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<SEC-DOCUMENT>0000909567-03-000852.txt : 20030630
<SEC-HEADER>0000909567-03-000852.hdr.sgml : 20030630
<ACCEPTANCE-DATETIME>20030630101059
ACCESSION NUMBER:		0000909567-03-000852
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030331
FILED AS OF DATE:		20030630

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTERUNION FINANCIAL CORP
		CENTRAL INDEX KEY:			0000924805
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS BUSINESS CREDIT INSTITUTION [6159]
		IRS NUMBER:				870520294
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10KSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-28638
		FILM NUMBER:		03762776

	BUSINESS ADDRESS:	
		STREET 1:		1232 NORTH OCEAN WAY
		STREET 2:		PALM BEACH
		CITY:			PALM BEACH
		STATE:			FL
		ZIP:			33480
		BUSINESS PHONE:		5618440517

	MAIL ADDRESS:	
		STREET 1:		249 ROYAL PALM WAY
		STREET 2:		STE 301H
		CITY:			PALM BEACHF
		STATE:			FL
		ZIP:			33480
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>t10212e10ksb.txt
<DESCRIPTION>FORM 10-KSB
<TEXT>
<PAGE>
================================================================================

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-KSB

     PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2003          Commission File No: 000-28638

                        INTERUNION FINANCIAL CORPORATION
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

               Delaware                                     87-0520294
     -------------------------------                    ------------------
     (State or other jurisdiction of                       (IRS Employer
      incorporation or organisation)                    Identification No.)

   1232 N. Ocean Way, Palm Beach, Fl                          33480
- ----------------------------------------                    ---------
(Address of principal executive offices)                   (Zip Code)

           (561) 845-2849                                (561) 844-0517
      ---------------------------                  ----------------------------
      (Issuer's telephone number)                  (Issuer's telecopier number)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act: Common Stock $0.001
Par Value

Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $95,056

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and ask prices of such stock, as of a specified date within the past 60
days. $1,473,003 as of April 30, 2003

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of share outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: $0.001 Par Value Common Shares --
4,916,549 as of March 31, 2003.

Transitional Small Business Disclosure Format (Check One)  Yes      No [X]

================================================================================

                                  Page 1 of 20
<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                                   FORM 10-KSB
                                TABLE OF CONTENTS

PART I.........................................................................3
    Item 1  DESCRIPTION OF BUSINESS............................................3
    Item 2  DESCRIPTION OF PROPERTY............................................6
    Item 3  LEGAL PROCEEDINGS..................................................6
    Item 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................6
PART II........................................................................6
    Item 5  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........6
    Item 6  MANAGEMENT'S DISCUSSION AND ANALYSIS...............................8
    Item 7  FINANCIAL STATEMENTS..............................................13
    Item 8  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE..........................................14
PART III......................................................................14
    Item 9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
            PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT........14
    Item 10 EXECUTIVE COMPENSATION............................................15
    Item 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....17
    Item 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................18
    Item 13 EXHIBITS AND REPORTS ON FORM 8-K..................................19



                                  Page 2 of 20
<PAGE>

PART I

Item 1   DESCRIPTION OF BUSINESS

(A)      BUSINESS DEVELOPMENT

INTERUNION FINANCIAL CORPORATION (the "Company"), is a Delaware corporation. The
Company was incorporated on February 7, 1994. InterUnion strategy is to acquire,
when possible, a majority interest in financial services business. The Company
acquires for cash but preferably for Common Shares of the Company with
additional incentives for vending shareholders via Common Share Purchase
Warrants and Stock Options for management.

In 1999, the Company restructured its interest in its Canadian based investment
management activities in order to facilitate the growth strategy in that sector.
InterUnion Asset Management ("IUAM") became the holding company for the
Company's interest in the following investment management companies: Guardian
Timing Services Inc. ("GTS"); Leon Frazer, Black & Associates Limited ("LFB");
AIL Investment Services ("AILIS") and Black Investment Limited ("BIM"). The
purpose of IUAM was to pursue acquisitions on a tax effective basis as well as
secure an institutional strategic alliance. Merchant banking activities focus on
restructuring and/or consolidating as principal, in order to capitalize smaller
or privately/family held companies and attract institutional interest.
Investment banking activities focus on advisory services and raising of capital,
as agent, for small and medium size corporations, public or private which are
either looking for institutional financing or strategic alliances in sectors in
which InterUnion Financial Corporation has recognized research and corporate
finance strength.

The Company's policy is not to get involved in the corporation it advises or
provides financing to when acting as agent, and to limit the extent of its
involvement in the corporation in which it acts as principal.

On January 25, 1999, the Company, through a roll over of its interests,
reorganised its investment management companies: BIM, GTS and LFB, into IUAM.
The purpose of the reorganisation was to allow IUAM to implement its business
plan and continue its acquisition program, on a tax effective basis, as a
consolidator of Canadian investment management companies and get access to an
institutional strategic alliance. That restructuring has allowed the Company to
include its IUAM ownership in its merchant banking activities.

On January 25, 1999, IUAM issued 310,010 convertible preferred shares to Working
Venture Canadian Fund ("WVCF") for gross proceeds of C$5,000,000. (C$ is the
symbol used for the Canadian currency, unless preceded by C, all dollar amounts
are US dollars). Each convertible preferred share was convertible into one
common share of IUAM and gave the holder one vote per share. WVCF is a Canadian
institutional investor with more than $500 million in funds under
administration. WVCF's only fund is a labor sponsored fund with approximately
400 shareholders. Investors in these funds receive an immediate tax credit of up
to 40% of the amount invested.

On March 9,1999, WVCF converted their Convertible Preferred Shares in IUAM
Common Shares and acquired an additional 568,160 Common Shares for C$5,000,000.
At that point, the ownership structure of IUAM became WVCF 56% and IUFC 44%.
Concurrent with that last financing, IUAM incorporated a new entity, AIL
INVESTMENT SERVICES LIMITED ("AILIS"). The objective of AILIS being to create a
family of mutual funds in order to expand WVCF's product line. The funds raised
by expanding the products sold by WVCF's sales force would be managed by the
various investment managers within the IUAM group.

On November 22, 1999, at the Company's Shareholders' meeting it was approved to
amend the Certificate of Incorporation of the Company by allowing the Board of
Directors of the Company to set the total amount of common voting stock, each
share of stock having one vote, at $0.001 par value and shall be set by
resolution as adopted by the Board of Directors, which such number of authorised
shares may be changed from time to time, within our 10,000,000 share limitation,
as adopted by resolution(s) adopted by the Board of Directors.


                                  Page 3 of 20
<PAGE>

During December 1999, the Company at the recommendation of the Board of
Directors simplified its corporate structure by reducing the number of
subsidiaries through reallocation of their business to other operating entities
or the merging of their activities. To achieve simplification of the corporate
structure the following subsidiaries were dissolved:

         Credifinance Realty Corp., Toronto, Ontario, Canada
         Credifinance Securities Inc., Florida, USA
         Marbury Trading Corporation, Panama
         Bearhill Limited, British Virgin Islands

In December 1999, the Company formed a new, wholly owned, subsidiary named
InterUnion Merchant Group Inc. (IUMG), a British Virgin Islands based company.
InterUnion Merchant Group took over the assets and liabilities of Marbury
Trading Corporation and Bearhill Limited upon their liquidation. The Company
also changed name of I & B Inc. Delaware, USA, a wholly owned subsidiary to
Credifinance Capital Corp. (CFCC), Delaware, USA.

In September 2000, the Company decided to separate the investment banking and
investment management operations. In order to focus on its investment management
operation, the Company sold its investment banking operations to RIF Capital
Inc. (shareholder) for a consideration of the assumption of all the assets and
liabilities of the Company, exclusive of the Company's 42.8% ownership in IUAM
and its 100% ownership in IUAM. The shareholders of the Company approved the
sale at the annual meeting on November 17, 2000. The investment banking
operation was comprised of Credifinance Capital Corp. and its wholly owned
subsidiary, Credifinance Capital Inc. and the latter's wholly owned subsidiary,
Credifinance Securities Limited.

Following the sale, the Company owned a 42.8% interest in IUAM and 100% interest
in IUMG.

In December, 2001, InterUnion Financial Corporation ("InterUnion "or the
"Company"), sold its 42.8% owned subsidiary and main assets, InterUnion Asset
Management Limited ("IUAM"), to AMIC Canada Limited ("AMIC"), a wholly owned
subsidiary of Asset Management Investment Company, PLC, a corporation registered
in England and Wales.

IUAM based in Toronto, Canada, manages approximately C$1.5 billion for
institutions and individuals. The company had previously sold the controlling
interest of IUAM to Working Ventures Fund of Canada (Working Venture") for C$10
million in March, 1999.

AMIC paid C$10,550,000 in cash to the shareholders of IUAM: the Company and
Working Ventures, and assumed the C$3,500,000 Convertible Preferred Debenture
owed by IUAM to one of its investee companies. The Company received 75% of the
pro-rata proceeds on December 20, 2001 and received the 25% remainder on March
28, 2002, which was held in escrow, pending the issuance of a certificate under
Section 116 of the Income Tax Act (Canada).

The shareholders of IUAM agreed to pay a C$300,000 commission to IUAM's
President, Chief Executive Officer and Director, Selwyn Kletz, and to its Chief
Financial Officer, Russell Lindsay.

The nominees of the Company on the Board of Directors of IUAM resigned on
closing.

In accordance with Regulation S-X, the Company was required to disclose the
pro-forma consolidated balance sheet and the pro-forma consolidated statement of
operations had this disposition been completed as at the beginning of fiscal
2001. The Form 8-K/A was filed and dated March 15, 2002.


