----

----

| Index                                                        |                         |
|--------------------------------------------------------------|------------------------------|
|                                                         |                         |
| Report of Independent Registered Public Accounting Firm      |     2    |
|                                                         |                         |
| Consolidated Statements of Financial Position                |    3          |
|                                                         |                         |
| Consolidated Statements of Operations and Comprehensive Loss |    4          |
|  Consolidated Statement of Shareholders Equity          |  5-6                    |
|                                                         |                         |
| Consolidated Statements of Cash Flows                        |   7                |
|                                                         |                         |
| Notes to Consolidated Financial Statements                   | 8-21     |

----

----

| As at,                                                                      |       |             |             | Note              | March 31, 2013     | March 31, 2012     |
|-----------------------------------------------------------------------------|------------|------------------|------------------|-------------------|--------------------|--------------------|
|                                                                        |       |             |             |              |               |               |
| Assets                                                                      |       |             |             |              |               |               |
| Current                                                                     |       |             |             |              |               |               |
|     Cash                                                |       |             |             |              |  $3,376,531   |  $58,359      |
|     Short term investments                              |       |             |  -          |  227,600     |
|     Other receivable                                    |       |             |             |  108,544     |  231,039      |
|     Exploration and evaluation expenditures recoverable | 5          |  -          |  6,972,740  |
|                                                                        |       |             |             |              |  $3,485,075   |  $7,489,738   |
| Long-term assets                                                            |       |             |             |              |               |
|    Office equipment and furniture                            |       | 4                |  $5,720     |  $6,717      |
| Total assets                                                                |       |             |             |  $3,490,795  |  $7,496,455   |
| Liabilities and Shareholders' equity                                        |       |             |             |
| Current liabilities                                                         |       |             |             |              |               |
|     Accounts payable and accrued liabilities            | 13(iv), 14 |  $454,663   |  $1,040,450 |
|     Deferred costs recovery                             |       | 5                |  $-         |  $1,615,177  |
| Total current liabilities                                                   |       |             |  $454,663   |  $2,655,627  |
| Shareholders' Equity                                                        |       |             |             |              |               |
| Capital stock                                                               |       |             | 6                |  $36,260,401 |  $36,081,260  |
| Warrants                                                                    |       |             |             | 8                 |  6,953,745    |  7,446,261    |
| Stock option reserve                                                        |       |             |             |  4,755,077   |  4,755,077    |
| Fair value reserve                                                          |       |             |             |  -           |  19,500       |
| Deficit                                                                     |       |             |             |              |  (44,933,091) |  (43,461,270) |
|                                                                        |       |             |             |              |               |               |
| Total Shareholders' equity                                                  |       |             |  $3,036,132 |  $4,840,828  |
|                                                                        |       |             |             |              |               |               |
| Total  liabilities and Shareholders'equity                        |       |  $3,490,795 |  $7,496,455 |
| Commitments and Contingent Liabilities (Note 12)                            |       |             |             |
| Related Party Transactions (Note 13)                                        |       |             |             |

