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FINANCIAL STATEMENTS Management's Responsibility e accompanying financial statements for KV Mortgage Fund Inc. (the "Fund") are the responsibility of management and have been prepared in accordance with Canadian generally accepted accounting principles. Management is responsible for ensuring that these financial statements, which include amounts based on estimates and judgments, are complete and reliable in all material respects. In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. e integrity and reliability of the Fund's reporting systems are achieved through the use of policies and procedures, and the appropriate delegation of authority and division of responsibilities. Management maintains a system of internal controls to provide reasonable assurance that assets are safeguarded and that reliable financial records are maintained. e independent auditors, KPMG LLP, whose report on their examination follows, have audited the financial statements in accordance with Canadian generally accepted auditing standards. e independent auditors' report outlines the nature of their examination, and their opinion on the Fund's financial statements. e directors of the Fund are responsible for review and final approval of the financial statements and for ensuring that management fulfills its financial reporting responsibilities. Original signed by Aleem Virani Original signed by Jonathan Herman Aleem Virani, CA, CBV Jonathan Herman, CA President Chief Financial Officer April 30, 2014 April 30, 2014 35

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