                                  Page 4 of 20
<PAGE>

(B)      BUSINESS OF ISSUER

GENERAL

The Company was formed as a "business bank" which would acquire, when possible,
a majority interest in financial services companies in order to expand its
investment banking activities.

InterUnion is both a holding and an operating company as it engages in
activities which can be separate from the activities of its named subsidiaries:
InterUnion derives independent revenues from its own investment banking
activities.

PRODUCTS AND/OR SERVICES OF ACTIVE SUBSIDIARIES

In addition to the operations of InterUnion Financial Corporation as the parent,
the Company owns an operating entity, InterUnion Merchant Group Inc.

The Company's investment banking operations, consisting of Credifinance Capital
Corp., Credifinance Capital Inc. and Credifinance Securities Limited, were sold
in September 2000 to RIF Capital Inc.

InterUnion Merchant Group ("IUMG"), is a B.V.I. corporation with administrative
offices in Geneva Switzerland. Following the Company's sale of its investment
banking operations, IUMG has had no activities. IUMG's investment in Receptagen
Ltd, a Canadian based company, was assumed by the Company prior to the sale of
the investment banking operation and the assumption of the assets and the
liabilities of the Company in the sale to RIF Capital Inc.

IUMG owns the proprietary rights to certain computer software known as ITM
Software, which is a computer software program used to generate buy and sell
signals with respect to any stock market monitored. The forecasting technique
used by the ITM market timing model involves general market indicators, interest
rates and monetary analysis, market perception indicators, and various
statistical data to detect trends. Due to an uncertain future of the software
and its inability to produce an identifiable cash flow in the near future, the
Company decided to depreciate the ITM Software fully. However, the Company will
update and maintain the software and sell it when a suitable offer to purchase
is received.

COMPETITION

Competition is a part of every business. InterUnion faces competition directly
and through its subsidiaries from larger, better-capitalized financial service
companies as well as smaller, also better capitalized niche companies.

GROWTH STRATEGY

Since inception, InterUnion's strategy has been to be a "business bank" i.e. to
be able to take advantage of investing/advisory opportunities. These
opportunities can include the temporary involvement of the Company in pure
financial service transactions. InterUnion's business will retain the purchase
and selling of companies or part of companies which will use InterUnion's
investment management services as well as its ability to pay cash and/or issue
its own security in order to complete corporate transactions. InterUnion's
strategy is also to reduce its shareholders' risk by ensuring that its book
value is spread among various interests and does not depend on only one sector
of activity or only one operating company. InterUnion has been successful in
managing its investors' risk as today there is a sufficient number of
professionals with adequate credentials and experience in the various operations
who at the same time are shareholders of InterUnion. In time, as InterUnion gets
a larger and more diversified shareholder base, that strategy should help
InterUnion to grow and enable it to obtain outside financing.



                                  Page 5 of 20
<PAGE>

GOVERNMENT REGULATION

The operating activities of the Company are not subject to governmental
regulatory agencies.

EMPLOYEES

InterUnion has 1 full time employee.

Item 2   DESCRIPTION OF PROPERTY

The Company does not own real estate and has no leasehold interests in real
estate. The Company maintains an office at 1232 North Ocean Way, Palm Beach.

Item 3   LEGAL PROCEEDINGS

There is no current or pending litigation.

Item 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no shareholders meetings during the period covered by this report.

PART II

Item 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)       MARKET INFORMATION

The issuer's common equity is traded on the NASD OTC Bulletin Board under the
symbol: IUFN.

The high and low sale prices for each quarter within the last two fiscal years
are as follows.

<TABLE>
<CAPTION>
Period            Open           High          Low          Close
- ------            ----           ----          ----         -----
<S>               <C>            <C>           <C>          <C>
FY02 Qtr 1        1.44           1.95          1.40         1.90
FY02 Qtr 2        1.90           6.50          1.90         3.25
FY02 Qtr 3        3.25           3.25          2.00         2.10
FY02 Qtr 4        2.10           2.10          1.01         1.02
FY03 Qtr 1        1.07           1.35          0.75         0.75
FY03 Qtr 2        0.75           1.75          0.20         0.50
FY03 Qtr 3        0.71           0.76          0.20         0.71
FY03 Qtr 4        0.45           0.50          0.15         0.45
</TABLE>


(b)       HOLDERS

The approximate number of holders of record of each class of stock is as
follows:

<TABLE>
<CAPTION>
Class of Stock                                     Number of Holders
- ------------------                                 -----------------
<S>                                                <C>
Common Share                                       323
Class A Preferred                                  None issued(1)
Class B Preferred                                  None issued
Class C Preferred                                  None issued
</TABLE>

     (1)  1,500,000 Class A Preferred shares, representing 100% of the issued
          shares in this class were converted to 15,000,000 common shares on a
          10 for 1 basis.


                                  Page 6 of 20
<PAGE>

(c)       DIVIDENDS

The Company has never declared or paid dividends on its common stock or its
preferred stock. There are no restrictions, other than state law that may be
applicable; those limit the ability to pay out all earnings as dividends.
However, during the second quarter of Fiscal 2003, an extraordinary cash
dividend of $2,549,010 ($1.33 per common share) was paid to the shareholders of
record on August 23, 2002. The Company also distributed 600,000 common shares of
Kyto Pharmaceutical Inc (0.3131 Kyto share per common share), which it had
acquired in settlement of a debt, to share holders of record as of August 23,
2002. The Board of Directors does not anticipate paying any dividends in the
foreseeable future; it intends to retain the earnings, which could be
distributed, if any, for the operations, expansion and development of its
business.

(d)       RECENT SALES OF UNREGISTERED SECURITIES

          (i)  SALES PURSUANT TO REGULATION D

The Company has not made any sales within the past three (3) years in reliance
upon an exemption from the registration requirements of the Securities Act of
1933, as amended, as contained within Regulation D, promulgated by the
Securities and Exchange Commission.

(B)       SALES PURSUANT TO REGULATION S

The following sales of Common Stock were made by the Company within the past
three (3) years in reliance upon an exemption from the registration requirements
of the Securities Act of 1933, as amended, as contained within Regulation S
promulgated by the Securities and Exchange Commission:

<TABLE>
<CAPTION>
Title of Class   Number of       Price per
(1)(2)(3)(4)(5)     Shares          Share      Consideration          Commission                  Date
- ---------------  ---------       ---------     -------------          ----------         --------------
<S>             <C>                 <C>            <C>                 <C>               <C>
Common(6)          229,453          5.00           1,147,265              Nil                April 1997
Common(7)           60,000          3.00             180,000              Nil                 June 1997
Common(8)           15,000          6.00              90,000              Nil               August 1997
Common(9)          213,194          4.00             852,776              Nil             February 1998
Common(10)         216,640          3.64             788,569              Nil                April 1998
Common(11)          17,002          4.00              68,008              Nil                  May 1998
Common              35,000          4.00             140,000            7,000                 June 1998
Common(11)         262,142          4.00           1,048,568              Nil                 July 1998
Common(11)          10,000          4.00              40,000              Nil             December 1998
Common(11)         180,000          3.50             630,000           63,000             February 1999
Common(12)          25,000          3.50              87,500              Nil                March 1999
Common(11)           1,140          4.00               4,560              Nil                March 1999
Common(13)         114,500          0.50              57,250              Nil             November 1999
Common (14)      2,014,198          0.40             805,679              Nil             November 1999
Common(15)      15,000,000          0.01             150,000              Nil            September 2000
Common(16)          16,575          3.02              50,000              Nil                April 2002
Common(17)       3,000,000          0.55           1,650,000              Nil               August 2002
</TABLE>

NOTES TO SALES PURSUANT TO REGULATION S

     (1)  All sales were made directly by the Company as issuer.

     (2)  The class of persons to whom the Company sold the above-referenced
          securities were individuals or entities whom the Company had reason to
          believe were either accredited investors within the meaning of
          Regulation Section 230.501 or were investors having such knowledge and
          experience in financial and business matters that the purchaser could
          properly evaluate the risks and merits of the investment.

     (3)  All sales as shown above were made to non-U.S. persons.


                                  Page 7 of 20
<PAGE>
     (4)  The company specifically relied upon compliance with Regulation S as
          promulgated by the Securities and Exchanges Commission. The Company
          was in compliance with Category 3 of Rule 903 of Regulation S which
          provides an issuer safe harbour. Under this Category the Company
          complied with the two general conditions of Rule 903(a) and (b) and to
          transactional and offering restrictions by the execution of an
          investor Subscription Agreement, and the placing of the appropriate
          restrictive legend on the stock certificate(s).

     (5)  These shares were issued on the conversion of a debenture.

     (6)  These shares were issued with regards to the Receptagen restructuring.
          The consideration was determined by the price of the common stock at
          the time of the transaction. These shares were given to a non-related
          party.

     (7)  These shares were issued upon the exercise of employee stock options,
          previously granted to Mr. Selwyn J. Kletz.

     (8)  These shares were issued upon the exercise of warrants.

     (9)  These shares were issued in the acquisition of IUAM. The consideration
          received was 91.55% of all of the issued and outstanding shares of
          IUAM. The valuation of IUAM was determined by an arms lengths
          transaction. These shares were given to a non-related party.

     (10) These shares were issued in the acquisition of BIM. The consideration
          received was 45% of all of the issued and outstanding shares of BIM.
          The valuation of BIM was determined by an arms lengths transaction.
          These shares were given to a non-related party.

     (11) These shares were issued in settlement of an equal amount due to the
          purchaser of the common stock.

