipment 153 153 - Computer equipment and systems development 13,914 13,293 621 56,101 26,027 30,074 13

Cost Accumulated depreciation Net Land 2,092-2,092 Buildings and leasehold improvements 28,517 4,324 24,193 Machinery and equipment 11,263 5,118 6,145 Automotive equipment 178 164 14 Computer equipment and systems development 13,783 11,192 2,591 55,833 20,798 35,035 Included in automotive equipment are assets under capital lease with a cost of nil ( - 25) and accumulated depreciation of nil ( - 17). 6 Intangible assets Cost Accumulated amortization Net Customer relationships 12,905 6,677 6,228 Cost Accumulated amortization Net Customer relationships 12,905 5,342 7,563 7 Other assets Loans and advances to customers, bearing interest at prime plus 1.25% and maturing in 2014 193 1,198 Deferred financing costs (notes 9 and 20) 1,941 - Interests in buying groups 25 25 Banner conversion program - net of amortization 318 567 2,477 1,790 14

Included in other assets are deferred financing costs related to the renewal of the Fund s existing revolving loan facility (note 9) and activities related to the issuance of Fund units by way of a private placement (note 20). Costs to renew the bank facility will be netted against the net debt subsequent to December 31, and amortization of those cost will commence concurrently with the effective date of the new revolving loan facility. Private placement costs will be charged to equity on completion of the arrangement subsequent to December 31,. 8 Bank indebtedness Cheques written in excess of cash on hand 4,107 7,142 9 Long-term debt Revolving loan facility (see below) 72,165 89,973 Financing costs (449) (705) 71,716 89,268 Promissory notes payable to a company controlled by a Trustee, non-interest bearing, repayable by monthly instalments of 97, maturing on January 1, 2010 87 1,126 Obligation under capital leases, bearing interest at varying rates up to 7.4% - 7 71,803 90,401 Less: Current portion 97 1,169 71,706 89,232 Principal repayments of long-term debt over the next four years are 97 in 2010, nil in 2011 and 2012 and 72,165 in 2013. Revolving loan facility The Fund has a revolving loan facility with Wachovia Capital Financial Corporation (Canada) scheduled to mature on September 30, 2011. Subsequent to December 31,, the loan facilities were renewed on February 1, 2010 and the renewed facilities now mature on January 31, 2013. Under the renewed facility, up to 275,000 may be borrowed for operating requirements in Canadian and US currency. Interest is charged at 15

variable rates based on the Canadian prime rate or US prime rate. The amount advanced under the facility at any time is limited to a defined percentage of inventories and accounts receivable, less certain reserves and land and building of the Fund. The facility is secured by a first charge over the Fund s assets and an assignment of accounts receivable and requires that certain covenants be met by the Fund. The Fund was not in breach of any of its covenants during the year. 10 Interest Long-term debt 2,580 6,045 Cash, bank indebtedness and loans (76) (262) Net cash interest 2,504 5,783 Amortization of financing costs 257 257 Accretion of promissory notes 129 129 2,890 6,169 11 Pensions and other post-retirement benefits Description of benefit plans Defined benefit pension plans The Fund sponsors two non-contributory defined benefit pension plans: one a registered pension plan for salaried employees and the other a non-registered pension plan for executives. The pensions from both plans are based on years of service and highest average salary. The plans were closed to new participants effective August 1, 2000. The Fund amended the registered defined benefit pension plan effective January 1, 2005 to reduce the benefit formula for future years of service and to allow members of the defined benefit pension plan to participate in the defined contribution plan. In respect of the unfunded executive pension plan, the Fund has issued letters of credit amounting to 1,675 ( - 1,727) based on annual actuarial estimates. The most recent actuarial valuation of the pension plans for funding purposes was as of December 31, 2007. The next actuarial valuation is scheduled for December 31, 2010. Defined contribution plans The Fund sponsors defined contribution plans for eligible employees. Pension expense for the defined contribution plans for the year ended December 31, amounted to 478 ( - 524). 16

Post-retirement benefits other than pensions The Fund provides extended health care benefits and pays provincial medical plan premiums on behalf of qualifying employees. The Fund also pays for the dental benefits of certain retirees who had been employed at a predecessor company. Total cash payments Total cash payments for employee future benefits for, consisting of cash contributed by the Fund to defined benefit plans, defined contribution plans, and other post-retirement benefits, were 2,456 ( - 3,517). 17