----

|                                                                                    | Note              | 2013               | 2012               | 2011               |
|-----------------------------------------------------------------------------------------|-------------------|--------------------|--------------------|--------------------|
|                                                                                    |              |               |               |               |
| Income                                                                                  |              |               |               |               |
|                                                                                    |              |               |               |               |
| Other income                                                                            | 5                 | $100,130           | $ -                | $ -                |
|                                                                                    |              |  $100,130     |  $ -          |  $ -          |
|                                                                                    |              |               |               |               |
| Expenses                                                                                |              |               |               |               |
|    Exploration and evaluation expenditure recovery                       | 5                 |  (230,455)    |  -            |  -            |
|    Consulting fees                                                       | 10,12(a), 13(iii) | 741,159            |  432,607      | 778,899            |
|     Professional fees                                               |              | 244,879            |  870,571      | 1,221,720          |
|    Write down of short term investments                                  |              | 162,291            |  776,774      | 386,672            |
|     Shareholders' information                                       | 13 (i)            | 284,606            |  131,575      | 148,610            |
|     Travel, meals and promotions                                    | 13(ii)            | 174,142            |  32,114       | 131,976            |
|     Office and general                                              |              | 58,179             |  42,655       | 44,264             |
|     Exchange loss                                                   |              | 51,179             |  8,653        | 20,688             |
|     Payroll                                                         |              | 47,806             |  46,158       | 39,738             |
|     Rent                                                            |              | 22,071             |  25,836       | 26,117             |
|     Communication                                                   |              | 6,535              |  9,493        | 15,090             |
|     Transfer agents fees                                            |              | 6,123              |  5,777        | 11,146             |
|     Bank charges and interest                                       |              | 2,222              |  1,749        | 4,096              |
|     Amortization                                                    |              | 1,772              |  2,240        | 2,433              |
|    Loss (gain) on disposal of short term investments                     |              | -558               |  84,176       | 948,189            |
|                                                                                    |              |  1,571,951    |  2,470,378    |  3,779,638    |
| Net loss for year                                                                       |              |  (1,471,821)  |  (2,470,378)  |  (3,779,638)  |
| Other comprehensive loss                                                                |              |               |               |               |
|    Unrealized gain (loss) for year on short term investments, net of tax |              |  -            |  (148,847)    |  2,864,560    |
| Other comprehensive income (loss) for year                                              |              |  -            |  (148,847)    |  2,864,560    |
| Net comprehensive loss for year                                                         |              |  $(1,471,821) |  $(2,619,225) |  $(915,078)   |
| Net loss attributable to :                                                              |              |               |               |               |
|      Shareholders of the Company                               |              |  $(1,471,821) |  $(2,470,378) |  $(3,728,327) |
|      Non-controlling interest                                  |              |  $-           |  $-           |  $(51,311)    |
|                                                                                    |              |  $(1,471,821) |  $(2,470,378) |  (3,779,638)  |
| Total comprehensive loss attributable to:                                               |              |               |               |               |
|      Shareholders of the Company                               |              |  $(1,471,821) |  $(2,619,225) |  $(863,767)   |
|     Non-controlling interest                                        |              |  -            |  -            |  (51,311)     |
|                                                                                    |              |  $(1,471,821) |  $(2,619,225) |  $(915,078)   |
| Basic and diluted loss per share                                                        |              |               |               |               |
|     Net Loss per share                                              | 9                 |  $(0.02)      |  $(0.03)      |  $(0.05)      |

