MRRM Inc. - Directors' report and management discussion and analysis of the
financial condition and results of operations - Interim 2010.Q4 February 28,
2010 (4th Quarter)

    
    The following discussion and analysis should be read in conjunction with
    the Annual Report. Included in these documents may be forward-looking
    statements with respect to the Company. These forward-looking statements
    by their nature necessarily involve risks and uncertainties that could
    cause actual results to differ materially from those contemplated by such
    statements. The Company considers the assumptions on which these forward-
    looking statements are based to be reasonable at the time they were
    prepared but cautions the reader that these assumptions regarding future
    events, many of which are beyond the control of the Company, may
    ultimately prove to be incorrect.

    The unaudited interim consolidated financial statements were prepared by
    the Company in accordance with Canadian generally accepted accounting
    principles and have not been reviewed by the Company's auditors. Certain
    comparative figures have been reclassified to conform with the
    presentation adopted in the financial statements.

     Extract of information from the Annual Report which will be circulated
                     on June 2, 2010 to the shareholders.

    Additional documents and information are available at the System for
    Electronic Document Analysis and Retrieval (SEDAR) and can be assessed
    through the internet: For MRRM's profile go to www.sedar.com or for
    documents go to www.sedar.com Information is also available on the
    Corporate website at www.MRRM.ca.
    

MONTREAL, May 6 /CNW Telbec/ -

    
    Consolidated Earnings And Comprehensive Income and Retained Earnings
    --------------------------------------------------------------------
    

Revenues for the year (last year) were $65,808,000 ($61,117,000) increasing by $4,691,000 (7.7%). As shown in the segmented information, sales and income from operating activities amounted to $65,024,000 ($61,916,000) being 98.8% (101.3%) of total revenues. Income from corporate totaled $784,000 ($-799,000). Unrealized gains in fair market value of the portfolio amounted to $767,000 ($-926,000). Operating Revenues increased by $3,108,000 (5.0%) compared to last year. Revenue from Corporate increased by $1,583,000 of which $1,693,000 was attributable to an increase in unrealized fair value of investments held for trading.

Costs and expenses for the year (last year) were $64,083,000 ($61,065,000), an increase of $3,018,000 (4.9%). Costs related to operating activities, before exchange and interest, increased by $3,157,000 (5.2%). Expenses related to corporate increased by $37,000.

Operating results are discussed later on in this report.

The impact of the fluctuating Canadian dollar resulted in a total currency exchange gain of $316,000 (all included under cost of sales) versus a gain of $278,000 ($157,000 included under cost of sales) last year. As disclosed in the Notes, the net exposures were as follows: at February 28, 2010, US($450,000); at February 28, 2009, US($404,000); at November 30, 2009, US($492,000); at November 30, 2008, US($550,000). The above US dollars include the equivalents for euros and pounds sterling which are not material.

At the end of this year, there were no forward exchange contracts pending.

Interest expensed on bank indebtedness and the reducing term loan amounted to $210,000 compared to $328,000 last year for a decrease of $118,000. Interest related to the long-term debt was $111,000 compared to $149,000 last year.

Earnings before income taxes for the year (last year) were $1,725,000 ($52,000), an increase of $1,673,000. Earnings from operating activities for the year (last year) were $1,158,000 ($1,031,000), an increase of $127,000. Earnings (loss) from corporate for the year (last year) were $567,000 ($-979,000), an increase of $1,546,000.

Income taxes for the year (last year) were $205,000 ($194,000). Details of the income tax components are presented in the Notes to the financial statements.

Net earnings (loss) for the year (last year) were $1,520,000 (-$142,000) or $0.60 (-$0.06) per share.

Dividends paid during the year amounted to $254,000. This represents a special year-end dividend of $0.10 per share. The declaration and payment of dividends is at the discretion of the Board of Directors. No change is anticipated in the current dividend policy.