The status of the defined benefit pension plans and post-retirement benefit plans, in aggregate, is as follows: Pension benefit plans Other benefit plans Defined benefit costs Current service cost 367 468 - - Interest cost 2,400 2,249 258 240 Actual (return) loss on plan assets (3,889) 3,571 - - Actuarial losses (gains) 5,744 (5,721) 569 (578) Defined benefit costs before adjustments 4,622 567 827 (338) Adjustments to recognize the long-term nature of employee future benefit costs Difference between expected return and actual return on plan assets for year 1,706 (6,286) - - Difference between actuarial loss or gain recognized for year and actual actuarial loss or gain on accrued benefit obligation for year (5,757) 6,390 (569) 578 Difference between past service costs recognized for year and past service costs owing - - (83) (89) Defined benefit costs recognized 571 671 175 151 Accrued benefit obligation Balance - Beginning of year 34,038 40,237 3,699 4,297 Current service cost 367 468 - - Interest cost 2,400 2,249 258 240 Benefits paid (2,615) (3,195) (280) (260) Actuarial losses (gains) 5,744 (5,721) 569 (578) Balance - End of year 39,934 34,038 4,246 3,699 Plan assets Fair value - Beginning of year 34,935 39,060 - - Actual return (loss) on plan assets 3,889 (3,571) - - Employer contributions 1,194 2,641 280 260 Benefits paid (2,615) (3,195) (280) (260) Fair value - End of year 37,403 34,935 - - Funded status - plan (deficit) surplus (2,529) 897 (4,246) (3,699) Unamortized net actuarial loss (gain) 14,912 10,860 268 (301) Unamortized past service costs - - (1,144) (1,226) Accrued benefit asset (liability) 12,383 11,757 (5,122) (5,226) 18

Assets The weighted average asset allocation of the defined benefit plan consists of: % % Equity securities 46 36 Debt securities 45 42 Short-term securities 9 22 Significant assumptions The significant weighted average assumptions used are as follows: 100 100 Pension benefit plans Other benefit plans % % % % Accrued benefit obligation as of December 31 Discount rate 5.75 7.25 5.75 7.25 Rate of compensation increase 3.50 3.50 - - Benefit costs for year ended December 31 Discount rate 7.25 5.75 7.25 5.75 Expected long-term rate of return on plan assets 7.00 7.00 - - Rate of compensation increase 3.50 3.50 - - Assumed health care cost trend rates at December 31 are as follows: Initial health care cost trend rate 6.0% 6.0% Cost trend rate declines to 6.0% 6.0% Year that the rate reaches the rate it is assumed to remain at all years all years Sensitivity analysis Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates for would increase or decrease total service and interest costs by nil and 31, respectively. In addition, this change would increase or decrease the accrued benefit obligation by 430 and 375, respectively. 19

12 Unitholders capital and contributed surplus The authorized capital of the Fund consists of an unlimited number of Fund units. Under the Arrangement, on May 18, 2005, shareholders of CanWel transferred their common shares, directly or indirectly, to the Fund and received either two units of the Fund or two Exchangeable Partnership Units of the Partnership and two special voting units of the Fund. Exchangeable Partnership Units can be converted at the option of the holder, and in certain circumstances at the option of the Fund, on a one-to-one basis for units of the Fund. The Exchangeable Partnership Units are included in the unitholders capital on the consolidated balance sheets. The following is a summary of changes to unitholders capital and contributed surplus of the Fund: Number Fund units Amount Exchangeable Partnership Units Number Amount Contributed surplus Balance - December 31, 2007 24,183,456 113,442 11,144,279 36,486 4,025 Units issued pursuant to Unit option plan - for cash 54,999 286 - - (169) Employee Unit Ownership Plan - for cash 26,828 108 - - - Restricted Equity Unit Plan 217,515 913 - - (913) Units repurchased (776,200) (3,641) - - 613 Unit-based compensation - - - - 1,163 Accrued distributions on unvested Restricted Equity Units - - - - 182 Balance - December 31, 23,706,598 111,108 11,144,279 36,486 4,901 Units issued pursuant to Unit option plan - for cash 55,333 285 - - (168) Employee Unit Ownership Plan - for cash 67,508 123 - - - Restricted Equity Unit Plan 230,765 849 - - (849) Unit-based compensation - - - - 383 Accrued distributions on unvested Restricted Equity Units - - - - 71 Balance - December 31, 24,060,204 112,365 11,144,279 36,486 4,338 20