     (12) These shares issued for services received from the Chairman of the
          Company, Mr. Robert Crosbie.

     (13) The shares issued in settlement of note payable.

     (14) The shares issued in settlement of note payable.

     (15) These shares were issued on the conversion of 1,500,000 shares of
          Class "A" Preferred at ratio of 10 to 1.

     (16) These shares issued for services received from a Director of the
          Company, Mr. Robert Crosbie.

     (17) These shares issued for consulting services received.


Item 6    MANAGEMENT'S DISCUSSION AND ANALYSIS

(a)       OVERVIEW

InterUnion Financial Corporation ("IUFC" or "InterUnion") was incorporated on
February 7, 1994. InterUnion strategy is to acquire, when possible, a majority
interest in financial services business. The Company acquires for cash but
preferably for Common Shares of the Company with additional incentives for
vending shareholders via Common Shares Purchase Warrants and Stock Options for
management.

In 1999, the Company restructured its interest in its Canadian based investment
management activities in order to facilitate the growth strategy in that sector.
InterUnion Asset Management became the holding


                                  Page 8 of 20
<PAGE>

company for the Company's interest in the following investment management
companies: Guardian Timing Services Inc. ("GTS"); Leon Frazer, Black &
Associates Limited ("LFB"); AIL Investment Services ("AILIS") and Black
Investment Limited ("BIM"). The purpose of the restructuring of IUAM was to
pursue acquisitions on a tax effective basis as well as secure an institutional
strategic alliance.

Also in 1999, the Company simplified its corporate organisation chart:
Credifinance Realty Capital Corp. (Ontario), Credifinance Securities Inc.
(Florida); Marbury Trading Corp. (BVI) and Bearhill Ltd. (BVI) were dissolved. A
new company, InterUnion Merchant Group Inc. ("IUMG") (BVI), took over the assets
and liabilities of the dissolved companies as of January 1st, 2000. As of that
date as well, the name of I&B Inc. (Delaware) was changed to Credifinance
Capital Corp. (Delaware).

In June 2000, the Company acquired 243,750 of its Common Shares at the rate of
$0.6153 per share in settlement of a $150,000 Note Receivable from an unrelated
party.

During the second calendar quarter of 2000, the Company sold its investment
banking subsidiary, Credifinance Capital Corp. (Delaware) "CFCC" to its majority
shareholder RIF Capital Inc ("RIF"). The transaction was made effective
September 30, 2000, and was approved by the shareholders of the Company at the
Company's Annual and Special Shareholders meeting in November 2000. The purpose
of the transaction was to make the Company a "pure play" and allow more
flexibility to either raise capital or use its Common Stock as currency while
pursuing acquisitions of investment management companies in Canada through IUAM
or, alone, elsewhere. It also allows an opportunity for the shareholders of IUAM
to roll over their interest in a tax effective manner into the Company while,
offering at the same time the possibility to the minority shareholders of the
IUAM investee companies, to exchange the share they hold in private companies
for common stock of a public entity.

In September 2000, the Company converted its Class "A" Preferred Shares into
Common Shares at the rate of 1 to 10. Consequently, in lieu of 1,500,000 Class
"A" Preferred Shares, the Company issued 15,000,000 Common Shares.

In November 2000, in a Special Meeting of the Shareholders of the Company, it
was resolved to execute a reverse split in the issued and outstanding common
stock of the Company in the ratio of ten (10) to one (1). Consequently, the
number of issued and outstanding common stock of the Company reduced to
1,899,974.

In December, 2001, InterUnion Financial Corporation ("InterUnion" or the
"Company"), sold its 42.8% owned subsidiary and main asset, InterUnion Asset
Management Limited ("IUAM"), to AMIC Canada Limited ("AMIC"), a wholly owned
subsidiary of Asset Management Investment Company, PLC, a corporation registered
in England and Wales.

IUAM, based in Toronto, Canada, manages approximately C$1.5 billion for
institutions and individuals. The Company had previously sold the controlling
interest of IUAM to Working Ventures Fund of Canada ("Working Ventures") for
C$10 million in March 1999.

AMIC paid C$10,550,000 in cash to the shareholders of IUAM: the Company and
Working Ventures, and assumed the C$3,500,000 Convertible Preferred Debenture
owed by IUAM to one of its investee companies. The Company received 75% of the
pro-rata proceeds on December 20, 2001 and received the 25% remainder on March
28, 2002, after the issuance of a certificate under Section 116 of the Income
Tax Act (Canada).

The Company, since the sale of its interest into IUAM, has been reviewing a
number of business opportunities. In view of its cash position, the Company has
received a number of proposals: however, current markets and general economic
conditions are prompting management to carefully assess those business
opportunities.



                                  Page 9 of 20
<PAGE>

Revenues

Total revenues for the year ended March 31, 2003 were $95,056, an increase of
138% from $39,928 the previous year.

Cost of Revenues

During the year 2003, the selling, general and administrative expenses increase
by $1,669,983 to $1,836,884. This increase was on account of a service agreement
entered into in August of 2002.

Interest Income

The Company's interest income mainly consisted of interest from loans to
affiliated companies and the interest on credit balances maintained with the
banks. The company's interest earnings decreased by 44% to $15,100 in fiscal
2003.

Gain/Loss on Issuance of Security

The Company had no gain or loss on issuance of securities during FY 2003 and FY
2002.

Exposure to International Operations

The Company's revenues are generated in North America, however, it has a 100%
owned subsidiary in British Virgin Islands. The Company, therefore, does not
have a significant exposure to currency or country risk.

Seasonal

Neither the Company nor its subsidiaries operate in any business which could be
affected by changes in season.

(b)       RESULTS OF OPERATIONS


Financial highlights are as follows:
<TABLE>
<CAPTION>
                                          2003          2002          2001
                                       ----------     ---------    ----------
<S>                                    <C>            <C>          <C>
Revenues                                   95,056        39,928        333,029
Loss from Continuing Operations        (1,727,453)     (140,840)      (740,238)
Discontinued operation                          0             0       (422,232)
Disposal of Equity Investment                   0       518,328    (1,1163,455)
Net Profit (Loss)                      (1,727,453)      377,487     (2,325,925)

Assets                                     98,558     3,238,372      3,144,335
Shareholders' Equity                       65,502     3,192,100      2,764,613
Working Capital                            65,502     2,474,502        (90,619)
Common Shares Outstanding               4,916,549     1,916,549      1,899,974
Book Value per Common Share                  0.01          1.67           1.46
</TABLE>


                                 Page 10 of 20
<PAGE>

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

(1)       Overview

During fiscal 2003 revenue of the Company amounted to $95,056 as compared to
$39,928 in the fiscal 2002. The total expenses for the year ended March 31, 2003
was 1,822,509 as compared to $180,768 in fiscal 2002, representing an increase
of $ 1,641,741. The Company's net loss for fiscal year 2003 was $1,727,453 as
compared to income of $377,487 in fiscal 2002. The Company recorded a consulting
expense of $1,650,000 as a result of shares issued on account of a service
agreement.

Loss per share for fiscal 2003 was $0.418 versus a gain of $0.197 a year
earlier. The number of common shares outstanding as of March 31,2003 is
4,916,549 versus 1,916,549 as of March 31, 2002.

(2)       Revenues

For the fiscal year 2003, the Company's revenues stood at $95,056 as compared to
$39,928 for fiscal 2002, representing an increase of $55,128 or 138%.

(3)       COST OF REVENUES

For the year ended March 31,2003, the selling, general and administrative
expenses increase by $1,669,983 to $1,834,884.

(4)       NET LOSS

Net loss for the year ended March 31, 2003 was $1,727,453 as compared to a gain
of $377,487 for the fiscal year 2002, representing a decrease of $2,104,940.

Basic loss per share for the year 2003 was $0.418 versus a gain of $0.197 the
previous year. Weighted average common shares outstanding in Fiscal 2003 was
4,135,727 versus 1,916,421 in Fiscal 2002.

Fiscal Year 2002 Compared to Fiscal Year 2001

(1)       Overview

During fiscal 2002 revenue of the Company amounted to $39,928 as compared to
$333,029 in the fiscal 2001. The total expenses for the year ended March 31,
2002, excluding equity pick-up of IUAM was $180,768 as compared to $1,073,267 in
fiscal 2001, representing a decrease of $ 892,498 or 83.15%. The Company's
equity share in the loss of IUAM for the year 2002 was $238,342 in comparison to
$1,163,455 in fiscal 2001. The Company recorded a net profit of $756,669 from
the sale of IUAM in December 2001. The Company's net profit for the fiscal year
2002 was $377,487 as compared to a loss of $2,325,925 in fiscal 2001,
representing an increase of $2,703,412 or 116.23%.

The Company does not expect to record future losses through amortization or
write-downs.

Profit per share for fiscal 2002 was $0.197 versus a loss of $2.016 a year
earlier. The number of common shares outstanding as of March 31, 2002 is
1,916,549 versus 1,899,974 as of March 31, 2001.

(2)       Revenues

For the fiscal year 2002, the Company's revenues stood at $39,928 as compared to
$333,029 for fiscal 2001, representing a decline of $293,101 or 88.01%.



                                 Page 11 of 20
<PAGE>

(3)       COST OF REVENUES

Until 2nd quarter of FY2001 the principal elements comprising costs of revenues
were commissions and salaries paid to non administrative personnel who were
remunerated solely on the basis of their performance. However, due to disposal
of the investment banking business in FY2001 the cost of revenue primarily
consisted of general, selling and administrative expenses. During the year 2002,
the selling, general and administrative expenses declined by $199,706 to
$166,901 representing a decline of 54.7% over fiscal 2001.

