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MINAEAN INTERNATIONAL CORP. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Nine Months Ended December 31, 2013 and 2012 Expressed in Canadian Dollars (Unaudited-Prepared by Management) ______________________

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Page 1: MINAEAN INTERNATIONAL CORP. CONDENSED INTERIM …minaean.com/wp-content/uploads/2016/02/FS-Q3-Dec-2013.pdf · MINAEAN INTERNATIONAL CORP. CONDENSED INTERIM CONSOLIDATED FINANCIAL

MINAEAN INTERNATIONAL CORP.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended December 31, 2013 and 2012

Expressed in Canadian Dollars (Unaudited-Prepared by Management)

______________________

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MINAEAN INTERNATIONAL CORP.

Index Page

Notice of no Auditor Review 3 Condensed Interim Consolidated Financial Statements Condensed Interim Consolidated Statements of Financial Position 4 Condensed Interim Consolidated Statements of Changes in Deficiency 5 Condensed Interim Consolidated Statements of Loss and Comprehensive Loss 6 Condensed Interim Consolidated Statements of Cash Flows 7 Notes to Condensed Interim Consolidated Financial Statements 8-23

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MINAEAN INTERNATIONAL CORP.

NOTICE OF NO AUDITOR REVIEW OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim consolidated financial statements, they must be accompanied by a notice indicating that the interim consolidated financial statements have not been reviewed by an auditor. The accompanying unaudited interim consolidated financial statements of the Company have been prepared by management and approved by the Audit Committee and Board of Directors of the Company. The Company’s independent auditors have not performed a review of these interim consolidated financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditors. February 27, 2014

Suite 2050-1055 West Georgia St., PO Box 11121, Vancouver, BC Canada V6E 3P3 Phone (604) 684-2181 Fax (604) 682-4768 [email protected] www.minaean.com

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MINAEAN INTERNATIONAL CORP. Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited-Prepared by Management) December 31, 2013 March 31, 2013 ASSETS Current Cash $ 58,005 $ 64,061 Short-term investments 3 171,443 48,198 Receivables 321,593 161,281 Inventory 103,132 − Prepaid expenses and deposits 253,505 172,989 907,678 446,529 Long-term investment 3 11,205 11,048 Property, plant and equipment 4 129,192 181,738 $ 1,048,075 $ 639,315 LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current Bank indebtedness 5 $ 259,661 $ 104,054 Trades payable and accrued liabilities 854,831 725,916 Other payable 6 1,147,503 1,123,503 Deferred revenue 2,120 2,310 Convertible debentures 9 − 200,000 Current portion of loans payable 7 200,000 5,305 Current portion of promissory notes payable 8 851,000 645,000 Due to related parties 11 985,317 864,236 4,300,432 3,670,324 Promissory notes payable 8 − 50,000

4,300,432 3,720,324 Shareholders' deficiency Capital stock 10 8,002,068 7,942,472 Share subscriptions 10 40,881 − Share based payment reserve 10 1,264,601 931,240 Accumulated other comprehensive loss (45,076) (23,969) Deficit (12,514,831) (11,930,752)

(3,252,357) (3,081,009)

$ 1,048,075 $ 639,315 Nature and continuance of operations (Note 1) Commitments (Note 12) The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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MINAEAN INTERNATIONAL CORP. Condensed Interim Consolidated Statement of Change in Deficiency (Expressed in Canadian Dollars) (Unaudited – Prepared by Management)

Share Capital

Note Number of

shares Amount Share

subscriptions Reserves

Equity component of convertible debentures

Accumulated other

comprehensive loss Deficit Total equity

Balance, March 31, 2012 49,698,025 $ 7,739,967 $ 70,000 $ 934,883 $ 44,444 $ (4,193) $(11,483,020) $ (2,697,919)

Bonus shares 100,000 13,000 − − − − − 13,000 Private placement 833,333 80,000 8,750 − − − − 88,750 Share issuance costs 9,333 (905) − − − − − (905) Share-based compensation − − − 5,820 − − − 5,820 Net loss for the period − − − − − − (351,544) (351,544) Cumulative translations adjustment − − − − − (35,641) − (35,641)

Balance, December 31, 2012 50,640,691 7,832,062 78,750 940,703 44,444 (39,834) (11,834,564) (2,978,439) Private placement 1,491,000 111,825 (78,750) − − − − 33,075 Share issuance costs 14,000 (1,416) − − − − − (1,416) Share-based compensation − − − (9,463) − − − (9,463) Settlement of convertible debenture − − − − (44,444) − 44,444 − Net loss for the period − − − − − − (140,632) (140,632) Cumulative translations adjustment − − − − − 15,865 − 15,865

