As at June 30, 2010 and 2009, the Company is exposed to currency risk through the following assets and liabilities denominated  in Malaysian ringgit:  Based on the above net exposures as at June 30, 2010, and assuming that all other variables remain constant, a 5% depreciation  or appreciation of the Malaysian ringgit against the Canadian dollar would result in an increase/decrease of approximately $151,000 (2009 – $66,000) in the Company’s net losses. As at June 30, 2010 and 2009, the Company is exposed to foreign currency risk through the following assets denominated in US  dollars:  Based on the above net exposures as at June 30, 2010, and assuming that all other variables remain constant, a 5% depreciation  or appreciation of the US dollar against the Canadian dollar would result in an increase/decrease of approximately $269,000  (2009 – $nil) in the Company’s net losses. During 2009, the Company entered into a number of foreign exchange forward contracts to reduce its exposure to foreign  currency risk. The contracts obliged the Company to convert $5,500,000 to Malaysian ringgits at predetermined exchange rates  on a monthly basis from February to July 2009. For the year ended June 30, 2010, a total of $500,000 (2009 – $5,000,000) was  settled for Malaysian ringgit under the forward contracts resulting in a loss of $15,434 (2009 – $61,245) comprised of a total  realized loss of $15,434 (2009 – total realized loss of $51,023 and an unrealized mark-to-market loss of $10,222). As at June 30,  2010, a total of $nil (2009 – $500,000) in forward contracts remain to purchase Malaysian ringgits.  Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in  market prices other than those arising from interest rate risk or foreign currency risk. As at June 30, 2010 and 2009, the Company is not exposed to other price risk.  Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in  market interest rates. The Company is subject to interest rate risk with respect to its cash equivalents and financial liabilities.  However, this risk is limited because of the short-term maturity of these instruments. The Company’s interest rate sensitivity  analysis suggests they are not exposed to significant interest rate risk.  Credit risk is the risk of a loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The  carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the  Company’s maximum exposure to credit risk. The Company’s credit risk is attributable to its liquid financial assets. The Company established an investment policy to avoid  any investments other than government t-bills, term deposits guaranteed by major Canadian financial institutions, or term  15 | P a g e (ii) Credit risk  Interest rate risk  Price risk  2010  2009  In thousands  US$  CDN  US$  CDN  Cash and cash equivalents  3,354  3,545  -  -  Accounts receivable 1,815  1,932  -  -  Accounts payable and accrued liabilities  (87)  (93)  -  -  2010  2009  In thousands  RM  CDN  RM  CDN  Cash and cash equivalents   383  125  6,590  1,187  Restricted cash  565  185  221  73  Forward contracts  -  -  31  10  Accounts receivable 8  3  13  4  Deposits and advances  260  85  2,892  956  Accounts payable and accrued liabilities  (10,464)  (3,428)  (5,749)  (1,901)  MANAGEMENT’S DISCUSSION & ANALYSIS  For the period ended June 30, 2010  Form51-102F 