(4)       NET PROFIT

Net profit for the year ended March 31, 2002 was $377,487 as compared to a loss
of $2,325,925 for the fiscal year 2001, representing an increase of $2,703,412
or 116.23%. The net profit for the fiscal 2002 was contributed mainly by the
sale of 42.8% owned subsidiary of IUAM in December, 2001.

Basic profit per share for the year 2002 was $0.197 versus a loss of $2.016 the
previous year. Weighted average common shares outstanding in Fiscal 2002 was
1,916,421 versus 1,153,759 in Fiscal 2001.

(c)       LIQUIDITY AND CAPITAL RESOURCES

In order to meet its growth plans and fund any operating cash requirements, the
Company's policy is to issue additional capital stock, when possible. To date
the Company has done this either through the issuance of Confidential Private
Placement Offerings under Regulation "D" or Regulation "S". The following are
details of these private placements during the previous six fiscal years:

<TABLE>
<CAPTION>
Date                          # of Shares           Amount            Type
- ---------------               -----------         ---------      --------------
<S>                           <C>                 <C>            <C>
April 1997                       229,453          1,147,265      Regulation "S"
June 1997                         60,000            180,000      Regulation "S"
August 1997                       15,000             90,000      Regulation "S"
February 1998                    213,194            852,776      Regulation "S"
April 1998                       216,640            788,569      Regulation "S"
May 1998                          17,002             68,008      Regulation "S"
June 1998                         35,000            140,000      Regulation "S"
July 1998                        262,142          1,048,568      Regulation "S"
December 1998                     10,000             40,000      Regulation "S"
February 1999                    180,000            630,000      Regulation "S"
March 1999                        25,000             87,500      Regulation "S"
March 1999                         1,140              4,560      Regulation "S"
November 1999                    114,500             57,250      Regulation "S"
November 1999                  2,014,198            805,679      Regulation "S"
September 2000                15,000,000            150,000      Regulation "S"
April 2002                        16,575             50,000      Regulation "S"
August 2002                    3,000,000          1,650,000      Regulation "S"
</TABLE>


All of the Company's Class A Preferred Shares were converted into common shares
in Fiscal 2001.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of results of operations and financial conditions
are based upon the financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America
(GAAP). The preparation of these financial statements requires management to
make estimates and judgement that affect the reported amounts of assets,
liabilities, revenue and expenses. Management bases its estimates on historical
experience and on various other assumptions that they believe to be reasonable
under the circumstances. Note 2 of the "Notes to Financial Statement" includes
Summary of the significant accounting policies and methods used in
preparation of the financial statements.

                                 Page 12 of 20
<PAGE>

New Accounting Pronouncements

Impact of Recent Accounting Pronouncement: In May 2002 the Financial Accounting
Standard Board ('FASB') issued SFAS 145 "Rescission of FASB Statement N0. 4, 44,
and 64. Amendment of FASB Statement No. 13 and Technical Corrections". This
pronouncement requires that gains or losses arising from early extinguishments
of debt that are part of a company's recurring operation (I.e., a risk
management strategy) would not be reported as extraordinary items. The statement
also provides that modifications to a capital lease that make it operating lease
be accounted for as a sale-leaseback.

In June 2002, the Financial Accounting Standards Board ('FASB') issued SFAS 146
"Accounting for cost associated with exit or disposal activities". This
pronouncement replaces Emerging Issues Task Force (EITF) Issue No. 94-3
"Liability Recognition for certain employee termination benefits and other costs
to exit an activity". It requires that cost associated with exit or disposal
activities be recognized when they are incurred rather than at the date of
commitment to an exit or disposal plan.

In December 2002, the Financial Accounting Standards Board ('FASB') issued SFAS
148 "Accounting for Stock-Based Compensation-Transition and Disclosure-an
amendment of FASB Statement 123"- This Statement amends SFAS 123 "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
compensation. It also requires prominent disclosures about the methods of
accounting for stock-bases compensation and the method used on reported results.

Concluding Remarks

There are no other known trends, events or uncertainties that may have, or are
reasonably likely to have, a material impact on the Company's short-term or
long-term liquidity.

In addition, there is no significant income or losses that have risen from the
Company's continuing operations that has not been analysed or discussed above.
Nor has there been any material change in any line item that is presented on the
financial statements that has also not been discussed above.

This Form 10-KSB contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. For this purpose any
statements contained in this Form 10-KSB that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, words such as "may", "will", "expect", "believe", "anticipate",
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within the Company's control. These
factors include but are limited to economic conditions generally and in the
industries in which the Company's customers & investee participate in;
competition within these industries and that of the Company's, including
competition from much larger competitors; technological advances which could
render the Company's services less competitive or absolute; failure by the
Company successfully to improve its skills or anticipate current or prospective
customers' needs; price increases or other limitations by the Company for use or
its services and delays, reductions or cancellations of mandates previously
placed with the Company.

Item 7    FINANCIAL STATEMENTS

The audited consolidated financial statements for InterUnion Financial
Corporation, covering fiscal years ended March 31, 2003 and 2002 are submitted
in compliance with the requirements of Item 310 of Regulation S-B.


                                 Page 13 of 20
<PAGE>

Items 8   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

During the last two fiscal years and subsequent interim period to the date
hereof, there were no disagreements between InterUnion and its certifying
accountants on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to satisfaction of the certifying accountants, would have caused it
to make a reference to the subject matter of the disagreements in connection
with its reports.

None of the reportable events described in Item 304(a) (1) (ii) occurred with
respect to InterUnion within the last two fiscal years and the subsequent
interim period to the date of change. During the last two fiscal years and the
subsequent interim period to the date of change, InterUnion did not consult
Mintz & Partners regarding any matter or events set forth in Item 304(a) (2) (i)
and (ii) of Regulation S-B.

PART III

Item 9    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

(a)       IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
Name,
Municipality of Residence   Age   Length of Service
- -------------------------   ---   ----------------------------------------------
<S>                         <C>   <C>
Georges Benarroch           56    Director and appointed as President and Chief
Paris, France                     Financial Officer; March 21, 1994

T. Jack Gary, III           61    Appointed as Secretary
West Palm Beach, Florida          January 30, 1995

Muriel Woodtli              52    Appointed as Director
Geneva, Switzerland               November 22, 1999

Peter Prendergast           46    Appointed as Director
Toronto, Ontario, Canada          June 3, 2002
</TABLE>

GEORGES BENARROCH is the President, Chief Executive Officer of the Company as
well as a Director and Chairman of the Audit Committee. Mr. Benarroch is also a
Director of Credifinance Capital Corp., the Chief Executive Officer, and
Chairman of the Board of Credifinance Securities Limited, President, Chief
Executive Officer, and Chairman of the Board of Credifinance Capital Inc.

T. JACK GARY, III is the Secretary of the Company. He is Manager of the West
Palm Beach, Florida, office of Raymond James & Associates, a national brokerage
firm, having held that position since 1995 as well as a Director. Mr. Gary will
devote the time required to fulfil his duties as Secretary at InterUnion.

MURIEL WOODTLI served as a Director of the Company. She is a legal assistant in
Geneva, Switzerland. Ms. Woodtli's duties for InterUnion will be limited to her
participation at Board Meetings and as a member of the Audit Committee.

Peter Prendergast is a Director of the Company.


                                 Page 14 of 20
<PAGE>

     (1)  No director of InterUnion is currently a director of any other
          reporting company.

     (2)  Under Section 1, ARTICLE III, of the By-Laws, the directors shall
          serve until the next annual meeting of the stockholders, as prescribed
          by the Board of Directors, at which time directors are elected by the
          stockholders.

     (3)  In accordance with Item 405 no director, executive officer and
          beneficial owner of more than ten percent (10%) of any class of equity
          securities of the Company failed to file on a timely basis reports
          required by section 16(a) of the Exchange Act during the most recent
          two fiscal years to the best of the Company's knowledge.

(b)       AUDIT COMMITTEE

The Audit Committee had no meetings since approving the financial statements for
the previous year.

(c)       IDENTIFY SIGNIFICANT EMPLOYEES

The Company does not expect to receive a significant contribution from employees
that are not executive officers.

(d)       FAMILY RELATIONSHIPS

Currently, there are no directors, executive officers or persons nominated or
persons chosen by the Company to become a director or executive officer of the
Company who are directly related to an individual who currently holds the
position of director or executive officer or is nominated to one of the said
positions.

(e)       INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

There are no material events that have occurred in the last five years that
would affect the evaluation of the ability or integrity of any director, person
nominated to become a director, executive officer, promoter or control person of
the Company.

(f)      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

For the two fiscal years ended March 31, 2003, to the best of the Company's
knowledge no director, executive officer and beneficial owner of more than ten
percent (10%) of any class of equity securities of the Company failed to file on
a timely basis reports required by section 16(a) of the Exchange Act.