Balance, March 31, 2013 52,145,691 7,942,472 − 931,240 − (23,969) (11,930,752) (3,081,009) Private placement 10 800,000 60,000 − − − − − 60,000 Share issuance costs 10 14,000 (404) − − − − − (404) Subscriptions received in advance 10 − − 40,881 − − − − 40,881 Share-based compensation 10 − − − 333,361 − − − 333,361 Net loss for the period − − − − − − (584,079) (584,079) Cumulative translations adjustment − − − − − (21,107) − (21,107)

Balance, December 31, 2013 52,959,691 $ 8,002,393 $ 40,881 $ 1,264,601 $ − $ (45,076) $(12,514,831) $ (3,252,357) The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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MINAEAN INTERNATIONAL CORP. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the nine months ended December 31, (Expressed in Canadian Dollars) (Unaudited-Prepared by Management) Three months ended Nine months ended December 31, December 31, Notes 2013 2012 2013 2012 Sales $ 630,567 $ 20,372 $ 1,154,043 $ 70,205 Cost of sales 314,972 1,829 614,287 44,503 315,595 18,543 539,756 25,702 Expenses Accretion of convertible debt − 3,089 − 9,267 Advertising and promotion 306 − 748 − Amortization 13,639 14,898 39,132 41,459 Consulting fees − − − 15,014 Financing costs 498 3,250 3,579 7,583 Foreign exchange loss (gain) 19,216 (10,477) 28,060 (11,011) Interest and bank charges 17,569 11,727 61,061 39,577 Interest on promissory notes 8 15,723 9,818 39,918 29,349 Interest on loans payable 7 5,545 − 18,263 − Interest on convertible debentures 9 − 5,545 − 16,575 Management fees 11 15,000 15,000 45,000 45,000 Office and administration 11 57,660 45,343 209,200 83,592 Professional fees (recovery) 5,794 745 17,913 (26,365) Regulatory and transfer agent fees 2,405 2,036 6,960 7,840 Rent 9,734 9,089 29,599 28,985 Share-based compensation 10 106,478 2,170 333,361 5,820 Travel and entertainment 10,345 696 21,627 17,130 Wages and benefits 135,674 40,737 274,967 130,003 415,586 153,666 1,129,388 439,818 Loss before other items (99,991) (135,123) (589,632) (414,116) Other items Interest and other income 3,468 465 5,553 2,327 Gain on write off of payables − − − 60,486 Write off of capital assets − 7 − (241) 3,468 472 5,553 62,572 Net loss for the period (96,523) (134,651) (584,079) (351,544) Foreign currency translation reserve 8,525 8,521 21,107 (35,641)

Comprehensive loss for the period $ (87,998) $ (126,130) $ (562,972) $ (387,185) Loss per share $ (0.00) $ (0.00) $ (0.01) $ (0.01)

Weighted average number of shares outstanding 52,959,691 50,640,691 52,573,080 50,323,411 The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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MINAEAN INTERNATIONAL CORP. Condensed Interim Consolidated Statements of Cash Flows For the nine months ended December 31, (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

Three months ended Nine months ended December 31, December 31, 2013 2012 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ (96,523) $ (134,651) $ (584,079) $ (351,544) Items not affecting cash: Accretion of convertible debt − 3,088 − 9,266 Amortization 13,639 14,106 39,132 40,940 Share-based compensation 106,478 2,170 333,361 5,820

Interest accrued on promissory notes, loans payable and convertible debentures 29,863 15,364 88,820 63,101

Interest income accrued (630) (34) (2,034) (100) Financing costs − 3,250 2,167 7,583 Gain on forgiveness of debt − − − (60,486) Write off of property, plant & equipment − (7) − 241 52,827 (96,714) (122,633) (285,179) Changes in non-cash working capital items: Receivables (228,369) 11,955 (160,312) 143,025 Inventories 61,383 (15,839) (103,132) (15,839) Prepaid expenses and deposits (35,307) (23,711) (82,683) (13,181) Deferred revenue 91 22,919 (190) 22,801 Trades payable and accrued liabilities 41,314 2,075 40,095 (103,901) Dues to related parties 48,908 51,430 121,081 147,554 Net cash used in operating activities (59,153) (47,885) (307,774) (104,720) CASH FLOWS FROM INVESTING ACTIVITIES Investment in short-term investments − − (129,500) − Redemption of short-term investments 8,132 − 8,132 − Acquisition of property, plant & equipment (354) − (1,156) − Net cash provided by (used in) investing activities 7,778 − (122,524) − CASH FLOWS FROM FINANCING ACTIVITIES Bank indebtedness 7,509 (12,225) 155,607 (12,263) Repayments on loans payable (56,164) (1,373) (81,469) (4,259) Proceeds from loans payable 46,164 − 276,164 − Repayment of convertible debentures − − (200,000) − Repayment of promissory notes payable (8,000) − (8,000) − Proceeds from promissory notes payable − − 164,000 50,000 Proceeds from related party loans − 5,000 − 60,500 Repayment of director's loan − − − (29,000) Proceeds from share issuances − − 60,000 80,000 Share subscriptions 65,881 78,750 40,881 8,750 Share issuance costs (325) − (404) (905) Net cash provided by financing activities 55,065 70,152 406,779 152,823 Effect of foreign exchange on cash flows 20,128 2,802 17,463 (27,614) Change in cash 23,818 25,069 (6,056) 20,489 Cash, beginning of period 34,187 44,682 64,061 49,262 Cash, end of period $ 58,005 $ 69,751 $ 58,005 $ 69,751

