Mongolia Growth Group Ltd. Annual Report 2021

FY2021 Annual Report · Mongolia Growth Group Ltd.

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2021 Annual Report

Letter to Shareholders

Harris Kupperman
CEO and Chairman of the Board

Dear Shareholders,
By all accounts, 2021 was a transformative year for our
company. We transitioned the business to that of a
Merchant Bank, grew our cash and marketable securities
balance dramatically and launched a business from
scratch that has now taken in more than $2 million in
importantly, we have
subscription proceeds. More
substantial momentum as we continue to pivot the
business and seek out acquisition opportunities.

As of the end of December, our company has in excess
of $28.6 million of cash and net marketable securities
with negligible debt (when excluding margin borrowings
and short futures call options related to fully hedged call
spreads). Based on current subscriber trends at KEDM,
and a reasonable expectation for renewal rates, we
believe that our company will be cash flow positive going
forward (excluding one-time expenses). This means
we now have a stable base to build upon and reinvest,
without having to worry about how to fund operating
losses—which is quite different from the first decade of
our company’s existence. We now have the time to stop,
think, and act intelligently to create value—on our terms.
While the pathway to today has been difficult, we now
have the capital resources to take this business in many
exciting directions. The last decade has been painful and
frustrating, I am hopeful that the coming decade will be
exciting and prosperous.

Our Future Direction:

In conjunction with Genevieve and our Board, we
have looked at various go-forward operating models.
I primarily see myself as an allocator of capital and
believe that transitioning our company into a Merchant
Bank makes the most sense in terms of a future
business model. Becoming a Merchant Bank will allow
us the flexibility to incubate various businesses, while
simultaneously funding growth businesses that we own
majority or minority stakes in. While my background is
in public securities, there are regulatory and tax reasons
why we cannot be a publicly traded vehicle composed
primarily of non-controlling minority interests in public
securities. Our expectation is that the composition of our
balance sheet will migrate towards both minority and

controlling positions in various businesses—public and
private, where we can influence the outcome of events.

I believe we have many advantages as a Merchant Bank,
particularly as I frequently encounter businesses in need
of both capital and capital markets perspective. There
are many gaps to arbitrage between public and private
valuations, lowering costs of capital for businesses along
the way, and I am excited to put this theory to practice.

Finally, I believe that a permanent capital vehicle such
as our company, where our board and management
control approximately 30% of the voting shares, gives us
a unique advantage in allocating capital, as we can take a
long-term view of our investments. Hopefully, this long-
term view will attract unique investment opportunities,
those that Private Equity, with their frequent re-selling of
equity positions, miss out on. KEDM is our first internally
funded business venture. We hope to acquire and grow
from here.

We now segregate our business lines into three categories
(Investment Properties, Subscription Business Products,
and Corporate Division (which includes our investment
portfolio).

Investment Properties:

The fourth quarter of 2021 continued to be difficult for
our Mongolian property operations due to recurring
periods of COVID-19 lock-downs and the inability of many
of our tenants to manage their businesses. As a property
company, we are only as successful as our tenants
and when our tenants’ businesses cannot operate,
we are unable to collect the rent we are contractually
owed. During the year we reported $679,091 (2020
- $756,283) of leasing revenue and $190,850 (2020 -
$68,170) of other revenue (primarily 3rd party), offset
by $759,100 (2020 - $860,936) of expenses in Mongolia.
Unfortunately, we have zero visibility into the future
trajectory of the economic crisis in Mongolia. Until
businesses are allowed to operate without interference,
we are likely to continue to report depressing returns
from our Mongolian operations.

Mongolia Growth Group Ltd |investments should we find additional businesses to launch or
acquire stakes in.

Conclusion

2021 was transformative for our company. We have now
incubated and launched KEDM with great success and expect
it to become a rapidly growing revenue stream that we can
build upon. Our public securities investments are paying off
and we are now in a position to pivot the business model to
a Merchant Bank model. We intend to scale up our staffing,
target unique opportunities and continue to profitably
diversify our company.

While we remain optimistic about Mongolia’s long-term
future, it remains mired in economic crisis. As a result,
we remain focused on selling non-core property assets
(particularly in office and re-development) so that we can
diversify the company, while keeping our core portfolio and
management team, so that we can pivot back to Mongolia
when the economy returns to attractive growth rates.

Finally, I remain of the opinion that our shares are undervalued.
During the year, the company used its increased liquidity to
accelerate the rate of share purchases and re-purchased
3,311,500 shares under our Normal Course Issuer Bid (NCIB)
at an average price of $0.65/share. At year end, our share
count was 27,778,499 or 22% less than during our peak share-
count in 2016. To date, the company has repurchased a total
of 7,754,100 shares.

While we didn’t always have much in the way of liquidity, we
never stopped believing in ourselves and remained aggressive
with our NCIB. We knew that eventually we’d find our footing.

We’re excited for the future.

Sincerely,

Harris Kupperman

CEO and Chairman of the Board

During the year, we purchased a mixed-use property in Puerto
Rico for approximately $820,000 that we are in the process
of renovating. We intend to use this property primarily for
internal purposes, though we believe we can rent portions of
the property to earn rental income.

Subscription Business Products:

KEDM, our subscription business, which tracks various Event-
Driven strategies, successfully transitioned into a revenue
producing product on July 1st. During the year, we recognized
$944,411 of revenue at a very healthy margin. Throughout
the year, recognized revenue and subscriber count continued
to increase each month sequentially and has continued to
increase since year-end. As of the date of this letter, we have
taken in over CDN $2 million in subscription proceeds. We
intend to aggressively invest resources to improve KEDM
and increase the overall value proposition for subscribers.
Additionally, given the reception to KEDM amongst readers, we
intend to increase our marketing spend to grow the subscriber
base. We believe that these two initiatives will reduce the
short-term profitability of the subscription business; however,
we intend to moderate spending so that the business remains
profitable.

Given the reception to date for KEDM, we believe that there
are ancillary services that we can launch and monetize,
providing further value to KEDM subscribers. It is likely that
these services will be a cost center as they are conceived
and grown before monetization. To
learn more about
KEDM, go to www.KEDM.COM. Additionally, the company is
considering acquiring other financial publications that would
be complimentary to KEDM.

Corporate Division:

During the year, our corporate expenses increased primarily
due to an increase in legal, corporate structuring and tax
planning expenses. We expect this heightened level of
expenses to continue into 2022. When we didn’t expect our
company to reach profitability, we didn’t think much about
the efficiency of our corporate and tax structure. Now that
we have taxable income, we are reviewing our structure
for optimization. Additionally, we anticipate that corporate
expenses will increase in future quarters as we add staff to
help grow our business—particularly related to business
development activities and the marketing of KEDM.

Our public securities portfolio produced a $7,946,088
unrealized gain (2020 - $4,265,403 unrealized gain) and a
$10,306,006 realized gain (2020 - $3,288,803 realized gain).
I would like to caution you strongly that returns like we have
recently experienced, are highly unlikely to be repeated in
future quarters. Our portfolio is currently concentrated in
investments in energy, uranium, and the housing sector.
Additionally, we initiated a small position in a cryptocurrency
named Monero. We view these investments as highly liquid
alternatives to holding cash and we intend to liquidate various

| Mongolia Growth Group LtdMONGOLIA GROWTH GROUP LTD.

Management Discussion & Analysis
December 31, 2021

The management of Mongolia Growth Group Ltd. (“MGG” or “the Corporation”) presents the Corporation’s management
discussion and analysis for the year ended December 31, 2021 (the “MD&A”), compared with the year ended December 31,
2020. As of January 1, 2011, the Corporation adopted International Financial Reporting Standards (“IFRS”). This MD&A provides
an overall discussion, followed by analyses of the performance of the Corporation’s major reportable segments. The reporting
and presentation currency in the consolidated financial statements and in this discussion and analysis is the Canadian dollar,
unless otherwise noted.

This MD&A is dated April 21, 2022, and incorporates all relevant information and considerations to that date.

The following discussion and analysis should be read in conjunction with the audited consolidated financial statements of the
Corporation for the year ended December 31, 2021 and December 31, 2020 together with all of the notes, risk factors and
information contained therein, available on SEDAR at www.sedar.com.

Forward Looking Statements

This MD&A contains forward-looking statements relating to future events. In some cases, forward-looking statements can be
identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “should”, “believe”,
or similar expressions. These statements represent management’s best projections but undue reliance should not be placed
upon them as they are derived from numerous assumptions. These assumptions are subject to known and unknown risks
and uncertainties, including the “Risks and Uncertainties” as discussed herein. Actual performance and financial results will
differ from any projections of future performance or results expressed or implied by such forward looking statements and the
difference may be material.

Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
From time to time, the Corporation’s management may make estimates and have opinions that form the basis for the forward-
looking statements. The Corporation assumes no obligation to update such statements if circumstances, management’s estimates,
or opinions change.

Forward looking statements are included within the Outlook and Executive Strategy sections of this MD&A.

Mongolia Growth Group Ltd |Section 1 – Overview

Financial and Operational Overview

The Corporation has three core focuses of operation: Investment Properties, Subscription Products, and Corporate.

Management believes that its current property operations are not at a sufficient scale to be cash flow positive. As such, the
Corporation is looking at various investment opportunities outside of Mongolia, in order to diversify its business and has adopted
a Merchant Bank model. Since 2017, the Corporation has spent substantial time evaluating a number of businesses for acquisition
but has not decided to move forward on any acquisition. However, the Corporation has incubated and launched a Subscription
Products business, which began to produce revenue during the third quarter of this year.

The year saw an increase in overall corporate revenue primarily related to the Corporation recognizing subscription products
revenue, offset by a slight decline in leasing revenue, primarily due to Covid-19 disruptions in Mongolia and asset sales in
Mongolia. Additionally, the Corporation recognized realized and unrealized gains from its investment portfolio.

The Corporation’s rental revenue was down when compared to 2020. While the Corporation managed to maintain a high
occupancy rate, with 100% office and 84.2% retail occupancy rates, it had to offer significant discounts to tenants affected by
closures due to Covid-19 heavily affecting revenue.

During the year, the Company sold eight properties for net proceeds of $2,125,367 at a net loss of $37,641. (2020- $106,762
gain). During the year, the Corporation purchased a mixed-use property in Puerto Rico for $821,591 which has been classified
as PPE and is currently under renovation which will entail additional capital expenditures. It is anticipated that the Corporation
will continue to dispose of non-core Mongolian properties in future quarters in order to fund future working capital needs, along
with funding the start-up costs or capital cost of the acquisition of a business outside of Mongolia.

During the year, the Corporation began to recognize revenue ($944,411) from its newly launched subscription data product
named KEDM. It is anticipated that KEDM related revenue will increase in future years as the number of subscribers increases
and the Corporation adds additional services to the core KEDM platform. The increases in revenue will be somewhat offset by
the expectation of additional costs in relation to KEDM.

While the Corporation seeks out a business to build or acquire, the Corporation has invested its excess capital in publicly traded
securities. During 2021, the Corporation’s investment portfolio experienced $10,306,006 of realized gains and $7,946,088 of
unrealized gains. As of the end of December, the Corporation has in excess of $28.6 million of cash and net marketable securities
with negligible debt (when excluding margin borrowings and short futures call options related to fully hedged call spreads). The
Corporation believes that over time, it will continue to dispose of property assets to fund potential future investments outside
Mongolia. The Corporation sees its public securities holdings as a source of capital to fund a future acquisition along with the
working capital needs of the business. The Corporation may also be forced to take on additional borrowings or issue equity in
order to finance a future acquisition.

Mongolian Economic Overview

Starting in 2012, the Mongolian government initiated a program to restrict and inhibit foreign investment. Additionally, various
government officials made statements designed to intimidate foreign investors, followed by arbitrary arrests of foreign employees
and confiscations of foreign investments. These actions led to a dramatic slow-down in foreign direct investment (FDI) and an
exodus of foreign investors. The economy would have entered a crisis sooner if not for expansionary fiscal policy and monetary
stimulus from the Central Bank of Mongolia. However, by 2014, even this stimulus was insufficient to avert the economic crisis
which is currently ongoing.

Despite official statistics that tended to show moderate economic growth, the Corporation is of the opinion that the economy
had been in contraction from 2014 until mid-2018, though the rate of contraction had varied based on economic policy. During
the second half of 2018, the Corporation noticed the first green shoots in many years.

Beginning in February of 2020, the Government of Mongolia undertook extraordinary actions to limit the spread of Covid-19.
These actions included closing borders, closing schools, reducing gatherings and drastic limitations on business operations
including the Corporation’s operations. It is anticipated that these actions will continue to impact Mongolia’s economic recovery.
Since the initiation of these actions, the Corporation has experienced a material reduction in rental revenues received. At
this time, there is no way to know the ultimate impact of these extra-ordinary actions upon the economy or the Corporation.
Additionally, there is a question as to the duration of these efforts and if this will be a continued endeavor. Until the economy
fully re-opens, the Corporation anticipates continued declines in rental revenues against a fixed cost structure in Mongolia and
at the corporate level.

To date, the Corporation has experienced a low level of bad debt expense; however, it has had to issue a significant number of
discounts to tenants affected by the economic crisis. Additionally, many tenants have struggled to operate their businesses and
the Corporation anticipates that some tenants may exit leases prematurely over the next few quarters, leading to an increase
in vacancy and renovation expenses. The Corporation remains focused on filling leases as rapidly as possible but cautions
shareholders that future rental rates may decline substantially from currently contracted rates. Additionally, certain tenants may

| Mongolia Growth Group Ltdrequire rent discounts in order to stabilize their businesses. The Corporation intends to review each tenants’ circumstances when
determining the appropriate course of action.

Additionally, travel restrictions have made it difficult for members of senior management to travel to Mongolia during the last
few years and the overall operation of the business may suffer until global travel returns to normal. To date, the Corporation
believes that its Mongolian staff have performed well during the crisis.

Management believes that the current economic crisis is the result of policies that have discouraged Foreign Direct Investment
(“FDI”) along with Covid-19. When the government takes the appropriate steps to stimulate FDI, it is expected that the economy
can return to sustainable economic growth. Management remains a believer in the long-term growth potential of Mongolia.

Mongolia’s economy is likely to be impacted by the Russian invasion of Ukraine as Russia is a substantial trading partner of
Mongolia. Recent actions to restrict Russian access to SWIFT may have negative impacts upon Mongolia’s ability to trade with
Russia, which may negatively impact the Mongolian economy. To date, Mongolia has taken a neutral view regarding the Russian
invasion. There is no way to know if Mongolia’s stance will shift over time.

Mongolian Property Overview

During the boom years at the beginning of this decade, multiple sizable property developments were initiated. Despite an
economic crisis that began in 2014, many of these developments were ultimately completed, while new projects have continually
been initiated despite weak demand for these properties. There also remains a sizable shadow inventory of partially completed
projects that may re-commence development at any time.

Before the economy was impacted by Covid-19, well-placed office and retail space in the city center was beginning to get
absorbed and rental rates were starting to increase, for the first time in many years. Management continues to monitor and
evaluate the ultimate impact of Covid-19 on property prices and the Mongolian economy.

Management cautions investors that it is focused on continuing to dispose of non-core property assets, when possible, in order
to recycle capital.

Mongolian Property Business

During the past decade, Management and employees have worked hard to build up the infrastructure needed to manage MGG’s
institutional property platform. This platform is unique in Mongolia and is one of the only platforms capable of managing assets
through the full cycle of ownership from acquisition through disposition and includes dedicated departments that manage
maintenance, leasing, marketing, and tenant management. Management believes it has a strong team in place to manage the
business on an ongoing basis.

Due to MGG’s unique platform, the Corporation also offers third-party leasing and property management to its focus, in order to
The Corporation has continued to have occupancy levels that are in excess of current market conditions, and it credits its
leverage its existing resources through its website at www.MGGproperties.com.
leasing and property management teams with this success. Additionally, bad debt expense has remained below
expectations. However, the Corporation has had to issue significant discounts to tenants most affected by the current
The Corporation has continued to have occupancy levels that are in excess of current market conditions, and it credits its leasing
pandemic. The Corporation is unsure as to when or if these discounts can be rolled back.
and property management teams with this success. Additionally, bad debt expense has remained below expectations. However,
the Corporation has had to issue significant discounts to tenants most affected by the current pandemic. The Corporation is
Portfolio
unsure as to when or if these discounts can be rolled back.
Mongolia Growth Group’s Mongolian properties are located in the Downtown and the Central Business District of
Portfolio
Ulaanbaatar. During the year, the Company purchased an office building in Rincon, Puerto Rico. Within the financial
Mongolia Growth Group’s Mongolian properties are located in the Downtown and the Central Business District of Ulaanbaatar.
statements, MGG classifies properties in each of the following categories: Investment Properties, Property and Equipment,
During the year, the Company purchased an office building in Rincon, Puerto Rico. Within the financial statements, MGG
and Other Assets/Prepaid Deposits. Fluctuations in the values of the Corporation’s property portfolio during the year can
classifies properties in each of the following categories: Investment Properties, Property and Equipment, and Other Assets/
be attributed to changes in valuations, properties purchased and sold, and the change in value of the functional currency
Prepaid Deposits. Fluctuations in the values of the Corporation’s property portfolio during the year can be attributed to changes
(Mongolian Tögrög) versus the Canadian dollar.
in valuations, properties purchased and sold, and the change in value of the functional currency (Mongolian Tögrög) versus the
Canadian dollar.
Investment Properties
Investment Properties
Investment Properties include properties held to earn rental revenue, for capital appreciation, and/or for redevelopment.
Investment Properties are initially valued at fair value, which is the purchase price plus any directly attributable expenditure.
Investment Properties include properties held to earn rental revenue, for capital appreciation, and/or for redevelopment.
Investment Properties are subsequently valued at fair value, which reflects market conditions at the date of the statement
Investment Properties are initially valued at fair value, which is the purchase price plus any directly attributable expenditure.
Investment Properties are subsequently valued at fair value, which reflects market conditions at the date of the statement of
of financial position.
financial position.

The following table represents properties classified as Investment Properties, as of December 31, 2021:

Office
Retail
Land and Redevelopment

Total

# of Properties

2
6
2

2021
Value at 31-December-2021
$CDN
925,127
7,119,588
3,841,192

11,885,907

# of Properties

2
14
2

2020
Value at 31-December-2020
$CDN
896,266
9,415,983
4,229,987

14,542,236

purchased in October 2011, as well as the newly purchased, mixed-use property in Puerto Rico, fall within this category. The

Corporation anticipates continuing capitalized expenditures for the renovation of the newly purchased property in Puerto

The following table represents properties classified as Property and Equipment, as of December 31, 2021:

# of Properties

Value at 31-December-2021

# of Properties

Value at 31-December-2020

2021

$CDN

2,201,317

2020

$CDN

1,265,587

Rico.

Office

Retail

Total

Land and Redevelopment

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

Mongolia Growth Group Ltd |

The Corporation has continued to have occupancy levels that are in excess of current market conditions, and it credits its

leasing and property management teams with this success. Additionally, bad debt expense has remained below

expectations. However, the Corporation has had to issue significant discounts to tenants most affected by the current

pandemic. The Corporation is unsure as to when or if these discounts can be rolled back.

Portfolio

Mongolia Growth Group’s Mongolian properties are located in the Downtown and the Central Business District of

Ulaanbaatar. During the year, the Company purchased an office building in Rincon, Puerto Rico. Within the financial

statements, MGG classifies properties in each of the following categories: Investment Properties, Property and Equipment,

and Other Assets/Prepaid Deposits. Fluctuations in the values of the Corporation’s property portfolio during the year can

be attributed to changes in valuations, properties purchased and sold, and the change in value of the functional currency

(Mongolian Tögrög) versus the Canadian dollar.

Investment Properties

Investment Properties include properties held to earn rental revenue, for capital appreciation, and/or for redevelopment.

Investment Properties are initially valued at fair value, which is the purchase price plus any directly attributable expenditure.

Investment Properties are subsequently valued at fair value, which reflects market conditions at the date of the statement

of financial position.

The following table represents properties classified as Investment Properties, as of December 31, 2021:

# of Properties

Value at 31-December-2021

# of Properties

Value at 31-December-2020

Office

Retail

Land and Redevelopment

Total

2021

$CDN

925,127

7,119,588

3,841,192

11,885,907

2020

$CDN

896,266

9,415,983

4,229,987

14,542,236

Property and Equipment

Property and Equipment
Properties are classified as Property and Equipment if the Corporation occupies more than 10% of the property. Properties
classified as Property and Equipment are measured at cost less accumulated depreciation, less any accumulated impairment
losses. All repairs and maintenance costs to these properties are charged to the Consolidated Statement of Operations
Properties are classified as Property and Equipment if the Corporation occupies more than 10% of the property. Properties
during the period in which they occur unless eligible for capitalization. The Corporation’s Mongolian headquarters,
classified as Property and Equipment are measured at cost less accumulated depreciation, less any accumulated impairment
purchased in October 2011, as well as the newly purchased, mixed-use property in Puerto Rico, fall within this category. The
losses. All repairs and maintenance costs to these properties are charged to the Consolidated Statement of Operations during the
period in which they occur unless eligible for capitalization. The Corporation’s Mongolian headquarters, purchased in October
Corporation anticipates continuing capitalized expenditures for the renovation of the newly purchased property in Puerto
2011, as well as the newly purchased, mixed-use property in Puerto Rico, fall within this category. The Corporation anticipates
Rico.
continuing capitalized expenditures for the renovation of the newly purchased property in Puerto Rico.

The following table represents properties classified as Property and Equipment, as of December 31, 2021:

2020
Value at 31-December-2020
$CDN
1,265,587
-
-

1,265,587
31 –December- 2019

Occupancy Rate*
96.9%
100.0%

# of Properties

Office
Retail
Occupancy Rates
Land and Redevelopment
A summary of MGG’s property portfolio occupancy rates is set forth in the following table:

2
-
-

Total

2
31 –December- 2021

2,201,317

31 –December- 2020

1
-
-

2021
Value at 31-December-2021
$CDN
2,201,317
-
-

Occupancy Rates

A summary of MGG’s property portfolio occupancy rates is set forth in the following table:

Occupancy Rate*
Occupancy Rates
Office
96.6%
A summary of MGG’s property portfolio occupancy rates is set forth in the following table:
Retail
100.0%
Occupancy Rates
A summary of MGG’s property portfolio occupancy rates is set forth in the following table:
Weighted Average**

Occupancy Rate*
100.0%
84,2%

Office
Retail

* Occupancy rates are calculated on a per meter basis and only include properties in the rental pool. It does not include those currently listed for sale.
** Weighted Average is calculated based on total meters available for lease.

31 –December- 2021

31 –December- 2019

31 –December- 2020

31 –December- 2021
91.0%
Occupancy Rate*
100.0%
84,2%

Occupancy Rate*
100.0%
84,2%

31 –December- 2020
97.0%
Occupancy Rate*
96.6%
100.0%

Occupancy Rate*
96.9%
100.0%

Occupancy Rate*
96.6%
100.0%

31 –December- 2019
98.8%
Occupancy Rate*
96.9%
100.0%

Demand for retail space has remained strong, despite a challenging economy. Occupancy levels for the Corporation’s office
Weighted Average**
space continue to be strong even while vacancy levels throughout the city have remained high as additional supply has
Weighted Average**
* Occupancy rates are calculated on a per meter basis and only include properties in the rental pool. It does not include those currently listed for sale.
entered the market.
** Weighted Average is calculated based on total meters available for lease.

