DIVERSIFIED ROYALTY CORP .  Notes toConsolidatedFinancial Statements  (Unaudited)  (Expressed in Canadian dollars)  Year ended December 31, 2014  8. Provisions and contingencies:  The liability to the insurance underwriter shown above is partially offset by $434,236 of insuran ce  proceeds receivable (Note 5).  (a) John Bennett indemnity claim:  John Bennett (“Bennett”), founder and CEO of the Company until early 2004, is charged with  conspiracy to defraud and major fraud against the United States between 2001 and mid -2004. The Company and twoformervice presidents (both of whom left the Company in 2004) have  pleaded guilty to this same conspir acy against the United States. Bennett was extradited to the United States in November 2014 and is expected to be tried in  November 2015. The Company has been ordered by the courtsto reimburseBennett for the  reasonablelegal costs hehas incurred and will incurin connection with hiscriminal defense. The Company has accruedfor Bennett’s legal costs incurred and reimbursable to him as at  December 31, 2014. The cost to the Company in respect of his future legal expenses will be  recorded when these expenses are known and the amounts reimbursable to him can be  reasonably estimated.  If Bennett is acquitted, the Company’s insurer is responsible for Bennett’s legal costs. If Bennett  is found guilty, the Company will be required to reimbur se its insurance underwriter for a ll  amounts advanced to Bennett and the Company will beentitled to reimbursement from  Bennett. The Company’s ability to obtain reimbursement will depend on its ability to identify  and obtain recourse against Bennett’s assets, including, without limitation, the balance of any  paymentsstill due to Bennett under the Reward for Tenure Agreement referred to  in note 9.  19  John Bennett  Liability to  indemnity  insurance  claim  underwriter  Other  Total  (a)  (b)  Balance, January 1, 2013  $  25,974  $  -  $  100,000  $  125,974  Provisions made during the year 503,670  380,342  -  884,012  Provisions used during the year (395,587)  - -  (395,587)  Change in foreign exchange rate 713  -  -  713  Balance, December 31, 2013  134,770  380,342  100,000  615,112  Provisions made during the year 538,307  330,629  -  868,936  Provisions used during the year (25,370)  -  -  (25,370)  Change in foreign exchange rate 5,855  34,507  -  40,362  Balance, December 31, 2014  $ 653,562  $  745,478  $  100,000  $ 1,499,040 