DIVERSIFIED ROYALTY CORP .  Notes toConsolidatedFinancial Statements  (Unaudited)  (Expressed in Canadian dollars)  Year ended December 31, 2014  The loss on disposal of assets held for sale and related restructuring costs recorded in 2013 are  composed of the following items:  The Company has exposure to the following risks from its use  of financial instruments: credit risk,  market risk, liquidity risk, currency risk and interest rate risk. This note presents information about  the Company’s exposure to each of the above risks, the Company’s objectives, policies and  processes for measuri ng and managing risk, and the Company’s management of capital. Further  quantitative disclosures are included throughout these consolidated financial statements. The Company’s risk management policies are established to identify and analyze the risks faced  by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to  limits. Risk management policies and systems are reviewed regularly to reflect changes in market  conditions and the Company’s activities. The Company, through its training and management  standards and procedures, aims to develop a disciplined and constructive control environment in  which all employees understand their roles and obligations. The Board of Directors has responsibility for the oversight of th e Company’s risk management  framework. The Board of Directors has mandated the Audit Committee to review how management  monitors compliance of the Company’s risk management policies and procedures and review the  adequacy of the risk management policies an d procedures.  Credit risk is the risk of financial loss to the  Company if a customer or counterparty to a financial  instrument fails to meet its contractual obligations, and arises principally from the Company’s  amounts due from Franworks . The Company monitors this risk through its regular review of  the operating and financing activities of Franworks. The Company’s maximum exposure to  credit risk is the value of its royalty fee receivable from Franworks. There are no past -due  amounts.  (a) Credit risk:  19. Financial risk management:  18. Loss on disposal of assets held for sale and related restructuring costs  (continued):  2014  2013  Sale price (including purchase price adjustments)  $  -  7,732,064  Carrying value of property, plant and equipment  -  (7,276,216)  Working capital deficit assumed by the buyer  -  (277,264)  Selling and disposal costs  -  (1,035,286)  Loss on disposal of assets held fo r sale  -  (302,174)  Restructuring costs related to the sale  -  (257,500)  Loss on disposal of assets held for sale and related  restructuring  costs  $  -  (559,674)  28 