    
    -------------------------------------------------------------------------
    ANNUAL RESULTS                  2010     2009     2008     2007     2006
                                    ----     ----     ----     ----     ----
    (Expressed in thousands,
     except for amounts per share      $        $        $        $        $
     - unaudited)                      -        -        -        -        -
    -------------------------------------------------------------------------
    Revenues                      65,808   61,117   49,224   51,164   42,707
    -------------------------------------------------------------------------
    Net Earnings (loss)            1,520     (142)      70    1,093    1,050
    -------------------------------------------------------------------------
    Net Earnings (loss)
     per share                      0.60    (0.06)    0.03     0.43     0.41
    -------------------------------------------------------------------------
    Total Assets                  34,303   37,923   33,449   32,223   28,296
    -------------------------------------------------------------------------
    Total long-Term Financial
     Liabilities                   1,410    2,248    2,868    3,651      580
    -------------------------------------------------------------------------
    Dividends Per share             0.10     0.00     0.05     0.35     0.35
    -------------------------------------------------------------------------


    Summary of Quarterly Results
    ----------------------------
    

The following financial summary is derived from the Company's financial statements for each of the eight most recently completed fiscal quarters.

    
    -------------------------------------------------------------------------
    Summary of
     Quarterly
     Financial
     Results
     for the  Feb 28, Nov 30, Aug 31, May 31, Feb 28, Nov 30, Aug 31, May 31,
     eight      2010    2009    2009    2009    2009    2008    2008    2008
     most      (2010.  (2010.  (2010.  (2010.  (2009.  (2009.  (2009.  (2009.
     recent    ------  ------  ------  ------  ------  ------  ------  ------
     fiscal       Q4)     Q3)     Q2)     Q1)     Q4)     Q3)     Q2)     Q1)
     quarters     ---     ---     ---     ---     ---     ---     ---     ---
    -------------------------------------------------------------------------
    (Expressed
     in
     thousands,
     except
     for
     amounts
     per
     share -
     unaudited)    $       $       $       $       $       $       $       $
    -------------------------------------------------------------------------
    Revenues  15,181  17,672  15,466  17,489  16,502  16,962  14,091  13,562
    -------------------------------------------------------------------------
    Net
     Earnings
     (loss)      562     455     169     334    (200)   (343)    287     114
    -------------------------------------------------------------------------
    Earnings
     (loss)
     per share  0.22    0.18    0.07    0.13   (0.08)  (0.14)   0.11    0.05
    -------------------------------------------------------------------------
    Dividends
     per share  0.10    0.00    0.00    0.00    0.00    0.00    0.00    0.00
    -------------------------------------------------------------------------
    

Revenues for this quarter (last year) were $15,181,000 ($16,502,000), a decrease of $1,321,000 (-8.0%). Revenue from operating activities amounted to $15,094,000 ($16,752,000) being 99.4% (101.5%) of total revenues. Income from corporate totaled $87,000 ($-250,000). Operating revenues for this quarter decreased by $1,658,000 (-9.9%) compared to this quarter last year. Revenue from Corporate increased by $337,000 of which $225,000 was attributable to unrealized fair value of investments held for trading.

Costs and expenses for this quarter (last year) were $14,718,000 ($16,590,000), a decrease of $1,872,000 (-11.3%). Costs related to operating activities, before exchange and interest, decreased by $1,705,000 (-10.4%).

Included in the financial results for this quarter last year was investment tax credits of $61,000.

Interest expense for this quarter (last year) was $45,000 ($71,000) and was $49,000 in 2010.Q3, $54,000 in 2010.Q2 and $62,000 in 2010.Q1. As well this quarter, the Company recovered $16,000 due to variation in fair value of the interest rate swap which is a component of the long term debt facility.

Earnings (loss) before income taxes for this quarter (last year) were $463,000 (-$88,000), an increase of $551,000. Earnings from operating activities were $408,000 ($201,000), an increase of $207,000 and corporate were $55,000 (-$289,000),an increase of $344,000.

Income taxes for this quarter (last year) were -$99,000 ($112,000). The effective tax rates are presented in the Notes to the financial statements.

Net earnings (loss) for this quarter (last year) was $562,000 (-$200,000) or $0.22 (-$0.08) per share.

    
    Consolidated Cash Flows, Liquidity and Balance Sheets
    -----------------------------------------------------
    

In investing activities, the Company added $672,000 of net property, plant and equipment compared to $602,000 last year.