----

|                                                                                                             | Number of Shares | Capital Stock     | Warrants          | Stock option reserve | Fair value reserve | Accumulated Deficit | Non-controlling interest | Total Equity      |
|------------------------------------------------------------------------------------------------------------------|------------------|-------------------|-------------------|----------------------|--------------------|---------------------|--------------------------|-------------------|
| Balance, April 1, 2010                                                                                           | 65,229,076       |  $35,298,257 |  $7,343,886  |  $4,573,748     |  $(2,696,213) |  $(37,262,565) |  $(356,814)         |  $6,900,299  |
| Subscription received in fiscal 2010 reversed on issuance of shares                                              |             |  (303,480)   |              |                 |               |                |                     |  (303,480)   |
| Issued under private placement                                                                                   |  12,700,000 |  2,564,925   |              |                 |               |                |                     |  2,564,925   |
| Finder fee                                                                                                       |             |  (256,493)   |              |                 |               |                |                     |  (256,493)   |
| Value of warrants issued under private placement                                                                 |             |  (1,232,145) |  1,232,145   |                 |               |                |                     |  -           |
| Value of warrants issued as finder’s fee                                                                   |             |  (123,214)   |  123,214     |                 |               |                |                     |  -           |
| Issued under 2009 Consultant stock compensation plan                                                             |  135,000    |  48,093      |              |                 |               |                |                     |  48,093      |
| Value of options issued                                                                                          |             |              |              |  181,329        |               |                |                     |  181,329     |
| Issued on exercise of warrants                                                                                   |  600,000    |  60,503      |              |                 |               |                |                     |  60,503      |
| Value of warrants exercised                                                                                      |             |  21,694      |  (21,694)    |                 |               |                |                     |  -           |
| Unrealised gain on short term investments ,net of tax                                                            |             |              |              |                 |  2,864,560    |                |                     |  2,864,560   |
| Non-controlling interest                                                                                         |             |              |              |                 |               |                |  356,814            |  356,814     |
| Net loss for year                                                                                                |             |              |              |                 |               |  (3,728,327)   |                     |  (3,728,327) |
| Balance, March 31, 2011                                                                                          | 78,664,076       |  $36,078,140 |  $8,677,551  |  $4,755,077     |  $168,347     |  $(40,990,892) |  -                  |  $8,688,223  |
| Issued under 2009 Consultant Stock Compensation Plan                                                             | 50,000           |  $3,120      |              |                 |               |                |                     |  3,120       |
| Cancellation of previously issued  warrants against exploration and evaluation expenditure recoverable |             |              |  (1,231,290) |                 |               |                |                     |  (1,231,290) |
| Unrealised loss on short term investments, net of tax                                                            |             |              |              |                 |  (148,847)    |                |                     |  (148,847)   |
| Net loss for year                                                                                                |             |              |              |                 |               |  (2,470,378)   |                     |  (2,470,378) |
| Balance, March 31, 2012                                                                                          | 78,714,076       |  $36,081,260 |  $7,446,261  |  $4,755,077     |  $19,500      |  $(43,461,270) |  $-                 |  $4,840,828  |

----

|                                                                                                             | Number of Shares | Capital Stock     | Warrants         | Stock option reserve | Fair value reserve | Accumulated Deficit | Non-controlling interest | Total Equity      |
|------------------------------------------------------------------------------------------------------------------|------------------|-------------------|------------------|----------------------|--------------------|---------------------|--------------------------|-------------------|
| Balance, March 31, 2012                                                                                          |  78,714,076 |  $36,081,260 |  $7,446,261 |  $4,755,077     |  $19,500      |  $(43,461,270) |  $-                 |  $4,840,828  |
| Issued under Consultant Stock Compensation Plans                                                                 |  3,045,000  |  179,141     |             |                 |               |                |                     |  179,141     |
| Cancellation of previously issued  warrants against exploration and evaluation expenditure recoverable |             |              |  (492,516)  |                 |               |                |                     |  (492,516)   |
| Unrealised loss on short term investments ,net of tax                                                            |             |              |             |                 |  (19,500)     |                |                     |  (19,500)    |
| Net loss for year                                                                                                |             |              |             |                 |               |  (1,471,821)   |                     |  (1,471,821) |
| Balance, March 31, 2013                                                                                          |  81,759,076 |  36,260,401  |  6,953,745  |  4,755,077      |  -            |  (44,933,091)  |  -                  |  3,036,132   |