97.0%
MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

91.0%

98.8%

97.0%

91.0%

98.8%

Demand for retail space has remained strong, despite a challenging economy. Occupancy levels for the Corporation’s office
Demand for retail space has remained strong, despite a challenging economy. Occupancy levels for the Corporation’s office space
Leasing Schedule
Demand for retail space has remained strong, despite a challenging economy. Occupancy levels for the Corporation’s office
space continue to be strong even while vacancy levels throughout the city have remained high as additional supply has
continue to be strong even while vacancy levels throughout the city have remained high as additional supply has entered the
In order to reduce the Corporation’s exposure to currency fluctuations and inflation, the Corporation targets shorter lease
space continue to be strong even while vacancy levels throughout the city have remained high as additional supply has
entered the market.
market.
durations with most tenants. Management’s experience is that this practice is in line with local industry standards, with the
entered the market.
Leasing Schedule
Leasing Schedule
expectation that once leases expire, existing tenants are offered the first right to re-lease the space at then prevailing market
In order to reduce the Corporation’s exposure to currency fluctuations and inflation, the Corporation targets shorter lease
Leasing Schedule
rates.
In order to reduce the Corporation’s exposure to currency fluctuations and inflation, the Corporation targets shorter lease
durations with most tenants. Management’s experience is that this practice is in line with local industry standards, with the
In order to reduce the Corporation’s exposure to currency fluctuations and inflation, the Corporation targets shorter lease
expectation that once leases expire, existing tenants are offered the first right to re-lease the space at then prevailing market
durations with most tenants. Management’s experience is that this practice is in line with local industry standards, with the
A summary of the Corporation’s lease signings by asset class is presented in the chart below (while these are contracted
durations with most tenants. Management’s experience is that this practice is in line with local industry standards, with the
rates.
expectation that once leases expire, existing tenants are offered the first right to re-lease the space at then prevailing market
rates, it is anticipated that many tenants will pay reduced cash rates until the economic crisis concludes):
expectation that once leases expire, existing tenants are offered the first right to re-lease the space at then prevailing market
rates.
A summary of the Corporation’s lease signings by asset class is presented in the chart below (while these are contracted
rates.
rates, it is anticipated that many tenants will pay reduced cash rates until the economic crisis concludes):
A summary of the Corporation’s lease signings by asset class is presented in the chart below (while these are contracted rates, it
is anticipated that many tenants will pay reduced cash rates until the economic crisis concludes):

A summary of the Corporation’s lease signings by asset class is presented in the chart below (while these are contracted
Most Recent Lease Signings
rates, it is anticipated that many tenants will pay reduced cash rates until the economic crisis concludes):
Most Recent Lease Signings

New Price Per Meter
Old Price Per Meter
Percent
New Price Per Meter
(Mongolian Tögrög)
(Mongolian Tögrög)
Increase (decrease)
(Mongolian Tögrög)
30,000
35,000
35,000
16.67%
35,000
35,000
0.00%
35,000
40,000
33.33%
40,000
30,000
0.00%
27,777
27,777
27,777
New Price Per Meter
Old Price Per Meter
0.00%
35,000
35,000
35,000
(Mongolian Tögrög)
(Mongolian Tögrög)
28.57%
45,000
45,000
35,000
35,000
30,000
45,000
12.50%
35,000
0.00%
45,000
40,000
35,000
35,000
0.00%
35,486
35,000
35,000
40,000
30,000
35,486
35,486
27,777
27,777
35,000
35,000
The weighted average remaining lease length, calculated as a percentage of monthly revenues, increased slightly during the
45,000
35,000
year to 10.6 months in December 2021 compared to 9.2 months in December 2020. The increase is primarily attributed to
45,000
40,000
the Corporation signing a three-year lease with a local university for one of its office buildings.
35,000
35,000
35,486
35,486

Nov-21
Nov-21
Nov-21
Nov-21
Nov-21
Nov-21
Nov-21
Nov-21
Dec-21
Lease Renewal Date
Dec-21
Dec-21
Dec-21
Nov-21
Dec-21
Dec-21
Dec-21
Nov-21
Dec-21
Dec-21
Nov-21
Dec-21
Nov-21
Dec-21
Dec-21
Dec-21
Dec-21
Dec-21

Old Price Per Meter
(Mongolian Tögrög)
30,000
35,000
30,000
Most Recent Lease Signings
27,777
35,000
35,000
40,000
35,000
35,486

Lease Type
Lease Type
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Retail Lease
Retail Lease
Office Lease
Lease Type
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Office Lease
Retail Lease
Office Lease
Office Lease
Retail Lease
Retail Lease
Office Lease
Office Lease
Office Lease
Office Lease
Retail Lease

The weighted average remaining lease length, calculated as a percentage of monthly revenues, increased slightly during the
year to 10.6 months in December 2021 compared to 9.2 months in December 2020. The increase is primarily attributed to the
The weighted average remaining lease length, calculated as a percentage of monthly revenues, increased slightly during the
Corporation signing a three-year lease with a local university for one of its office buildings.
year to 10.6 months in December 2021 compared to 9.2 months in December 2020. The increase is primarily attributed to
the Corporation signing a three-year lease with a local university for one of its office buildings.

Percent
Increase (decrease)
16.67%
0.00%
33.33%
0.00%
Percent
0.00%
Increase (decrease)
28.57%
16.67%
12.50%
0.00%
0.00%
33.33%
0.00%
0.00%
0.00%
28.57%
12.50%
0.00%
0.00%

183
44
33
72
SqM
24
44
183
36
44
49
33
201
72
24
44
36
49
201

Contractually Obligated Rental Revenue

183
44
33
72
24
44
36
49
201

Lease Renewal Date

SqM

80.00%

60.00%

Contractually Obligated Rental Revenue

80.00%
20.00%

40.00%

0.00%
60.00%

40.00%

20.00%
80.00%
8
0.00%
60.00%

40.00%

20.00%

0.00%

2022

2024
2023
Contractually Obligated Rental Revenue

Office

Redevelopment

Retail

2023

2024

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

Retail

Office

Redevelopment

2022

2023

2024

Retail

Office

Redevelopment

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

| Mongolia Growth Group Ltd

Subscription Products

Due to the impacts of Covid-19, Management is unable to determine current market rates as many tenants in Mongolia are
operating under some form of discount or rental holiday. It is Management’s belief that the majority of the Corporation’s
existing leases are at rates that are in-line with prevailing market rates that existed before Covid-19. Future changes in lease
Due to the impacts of Covid-19, Management is unable to determine current market rates as many tenants in Mongolia are
rates are dependent on economic conditions.
operating under some form of discount or rental holiday. It is Management’s belief that the majority of the Corporation’s existing
leases are at rates that are in-line with prevailing market rates that existed before Covid-19. Future changes in lease rates are
dependent on economic conditions.

Subscription Products
For the past year, the Corporation has been building a financial data product known as KEDM, which helps investors to
monitor various Event-Driven opportunities. The Corporation initiated a paywall on July 1, 2021, in order to monetize this
service. During the year, the Corporation recognized $944,411 of subscription revenue. At year end, the Corporation has
For the past year, the Corporation has been building a financial data product known as KEDM, which helps investors to monitor
various Event-Driven opportunities. The Corporation initiated a paywall on July 1, 2021, in order to monetize this service. During
$1,035,471 of unearned revenue related to subscription fees that have been collected and not earned. As of December 31,
the year, the Corporation recognized $944,411 of subscription revenue. At year end, the Corporation has $1,035,471 of unearned
2021, the Corporation had received $1,979,882 of total billings.
revenue related to subscription fees that have been collected and not earned. As of December 31, 2021, the Corporation had
received $1,979,882 of total billings.
The Corporation intends to increase the marketing of KEDM along with investing to improve the scope and quality of the
data. Should KEDM continue to perform acceptably, the Corporation may look to launch or acquire additional subscription
The Corporation intends to increase the marketing of KEDM along with investing to improve the scope and quality of the data.
products. Additionally, the Corporation is reviewing additional services that it can add to the core KEDM platform in order
Should KEDM continue to perform acceptably, the Corporation may look to launch or acquire additional subscription products.
to increase revenues. The total KEDM subscriber base has continued to grow at an attractive rate since the end of the year.
Additionally, the Corporation is reviewing additional services that it can add to the core KEDM platform in order to increase
revenues. The total KEDM subscriber base has continued to grow at an attractive rate since the end of the year. For more
For more information on KEDM, go to http://www.KEDM.COM.
information on KEDM, go to http://www.KEDM.COM.

Investments

Investments
The Corporation has invested a portion of its excess capital in marketable securities. As of December 31, 2021, the
The Corporation has invested a portion of its excess capital in marketable securities. As of December 31, 2021, the Corporation
Corporation held positions in multiple different publicly traded companies with the values of marketable securities owned
held positions in multiple different publicly traded companies with the values of marketable securities owned of $37,802,853,
of $37,802,853, securities sold short of $2,652,329 and $9,173,869 due to broker.
securities sold short of $2,652,329 and $9,173,869 due to broker.

During the year, the Corporation realized gains of $10,306,006 (2020- gain of $3,288,803) from sales of public securities and
During the year, the Corporation realized gains of $10,306,006 (2020- gain of $3,288,803) from sales of public securities and
experienced unrealized gains of $7,946,088 (2020 –gain of $4,265,403).
experienced unrealized gains of $7,946,088 (2020 –gain of $4,265,403).

At the end of the year, the portfolio’s holdings with a weighting in excess of 10% of the brokerage account’s equity were:

Top Holdings

Holdings
Crude Oil Futures Calls
Sprott Uranium Trust (U-U – Canada)
St Joe Company (JOE – USA)
Valaris PLC (VAL – USA)
Lee Enterprises (LEE – USA)
Crude Oil Futures

Shares
-
362,354
70,379
76,230
76,279
-

25.0%
18.0%
16.5%
12.4%
11.9%
11.0%

The Corporation’s public securities as of December 31, 2021, are broken out in the following sectors:

Industry Sector

Percentage

Long Portfolio

Crude Oil Futures and Calls
Uranium
Energy Services
Media and Communications
Land
Housing
Financials
Technology
Natural Gas
Thermal Coal
Other long equities

36.0%
25.2%
17.9%
17.6%
16.5%
7.5%
7.2%
4.7%
4.4%
3.9%
1.1%

Short Portfolio

Industry Sector
Short Crude Oil Futures Calls
Other Short options

Percentage
-9.3%
-0.2%

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

The Corporation believes that public securities are a liquid alternative to holding cash while seeking out additional businesses
to launch or acquire. The Corporation intends to sell its holdings to fund such future businesses. There are tax and regulatory
The Corporation believes that public securities are a liquid alternative to holding cash while seeking out additional
reasons that this portfolio should not be thought of as the future of the Corporation. The Corporation cautions investors that the
businesses to launch or acquire. The Corporation intends to sell its holdings to fund such future businesses. There are tax
and regulatory reasons that this portfolio should not be thought of as the future of the Corporation. The Corporation
cautions investors that the public securities portfolio is likely to be more volatile than the overall market or a money market
account. Additionally, investing in public securities entails substantial risks, far beyond the risks of investing excess cash into
a bank account. The Corporation does not expect the recent returns to be repeatable, sustainable or indicative of future
returns from the public securities portfolio.

Subsequent to December 31, 2021, the Corporation purchased various Russian securities. As at March 31, 2022, the

Company marked all of these securities to zero. As of March 31, 2022, the public securities portfolio had a net equity value

of approximately $36,000,000 when compared to a net equity value of about $27,800,000 at December 31, 2021. During

the first quarter, the Corporation withdrew approximately $800,000 from the public securities portfolio to fund working

capital needs.

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

Mongolia Growth Group Ltd |

public securities portfolio is likely to be more volatile than the overall market or a money market account. Additionally, investing
in public securities entails substantial risks, far beyond the risks of investing excess cash into a bank account. The Corporation does
not expect the recent returns to be repeatable, sustainable or indicative of future returns from the public securities portfolio.

Subsequent to December 31, 2021, the Corporation purchased various Russian securities. As at March 31, 2022, the Company
marked all of these securities to zero. As of March 31, 2022, the public securities portfolio had a net equity value of approximately
$36,000,000 when compared to a net equity value of about $27,800,000 at December 31, 2021. During the first quarter, the
Due from and due to brokers
Corporation withdrew approximately $800,000 from the public securities portfolio to fund working capital needs.
The Company has margin facilities with its prime brokers. As at December 31, 2021 and 2020, the Company’s amounts due
Due from and due to brokers
to brokers have no specific repayment terms, and they are governed by the margin terms set forth in the prime brokerage
agreements. As at December 31, 2021, the Company had net margin borrowings of $9,173,869 (2020 – net cash on deposit
The Company has margin facilities with its prime brokers. As at December 31, 2021 and 2020, the Company’s amounts due
of $1,373). The fair value of the collateral-listed equity securities is calculated daily and compared to the Company’s margin
to brokers have no specific repayment terms, and they are governed by the margin terms set forth in the prime brokerage
limits. The prime brokers can at any time demand full or partial repayment of the margin balances and any interest thereon
agreements. As at December 31, 2021, the Company had net margin borrowings of $9,173,869 (2020 – net cash on deposit of
or demand the delivery of additional assets as collateral.
$1,373). The fair value of the collateral-listed equity securities is calculated daily and compared to the Company’s margin limits.
The prime brokers can at any time demand full or partial repayment of the margin balances and any interest thereon or demand
the delivery of additional assets as collateral.

2021

Due from brokers
Due to brokers

Gross
amounts due
from brokers
$

6,872
-

Gross
amounts due
from brokers
$

1,415
-

Gross
amounts due
to brokers
$

(4,552)
(9,173,869)

Gross
amounts due
to brokers
$

(42)
-

Net
amounts
$

2,320
(9,173,869)

Net
amounts
$

1,373
-

2020

Digital Assets
Digital Assets
During the year, the Corporation opened a digital currency account at Kraken Custody and purchased Monero (XMR)
During the year, the Corporation opened a digital currency account at Kraken Custody and purchased Monero (XMR)
cryptocurrency. The Corporation purchased 920 Monero coins during the year for $314,419. At the end of the year, the coins
cryptocurrency. The Corporation purchased 920 Monero coins during the year for $314,419. At the end of the year, the
were worth $266,890 as it experiences an unrealized loss of $42,606 and a currency loss of $4,923.
coins were worth $266,890 as it experiences an unrealized loss of $42,606 and a currency loss of $4,923.

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

| Mongolia Growth Group Ltd

Section 2 - Results of Operations
Section 2 – Results of Operations
Selected Annual Financial Information (CAD)
Selected Annual Financial Information (CAD)

Revenue and other income

1,776,711

931,215

1,140,830

Year ended
31-December-2021
($)

Year ended
31-December-2020
($)

Year ended
31-December-2019
($)

Income

Net income (loss) attributable to equity holders of the
Corporation

Total Comprehensive
equity holders of the Corporation

income/ (loss) attributable to

Basic earnings per share ("EPS") (in CAD)
Net income/ (loss)

Diluted EPS (in CAD)
Net Income/ (loss)

Balance Sheet
Total assets
Total liabilities
Total equity
Shares outstanding at year end
Book value per share

15,549,306

3,727,544

(3,250,446)

15,491,985

2,516,287

(4,257,182)

0.53

55,026,865
14,849,578
40,177,287
27,778,499
1.47

0.12

27,970,421
1,123,994
26,846,427
31,281,499
0.86

(0.10)

26,077,221
1,407,393
24,669,828
32,767,499
0.75

Rental Revenue from Investment Properties
Rental Revenue from Investment Properties
Rental revenue from Investment Properties decreased from $756,283 in 2020 to $679,091 in 2021. This is primarily due to
Rental revenue from Investment Properties decreased from $756,283 in 2020 to $679,091 in 2021. This is primarily due to
discounts given to tenants due to Covid-19 restrictions, fewer investment properties along with the depreciation of the
discounts given to tenants due to Covid-19 restrictions, fewer investment properties along with the depreciation of the Mongolian
Mongolian Togrog.
Togrog.

Unearned Revenue
Unearned Revenue
The Company has developed a data analytics service, named KEDM, that tracks various Event-Driven strategies. The Company
The Company has developed a data analytics service, named KEDM, that tracks various Event-Driven strategies. The Company
initiated a paywall on July 1, 2021, to start monetizing this service. Revenue collected that has not been earned has been
initiated a paywall on July 1, 2021, to start monetizing this service. Revenue collected that has not been earned has been
classified as unearned revenue and will be classified according to the Company’s revenue policies described in note 3 of the
classified as unearned revenue and will be classified according to the Company’s revenue policies described in note 3 of the 2021
consolidated financial statements.
2021 consolidated financial statements.

As of December 31, 2021, the Company has unearned revenue of $1,035,471 (December 31, 2020 - $nil).
As of December 31, 2021, the Company has unearned revenue of $1,035,471 (December 31, 2020 - $nil).
MGG has engaged an arm’s length company to compile and produce the KEDM report on an ongoing basis, while MGG will act as
the distributor and marketer of the product. As a part of this engagement, MGG has agreed to pay certain direct and approved
MGG has engaged an arm’s length company to compile and produce the KEDM report on an ongoing basis, while MGG will
expenses related to producing KEDM in addition to 20% of quarterly earned revenues above a threshold. Expenses related to
act as the distributor and marketer of the product. As a part of this engagement, MGG has agreed to pay certain direct and
the unearned revenue have generally not yet been incurred and are not reflected in the Company’s financial statements. MGG
approved expenses related to producing KEDM in addition to 20% of quarterly earned revenues above a threshold. Expenses
owns all intellectual property related to KEDM and the arm’s length company disclaims any ownership or rights to the intellectual
related to the unearned revenue have generally not yet been incurred and are not reflected in the Company’s financial
property. The agreement can be discontinued by either party following a reasonable transition period and MGG can engage a
substitute party to continue the production of KEDM. For more information about KEDM, go to www.KEDM.com.
statements. MGG owns all intellectual property related to KEDM and the arm’s length company disclaims any ownership or
rights to the intellectual property. The agreement can be discontinued by either party following a reasonable transition period
Revenue from Other Sources
and MGG can engage a substitute party to continue the production of KEDM. For more information about KEDM, go to
Revenue from other sources consists of late fees, fees earned for third-party leasing, and property management. For the year
www.KEDM.com.
ending December 31, 2021, revenues from other sources increased to $190,850 compared to $68,170 for the year ending
December 31, 2020, as there was an increase in brokerage transactions during the year.
Revenue from Other Sources
Revenue from Subscriptions
Revenue from other sources consists of late fees, fees earned for third-party leasing, and property management. For the
year ending December 31, 2021, revenues from other sources increased to $190,850 compared to $68,170 for the year
Revenue from subscriptions consists of fees earned through our data analytics subscriptions. For the year ending December 31,
ending December 31, 2020, as there was an increase in brokerage transactions during the year.
2021, revenues from subscriptions were $944,411 compared to $nil in 2020 as KEDM had not yet been launched.

Gain/loss on disposal of Investment Properties

During the year, the Corporation sold eight properties with a value of $2,163,008 for a net loss of $37,641 (2020 – three properties
for cash consideration of $690,134 and a net gain of $106,762).

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

Mongolia Growth Group Ltd |

Fair Value Adjustment on Investment Properties

The estimate of fair value of investment properties is a critical accounting estimate to the Corporation. An external appraiser
estimates the fair value of the majority of the Investment Properties annually, the remainder are appraised internally by
Management. The fair value of investment properties is based on the nature, location and condition of the specific asset. The
fair value of investment properties represents an estimate of the price that would be made in an arm’s length transaction
between knowledgeable, willing parties. The Corporation operates in the emerging real estate market of Mongolia, which given
its current economic and industry conditions, has an increased inherent risk given the lack of reliable and comparable market
information. For the year ended December 31, 2021, the Corporation recorded a valuation loss of $441,870 (2020 – $2,700,069
loss). Management continues to evaluate the impacts of Covid-19 on property prices.

Income Taxes

The Corporation has subsidiaries in Mongolia that are subject to income taxes and, accordingly, has provided for current and
deferred income taxes with respect to those subsidiaries.

Differences between IFRS and statutory taxation regulations in Mongolia give rise to temporary differences between the carrying
amount of assets and liabilities for financial reporting purposes and their tax bases. The deferred tax liability on the balance sheet
increased by $531,408 during the year (Q4 2020 - $103,051 decrease) due to gains in our investment portfolio.

The Corporation’s marketable securities portfolio has generated large gains in 2020 and 2021. It is expected that the Corporation
will use up all of its Non-capital losses available and to pay taxes in Canada on some of these gains. The Corporation has
estimated the deferred liability to be approximately $1,010,244.

Unrealized public securities investment gain/loss

During the year, the Corporation had an unrealized public securities investment gain of $7,946,088 compared to an unrealized
public securities investment gain of $4,265,403 during 2020.

Realized public securities investment gain/loss

During the year, the Corporation had realized investment gains of $10,306,006 compared to a realized investment gain of
$3,288,803 in 2020.

Realized foreign currency gain/loss

During the year, the Corporation had a realized foreign currency loss of $313,464 compared to a realized foreign currency loss
of $14,727 in 2020.

Share Repurchase

During 2021, the Corporation repurchased 3,311,500 common shares under its Normal Course Issuer Bid (NCIB) at an average
price of $0.65 (2020-1,642,500, $0.21 average). As at December 31, 2021, the Corporation did not hold any shares in Treasury to
be cancelled during the first quarter of 2022 (2020- 191,500).

Property Operating Expenses

Property Operating Expenses consist of repairs and maintenance, bad debts, utilities, salaries, as well as land and property taxes.
For the year ending December 31, 2021, property operating expenses were $760,783 compared to $860,936 during the same
period in 2020 due to a smaller number of investment properties.

Corporate Expenses

Corporate expenses include senior management and board of directors’ compensation, listing fees, professional fees, technology,
travel, investment research expenses, KEDM.COM development costs and administrative costs.

For the year ending December 31, 2021, general and administration expenses have increased from $910,968 in 2020 to $2,021,493
in 2021. This increase was primarily driven by an increase in various legal, corporate structuring, and tax planning expenses as
it evaluates the current corporate structure for optimization along with increased management compensation and expenses
related to the production of KEDM. The Corporation anticipates that these expenses will remain elevated during the next few
quarters before returning to a more normalized level. Additionally, the Corporation is looking to hire additional employees at
the corporate level in order to assist in marketing KEDM, building up the Merchant Bank and seeking out additional investment
opportunities.

Management considers the majority of the legal expenses to be non-recurring but cautions investors that such expenses are
likely to remain at an elevated level for the next few quarters.