Available credit facilities

The credit facilities available and reported at last year-end remain substantially unchanged. The facilities are comprised of a revolving line of credit for $6,750,000 CDN (or its US equivalent) and a 5 year reducing term facility initially borrowed at fiscal year-end 2007 for $3,500,000. The revolving line of credit bears interest at the Canadian prime rate plus 0.25% for Canadian loans and U.S. base rate plus 0.25% for U.S. loans and, optionally, the Company may take advantage of Bankers Acceptances. The reducing term facility is at a combined fixed rate for interest and fees of 5.83% for the term of the loan. The financial covenants and arrangements relating to these facilities are detailed in the Notes to the audited consolidated financial statements. These covenants are being respected and have been met.

Receivables decreased by $632,000 compared to last fiscal year-end. Account balances are substantially current, there are no anticipated serious collection issues and any potential write-offs have been provided for in the accounts.

Inventories decreased by $3,060,000 (-28.1%) while overall volumes of rice decreased by 18.4%.

Marketable securities - see table below for financial summary and investment mix.

Property, plant and equipment decreased by $491,000 comprised of additions of $672,000, disposals of $2,000 and amortization of $1,161,000.

Bank indebtedness was $922,000 compared to $4,596,000 at last year-end, a decrease of $3,674,000. This is mainly attributable to the decrease in inventories.

Payables decreased by $502,000, due mainly to lower rice purchases.

Long-term debt is being repaid in accordance with the arrangements of the five year reducing term facility agreement as described under credit facilities.

Future income taxes, net liability, increased by $124,000 which is mainly attributable to the increase of $103,000 for the unrealized change in fair value of investments held for trading at February 28, 2010.

Shareholders' equity increased by $1,266,000 to $17,924,000 from $16,658,000 and represents $7.07 ($6.57) per share.

Capital stock remained unchanged at $539,000 and represents 2,535,000 issued common shares.

The MRRM Inc. shares have a very limited distribution and are infrequently traded on the TSX-Venture Exchange under the symbol MRR.

    
                                                     www.TSX-Venture Exchange
                                                     ------------------------

    Critical Accounting Policies:
    -----------------------------
    

The Company's critical accounting policies are those that it believes are the most important in determining its financial condition and results. A summary of the Company's significant accounting policies, including the critical accounting policies, is set out in the notes to the consolidated financial statements in the annual report for the year ended February 28, 2009. An extract of these policies is set out in the notes to the quarterly consolidated financial statements.

    
    Future Accounting Changes:
    International Financial Reporting Standards (IFRS)
    

In 2005, the Accounting Standards Board of Canada (AcSB) announced that accounting standards in Canada are to converge with IFRS. In March 2009, the CICA published an updated version of its "Implementation Plan for Incorporating International Financial Reporting Standards from Canadian GAAP".

This plan includes an outline of the key decisions that the CICA will need to make as it implements the Strategic Plan for publicly accountable enterprises that will converge Canadian generally accepted accounting standards with IFRS. While IFRS uses a conceptual framework similar to Canadian GAAP, there are significant differences in accounting policy which must be addressed. The CICA has confirmed the changeover date from current Canadian GAAP to IFRS for year ends beginning on or after January 1, 2011.

The Company has established an IFRS convergence team that oversees and is actively involved in the transition to IFRS. The Company is devoting the necessary resources to achieve a seamless transition to IFRS by the required date of conversion.

In order to integrate new accounting and reporting standards and assess the impact that the new policies may have on our activities, the Company has undertaken the development of a changeover plan to ensure that a smooth transition occurs.

    
    Discussion of Results:
    ----------------------
    

In Dainty Foods, net sales increased by $2,925,000 (5.0%) for the year and decreased by $1,906,000 (-11.9%) for the quarter compared to last year. Overall rice sales volumes decreased by 12.3% for the year and 5.1% for the quarter compared to last year. The volume reduction is primarily due to lower sales to two major customers, one of which was involved in a labour dispute with its workforce and the other delayed orders for an extended period. Furthermore sales of bulk and bagged rice also contributed to the decrease in volume compared to last year when panic buying erupted due to concerns of possible rice shortages. Costs and expenses increased by $2,872,000 (5.0%) for the year and decreased by $1,978,000 (-12.5%) for the quarter compared to last year and earnings before income taxes for the year increased by $53,000 and $72,000 for the quarter compared to last year.