Cash paid for interest $ 4,918 $ 706 $ 14,546 $ 2,612

Cash paid for taxes $ − $ − $ − $ − The accompanying notes are an integral part of these condensed interim consolidated financial statements

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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1. NATURE AND CONTINUANCE OF OPERATIONS

Minaean International Corp. (“Minaean”) was incorporated under the Business Corporations Act (Alberta) on November 5, 1998. On April 29, 2003, Minaean completed a share exchange with Minaean Building Solutions Inc. (“MBSolutions”). Minaean has five wholly-owned subsidiaries, MBSolutions, Minaean Habitat India Private Limited (“MHIPL”), MHI Projects Pvt Ltd. (“MHIP”), Minaean Building Structures Inc. (“MBStructures”), and Minaean (Ghana) Limited (“MGhana”) (collectively the “Company”). The Company is in the business of innovation, production and marketing of new construction technologies having developed three types of building systems, namely "Vesta Quik-Build", a corrugated wall panel system, "Artisan Quik-Build", a steel framing load bearing wall pane system, and "Modular Quik-Build", a factory production and assembly of cladded wall panels. The Company's core business of development and production of "Vesta" quick building system has been put on hold due to rising steel prices. The Company has been promoting and marketing its more economic and cost effective Artisan and Modular systems which have been gaining a gradual recognition globally. The Company is researching and developing "Cellular Light Concrete", an infill product, with the support of the Canadian Government’s NSERC. This product is to be used with the "Artisan QBS" trade marked "Artisan Composite QBS" to meet the mindset and needs of developing countries desiring cost effective quick build system. The Company’s head office, principal address and records office is Suite 2050-1055 West Georgia Street, PO Box 11121, Royal Centre, Vancouver, BC V6E 3P3. The registered office is Suite 700-595 Burrard Street, PO Box 49290, Vancouver, BC V7X 1S8. These condensed interim consolidated financial statements have been prepared on a going concern basis, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. These condensed interim consolidated financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses from inception and has a working capital deficiency of $3,392,754 at December 31, 2013 (March 31, 2013 – working capital deficiency of $3,223,795). The Company continues to be dependent upon its ability to finance its operations through financing activities that may include issuance of additional debt or equity securities. The Company’s continuing operations and ultimately, the Company’s ability to continue as a going concern, is dependent upon its ability to either secure additional debt or equity capital and/or generate consistent cash flow from operations in the future. The Company has and may continue to have capital requirements in excess of its currently available resources. In order for the Company to meet its liabilities as they come due and continue its operations, the Company is currently dependent upon its ability to generate such financing. While the Company has been successful in obtaining its required financing in the past, mainly through the issuance of equity capital and debt financing from both arms length and non-arms length parties, there is no assurance that such financing will be available or be available on favorable terms. An inability to raise additional financing may impact the future assessment of the Company as a going concern. The consolidated financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern. These condensed interim consolidated financial statements do not give effect to any adjustments to the amounts or classification of assets and liabilities which might be necessary should the Company be unable to continue in existence. The Company has never paid dividends.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION

These financial statements were authorized for issue on February 27, 2014 by the directors of the Company. Statement of compliance and conversion to International Financial Reporting Standards These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with International Accounts Standards (“IAS”) 34, “Interim Financial Reporting” using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

Basis of presentation The condensed interim consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The condensed interim consolidated financial statements are presented in Canadian dollars unless otherwise noted. Subsidiaries In addition to the Company, the condensed interim consolidated financial statements include all subsidiaries. Subsidiaries are all corporations over which the Company is able, directly or indirectly, to control financial and operational policies, which is the authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. They are de-consolidated from the date that control by the Company ceases. The subsidiaries of the Company are as follows:

Percentage owned Country of

incorporation December 31, 2013 March 31, 2013 Minaean Building Solutions Inc. Canada 100% 100% Minaean Habitat India Pvt Ltd. India 100%(1) 100%(1) MHI Projects Pvt Ltd. India 100%(2) 100%(2) Minaean Building Structures Inc. Canada 100% 100% Minaean (Ghana) Limited Ghana 100% 100%