Unrealized digital assets investment gain/loss

During the year, the Corporation had an unrealized digital assets investment loss of $42,606 and a currency loss of $4,923 (2020
– $nil).

| Mongolia Growth Group LtdCurrency

The Mongolian Tögrög has fluctuated significantly over the past ten years; however, it was relatively unchanged in 2021 increasing
from 2235 at the end of December 2020 to 2237 at the end of December 2021. The fluctuation in the currency is reflected in
the Corporation’s financial statements, most notably in the investment property portfolio. Note 11 in the financial statements
discloses the foreign exchange adjustment, which flows through the investment property classification during each period. As at
December 31, 2021, the Corporation recognized a foreign exchange adjustment loss of $51,451 (2020 - loss of $1,151,720) due
to the timing of the sales of investment property portfolio.

Net Income

For the year ended December 31, 2021, the Corporation had a net income of $15,549,306 compared to a net income of $3,727,544
for the year ended December 31, 2020. This increase versus the same period last year is primarily due to the substantial unrealized
and realized gains on marketable securities of $7,946,088 and $10,306,006 respectively as well as the subscription revenue of
$944,411 earned during the period. Management cautions investors that the Corporation is primarily focused on increasing
shareholder value on a per-share basis. This means that, operationally, Management is more concerned with long-term asset
appreciation at the expense of short-term cash flow. Management expects this to be the case for the foreseeable future.

Mongolia Growth Group Ltd |Section 3 - Financial Condition
Section 3 - Financial Condition
Cash Flow
Cash Flow
Mongolia Growth Group’s primary sources of capital are cash generated from equity issuance, investing, financing and asset
Mongolia Growth Group’s primary sources of capital are cash generated from equity issuance, investing, financing and asset
sales. Management expects to meet all of the Corporation’s obligations through current cash and cash equivalents along
sales. Management expects to meet all of the Corporation’s obligations through current cash and cash equivalents along with
with cash flows from asset sales.
cash flows from asset sales.
The following table provides an overview of the Corporation’s cash flows from operating, financing and investing activities
The following table provides an overview of the Corporation’s cash flows from operating, financing and investing activities for the
for the year ended December 31, 2021, and 2020.
year ended December 31, 2021, and 2020.

Net change in cash related to:
Operating
Investing
Financing
Effects of exchange rates on cash

Net change in cash during the period

31-December-2021
$

8,986,056
(5,767,722)
(2,141,125)
(42,669)

1,034,540

For the year ending
31-December-2020
$

(940,137)
1,769,219
(299,688)
95,122

624,516

Overall, the Corporation had cash inflows of $1,034,540 during 2021 primarily due to significant cash inflows from operating
Overall, the Corporation had cash inflows of $1,034,540 during 2021 primarily due to significant cash inflows from operating
activities. The changes in components of cash flows for the year ended December 31, 2021, compared to the year ended
activities. The changes in components of cash flows for the year ended December 31, 2021, compared to the year ended
December 31, 2020, were the result of the following factors:
December 31, 2020, were the result of the following factors:

• Operating– The Corporation experienced significant operating cash inflows due to a significant net change in non-cash
working capital as the Company had a large amount due to broker at year end. In contrast, at the end of
• Operating–The Corporation experienced significant operating cash inflows due to a significant net change in
2020, the Company had a large amount on deposit at the broker.
non-cash working capital as the Company had a large amount due to broker at year end. In contrast, at the
end of 2020, the Company had a large amount on deposit at the broker.

• Investing– The Corporation experienced significant outflows from investing activities for the year ended 2021 primarily
due to significant net purchase of marketable securities and acquisition of digital assets, offset slightly by
Investing–The Corporation experienced significant outflows from investing activities for the year ended 2021
inflows from the disposal of investment properties. In contrast, the Corporation had inflows from the sale
primarily due to significant net purchase of marketable securities and acquisition of digital assets, offset slightly
of marketable securities and proceeds on the sale of investment properties in 2020.
by inflows from the disposal of investment properties. In contrast, the Corporation had inflows from the sale
• Financing– The Corporation experienced large cash outflows from Financing activities during 2021 due to share
of marketable securities and proceeds on the sale of investment properties in 2020.
repurchases. In contrast, in 2020, the Corporation had negligible outflows from Financing activities due to
a much smaller share repurchases.

•

Financing– The Corporation experienced large cash outflows from Financing activities during 2021 due to
To date, the Corporation has been able to meet all of its capital and other cash requirements from its internal sources of cash.
share repurchases. In contrast, in 2020, the Corporation had negligible outflows from Financing activities due
As at December 31, 2021, the Corporation had $2,396,311 (2020 - $1,361,771) in cash and cash equivalents. Management
to a much smaller share repurchases.
considers its marketable securities holdings to be fairly liquid and can be sold should the Corporation need to increase its cash
position.
To date, the Corporation has been able to meet all of its capital and other cash requirements from its internal sources of
cash. As at December 31, 2021, the Corporation had $2,396,311 (2020 - $1,361,771) in cash and cash equivalents.
Total Assets
Management considers its marketable securities holdings to be fairly liquid and can be sold should the Corporation need to
As of December 31, 2021, the Corporation had $40,809,029 (2020 - $12,134,944) in Current Assets of which $2,396,311 were held
increase its cash position.
in cash and cash equivalents (2020 - $1,361,771) and $37,802,853 were held in marketable securities (Q4 2020 -$10,612,071),
$311,437 were held in unrealized gain on futures contract (Q4 2020-nil), $266,890 were held in digital assets (Q4 2020-nil),
Total Assets
and $29,218 were held in other assets (Q4 2020-$159,729). The increase in marketable securities is due to gains in marketable
As of December 31, 2021, the Corporation had $40,809,029 (2020 - $12,134,944) in Current Assets of which $2,396,311
securities during the period. Investment Properties are classified as Non-Current Assets and are carried at Fair Market Value.
were held in cash and cash equivalents (2020 - $1,361,771) and $37,802,853 were held in marketable securities (Q4 2020 -
During the year, Investment Properties decreased to $11,885,907 (Q4 2020 -$14,542,236) due to a decrease in the total number
of properties held as well as an unrealized fair value impairment.
$10,612,071), $311,437 were held in unrealized gain on futures contract (Q4 2020-nil), $266,890 were held in digital assets
(Q4 2020-nil), and $29,218 were held in other assets (Q4 2020-$159,729). The increase in marketable securities is due to
Property and Equipment, which primarily consists of properties that are measured at their cost base, increased significantly from
gains in marketable securities during the period. Investment Properties are classified as Non-Current Assets and are carried
$1,293,241 as at December 31, 2020, to $2,220,207 as at December 31, 2021 as the Company purchased a mixed use property
at Fair Market Value. During the year, Investment Properties decreased to $11,885,907 (Q4 2020 -$14,542,236) due to a
in Puerto Rico during the year that has been classified as Property and Equipment.
decrease in the total number of properties held as well as an unrealized fair value impairment.
Total Liabilities
Property and Equipment, which primarily consists of properties that are measured at their cost base, increased significantly
As of December 31, 2021, the Corporation had current liabilities of $13,839,334 (2020 - $605,158) consisting primarily of
from $1,293,241 as at December 31, 2020, to $2,220,207 as at December 31, 2021 as the Company purchased a mixed use
marketable securities sold short of $2,652,329, amounts due to broker of $9,173,869, payables of $913,391, and unearned
property in Puerto Rico during the year that has been classified as Property and Equipment.
revenue of $1,035,471 (Q4 2020-nil).

At the end of December 31, 2021, the CEBA loan was reclassified from long term to short term.

As of December 31, 2021, the non-current liabilities on the balance sheet were deferred income taxes of $1,010,244 (Q4 2020-
$478,836).

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

Management considers all other current cash commitments to be immaterial and operational in nature.

| Mongolia Growth Group Ltd

Total Liabilities

As of December 31, 2021, the Corporation had current liabilities of $13,839,334 (2020 - $605,158) consisting primarily of

marketable securities sold short of $2,652,329, amounts due to broker of $9,173,869, payables of $913,391, and unearned

revenue of $1,035,471 (Q4 2020-nil).

At the end of December 31, 2021, the CEBA loan was reclassified from long term to short term.

As of December 31, 2021, the non-current liabilities on the balance sheet were deferred income taxes of $1,010,244 (Q4
As of December 31, 2021, the non-current liabilities on the balance sheet were deferred income taxes of $1,010,244 (Q4
2020-$478,836).
2020-$478,836).
Management considers all other current cash commitments to be immaterial and operational in nature.
Management considers all other current cash commitments to be immaterial and operational in nature.
Total Equity
Total Equity
Total Equity
During the year, the Company’s equity value increased to $40,177,287 at December 31, 2021 from $26,846,427 at December
During the year, the Company’s equity value increased to $40,177,287 at December 31, 2021 from $26,846,427 at December
31, 2020.
During the year, the Company’s equity value increased to $40,177,287 at December 31, 2021 from $26,846,427 at December
31, 2020.
31, 2020.
The equity of the Corporation consists of one class of common shares.
The equity of the Corporation consists of one class of common shares.
The equity of the Corporation consists of one class of common shares.
Outstanding
Common shares
Outstanding
Options to buy common shares
Common shares
Options to buy common shares

31-December- 2021
27,778,499*
31-December- 2021
-
27,778,499*
* As at December 31, 2021, the Corporation held no common shares in Treasury to be cancelled during the first quarter of 2022 (2020-191,500).
-
* As at December 31, 2021, the Corporation held no common shares in Treasury to be cancelled during the first quarter of 2022 (2020-191,500).
* As at April 21, 2022 the Corporation had 27,778,499 shares outstanding, no shares held in treasury and no options outstanding.
* As at April 21, 2022 the Corporation had 27,778,499 shares outstanding, no shares held in treasury and no options outstanding.
Acquisitions and Dispositions
Acquisitions and Dispositions
Acquisitions and Dispositions
During the year, the Company sold eight properties with a value of $2,125,367 at a net loss of $37,641 (2020- $690,134 and
During the year, the Company sold eight properties with a value of $2,125,367 at a net loss of $37,641 (2020- $690,134 and
a net gain of $106,762). The Company purchased a mixed use property in Puerto Rico during the year for $821,591 that has
During the year, the Company sold eight properties with a value of $2,125,367 at a net loss of $37,641 (2020- $690,134 and a
a net gain of $106,762). The Company purchased a mixed use property in Puerto Rico during the year for $821,591 that has
been classified as Property and Equipment (2020-no properties purchased).
net gain of $106,762). The Company purchased a mixed use property in Puerto Rico during the year for $821,591 that has been
been classified as Property and Equipment (2020-no properties purchased).
classified as Property and Equipment (2020-no properties purchased).
Related Party Transactions
Related Party Transactions
Related Party Transactions
Parties are generally considered to be related if the parties are under common control or if one party has the ability to
Parties are generally considered to be related if the parties are under common control or if one party has the ability to
control the other party or can exercise significant influence or joint control over the other party in making financial and
Parties are generally considered to be related if the parties are under common control or if one party has the ability to control
control the other party or can exercise significant influence or joint control over the other party in making financial and
the other party or can exercise significant influence or joint control over the other party in making financial and operational
operational decisions. In considering each possible related party relationship, attention is directed to the substance of the
decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not
operational decisions. In considering each possible related party relationship, attention is directed to the substance of the
relationship, not merely the legal form.
merely the legal form.
relationship, not merely the legal form.
Key management personnel of the Corporation include all directors, executive management, and persons related to
Key management personnel of the Corporation include all directors, executive management, and persons related to directors
Key management personnel of the Corporation include all directors, executive management, and persons related to
directors and executive management. The summary of compensation for key management personnel is as follows:
and executive management. The summary of compensation for key management personnel is as follows:
directors and executive management. The summary of compensation for key management personnel is as follows:

31-December-20
31,281,499*
31-December-20
-
31,281,499*
-

2021
$
2021
661,332
$
60,000
661,332
60,000
721,332
721,332

2020
Related Party Transactions
$
2020
Related Party Transactions
479,281
Salaries and other short-term benefits to officers
$
40,000
Director fees
479,281
Salaries and other short-term benefits to officers
40,000
Director fees
519,281
Total
Total
519,281
During 2021, the Company agreed to reimburse a Company owned by an officer of the Company, $233,933 for professional
During 2021, the Company agreed to reimburse a Company owned by an officer of the Company, $233,933 for professional fees
During 2021, the Company agreed to reimburse a Company owned by an officer of the Company, $233,933 for professional
incurred from shared services.
fees incurred from shared services.
fees incurred from shared services.
As at December 31, 2021, amounts due to related parties totaled approximately $140,000 (2020 - $45,000) comprised of fees
As at December 31, 2021, amounts due to related parties totaled approximately $140,000 (2020 - $45,000) comprised of
owed to management were included in trade payables and accrued liabilities.
As at December 31, 2021, amounts due to related parties totaled approximately $140,000 (2020 - $45,000) comprised of
fees owed to management were included in trade payables and accrued liabilities.
Off-Balance Sheet Items
fees owed to management were included in trade payables and accrued liabilities.
Off-Balance Sheet Items
As of December 31, 2021, the Corporation had no off-balance sheet items.
Off-Balance Sheet Items
As of December 31, 2021, the Corporation had no off-balance sheet items.
COVID-19
As of December 31, 2021, the Corporation had no off-balance sheet items.
Beginning in February of 2020, the Government of Mongolia undertook extraordinary actions in order to limit the spread of
COVID-19. These actions included closing borders, closing schools, reducing gatherings and drastic limitations on business
operations. It is anticipated that these actions will lead to a severe economic crisis. Since the initiation of these actions, the
Company has experienced a material reduction in rental revenues received. It is also reasonable to expect there could be
a material negative impact on the fair values of investment properties; however, at this time the potential effect cannot be
quantified. At this time, there is no way to know the ultimate impact of these extraordinary actions upon the economy or the
Company.

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A
MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

16
16

Events Subsequent to Year End

• The Company sold two properties for total proceeds of approximately $381,000 and a net gain of $nil.

• On February 24, 2022, Russia invaded Ukraine. Mongolia’s economy is likely to be impacted by the Russian invasion of
Ukraine as Russia is a substantial trading partner of Mongolia. Recent actions to restrict Russian access to SWIFT may have
negative impacts upon Mongolia’s ability to trade with Russia, which may negatively impact the Mongolian economy. To
date, Mongolia has taken a neutral view regarding the Russian invasion. There is no way to know if Mongolia’s stance will
shift over time.

• Subsequent to year end, the Company cancelled its brokerage license in Mongolia to apply for a license through a different

subsidiary for structuring purpose. The Company’s new license has not yet been approved.

Mongolia Growth Group Ltd |

• As disclosed in the Corporation’s March 21, 2022 press release, the Corporation announced that the TSX Venture Exchange
(the “Exchange”) had accepted a Notice of Intention to renew its normal course issuer bid to purchase outstanding
common shares of the Corporation on the open market in accordance with the policies of the TSX.

Securities Sought

Up to 1,935,000 common shares, representing up to approximately 7.0% of the 27,778,499 Common Shares of the Issuer
currently issued and outstanding, or approximately 9.9% of the 19,362,249 common shares constituting the Issuer’s
current Public Float (as defined in the Policies of the Exchange).

Duration

The Issuer intends to commence purchasing its common shares under the Normal Course Issuer Bid three clear trading
days following acceptance of the same by the TSX Venture Exchange (the “Exchange”). The Bid will commence on or
about March 24, 2022, and the Bid will end no later than March 23, 2023.

Method of Acquisition

Purchases will be affected through the facilities of the Exchange. Purchase and payment for the common shares of the
Issuer will be made by the Issuer in accordance with Exchange requirements.

Member and Broker

The Normal Course Issuer Bid will be conducted by M Partners Inc. of 70 York Street, Suite 1560, Toronto ON M5J 1S9;
Thomas Matthews: Phone: (416) 603-7381.

Consideration Offered

Purchases of common shares under the Normal Course Issuer Bid will be conducted at applicable Market Prices in
accordance with Exchange requirements. Completion of purchases under the bid will be subject to the Issuer having
sufficient funds to acquire the common shares and continue to meet its working capital requirements throughout the
course of the bid. The Issuer may in the normal course of its business operations, subject to market conditions, sell one or
more of its investment properties to fund acquisitions throughout the course of the bid.

Reasons for the Normal Course Issuer Bid

The Issuer is undertaking the bid because, in the opinion of its board of directors, the market price of its common shares,
from time to time, may not fully reflect the underlying value of its operations and future growth prospects. The Issuer
believes that in such circumstances, the purchase of the common shares of the Issuer may represent an appropriate and
desirable use of the Issuer’s funds and further enhance market stability.

Persons Acting Jointly or in Concert with the Issuer

N/A

Valuation

After making reasonable enquiry, the Issuer is not aware of any appraisal or valuation of the Issuer’s securities that has
been prepared within the preceding two years.

In connection with the preparation of its audited financial statements for the financial year ending December 31, 2019,
the Issuer engaged CBRE Limited, an arm’s length property valuator, to prepare the following independent valuation
report (the “Valuation”) in respect of the Issuer’s Mongolian real estate investment assets:

• Report entitled “Valuation Review Report”, dated March 16, 2021, which ascribed a value of 26,074,622,667 MNT
(Mongolian Togrogs) to the Issuer’s material real estate investment assets as at December 31, 2020;

The Valuations were prepared for internal accounting purposes and the Issuer does not have permission to share the
Valuations externally.

Previous Purchases

The Issuer has purchased 2,250,000 of its common shares at an average price of $0.76 within the past 12 months.

Acceptance by Insiders, Affiliates and Associates

To the knowledge of the Issuer, no director, senior officer or other Insider of the Issuer or any associate or affiliate of the
Issuer or any insider of the Issuer currently intends to sell common shares under the Normal Course Issuer Bid. However,
such sales by persons through the facilities of the Exchange may occur if the personal circumstances of such persons
change or any such person makes a decision to sell shares as market circumstances may warrant. The benefits to any such
person whose shares are purchased under the bid would be the same as the benefits available to all other holders of the
Issuer’s common shares whose shares are purchased under the bid.

| Mongolia Growth Group LtdBenefits from the Normal Course Issuer Bid

N/A

Material Changes in the Affairs of the Issuer Company

The Issuer currently has no plans or proposals for any Material Change in the affairs of the Issuer or to make any Material
Changes in its business, corporate structure (debt or equity), management or personnel, or any other change which might
reasonably be expected to have a significant effect on the price or value of the securities.

Mongolia Growth Group Ltd |Section 4 - Quarterly Information
Section 5 - Quarterly Information
Quarterly Results
Quarterly Results
The following table is a summary of select quarterly information over the previous eight quarters:
The following table is a summary of select quarterly information over the previous eight quarters:

Revenue
Net income (loss)
Income (loss) per common share
Total Assets
Weighted Average Shares (No.)
Ending Shares (No.)

Q4 2021
638,904
1,817,849
0.07
55,026,865
29,309,116
27,778,499

Q3 2021
708,530
3,859,343
0.13
41,322,146
29,667,449
28,415,999

Q2 2021
179,416
3,756,952
0.13
38,950,727
30,220,380
28,849,499

Q1 2021
249,861
6,115,162
0.20
33,756,541
30,756,617
30,028,499

Q4 2020
182,989
5,257,076
0.17
27,970,421
32,102,372
31,281,499

Q3 2020
324,695
1,048,297
0.03
23,992,584
32,312,665
31,856,999

Q2 2020
198,393
(1,279,482)
(0.04)
23,427,206
32,455,903
31,132,499

Q1 2020
225,138
(1,298,347)
(0.04)
25,832,058
32,665,532
32,398,499

Revenue
Revenue
During the fourth quarter, the Corporation earned total revenues of $638,904 (Q4 2020 -$182,989) most of which was
During the fourth quarter, the Corporation earned total revenues of $638,904 (Q4 2020 -$182,989) most of which was generated
generated through subscription revenue $522,901 (Q4 2020 - $nil). During the fourth quarter, the Company earned
through subscription revenue $522,901 (Q4 2020 - $nil). During the fourth quarter, the Company earned $199,176 in rental
revenue (Q4 2020 - $170,183), $20,517 in other revenue (Q4 2020 - $15,419) and a loss on disposal of Investment property of
$199,176 in rental revenue (Q4 2020 - $170,183), $20,517 in other revenue (Q4 2020 - $15,419) and a loss on disposal of
$103,692 (Q4 2020 - $2,613 loss).
Investment property of $103,692 (Q4 2020 - $2,613 loss).

During the quarter, the Corporation also incurred an unrealized loss on fair value adjustment on investment properties and
During the quarter, the Corporation also incurred an unrealized loss on fair value adjustment on investment properties and
impairment of PP&E of $388,240 (Q4 2020 - $647,298).
impairment of PP&E of $388,240 (Q4 2020 - $647,298).
Lastly, during the quarter, the Corporation had unrealized gains of $3,046,452 and realized gains of $371,600 in its marketable
securities portfolio (Q4-2020 – unrealized: $5,012,686, realized gain: $1,293,328)
Lastly, during the quarter, the Corporation had unrealized gains of $3,046,452 and realized gains of $371,600 in its
marketable securities portfolio (Q4-2020 – unrealized: $5,012,686, realized gain: $1,293,328)
Expenses

Quarterly expenses totaled $1,142,053 (Q4 2020 - $672,723). This increase was due to expenses related to the Company’s
Expenses
subscription business, legal expenses and year-end bonuses.
Quarterly expenses totaled $1,142,053 (Q4 2020 - $672,723). This increase was due to expenses related to the Company’s
Net Income
subscription business, legal expenses and year-end bonuses.

During the quarter, the Corporation experienced a gain of $1,817,849 in comparison to a gain of $5,257,076 in the same quarter
Net Income
of the previous year. This difference is mainly attributed to significant gains in the marketable securities portfolio during the year
During the quarter, the Corporation experienced a gain of $1,817,849 in comparison to a gain of $5,257,076 in the same
as well as income earned from the Corporation’s new subscription business.
quarter of the previous year. This difference is mainly attributed to significant gains in the marketable securities portfolio
during the year as well as income earned from the Corporation’s new subscription business.

MONGOLIA GROWTH GROUP LTD., Q4 2021 MD&A

| Mongolia Growth Group Ltd

Section 5 – Critical Estimates

Critical Accounting Estimates

The preparation of financial statements in accordance with IFRS required Management to make assumptions about the future
that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical
experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the future, actual experience may differ from these estimates and assumptions.

The critical estimates made in the preparation of the consolidated financial statements include the following:

Fair value of investment properties

The estimate of fair value of investment properties is the most critical accounting estimate to the Company. An external
appraiser estimates the fair value of the majority of Investment Properties annually, the remainder is appraised internally by
Management. The fair value of investment properties is based on the nature, location and condition of the specific asset. The
fair value of investment properties represents an estimate of the price that would be made in an arm’s length transaction
between knowledgeable, willing parties. The Corporation operates in the emerging real estate market of Mongolia, which given
its current economic and industry conditions, has an increased inherent risk given the lack of reliable and comparable market
information. For the year ending December 31, 2021, the Corporation recorded a fair value impairment loss of $441,870 (Q4
2020 – $2,700,069 loss).