The outstanding unitholders capital is as follows: Number Amount Number Amount Fund units 24,060,204 112,365 23,706,598 111,108 Exchangeable Partnership Units 11,144,279 36,486 11,144,279 36,486 Fund units The beneficial interest of the two classes of Fund units is as follows: a) Fund units 35,204,483 148,851 34,850,877 147,594 Each unit is transferable and represents an equal undivided beneficial interest in any distribution of the Fund. Each unit held entitles the unitholder to one vote at all meetings of unitholders. Except as set out under the redemption rights below, the units have no conversion, retraction, redemption or pre-emptive rights. Units are redeemable at any time at the option of the holder at amounts related to market prices at the time, subject to a maximum of 50 in cash redemptions by the Fund in any one month. The limitation may be waived at the discretion of the Trustees of the Fund. Redemption in excess of these amounts, assuming no waiving of the limitation, shall be paid by way of distribution in specie. b) Special voting units The Fund may issue special voting units from time to time to holders of record of securities. The special voting units shall be entitled to such number of votes at meetings of unitholders as may be determined by the Trustees at the time of issuance but shall not be entitled to any distributions from the Fund. Special voting units (each representing the same number of votes as one unit of the Fund) have been issued to the holders of Exchangeable Partnership Units of the Partnership on the basis of one special voting unit for each Exchangeable Partnership Unit held. Accordingly, 11,144,279 ( - 11,144,279) special voting units are outstanding as at December 31,. 21

Exchangeable Partnership Units of the Partnership Exchangeable Partnership Units are issued by the Partnership and are intended to be, to the greatest extent practicable, the economic equivalent of units of the Fund. Holders of Exchangeable Partnership Units are entitled to receive distributions from the Partnership equal, to the greatest extent practicable, to distributions paid by the Fund to holders of units. Each Exchangeable Partnership Unit is exchangeable for a unit of the Fund on a one-for-one basis. The Exchangeable Partnership Units are not transferable. Each Exchangeable Partnership Unit will be issued together with a special voting unit of the Fund entitling the holder to one vote at all meetings of unitholders of the Fund for each special voting unit held. Concurrent with the exchange of Exchangeable Partnership Units for units of the Fund, any related special voting units will be cancelled. Unit option plan CanWel had a stock option plan available to directors, officers, employees and consultants. On May 18, 2005, in accordance with the Arrangement, 1,050,000 outstanding stock options of CanWel were converted into 2,100,000 unit options of the Fund. The following is an analysis of the outstanding unit options of the Fund: Unit options Weighted average exercise price Fund unit options outstanding - December 31, 2007 1,355,415 3.81 Unit options exercised (54,999) 2.13 Outstanding and exercisable - December 31, 1,300,416 3.89 Unit options exercised (55,333) 2.13 Outstanding and exercisable - December 31, 1,245,083 3.96 The following table summarizes the unit options outstanding at December 31, : Exercise price Number outstanding Weighted average remaining contractual life (years) Weighted average exercise price Number of exercisable options 2.13-4.25 1,245,083 4.0 3.96 1,245,083 22