----

|                                                                                                                              | Note   | 2013               | 2012               | 2011               |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------------------|--------------------|
| Cash flows from operating activities                                                                                              |   |               |               |               |
|    Net loss for year                                                                                               |   |  $(1,471,821) |  $(2,470,378) |  $(3,779,638) |
|    Amortization of office equipment and furniture                                                                  |   |  1,772        |  2,240        |  2,433        |
|    Write down of short term investments                                                                            |   |  162,291      |  776,774      |  386,672      |
|    Loss (gain) on disposal of short term investments                                                               |   |  (558)        |  84,176       |  948,189      |
|   Exploration and evaluation expenditure recovery                                                                       |   |  (230,455)    |               |               |
|    Payment to an employee in common shares                                                                         |   |  -            |  3,120        |  -            |
|    Consulting fees settled for common shares                                                                       | 13     | 179,141            | 7,171              | 273,043            |
| Net change in working capital components                                                                                          |   |               |               |               |
|    Other receivables                                                                                               |   |  122,495      |  (116,970)    |  (50,209)     |
|    Accounts payable and accrued liabilities                                                                        |   | (585,787)          | 376,873            | -331,060           |
|                                                                                                                              |   |  $(1,822,922) |  $(1,336,994) |  $(2,550,570) |
| Cash flows from investing activities                                                                                              |   |               |               |               |
|    Purchase of office equipment and furniture                                                                      |   |  (776)        |  -            |  (2,587)      |
|    Exploration and evaluation (expenditure) recovery                                                               |   |  5,095,502    |  383,887      |  (307,906)    |
|    Purchase of short term investments                                                                              |   |  -            |  -            |  (5,528)      |
|    Proceeds from sale of short term investments                                                                    |   | 46,368             | 663,002            | 946,188            |
|                                                                                                                              |   |  $5,141,094   |  $1,046,889   |  $630,167     |
| Cash flows from financing activities                                                                                              |   |               |               |               |
|    Short term loan                                                                                                 |   |  -            |  -            |  (1,117,161)  |
|    Funds advanced to subsidiary                                                                                    |   |  -            |  -            |  (1,029,953)  |
|    Common shares issued net of issuance costs                                                                      |   |  -            |  -            |  2,065,455    |
|                                                                                                                              |   |  $-           |  $-           |  $(81,659)    |
| Increase (Decrease) in cash during year                                                                                           |   |  3,318,172    |  (290,105)    |  (2,002,062)  |
| Cash at beginning of year                                                                                                         |   | 58,359             | 348,464            | 2,350,526          |
| Cash at end of year                                                                                                               |   |  $3,376,531   |  $58,359      |  $348,464     |
| Supplemental disclosures                                                                                                          |   |               |               |               |
| Non-cash operating activities                                                                                                     |   |               |               |               |
|    Consulting fees  and employee compensation settled for                                                |   |  (179,141)    |  (10,291)     |  (273,043)    |
|      shares and  options and expensed during the year                                          |
|    Consulting fees prepaid in shares                                                                               |   |  -            |  -            |  (7,171)      |
|                                                                                                                              |   |  $(179,141)   |  $(10,291)    |  $(280,214)   |
| Non-cash investing activities                                                                                                     |   |               |               |               |
| Value of warrants previously issued towards acquisitions now cancelled against exploration and evaluation expenditure recoverable |   |  492,516      |  1,231,290    |  -            |
| Value of warrants issued towards acquisitions                                                                                     |   |               |               |  (173,953)    |
|                                                                                                                              |   |  492,516      |  1,231,290    |  (173,953)    |
| Non-cash financing activities                                                                                                     |   |               |               |               |
| Value of warrants exercised                                                                                                       |   |  $-           |  $-           |  $21,694      |

----

| (a)   | Statement of Compliance and Basis of presentation |
|-----------------|---------------------------------------------------|

----

| 3. | SIGNIFICANT ACCOUNTING POLICIES |
|----|---------------------------------|

----

| Foreign currency translation |   |
|------------------------------|--------|

|   | Share-based payments |
|--------|----------------------|

|   | The Company accounts for share-based payments granted to directors, officers, employees and consultants using the Black-Scholes option-pricing model to determine the fair value of the plan at grant date. An estimated forfeiture rate is incorporated into the fair value calculated and adjusted to reflect the actual number of options that vest. Share-based payments are recorded and reflected as an expense over the vesting period with a corresponding amount reflected in stock option reserve. At exercise, the associated amounts previously recorded in stock option reserve are transferred to common share capital. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The quoted market price of the Company’s shares on the date of issuance under any share- based plan is considered as fair value of the shares issued. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Income taxes |
|--------|--------------|

|   | A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Determination of fair value |
|--------|-----------------------------|