The increases in revenue and cost of sales for the year were mainly attributable to increased sales of flour and bulk rice compared to last year.

Earnings before income taxes increased by $53,000 for the year and by $72,000 for the quarter compared to last year as cost of sales increased in line with increased sales, while operating, selling, and administrative expenses decreased for the year and the period.

The Company continues to pursue new value-added retail products some of which will be outsourced. This outsourcing will minimize capital investment while enhancing Dainty Foods' offerings in the retail marketplace for both branded and private label items. New selling relationships continue to be developed and are intended to add strength to our retail sales efforts.

World market cost of rice continues to decline gradually. Dainty Foods continues to manage rice contracts to short term duration.

In February 2010, the Company incorporated Dainty Foods International, Inc. which will be used as a vehicle for further business expansion in the USA.

In Robert Reford, revenue increased by $183,000 (5.8%) for the year and by $248,000 (35.0%) for the quarter compared to last year partially reflecting the addition of Montship Inc. for the last month of the fiscal year as well as Norton Lilly for a full year versus a partial year in FYE 2009.

Earnings before income taxes for the year increased by $74,000 and by $135,000 compared to this quarter last year.

On February 1, 2010 Montship Inc. of Montreal joined the strategic alliance created between Robert Reford and Norton Lilly International Inc. in 2008. This alliance will continue to serve to increase overall revenues, open up marketing opportunities and offer synergies for the three partners. Our customers will continue to receive the best quality and array of services possible in the agency business from coast to coast and throughout the Great Lakes. Montship Inc. was founded in 1925, and remains wholly owned by its directors and officers who are all active in the Company. They have divisions offering services in liner agency, trucking, warehousing and container repair. Montship will bring a strong business base and some very experienced staff to the partnership which is solely focused on vessel and port operations agency business. We happily welcome Montship aboard.

Corporate Investments, portfolio income is summarized as follows:

    
                                For the period              For the quarter
                                --------------              ---------------
    -------------------------------------------------------------------------
                              2010          2009          2010          2009
                              ----          ----          ----          ----
    -------------------------------------------------------------------------
    Dividend and
     interest income      $148,000      $184,000       $47,000       $38,000
    -------------------------------------------------------------------------
    Capital (losses)     -$131,000      -$57,000      -$14,000     -$117,000
    -------------------------------------------------------------------------
    Unrealized change
     in Fair Value        $767,000     -$926,000       $54,000     -$171,000
                         ----------    ----------    ----------    ----------
                         ----------    ----------    ----------    ----------
    -------------------------------------------------------------------------
    Totals:               $784,000     -$799,000       $87,000     -$250,000
                         ----------    ----------    ----------    ----------
    -------------------------------------------------------------------------
    

During this year, global financial markets have improved and as indicated above, our portfolio recovered $767,000 of the $926,000 loss we had experienced last fiscal year. The portfolio remains conservatively invested and no significant policy changes are foreseen. The Corporate Investments continue to be held with a long term view.

Effective June 1, 2009 the mandate for management of the portfolio was transferred to MacDougall Investment Counsel Inc.

    
    -------------------------------------------------------------------------
    Investment Mix            Feb 28,   Nov 30,   Aug 31,   May 31,   Feb 28,
                                2010      2009      2009      2009      2009
                            (2010.Q4) (2010.Q3) (2010.Q2) (2010.Q1) (2009.Q4)
                            --------- --------- --------- --------- ---------
    -------------------------------------------------------------------------
    Cash & Equivalents           0.2%      0.5%      0.7%     18.9%     21.0%
    -------------------------------------------------------------------------
    Bonds                       27.2%     27.9%     30.9%     18.9%     20.3%
    -------------------------------------------------------------------------
    Preferred Shares            17.6%     17.6%     14.7%     13.1%     13.1%
    -------------------------------------------------------------------------
    Canadian Equities           37.7%     37.3%     33.5%     31.1%     27.3%
    -------------------------------------------------------------------------
    U.S. & Foreign Equities     17.3%     16.7%     20.2%     18.0%     18.3%
    -------------------------------------------------------------------------
    

Certification

The Company's management, under the direction and supervision of the Chief Executive Officer and Chief Financial Officer, continually evaluates the effectiveness of the Company's disclosure controls and procedures and has concluded that such disclosure controls and procedures are effective.