The fair value of unit options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Expected dividend yield nil% Expected unit price volatility 30% Risk-free interest rate 4.75% Expected life of options (years) 10 Compensation expense in respect of outstanding options for the year ended December 31, was nil ( - 312). Employee Unit Ownership Plan In 2004, CanWel established an Employee Stock Ownership Plan ( ESOP ). The ESOP was effective January 1, 2005. On May 18, 2005, the ESOP was replaced with an Employee Unit Ownership Plan ( EUOP ) of the Fund that allows the EUOP to issue treasury-based units so that eligible employees of the Fund can purchase market-traded units of the Fund through payroll deduction. The Fund will make an employer s contribution of 15% of the issue price of the units. Treasury-based issuances will be made at the average trading price of units of the Fund on the TSX for the five trading days immediately prior to the purchase date. During, the Fund issued 67,508 ( - 26,828) units from treasury at an average price of 1.82 ( - 4.01) per unit for gross proceeds of 123 ( - 108) from employees, in respect of the two semi-annual qualifying periods ended December 31,, pursuant to the EUOP. Restricted Equity Unit Plan On May 11, 2006, unitholders approved the CanWel Restricted Equity Unit Plan (the Plan ). The Plan provides for an allotment of Restricted Equity Units ( REUs ) to designated Trustees of the Fund and designated directors, officers and employees of CanWel (each a Member ) at the discretion of the compensation committee. The value of the REUs will appreciate or depreciate with increases or decreases in the market price of the Fund s units. REUs vest one-third on the date of grant and one-third on each of the first and second anniversary of the date of the grant. However, vesting may be accelerated at the discretion of the compensation committee. REUs shall, within 30 days of vesting and, in any event, by no later than December 31 following the vesting date, be satisfied by the Fund issuing to the Member that number of units equal to the number of vested REUs then credited to the Member. The REUs earn additional REUs for the distributions that would otherwise have been paid on the REUs as if they had been issued as of the date of the grant. The number of additional REUs is calculated using the average market price of the Fund units in the five days immediately preceding each distribution. REUs granted are considered to be in respect of future services and are recognized in unit-based compensation costs over the vesting period. Compensation cost is measured based on the market price of the Fund s units on the date of grant of the REUs. 23

On May 29, 2006, the Fund granted 77,500 REUs at a grant date value of 310 and, on June 13, 2006, granted 5,000 REUs at a grant date value of 18. On March 27, 2007, the Fund granted 274,250 REUs at a grant date value of 1,083, on August 13, 2007, the Fund granted 50,000 REUs at a grant date value of 232 and, on May 12,, the Fund granted 17,000 REUs at a grant date value of 77. One-third of these vested at time of grant, which has been recognized as unit-based compensation at that time. The balance of the REUs are unvested and are recognized in compensation costs on a straight-line basis over the 24-month vesting period. Compensation expense in respect of REUs for the year ended December 31, amounted to 383 ( - 801). On May 12,, the Fund granted and issued 11,060 REUs at a grant date value of 50, which has been recognized as unit-based compensation at that time. The Fund s obligation to issue units on the vesting of REUs is an unfunded and unsecured obligation of the Fund. Unvested Vested REUs granted and vested on May 29, 2006-77,500 REUs granted and vested on June 13, 2006-1,666 REUs granted and vested on January 5, 2007-12,730 REUs granted and vested on March 27, 2007-271,750 REUs granted and vested on May 29, 2007-11,820 REUs granted and vested on August 13, 2007-50,000 REUs granted and vested on March 11, 37,501 77,832 REUs granted and vested on May 12, 5,668 11,332 REUs granted and vested on May 12, - 11,060 REUs granted and vested on May 14, - 19,048 Fund units issued - (639,132) Additional REUs earned on unvested REUs 20,892 94,394 Balance at December 31, 64,061 - Earnings per unit Earnings per unit is a calculation using the weighted average number of Fund units and Exchangeable Partnership Units outstanding for the year. The weighted average number of Fund units and Exchangeable Partnership Units is determined by relating the portion of time within the reporting period that the units have been outstanding to the total time in the period. In computing diluted earnings per unit, equivalent units are considered outstanding for all unit options of other potentially dilutive instruments, notwithstanding that certain vesting periods may not yet be complete. When the unit price is greater than the option price, the fully diluted number of units may be greater than the basic number of units outstanding. Distributions/dividends During the year ended December 31,, the Fund declared distributions to unitholders of 13,955 ( - 18,087) and the Partnership declared total distributions to holders of Exchangeable Partnership Units of 6,500 ( - 8,358), resulting in aggregate distributions of 20,455 ( - 26,445). 24