Operating Environment of the Corporation

Mongolia displays many characteristics of an emerging market including relatively high inflation and interest rates. The tax and
customs legislation in Mongolia is subject to varying interpretations and frequent changes. The future economic performance of
Mongolia is tied to continuing demand from China and continuing high global prices for commodities as well as being dependent
upon the effectiveness of economic, financial, and monetary measures undertaken by the Government of Mongolia together
with tax, legal, regulatory, and political developments. Management is unable to predict all developments that could have an
impact on the Mongolian economy and consequently, what effect, if any, they could have on the future financial position of the
Corporation.

Recently, the Corporation has experienced difficulty converting Mongolian Tögrög to U.S. Dollars at large Mongolian banks. There
can be no certainty regarding the ability to convert or wire money from Mongolia in the future.

In recent years, Mongolia signed an agreement with the IMF. There is no certainty regarding the demands that the IMF may make
upon Mongolia for austerity or the impacts that this may have on the economy of Mongolia.

During October 2019, Mongolia was added to the FATF “grey-list” for countries with weak anti-money laundering laws and
prevention practices. Though Mongolia was recently removed from the “grey-list,” the Corporation is unsure of how this will
impact its ability to convert currency or transfer funds internationally. Additionally, the Corporation is unsure of what other
impacts this may have upon its business.

Due to the economic crisis, businesses are increasingly paying for transactions using various forms of barter such as used
equipment, apartments, vehicles, future services and livestock. To date, the Corporation has only agreed to receive barter items
in extreme circumstances and has a strong preference to avoid using barter in transactions. As the economic crisis has worsened,
barter transactions have become a more substantial percentage of overall economic transactions. As a result, the Corporation
may be forced to receive barter items at a higher frequency. These barter items are often difficult to value and monetize and may
cause other difficulties for the Corporation that are impossible to predict.

On February 24, 2022, Russia invaded Ukraine. Mongolia’s economy is likely to be impacted by the Russian invasion of Ukraine as
Russia is a substantial trading partner of Mongolia. Recent actions to restrict Russian access to SWIFT may have negative impacts
upon Mongolia’s ability to trade with Russia, which may negatively impact the Mongolian economy. To date, Mongolia has taken
a neutral view regarding the Russian invasion. There is no way to know if Mongolia’s stance will shift over time.

Deferred Tax Assets

Deferred tax assets are recognized to the extent that it is probable that deductible temporary differences will reverse in the
foreseeable future and there will be sufficient future taxable profits against which the deductible temporary differences can
be utilized. The Corporation reviews the carrying amount of deferred tax assets at the end of each reporting period which is
reduced to the extent that it is no longer probable that deferred tax assets recognized will be recovered or increased to the
extent that sufficient future taxable profit will be available to allow all or part of a previously unrecognized deferred tax asset
to be recovered. Estimates of future taxable income are based on forecasted cash flows from operations, available tax planning
opportunities and expected timing of reversals of taxable temporary differences.

Mongolia Growth Group Ltd |Valuation of Marketable Securities

The Company recognizes marketable securities at fair value. Fair value is determined on the basis of market prices from
independent sources, if available. If there is no market price, then the fair value is determined by using valuation models with
inputs derived from observable market data where possible but where observable data is not available, judgement is required
to establish fair values.

Significant judgments made in the preparation of these consolidated financial statements include the
following areas:

Judgement is required in determining whether an asset meets the criteria for classification as assets held for sale and or as
discontinued operations in the consolidated financial statements. Criteria considered by management include the existence of
and commitment to a plan to dispose of the assets, the expected selling price of the assets, the probability of the sale being
completed within an expected timeframe of one year and the period of time any amounts have been classified within assets
held for sale. Management reviews the criteria for assets held for sale each quarter and reclassifies such assets to or from this
financial position category as appropriate. On completion of the sale, Management exercises judgement as to whether the sale
qualifies as a discontinued operation.

As at December 31, 2021 and 2020, Management has made the judgment that none of the Corporation’s assets meet the criteria
to be classified as held for sale. While this is due to a number of factors, a primary reason is that due to the conditions of the
Mongolian economy and the lack of liquidity in the market, management was unable to conclude that the sale of any significant
size asset could be considered highly probable.

Judgement is required in determining whether the Company’s Investment property and land use rights titles are at risk. As
at December 31, 2021 and 2020, Management has made the judgment that Investment Properties whereby the land title has
recently expired but is expected to be renewed in the near future should continue to be classified as Investment Properties.
Properties whereby Management judges that the Company’s titles are at risk, have been impaired to reflect the level of risk
estimated by Management.

| Mongolia Growth Group LtdSection 6 – Risk Management

Credit Risk

The Corporation’s exposure to credit risk is managed through risk management policies and procedures with emphasis on the
quality of the investment portfolio. For the year, most of the Corporation’s credit risk consisted of institutional deposits. The
majority of the funds invested are held in reputable Canadian, American or Mongolian banks.

The Corporation is exposed to credit risk as an owner of real estate in which tenants may become unable to pay contracted
rents. The Corporation mitigates this risk by carrying out due diligence on significant tenants. The Corporation’s properties
are diversified across residential and commercial classes. Historically, bad debts have not been a substantial expense for the
Corporation. Recently, the Corporation has experienced an increase in late rental payments. The Corporation believes that it will
collect all of this debt, but there is no certainty that this will occur.

Liquidity Risk

Under certain market conditions, such as during volatile markets or when trading in a security or market is otherwise impaired,
the liquidity of the Corporation’s portfolio positions may be reduced. In addition, the Corporation may from time to time hold
large positions with respect to a specific type of financial instrument, which may reduce the Corporation’s liquidity. During such
times, the Corporation may be unable to dispose of certain financial instruments, including longer-term financial instruments,
which would adversely affect its ability to rebalance its portfolio. In addition, such circumstances may force the Corporation
to dispose of financial instruments at reduced prices, thereby adversely affecting its performance. If there are other market
participants seeking to dispose of similar financial instruments at the same time, the Corporation may be unable to sell such
financial instruments or prevent losses relating to such financial instruments. Furthermore, if the Corporation incurs substantial
trading losses, the need for liquidity could rise sharply while its access to liquidity could be impaired. In addition, in conjunction
with a market downturn, the Corporation’s counterparties could incur losses of their own, thereby weakening their financial
condition and increasing the Corporation’s exposure to their credit risk.

The Corporation does not believe its current maturity profile lends itself to any material liquidity risk, taking into account the
level of cash and cash equivalents, investments and marketable securities as at December 31, 2020.

As at December 31, 2021, the Corporation had working capital of $26,969,695 (2020- $11,529,786) comprised of cash and cash
equivalents, other assets, net of trade and accrued liabilities, income taxes payable, and short-term bank loan. Management
considers the funds on hand to be sufficient to meet its ongoing obligations.

Market Risk

Market risk is the risk that the fair value of, or future cash flows from, the Corporation’s financial instruments will significantly
fluctuate due to changes in market prices. The value of the financial instruments can be affected by changes in interest rates,
foreign exchange rates, and equity and commodity prices. The Corporation is exposed to market risk in trading its investments
and unfavorable market conditions could result in dispositions of investments at less than favorable prices.

Property Title Risk

Mongolian law has strong protections for property assets; however, implementation of Mongolian law is often arbitrary, with
high degrees of corruption and incompetence. Additionally, laws frequently change, which can invalidate a property title. To date,
the Corporation has only had one of its property assets confiscated by the Government of Mongolia; however, the Corporation
believes that there is a possibility that it will have additional assets confiscated by the Government of Mongolia or stolen by
private individuals during future periods. The Corporation is currently not aware of any individual asset that is in imminent
danger of being confiscated or stolen.

Catastrophe risk

The Company has obtained insurance on buildings and all permanent fixtures totaling approximately $8,300,000 effective May
8th, 2021 ($11,700,000 - May 7th, 2020). To date the Company has not been able to obtain insurance on its Puerto Rican
property with value of $930,825 at December 31, 2021. As the property is located on the ocean, it is at risk of significant
hurricane damage or other natural disasters which could result in a significant impairment to its value.

Cryptocurrencies Risk

Cryptocurrencies are measured at fair value less cost to sell. Cryptocurrency prices are affected by various forces including
global supply and demand, interest rates, exchanges rates, inflation or deflation and political and economic conditions. Further,
cryptocurrencies have no underlying backing or contracts to enforce recovery of invested amounts. The profitability of the
Corporation is related to the current and future market price of cryptocurrencies; in addition, the Corporation may not be able to
liquidate its inventory of cryptocurrencies at its desired price if necessary. Investing in cryptocurrencies is speculative, prices are
volatile, and market movements are difficult to predict. Supply and demand for such currencies change rapidly and are affected
by a variety of factors, including regulation and general economic trends.

Mongolia Growth Group Ltd |Cryptocurrencies have a limited history; their fair values have historically been volatile, and the value of cryptocurrencies held by
the Corporation could decline rapidly. A decline in the market prices of cryptocurrencies could negatively impact the Corporation’s
future operations. Historical performance of cryptocurrencies is not indicative of their future performance.

Many cryptocurrency networks are online end-user-to-end-user networks that host a public transaction ledger (blockchain) and
the source code that comprises the basis for the cryptographic and algorithmic protocols governing such networks. In many
cryptocurrency transactions, the recipient or the buyer must provide its public key, which serves as an address for a digital wallet,
to the seller. In the data packets distributed from cryptocurrency software programs to confirm transaction activity, each party
to the transaction user must sign transactions with a data code derived from entering the private key into a hashing algorithm,
which signature serves as validation that the transaction has been authorized by the owner of the cryptocurrency. This process
is vulnerable to hacking and malware and could lead to theft of the Corporation’s digital wallets and the loss of the Corporation’s
cryptocurrency.

Cryptocurrencies are loosely regulated and there is no central marketplace for exchange. Supply is determined by a computer
code, not a central bank. Additionally, exchanges may suffer from operational issues, such as delayed execution, that could have
an adverse effect on the Corporation.

The cryptocurrency exchanges on which the Corporation may trade on are relatively new and, in many cases, largely unregulated,
and therefore may be more exposed to fraud and failure than regulated exchanges for other assets. Any financial, security,
or operational difficulties experienced by such exchanges may result in an inability of the Corporation to recover money or
cryptocurrencies being held on the exchange. Further, the Corporation may be unable to recover cryptocurrencies awaiting
transmission into or out of the exchange, all of which could adversely affect an investment of the Corporation. Additionally, to
the extent that the digital asset exchanges representing a substantial portion of the volume in digital asset trading are involved
in fraud or experience security failures or other operational issues, such digital asset exchanges’ failures may result in loss or less
favorable prices of cryptocurrencies, or may adversely affect the Corporation, its operations, and its investments.

Furthermore, crypto-exchanges comingle their client’s assets in exchange wallets. When crypto-assets are commingled,
transactions are not recorded on the applicable blockchain ledger but are only recorded by the exchange. Therefore, there is a
risk around the occurrence of transactions or existence of period end balances represented by exchanges.

Loss of access risk

The loss of access to the private keys associated with the Corporation’s cryptocurrency holdings may be irreversible and could
adversely affect an investment. Cryptocurrencies are controllable only by an individual that possess both the unique public key
and private key or keys relating to the “digital wallet” in which the cryptocurrency is held. To the extent a private key is lost,
destroyed, or otherwise compromised and no backup is accessible the Corporation may be unable to access the cryptocurrency.

Irrevocability of transactions

Cryptocurrency transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable. Once a
transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer or theft generally will
not be reversible, and the Corporation may not be capable of seeking compensation.

Hard fork and air drop risks

Hard forks may occur for a variety of reasons including, but not limited to, disputes over proposed changes to the protocol,
significant security breach, or an unanticipated software flaw in the multiple versions of otherwise compatible software. In the
event of a hard fork in a cryptocurrency held by the Corporation, it is expected that the Corporation would hold an equivalent
amount of the old and new cryptocurrency following the hard fork. Air drops occur when the promoters of a new cryptocurrency
send amounts of the new cryptocurrency to holders of another cryptocurrency that they will be able to claim a certain amount
of the new cryptocurrency for free. The Corporation may not be able to realize the economic benefit of a hard fork or air drop,
either immediately or ever, for various reasons. For instance, the Corporation may not have any systems in place to monitor or
participate in hard forks or airdrops.

Currency Risk

The Corporation owns properties located in Mongolia and collects rental revenue in Mongolian Tögrög, and is therefore subject
to foreign currency fluctuations that may impact its financial position and results. Changes in the Mongolian Tögrög, U.S. dollar
and Canadian dollar foreign currency exchange rates impact the fair value of securities denominated in Mongolian Tögrög and
in U.S. dollars. All of the Corporation’s revenues are received in Mongolian Tögrög while approximately half of the Corporation’s
expenses are incurred in U.S. and Canadian Dollars. Therefore, a depreciation in the Mongolian Tögrög against the US and
Canadian Dollar will reduce net income. The exchange rate continues to be volatile and there is an expectation that volatility may
continue for the foreseeable future.
Economic Volatility and Uncertainty

Over the past few years, economic volatility and uncertainty around the world has contributed to dramatically restricted access
to capital and reduced capital markets activity for more speculative businesses. Management believes that the Corporation has
sufficient resources to carry on its business and remain a going concern.

| Mongolia Growth Group LtdMGG holds a large portion its assets, investments, and operations in the nation of Mongolia. Mongolia is presently experiencing
drastic changes in its economy. Economic volatility and uncertainty in Mongolia could result in inflation, hyperinflation, economic
stagnation, political extremism, and other similarly detrimental scenarios which could materially harm the Corporation.

Preliminary growth estimates according to the National Statistics Office for 2021 was an increase of 1.4% year-over-year, while
inflation estimates were 13.4% according to Mongol Bank. Management cautions investors that official economic numbers often
deviate materially from actual underlying economic conditions. Additionally, the Corporation is not able to accurately predict the
ultimate impact of COVID-19 on the economy of Mongolia.

Depending on the requirements of MGG’s businesses, additional funds may be required to be raised in the capital markets and
there is no guarantee that sufficient funds raised will be available to complete a financing required to augment the Corporation’s
operations.

The Corporation is currently suffering the effects of Covid-19 on both its property portfolio and investment portfolio. There can
be no certainty as to the ultimate impact caused by Covid-19 or the government’s response to it in Mongolia and globally.

Risks and Uncertainties

The Corporation, as part of its operations, carries financial instruments consisting of cash and cash equivalents, investments
and marketable securities, accounts receivable, and trade payables and accrued liabilities. It is Management’s opinion that the
Corporation is not exposed to significant credit, interest or currency risks arising from these financial instruments except as
otherwise disclosed in the notes to the Consolidated Financial Statements.

Further information related to Mongolia Growth Group Ltd. and the risks and uncertainties of MGG is filed on the System for
Electronic Document Analysis and Retrieval (“SEDAR”) and can be reviewed at www.sedar.com.

Financial Instruments

The Corporation’s financial instruments consist of cash and cash equivalents, investments and marketable securities, accounts
receivable and trade and accrued payables. The Corporation is subject to interest risk as it earns interest income from its cash
deposits. It is Management’s opinion that the Corporation is not exposed to significant credit risks arising from these financial
instruments and that the fair value of these financial instruments approximates their carrying values. Management believes that
there are material currency risks associated to certain Financial Instruments of the Corporation as they are held in Mongolian
Tögrög. For further discussion of financial instrument risks, see the Insurance and Financial Risk Management note (Note 17 on
December 31, 2021 Financial Statements).

Unless the context otherwise requires, references to the “Corporation” include the Corporation and its subsidiaries and affiliates
collectively.
Changes in Investment Strategies

The Corporation may alter its investment strategies and restrictions without prior approval by shareholders to adapt to changing
circumstances.

Possible Negative Impact of Regulation

The regulatory environment is evolving and changes to it may adversely affect the Corporation. To the extent that regulators adopt
practices of regulatory oversight that create additional compliance, transaction, disclosure or other costs for the Corporation,
returns of the Corporation may be negatively affected. In addition, the regulatory or tax environment for securities, derivatives
and related instruments is evolving and may be subject to modification by government or judicial action that may adversely affect
the value of the investments held by the Corporation. The effect of any future regulatory or tax change on the Corporation is
impossible to predict.

Property Specific Risk

The Corporation currently has a standing agreement with the owner of a 42 sq. meter apartment in Mongolia which has been
included in one of the Corporation’s properties classified as land and development. The agreement entitles the owner of the
apartment to 84 sq. meters of space on the first floor of a new building to be built on this land. In this agreement, the Corporation
had an obligation to complete the construction of a new building by the end of 2017 and the agreement was not extended.
A liability of $263,667 (2020 - $223,693) is currently included in the Corporation’s balance sheet to reflect this liability. In
addition, the Corporation has recognized a $995,949 (2020 - $1,108,907 unrealized fair value loss on this property in excess of
the fair value adjustment calculated using the valuation approaches described. This adjustment is Management’s estimate of
the market’s perception of the risk related to this agreement. While the Corporation has received legal advice that it is not at a
substantial risk of losing the property in question, interpretations of Mongolian law can be varied and arbitrary. The Corporation
cautions investors that should it lose this property, it would result in a material reduction in the Corporation’s overall assets and
fair value (3.3 million dollars current carrying value). In addition, there is the potential that the 84 sq. meter liability could inhibit
the sale or development of this asset in future periods. The Corporation was not able to obtain any insurance on its Puerto Rican
property. There is a risk that the property could be significantly or completely impaired in the event of a hurricane, earthquake
or any other natural disaster.

Mongolia Growth Group Ltd |PFIC Risk

The Corporation has not undertaken an analysis to determine if it is a Passive Foreign Income Company (PFIC) under United
States tax statutes, nor does it intend to. US shareholders are advised to consult with tax professionals to determine the risks and
potential penalties that could be applicable if the Corporate is determined to be a PFIC at a later date.

Use of Derivatives

The Corporation may use derivative instruments. The use of derivatives in general presents additional risks to those applicable
to trading only in the underlying assets. To the extent of the Corporation’s investment in derivatives it may take a credit risk with
respect to parties with whom it trades and may also bear the risk of settlement default. When used for hedging purposes, an
imperfect or variable degree of correlation between price movements of the derivative instrument and the underlying investment
sought to be hedged may prevent the Corporation from achieving the intended hedge effect or expose the Corporation to the
risk of loss. In addition, derivative instruments may not be liquid at all times, so that in volatile markets the Corporation may not
be able to close out a position without incurring a loss. No assurance can be given that short sales, hedging, leverage and other
techniques and strategies utilized by the Corporation to hedge its exposure will not result in material losses.

Custody Risk and Broker or Dealer Insolvency

The Corporation does not control the custodianship of all of its assets. The Corporation’s assets will be held in one or more
accounts maintained for the Corporation by its broker or brokers. Such brokers are subject to various laws and regulations in
various jurisdictions that are designed to protect their customers in the event of their insolvency. However, the practical effect
of these laws and their application to the Corporation’s assets are subject to substantial limitations and uncertainties. Because
of the large number of entities and jurisdictions involved and the range of possible factual scenarios involving the insolvency
of a broker or any sub-custodians, agents or affiliates, it is impossible to generalize about the effect of their insolvency on the
Corporation and its assets. Investors should assume that the insolvency of any of the brokers or such other service providers
would result in the loss of all or a substantial portion of the Corporation’s assets held by or through such brokers and/or the
delay in the payment of withdrawal proceeds. The Corporation’s cryptocurrency is currently being held at Kraken Custody.
There is a risk that the custodian loses the Corporation’s cryptocurrency. Refer to the cryptocurrency risk section for further
cryptocurrency risks.

Investment and Trading Risks in General

All trades made by the Corporation risk the loss of capital. The Corporation may utilize trading techniques or instruments,
which can, in certain circumstances, maximize the adverse impact to which a client’s account may be subject. No guarantee
or representation is made that the Corporation’s investment program will be successful, and investment results may vary
substantially over time. Many unforeseeable events, including actions by various government agencies, and domestic and
international economic and political developments may cause sharp market fluctuations which could adversely affect the
Corporation’s portfolio and performance.

General Economic and Market Conditions

The success of the Corporation’s activities may be affected by general economic and market conditions, such as interest rates,
availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political circumstances.
These factors may affect the level and volatility of securities prices and the liquidity of the Corporation’s investments. Unexpected
volatility or illiquidity could impair the Corporation’s profitability or result in losses.

Issuer–Specific Changes

The value of an individual security or particular type of security can be more volatile than and can perform differently from the
market as a whole.

Portfolio Turnover

The Corporation has not placed any limits on the rate of portfolio turnover and portfolio securities may be sold without regard
to the time they have been held when, in the opinion of the Corporation, investment considerations warrant such action. A high
rate of portfolio turnover involves correspondingly greater expenses than a lower rate.

Liquidity of Underlying Investments

Some of the securities in which the Corporation may invest may be thinly traded. There are no restrictions on the investment of
the Corporation in illiquid securities. It is possible that the Corporation may not be able to sell or repurchase significant portions
of such positions without facing substantially adverse prices. If the Corporation is required to transact in such securities before
its intended investment horizon, the performance of the Corporation could suffer.

Highly Volatile Markets

The prices of financial instruments in which the Corporation’s assets may be invested can be highly volatile and may be influenced
by, among other things, specific corporate developments, interest rates, changing supply and demand relationships, trade, fiscal,

| Mongolia Growth Group Ltdmonetary and exchange control programs and policies of governments, and national and international political and economic
events and policies. The Corporation is subject to the risk of the failure of any of the exchanges on which the Corporation’s
positions trade or of their clearinghouses.

Emerging Markets

The Corporation may invest in the securities of companies which operate in some emerging markets. Operating in emerging
markets involves additional risks because companies in emerging markets may be less regulated and not subject to the same
standards, reporting practices and disclosure requirements that apply in more developed markets. In addition, some emerging
markets and legal systems may not adequately protect investor rights.

Small- to Medium- Capitalization Companies

The Corporation may invest a portion of its assets in the securities of companies with small- to medium-sized market capitalizations.
While the Corporation believes these investments often provide significant potential for appreciation, those securities may
involve higher risks in some respects than do investments in securities of larger companies. For example, while smaller companies
generally have potential for rapid growth, they often involve higher risks because they may lack the management experience,
financial resources, product diversification, and competitive strength of larger companies. In addition, in many instances, the
frequency and volume of their trading may be substantially less than is typical of larger companies. As a result, the securities
of smaller companies may be subject to wider price fluctuations. When making large sales, the Corporation may have to sell
portfolio holdings at discounts from quoted prices or may have to make a series of small sales over an extended period of time
due to the trading volume of smaller Corporation securities.

Fixed Income Securities

The Corporation may occasionally invest in bonds or other fixed income securities of issuers, including, without limitation, bonds,
notes and debentures issued by corporations. Fixed income securities pay fixed, variable or floating rates of interest. The value
of fixed income securities in which the Corporation invests will change in response to fluctuations in interest rates. In addition,
the value of certain fixed-income securities can fluctuate in response to perceptions of credit worthiness, political stability
or soundness of economic policies. Fixed income securities are subject to the risk of the issuer’s inability to meet principal
and interest payments on its obligations (i.e., credit risk) and are subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and general market liquidity (i.e., market risk). If fixed income
investments are not held to maturity, the Corporation may suffer a loss at the time of sale of such securities.