(1) owned by Minaean Building Solutions Inc. (2) owned by Minaean Habitat India Pvt Ltd. Consolidation Assets, liabilities, revenues and expenses of the subsidiaries are recognized in accordance with the Company’s accounting policies. Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Critical Accounting Estimates and Judgments The preparation of these condensed interim consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported expenses during the period. Actual results could differ from these estimates.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

i) The recoverability of receivables that are included in the statements of financial position is based on the historical collection of receivables.

ii) The carrying value of property, plant and equipment, which are included in the statements of financial position

based on continued use and anticipated benefit to the Company. iii) The inputs used in accounting for share-based compensation expense included in profit or loss calculated using

the Black-Scholes option pricing model and market inputs. iv) The valuations of shares issued in non-cash transactions using the quoted share price as the fair value based

measurement on the date the shares are issued for the transaction.

v) The recognition of deferred tax assets based on the change in unrecognized deductible temporary tax differences.

vi) The Company uses the percentage of completion method for recognizing its revenues from long term fixed

price construction contracts. In determining the timing and appropriate amount of revenue to recognize, management estimates the actual amount of work performed and the associated costs incurred to date in relation to the total contract revenues and costs for each project.

Foreign currency translation The functional currency of each of the Company’s entities is measured using the currency of the primary economic environment in which that entity operates. The condensed interim consolidated financial statements are presented in Canadian dollars which is the parent company’s functional and presentation currency. The functional currency of MHIPL and MHIP, which have operations in India is the Indian Rupee. All other subsidiaries and the parent have a functional currency of the Canadian Dollar. Financial instruments The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), loans and receivables, held-to-maturity investments, and available-for-sale. The Company classifies its financial liabilities as either at fair value through profit or loss and other financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Financial instruments (cont’d) Financial assets are classified at fair value through profit or loss when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. Transaction costs are expensed as incurred.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognized at the transaction value, including transaction costs and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. Held-to-maturity investments are recognized on a trade-date basis and initially measured at fair value, including transaction costs. They are subsequently measured at amortized cost. Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not suitable to be classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments and are subsequently measured at fair value. These are included in current assets. Available-for-sale financial assets are measured initially at their fair value including transaction costs directly attributable to the acquisition. They are subsequently measured at fair value. Unrealized gains and losses are recognized in other comprehensive income, except for impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses. Regular purchases and sales of financial assets are recognized on the trade-date – the date on which the Company commits to purchase the asset. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each period end. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. Objective evidence of impairment could include the following:

• significant financial difficulty of the issuer or counterparty; • default or delinquency in interest or principal payments; or • it has become probable that the borrower will enter bankruptcy or financial reorganization.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Financial instruments (cont’d)

For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate. The carrying amount of all financial assets, excluding trade receivables, is directly reduced by the impairment loss. The carrying amount of trade receivables is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease relates to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss. On the date of impairment reversal, the carrying amount of the financial asset cannot exceed its amortized cost had impairment not been recognized. Financial liabilities and equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities. Other financial liabilities Other financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expenses over the corresponding period. The effective interest rate is the rate that exactly discounts estimated future cash payments over the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Financial instruments (cont’d)

The Company’s financial instruments at December 31, 2013 are as follows:

Loans & receivables

Available for sale

Fair Value through Profit

or Loss

Other financial liabilities

Financial assets Cash $ – $ – $ 58,005 $ – Investments – – 182,648 – Receivables 321,593 – – –

Financial liabilities Bank indebtedness – – – 259,661 Trade payables – – – 854,831 Other payable – – – 1,147,503 Due to related parties – – – 985,317 Loans payable – – – 200,000 Promissory notes – – – 851,000 $ 321,593 $ – $ 240,653 $ 4,298,312

Unless otherwise disclosed their carrying values approximate their fair values due to the short term nature of these instruments.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or

indirectly; and • Level 3 – Inputs that are not based on observable market data.

Summary of significant accounting policies These condensed interim consolidated financial statements have been prepared on the basis of accounting policies and methods of computation consistent with those applied in the Company’s audited financial statements for the year ended March 31, 2013. These condensed interim consolidated financial statements does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the Company’s audited annual financial statements for the year ended March 31, 2013.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Standards and interpretations issued but not yet effective Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements. The Company has not early adopted these standards and is currently assessing the impact that these standards will have on its financial statements.

a) IFRS 9: New standard that replaces IAS 39 for classification and measurement of financial assets, effective for annual periods beginning on or after January 1, 2015;

b) IFRS 10 Investment Entities: Amendment: effective for periods on or after January 1, 2014;

c) IAS 32 Amendment to clarify requirements for offsetting financial assets and financial liabilities, effective for annual periods beginning on or after January 1, 2014; and

d) IFRIC 21 Levies: effective for periods on or after January 1, 2014. 3. INVESTMENTS

Investments consist of highly liquid Canadian dollar denominated guaranteed investment certificate (“GIC”). Short-term investments have a term to maturity of greater than ninety days but not more than one year. Long-term investments have a term to maturity of greater than one year. The counter-party is a financial institution. At December 31, 2013, the Company held the following investments:

December 31, 2013 March 31, 2013 Short-term investments Includes accrued interest of $1,943 (March 31, 2013 - $66)

yielding an interest rate of 1.65% maturing between March 28, 2014 and May 2, 2014.