The amounts and record dates of distributions and payments were as follows: Fund units Exchangeable Partnership Units Amounts per unit Amounts per unit January 31, 1,383 0.05833 650 0.05833 February 27, 1,385 0.05833 650 0.05833 March 30, 1,396 0.05833 650 0.05833 April 30, 1,396 0.05833 650 0.05833 May 29, 1,396 0.05833 650 0.05833 June 30, 997 0.04166 464 0.04166 July 31, 999 0.04166 464 0.04166 August 31, 1,000 0.04166 464 0.04166 September 30, 1,000 0.04166 464 0.04166 October 30, 1,000 0.04166 464 0.04166 November 30, 1,001 0.04166 465 0.04166 December 31, 1,002 0.04166 465 0.04166 13,955 0.58327 6,500 0.58327 The distributions with a record date of December 31, totalling 1,467 ( - 2,033) were accrued at December 31, and paid in January 2010. Normal Course Issuer Bid ( NCIB ) The Fund conducted a NCIB commencing on June 11, and terminating on June 10,, allowing for the purchase and cancellation of up to 1,914,954 of the Fund s issued and outstanding Fund units. No units were repurchased during the year ended December 31, ( - 776,200 units). As at December 31,, the Fund had 24,060,204 ( - 23,706,598) units issued and outstanding. 25

13 Income taxes The Fund is a unit trust for income tax purposes and, accordingly, the Fund is taxable only on any taxable income not allocated to the unitholders. Subsidiaries of the Fund are subject to tax at statutory rates. During the year ended December 31,, all taxable income of the Fund has been distributed to unitholders. Any income tax obligations relating to the distributions are the obligations of the unitholders. The Fund s effective income tax rate differs from the statutory income tax rate. The difference arises from the following items: Earnings before income taxes 12,281 16,904 Income tax at statutory rates 3,844 5,392 Fund distributions deductible for tax purposes (4,487) (4,667) Partnership income allocated to partners (1,920) (2,156) Adjustments to future tax assets related to tax rates (257) 14 Unit-based compensation 120 371 Amounts not deductible for tax and other 1,216 1,054 (Recovery of) provision for income taxes (1,484) 8 Temporary differences that give rise to future income tax assets and liabilities are as follows: Current Long-term Current Long-term Future income tax assets (liabilities) Property, plant and equipment 63 (93) - (85) Pensions and other post-retirement benefits - (1,925) - (1,774) Non-capital losses 5,426 3,793-6,863 Non-deductible reserves 1,227 1,547 1,385 2,263 Intangible assets - customer relationships - (1,641) - (2,367) Other - - - - 6,716 1,681 1,385 4,900 26

At December 31,, the Fund has approximately 31,981 of non-capital losses that may be available for deduction against taxable income in future years. These losses expire as follows: 2014 4,643 2015 2,654 2025 6,450 2026 4,513 2027 1,622 2028 4,146 2029 7,953 31,981 14 Related party transactions The Fund has transactions with related parties in the normal course of operations at exchange amounts as agreed between the related parties as follows: Land and building lease payments for distribution facilities paid to a company in which a Trustee and an officer of the Fund have an interest and lease payments for certain treatment plant facilities to a company solely controlled by a Trustee of the Fund 2,558 2,632 Fees paid for management services and other charges paid to a company controlled by a Trustee of the Fund 756 761 Fees paid for professional services and other charges paid to a company controlled by a officer of the Fund 558 588 As at December 31,, accounts payable and accrued liabilities include amounts owing to companies controlled by related parties of 172 ( - 134). As at December 31,, other accounts receivable include an amount due from a trustee of 44 ( - 34). 27

The Fund has real estate operating lease commitments with a company in which a Trustee of the Fund has an interest. Future minimum payments under the terms of these leases are as follows: Year ending December 31 2010 2,864 2011 2,961 2012 2,973 2013 2,973 2014 2,182 Thereafter 4,206 15 Contingencies and commitments Lease commitments The Fund has operating lease commitments as follows: a) real estate operating leases with third parties and related parties (note 14) covering most of the distribution centre and treatment plant properties that it operates across Canada b) operating leases covering certain vehicles, warehouse equipment and head office. Future minimum payments due under the terms of these leases are as follows: Year ending December 31 2010 6,281 2011 5,601 2012 4,779 2013 4,055 2014 2,985 Thereafter 4,683 Buyback arrangements Under a buyback arrangement, the Fund is committed to a financial institution to purchase the inventory of a customer, limited to the lesser of the amount of the advance or the value of the inventory. In the case that the Fund is called upon for this commitment, the inventory would usually be sold in the normal course of operations. At December 31,, the amount for which the Fund could be called upon totalled 1,016. The agreement expires in 2010. 28