                                 Page 15 of 20
<PAGE>

Item 10   DIRECTOR AND OFFICER COMPENSATION

(A)       SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Name and                 Fiscal    Base          Other         Long Term       All other         Total
Principal Position       Year      Salary        Bonus         Compensation    Compensation      Compensation
- ------------------       ------    ----------    ----------    ------------    ------------      -------------
<S>                      <C>       <C>           <C>           <C>             <C>               <C>
Georges Benarroch        2003      None          None          None            None              None
President & CEO          2002      None          None          None            $750(1)           $750
                         2001      None          None          None            None              None
                         2000      None          None          None            $13,387(1)        $13,387
                         1999      None          None          None            $30,000(1)        $30,000


Robert W. Crosbie        2003      None          None          None            None              None
Director                 2002      None          None          None            None              None
                         2001      None          $50,000(3)    None            None              $ 50,000
                         2000      None          None          None            None              $ 50,000
                         1999      $18,230(2)    $87,500(5)    None            $83,044(2)        $188,774


Muriel Woodtli           2003      None          None          None            None              None
Director                 2002      None          None          None            $1,277(4)         $1,277
                         2001      None          None          None            $2,000(4)         $2,000
                         2000      None          None          None            $1,750(4)         $1,750
                         1999      None          None          None            None              None


T. Jack Gary             2003      None          None          None            None              None
Corporate                2002      None          None          None            None              None
Secretary                2001      None          None          None            None              None
                         2000      None          None          None            None              None
                         1999      None          None          $42,500(6)      None              $42,500


Martin Kovnats           2003      None          None          None            $ 1,121(7)        $ 1,121
Vice-President           2002      None          None          None            $33,523(7)        $33,523
                         2001      None          None          None            $ 6,393(7)        $ 6,393
                         2000      None          None          None            $12,388(7)        $12,388
                         1999      None          None          None            None              None
</TABLE>

     (1)  This amount represents life, disability and medical insurance and
          certain expenses.

     (2)  This was paid by Black Investment Management Limited, a subsidiary of
          IUAM, for services unrelated to those offered to InterUnion Financial
          Corporation.

     (3)  This represents 16,575 Common Shares of the Company, issued in Fiscal
          2002.

     (4)  Director's fees.

     (5)  This represents 25,000 Common Shares of the Company.

     (6)  The amount represents 50,000 stock option with an expiry date of
          September 3, 2001 and an exercise price of $4.00 per share.

     (7)  Mr. Martin Kovnats is a Vice President of IUFC. He represents IUFC at
          the Board Meetings of IUAM. The amount indicated above is paid
          directly to his firm, Aird & Berlis, for the time spent on IUFC
          business.



                                 Page 16 of 20
<PAGE>

(B)       ALL COMPENSATION COVERED

The Company has no formal options, warrants, SARs, long-term incentive plans,
pension or profit sharing plans, or other compensation plans, in effect
regarding any employees of the Company.

The Company feels that it does not have to include executive compensation for an
executive officer of any subsidiary because under Rule 3b-7 under the Exchange
Act (17 CFR 240.3b-7) no executive officer(s) of any subsidiary perform(s)
policy making functions for the registrant.

The Company has no agreement or understanding, express or implied, with any
officer or director, or any other person regarding employment with the Company
or compensation for services.

Section 14 of ARTICLE III of the By-Laws of InterUnion provides that directors
do not receive any stated salary for their services as directors. However, by
board resolution, a fixed fee and expenses of attendance may be allowed for each
meeting. These limitations do not affect compensation for a person serving as an
officer or otherwise for the Company and receiving compensation therefore. The
Company's Board of Directors has approved payment of $1,750, $2,000 and $1,277
respectively for the services of each of its independent directors for the
fiscal year ending March 31, 2000, 2001 and 2002.

Item 11   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following persons (including any group as defined in Regulation S-B, Section
228.403) are known to InterUnion Financial Corporation, as the issuer, to be the
beneficial owner of more than five percent (5%) of any class of the said
issuer's voting securities.

<TABLE>
<CAPTION>
Title of     Name and Address of          Amount and Nature of     Percentage
Class        Beneficial Owner             Beneficial Owner         of Class
- --------     --------------------------   --------------------     ----------
<S>          <C>                          <C>                      <C>
Common       RIF Capital Inc. (1)                1,688,016         34.33%
             Price Waterhouse Centre
             PO Box 634C
             St. Michael, Barbados, WI

                                          Total  1,688,016         34.33%
</TABLE>

     (1)  RIF Capital Inc. is wholly owned by Central Investment Trust.
          Safeguardian Limited is the sole protector of Central Investment Trust
          and is neither a beneficiary of the Trust or its subsidiaries.

(b)       SECURITY OWNERSHIP OF MANAGEMENT

In September 2000, the Company approved the conversion of 1,500,000 shares of
Class A Preferred stock, owned by RIF Capital Inc., into 15,000,000 common
shares of the Company.


                                 Page 17 of 20
<PAGE>
The following information lists, as to each class, equity securities
beneficially owned by all directors and nominees, and of the directors and
nominees of the issuer, as a group.

<TABLE>
<CAPTION>
Title of     Name and Address of                  Amount and Nature of      Percentage
Class        Beneficial Owner                     Beneficial Owner          of Class
- --------     --------------------------           --------------------      ----------
<S>          <C>                                  <C>                       <C>
Common       Safeguardian Limited                            1,688,016      34.33%
             PO Box 316                                        Trustee
             Jardine House                            (voting power of
             1 Hesley Street                        Central Investment
             St. Helier, Jersey, UK JE4 8UD                      Trust





Common       Georges Benarroch                                     ---       0.00%
             68 rue Spontini
             Paris, France  75016

Common       T. Jack Gary, III                                     ---       0.00%
             515 North Flagler Drive, #1500
             West Palm Beach, Florida  33401

Common       Muriel Woodtli                                        ---       0.00%
             10 Rue Pierre-Fatio
             Geneva, Switzerland

Common       Directors and Executive Officers                               34.33%
             as a group (2 people)
</TABLE>


          NOTE TO (A) AND (B): As to the beneficial owner(s) of the securities
          listed above in (a) and (b), no such owner has any right to acquire
          within sixty (60) days or otherwise, the right to acquire shares from
          options, warrants, rights, conversion privileges or similar
          obligations.

(c)       CHANGES IN CONTROL

Currently, there is no such arrangement that may result in a change in control
of the Company.

Item 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a)       CERTAIN RELATED TRANSACTIONS

Detail of related party transactions are described in note 8 of the
Consolidated Financial Statements.



                                 Page 18 of 20
<PAGE>

Item 13   EXHIBITS AND REPORTS ON FORM 8-K

(a)       Listing of Exhibits

<TABLE>
<CAPTION>
Exhibit                                                                                                Page
Table Number   Exhibit Name                                                                           Number
- ------------   ------------                                                                           ------
<S>            <C>                                                                                      <C>
(2)(i)         Unanimous Consent in Lieu of The First Meeting of the Board  of Directors of AU 'N       +
               AG, INC. (A Delaware Corporation)

(2)(ii)        Pre-Organisation Subscription and Letter of Non-Distributive Intent                      +

(2)(iii)       Plan and Agreement of Merger                                                             +

(2)(iv)        Certificate of Merger, dated February 15, 1994                                           +

(3)(i)         Certificate of Incorporation of AU 'N AG, INC. Dated February 15, 1994                   +

(3)(ii)        Certificate of Amendment of Certificate of Incorporation of AU 'N  AG, INC. Dated        +
               April 11, 1994

(3)(iii)       Certificate of Amendment of Certificate of Incorporation of AU 'N  AG, INC. Dated        +
               April 11, 1994

(3)(iv)        Bylaws of InterUnion Financial Corporation                                               +

(4)            Instruments Defining the Rights of Security Holders Including Indentures                 +
</TABLE>

               +    Incorporated by reference to the Company's Registration
                    Statement on Form 10-KSB filed on June 20, 1997.

(b)       Reports on Form 8-K Subsequent to the Third Quarter

<TABLE>
<CAPTION>
Exhibit                                                                                                Page
Table Number   Exhibit Name                                                                           Number
- ------------   ------------                                                                           ------
<S>            <C>                                                                                      <C>

(10)           Working Venture Canadian Fund's Investment in InterUnion Asset Management Limited        ++

(16)           Letter on change in certifying accountant                                                +++

(2)            Disposition of Asset - InterUnion Asset Management Ltd.                                  ++++
               as at December 20, 2001
</TABLE>

               ++   Incorporated by reference to the Company's Registration
                    Statement on Form 8-K filed on March 16, 1999.

               +++  Incorporated by reference to the Company's Registration
                    Statement on Form 8-K filed on April 27, 1999 and May 6,
                    1999.

               ++++ Incorporated by reference to the Company's Registration
                    Statement on Form 8-K filed on March 15, 2002.



                                 Page 19 of 20
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorised.

                                INTERUNION FINANCIAL CORPORATION
Date: June 27, 2003             By: /s/ Georges Benarroch
- -------------------
                                Georges Benarroch
                                Director, President and Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in their capacities on the
dates indicated.

<TABLE>
<CAPTION>
     Signature                                   Title                                   Date
- ----------------------       -----------------------------------------------         -----------
<S>                          <C>                                                     <C>
s/s  Georges Benarroch       Director, President and Chief Executive Officer         June 27, 2003
- ----------------------
Georges Benarroch

s/s  Muriel Woodtli          Director                                                June 27, 2003
- ----------------------
Muriel Woodtli
</TABLE>


                                 Page 20 of 20
<PAGE>






================================================================================

                                                INTERUNION FINANCIAL CORPORATION

                                               CONSOLIDATED FINANCIAL STATEMENTS

================================================================================
                                                         MARCH 31, 2003 and 2002
================================================================================


<PAGE>
                        INTERUNION FINANCIAL CORPORATION

                             MARCH 31, 2003 and 2002


                                    CONTENTS

                                                                Page

   Independent Auditors' Report:                                   F-2

   Consolidated Financial Statements:

   Consolidated Balance Sheets                                     F-3

   Consolidated Statements of Operations                           F-5

   Consolidated Statements of Shareholders' Equity                 F-6

   Consolidated Statements of Cash Flows                           F-7

   Notes to Consolidated Financial Statements              F-8 To F-17


================================================================================

<PAGE>
                          INDEPENDENT AUDITORS' REPORT

================================================================================

To The Directors and Shareholders of
InterUnion Financial Corporation

We have audited the accompanying consolidated balance sheets of InterUnion
Financial Corporation as of March 31, 2003 and 2002 and the related consolidated
statements of operations, shareholders' equity and cash flows for the years then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of InterUnion Financial
Corporation as of March 31, 2003 and 2002, and the results of its operations and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.