The Company's management is also responsible for establishing and maintaining internal controls over financial reporting. These controls were designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP.

There have been no changes in the Company's internal controls over financial reporting during this quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Outlook

Dainty Foods expects to gradually increase retail volumes of value-added products in Canada and the USA coupled with the strong increase in flour sales experienced during the last two years.

Microwaveable branded pasta products are expected to add incremental profitability during the last two quarters of Fiscal 2011.

Profit for the quarter was in line with expectations and earnings for the next quarter are expected to match last year. Margins on our U.S. sales will decline in relation to the devaluation of the U.S. Dollar.

The ship agency results were in line with expectations and the addition of Montship Inc. is expected to improve profitability over last year.

While the Company is anticipating continued growth in food processing and selling and maintaining a strong position within the ship agency services business, growth will be impacted by several factors including (i) the ability of the Company to secure rice at competitive prices (ii) the rate of acceptance of new co-packed products (iii) the ability within the marketplace to manage price increases to cover increased costs, and (iv) general economic conditions.

Risks and Uncertainties

Overview

Management of risk includes properly identifying, communicating and controlling the risks which may cause a serious impact to the business. Management is confident that the Company employs effective procedures to address all material risks.

Ability to Achieve Revenue Results

The Company has two operating divisions which are engaged in the food industry and ship agency services. Les Aliments Dainty Foods relies on continued demand for our brands and products. Robert Reford relies on its ability to offer on a competitive basis a full range of ship agency services to its international clients. To achieve our business results, we must develop and sell products and services that appeal to our consumers and customers. Our success also depends on effective sales, promotion and marketing programs in an increasingly competitive environment. We must build mutually beneficial sustainable relationships with our customers. Our ability to execute in these areas will determine how successful we are in growing and sustaining superior sales and profitability. Our performance will be dependent on our ability to sell quality services and products at the most competitive prices. The continued success is partly driven by leading edge innovation as evidenced by the new value added product lines and the Ship Agency partnerships.

Ability to Address Cost and Expense Concerns

The Company's costs are subject to fluctuations, particularly due to changes in bulk rice prices and grain yields, raw materials, cost of labor, foreign exchange and interest rates. The Company's success is partly dependent on management's ability to address and manage these fluctuations through pricing strategies, cost reductions, effective procurement and adoption of IT solutions to improve efficiencies.

Economic Conditions

Economic conditions, natural disasters and political unrest may result in business interruption, inflation or deflation with a resulting impact on the demand for our products and services. Our success will depend in part on our ability to manage our business through any disruptions which may arise.

Environment

The environment we do business in may be altered by changes in laws and regulations in Canada, the United States and internationally. Changes may include product-related laws and regulations, accounting and taxation requirements, environmental policy, and shifts and alterations by our competitors in our markets. The Company is pro-actively engaged in achieving the highest quality control certifications to ensure safe quality food is delivered to the end user. Les Aliments Dainty Foods faces similar dangers and risks of liability as may be encountered by all food processors. There are stringent quality control procedures in place to reduce these risks. The occurrence of a contamination problem could result in a costly product recall and damage to our reputation for superior product quality and value. We maintain adequate product liability and other insurance coverage to mitigate losses as a result of contamination issues that may arise. Robert Reford minimizes liability risk by establishing that all purchases ordered in its capacity as agent for goods and services delivered to the ships are "on behalf of" the principals (ship owners or operators) as authorized by them. The vendors are instructed accordingly. Our ability to manage regulatory, tax and legal matters and to be able to resolve pending matters within current estimates may impact our results.

MRRM Inc. continually strives to be environmentally responsible and includes energy and waste reduction efforts throughout the operations.

    
    On behalf of the Board

    (signed)                 (signed)

    Nikola M. Reford         Terry Henderson
    Chairman                 President & Chief Executive Officer

    Dated at Montreal (Westmount), Quebec,  May 6, 2010.


