Chartered Accountants 2700 205 – 5th Avenue SW Calgary AB T2P 4B9 Telephone  Telefax Internet   (403) 691-8000  (403) 691-8008  www.kpmg.ca  We have audited the accompanying consolidated financial statements of Alaris Royalty Corp., which  comprise the consolidated statements of financial position as at December 31, 2011, December 31, 2010  and January 1, 2010, the consolidated statements of comprehensive income, changes in equity and cash  flows for the years ended December 31, 2011 and December 31, 2010, and notes, comprising a summary  of significant accounting policies and other explanatory information.  Management is responsible for the preparation and fair presentation of these consolidated financial  statements in accordance with International Financial Reporting Standards, and for such internal control  as management determines is necessary to enable the preparation of consolidated financial statements that  are free from material misstatement, whether due to fraud or error.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  We conducted our audits in accordance with Canadian generally accepted auditing standards. Those  standards require that we comply with ethical requirements and plan and perform the audit to obtain  reasonable assurance about whether the consolidated financial statements are free from material  misstatement.  An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in  the consolidated financial statements. The procedures selected depend on our judgment, including the  assessment of the risks of material misstatement of the consolidated financial statements, whether due to  fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s  preparation and fair presentation of the consolidated financial statements in order to design audit  procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on  the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of  accounting policies used and the reasonableness of accounting estimates made by management, as well as  evaluating the overall presentation of the consolidated financial statements.  We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide  a basis for our audit opinion. KPMG LLP is a Canadian limited liability partnership and a  member firm of the KPMG network of independent member firms  affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.  KPMG Canada provides services to KPMG LLP. 16  2011 Annual Report  Alaris Royalty Corp. Auditors’ responsibility  Management’s responsibility for the consolidated financial statements  To the Shareholders of Alaris Royalty Corp. 