Equity Securities

To the extent that the Corporation holds equity portfolio investments, or short positions in equities, it will be influenced by stock
market conditions in those jurisdictions where the securities held by the Corporation, are listed for trading and by changes in the
circumstances of the issuers whose securities are held by the Corporation.

Options

Selling call and put options is a highly specialized activity and entails greater than ordinary investment risk. The risk of loss when
purchasing an option is limited to the amount of the purchase price of the option; however, investment in an option may be
subject to greater fluctuation than an investment in the underlying security. In the case of the sale of an uncovered option there
can be potential for an unlimited loss. To some extent this risk may be hedged by the purchase or sale of the underlying security.

Shorting

Selling a security short (“shorting”) involves borrowing a security from an existing holder and selling the security in the market
with a promise to return it at a later date. Should the security increase in value during the shorting period, losses will incur to the
Corporation. There is in theory no upper limit to how high the price of a security may go. Another risk involved in shorting is the
loss of a borrow, a situation where the lender of the security requests its return. In cases like this, the Corporation, must either
find securities to replace those borrowed or step into the market and repurchase the securities. Depending on the liquidity of
the security shorted, if there are insufficient securities available at current market prices, the Corporation, may have to bid up
the price of the security in order to cover the short position, resulting in losses to the Corporation.

Trading Costs

The Corporation may engage in a high rate of trading activity resulting in correspondingly high costs being borne by the
Corporation.

Currency and Exchange Rate Risks

The Corporation’s assets will be denominated in multiple currencies. The Corporation will report their results in Canadian dollars.
The Corporation expects to report allocations of profit and loss for income tax purposes in Canadian dollars. Changes in currency
exchange rates may affect the value of the Corporation’s portfolio and the unrealized appreciation or depreciation of investments.

Leverage

The Corporation may use financial leverage by borrowing funds against the assets of the Corporation. Leverage increases
both the possibilities for profit and the risk of loss for the Corporation. From time to time, the credit markets are subject to
periods in which there is a severe contraction of both liquidity and available leverage. The combination of these two factors can

Mongolia Growth Group Ltd |result in leveraged strategies being required to sell positions typically at highly disadvantageous prices in order to meet margin
requirements, contributing to a general decline in a wide range of different securities. Illiquidity can be particularly damaging to
leveraged strategies because of the essentially discretionary ability of dealers to raise margin requirements, requiring leveraged
strategy to attempt to sell positions to comply with such requirements at a time when there are effectively no buyers in the
market at all or at any but highly distressed prices. These market conditions have in the past resulted in major losses. Such
conditions, although unpredictable, can be expected to recur.

Future Acquisitions and Business Diversification

Management is currently evaluating future acquisitions of businesses and operating assets that are not related to investments
within Mongolia. There can be no certainty that the Corporation will acquire any business. Additionally, if the Corporation
acquires part or all of a business outside of Mongolia, it may dilute management’s focus on current operations within Mongolia.
Additionally, shareholders who desire a Mongolia focused investment vehicle may sell shares of the Corporation if they do not
desire investments outside of Mongolia. There can be no certainty that the Corporation can raise adequate funding to finance
an acquisition of a business outside of Mongolia or that diversification of the Corporation’s business is in the best interest of the
Corporation. Capital spent on researching businesses outside of Mongolia will increase operating expenses and operating losses
as long as such due diligence is ongoing.

Internal Controls over Financial Reporting

Changes in securities laws no longer require the Chief Executive Officer and Chief Financial Officer of junior reporting issuers
to certify that they have designed internal control over financial reporting, or caused it to be designed under their supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with IFRS.

Instead, an optional form of certification has been made available to junior reporting issuers and has been used by the
Corporation’s certifying officers since December 31, 2013 annual filings. The new certification reflects what the Corporation
considers to be a more appropriate level of CEO and CFO certification given the size and nature of the Corporation’s operations.
This certification requires the certifying officers to state that: they have reviewed the interim MD&A and consolidated financial
statements; they have determined that there is no untrue statement of a material fact, or any omission of material fact required
to be stated which would make a statement or its omission misleading in light of the circumstances under which it was made
within the interim MD&A and consolidated financial statements; based on their knowledge, the interim filings, together with the
other financial information included in the interim filings, fairly present in all material respects the financial condition, results of
operations and cash flows of the Corporation as of the date and for the periods presented in the filings.

Additional Information

Additional information relating to Mongolia Growth Group Ltd., including its interim financial statements, is available on SEDAR
at www.sedar.com.

| Mongolia Growth Group LtdMongolia Growth Group Ltd.
Consolidated Financial Statements

December 31, 2021
(expressed in Canadian dollars)

Mongolia Growth Group Ltd |Mongolia Growth Group
Ltd.
Consolidated Financial Statements
December 31, 2016
(Expressed in Canadian dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of
Mongolia Growth Group Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Mongolia Growth Group Ltd. (the “Company”),
which are comprised of the consolidated statements of financial position as at December 31, 2021 and 2020, and the
consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for the years then
ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the
Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is
sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report
includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.

2 | P a g e

| Mongolia Growth Group Ltd

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.

Mongolia Growth Group Ltd |

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Daniel Nathan.

Vancouver, Canada

April 21, 2022

Chartered Professional Accountants

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Consolidated Statements of Financial Position
Mongolia Growth Group Ltd.
As at December 31
Consolidated Statements of Financial Position
As at December 31
(Ex pressed in Canadian dollars)

(Ex pressed in Canadian dollars)

Assets

Current assets
Assets
Cash (note 5)
Current assets
Marketable securities owned (note 7)
Unrealized gain on futures contract (note 7)
Cash (note 5)
Marketable securities owned (note 7)
Due from broker (note 6 )
Unrealized gain on futures contract (note 7)
Digital assets (note 9 )
Due from broker (note 6 )
Other assets (note 10)
Digital assets (note 9 )
Non-current assets
Other assets (note 10)
Inv estment properties (note 11)
Non-current assets
Other assets-long term receivable (note 10)
Inv estment properties (note 11)
Property and equipment (note 12)
Other assets-long term receivable (note 10)
Property and equipment (note 12)

T otal assets

T otal assets
Liabilities

2021
$
2021
$

2,396,311
3 7 ,802,853
3 11,437
2,396,311
3 7 ,802,853
2 ,320
3 11,437
2 6 6,890
2 ,320
2 9 ,218
2 6 6,890
4 0,809,029
2 9 ,218
1 1,885,907
4 0,809,029
1 11,722
1 1,885,907
2 ,220,207
1 11,722
1 4 ,217,836
2 ,220,207
1 4 ,217,836
55,026,865

2020
$
2020
$

1 ,361,771
1 0,612,071
-
1 ,361,771
1 0,612,071
1 ,373
-
-
1 ,373
1 59,729
-
1 2 ,134,944
1 59,729
1 4 ,542,236
1 2 ,134,944
-
1 4 ,542,236
1 ,293,241
-
1 5,835,477
1 ,293,241
1 5,835,477
27 ,970,421

55,026,865

27 ,970,421

Current liabilities
Liabilities
Trade payables and accrued liabilities (note 13)
Current liabilities
Unearned revenue (note 8)
Due to broker (note 6 )
Trade payables and accrued liabilities (note 13)
Marketable securities sold short (note 7)
Unearned revenue (note 8)
Due to broker (note 6 )
Short Term CEBA Loan (note 6 )
Marketable securities sold short (note 7)
Incom e taxes payable
Short Term CEBA Loan (note 6 )
Incom e taxes payable
Non-current liabilities
Long Term CEBA Loan (note 6)
Non-current liabilities
Deferred income tax liability (note 14)
Long Term CEBA Loan (note 6)
Deferred income tax liability (note 14)
T otal liabilities

9 13,391
1 ,035,471
9 13,391
9 ,173,869
1 ,035,471
2 ,6 52,329
6 0,000
9 ,173,869
2 ,6 52,329
4 ,274
6 0,000
13,839,334
4 ,274
13,839,334
-
1 ,010,244
-
1 ,010,244
14,849,578

56 4 ,542
-
56 4 ,542
-
-
3 9 ,223
-
-
3 9 ,223
1 ,393
-
605,158
1 ,393
605,158
4 0,000
4 7 8,836
4 0,000
4 7 8,836
1,123,994

Equity
T otal liabilities

Share capital (note 15)
Equity
Contributed surplus
Share capital (note 15)
Accumulated other comprehensive loss
Contributed surplus
Deficit
Accumulated other comprehensive loss
Deficit
T otal equity

14,849,578

1,123,994

51 ,004,122
6 ,849,976
51 ,004,122
(1 5,501,963)
6 ,849,976
(2 ,174,848)
(1 5,501,963)
(2 ,174,848)
40,17 7,287

53 ,165,247
6 ,849,976
53 ,165,247
(1 5,444,642)
6 ,849,976
(1 7,724,154)
(1 5,444,642)
(1 7,724,154)
26,846,427

T otal equity
T otal equity and liabilities

40,17 7,287
55,026,865

26,846,427
27 ,970,421

T otal equity and liabilities
Commitment and contingencies (note 19)

55,026,865

27 ,970,421

Subsequent events (note 25)
Commitment and contingencies (note 19)

Subsequent events (note 25)
Approved by the Board of Directors

“James Dwyer” Director “Harris Kupperman“ Director
Approved by the Board of Directors

“James Dwyer” Director “Harris Kupperman“ Director

5 | P a g e

The accompanying notes are an integral part of these consolidated financial statements.

5 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
Consolidated Statements of Operations
For the year ended December 31
For the years ended December 31

(Ex pressed in Canadian dollars)
(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

2021
$

2020
$

Revenue
Rental income
Subscription revenue (note 8)
Other revenue
Gain (loss) on disposal of investment property (note 11)

From time to time, the Company enters into derivative financial instruments for
speculative purposes. These instruments are marked to market, and the corresponding
7 56,283
gains and losses for the year are recognized in the consolidated statement of operations.
-
The carrying value of these instruments is fair value, which approximates the amount
68,170
that would be received or paid if the derivative were to be transferred to a market
1 06,762
participant at the consolidated statement of financial position date. The fair value is
included in marketable securities if in an asset position or marketable securities sold
931,215
short if in a liability position.

67 9,091
944,411
1 90,850
(37 ,641)

T otal revenue

1,7 76,711

Expenses
Salaries and wages
Other expenses (note 22)
Depreciation (note 12)

As at December 31, 2021, the Company had a net fair market value of approximately
599,199
$2,652,329 of derivative financial liabilities that will expire if out of the money at
1 ,440,400
ex piration (Note 7).
68,7 95

887 ,864
2,209,606
7 2,108

ii)

Financial assets managed as fair value through profit or loss

(3,169,578)

T otal operating expenses

(2,108,394)
Financial assets managed as fair value through profit or loss are financial instruments
that are not classified as held for trading but form part of a portfolio that is managed
(2,7 00,069)
and whose performance is evaluated on a fair v alue basis in accordance with the
Company’s documented investment strategy.

Unrealized loss on fair value adjustment on
Inv estment properties (note 11)
Rev ersal of impairment (impairment) of property and
equipment (note 12)
Unrealized gain on short term investments
Realized gain on short term investments
Unrealized loss on digital assets (note 9)
Foreign currency loss
Reclassification of accumulated other comprehensive income on

(36,426)
4,265,403
The Company’s marketable securities owned, unrealized gain on futures contract, and
3,288,803
marketable securities sold short are all classified as held for trading and carried at FVTPL.
-
(1 4,727)

53,630
7 ,946,088
1 0,306,006
(42,606)
(31 3,464)

Recognition, derecognition and measurement

(441,870)

T otal other income

disposal of subsidiary (note 24)

-
Financial assets and financial liabilities at fair v alue through profit or loss are initially
recognized at fair v alue. Transaction costs are expensed as incurred in the consolidated
4,802,984
statement of operations. Subsequent to initial recognition, all financial assets and financial
liabilities at fair v alue through profit or loss are measured at fair v alue. Gains and losses
3,625,805
arising from changes in the fair value of financial assets or financial liabilities at fair value
through profit or loss are presented in the consolidated statement of operations in realized
and unrealized gain on short-term investments.
1 01,739

17 ,474,778

16,081,911

(532,605)

(33,006)

Net income before income taxes

Income tax (expense) recovery (note 14)

Net income for the year

Financial assets at amortized cost

15,549,306

3,7 27,544

Classification

Net income per share (note 15)
Basic

Diluted

From net income for the year

Financial assets at amortized cost are non-derivative financial assets with cash flows that are
0.12
“solely from the payment of principal and interest” (SPPI) and that are managed under a “held
to collect” business model.
From net income for the year

0.53

0.12

The Company’s financial assets at amortized cost consist of cash, due from brokers, as well as
accounts receivable and long term receivable, which are included in other assets.

Recognition and measurement

At initial recognition, the Company measures its financial assets at its fair v alue plus
transactions costs incurred. The amortized cost is the amount at which the financial asset is
measured at initial recognition minus the principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between that initial amount
and the maturity amount and adjusted for any loss allowance.

The accompanying notes are an integral part of these consolidated financial statements.

13 | P a g e
6 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Mongolia Growth Group Ltd.
Consolidated Statements of Comprehensive Income (Loss)
Notes to the Consolidated Financial Statements
For the years ended December 31
For the year ended December 31

(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

2021
$

2020
$

Net income for the year

Other comprehensive loss
Items that may be subsequently reclassified to income or loss
Unrealized losses on translation of financial statement
operations with Mongolian Tögrög functional
currency to Canadian dollar reporting currency

From time to time, the Company enters into derivative financial instruments for
3,7 27,544
speculative purposes. These instruments are marked to market, and the corresponding
gains and losses for the year are recognized in the consolidated statement of operations.
The carrying value of these instruments is fair value, which approximates the amount
that would be received or paid if the derivative were to be transferred to a market
participant at the consolidated statement of financial position date. The fair value is
included in marketable securities if in an asset position or marketable securities sold
(1 ,211,257)
short if in a liability position.

15,549,306

(90,327)

Items subsequently reclassified to income or loss

Reclassification of accumulated other comprehensive
income on disposal of subsidiary (note 24)

As at December 31, 2021, the Company had a net fair market value of approximately
-
$2,652,329 of derivative financial liabilities that will expire if out of the money at
ex piration (Note 7).
T otal comprehensive income

15,491,985

2,516,287

33,006

ii)

Financial assets managed as fair value through profit or loss

Financial assets managed as fair value through profit or loss are financial instruments
that are not classified as held for trading but form part of a portfolio that is managed
and whose performance is evaluated on a fair v alue basis in accordance with the
Company’s documented investment strategy.

The Company’s marketable securities owned, unrealized gain on futures contract, and
marketable securities sold short are all classified as held for trading and carried at FVTPL.

Recognition, derecognition and measurement

Financial assets and financial liabilities at fair v alue through profit or loss are initially
recognized at fair v alue. Transaction costs are expensed as incurred in the consolidated
statement of operations. Subsequent to initial recognition, all financial assets and financial
liabilities at fair v alue through profit or loss are measured at fair v alue. Gains and losses
arising from changes in the fair value of financial assets or financial liabilities at fair value
through profit or loss are presented in the consolidated statement of operations in realized
and unrealized gain on short-term investments.

Financial assets at amortized cost

Classification

Financial assets at amortized cost are non-derivative financial assets with cash flows that are
“solely from the payment of principal and interest” (SPPI) and that are managed under a “held
to collect” business model.

The Company’s financial assets at amortized cost consist of cash, due from brokers, as well as
accounts receivable and long term receivable, which are included in other assets.

Recognition and measurement

The accompanying notes are an integral part of these consolidated financial statements.

7 | P a g e
13 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
Consolidated Statements of Changes in Equity
For the year ended December 31
For the years ended December 31

(Ex pressed in Canadian dollars)
(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

A ccu mulated
ot h er
com pr ehensive
l oss

Sh a re
ca pital
$

Con t ributed
su r plus
$

Ba l a nce at January 1,
2020
Net loss for the y ear
Reclassification (note 24)
Ot h er com prehensive loss

T ot al
From time to time, the Company enters into derivative financial instruments for
$
speculative purposes. These instruments are marked to market, and the corresponding
gains and losses for the year are recognized in the consolidated statement of operations.
The carrying value of these instruments is fair value, which approximates the amount
2 4 ,669,828
that would be received or paid if the derivative were to be transferred to a market
3 ,7 27,544
participant at the consolidated statement of financial position date. The fair value is
-
included in marketable securities if in an asset position or marketable securities sold
(1 ,211,257)
short if in a liability position.
2 7 ,186,115

(1 4,233,385)
-
-
(1 ,211,257)
(1 5 ,444,642)

(21 ,451,698)
3 ,7 27,544
-
-
(1 7 ,724,154)

5 3,504,935
-
-
-
5 3,504,935

6 ,849,976
-
-
-
6 ,849,976

Defi ci t
$

Sh are repurchase

As at December 31, 2021, the Company had a net fair market value of approximately
(3 39,688)
$2,652,329 of derivative financial liabilities that will expire if out of the money at
ex piration (Note 7).

(3 39,688)

ii)

Financial assets managed as fair value through profit or loss

53,165,247

6,849,976

(15,444,642) (17,724,154) 26,846,427

Ba l a nce at December 31,
2020

The Company’s marketable securities owned, unrealized gain on futures contract, and
marketable securities sold short are all classified as held for trading and carried at FVTPL.

Sh a re
ca pi tal
Recognition, derecognition and measurement
$

Con t ributed
su r plus
$

Defi ci t
$

T ot al
$

A ccu mulated
ot h er
com pr ehensiv
e l oss
$

Ba l a nce at January 1,
2021
Net in com e for the year
Reclassification (note 24)
Ot h er com prehensive loss

Financial assets and financial liabilities at fair v alue through profit or loss are initially
2 6 ,846,427
recognized at fair v alue. Transaction costs are expensed as incurred in the consolidated
1 5 ,549,306
statement of operations. Subsequent to initial recognition, all financial assets and financial
3 3,006
liabilities at fair v alue through profit or loss are measured at fair v alue. Gains and losses
(9 0,327)
arising from changes in the fair value of financial assets or financial liabilities at fair value
4 2 ,338,412
through profit or loss are presented in the consolidated statement of operations in realized
and unrealized gain on short-term investments.

(1 5 ,444,642)
-
3 3,006
(9 0,327)
(1 5 ,501,963)

(1 7 ,724,154)
1 5 ,549,306
-
-
(2 ,174,848)

5 3,165,247
-
-
-
5 3,165,247

6 ,849,976
-
-
-
6 ,849,976

(2 ,161,125)

Sh are repurchase

(2 ,161,125)

Financial assets at amortized cost

Ba l a nce at December
31, 2021

Classification

51,004,122

6,849,976

(15,501,963)

(2,174,848)

40,177,287

The Company’s financial assets at amortized cost consist of cash, due from brokers, as well as
accounts receivable and long term receivable, which are included in other assets.

Recognition and measurement

The accompanying notes are an integral part of these consolidated financial statements.

13 | P a g e
8 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Consolidated Statements of Cash Flow
As at December 31, 2021

(Ex pressed in Canadian dollars)

Cash provided by (used in)

Operating activities
Net income (loss) for the year
Items not affecting cash

Depreciation (note 12)
Deferred taxes
Allowance for doubtful receivable (note 10)
Realized (gain) loss on disposal of investment properties (note 11)
Impairment (Reversal of Impairment) of property and equipment

(note 1 2)

Unrealized (gain) on marketable securities
Realized (gain) on marketable securities
Unrealized loss and FX loss on digital assets (note 9)
Foreign Exchange
Unrealized loss on fair value adjustment on investment

properties (note 11)

Reclassification of accumulated other comprehensive income on

disposal of subsidiary (note 24)

Net change in non-cash working capital balances (note 20)

Financing activities
Share repurchase (note 15)
CEBA loan (note 6)

Investing activities
Net (purchase) sale of marketable securities
Acquisition of property and equipment (note 12)
Net proceeds on sale of investment properties (note 11)
Acquisition of digital assets (note 9)

Effect of exchange rates on cash

Increase in cash

Cash – Beginning of year

2021
$

2020
$

1 5,549,306

3,7 27,544

7 2,108
531,408
55,862
37 ,641

68,7 95
(1 03,051)
-
(1 06,762)

(53,630)
(7 ,946,088)
(1 0,306,006)
42,606
4,923

36,426
(4,265,403)
(3,288,803)
-
-

441,870

2,7 00,069

33,006

-
(1,536,994) (1,231,185)

1 0,523,050
8,986,056

291,048
(940,137)

(2,161,125)
20,000
(2,141,125)

(339,688)
40,000
(299,688)

(6,636,823)
(941,847)
2,1 25,367
(31 4,419)
(5,767,722)

1 ,186,552
(7 05)
583,372
-
1,7 69,219

1,077,209

529,394

(42,669)

95,122

1 ,034,540

624,516

1 ,361,771

7 37,255

Cash – End of y ear

2,396,311

1,361,771

*Supplementary cash flow information (note 20)

The accompanying notes are an integral part of these consolidated financial statements.

9 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

1 Corporate information

Mongolia Growth Group Ltd. (“MGG” or the “Company”) was incorporated in Alberta on
December 17, 2007, and is a Merchant bank with real estate investments in Ulaanbaatar, Mongolia,
a subscription product business and a public securities portfolio that will be sold to invest in
unique opportunities to profitably diversify our Company.

The Company’s common shares were previously listed on the Canadian Securities Exchange (CSE).
On January 9, 2013, the Company filed an application for the de-listing of the common shares from
the CSE and filed an application for the listing of common shares on the TSX V enture Exchange
(TSXV ). The Company is now listed on the TSXV, having the symbol YAK.

MGG has three wholly-owned subsidiaries at December 31, 2021; Mongolia (Barbados) Corp.,
MGG US Inc., and Lemontree PR LLC. Mongolia (Barbados) Corp. owns the wholly-owned
subsidiaries MGG Properties LLC and Big Sky Capital LLC. Big Sky Capital LLC owns the
wholly-owned subsidiaries, Carrollton LLC, Biggie Industries LLC, Zulu LLC, Crescent City LLC
and Oceanus LLC (together “the investment property operations”). The investment property
operations are conducted in Big Sky Capital LLC and its subsidiaries. No active business operations
occur in Oceanus LLC at this time. MGG’s marketable securities are currently held in brokerage
accounts owned by Mongolia (Barbados) Corp and MGG US Inc.

At December 31 , 2021 and 2020, the principal subsidiaries of the Company, their geographic
locations, and the ownership interest held by the Company, were as follows:

Na me
Mon gol i a (Barbados) Corp. Hol di n g Com pany and Brokerage

Pri n cipal Activity

Own ersh i p

December
31 , 2021
100%

December
31 , 2020
100%

Lem on tree PR LLC
MGG US In c.
MGG Properties LLC

Bi g Sky Capital LLC

Carrol lton LLC
Bi ggie In dustries LLC
Zu l u LLC
Crescen t Ci ty
Ocean u s LLC

A ccou nt
Real estate operations
In v estments
Hol di n g Com pany and Real estate
operation s
Hol di n g Com pany and Real estate
operation s
Real estate operations
Real estate operations
Real estate operations
Real estate operations
Real estate operations

100%
100%
100%

100%

100%
100%
100%
100%
100%

Loca t i on
Barbados

Pu erto Rico
Un i ted States
Mon gol i a

n i l
n i l
100%

100%

Mon gol i a

100%
100%
100%
100%
100%

Mon gol i a
Mon gol i a
Mon gol i a
Mon gol i a
Mon gol i a

The Company is registered in Alberta, Canada, with its Head Office at its registered and records
address at Centennial Place, East Tower, 1900, 520 – 3 rd Avenue S.W. Calgary, Alberta, Canada
T2P 0R3. The Company’s Canadian headquarters are located at 100 King Street West, Suite 5600,
Toronto, Ontario, M5X 1C9, Canada. The Company’s Mongolian investment property operations
are based out of its office located at the MGG Properties Building on Seoul St. in Ulaanbaatar,
Mongolia.