Toronto, Canada                                         /s/ Mintz & Partners LLP
June 19, 2003                                              Chartered Accountants


                                                                             F-2
<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS AT MARCH 31                                            2003         2002
- ------------------------------------------------------------------------------
<S>                                                     <C>         <C>
                         A S S E T S
CURRENT ASSETS
    Cash and cash equivalents                           $97,319     $2,464,985
    Receivable from Affiliates                                0         41,226
    Prepaid expenses and other current assets             1,239         14,563
                                                        -------     ----------
                  Total current assets                   98,558      2,520,774
                                                        -------     ----------
NON-CURRENT ASSETS
    Notes receivable      (Note 3)                            0        717,598
                                                        -------     ----------
                  Total non-current assets                    0        717,598
                                                        -------     ----------
                  TOTAL ASSETS                          $98,558     $3,238,372
                                                        =======     ==========
</TABLE>

- --------------------------------------------------------------------------------
                 See Notes to Consolidated Financial Statements              F-3


<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS AT MARCH 31                                                              2003            2002
- ----------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>
                             L I A B I L I T I E S
CURRENT LIABILITIES

    Accrued liabilities                                                 $     33,056     $    46,272
                                                                        ------------     -----------
                  Total liabilities                                           33,056          46,272
                                                                        ------------     -----------

                              SHAREHOLDERS' EQUITY

CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (Note 4)
    Class A Preferred Stock, $0.10 par value
         Authorized -1,500,000 shares
         Issued and outstanding - None                                             -               -
    Class B Preferred Stock, $0.10 par value
         Authorized - 1,000 shares
         Issued and outstanding - None                                             -               -
    Class C Preferred Stock, $0.10 par value
         Authorized - 1,000 shares
         Issued and outstanding - None                                             -               -
    Common Stock, $0.001 par value
         Authorized -5,000,000 shares
         Issued and outstanding 4,916,549 in 2003; 1,916,549 in 2002          49,165          19,165
    Additional Paid-In Capital                                            12,267,128      10,647,128

ACCUMULATED DEFICIT                                                      (12,250,791)     (7,474,193)
                                                                        ------------     -----------
                  Total shareholders' equity                                  65,502       3,192,100
                                                                        ------------     -----------
Total Liabilities and Shareholders' Equity                              $     98,558     $ 3,238,372
                                                                        ============     ===========
</TABLE>

- --------------------------------------------------------------------------------
                 See Notes to Consolidated Financial Statements              F-4


<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED MARCH 31                                            2003           2002
- ----------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>
REVENUES
    Investment Banking                                              $    79,956      $  13,134
    Interest Income                                                      15,100         26,794
                                                                    -----------      ---------
                                                                         95,056         39,928
                                                                    -----------      ---------
EXPENSES
    Selling, General and Administrative                               1,836,884        166,901
    Foreign Exchange (Gain)/Loss                                        (14,384)         8,517
    Interest                                                                  9          5,350
                                                                    -----------      ---------
                                                                      1,822,509        180,768
                                                                    -----------      ---------

LOSS FROM CONTINUING OPERATIONS BEFORE UNDERNOTED
ITEMS                                                                (1,727,453)      (140,840)
                                                                    -----------      ---------
DISPOSAL OF EQUITY INVESTMENT (Note 6)
Equity in net losses of unconsolidated affiliate                              0       (238,342)
Gain on disposal of unconsolidated affiliate                                  0        756,669
                                                                    -----------      ---------
                                                                              0        518,327
                                                                    -----------      ---------
NET INCOME (LOSS) FOR THE YEAR                                      $(1,727,453)     $ 377,487
                                                                    ===========      =========

EARNINGS (LOSS) PER COMMON SHARE - Basic and Diluted
    Weighted average common shares outstanding                        4,135,727      1,916,421

    Basic earnings (loss) per share                                      (0.418)         0.197
    Diluted earnings per share                                                           0.197
</TABLE>


- --------------------------------------------------------------------------------
                 See Notes to Consolidated Financial Statements              F-5



<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
                                                          Number                       Additional        Share
                                                            of                           Paid-in        Capital
                                                       Common Shares       Amount        Capital        Totals
- -----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>          <C>             <C>
    Balance, March 31, 2001                              1,899,974       $18,999      $10,597,294     $10,616,293
Issued on settlement of Director's Fee (Note 8)             16,575           166           49,834          50,000
                                                         --------------------------------------------------------
    Balance March 31, 2002                               1,916,549        19,165       10,647,128      10,666,293
 Issued on settlement of Consulting Fee (Note 9)         3,000,000        30,000        1,620,000       1,650,000
                                                         --------------------------------------------------------
    BALANCE MARCH 31, 2003                               4,916,549       $49,165      $12,267,128     $12,316,293
                                                         --------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
Deficit                                                           Comprehensive
                                                    Deficit          Income
                                                  ------------    -------------
<S>           <C> <C>                             <C>              <C>
Balance March 31, 2001                            $ (7,851,680)
    Net income for fiscal 2002                         377,487     $   377,487
                                                  ------------     -----------
Balance March 31, 2002                              (7,474,193)    $   377,487
                                                                   ===========
    Dividends Paid                                  (3,049,145)
    Net income for fiscal 2003                      (1,727,453)     (1,727,453)
                                                  ------------     -----------
Balance March 31, 2003                            $(12,250,791)    $(1,727,453)
                                                  ============     ===========
</TABLE>

- --------------------------------------------------------------------------------
                 See Notes to Consolidated Financial Statements              F-6

<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED MARCH 31,                                     2003             2002
- -----------------------------------------------------------------------------------------
<S>                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Income (Loss) before discontinued operations               $(1,727,453)    $  377,487

    Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities
      Equity in net losses of unconsolidated affiliates                  0        238,342
      Non cash operating expenses (income)                       1,650,000        (29,282)
      Gain on disposal of unconsolidated affiliate                       0       (756,669)
                                                               -----------     -----------
                                                                   (77,453)      (170,122)
    Changes in non-cash operating assets and liabilities:
      (Increase) decrease in receivable and other assets            54,551         (1,661)
      Increase (Decrease) in accrued liabilities                   (13,217)         7,142
                                                               -----------     ----------
NET CASH FLOWS USED IN OPERATING ACTIVITIES                        (36,119)      (164,641)
                                                               -----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES
      Dividends Paid                                            (2,549,145)             0
      Repayment of Notes Payable                                         0       (287,193)
                                                               -----------     ----------
NET CASH FLOWS USED IN FINANCING ACTIVITIES                     (2,549,145)      (287,193)
                                                               -----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES
       Proceeds from sale of investment (Note 6)                         0      2,709,463
       Repayment of Notes Receivable                                     0        200,000
       Repayment of long term Notes Receivable                     717,598              0
       Investment in Short term notes Receivable(Note 9)          (500,000)             0
                                                               -----------     ----------
NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES                    217,598      2,909,463
                                                               -----------     ----------
NET INCREASE (DECREASE) IN CASH                                 (2,367,666)     2,457,629
CASH AND CASH EQUIVALENTS - Beginning of Year                    2,464,985          7,356
                                                               -----------     ----------
CASH AND CASH EQUIVALENTS - End of Year                        $    97,319     $2,464,985
                                                               ===========     ==========
</TABLE>


For supplemental disclosure information for the Consolidated Statement of Cash
flows, see note 9.

- --------------------------------------------------------------------------------
                 See Notes to Consolidated Financial Statements              F-7

<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002


     1.   ORGANIZATION AND BASIS OF PRESENTATION

Description of Business: InterUnion Financial Corporation ("IUFC") and its
subsidiaries (collectively the "Company") are engaged in financial services with
activities in investment banking business, in particular, the investment
management business.

Principles of Consolidation: The consolidated financial statements include the
accounts of IUFC and all wholly owned and majority owned subsidiaries from their
respective dates of acquisition, after the elimination of all significant
inter-company transactions and balances. At March 31, 2003 (March 31, 2002 -
refer to note 6), the consolidated subsidiary of IUFC is InterUnion Merchant
Group Inc. ("IUMG"). Investments in affiliates, representing 20% to 50% of the
ownership, are accounted for under the equity method. Under the equity method,
the Company records its proportionate share of income (loss) of the affiliate
(net of the amortization of the excess of the purchase price over the net assets
acquired) to results of operations, with this amount either added to (deducted
from) the cost of the investment. Dividends received from affiliates which are
accounted for on the equity basis are deducted from the carrying value of the
investment. Equity method affiliates were InterUnion Asset Management Limited
(Note 6) and its subsidiaries; Black Investment Management Limited, Guardian
Timing Services Limited, Leon Frazer, Black & Associates Limited, The Glen
Ardith-Frazer Corporation, and P.J. Doherty & Associates Co. Ltd. Investments in
companies representing less than 20% ownership are accounted for under the cost
method.

     2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents: Cash and cash equivalents include demand deposits
with banks, money market accounts, and other highly liquid short-term
investments with original maturities of 90 days or less when acquired. Balances
of cash and cash equivalents in financial institutions may at times exceed the
government-insured limits.