$ 171,443 $ 48,198 Long-term investments Includes accrued interest of $205 (March 31, 2013 - $48)

yielding an interest rate of 1.9% maturing on January 7, 2015.

11,205 11,048 $ 182,648 $ 59,246

The investments are held as a guarantee against a line of credit through the State Bank of India.

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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4. PROPERTY, PLANT AND EQUIPMENT

Furniture & Equipment

Computer Equipment

Leasehold Improvements Software Vehicle Total

Cost:

At March 31, 2012 $ 410,444 $ 44,763 $ 2,522 $ 12,989 $ 26,193 $ 496,911 Additions − 152 − − − 152 Disposals (8,511) − − − − (8,511) Forex translation adjustment (19,112) (1,697) − (609) (1,228) (22,646) At March 31, 2013 382,821 43,218 2,522 12,380 24,965 465,906 Additions 319 838 − − − 1,157 Forex translation adjustment (31,492) (2,854) − (1,019) (2,055) (37,420)

At December 31, 2013 $ 351,648 $ 41,202 $ 2,522 $ 11,361 $ 22,910 $ 429,643

Amortization: At March 31, 2012 $ 185,511 $ 44,116 $ 2,522 $ 3,247 $ 11,064 $ 246,460 Amortization for the period 45,818 540 − 3,095 6,381 55,834 Eliminated on disposal (7,181) − − − − (7,181) Forex translation adjustment (8,599) (1,676) − (152) (518) (10,945) At March 31, 2013 215,549 42,980 2,522 6,190 16,927 284,168 Amortization for the period 30,627 158 − 2,130 5,856 38,771 Forex translation adjustment (17,749) (2,835) − (510) (1,393) (22,487)

At December 31, 2013 $ 228,427 $ 40,303 $ 2,522 $ 7,810 $ 21,390 $ 300,452

Net book value: At March 31, 2012 $ 224,933 $ 647 $ − $ 9,742 $ 15,129 $ 250,451

At March 31, 2013 $ 167,272 $ 238 $ − $ 6,190 $ 8,038 $ 181,738

At December 31, 2013 $ 123,221 $ 899 $ − $ 3,551 $ 1,520 $ 129,191 5. BANK INDEBTEDNESS

December 31, 2013 March 31, 2013

SBI line of credit of up to $104,500 bearing interest at 3% per annum and is payable on demand. This facility is secured by a term deposit investment through a director of the Company which matures on November 18, 2016.

$ 103,662

$ 104,054

HSBC line of credit facility of INR 12 Million bearing interest at 2% over the effective bank rate, secured by a short-term investment of $179,500 and is payable on demand.

155,999

$ 259,661 $ 104,054

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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6. OTHER PAYABLES

December 31, 2013 March 31, 2013 Effective December 1, 2010, EDC provided a financial security guarantee

on SBI’s $1,000,000 loan facility to the Company expiring November 30, 2013. In November 2011, SBI effected liquidation and demanded repayment of the loan facility and EDC issued payment to SBI in settlement of the claim. Accordingly, the Company will reimburse $1,000,000 to EDC for the settlement of the claim with SBI. The outstanding balance will bear interest at the Canadian prime rate of interest currently at 3% per annum.

During fiscal 2012, the Company repaid $384,297 of the principal amount. As at December 31, 2013, the Company accrued interest payable of $39,856 (March 31, 2013 - $22,114) on the balance outstanding.

$ 615,703

$ 615,703

Effective May 1, 2011, EDC provided a financial security guarantee on US Bank’s US$500,000 loan facility to the Company expiring April 30, 2012. In December 2011, US Bank effected liquidation and demanded repayment of the loan facility and EDC issued payment to US Bank in settlement of the claim. Accordingly, the Company will reimburse US$500,000 to EDC for the settlement of the claim with US Bank. The outstanding balance will bear interest at the US prime rate of interest currently at 3.25% per annum. As at December 31, 2013, the Company accrued $34,284 (March 31, 2013 - $21,387) in interest payable on this balance.

Foreign exchange translation on the US$500,000 payable.

500,000

31,800

500,000

7,800

$ 1,147,503 $ 1,123,503

In January 2014, the Company was informed that it is a defendant in a lawsuit filed in the Supreme Court of British Columbia by EDC. The agency claims that Minaean owes it $615,702 plus $500,000 (U.S.). The amounts allegedly represent loans that EDC guaranteed for Minaean. The allegations are contained in a brief Notice of Claim filed at the Vancouver courthouse last month. The Company has not been served a Notice of the lawsuit but it already in discussions with EDC for an amicable settlement.