At December 31, 2021, the Company is organized into three segments based on the business
operations:

• Big Sky Capital LLC and its subsidiaries own investment properties which are located in
Ulaanbaatar, Mongolia and are held for the purpose of generating rental revenue, capital
appreciation, and/or redevelopment; and

• The MGG Corporate office is located in Toronto, Canada.

• The Subscription Products office is located in Toronto, Canada.

10 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

2 Basis of presentation

The consolidated financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards (IFRS), as issued by the International Accounting
Standards Board (IASB). The significant accounting policies used in the preparation of these
consolidated financial statements are summarized in note 3.

These consolidated financial statements have been prepared on a going concern basis, meaning
that the Company will continue in operation for the foreseeable future and will be able to realize
assets and discharge liabilities in the ordinary course of operations.

The consolidated financial statements, including the notes to the consolidated financial
statements, are presented in Canadian dollars ($) which is the presentation currency and the
functional currency of the parent Company. The functional currency of the Mongolian subsidiaries
is the Mongolian National Tögrög (MNT). The functional currency of the Company’s operating
subsidiary in Barbados in the Canadian Dollar. The functional currency of the Company’s
operating subsidiaries in the United States is the US Dollar.

These consolidated financial statements were approved by the Board of Directors of the Company
for issue on April 21, 2022.

3 Significant accounting policies

a. Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, as
modified by the revaluation of inv estment properties, marketable securities, options on
futures, calls, puts and digital assets at fair value. In addition, these financial statements
hav e been prepared using the accrual basis of accounting, except for cash flow information.

b. Basis of consolidation

These consolidated financial statements include the accounts of MGG and its wholly-owned
subsidiaries. Subsidiaries are entities controlled by MGG. Control exists when MGG is
ex posed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. The financial statements of
the subsidiaries are prepared for the same reporting y ear as MGG, using consistent
accounting policies. Intercompany balances and transactions, and any unrealized income and
ex penses arising from intercompany transactions, are eliminated in preparing the
consolidated financial statements. Upon the disposal of a subsidiary, amounts previously
recognized in other comprehensive income in respect of that entity, are reclassified to profit
and loss.

c. Financial instruments

Classification and measurement

The classification of financial assets is based on the Company’s business models and the
financial asset’s contractual cash flow characteristics. Business models are reassessed
periodically, and contractual cash flow characteristics are assessed to determine whether they
are “Solely payments of principal and interest” (SPPI).

11 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

Financial assets, including hybrid contracts, are classified as either amortized cost, fair value
through other comprehensive income (FVOCI), or the residual classification of fair value
through profit and loss (FVTPL).

Financial assets with cash flows that are SPPI and are held within a business model where the
objective is to hold the financial assets in order to collect contractual cash flows (“Hold to
collect” business model) are measured at amortized cost.

Financial assets with cash flows that are SPPI and are held within a business model where the
dual objective is to hold the financial assets in order to collect contractual cash flows and
selling financial assets (“Hold to collect and sell” business model) are measured at FVOCI.

Financial assets with cash flows that are SPPI but are not held within the “Hold to collect” or
“Hold to collect and sell” business models are measured at FVTPL.

Financial assets with cash flows that do not meet the SPPI conditions are measured at FVTPL.

Marketable securities held for trading are classified as FV TPL. For all other marketable
securities that are not held for trading, the Company, on initial recognition, may irrevocably
elect to present subsequent changes in the investment’s fair value in other comprehensive
income. This election is made on an investment-by-investment basis.

Financial liabilities are measured at amortized cost unless they must be measured at fair value
through profit or loss (such as instruments held for trading or derivatives) or if the Company
elects to measure them at fair value through profit or loss.

Financial assets and financial liabilities are recognized when the Company becomes a party to
the contractual provisions of the instrument. Financial assets are derecognized when the
rights to receive cash flows from the assets have expired or have been transferred and the
Company has transferred substantially all risks and rewards of ownership. Financial assets
and financial liabilities are recognized on the trade date, the date on which the Company
commits to purchase or sell the investment.

Financial assets and financial liabilities are offset and the net amount reported in the
consolidated statement of financial position when there is a legally enforceable and
unconditional right to offset the recognized amounts and when there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously.

Financial assets and financial liabilities held for trading

A financial asset or financial liability is classified as held for trading if it is acquired or
incurred principally for the purpose of selling or repurchasing in the near term or if on
initial recognition it is part of a portfolio of identifiable financial investments that are
managed together and for which there is evidence of a recent actual pattern of short-
term profit taking. Derivatives are also categorized as held for trading. The Company
does not classify any derivatives as hedges in a hedging relationship.

The Company makes short sales in which a borrowed security is sold in anticipation of
a decline in the market v alue of that security, or it may use short sales for various
arbitrage transactions.

12 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

From time to time, the Company enters into derivative financial instruments for
speculative purposes. These instruments are marked to market, and the corresponding
gains and losses for the year are recognized in the consolidated statement of operations.
The carrying value of these instruments is fair value, which approximates the amount
that would be received or paid if the derivative were to be transferred to a market
participant at the consolidated statement of financial position date. The fair value is
included in marketable securities if in an asset position or marketable securities sold
short if in a liability position.

As at December 31, 2021, the Company had a net fair market value of approximately
$2,652,329 of derivative financial liabilities that will expire if out of the money at
ex piration (Note 7).

ii)

Financial assets managed as fair value through profit or loss

The Company’s marketable securities owned, unrealized gain on futures contract, and
marketable securities sold short are all classified as held for trading and carried at FVTPL.

Recognition, derecognition and measurement

Financial assets at amortized cost

Classification

The Company’s financial assets at amortized cost consist of cash, due from brokers, as well as
accounts receivable and long term receivable, which are included in other assets.

Recognition and measurement

13 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

c. Financial instruments (continued)

Interest income is calculated by applying the effective interest rate to the gross carrying
amount of financial assets.

Financial liabilities at amortized cost

Classification

The Company’s financial liabilities at amortized cost are non-derivative liabilities that
comprise trade payables and accrued liabilities, due to broker, and short-term and long term
CEBA loan.

Recognition and measurement

Trade payables and accrued liabilities are initially recognized at fair value. Subsequently, they
are measured at amortized cost using the effective interest method. Due to brokers and CEBA
loans are recognized initially at fair v alue, net of any transaction costs incurred, and
subsequently at amortized cost using the effective interest method.

Impairment

Substantially all of the Company’s financial assets at amortized cost are short-term assets and
from sources with low credit risk. The Company monitors its financial assets measured at
amortized cost and counterparty risk.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. Financial
assets and liabilities recorded at fair value in the consolidated statement of financial position
are measured and classified in a hierarchy consisting of three levels for disclosure purposes.
The three levels are based on the priority of the inputs to the respective valuation technique.
The fair v alue hierarchy gives the highest priority to quoted prices in active markets for
identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
An asset or liability’s classification within the fair value hierarchy is based on the lowest level
of significant input to its valuation. The input levels are defined as follows:

Level 1: Unadjusted quoted prices in active m arkets for identical assets or
liabilities

• The Company defines active markets based on the frequency of v aluation and any
restrictions or illiquidity on disposition of investments. The size of the bid/ask spread is
used as an indicator of market activity for fixed maturity securities. Fair value is based on
market price data for identical assets obtained from the investment custodian, investment
managers or dealer markets. The Company does not adjust the quoted price for such
instruments.

Level 2: Quoted prices in m arkets that are not active or inputs that are
observable either directly (i.e. as prices) or indirectly (i.e. derived from prices)

• Lev el 2 inputs include observable market information, including quoted prices for assets
in markets that are considered less active. Fair value is based on or derived from market

14 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

Financial instruments (continued)

price data for same or similar instruments obtained from the investment custodian,
inv estment managers or dealer markets.

Level 3: Unobservable inputs that are supported by little or no market activity
and are significant to the estimated fair value of the assets or liabilities

• Lev el 3 assets and liabilities would include financial instruments whose v alues are
determined using internal pricing models, discounted cash flow methodologies, or similar
techniques that are not based on observable market data, as well as assets or liabilities for
which the determination of estimated fair v alue requires significant management
judgement or estimation.

The Company has determined the estimated fair values of its financial instruments based
upon appropriate valuation methodologies.

The lev els of the fair v alue inputs used in determining estimated fair v alue of the
Company’s financial assets at fair value through profit or loss as at December 31, 2021
and 2020, is shown below.

Marketable
securities
Unrealized gain on
futures contract
Marketable
securities sold short

Decem ber 31, 2 021

Lev el 1

Lev el 2

Lev el 3

Estim ated fair values

$3 7 ,802,853

$3 11,437

($2 ,652,329)

$ 35,461,960 $ 35,461,960

Marketable
securities

Marketable
Securities sold short

Decem ber 31, 2 020

Lev el 1

Lev el 2

Lev el 3

Estim ated fair values

$1 0,612,071

($3 9 ,223)

$ 10,572,848 $ 10,572,848

At December 31, 2021 and 2020 there were no financial assets or liabilities measured and
recognized in the statement of financial position at fair value that would be categorized as
lev el 2 and 3 in the fair value hierarchy above.

d. Investment properties

Investment properties include properties held to earn rental revenue, for capital appreciation,
and/or for redevelopment. Investment properties are initially measured at fair which is most
often the purchase price plus any directly attributable expenditures. Investment properties
are subsequently measured at fair value, which reflects market conditions at the date of the
consolidated statement of financial position. Gains or losses arising from changes in the fair

15 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

d. Investment properties (continued)

v alue of investment properties are recognized in the consolidated statement of operations in
the y ear they arise. A key characteristic of an investment property is that it generates cash
flows largely independently of the other assets held by an entity.

Subsequent expenditure is included in the asset’s carrying amount only when it is probable
that future economic benefits associated with the item will flow to the Company and the cost
of the item can be measured reliably. All other repairs and maintenance costs are charged to
the consolidated statement of operations during the financial period in which they occur.

Substantially all of the Company’s income generating properties and properties under
development are investment properties.

Properties under development are measured at cost.

Certain land leases held under an operating lease are classified as investment properties when
the definition of an investment property is met. At inception these leases are recognized at the
lower of the fair v alue of the property and the present value of the minimum lease payments.

Some properties may be partially occupied by the Company, with the remainder being held
for rental income or capital appreciation. If that part of the property occupied by the Company
can be sold separately, the Company accounts for the portions separately. The portion that is
owner-occupied is accounted for under IAS 16, and the portion that is held for rental income,
capital appreciation or both is treated as investment property under IAS 40. When the
portions cannot be sold separately, the whole property is treated as investment property only
if an insignificant portion is owner-occupied. The Company considers the owner-occupied
portion as insignificant when the property is more than 90% held to earn rental income or
capital appreciation. In order to determine the percentage of the portions, the Company uses
the size of the property measured in square metres.

The fair value of investment properties was based on the nature, location and condition of the
specific asset. The fair v alue is calculated at December 31 on the majority of investment
properties by an independent, professional, qualified appraisal firm, whose appraisers hold
recognized relevant, professional qualifications and who hav e recent ex perience in the
locations and categories of the investment properties v alued. The remaining investment
properties’ fair v alue was calculated by Management and was performed by qualified
individuals with recent experience in the locations and categories of the investment properties
v alued.

e. Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are categorized as
held for sale at the point in time when the asset or disposal group is available for immediate
sale. Management has committed to a plan to sell and is actively locating a buyer at a sales
price that is reasonable in relation to the current fair value of the asset, and the sale is probable
and ex pected to be completed within a one y ear period. Investment properties measured
under the fair v alue model and held for sale continue to be measured by the guidelines of IAS
40 – Inv estment Property. All other assets held for sale are stated at the lower of carrying
amounts and fair value less selling costs. An asset that is subsequently reclassified as held and
in use, with the exception of investment property measured under the fair value model, is
measured at the lower of its recoverable amount and the carrying value that would have been
recognized had the asset never been classified as held for sale.

16 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

f. Rev enue recognition

Rev enue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured. Revenue is measured at the fair value
of the consideration received or receivable. The Company’s specific revenue recognition
criteria are as follows:

i) Rental revenue

The Company has not transferred substantially all of the benefits and risk of ownership
of its investment properties, and therefore, the Company accounts for leases with its
tenants as operating leases. Rental revenue includes all amounts earned from tenants
related to lease agreements including property tax and operating cost recoveries.

The Company reports rental revenue on a straight-line basis, whereby the total amount
of cash to be received under a lease is recognized into earnings in equal periodic
amounts over the term of the lease.

Contingent rents are recognized as revenue in the period in which they are earned.

Amounts payable by tenants to terminate their lease prior to their contractual expiry
date (lease cancellation fees) are included in rental revenue at the time of cancellation.

ii)

Investment income

Investment income is recorded as it accrues using the effective interest method.

iii) Subscription Revenue

The Company’s source of revenue consists of subscriptions to its an investment data
analytics service. The subscription service provides customers the right to access its
weekly data publications. The Company’s subscription service represents a series of
distinct publications produced each week and are made available to the customer
continuously throughout the contractual period. However, the extent to which the
customer uses the services may vary at the customer’s discretion.

A performance obligation is a commitment in a contract with a customer to transfer
products or services that are distinct. Determining whether products and services are
distinct performance obligations that should be accounted for separately or combined
as one unit of accounting may require significant judgment. The Company’s data
analytics service is considered to have a single performance obligation where the
customer simultaneously receives and consumes the benefit, and as such revenue is
recognized ratably over the term of the contractual agreement.

For the Company’s data subscription product, the Company generally receives payment
for the full subscription contract up front.

iv ) Unearned revenue

Pay ments received in advance of services being rendered are recorded as unearned
revenue and recognized ratably over the requisite service period.

17 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

g. Digital Assets

The Company's digital assets are primarily traded in active markets and are purchased with
the intent to re-sell in the near future, generating a profit from the fluctuations in prices or
margins. As a result digital assets are measured at fair value less cost to sell, with changes in
fair v alue recognized in profit or loss.

h. Cash

Cash includes cash held at banks or on hand and demand deposits.

i. Property and equipment

On initial recognition, property and equipment are valued at cost, being the purchase price
and directly attributable cost of acquisition or construction required to bring the asset to the
location and condition necessary to be capable of operating in a manner intended by the
Company, including appropriate borrowing costs and the estimated present value of any
future unavoidable costs of dismantling and removing items. Property and equipment is
subsequently measured at cost less accumulated depreciation, less any accumulated
impairment losses. All repairs and maintenance costs are charged to the consolidated
statement of operations during the period in which they occur.

Depreciation is recognized in the consolidated statement of operations and is provided on a
straight-line basis over the estimated useful life of the assets as follows:

Buildings
Furniture and fixtures
Equipment

Straight-line over 40 years
Straight-line over 5 to 10 years
Straight-line over 1 to 5 years

Impairment reviews are performed when there are indicators that the net recoverable amount
of an asset may be less than the carrying v alue. The net recoverable amount is determined as
the higher of an asset’s fair v alue less cost to dispose and v alue in use. Impairment is
recognized in the consolidated statement of operations, when there is objective evidence that
a loss event has occurred which has impaired future cash flows of an asset. In the event that
the v alue of previously impaired assets recovers, the previously recognized impairment loss is
recovered in the consolidated statement of operations at that time.

An item of property and equipment is derecognized upon disposal or when no further
economic benefits are expected from its use. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the consolidated statement of operations in the period the asset is
derecognized.

Depreciation methods, useful lives and residual values are reviewed at each financial year end
and adjusted if appropriate.

18 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

Income taxes

Income taxes are comprised of both current and deferred taxes. Current tax and deferred tax
are recognized in the statement of operations except to the extent that it relates to items
recognized in Other Comprehensive Income (“OCI”) or directly in equity. In this case, the tax
is recognized in OCI or directly in equity respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the consolidated statement of financial position date in the countries
where the Company and its subsidiaries operate and generate taxable income and are
measured at the amount expected to be recovered from or paid to the taxation authorities for
the current and prior periods.

Deferred income tax assets and liabilities are recorded for the expected future income tax
consequences of events that have been included in the consolidated financial statements or
income tax returns. Deferred income taxes are provided for using the liability method. Under
the liability method, deferred income taxes are recognized for all significant temporary
differences between the tax and financial statement bases for assets and liabilities and for
certain carry-forward items, such as losses and tax credits not utilized from prior years.
However, if the deferred income tax arises from initial recognition of an asset or a liability in
a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable income, it is not accounted for.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary
differences is restricted to those instances where, in the opinion of Management, it is probable
that future taxable profit will be available against which the deferred tax asset can be realized.
Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates, on the date the changes in tax laws and rates have been enacted or substantively
enacted.

k. Foreign exchange transactions

Foreign currency transactions are translated at the rate of exchange in effect on the dates they
occur. Gains and losses arising as a result of foreign currency transactions are recognized in
the current year consolidated statement of operations. At reporting dates, monetary items are
translated at the closing rate of exchange in effect at the consolidated statement of financial
position date.

Translation of foreign operations

For the purpose of the consolidated financial statements, the results and financial position of
the Company’s operations are expressed in Canadian dollars, which is the functional currency
of the parent, and the presentation currency of the consolidated financial statements.

The Company translates the assets, liabilities, income and expenses of its subsidiaries which
hav e a functional currency other than the Canadian dollar, to Canadian dollars on the
following basis:

• Assets and liabilities are translated at the closing rate of ex change in effect at the

consolidated statement of financial position date.

19 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

k. Foreign exchange transactions (continued)

•

Income and expense items are translated using the average rate for the month in which
they occur, which is considered to be a reasonable approximation of actual rates.

• Equity items are translated at their historical rates.
• The translation adjustment from the use of different rates is included as a separate

component of equity, in accumulated other comprehensive income (loss).

l. Comprehensive income

Comprehensive income consists of net income (loss) and OCI. OCI includes changes in
unrealized gains (losses) on the translation of subsidiaries with a functional currency other
than the Canadian dollar.

m. Share capital and deferred share issuance costs

Ordinary shares issued by the Company are classified as equity. Costs directly identifiable
with the raising of capital will be charged against the related share issue, net of any tax effect.

Costs related to shares not yet issued are recorded as deferred financing costs. These costs will
be deferred until the issuance of the shares to which the costs relate, at which time the costs
will be charged against the related share issuance or charged to operations if the shares are
not issued.

n. Earnings (loss) per share

For both continuing and discontinued operations, the Company presents basic and diluted
earnings (loss) per share (EPS) data for its common shares. Basic EPS is calculated by dividing
the results of operations attributable to ordinary shareholders of the Company by the
weighted average number of common shares outstanding during the period. Diluted EPS is
determined by adjusting the results of operations attributable to common shareholders and
the weighted average number of common shares outstanding for the effects of all dilutive
potential common shares, which comprise share options.

o. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker, who is responsible
for allocating resources and assessing performance of operations, has been identified as the
Chief Ex ecutive Officer. The Company is now managed as three operating segments based on
how information is produced internally for the purpose of making operating decisions. The
segments are defined as inv estment property operations, subscription products and
corporate.

p. Leases

IFRS 1 6, Leases (“IFRS 1 6”) sets out the principles for the recognition, measurement,
presentation and disclosure of leases for both the lessee and the lessor.

From a lessee point of view, the Company has entered into Mongolian government land leases
on some of its investment properties. The Company, as a lessee, has determined, based on an

20 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

p. Leases (continued)

ev aluation of the terms and conditions of the arrangements, that these land leases meet the
definition of an investment property and has classified them as such; therefore, the fair value
model is applied to those assets, and gains and losses on changes in fair value are recorded in
profit or loss. The pay ments on these leases are nominal, and are therefore ex empt from
recognition as low-value leases.

The Company has also entered into commercial and residential property leases on its
inv estment properties. The Company as a lessor, has determined, based on an evaluation of
the terms and conditions of the arrangements, that it retains the significant risks and rewards
of ownership of these properties and therefore accounts for these agreements as operating
leases.

For other leases of low-value assets or short-term leases that end within 12 months of the
commencement date and which have no renewal or purchase option, the Company has
elected to apply the recognition exemptions specified in IFRS 16, allowing the Company to
continue to expense the lease payments in the period in which they are incurred. The total of
such expenses was $5,092 for the 2021 fiscal year (2020 - $9,109).

q. Provisions and contingent liabilities

Provisions are recognized when the Company has a present legal or constructive obligation as
a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. When the Company ex pects some or all of the provision to be
reimbursed, the reimbursement is recognized as a separate asset but only when the
reimbursement is v irtually certain. The ex pense of any provision is recognized in the
consolidated statement of operations net of any reimbursement. If the effect of the time value
of money is material, provisions are discounted using a current pre-tax rate that reflects,
where appropriate, the risks specific to the liability. Where discounting is used, the increase
in the provision due to the passage of time is recognized as a borrowing cost.

Contingent liabilities are disclosed if there is a possible future obligation as a result of a past
ev ent, or if there is a present obligation as a result of a past event but either a payment is not
probable or the amount cannot be reasonably estimated.

Due from and to brokers

Amounts due from and to brokers represent negative cash balances or margin accounts, and
pending trades on the purchase or sale of securities. Where terms in the prime brokerage
agreements permit the prime broker to settle margin balances with cash accounts or
collateral, the due from brokers cash balances are offset against the due to brokers margin
balances at each prime broker.

21 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

Marketable Securities

The Company presents results from trading marketable securities on both a realized and
unrealized basis separately in profit and loss. A realized gain or loss is recorded upon transfer
of ownership of a marketable security, calculated as proceeds (net of broker fees) less its cost
which is measured on a first-in-first-out (“FIFO”) basis. Unrealized gains and losses are the
fair v alue adjustments to positions still held at reporting dates.

Futures Contracts

The Company may invest in financial futures contracts (“futures contracts”) for the purpose
of hedging its existing portfolio securities or for speculative reasons.

Upon entering into a futures contract, the Company is required to pledge to the broker an
amount of cash and/or other assets equal to a certain percentage of the contract amount. This
pay ment is known as “initial margin.” Subsequent payments, known as “variation margin,”
are calculated each day, depending on the daily fluctuations in the fair value/market value of
the underlying assets. An unrealised gain or loss equal to the v ariation margin is recognised
on a daily basis and carried on the balance sheet. When the contract expires or is closed the
gain (loss) is realised and is presented in the Statement of Operations as a realised gain (loss)
on short term investments. Futures contracts are valued daily at their last quoted sale price
on the exchange they are traded. A “sale” of a futures contract means a contractual obligation
to deliver the securities or foreign currency called for by the contract at a fix ed price at a
specified time in the future. A “purchase” of a futures contract means a contractual obligation
to acquire the securities, commodities or foreign currency at a fixed price at a specified time
in the future.

u. Current Accounting Policy Changes

There were no accounting policy changes which impacted the Company in the December 31,
2021 fiscal year, however notes 3g, 3r and 3t above were adopted this y ear.