    MRRM Inc.

    CONSOLIDATED EARNINGS
    And COMPREHENSIVE INCOME

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    -------------------------------------------------------------------------

    (unaudited)     For the TWELVE Months Ending      For the Quarter Ending
                    ----------------------------      ----------------------

                       February 28,  February 28,  February 28,  February 28,
                       ------------  ------------  ------------  ------------
                              2010          2009          2010          2009
                              ----          ----          ----          ----
                              '000          '000          '000          '000
    Revenues
      Sales                $65,024       $61,916       $15,094       $16,752
      Increase
       (decrease) in
       fair value of
       marketable
       securities held
       for trading             784          (799)           87          (250)
                       ------------  ------------  ------------  ------------

                            65,808        61,117        15,181        16,502
                       ------------  ------------  ------------  ------------

    Costs and expenses
      Cost of sales,
       selling and
       administrative       62,773        59,544        14,400        16,102
      Amortization           1,161         1,195           289           298
      Exchange (gain)            0          (121)            0             0
      Interest on
       long-term debt          111           149            25            33
      Other interest            99           179            20            38
      Change in fair
       value of
       interest rate
       swap                    (61)          119           (16)          119
                       ------------  ------------  ------------  ------------
                            64,083        61,065        14,718        16,590
                       ------------  ------------  ------------  ------------
    Earnings (loss)
     before income
     taxes                   1,725            52           463           (88)
                       ------------  ------------  ------------  ------------

    Income taxes
     (recovery)
      Current                   81           (21)         (109)          (71)
      Future                   124           215            10           183
                       ------------  ------------  ------------  ------------
                               205           194           (99)          112
                       ------------  ------------  ------------  ------------

    Net earnings and
     comprehensive
     income (loss)          $1,520         ($142)         $562         ($200)
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

    Basic earnings
     (loss) per share        $0.60        ($0.06)        $0.22        ($0.08)
                             -----        -------        -----        -------
                             -----        -------        -----        -------

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    MRRM Inc.
    CONSOLIDATED  RETAINED EARNINGS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (unaudited)     For the TWELVE Months Ending      For the Quarter Ending
                    ----------------------------      ----------------------

                       February 28,  February 28,  February 28,  February 28,
                       ------------  ------------  ------------  ------------
                              2010          2009          2010          2009
                              ----          ----          ----          ----
                              '000          '000          '000          '000

    Balance, beginning
     of period             $16,119       $16,261       $17,077       $16,319
    Net earnings (loss)      1,520          (142)          562          (200)
                       ------------  ------------  ------------  ------------

                            17,639        16,119        17,639        16,119

    Dividends                  254             0           254             0
                       ------------  ------------  ------------  ------------

    Balance, end of
     period                $17,385       $16,119       $17,385       $16,119
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    MRRM Inc.
    CONSOLIDATED CASH FLOWS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (unaudited)     For the TWELVE Months Ending      For the Quarter Ending
                    ----------------------------      ----------------------

                       February 28,  February 28,  February 28,  February 28,
                       ------------  ------------  ------------  ------------
                              2010          2009          2010          2009
                              ----          ----          ----          ----
                              '000          '000          '000          '000

    OPERATING
     ACTIVITIES

    Net earnings (loss)     $1,520         ($142)         $562         ($200)
    Defined benefit
     plan payments             (59)          (70)          (15)          (19)
                               ----          ----          ----          ----
                             1,461          (212)          547          (219)
                             -----          -----          ---          -----
    Non-cash items
      Change in fair
       value of
       marketable
       securities held
       for trading            (636)          983           (40)          288
      Change in fair
       value of
       interest rate
       swap                    (61)          119           (16)          119
      Loss on disposal
       of equipment              2             7             2             0
      Amortization           1,161         1,195           289           298
      Pension benefit
       cost                     30            30             8             8
      Pension benefit
       income                  (24)            0             0             0
      Future income
       taxes                   124           215            10           183
                       ------------  ------------  ------------  ------------
                                                   ------------  ------------
                               596         2,549           253           896
      Changes in
       non-cash working
       capital items         3,308        (2,549)        2,153           (13)
                       ------------  ------------  ------------  ------------
      Non-cash
       operating items
       generated (used)      3,904             0         2,406           883
                       ------------  ------------  ------------  ------------