Claims During the normal course of business, certain product liability and other claims have been brought against the Fund and, where applicable, its suppliers. Management has contested the validity of these claims and believes that they are without merit and that any possible settlement will have no material effect on the financial position or future earnings of the Fund. Letters of credit The Fund has issued letters of credit amounting to 1,675 ( - 1,727) in respect of historical obligations for an unfunded closed pension fund for former executives (note 11). The Fund has also issued letters of credit totalling 193 ( - 1,087) in favour of third parties with whom the Fund has business relationships. 16 Financial instruments The carrying amounts and fair values of financial instruments were as follows: Carrying amount Fair value Carrying amount Fair value Loans and receivables Trade accounts receivable 45,884 45,884 56,845 56,845 Other accounts receivable 436 436 802 802 Loans and advances 193 193 1,198 1,198 Financial liabilities Bank indebtedness 4,107 4,107 7,142 7,142 Accounts payable and accrued liabilities 42,335 42,335 46,203 46,203 Distributions payable 1,467 1,467 2,033 2,033 Revolving loan facility 72,165 72,165 89,973 89,973 Promissory note payable 97 97 1,126 1,126 The following methods and assumptions were used to determine the estimated fair value of each class of financial instruments: The fair value of trade accounts receivable, other accounts receivable, bank indebtedness, accounts payable and accrued liabilities, and distributions payable is comparable to their carrying amount, given the short maturity periods. The fair value of loans and advances approximates the carrying value. 29

The fair value of the Fund s revolving loan facility approximates its carrying value as it bears interest at variable rates based on current market rates. The fair value of the Fund s promissory note payable approximates its carrying value. The revenues and expenses resulting from financial assets and liabilities recorded in net earnings are as follows: Interest on loans and advances (47) (55) Interest on revolving bank loan 2,580 6,045 Accretion on promissory notes 129 129 Interest on cash and bank indebtedness (29) (207) Financial risk management The Fund s activities result in exposure to a variety of financial risks, including risks related to credit, interest rates, currency and liquidity. Financial assets include accounts receivable and loans and advances. Accounts receivable are measured at amortized cost. Financial liabilities include accounts payable and accrued liabilities, distributions payable, bank indebtedness and long-term debt. All financial liabilities are measured at amortized cost. The Board of Trustees has overall responsibility for establishment and oversight of the Fund s risk management, which seeks to minimize any potential adverse effects on the Fund s financial performance. Credit risk Credit risk is the risk of financial loss to the Fund if a customer fails to meet its contractual obligations, and arises primarily from the Fund s accounts receivable from customers and loans and advances. The Fund grants credit to its customers in the normal course of operations. To limit its exposure to credit risk, the Fund performs ongoing evaluations of the credit quality of its customers and follows diligent credit granting and collection procedures. Purchase limits are established for each customer and are reviewed regularly. The Fund also has mortgages on some property and charges on inventory owned by debtors. The Fund regularly reviews the collectability of its accounts receivable and loans and advances and establishes an allowance for doubtful accounts based on its best estimate of any potentially uncollectible amounts. At December 31,, management believes that the maximum exposure to credit risk is the carrying value of receivables. 30