Future Accounting Policy Changes

IAS 1 , Presentation of Financial Statements (“IAS 1 ”) The IASB issued ‘Classification of
Liabilities as Current or Non-Current (Amendments to IAS 1)’ in January 2020, affecting the
presentation of liabilities in the statement of financial position. The narrow-scope
amendments to IAS 1 clarify that liabilities are classified as either current or non-current,
depending on the rights that exist at the end of the reporting period. Classification is
unaffected by the ex pectations of the entity or ev ents after the reporting date. The
amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. The
amendments must be applied retrospectively in accordance with the normal requirements of
IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”). The
amendments are effective for annual periods beginning on or after January 1 , 2023 (in
accordance with ‘Classification of Liabilities as Current or Non-Current – Deferral of Effective
Date (Amendment to IAS 1 ) issued by the IASB in July 2020), with earlier application
permitted. The amendments have not been early adopted by the Company. The Company is
currently assessing any potential impact of this amendment.

22 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

w. Comparative Figures

Certain comparative figures have been reclassified to conform with the basis of presentation
applied for the year ended December 31, 2021. Specifically, we have reclassified $2,320 to
due from brokers from cash and marketable securities respectively, all within current assets.

4 Significant accounting estimates and judgements

The preparation of financial statements in accordance with IFRS requires Management to make
estimates and assumptions about the future that affect the reported amounts of assets and
liabilities. Estimates and judgements are continually evaluated based on historical experiences and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in net
income (loss) in the period of the change, if the change affects that period only, or in the period of
the change and future periods, if the change affects both.Significant estimates made in the
preparation of these consolidated financial statements include the following areas:

• Fair value of investment properties – The estimate of fair value of investment properties
is the most critical accounting estimate to the Company. An external appraiser estimates
the fair value of the majority of investment properties by dollar value annually.

The remaining balance of investment properties was valued internally. The fair value of
inv estment properties is based on the nature, location and condition of the specific asset.
The fair value of investment properties represents an estimate of the price that would be
made in an arm’s length transaction between knowledgeable, willing parties. This fair
v alue assumes that the Company is in possession of the property’s land and property titles
where applicable. Management judges that the Company has the appropriate titles for
each of the properties classified as Inv estment Properties. Properties whereby
Management judges that the Company’s titles are at risk, have been impaired to reflect the
lev el of risk estimated by Management.

• The Company operates in the emerging real estate market of Mongolia, which given its
current economic, political and industry conditions, gives rise to an increased inherent risk
giv en the lack of reliable and comparable market information. The significant estimates
underlying the fair value determination are disclosed in note 11. Changes in assumptions
about these factors could materially affect the carrying value of investment properties. In
addition, the significant global uncertainty resulting from the novel coronavirus (“COVID-
1 9”) pandemic has reduced the availability of reliable market metrics to inform opinions,
and therefore a higher degree of judgment must be applied. Consequently, fair values are
subject to significant change.

• V aluation of marketable securities – The Company recognizes marketable securities at fair
v alue. Fair value is determined on the basis of market prices from independent sources, if
av ailable. If there is no market price, then the fair value is determined by using valuation
models with inputs derived from observable market data where possible but where
observable data is not available, judgement is required to establish fair values.

23 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

4 Significant accounting estimates and judgements (continued)

• Operating environment of the Company - Mongolia displays many characteristics of an
emerging market including relatively high inflation and interest rates. The tax and customs
legislation in Mongolia is subject to varying interpretations and frequent changes.

• The future economic performance of Mongolia is tied to the continuing demand from
China and global prices for commodities as well as being dependent upon the effectiveness
of economic, financial and monetary measures undertaken by the Government of
Mongolia together with tax, legal, regulatory and political developments. Management is
unable to predict all developments that could have an impact on the Mongolian economy
and consequently what effect, if any, they could have on the future financial position of the
Company.

Significant judgements made in the preparation of these consolidated financial statements include
the following:

Judgement is required in determining whether an asset meets the criteria for classification
as assets held for sale and or as discontinued operations in the consolidated financial
statements. Criteria considered by management include the existence of and commitment
to a plan to dispose of the assets, the expected selling price of the assets, the probability of
the sale being completed within an expected time frame of one year and the period of time
any amounts have been classified within assets held for sale.
The Company reviews the criteria for assets held for sale each quarter and reclassifies such
assets to or from this financial position category as appropriate. On completion of the sale,
management ex ercises judgement as to whether the sale qualifies as a discontinued
operation.

As at December 31, 2021 and 2020, Management has made the judgment that none of the
Company’s assets meet the criteria to be classified as held for sale. While this is due to a
number of factors, a primary reason is that due to the conditions of the Mongolian
economy and the lack of liquidity in the market, management was unable to conclude that
the sale of any significant size asset could be considered highly probable.

• Judgement is required in determining whether the Company’s Investment property and
land use rights titles are at risk. As at December 31, 2020, Management made the
judgment that Investment Properties whereby the land title has recently expired but is
ex pected to be renewed in the near future should continue to be classified as Investment
Properties. Properties whereby Management judges that the Company’s titles are at risk,
hav e been impaired to reflect the level of risk estimated by Management. As of December
31 , 2021, all land titles of the Company’s Investment Properties were current.

24 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

5 Cash

Cash at banks earns interest at floating rates based on daily bank deposit rates. The component of
cash accounts currently consists only of cash amounts held in banks or on hand.

The following table discloses the geographical location of cash:

Barbados
Canada
United States
Mongolia

T otal cash

2021
$

1 ,560,652
27 4,900
31 3,036
247 ,723

2020
$

1 ,006,689
21 8,694
-
1 36,388

2,396,311

1,361,771

Cash is not collateralized. The carrying amount of cash approximates fair value.

The credit quality of cash balances may be summarized based on Standard and Poor’s ratings or
equivalents of Moody’s and/or Fitch ratings. The credit quality at December 31 was as follows:

Cash on hand
A or A+ rated
B- or B+ rated
BBB+ rated
Unrated

2021
$

2,27 2
460,755
368,234
1 ,559,329*
5,7 21

2020
$

1 ,916
1 99,491
1 34,471
1 ,005,228
20,665

1,361,771
T otal cash
*Cash i s h eld in a brokerage account, at which the Com pany also h as a m argin balance due and payable at December 31,

2,396,311

2021 (N ote 6).

The unrated balance relates to one private bank in Barbados (2020 – one) one brokerage company
in Canada (2020 – one) and a cryptocurrency platform. The BBB+ rating relates to a brokerage
company in the United States.

Credit facilities and due from and due to brokers

a) Credit facilities

During the year ended December 31, 2020, the Company qualified for a government-guaranteed
line of credit (Canada Emergency Business Account “CEBA”) of $40,000 which was interest-free
until December 31, 2020. On January 1 , 2021, the line of credit converted to a 2-year, 0% interest
term loan to be repaid by December 31, 2022 at which time a 25% balance forgiveness ($10,000)
will apply if the loan is repaid by such date. On January 1, 2021 the Company qualified for an
additional $20,000 2-year, 0% interest term loan to be repaid by December 31, 2022. The
Company has the option to exercise a 3-year term extension on the loans by December 31, 2022, if
the loans are not repaid by then, at which time, the remaining unpaid balance of the loans will bear
interest at 5% interest per annum during the extension period and must be paid in full by December
31 , 2025. Funds can be used to pay non-deferrable operating expenses including payroll.

25 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

6 Credit facilities and due from and due to brokers (continued)

Short and long term debt

Current
Non-current

60,000
-

2021
$

2020
$

-
40,000

60,000

40,000

a) Due from and due to brokers

The Company has margin facilities with its prime brokers. As at December 31, 2021 and 2020, the
Company’s amounts due to brokers have no specific repayment terms, and they are governed by
the margin terms set forth in the prime brokerage agreements. As at December 31 , 2021, the
Company had net margin borrowings of $7,614,540 (2020 – net cash on deposit of $1,006,568).
The fair v alue of the collateral-listed equity securities is calculated daily and compared to the
Company’s margin limits. The prime brokers can at any time demand full or partial repayment of
the margin balances and any interest thereon or demand the delivery of additional assets as
collateral.

Due from and due to brokers balances are presented on a net basis by broker in the consolidated
statement of financial position. Under the prime broker agreements, the broker may upon events
of default offset, net and/or regroup any amounts owed by the Company to the broker by amounts
owed to the Company by the broker. The following tables set out the offsetting of the Company’s
v arious accounts with prime brokers.

Due from and due to brokers

Gross
am ounts due
from brokers
$

Gross
am ounts due
to brokers

2021

Net
am ounts
$

Due from brokers
Due to brokers

6,87 2
-

(4,552)

(9 ,173,869 )

2,320
(9,17 3,869)

Gross
am ounts due
from brokers
$

Gross
am ounts due
to brokers
$

1 ,415
-

(42)
-

2020

Net
am ounts
$

1,37 3
-

26 | P a g e

Due from brokers
Due to brokers

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

7 Equity investments and other holdings, securities sold short, derivatives

and futures

Equity Investments and other holdings

Assets

Equity securities
Options on futures
Calls
Puts

Securities sold short and derivative liabilities

Liabilities

Options on futures
Calls
Puts

Futures

December 31,
2021
$

December 31,
2020
$

30,778,337
7 ,006,506
7 ,952
1 0,058

1 0,612,071
-
-
-

37 ,802,853

10,612,071

December 31,
2021
$

December 31,
2020
$

2,598,477
47 ,835
6,017
2,652,329

-
-
39,223
39,223

December 31,
2021
$

December 31,
2020
$

Cost Basis
Unrealized gains on futures contract

$2,768,220
$311,437

Fair Market Value

$3,079,657

-
-

A “purchase” of a futures contract means a contractual obligation to acquire the securities,
commodities or foreign currency at a fixed price at a specified time in the future and is not included
on the balance sheet. An unrealised gain or loss equal to the change in value of the contract is
recognised on a daily basis and carried on the balance sheet.

27 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

8 Subscription Revenue

The Company’s revenue from contracts with customers is comprised of investment data analytics
subscriptions.

The Company has been working on building a data analytics service, named KEDM, during the last
twelve months, that tracks various event-driven strategies. The Company initiated a paywall on
July 1 , 2021 to start monetizing this service. Revenue earned during the period is classified as
subscription revenue on the income statement. Revenue collected that has not yet been earned,
hav e been classified as unearned revenue and will be classified according to the Company’s revenue
policies described in note 3.

Contract Liabilities:

As of December 31, 2021, the Company has unearned revenue of $1,035,471 to be fully recognized
during fiscal 2022 in accordance with contract terms (December 31, 2020 - $nil).

MGG has engaged an arm’s length company to compile and produce the KEDM report on an
ongoing basis, while MGG will act as the distributor and marketer of the product. As a part of this
engagement, MGG has agreed to pay certain direct and approved expenses related to producing
KEDM in addition to 20% of quarterly earned revenues above a threshold of $125,000 USD. Most
of the ex penses related to the unearned revenue have not yet been incurred and are not reflected
in the Company’s financial statements. MGG owns all intellectual property related to KEDM and
the arm’s length company disclaims any ownership or rights to the intellectual property. The
agreement can be discontinued by either party following a reasonable transition period and MGG
can engage a substitute party to continue the production of KEDM.

9 Digital assets

Balance - beginning of year
Net purchases
Unrealized loss
Foreign currency loss

Balance - end of year

December 31,
2021
$

December 31,
2020
$

-
31 4,419
(42,606)
(4,923)

266,890

-
-
-
-

During the year, the Company opened a digital currency account at Kraken Custody and purchased
Monero (XMR) cryptocurrency.

10 Other assets

Accounts receivable
Long term receivable
Allowance for doubtful debt
Prepaid expenses

December 31,
2021
$

December 31,
2020
$

29,888
1 11,722
(55,862)
55,192

1 34,869
-
-
24,860

140,940

159,729

28 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

10 Other assets (continued)

As of December 31, 2021, the Company reclassified the $111,722 receivable from a property sold in
2019 from short term to long term. The Company has filed court proceedings against the debtor
and has made an allowance for 50% of the amount.

11 Investment properties

Balance - beginning of year

Acquisitions
Disposals
Fair v alue adjustment
Foreign exchange adjustments

2021
$

1 4,542,236
-
(2,163,008)
(441,870)
(51 ,451)

2020
$

1 8,831,985
1 45,412
(583,372)
(2,7 00,069)
(1 ,151,720)

Balance – end of year

11,885,907

14,542,236

During the year ended December 31, 2021, the Company sold eight properties for net proceeds of
$2,125,367 resulting in a net loss of $37,641. During the y ear ended December 31, 2020, the
Company sold three properties for total proceeds of $690,134 resulting in a net gain of $106,762
and acquired a property for $145,412 through the sale of a property during the prior year. During
the y ear, the Company recognized an unrealized fair v alue impairment of $441,870 (2020 -
$2,700,069 loss) on its property portfolio.

Investment properties by major category are as follows:

Office
Retail
Land and redevelopment sites

2021
$

925,127
7 ,119,588
3,841,192

2020
$

896,266
9,415,983
4,229,987

11,885,907

14,542,236

Investment properties with an aggregate fair value of $10,187,412 (2020 - $9,245,117) in addition
to the two Property and Equipment properties of $2,201,317 were valued by external independent
v aluation professionals who are deemed to be qualified appraisers who hold a recognized, relevant,
professional qualification and who has recent experience in the locations and categories of the
inv estment properties v alued. The remaining balance of inv estment properties were valued
internally.

The Company determined the fair value of investment properties using the income approach and
the sales comparison approach, which are generally accepted appraisal methodologies.

Under the income approach, the methodology used was the direct capitalization approach which
is based on rental income and yields. Rental incomes were based on current rent and reasonable
and supportable assumptions that represent what knowledgeable, willing parties would assume
about rental income from future rent in light of current conditions adjusted for non-recoverable
property costs. Yields were determined using data from real estate agencies, market reports and
property location among other things in determining the appropriate assumptions. Under this

29 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

11 Investment properties (continued)

method, year one income is stabilized and capped at a rate deemed appropriate for each investment
property.

The sales comparison approach analyzes all av ailable information of sales of comparable
properties that have recently taken place or have recently been marketed and adjusts the price to
reflect differences in the property valued and sold.

The entire portfolio of investment properties has been valued using the income approach, the sales
comparison approach or a combination thereof.

Due to the COV ID-19 pandemic and its ongoing impact on the economy, and specifically its
unknown future impact on the real estate market, there is heightened uncertainty surrounding the
v aluation of the investment properties. Consequently, there is a need to apply a higher degree of
judgment as it pertains to the forward-looking assumptions that underlie the Company’s valuation
methodologies. In addition, less weight can be ascribed to previous market ev idence, for
comparative purposes, to inform opinions of value. Given this impact on the availability of reliable
market metrics, fair values at December 31, 2021 may be subject to material change.

The Company currently has a standing agreement with the owner of a 42 sq. meter apartment
which has been included in one of the Company’s properties classified as land and redevelopment.
The agreement entitles the owner of the apartment to 84 sq. meters of space on the first floor of a
new building to be built on this land. In this agreement, the Company had an obligation to
complete the construction of a new building by the end of fiscal 2017 and the agreement was not
ex tended. A liability of $263,667 (2020 - $223,693) is currently included in the Company’s trade
pay ables and accrued liabilities (note 13) to reflect this liability. In addition, the Company has
recognized an unrealized fair v alue impairment of $995,949 included in investment properties
(2020 -$1,108,907) in ex cess of the fair v alue adjustment calculated using the v aluation
approaches described. This adjustment is Management’s estimate of the markets perception of the
risk related to this agreement, and is included within the unrealized gain (loss) on fair value
adjustment on Investment properties within profit and loss. Refer to Note 17 for additional
information.

Under the fair value hierarchy, the fair value of the Company's investment properties is considered
a lev el three, as defined in note 3.

The key valuation assumptions for commercial investment properties are as follows:

Max imum Minimum

Weighted- average

2021

Capitalization rate

1 3.1%

9.0%

1 1 .8%

Max imum Minimum Weighted- average

2020

Capitalization rate

1 1 .0%

8.9%

9.7 %

30 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

11 Investment properties (continued)

The following sensitivity table outlines the impact of a 0.25% change in the weighted average
capitalization rate on investment properties at 2021:

Change to fair value if
capitalization rate
increased 0.25%

Change to fair value if
capitalization rate
decreases 0.25%

Inv estment property

(25,790)

26,898

Additional valuation assumptions include the rental revenue per square meter, grade quality of the
property, and comparable market data.

Investment properties of $73,321 (2020 - $3,455,674) have no rental revenue associated with them
at December 31, 2021.

Investment properties include land use rights held under operating leases with an aggregate fair
v alue of $3,841,192 (2020 – $4,229,987) at December 31, 2021.

Certain investment properties held by the Company are leased out (the Company is the lessor)
under operating leases. The future minimum lease payments under non-cancellable leases are as
follows:

Less than 1 year
Between 1 and 5 years
Bey ond 5 years

2021
$

608,538
265,126
-

2020
$

7 69,266
1 58,875
-

87 3,664

928,141

Direct operating expenses arising from investment properties that generated rental income during
the y ear was $757,564 (2020 – $855,822). Direct operating expenses arising from investment
properties that did not generate rental income during the year was $1,536 (2020 - $5,114).

The Company’s operating leases, in which the Company is the lessor, are structured such that the
weighted average length of the leases as at December 31, 2021 was 10.6 months (9.2 months as at
December 2020), calculated as a percentage of monthly revenues.

31 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

12 Property and equipment

Furniture and
fix tures
$

Equipment

Buildings
$

2021

T otal
$

Cost

At January 1
Additions
Disposals
Rev ersal of

impairment
Foreign exchange

adjustment

7 2,194
-
(1 0,641)

1 26,541
-
(3,843)

1 ,7 33,299
941 ,847
-

53,630

1 ,932,034
941 ,847
(1 4,484)

53,630

(1 ,560 )

7 ,100

(2,578)

2,962

At December 31

59,993

1 29,798

2,7 26,198

2,915,989

Furniture
and fixtures
$

Equipment
$

Buildings
$

2021

T otal
$

Accumulated

depreciation

At January 1
Depreciation
Disposals
Foreign exchange

adjustment

54,401
5,170
(1 0,641)

1 1 6,680
9,569
(3,843)

467 ,712
57 ,369
-

638,793
7 2,108
(1 4,484)

(211)

(224)

(200)

(635)

At December 31

48,7 19

1 22,182

524,881

695,782

Net book value
at December 31

1 1 ,274

7 ,616

2,201,317

2,220,207

During the year ended December 31, 2021 the Company recognized a reversal of impairment on its
corporate office building of $53,630 (2020 – impairment of $36,426) which was implied by the
same valuation methodology described in note 11. During the year ended December 31, 2021, the
Company purchased an office building in Puerto Rico at a cost of $821,591 and made
improvements totaling $120,256. This property will serve as a Corporate office in Puerto Rico and
the remainder will be rented out to affiliated and non affiliated parties.

32 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

12 Property and equipment (continued)

Furniture and
fix tures
$

Equipment
$

Buildings
$

2020

T otal
$

Cost

December 31
Additions
Disposals
Rev ersal of

impairment
Foreign exchange

adjustment

7 0,944
-
-

1 ,250

1 28,444
7 05
(2,858)

250

1 ,800,646
-
-

2,000,034
7 05
(2,858)

(36,426)

(30,921)

(29,421)

At December 31

7 2,194

1 26,541

1 ,7 33,299

1 ,932,034

Furniture and
fix tures
$

Equipment
$

Buildings
$

2020

T otal
$

Accumulated

depreciation

At January 1
Depreciation
Disposals
Foreign exchange
adjustment

45,047
6,901
-

2,453

1 07,759
1 1 ,525
(2,858)

254

41 1,578
50,369
-

5,7 65

564,384
68,7 95
(2,858)

8,47 2

At December 31

54,401

1 1 6,680

467 ,712

638,793

Net book value
at December 31

1 7 ,793

9,861

1 ,265,587

1 ,293,241

13 T rade payables and accrued liabilities

Trade and accrued payables
Property commitment (note 10)
Security deposits

2021
$

57 4,681
263,667
7 5,043

2020
$

252,412
223,693
88,437

913,391

564,542

The carrying amounts above reasonably approximate the fair value at the consolidated statement
of financial position date. All trade and other payables are current.

33 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

14 Income taxes

a) Effective tax rate

The income tax expense reflects an effective tax rate that differs from the combined tax rate
for Canadian federal and provincial corporate taxes for the following:

Net income (loss) before income taxes

Combined statutory tax rate

Tax payable (recoverable) based on statutory tax rate
Effect of:

Permanent differences
Change in statutory, foreign tax, foreign exchange

2021
$

2020
$

1 6,081,911
26.5%

3,625,805
26.5%

4,262,000

961 ,000

1 ,676,000

690,000

rates and other

(2,446,395)

(1 ,157,739)

Adjustment to prior y ears provision versus
statutory tax returns and expiry of non-capital
losses

Change in unrecognised deductible tax differences

(436,000)
(2,523,000)

48,000
(643,000)

Total income tax expense (recovery)

532,605

(101,739)

Provision for (recovery of) income taxes

Current
Deferred

1 ,197
531,408

532,605

1 ,312
(1 03,051)

(1 01,739)

34 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

14 Income taxes (continued)

b) Deferred income taxes

Differences between IFRS and statutory taxation regulations in Mongolia give rise to temporary
differences between the carrying amount of assets and liabilities for financial reporting purposes
and their tax bases. The Company did not recognize a deferred tax asset in these Consolidated
Financial Statements as there is uncertainty with regard to the recoverability of the asset for both
the Canadian and Mongolian entities.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

Deferred Tax Assets (liabilities)

Property and equipment
Investment properties
Marketable security
Allowable capital losses
Non-capital losses available for future period

2021
$

52,000
(434,244)
(1 ,637,000)
-
1 ,028,000
(991,244)

2020
$

51 ,000
(47 8,836)
-
98,000
2,393,000
2,063,164

Unrecognized deferred tax assets

(1 9,000)

(2,542,000)

Net deferred tax liability

(1,010,244)

(478,836)

The significant components of the Company’s temporary differences, unused tax credits and
unused tax losses that have not been included on the consolidated statement of financial position
are as follows:

T emporary Differences

2021

Ex piry Date
Range

2020

Ex piry Date
Range

Property and equipment
Allowable capital losses
Non-capital losses
av ailable for future period

1 1 ,000 No expiry date
- No expiry date

1 94,000 No ex piry date
37 1,000 No ex piry date

58,000 No expiry date

9,028,000

2030 to 2039

Tax attributes are subject to review, and potential adjustment by tax authorities.

35 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

15 Share capital and contributed surplus

Common shares

The Company is authorized to issue an unlimited number of common and preferred shares.