----

----

| 4. | OFFICE EQUIPMENT AND FURNITURE |
|----|--------------------------------|

|             | Cost          | Accumulated amortization | Net book value | Net book value |
|------------------|---------------|--------------------------|----------------|----------------|
| As at March 31,  | 2013          | 2012                     |
| Office furniture | 4,725         | 3,332                    | 1,393          |  1,742    |
| Computer         | 6,795         | 4,653                    | 2,142          |  2,244    |
| Software         | 5,793         | 3,608                    | 2,185          |  2,731    |
|             |          |                     |           |           |
|             |  $17,313 |  $11,593            |  $5,720   |  $6,717   |

|   | The Company signed a settlement agreement on December 15, 2011 to dispose of its interest in the Israeli project held through its ownership of 76.79% equity in IPC Cayman. The agreement being extended, from time to time, and amended, was finally closed on June 29, 2012. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Year ended March 31,                                                    | 2013             | 2012             |
|-------------------------------------------------------------------------|------------------|------------------|
| Balance, at beginning of year                                           |  $6,972,740 |  $6,972,740 |
| Deferred cost recovery balance transferred                              | (1,615,177)      |             |
| Cash received on settlement                                             | (5,095,502)      |             |
| Value of warrants issued previously towards acquisition being cancelled | (492,516)        |             |
|                                                                    | (230,455)        | 6,972,740        |
| Exploration and evaluation expenditure recovery                         | 230,455          |             |
|                                                                    |             |             |
| Balance, end of year                                                    |  $-         |  $6,972,740 |

|                                                                          | 2013              | 2012             |
|-------------------------------------------------------------------------------|-------------------|------------------|
| Balance, beginning of year                                                    |  $1,615,177  |  $-         |
| Cancellation of warrants returned under the settlement agreement (Note 6) (i) |  -           |  1,231,290  |
| Cash deposits received under the settlement agreement ( Note 6) (ii)          |  -           |  383,887    |
| Transferred to exploration and evaluation expenditure recoverable             |  (1,615,177) |             |
| Balance, end of year                                                          |  $-          |  $1,615,177 |

| (b)   | Issued |
|-----------------|--------|

|                                                            | Common           |              |
|-----------------------------------------------------------------|------------------|-------------------|
|                                                            | Shares           | Amount            |
| Balance at April 1, 2011                                        |  78,664,076 |  $36,078,140 |
| Issued under 2009 Consultant Stock Compensation Plan            |  50,000     |  3,120       |
| Balance at  March 31, 2012                            |  78,714,076 |  $36,081,260 |
| Issued under  Consultant Stock Compensation Plans (i) |  3,045,000  |  $179,141    |
| Balance at March 31, 2013                                       |  81,759,076 |  $36,260,401 |

| (i)   | Shares were issued to two directors, CEO and the two consultants as bonus and were valued at market on the date of issue. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

|   |  (c) | As at March 31, 2013, the Company had the following active Consultant Stock Compensation Plans: |
|--------|-----------|-------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|      | Date of registration* | Registered shares under Plan | Issued to March 31, 2012 | As at April 1, 2012 | Issued            | Cancelled (i) | Balance at March 31, 2013 |
|-----------|-----------------------|------------------------------|--------------------------|---------------------|-------------------|---------------|---------------------------|
| 2009 Plan | 11-May-09             | 3,000,000                    | (893,333)                | 2,106,667           |  (2,181,667) |  75,000  |  -                   |
| 2011 Plan | 11-Apr-11             | 6,000,000                    |  -                  | 6,000,000           |  (938,333)   |  -       | 5,061,667                 |

|   | * | Registered with the Securities and Exchange Commission of the United States of America (SEC) as required under the Securities Act of 1933. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | 75,000 shares issued to an independent director as bonus were returned in November 2012 for cancelation and the director was paid in cash in lieu of the shares. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a)   | The following is a summary of all Stock Option Plans as at March 31, 2013: |
|-----------------|----------------------------------------------------------------------------|