As at December 31,, the trade accounts receivable were as follows: Current 44,353 Past due over 60 days 3,121 Trade accounts receivable 47,474 Less: Allowance for doubtful accounts 1,630 45,844 As at December 31,, the maximum exposure to credit risk is 46,473 ( - 58,845), which represents the carrying value amount of financial instruments classified as assets. Interest rate risk The Fund is exposed to interest rate risk through its variable rate long-term debt (note 9). Based on the Fund s average debt level during, the sensitivity of a 1% increase in interest rates would result in an approximate decrease of 1,026 in net annual earnings. Currency risk Currency risk is the risk that changes in market prices of foreign exchanges rates will affect the Fund s earnings or the value of its holdings of financial instruments. The Fund is exposed to currency risk on the United States dollar component of its revolving loan facility as well as sales and purchase transactions that are denominated in United States dollars. As at December 31,, a 0.01 increase in the United States dollar versus the Canadian dollar would have an insignificant impact on net earnings. As at December 31,, contracts held were not material to operations. Liquidity risk Liquidity risk is the risk that the Fund will not be able to meet its financial obligations as they fall due or at a reasonable cost. The Fund manages liquidity risk by having appropriate credit facilities available at all times. In addition, the Fund continuously monitors and reviews both actual and forecasted cash flows. Subsequent to December 31,, existing loan facilities were renewed and the facilities now mature on January 31, 2013 (note 9). The Fund is exposed to refinancing risks as there can be no assurance that the Fund will be able to secure credit on the same terms or amount when this facility expires. At December 31,, the fair value of the Fund s long-term debt approximated its carrying value of 71,706 ( - 89,232) as the long-term debt bore interest at current market rates. The fair value of other financial liabilities approximates their carrying values due to their short-term nature. 31

17 Changes in non-cash working capital items Accounts receivable 11,327 3,686 Inventories 16,174 11,843 Prepaid expenses 70 428 Accounts payable and accrued liabilities (3,868) (3,391) 23,703 12,566 18 Foreign sales and significant customer For the year ended December 31,, the Fund had sales to the United States of 981 ( - 1,328). The Fund has sold products to certain customers that comprise greater than 10% of its sales. During the year ended December 31,, four customers purchased 297,765 ( - 212,444 representing two customers) which is in excess of 10% of the Fund s sales. 19 Capital disclosures The Fund s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide distributions to unitholders and Exchangeable Partnership Unit holders and benefits for other stakeholders. The Fund includes debt and equity, comprising unitholders capital, contributed surplus, accumulated earnings and cumulative distributions on units, in the definition of capital. The Fund seeks to maintain a balance between the higher returns that might be possible with the leverage afforded by higher borrowing levels and the security afforded by a sound capital structure. It does this by maintaining appropriate debt levels in relation to its working capital and other assets in order to provide the maximum distributions to unitholders commensurately with the level of risk. Also, the Fund utilizes its debt capabilities to buy back units, where appropriate, in order to maximize cash distribution rates for remaining unitholders. The Fund manages the capital structure and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Fund may adjust the amount of distributions paid to unitholders, purchase units in the market, issue new units, or sell assets to reduce debt. The Fund s policy is to distribute all available cash from operations to the Fund for distribution to unitholders after provision for cash required for maintenance capital expenditures and other reserves considered advisable by the Fund s Trustees. The Fund has eliminated the impact of seasonal fluctuations by equalizing monthly distributions. 32

There are no externally imposed capital requirements and the Fund s loan agreements do not contain any capital maintenance covenants. There were no changes to the Fund s approach to capital management during this period. 20 Subsequent events Subscription receipts On December 17,, the Fund issued 15,131,700 subscription receipts by way of private placement at a price of 3.80 per subscription receipt for gross proceeds of 57,500. Subject to the satisfaction of certain conditions, each subscription receipt entitled the holder to receive one Fund unit without further action or payment immediately prior to the completion of the conversion and acquisition described below. On February 1, 2010, immediately prior to the conversion and business acquisition, all of the subscription receipts were exchanged for Fund units on a one-for-one basis. All of these Fund units were then exchanged for common shares as part of the conversion. The cash proceeds of 57,500, net of transaction costs deferred at December 31,, of approximately 1,870 were held in escrow at December 31, and released to the Fund on February 1, 2010. Conversion On February 1, 2010, pursuant to a plan of arrangement (the Conversion Arrangement ), the Fund converted into CanWel Holding Corporation ( New CanWel ), a corporate entity. All of the outstanding units of the Fund ( Fund Units ) and Class B exchangeable limited partnership interests of CanWel Holding Partnership were exchanged for common shares of New CanWel on a one-for-one basis. Also, the ownership of all the treatment plant limited partnership interests held by CanWel Holding Partnership were transferred to CanWel Hardware Inc., a subsidiary of CanWel. In addition, all of the outstanding options to acquire Fund Units were exchanged for options to acquire an equal number of common shares on the same terms and all of the outstanding entitlements under the Fund s Restricted Equity Unit Plan became rights to acquire an equivalent number of common shares on the same terms. As New CanWel is considered to be a continuation of the Fund, the exchange of Fund Units for common shares of New CanWel will be recorded at the carrying values of the Fund s assets and liabilities on January 31, 2010, in accordance with the continuity of interest method of accounting, as outlined in EIC-170, Conversion of an Unincorporated Entity to an Incorporated Entity. At December 31,, the Fund had expensed 370 of costs associated with this conversion, pursuant to the accounting policies of the Fund. 33