7. LOANS PAYABLE

December 31, 2013 March 31, 2013

SBI loan repayable in monthly installments of $211 (INR 10,986) during

the first year then $224 (INR 11,410) during the second and third years, including interest at 8% per annum and 9.75%, respectively, maturing December 3, 2013 and secured by a vehicle.

During the first quarter of fiscal 2014, the loan was fully repaid.

305

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7. LOANS PAYABLE (cont’d)

December 31, 2013 March 31, 2013

Arm’s length party loan, unsecured, non-interest bearing with no fixed term of repayment.

5,000

Arm’s length party loans, unsecured, bearing interest of 11% per annum

with no fixed term of repayment. Accrued interest of $86,614 was included in accounts payable. (Note 9)

200,000

− Less: current portion (200,000) (5,305) $ − $ −

8. PROMISSORY NOTES PAYABLE

December 31, 2013 March 31, 2013

Promissory note payable, unsecured, bearing interest at 10% per annum, maturing February 21, 2011. During fiscal 2012, the Company partially repaid the principal amount of $25,000 and an aggregate of $20,890 in interest on the note. During fiscal 2014, the Company partially repaid the principal amount of $8,000. Accrued interest of $13,013 (March 31, 2013 - $7,500) was included in accounts payable. In fiscal 2014, the maturity date was extended to February 21, 2015.

$ 67,000

$ 75,000 Promissory note payable to an arm’s length party, unsecured, bearing interest at

10% per annum, maturing October 6, 2011. Accrued interest of $63,575 (March 31, 2013 - $52,274) was included in accounts payable. The maturity date for the promissory note was extended to October 6, 2014.

150,000

150,000 Four promissory notes payable, unsecured and non-interest bearing with a

maturity date of August 13, 2011. During fiscal 2012, $20,000 was repaid to two promissory note holders. In fiscal 2014, the maturity date on the remaining two promissory notes was extended to February 13, 2015.

230,000

230,000 Promissory note payable to an arm’s length party, unsecured, bearing interest at

10% per annum, maturing September 8, 2013. The maturity date for the promissory note was extended to September 8, 2014. Accrued interest of $38,094 (March 31, 2013 - $25,697) was included in accounts payable.

165,000

165,000 Promissory note payable to an arm’s length party, unsecured, non-interest bearing,

maturing October 20, 2012. The maturity date was extended to October 20, 2014. The Company issued 50,000 common shares valued at $3,750 as bonus on the notes payable in fiscal 2012.

25,000

25,000

Promissory note payable to a non-arm’s length party, unsecured, non-interest

bearing, maturing May 14, 2013. The maturity date was extended to May 14, 2014. The Company issued 100,000 common shares valued at $13,000 as bonus on the notes payable. (Note 10)

50,000

50,000

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8. PROMISSORY NOTES PAYABLE (cont’d)

December 31, 2013 March 31, 2013

Promissory note payable to a non-arm’s length party, unsecured, bearing interest at 12% per annum, maturing October 2, 2013. The maturity date was extended to October 2, 2014. Accrued interest of $7,989 (March 31, 2013 - $nil) was included in accounts payable.

100,000

− Promissory note payable to a non-arm’s length party, unsecured, bearing interest

at 10% per annum, maturing July 29, 2014. Accrued interest of $2,718 (March 31, 2013 - $nil) was included in accounts payable.

64,000

− Less: current portion (851,000) (645,000)

$ − $ 50,000 9. CONVERTIBLE DEBENTURES

December 31, 2013 March 31, 2013

Convertible debentures $ − $ 200,000

Convertible debentures with a face value of $900,000, unsecured, bearing interest at 11% per annum, paid semi-annually, maturing January 31, 2013. The debentures are convertible into common shares at the option of the lender at $0.45 per share to January 31, 2011 (expired), then at $0.60 per share to January 31, 2012 (expired), then at $0.75 per share to January 31, 2013 (expired), and at $0.90 per share thereafter (expired). On issuance, the Company has allocated $700,000 of the face value of the debentures to the liability component and $200,000 to the equity component. The fair value of the liability component was estimated by discounting the future payments of interest and principal and will be accreted to the $900,000 face value using the estimated effective interest rate of 18%. The residual carrying value of $200,000 attributed to the equity component of the debentures was classified as equity component of convertible debentures. The Company issued 160,000 common shares valued at $51,200 as finders’ fees on the financing in fiscal 2008. In fiscal 2011, a debenture holder agreed to write off $39,446 in interest payable on $700,000 in convertible debentures. In fiscal 2012, the Company repaid $700,000 convertible debenture and outstanding interest totalling $50,000. As a result of the repayment, the Company reduced the equity portion of the debenture by $155,556. A total of $93,539 was reallocated to reserves to reflect the gain on settlement of the equity component. In fiscal 2013, the debenture matured and became no longer convertible. Accordingly, the equity component balance of $44,444 was realized through deficit. On maturity, the convertible debenture became a loan to the Company (Note 7).

