DIVERSIFIED ROYALTY CORP.  Years ended December 31, 2014and 2013  ConsolidatedStatements of Operations and Comprehensive  Income (Loss)  (Expressed in Canadian dollars)  The accompanying notesare an integral part of theseconsolidated financial statements. 2014  2013  Royaltyincome  $ 3,246,991  $  -  Expenses:  Salaries and benefits  955,540  1,206,006  Share-based compensation  280,461  413,236  General and administration(note 14)  1,035,926  724,975  Professional fees(note 16)  561,056  396,028  Litigation(note 8)  1,377,073  652,179  Proxy contest costs 271,851  -  Acquisitioncosts  1,522,973  71,815  Operating costs(note 15)  -  466,718  Amortization  -  140,847  Impairment loss  -  36,439  Loss on disposal of assets held forsale and related  restructuring costs(note 18)  -  559,674  6,004,880  4,667,917  Loss fromoperations  (2,757,889)  (4,667,917)  Finance income(note 17)  759,956  1,000,983  Finance costs (note 17)  (359,041)  (15,028)  Loss before income taxes (2,356,974)  (3,681,962)  Income tax recovery(note 6)  9,779,212  95,500  Net income (loss) and comprehensiveincome (loss) for the year  $ 7,422,238  $ (3,586,462)  Basic income (loss) per share(note 13)  $  0.17  $  Diluted income (loss) per share(note 13)  0.17  2 