| Date of Registration                           | April 30, 2003  | July 22, 2004   | Dec. 5, 2005    | Dec. 5, 2005    | Total           |
|------------------------------------------------|-----------------|-----------------|-----------------|-----------------|-----------------|
| Registered *                                   |  3,000,000 |  2,500,000 |  1,100,000 |  1,000,000 |  7,600,000 |
| Issued                                         |  3,000,000 |  2,500,000 |  1,100,000 |  1,000,000 |  7,600,000 |
| Outstanding, April 1, 2011                     |  1,730,000 |  1,945,000 |  1,100,000 |  1,000,000 |  5,775,000 |
| Canceled                                       |            |            |            |  (390,000) |  (390,000) |
| Outstanding, March 31, 2012 and March 31, 2013 |  1,730,000 |  1,945,000 |  1,100,000 |  610,000   |  5,385,000 |

|   | *   Registered with the Securities and Exchange Commission of the United States of America (SEC) as required under the Securities Act of 1933. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All outstanding options were fully vested on the dates of their grant. |
|--------|------------------------------------------------------------------------|

|   | (b) | The weighted average exercise price of the outstanding stock options was US$0.17 as at March 31, 2013 (March 31, 2012: US$0.17) |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

|                                                | March 31, 2013 |
|-----------------------------------------------------|----------------|
| Number of options outstanding and exercisable       | 5,385,000      |
| Exercise price in US$                               | 0.17           |
| Weighted average remaining contractual life (years) | 1.48           |

| 8. | WARRANTS |
|----|----------|

| (a)   | The movements during the year ended March 31, 2013 were as follows: |
|-----------------|---------------------------------------------------------------------|

|   |   |
|--------|--------|

|                                   | # of warrants     | Weighted average exercise price | Fair value         |
|----------------------------------------|-------------------|---------------------------------|--------------------|
| Issued and outstanding, April 1, 2011  |  73,071,420  | 0.30                            |  8,677,551    |
| Cancelled  (i)               |  (5,000,000) |  $(0.35)                   |  $(1,231,290) |
| Issued and outstanding, March 31, 2012 |  68,071,420  |  $0.30                     |  $7,446,261   |
| Cancelled  (ii)              |  (2,000,000) |  $(0.35)                   |  $(492,516)   |
| Issued and outstanding, March 31, 2013 |  66,071,420  |  $0.29                     |  $6,953,745   |

| (i)   | 5 million warrants issued to International Three Crown Petroleum Ltd., were cancelled on December 19, 201. As per the terms of the Settlement agreement (Note 5) these warrants were valued at $1,231,290 on the date of their issuance. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (ii)   | 2 million warrants issued to Allied Venture were cancelled on December 31, 2012 as a result of the settlement as explained in Note 5 and failure to receive any more funds under the settlement agreement. These warrants were valued at $492,516 on the date of their issuance. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| (j)   | Details of weighted average remaining life of the warrants granted and outstanding are as follows: |
|-----------------|----------------------------------------------------------------------------------------------------|

|                  | March 31, 2013                         |
|-----------------------|----------------------------------------|
|                  | Warrants outstanding & exercisable |
| Exercise price in US$ | Number                                 | Weighted average remaining contractual life (years) |
| 0.10                  | 10,400,000                             | 1.00 |
| 0.25                  | 12,846,420                             | 1.00 |
| 0.35                  | 42,825,000                             | 1.90 |
| 0.29                  | 66,071,420                             | 1.59 |

| 10. | CONSULTING FEES |
|-----|-----------------|

|                               | 2013                             | 2012                                       | 2011      |
|------------------------------------|----------------------------------|--------------------------------------------|-----------|
| Fees settled in stocks and options | $    179,141 | $      7,171 | $ 273,043 |
| Fees settled for cash              | 562,018                          | 425,436                                    | 505,856   |
|                               | $    741,159 | $  432,607                       | $ 778,899 |