10. SHARE CAPITAL AND RESERVES

Authorized share capital

Unlimited common shares with no par value. Share issuances Transactions during the nine months ended December 31, 2013: (i) On May 7, 2013, the Company issued 200,000 units at a price of $0.075 per unit for gross proceeds of $15,000.

Each unit consists of one common share and one-half transferable share purchase warrant of the Company. Each whole warrant entitles the holder to purchase one additional common share of the Company at a price of $0.10 per share until November 8, 2014.

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10. SHARE CAPITAL AND RESERVES (cont’d)

Share issuances (cont’d)

The Company issued 14,000 common shares as finder’s fee to a third party on a portion of this second tranche of private placement.

(ii) On September 11, 2013, the Company issued 600,000 units at a price of $0.075 per unit for gross proceeds of

$45,000. Each unit consists of one common share and one-half transferable share purchase warrant of the Company. Each whole warrant entitles the holder to purchase one additional common share of the Company at a price of $0.10 per share until March 12, 2015.

Share subscriptions received

The Company proposed to issue 545,080 Units of the Company at a price of $0.075 per Unit, for gross proceeds of $40,881. Each Unit will consist of one common share and one-half of one share purchase warrant of the Company. Each whole common share purchase warrant will entitle the holder to purchase one common share at a price of $0.10 per share for a period of 18 months. The proceeds from the private placement will be used for working capital purposes. The private placement is subject to regulatory approval. At December 31, 2013, the Company received $40,881 in share subscriptions. Subsequent to the period end, the Company filed for approval with the TSX Venture Exchange for this private placement.

Stock options and warrants

The Company has a stock option plan under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan, the exercise price of each option equals the market price of the Company's stock, less applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years and vest at the discretion of the Board of Directors. Stock option and share purchase warrant transactions are summarized as follows:

Warrants Stock Options

Number

Weighted Average

Exercise Price

Number

Weighted Average

Exercise Price

Outstanding, March 31, 2013 5,049,666 $ 0.14 1,400,000 $ 0.10 Expired (4,304,166) 0.15 (925,000) 0.10 Granted 400,000 0.10 4,815,000 0.09 Forfeited − − (20,000) 0.065 Re-priced from − − (3,870,000) 0.10 Re-priced to − − 3,870,000 0.065 Outstanding, December 31, 2013 1,145,500 $ 0.10 5,270,000 $ 0.066 Number currently exercisable 1,145,500 $ 0.10 5,270,000 $ 0.066

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10. SHARE CAPITAL AND RESERVES (cont’d) Stock options and warrants (cont’d) As at December 31, 2013, the following were outstanding:

Expiry Date

Number of Shares

Weighted Average Exercise Price

Weighted average period

Options September 4, 2014 455,000 $ 0.065 0.68 years May 28, 2018 3,395,000 $ 0.065 4.41 years October 24, 2018 1,420,000 $ 0.07 4.82 years Warrants August 18, 2014 745,500 $ 0.10 0.63 years November 8, 2014 100,000 $ 0.10 0.85 years March 11, 2015 300,000 $ 0.10 1.19 years

Share-based compensation During the nine months ended December 31, 2013, the Company recognized $333,361 of compensation expense on options granted to various directors, officers and employees. In addition, the Company modified stock options previously granted to directors, officers and employees to acquire 3,850,000 common shares at an exercise price of $0.10 per share expiring between September 4, 2014 and May 28, 2018, to an exercise price of $0.065 per share. The Company recorded $15,208 in additional share-based compensation expense for the modified options. During the period ended December 31, 2012, the Company recognized $5,820 of compensation expense on options granted to an investor relations consultant. Options granted with vesting terms are recalculated each period to adjust for the changes in the variables used in determining the fair value. The Company applies the fair value method in accounting for its stock options using the Black-Scholes option pricing model using the following estimates:

2013 2012 (issued) (re-priced) (issued) Risk free rate 1.41% 1.69% 1.14% Expected dividend yield −% −% −% Expected stock price volatility 92% 110% 102% Weighted average expected life 5 years 4.2 years 3 years Weighted average fair value $0.07 $0.05 $0.06

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MINAEAN INTERNATIONAL CORP. Notes to Condensed Interim Consolidated Financial Statements For the nine months ended December 31, 2013 (Expressed in Canadian Dollars) (Unaudited-Prepared by Management)

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11. RELATED PARTY TRANSACTIONS

Key management personnel are persons responsible for planning, directing and controlling activities of an entity, and include executive and non-executive directors. The remuneration of directors and other key management personnel during the period ended December 31, 2013 and 2012 were as follows:

2013 2012 Management & administrative fees (a) $ 72,000 $ 72,000 Management salaries 54,000 54,000 Rent (b) 18,000 18,000 Total $ 144,000 $ 144,000

(a) Management and administrative fees were incurred pursuant to a Management and Administrative Services

agreement dated July 2010 (Note 12(b)).