Business acquisition On February 1, 2010, New CanWel purchased 100% of the outstanding common shares of Broadleaf Logistics Company ( BLC ). BLC is a private, wholesale distributor of building materials and related products and markets its products nationally in Canada through facilities located across the country. BLC s principal customers are the major retailers in the building materials industry. The consideration transferred for BLC is to be satisfied through: a) the issuance of 10,250,000 common shares of New CanWel, with a acquisition date fair value of 4.63 per common share; b) 20,000 in cash; c) a secured subordinated interest-bearing promissory note of New CanWel in the aggregate principal amount of US18,500; and d) an adjustment based on the difference between net working capital of each of BLC and New CanWel on the closing date, February 1, 2010. At the acquisition date, New CanWel s estimate of the fair value of the purchase consideration was approximately 90,240. The final fair value of the net working capital adjustment in the purchase consideration has not yet been finalized. The fair value of the common shares issued as consideration was determined using the average market price for common shares of New CanWel trading on the TSX on February 1, 2010. The acquisition will be recorded under the acquisition method of accounting. Under this method, the identifiable assets acquired and the liabilities assumed are measured and recognized at their acquisition-date fair values. Any excess of the acquisition date fair value of the consideration over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed is recognized as goodwill. New CanWel has not yet finalized the fair values for the acquisition. The preliminary fair value of assets acquired and liabilities assumed was determined by the Fund s management based on information furnished by the management of BLC. 34

The preliminary fair values are: Fair value of purchase consideration at acquisition date 90,240 Fair values of identifiable assets acquired and liabilities assumed Cash 1,260 Trade receivables 38,560 Other receivables 4,610 Inventories 36,360 Prepaid expenses 3,590 Property, plant and equipment 1,770 Other assets 143 Accounts payable and accrued liabilities (32,990) Loan payable (32,670) Taxes payable (1,110) 19,523 Excess of fair value of purchase consideration over fair values of identifiable assets acquired and liabilities assumed 70,717 The excess of fair value of purchase consideration over fair values of identifiable assets acquired and liabilities assumed will be allocated between goodwill and intangible assets. The valuation of intangible assets has not yet been completed by management, but is expected to comprise customer relationships and distribution agreements. Any excess remaining after the recognition of identifiable intangible assets will be recognized as goodwill. The Fund is currently completing the valuation of the assets acquired and liabilities assumed and therefore is unable to disclose the fair values of identifiable intangible assets acquired. The final fair values assigned to the assets acquired and liabilities assumed may differ materially from the preliminary allocation presented in these financial statements. At December 31,, the Fund had expensed 1,534 of costs associated with this acquisition. 35

Annual Report Corporate Information Directors Officers Ian M. Baskerville Toronto, Ontario Amar S. Doman Chairman and CEO Peter Dhillon Richmond, British Columbia Martin Hope Chief Financial Officer Amar S. Doman West Vancouver, British Columbia R.S. (Rob) Doman Corporate Secretary Tom Donaldson Saint John, New Brunswick CanWel Building Materials Kelvin Dushnisky Toronto, Ontario Todd Grenich Seattle, Washington National Office Suite 302 369 Terminal Avenue Vancouver, British Columbia Canada Jacob Kotzubei Los Angeles, California Contact Phone: (604) 432-1400 Internet: www.canwel.com Stephen W. Marshall Vancouver, British Columbia Transfer Agent Martin Melone Los Angeles, California Siegfried J. Thoma Portland, Oregon Auditors PricewaterhouseCoopers LLP Vancouver, British Columbia Solicitors Goodmans LLP Toronto, Ontario Davis LLP Vancouver, British Columbia CIBC Mellon Trust Company Vancouver, British Columbia Stock Exchange Toronto Stock Exchange Trading Symbol: CWX