Use of Estimates: The preparation of financial statements in accordance with
United States generally accepted accounting principles requires management to
make estimates and assumptions. These estimates and assumptions affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the dates of the financial statements and reported amounts of
revenues and expenses during the reporting periods. Actual results may differ
from those estimates and assumptions.

Long-lived Assets: As prescribed by the Statement of Financial Accounting (SFAS)
No. 144, "Accounting for the Impairments or Disposal of Long-lived Assets", the
Company assesses the recoverability of its long-lived assets by determining
whether the asset balance can be recovered over the remaining depreciation or
amortization period through projected undiscounted future cash flows. Any
impairment in the value of the long lived assets is provided in the year the
long lived asset is considered impaired.

- --------------------------------------------------------------------------------
/Continued...                                                                F-8

<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

Fair Value of Financial Assets: The carrying value of cash and cash equivalents,
accounts receivable, accrued liabilities and notes receivable approximates the
fair value. In addition, unless described elsewhere, the carrying value of all
financial assets approximate the fair value based on terms and interest rates
currently available to the Company.

Income Recognition: Revenues are recognized once an assignment to provide
business and advisory services is completed.

Income Taxes: The Company provides for federal and state income taxes currently
payable, as well as for those deferred because of timing differences between
reporting income and expenses for financial statements purposes versus tax
purposes. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect of a change in
tax rates is recognized as income or expense in the period that includes the
enactment date.

The Company and its U.S. subsidiaries file U.S. federal and state income tax
returns. Non-U.S. subsidiaries, which are consolidated for financial reporting,
file tax returns outside the U.S., and therefore separate provisions for income
taxes have been determined for these entities. Except for return of capital and
selected dividends, the Company intends to reinvest the unremitted earnings of
its non-U.S. subsidiaries and postpone their remittance indefinitely.
Accordingly, no provision for U.S. income taxes for non-U.S. subsidiaries was
required for any year presented.


Impact of Recent Accounting Pronouncement: In May 2002 the Financial Accounting
Standards Board ('FASB') issued SFAS 145 "Rescission of FASB Statements No. 4,
44, and 64. Amendment of FASB Statement No. 13 and Technical Corrections". This
pronouncement requires that gains or losses arising from early extinguishments
of debt that are part of a company's recurring operation (i.e., a risk
management strategy) would not be reported as extraordinary items. The statement
also provides that modifications to a capital lease that make it operating lease
be accounted for as a sale-leaseback.

In June 2002, the Financial Accounting Standards Board ('FASB') issued SFAS 146
"Accounting for costs associated with exit or disposal activities". This
pronouncement replaces Emerging Issues Task Force (EITF) Issue No. 94-3
"Liability Recognition for certain employee termination benefits and other costs
to exit an activity". It requires that costs associated with exit or disposal
activities be recognized when they are incurred rather than at the date of
commitment to an exit or disposal plan.

In December 2002, the Financial Accounting Standards Board ("FASB") issued SFAS
148 "Accounting for Stock-Based Compensation-Transition and Disclosure -an
amendment of FASB Statement 123"- This Statement amends SFAS 123 "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. It also requires prominent disclosures about the method
of accounting for stock-based employee compensation and the method used on
reported results.

Management does not expect that the adoption of SFAS 145, SFAS 146 and SFAS 148
will have a material effect on the Company's operations or financial position.

- --------------------------------------------------------------------------------
Continued..                                                                  F-9

<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

Translation of Foreign Currencies: In accordance with SFAS No.52, "Foreign
Currency Translation", the financial statements of certain subsidiaries of the
Company are measured using local currency as the functional currency. Assets and
liabilities have been translated at current exchange rates and related revenue
and expenses have been translated at average monthly exchange rates. Gains and
losses resulting from the translation of subsidiaries' financial statements are
included as a separate component of shareholders' equity. Any gains or losses
resulting from foreign currency transactions are included in results of
operations.

Earnings per Share: Net earnings (loss) per share is reported in accordance with
SFAS No. 128, "Earnings Per Share". SFAS No. 128 requires dual presentation of
basic earnings per share ("EPS") and diluted EPS on the face of all statements
of earnings, for all entities with complex capital structures. Diluted EPS
reflects the potential dilution that could occur from common shares issuable
through the exercise or conversion of stock options, restricted stock awards,
warrants and convertible securities. In certain circumstances, the conversion of
these options, warrants and convertible securities are excluded from diluted EPS
if the effect of such inclusion is anti-dilutive. Fully diluted loss per share
is not provided, as the effect will be anti-dilutive.

Stock Based Compensation: The Company accounts for employee stock options in
accordance with Accounting Principles Board (APB) Opinion No. 25, "Accounting
for Stock Issued to Employees". Under APB No. 25, the Company applies the
intrinsic value method of accounting. SFAS No. 123, "Accounting for Stock-Based
Compensation", prescribes the recognition of compensation expense based on fair
value of options determined on the grant date. However, SFAS No. 123 allow
companies currently applying APB No. 25 to continue applying the intrinsic value
method under APB No. 25. For companies that continue in applying the intrinsic
value method, SFAS No. 123 mandates certain pro forma disclosures as if the fair
value method had been utilized. The recently promulgated accounting standard,
FIN44 "Accounting for Certain Transactions involving Stock Compensation", does
not affect the financial statements of the company.

Comprehensive Income: The Company follows Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". This statement establishes
standards for reporting and display of comprehensive income and its components.
Comprehensive income is net income plus certain items that are recorded directly
to shareholders' equity bypassing net income. The Company has no other
comprehensive income (loss) and comprehensive income (loss) is the net profit
(loss) for the year.

Segment Information: The Company follows SFAS No. 131 "Disclosures about
Segments of an Enterprise and Related Information". SFAS No. 131 requires that
the Company disclose its operations in the business segment as viewed by
management: which is Investment Banking, which includes its merchant, banking
activities and Investment Management.

- --------------------------------------------------------------------------------
Continued...                                                                F-10


<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

Other: All amounts in these financial statements are in United States dollars
unless indicated with a "C" to represent Canadian dollar presentation.

     3.   NOTES RECEIVABLE

<TABLE>
<CAPTION>
                                                                              2003       2002
                                                                              ----       ----
<S>                                                                           <C>      <C>
Notes Receivable from Credifinance Capital Corp. (CFCC) bearing
Interest @ 3% per annum with no maturity date. This note is unsecured.        $  0     $717,598
    Less: Current Portion                                                        0            0
                                                                              ----     --------
                                                     Non-current portion      $  0     $717,598
                                                                              ====     ========
</TABLE>

     4.   CAPITAL STOCK

Currently, the number of shares that the Company is authorised to issue under
each class of stock are:

<TABLE>
<C>            <S>
1,500,000      Class A Preferred Shares, ($0.10 par value), entitled to 100
               votes for every one share issued, annual dividends, if declared
               by the directors, at a rate of $0.01 per share, non-cumulative.
               In case of liquidation or dissolution of the company, the holder
               of Class A Preferred Shares shall be entitled to be paid in full
               the par value of the shares before the holder of the common stock
               of Class B and C Preferred Stock.

    1,000      Class B Preferred Shares, ($0.10 par value), non-voting, annual
               dividends, if declared by the directors, at a rate to be
               determined by the directors at the first issuance of these
               shares, non-cumulative.

    1,000      Class C Preferred Shares, ($0.10 par value), non-voting, annual
               dividends, if declared by the directors, at a rate to be
               determined by the directors at the first issuance of these
               shares, non-cumulative. These shares are convertible into common
               stock at terms determined by the directors when these shares are
               issued.

5,000,000      Common shares ($0.001 par value); each share has one vote.
</TABLE>

During fiscal 2003, the Company incurred a consulting expense of $1,650,000 on
account of a Service Agreement. The fee was paid by issuing 3,000,000 common
shares in the fiscal year 2003. This increased the number of issued and
outstanding common stock of the company to 4,916,549. The information was filed
on Form S-8 dated August 26, 2002.

During the second quarter ended September 30, 2002 an extraordinary cash
dividend of $2,549,010 ($1.33 per common share) was paid to the shareholders of
record on August 23, 2002. Also, IUFC has distributed as dividend 600,000 common
shares of Kyto Pharmaceutical Inc., which it acquired in settlement of a Note
Receivable of $500,000. The shareholders received 0.3131 common shares of Kyto
Pharmaceutical Inc. for each common share of InterUnion Financial Corp they
owned and cash for any fractional shares that would have been issued.

During fiscal 2002 the company issued 16,575 common shares in settlement of a
liability to a Director (Note 8).