As at December 31, 2013, $487,200 (March 31, 2013 - $411,600) in management and administrative fees were due to this company.

(b) As at December 31, 2013, $103,258 (March 31, 2013 - $66,292) in rent was due to a company controlled by the

spouse of a director of the Company. In addition, a loan of $10,000 (March 31, 2013 - $10,000) was due to this company.

(c) As at December 31, 2013, $50,000 (March 31, 2013 - $50,000) was due to a director of the Company.

(d) As at December 31, 2013, $164,000 (March 31, 2013 - $16,500) was due to a company controlled by a director of the Company. The Company issued a promissory note bearing interest at 10% per annum on $64,000 maturing July 29, 2014 and a promissory note bearing interest at 12% per annum on $100,000 maturing on October 2, 2013. The maturity date of the $100,000 promissory note was extended to October 2, 2014.

Amounts due to related parties are unsecured and have no specified interest rate or terms of repayment.

12. COMMITMENTS

(a) The Company has the following rental commitments on its leased premises:

2014 $ 7,029 2015 4,468 $ 11,497

(b) In July 2010, the Company entered into an agreement with a company to provide management and administrative

services to the Company for a period of three years (the “Term”) in exchange for a monthly fee of $5,000 and $3,000, respectively. At the end of the Term, the terms of the agreement are automatically renewed on annual basis until either party provides notice of termination.

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13. SEGMENTED INFORMATION The Company operates in one industry segment, being the development and production of building framing systems, and

in the geographic areas as follows:

December 31,

2013

2012

Sales for the period India $ 1,154,043 $ 70,205

December 31, 2013

March 31, 2013

Property, plant and equipment

North America $ 263 $ 310 India 128,929 181,428 $ 129,192 $ 181,738

14. SIGNIFICANT CUSTOMERS

During the period ended December 31, 2013, one customer individually comprised 98% of total sales.

During the period ended December 31, 2012, one other customer individually comprised 70% of total sales. 15. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments based on the funds available in order to support continued operation and future business opportunities. The board of directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company considers its capital to be shareholders’ deficiency.

The Company’s operations are currently not generating positive cash flow; as such, the Company is dependent on external financing to fund its activities. In order to carry out potential expansion and to continue operations, and pay for administrative costs, the Company will spend its existing working capital, and raise additional amounts as needed. Companies in this stage typically rely upon equity and debt financing or joint venture partnerships to fund its operations. The current financial markets are very difficult and there is no certainty with respect to the Company’s ability to raise capital. During the period ended December 31, 2013, the Company issued 800,000 units at a price of $0.075 per unit for total proceeds of $60,000 and received $40,881 in share subscriptions for 545,080 units at a price of $0.075 per unit. (Note 10).

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management during the period ended December 31, 2013. The Company is not subject to externally imposed capital requirements.

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16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

Cash and short-term investments are carried at fair value using a level 1 fair value measurement. The carrying value of accounts receivable, holdback receivables, bank indebtedness, accounts payable and accrued liabilities, loans payable and promissory notes payable approximate their fair value because of the short-term nature of these instruments.

Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Management believes that the credit risk concentration with respect to financial instruments included in cash is remote. Receivables are due primarily from one customer in India consisting of 80% of total receivables. Management continues to monitor the credit granted to all customers and used the services of Export Development Canada where possible.

Liquidity risk The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when they come due. As at December 31, 2013, the Company had a working capital deficiency of $3,392,754 (March 31, 2013 – working capital deficiency of $3,223,795). The Company has been successful in re-negotiating its bank indebtedness however there is no assurance the success of these efforts will continue. During the period ended December 31, 2013, the Company was unable to fulfill its payment obligations despite successfully re-negotiating the terms of repayment. Market risk Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant and the Company, as all other companies in its industry, has exposure to these risks. (a) Interest rate risk The Company has cash balances as well as bank indebtedness, loans payable, promissory notes payable and convertible debentures. The Company’s current policy is to maintain cash and term deposits in its banking institutions. The Company holds two lines of credit with two separate financial institutions. The lines of credit bear a fixed interest rate thereby reducing interest rate risk. The Company also invests in term deposits bearing a fixed rate of return. (b) Foreign currency risk The Company is exposed to foreign currency risk on fluctuations related to cash, receivables, accounts payable and accrued liabilities that are denominated in United States Dollars and Indian Rupees. Management does not hedge its exposure to foreign exchange risk and does not believe the Company’s net exposure to foreign currency risk is significant.

(c) Price risk

The Company does not feel it is significantly exposed to price risk with respect to commodity prices.