| 11. | INCOME TAXES |
|-----|--------------|

|                                                                                  |                                                                 | 2013             | 2012             | 2011           |
|---------------------------------------------------------------------------------------|----------------------------------------------------------------------|------------------|------------------|----------------|
| Income tax recovery based on combined corporate income tax rate of 26.50% (2012: 25%) |  $(390,033)                                                     |  $(617,595) |  $(889,551) |
| Increase(decrease) in taxes resulting from:                                           |                                                                 |             |             |
|                                                                                  | Non-deductible consulting fees                                       |  47,472     |  1,793      |  68,261   |
|                                                                                  | Non-deductible meals & entertainment expenses                    |  4,690      |  2,008      |  4,906    |
|                                                                                  | Non-taxable portion of loss (gain) on sale of short term investments |  (74)       |  10,522     |  118,524  |
|                                                                                  | Finder's fee                                                         |  -          |  -          |  (41,465) |
|                                                                                  | Write off of a short term investment                                 |  21,504     |  97,097     |  48,334   |
| Income tax recovery                                                                   |  (316,441)                                                      |  (506,175)  |  (690,991)  |
| Benefit of tax losses not recognised                                                  | 316,441                                                              | 506,175          | 690,991          |
| Provision for income taxes                                                            |  $-                                                             |  $-         |  $-         |

----

|                                               | Canada       | US           |
|----------------------------------------------------|--------------|--------------|
|                                               | 2013         | 2012         | 2013 | 2012 |
|                                               | in $ '000    |
|   Non-capital losses carried forward     |  $5,023 |  $3,156 |  $1,498 |  $1,498 |
|   Capital losses carried forward         | 1,056        | 1,211        | - | - |
|   Exploration and evaluation expenditure |  -      | 1,134        |   |   |
|   Other                                  |  -      | (5)          |   |   |
| Unrecognized deductible temporary differences      | 6,079        | 5,496        | 1,498 | 1,498 |

|                   | Canadian in CDN$In $’000                     |   | US in US$in $’000                                                  |
|------------------------|----------------------------------------------------|--------|--------------------------------------------------------------------------|
| 2014                   | 1,337                                              |   |                                                                     |
| 2015                   | 1,319                                              | 2025   | $           1,050 |
| 2026                   | 5,358                                              | 2026   | 3,300                                                                    |
| 2027                   | 271                                                | 2027   |      25                                         |
| 2028                   | 675                                                |   |                                                                     |
| 2029                   | 342                                                |   |                                                                     |
| 2030                   | 1,189                                              |   |                                                                     |
| 2031203220322033  | 2,0943,5011,6751,194                          |   |                                                                     |
|                   |        $ 18,956 |   | $           4,375 |

| (a)   | The Company entered into a consulting contract with Mr Kam Shah, the Chief Executive Officer and Chief Financial Officer on April 1, 2005 for a five-year term. This term was extended by another five years to March 31, 2015 by the audit committee on April 1, 2010. Mr Shah’s monthly fee is $15,000 plus taxes. Further, the contract provides for a lump sum compensation of US$250,000 for early termination of the contract without cause. The contract also provides for entitlement to stock compensation and stock options under appropriate plans as may be decided by the board of directors from time to time. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | There were contingent liabilities and assets as at March 31, 2013 in respect of indemnities undertaken and received as part of the oil and gas activities which have now been discontinued. No material losses or gains are likely to arise from such contingent liabilities and assets. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |  (i) | Included in shareholders’ information expense is $269,192 (2012 – $118,509, 2011: $122,059) to Current Capital Corp, (CCC) for media relations services. CCC is a shareholder corporation and a director of the Company provides accounting services as a consultant. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (ii) | Business expenses of $21,566 (2012: $38,056, 2011: 32,278) were reimbursed to directors of the corporation and $181,514 (2012 - $21,456, 2011: $80,575) to a key consultant and a former chief executive officer of the Company. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | Consulting fees include cash fee paid to directors for services of $249,876 and shares issued $61,175 (2012: cash fee $190,000, 2011: $190,000), $160,000 in cash and $63,371 in shares (2012: cash fee $120,000, 2011: $120,000) paid to a key consultant and a former chief executive officer of the Company, $142,000 in cash and $54,595 in shares paid to a consultant who controls CCC (2012:  cash fee $102,000, 2011: 102,000). These fees are included in consulting expenses. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Accounts payable includes $1,389 (2012: $95,052) due to CCC, $1,250 (2012: $87,660) due to directors, $nil (2012: $178,094) due to a key consultant and a former chief executive officer of the Company, and due to a consultant who controls CCC $nil (2012; $ 145,605). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
|-----|------------------------------------------|