The issued and outstanding common shares are as follows:

Balance, December 31, 2019
Shares re-purchased
Treasury stock cancelled
Balance, December 31, 2020

Shares re-purchased
Treasury stock cancelled

Number of
shares

Amount
$

32,7 67,499
-
(1 ,486,000)
31,281,499

-
(3,503,000)

53,504,935
(339,688)
-
53,165,247

(2,161,125)
-

Balance, December 31, 2021

27 ,778,499

51,004,122

As at December 31, 2021, the Company held nil (2020 -191,500) shares in treasury.

Options

A summary of the Company’s options as at December 31 and changes during the y ears then ended
follows:

December 31,
2021

Weighted
average
exercise
price
$

December 31,
2020

Weighted
average
exercise
price
$

-
-
-
-
-
-

1 ,420,000
(1 ,420,000)
-
-
-
-

0.7 3
(0.7 3)
-
-
-
-

Balance, beginning

of the y ear
Options expired
Options cancelled
Options granted
Options exercised
Options forfeited

Balance, end of the year

Ex ercisable

Weighted remaining
av erage life (years)

There were no options outstanding as of December 31, 2021 and the Company’s option plan has since
lapsed.

36 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

15 Share capital and contributed surplus (continued)

Earnings per share

The following table summarizes the shares used in calculating earnings (loss) per share:

2021

2020

Weighted average number of shares - basic
Effect of dilutive stock options

29,309,116
-

32,102,372
-

Weighted average number of shares - diluted

29,309,116

32,102,372

Basic earnings (loss) per share are derived by div iding net income (loss) for the y ear by the
weighted average number of common shares outstanding for the period.

16 Management of capital structure

The Company’s objective when managing capital is to ensure the Company is capitalized in a
manner which provides a strong financial position for its shareholders.

The Company’s capital structure includes equity and working capital. In managing its capital
structure, the Company considers future investment and acquisition opportunities, potential credit
av ailable and potential issuances of new equity. The Company’s objective is to maintain a flexible
capital structure that will allow it to ex ecute its stated business. There was no change in the
Company’s strategy or objective in managing capital since the prior year. There are no externally
imposed capital requirements at year end. Upon acquiring investment properties and operating
businesses, the Company will strive to balance its proportion of debt and equity within its capital
structure in accordance with the needs of the continuing business. The Company may, from time
to time, issue shares and adjust its spending to manage current and projected proportions as
deemed appropriate.

Current assets
Current liabilities

Working capital

2021

2020
$

40,809,029
(1 3,839,334)

1 2,134,944
(605,158)

26,969,695

11,529,786

The method used by the Company to monitor its capital is based on an assessment of the
Company’s working capital position relative to its projected obligations.

37 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

17 Financial risk management

The Board of Directors ensures that management has put appropriate risk management processes
in place. Through the Audit Committee, the Board oversees such risk management procedures and
controls. Management provides updates to the Audit Committee on a quarterly basis with respect
to risk management.

Catastrophe risk

The Company has obtained insurance on buildings and all permanent fix tures totalling
approximately $8,300,000 effective May 8th 2021 ($11,700,000 - May 7 th 2020). To date the
Company has not been able to obtain insurance on its Puerto Rican property with a v alue of
$930,825 at December 31, 2021.

Credit risk

Credit risk is the risk of an unexpected financial loss to the Company if a third party fails to fulfill
its performance obligations under the terms of a financial instrument. The Company’s credit risk
arises principally from the Company’s cash and receivables as well as its marketable securities
portfolio.

The Company’s maximum exposure to credit risk comprises the carrying values of cash, accounts
receivable and marketable securities was $40,653,861 at December 31, 2021 (December 31, 2020
- $1 2,134,944).

The Company’s ex posure to credit risk is managed through risk management policies and
procedures with emphasis on the quality of the investment portfolio. The majority of the funds
inv ested are held in reputable Barbadian, American, Canadian or Mongolian banks (note 5).

The Company is exposed to credit risk as an owner of real estate in that tenants may become unable
to pay the contracted rents. The Company mitigates this risk by carrying out appropriate credit
checks and related due diligence on the significant tenants. The Company’s properties are
div ersified across commercial classes.

Liquidity risk

Liquidity risk is the risk of having insufficient cash resources to meet financial obligations without
raising funds at unfavourable rates or selling assets on a forced basis. Liquidity risk arises from the
general business activities and in the course of managing the assets and liabilities. The purpose of
liquidity management is to ensure that there is sufficient cash to meet all financial commitments
and obligations as they fall due. The liquidity requirements of the Company’s business are met
primarily by funds generated from operations, liquid investments and income and other returns
received on investments. Cash provided from these sources is used primarily for investment
property operating expenses.

As at December 31, 2021, the Company does not believe the current maturity profile of the
Company lends itself to any material liquidity risk, taking into account the level of cash and
marketable securities as at December 31, 2021. All financial assets and liabilities have contractual
or expected maturities within 1 2 months, except for the CEBA loan which has repayment terms
described in Note 6. Due to the short term nature of the Company’s financial instruments, there
is no material impact due to discounting or the time value of money to disclose.

38 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

17 Financial risk management (continued)

Equity price risk

Equity price risk is the risk that the fair value of equity investments and other holdings and equities
sold short and derivatives will vary as a result of changes in the market prices of the holdings. The
majority of the Company’s equity investments and other holdings and all of the equities sold short
and derivatives are based on quoted market prices as at the consolidated statement of financial
position date. Changes in the market price of quoted securities and derivatives may be related to a
change in the financial outlook of the investee entities or due to the market in general. Where non-
monetary financial instruments − for example, equity securities − are traded in currencies other
than the Canadian dollar, the price, initially expressed in a foreign currency and then converted
into Canadian dollars, will also fluctuate because of changes in foreign exchange rates.

Securities sold short represent obligations of the Company to make future delivery of specific
securities and create an obligation to purchase the security at market prices prevailing at the later
delivery date. This creates the risk that the Company’s ultimate obligation to satisfy the delivery
requirements will exceed the amount of the proceeds initially received or the liability recorded in
the consolidated financial statements. In addition, the Company has entered into derivative
financial instruments which have a notional value greater than their fair value which is recorded
in the consolidated financial statements. This information is disclosed in note 7 to these
consolidated financial statements.

This creates a risk that the Company could settle these instruments at a v alue greater or less than
the amount that they have been recorded in the consolidated financial statements. The Company’s
equity investments and other holdings have a downside risk limited to their carrying v alue, while
the risk of equities sold short and derivatives is open-ended. The Company is subject to commercial
margin requirements which act as a barrier to the open-ended risks of the equities sold short and
derivatives. The Company closely monitors both its equity investments and other holdings and its
equities sold short and derivatives.

Currency risk

Currency risk is the risk that the v alue of monetary financial assets and financial liabilities
denominated in foreign currencies will vary as a result of changes in underlying foreign exchange
rates. The Company is exposed to currency risk due to potential variations in currencies other than
the Canadian dollar.

As at December 31, 2021, the Company had material exposure to the Mongolian Tögrög, the US
Dollar and the Russian Ruble. The approximate impact of a 10% fluctuation of the foreign currency
against the Canadian dollar are as follows:

Mongolian Tögrög
US Dollar
Russian Ruble

Impact of 10% fluctuation in foreign currency
2020
$
1 ,509,967
1 ,113,075
365

2021
$
1 ,304,329
2,777,545
1 82,754

39 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

17 Financial risk management (continued)

Other price risk

Other price risk market fluctuation risk is where fluctuations in the value of equity securities affect
the level and timing of recognition of gains and losses on securities held, and cause changes in
realized and unrealized gains and losses. The Company’s marketable securities are exposed to
other price risk. The approximate impact of a fluctuation of 10% in the price of the marketable
securities would impact the value of the marketable securities by $3,780,285 (2020 - $1,057,422).

Economic risk

Mongolian tax, currency and customs legislation is subject to varying interpretations, and changes,
which can occur frequently. Management’s interpretation of such legislation as applied to the
transactions and activity of the Company may be challenged by tax authorities.

Mongolian tax authorities may be taking a more assertive position in their interpretation of the
legislation and assessments, and it is possible that transactions and activities that have not been
challenged in the past may be challenged by tax authorities. As a result, significant additional taxes,

penalties and interest may be assessed. Fiscal periods remain open to review by the authorities in
respect of taxes for five calendar y ears preceding the year of review. Under certain circumstances
reviews may cover longer periods.

Mongolian tax legislation does not provide definitive guidance in certain areas, specifically in areas
such as Value added tax (VAT), corporate income tax, personal income tax and other areas. From
time to time, the Company adopts interpretations of such uncertain areas that reduce the overall
tax rate of the Company. As noted above, such tax positions may come under heightened scrutiny
as a result of recent developments in administrative and court practices. The impact of any
challenge by the tax authorities cannot be reliably estimated; however, it may be significant to the
financial position and/or the overall operations of the entity.

The Company’s management believes that its interpretation of the relevant legislation is
appropriate and the Company’s tax positions will be sustained.

Management performs regular re-assessments of tax risk and its position may change in the future
as a result of the change in conditions that cannot be anticipated with sufficient certainty at
present.

18 Related party transactions

Parties are generally considered to be related if the parties are under common control or if one
party has the ability to control the other party or can exercise significant influence or joint control
ov er the other party in making financial and operational decisions. In considering each possible
related party relationship, attention is directed to the substance of the relationship, not merely the
legal form.

Key management personnel of the Company include all directors and executive management, and
persons directly related to directors and executive management. The summary of compensation
for key management personnel is as follows:

Salaries and other short-term employee benefits
Director fees

2021
$

661 ,332
60,000

7 21,332

2020
$

47 9,281
40,000

519,281

40 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

18 Related party transactions ( continued)

During 2021, the Company agreed to reimburse a Company owned by an officer of the Company,
$233,933 for professional fees incurred from shared services.

As at December 31, 2021, amounts due to related parties totaled approximately $140,000 (2020 -
$45,000) comprised of fees owed to management were included in trade payables and accrued
liabilities.

19 Commitments and contingencies

From time to time and in the normal course of business, claims against the Company may be
received. On the basis of management’s assessments and professional legal advice, management
is of the opinion that no material losses will be incurred and no provision or disclosure has been
made in these consolidated financial statements.

The Company has an obligation to provide an 84 meter apartment to an owner of an apartment
that has been included in one of the Companhy’s properties classified as land and redevelopment.
See note 11 for more information.

The Company indemnifies its directors and officers against any and all claims or losses reasonably
incurred in the performance of their service to the Company to the extent permitted by law.

20 Supplementary cash flow information

Changes in non-working capital arising from

Unearned Revenue
Other assets
Net due to / (from) broker
Trade payables and accrued liabilities

Income tax payable

Changes in non-cash working capital from

operating activities

2021
$

1 ,035,470
(37 ,073)
9,172,922
348,849
2,882

2020
$

-
1 ,064,637
(586,325)
(17 8,941)
(8,323)

10,523,050

291,048

Income tax paid during the year was $2,416 (2020 - $32,914). Interest paid during the year was
$7 4 (2020 - $21).

21 Segment information

The Company’s operations are conducted in three reportable segments; Investment Property
Operations, Corporate, and Subscription Products. The Company reports information about its
operating segments based on the way management organizes and reports the segments within the
organization for making operating decisions and evaluating performance.

Investment Property Operations consist of commercial and residential investment property in
Mongolia held for the purposes of rental revenue, capital appreciation or redevelopment. These
properties are managed by Big Sky Capital LLC and its subsidiaries.

41 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

21 Segment information (continued)

The Company evaluates performance based on net income (loss) before income taxes.

In v estment
Pr operty

Cor por ate

Su bscr iption
Pr odu cts
$

2021

T ot al
$

Ren t al income
Su bscription r evenue
Pr operty operating expenses
Un r ealized loss on investment properties
Rev ersal of im pairment of PPE
Un r ealized m ark t o market gain
Un r ealized loss on digital assets
Ot h er expenses
Su bscription processing fees
Depr eciation
Loss on disposal of investment property
Ot h er revenue
Rea lized g ain on m arketable securities
Reclassification of a ccumulated other

com prehensive incom e on disposal of
su bsidiary

For eign Currency gain (loss)

Net i ncome (l oss) before income

6 7 9,091
-
(7 5 9,100)
(4 41,870)
5 3,630

-
-
(1 ,683)
-
-
- 7 ,946,088
(4 2,606)
-
(2 46,036) (1 ,810,566)
-
(1 1 ,022)
-
-
- 1 0 ,306,006

-
(61 ,086)
(37 ,641)
1 90,850

-
9 44,411
-
-
-
-
-
(21 0,927)
(6 9,157)
-
-
-
-

6 7 9,091
9 44,411
(7 60,783)
(4 41,870)
5 3,630
7 ,946,088
(4 2,606)
(2 ,267,529)
(6 9,157)
(7 2,108)
(37 ,641)
1 90,850
1 0 ,306,006

(3 3,006)
1 ,201

-
(31 4,666)

-
-

(3 3,006)
(31 3,465)

t a xes

(653,967) 16,071,551

664,327

16,081,911

Ren t al income
Pr operty operating expenses
Un r ealized loss on investment properties
Im pairment of PPE
Un r ealized m ark t o market gain
Ot h er expenses
Depr eciation
Ga in on disposal of investment property
Ot h er revenue
Rea lized g ain on m arketable securities
For eign currency gain (loss)

Net i ncome (l oss) before income

t a xes

In v estment
Pr operty
$

Cor por ate
$

7 5 6,283
(8 60,936)
(2 ,700,069)
(3 6,426)
-
(2 67,695)
(6 8,795)
1 06,762
6 8 ,170
-
6 ,7 24

-
-
-
-
4 ,265,403
(91 0,968)
-
-
-
3 ,288,803
(21 ,451)

2020

T ot al
$

7 5 6,283
(8 60,936)
(2 ,700,069)
(3 6,426)
4 ,265,403
(1 ,178,663)
(6 8,795)
1 06,762
6 8 ,170
3 ,288,803
(1 4,727)

(2,995,982)

6,621,787

3,625,805

42 | P a g e

| Mongolia Growth Group Ltd

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

21 Segment information (continued)

Balance as of
December 31, 2021

Tot al assets
Property and equipment
Inv estment properties
Expenditures

Property and equipment
Inv estment properties

Invest ment
Propert y
$

Subscription
product s
$

1 3 ,530,741
1 ,278,360
1 1,885,907

-
-

-
-
-

-
-

Corporat e
$

Tot al
$

4 1 ,496,124
9 4 1,847
-

55,026,865
2 ,220,207
1 1,885,907

9 4 1,847
-

Tot al liabilities

913,319

1,035,471

12,900,788

14,849,578

Balance as of
December 31, 2020

Tot al assets
Property and equipment
Inv estment properties
Expenditures

Property and equipment
Inv estment properties

Invest ment
Propert y
$

1 6 ,126,640
1 ,293,241
1 4 ,542,236

7 05
1 4 5,412

Corporat e
$

1 1,843,781
-
-

-
-

Tot al
$

2 7 ,970,421
1 ,293,241
1 4 ,542,236

7 05
1 4 5,412

Tot al liabilities

922,514

201,480

1,123,994

Trade payables
and accrued
liabilities

Revenue

Propert y and
equipment

Invest ment
propert y

2021
$

2020
$

2021
$

2020
$

2021
$

2020
$

2021
$

2020
$

Canada
USA
Mongolia

5 44,422 2 01 ,479
9 44,411
-
-
1 62,195
2 0 6,774 3 63,063 8 32,300

-
-

-
-
9 31,215 1 ,278,360 1 ,293,241 1 1 ,885,907 1 4,564,844

-
9 41 ,847

-
-

913,391 564,542 1,776,711

931,215 2,220,207 1,293,241 11,885,907 14,564,844

43 | P a g e

Mongolia Growth Group Ltd |

Mongolia Growth Group Ltd.
Notes to the Consolidated Financial Statements
For the year ended December 31

(Ex pressed in Canadian dollars)

22 Other expenses

Inv estor relations
Inv estment research expense
Repairs and maintenance
Office
Professional fees
Travel
Adv ertising
Land and property tax
Insurance
Utilities
Other
Subscription processing fees
Subscription product expenses

2021
$

2 2 ,480
52 ,942
4 8,987
9 8,651
1 ,176,824
3 0,999
1 2 ,552
9 4 ,507
4 9 ,775
53 ,807
2 87,998
6 9 ,157
2 1 0,927

2020
$

2 2 ,537
4 9 ,772
2 5,122
6 9 ,448
7 71,864
1 8,835
1 0,609
7 7,262
7 0,858
1 27,173
1 9 6,920
-
-

2,209,606

1,440,400

23 COVID-19

Beginning in February of 2020, the Government of Mongolia undertook extra-ordinary actions in
order to limit the spread of COVID-19 or other COV ID-19 related impacts. These actions included
closing borders, closing schools, reducing gatherings and drastic limitations on business
operations. As long-term investors in Mongolia, the Corporation welcomes these actions that keep
the people of Mongolia safe from COV ID-19; however it is anticipated that these actions will lead
to a severe economic crisis. Since the initiation of these actions, the Company has experienced a
material reduction in rental revenues received. It is reasonable to expect there could be a material
negative impact on the fair values of investment properties and/or marketable securities, however
at this time the potential effect cannot be quantified. At this time, there is no way to know the
ultimate impact of these extra-ordinary actions upon the economy or the Company.

24 Disposal of Subsidiary

On October 1 st, 2021, the Company disposed of its interest in its Orpheus LLC subsidiary as a
result of the sale of one of its land packages. The Company held 100% of the shares of Orpheus
LLC where the only assets and liabilities were related to the property. In connection with the sale,
the Company received cash considerations of $375,244 for assets with a fair market value of
$47 8,936, resulting in a loss of $103,692 classified as loss on disposal of investment property in
profit and loss. Orpheus LLC had $33,006 other comprehensive income and it was reclassified to
profit and loss.

25 Subsequent events

• The Company has sold two properties for total proceeds of approximately $381,000 and a

net gain of $nil.

44 | P a g e

| Mongolia Growth Group Ltd

Nick Cousyn
Independent Director

Mr. Cousyn is a Capital Markets’ professional with over 20
years of alternatives and traditional industry experience. Mr.
Cousyn was a licensed securities professional in the U.S.
with a background in equities, fixed income, derivatives
and distressed debt. While based in the US, some of
the firms he worked for included Deutsche Bank, Banque
Populaire, Wells Fargo and First Horizon National Bank.
During his 9 year tenure in Mongolia, Mr. Cousyn served as
Chief Communications Officer for Petro Matad and Chief
Operating Officer for BDSec (MO:BDS), Mongolia’s largest
broker and investment bank. He is currently employed by
Praetorian Capital Management, where he is a Partner and
the fund’s Client Representative. Mr. Cousyn holds a BA in
Economics from the University of California at Riverside.

Brad Farquhar
Independent Director

Mr. Farquhar is Chief Financial Officer of SSC Security
Services Corp. (TSXV: SECU; OTCQX: SECUF), a national
provider of physical and cyber security services to
Canadian industrial, commercial and government clients.
He previously co-founded Input Capital Corp., the world’s
first agriculture streaming company, as well as Assiniboia
Capital Corp., which built Canada’s largest farmland fund
before selling it to the Canada Pension Plan Investment
Board in 2014. Mr. Farquhar is a trained financial planner
who spent over 10 years as a senior advisor to senior
political leaders in Saskatchewan and Canada prior to
going into business. He received a MPA in Electoral
Governance from Griffith University in Australia, studied
political science at Carleton University, and completed
a BA at Providence College. Mr. Farquhar is a Director
of SSC Security Services Corp., Luxxfolio Holdings Inc.
(CSE: LUXX), Radicle Group Inc., and on the advisory
board of AgFunder.com.

Board of Directors

Harris Kupperman
CEO and Chairman of Mongolia Growth Group Ltd

Mr. Kupperman is a co-founder of Mongolia Growth
Group and has been the Executive Chairman of the
Corporation since March 2014. Mr. Kupperman was the
President and CEO of the Corporation from February
2011 to March 2014 and returned as CEO in December
2014. Mr. Kupperman publishes AdventuresInCapitalism.
com; a site dedicated to uncovering unique opportunities
around the world. He is currently the President of
Praetorian Capital Fund, a small cap, event-driven hedge
fund based in Miami Beach. He graduated from Tulane
University College with a history degree. Mr. Kupperman
served as a Director at Aeroquest
International Limited (TSX:AQL) from 2010-2011.

Jim Dwyer
Independent Director

Mr. Dwyer is a Partner and Board Member at Mongolian
Business Database in Ulaanbaatar. Jim was a New York-
based investment banker specializing in mergers and
acquisitions for 30 years and completed over 100 M&A
transactions. In addition, he founded and managed M&A
departments for two major investment banking firms:
Shearson Loeb Rhoades and UBS-North America. Mr.
Dwyer first visited Mongolia in 2001 to represent the
Government of Mongolia as lead investment banker for
the privatization of its largest bank, Trade & Development
Bank. Thereafter, he served as lead investment banker
for the privatization of the largest Government-owned
retail bank, Khan Bank. He co-founded the Business
Council of Mongolia (BCM) and served as Executive
Director from its formation in 2007 to 2016. He is also an
independent director of other Mongolian-based entities
including Golomt Bank, Mandal Insurance and Mongolian
Mutual Finance Group. Mr. Dwyer received a BBA from
the University of Notre Dame and an MBA from Columbia
Graduate School of Business (Columbia University).

Robert Scott
Independent Director

Mr. Scott, CPA, CA, CFA brings more than 20 years of
professional experience in accounting, corporate finance,
and merchant and commercial banking. Mr. Scott earned
his CFA in 2001, his CA designation in 1998 and has a
B.Sc. from the University of British Columbia. He is a
Founder and President of Corex Management Inc., a
private company providing accounting, administration,
and corporate compliance services to privately held
and publicly traded companies, and has served on the
management teams and boards of numerous Canadian
publicly traded companies with a strong track record of
cost effectively running operations. Mr. Scott has also
listed several companies on the TSX Venture Exchange
gaining extensive IPO, RTO, regulatory and reporting
experience, and currently holds senior management and
board positions with a number of issuers on the TSX
Venture Exchange & the Canadian Securities Exchange.

Officers

Harris Kupperman

Genevieve Walkden, MBA, CFP, CAIA

CEO and Chairman of the Board

CFO and Corporate Secretary

Auditors

Legal

Transfer Agent

Davidson & Company LLP
Vancouver, BC

Borden Ladner Gervais LLP

Computershare Investor Services

Calgary, AB

100 University Ave., 8th Floor

Farris, Vaughan, Wills & Murphy LLP

Vancouver, BC

Toronto, ON M5J 2Y1

Tel: 1 800 564 6253

www.investorcentre.com/service

Mongolia Growth Group Ltd |TSX - Venture

Canada: YAK
USA: MNGGF

MONGOLIA GROWTH GROUP Ltd.

First Canadian Place,100 King Street West,

56th Floor, Toronto, Ontario M5X 1C9, Canada

Tel: (877) 644-1186

Fax: (866) 468-9119

info@mongoliagrowthgroup.com | www.mongoliagrowthgroup.com

| Mongolia Growth Group Ltd