- --------------------------------------------------------------------------------
/Continued...                                                               F-11

<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

     5.   STOCK OPTIONS

The Company currently issues stock options at the direction of the Board of
Directors. To date, non-qualified stock options have been granted to selected
key employees under terms and conditions determined by the Board of Directors at
the time the options are issued. Presented below is a summary of stock option
plan activity:

<TABLE>
<CAPTION>
                                           Wt. Avg.                  Wt. Avg.
                                           Exercise      Options     Exercise
                                 Number     Price      Exercisable    Price
                                -------    --------    -----------   --------
<S>                             <C>         <C>         <C>           <C>
Balance, March 31, 2001         335,000     $4.00       335,000       $4.00
Cancelled                       (85,000)     4.00       (85,000)       4.00
                                -------     -----       -------       -----
Balance, March 31, 2002         250,000      4.00       250,000        4.00
Cancelled                             0      4.00             0        4.00
                                -------     -----       -------       -----
Balance, March 31, 2003         250,000     $4.00       250,000       $4.00
                                =======     =====       =======       =====
</TABLE>

Options outstanding and exercisable at March 31, 2003 are as follows:

<TABLE>
<CAPTION>
                      Outstanding                              Exercisable
- -------------------------------------------------------   ---------------------
                              Wt. Avg.      Wt. Avg.                   Wt. Avg.
                   Expiry     Remaining     Remaining                  Exercise
Price   Number      Date        Life     Exercise Price    Number        Price
- -----   -------   ----------  ---------  --------------    -------     --------
<S>     <C>       <C>            <C>          <C>          <C>          <C>
$4.00    50,000   Sept. 2003     <1           $4.00         50,000      $4.00
 4.00   200,000    May 2005      <3            4.00        200,000       4.00
</TABLE>

SFAS No.123 requires entities that account for awards for stock-based
compensation to employees in accordance with APB No.25 to present pro forma
disclosures of net income and earnings per share as if compensation cost was
measured at the date of grant based on fair value of the award. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option-pricing model with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                                                       2003
                                                                    -----------
<S>                                                                 <C>
Expected life of the option                                         1 - 3 years
Risk free interest rate                                                 5.0%
Expected volatility                                                   100.0%
Expected dividend yield                                                 0.0%
</TABLE>

- --------------------------------------------------------------------------------
/Continued...                                                               F-12

<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

     5.   STOCK OPTIONS-Continued

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options. As at March 31, 2003,
the shares of IUFC were trading below the exercise price of the option at $4.00
per share. As a result, the options are out of money, have no intrinsic value,
and have no impact on the earnings per share. Therefore there is no compensation
cost for the Company's stock option plan to recognize based upon the fair value
on the grant date under the methodology prescribed by SFAS No. 123, and the
Company's income from operations and earnings per share would not have been
impacted.

     6.   SALE OF ASSETS AND DISCONTINUATION OF OPERATIONS:

During fiscal 2002, the Company sold its 42.8% owned subsidiary, InterUnion
Asset Management Limited (IUAM), to a non related party. Effective December 20,
2001, the Company has no interest in IUAM. The share of equity in net losses of
IUAM for the nine months to December 20, 2001 was $238,342 which is shown
separately in the consolidated statements of operations. As a result of the
disposal of IUAM as of December 20, 2001, the Company reported a gain on
disposal of $756,669.

- --------------------------------------------------------------------------------
/Continued...                                                               F-13

<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

     7.   INCOME TAXES

The Company files US Federal income tax returns for its US operations. Separate
income tax returns are filed, as locally required, for each of its foreign
subsidiaries.

There was no provision for income taxes for the years ended March 31, 2003 and
2002.

The total provision for income taxes differs from that amount which would be
computed by applying the United States federal income tax rate to income (loss)
before provision for income taxes. The reasons for these differences are as
follows:

<TABLE>
<CAPTION>
Year Ended March 31,                            2003                 2002
                                         ------------------   -----------------
                                          Amount       %       Amount      %
                                         =========   ======   ========   ======
<S>                                      <C>         <C>      <C>         <C>
Statutory income tax rate (recovery)     $(389,000)  (22.52)  $ 85,000    22.52
Use of losses carried forward              389,000    22.52    (85,000)  (22.52)
                                         ---------   ------   --------   ------
Net taxes and effective rate             $       0        0   $      0        0
                                         =========   ======   ========   ======
</TABLE>

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the carrying amounts
and the tax basis of assets and liabilities and net operating loss
carry-forwards. Temporary differences and carry-forwards, which give rise to
deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                             March 31, 2003                 March 31, 2002
                                       --------------------------    --------------------------
                                        Component      Tax Effect     Component      Tax Effect
                                       -----------     ----------    -----------     ----------
<S>                                    <C>             <C>           <C>             <C>
Net operating losses - domestic        $ 1,987,000     $ 386,000     $   270,000     $  60,000
Less valuation allowance                (1,987,000)     (386,000)       (270,000)      (60,000)
                                       -----------     ---------     -----------     ---------
Net deferred asset                     $         0     $       0     $         0     $       0
                                       ===========     =========     ===========     =========

Net operating losses - foreign         $ 2,336,000     $ 117,000     $ 2,326,000     $ 116,000
Less valuation allowance               $(2,336,000)     (117,000)     (2,326,000)     (116,000)
                                       -----------     ---------     -----------     ---------
         Net deferred asset            $         0     $       0     $         0     $       0
                                       ===========     =========     ===========     =========
</TABLE>

At March 31, 2003, the Company had cumulative net operating loss carry-forwards
of approximately $1,987,000 and $ 2,336,000 in the United States and British
Virgin Islands respectively. These amounts will expire in various years through
2012. The related deferred tax asset have been completely offset by a valuation
allowance. The Company has no significant deferred tax liabilities.


- --------------------------------------------------------------------------------
/Continued...                                                               F-14


<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

     8.   RELATED PARTY TRANSACTIONS:

Directors, officers or employees of the Company may also be officers of and
serve on the board of directors of companies in which IUFC or its subsidiaries
have invested.

During the year ended March 31, 2003, a fee of $30,000 was paid to Credifinance
Capital Corp (CFCC), a company with common ownership, to act as the Paying Agent
for IUFC's Dividends. Also, a $42,841 management fee was paid to Credifinance
Securities Ltd (CFSL), a company with common ownership.

During the year ended March 31, 2001, the Company incurred an expense of $50,000
on account of Director's Fee. The fee was paid by issuing 16,575 common shares
in the fiscal year 2002.

During the year ended March 31, 2002 the Company earned interest income of
$26,308 on the Note Receivable from CFCC (Note 3) and incurred interest expense
of $5,278 on the Note Payable to RIF Capital Inc.

During the year ended March 31, 2002 the company paid $70,000 to RIF Capital
Inc, its majority shareholder, as a fee for consulting services rendered.

The above related party transaction were in the normal course of business and
the amounts of consideration were established and agreed to by the company and
the other party.

     9.   SUPPLEMENTAL CASH FLOW DISCLOSURE

The following is additional information regarding the Consolidated Statement of
Cash Flows:

<TABLE>
<CAPTION>
                                                                                   2003            2002
                                                                               ----------         -------
<S>                                                                            <C>                <C>
Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                       $        9         $ 5,350
  Cash paid during the year for income taxes                                            0          10,328
Supplemental disclosure of non-cash financing and investing:
  Liabilities paid by issuing common stock                                      1,650,000          50,000
Shares of Kyto Pharmaceutical Inc. received in settlement of Notes Receivable     500,000              0
Distribution of Kyto Pharmaceutical Inc. shares to shareholders as dividend       500,000              0
</TABLE>


- --------------------------------------------------------------------------------
/Continued...                                                               F-15


<PAGE>
                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                              MARCH 31, 2003 AND 2002

     10.  SEGMENT INFORMATION

The following tables summaries the revenues, operating income (losses) from
continuing operations and identifiable assets by geographical area.

<TABLE>
<CAPTION>
                                                              United               Adjustments &
                                                  Canada      States      Other    Elimination      Consolidated
                                                 -------    -----------   ------   -------------    -------------
<S>                                              <C>        <C>           <C>         <C>           <C>
For the year ended and as of March 31, 2003
Revenue from
  unaffiliated customers                         $     0    $    95,056   $   0       $     0       $    95,056
Revenue from
  Inter-segments                                       0              0       0             0                 0
                                                 -------    -----------   ------      -------       -----------
Total revenue                                          0         95,056       0             0            95,056
                                                 =======    ===========   =====       =======       ===========
Depreciation
& Amortization                                         0              0       0             0                 0
                                                 =======    ===========   =====       =======       ===========
Operating profit                                       0         95,056       0             0            95,056
                                                 =======    ===========   =====       =======       ===========
General corporate
  expenses                                             0     (1,822,500)      0             0        (1,822,500)
Interest expenses, net                                 0             (9)      0             0                (9)
Net (Loss) for the period                              0     (1,727,453)      0             0        (1,727,453)
                                                 =======    ===========   =====       =======       ===========
Identifiable assets                              $     0    $    98,558   $   0       $     0       $    98,558
                                                 =======    ===========   =====       =======       ===========

For the year ended and as of March 31, 2002
Revenue from
  unaffiliated customers                         $     0    $    39,928   $   0       $     0       $    39,928
Revenue from
  Inter-segments                                       0              0       0             0                 0
                                                 -------    -----------   ------      -------       -----------
Total revenue                                          0         39,928       0             0            39,928
                                                 =======    ===========   =====       =======       ===========
Depreciation
& Amortization                                         0              0       0             0                 0
                                                 =======    ===========   =====       =======       ===========
Operating profit                                       0         39,928       0             0            39,928
                                                 =======    ===========   =====       =======       ===========
General corporate
  expenses                                        (1,426)      (173,992)      0             0          (175,418)
Interest expenses, net                                 0         (5,350)      0             0            (5,350)
Disposal of Equity Investment                          0        518,327       0             0           518,327
                                                 -------    -----------   -----       -------       -----------
Net income (loss) for the period                  (1,426)       378,913       0             0           377,487
                                                 =======    ===========   =====       =======       ===========
Identifiable assets                              $ 6,857    $ 3,239,798   $   0       $(8,283)      $ 3,238,372
                                                 =======    ===========   =====       =======       ===========
</TABLE>

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Continued...                                                               F-16
<PAGE>

                        INTERUNION FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2003 AND 2002

     11.  CONTINGENCIES:

From time to time the Company is exposed to claims and legal actions in the
normal course of business, some of which are initiated by the Company. At March
31, 2003, management believes that any such outstanding issues will be resolved
without significantly impairing the financial condition of the Company.

- --------------------------------------------------------------------------------
                                                                            F-17


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