|   | Accruals include $ 310,000 to cover expense reimbursement and compensation agreed to be payable to CCC and two consultants upon termination of their consulting contracts and other entitlements as follows effective March 31, 2013: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | $ 80,000 to key consultant towards expenses and further $ 40,000 as fee for early termination of his consulting contract. |
|----------------|---------------------------------------------------------------------------------------------------------------------------|

| b.   | $ 150,000 to CCC for cancellation of all future finder fee claims on proceeds of  any warrants to be exercised |
|----------------|--------------------------------------------------------------------------------------------------------------------------|

| c.   | $40,000 to the consultant who controls CCC as fee for early termination of his consulting contract. |
|----------------|-----------------------------------------------------------------------------------------------------|

|                                     | March 31, 2013 | March 31, 2012 |
|------------------------------------------|----------------|----------------|
|                                     | Carrying value | Fair value     | Carrying value | Fair value |
| Financial assets                         |           |           |   |   |
| Cash                                     | 3,376,531      | 3,376,531      | 58,359 | 58,359 |
| Other receivable                         | 108,544        | 108,544        | 231,039 | 231,039 |
| Short term investments                   |  -        |  -        | 208,100 | 227,600 |
| Financial liabilities                    |           |           |   |   |
| Accounts payable and accrued liabilities | 454,663        | 454,663        | 1,040,450 | 1,040,450 |

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| a)   | Fair value of financial instruments |
|----------------|-------------------------------------|

|   | b) | Credit risk |
|--------|----|-------------|

| a.   | Cash– Cash is held with a major international financial institution in Canada and therefore the risk of loss is minimal. However, the Company does have a concentration risk since all funds are held with one bank. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Other receivable – The Company is not exposed to major credit risk attributable to customers. A significant portion of this amount is due from the Canadian government. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Liquidity risk |
|----------------|----------------|

----

|   | d) | Market risk |
|--------|----|-------------|

| 17. | SUBSEQUENT EVENT |
|-----|------------------|

|   | The following are key events that happened after the balance sheet until the date of these consolidated financial statements: |
|--------|-------------------------------------------------------------------------------------------------------------------------------|

| a.   | On April 5, 2013, the Company incorporated a wholly owned subsidiary, Portage Acquisition Inc., in the British Virgin Islands. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------|

| b.   | On June 4, 2013, the Company signed a Share Exchange Agreement with Portage. As per the terms of the agreement, the Company’s wholly owned subsidiary, Portage Acquisition Inc.  acquired all the issued and outstanding shares of Portage in exchange for 81.7 million shares and approximately 71.4 million warrants valid for two years and exercisable at $0.29 to acquire equal number of shares of the Company. Additionally, approximately 9.8 million shares of the Company were issued to Culminate Capital in consideration for financial services and other services rendered in connection with the acquisition of Portage. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The Company has commenced legal formalities to transfer its jurisdiction from Ontario to the British Virgin Islands. |
|----------------|----------------------------------------------------------------------------------------------------------------------|

| 18. | APPROVAL OF FINANCIAL STATEMENTS |
|-----|----------------------------------|

|   | The consolidated financial statements were approved by the board of directors and authorized for issue on July 24, 2013. |
|--------|--------------------------------------------------------------------------------------------------------------------------|

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