Losses before income taxes derived from U.S. operations are for the year ended March 31, 2013 and 2012 amounted to $3,088,865 and $23,968,164, respectively.

Net operating losses of the Company in its U.S. tax jurisdiction for the year ended March 31, 2012 totalled $23,968,164. This loss has been offset with the recognized intercompany loan interest income of $29,587,028 which resulted in an adjusted net operating income of $5,618,864.

The income tax benefit in the Consolidated Statements of Operations is comprised of:

The difference between the income tax benefits reported and amounts computed by applying the U.S. Federal rate to pretax income consisted of the following:

As of March 31, 2013 the Company had net operating loss carry forwards for income tax purposes of $15,358,839, which if unused, will expire in years 2025 through 2033. A valuation allowance is recorded against the deferred tax assets resulting from Net Operating Loss.

The components of deferred tax assets and deferred tax liabilities are as follows:

The Company has deferred income taxes only in the U.S.

Accounting for Uncertainty in Income Taxes - In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns. The Company’s U.S. federal income tax returns for the fiscal years ended March 31, 2010 through 2012 remain subject to examination. The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon an audit. Therefore, the Company has no reserves for uncertain tax positions. No interest or penalties have been levied against the Company and none are anticipated, therefore no interest or penalties have been included in the provision for income taxes.