    Cash flows from
     operating
     activities              5,365          (212)        2,953           664
                       ------------  ------------  ------------  ------------

    INVESTING
     ACTIVITIES

    Marketable
     securities             (2,569)         (382)         (294)         (162)
    Disposals of
     marketable
     securities              2,500           560           255           152
    Property, plant
     and equipment            (672)         (603)          (55)         (260)
    Disposal of
     equipment                   0             1             0             0
    Cash surrender
     value of life
     insurance policy            3            (5)            3            (5)
                       ------------  ------------  ------------  ------------

    Cash flows from
     investing
     activities               (738)         (429)          (91)         (275)
                       ------------  ------------  ------------  ------------

    FINANCING
     ACTIVITIES

    Bank indebtedness       (3,674)        1,298        (2,429)         (222)
    Long-term debt            (699)         (657)         (179)         (167)
    Dividends                 (254)            0          (254)            0
                       ------------  ------------  ------------  ------------
    Cash flows from
     financing
     activities             (4,627)          641        (2,862)         (389)
                       ------------  ------------  ------------  ------------

    Net change in cash
     and cash, end of
     period                     $0            $0            $0            $0

                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

    Dividends per share      $0.10         $0.00         $0.10         $0.00
                             -----         -----         -----         -----
                             -----         -----         -----         -----

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    MRRM Inc.
    (Formerly: Mount Royal Rice Mills Limited)
    CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
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    (unaudited)                                          As at         As at
                                                   February 28,  February 28,
                                                   ------------  ------------
                                                          2010          2009
                                                          ----          ----
                                                          '000          '000
    ASSETS
    Current
      Accounts receivable                               $6,193        $6,825
      Inventories                                        7,831        10,891
      Income taxes receivable                               35             0
      Tax credits receivable                                94         1,106
      Prepaids                                             111           141
      Future income taxes                                   15            15
                                                   ------------  ------------
                                                        14,279        18,978

    Tax credits receivable                                 868             0
    Marketable securities, at fair value                 4,425         3,720
    Property, plant and equipment, net                  14,729        15,220
    Cash surrender value of life insurance policy            2             5
                                                   ------------  ------------

                                                       $34,303       $37,923

                                                   ------------  ------------
                                                   ------------  ------------
    LIABILITIES
    Current
      Bank indebtedness                                   $922        $4,596
      Accounts payable and accrued liabilities          11,124        11,626
      Income taxes payable                                   0            21
      Current portion of accrued benefit liability          56            71
      Current portion of long-term debt                    739           699
                                                   ------------  ------------
                                                        12,841        17,013
                                                   ------------  ------------


    Long-term debt, reducing term loan maturing
     in 2012                                               784         1,523
    Fair value of interest rate swap contract               58           119
    Accrued benefit liability                              568           606
    Future income taxes                                  2,128         2,004
                                                   ------------  ------------

                                                        16,379        21,265
                                                   ------------  ------------
    SHAREHOLDERS' EQUITY

    Capital stock
        Common shares, without nominal or par value
         authorized in an unlimited number
        Issued            2,535,000 shares                 539           539

    Retained earnings                                   17,385        16,119
                                                   ------------  ------------
                                                        17,924        16,658
                                                   ------------  ------------

                                                       $34,303       $37,923
                                                   ------------  ------------
                                                   ------------  ------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    MRRM Inc.
    NOTES To CONSOLIDATED FINANCIAL STATEMENTS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (unaudited)                                 For the TWELVE Months Ending
                                                ----------------------------
                                                          February 28,  2010
                                                          ------------  ----
    

1- Accounting Policies, Financial Risk management and Supplementary Information

The unaudited interim consolidated financial statements were prepared by the Company in accordance with Canadian generally accepted accounting principles and have not been reviewed by the Company's auditors.

The accounting policies and procedures used in preparing these unaudited interim consolidated financial statements are the same as those used in preparing the audited annual consolidated financial statements for the year ended February 28, 2009 except for new accounting policies that have been adopted effective March 1, 2009. These unaudited interim statements should be read along with the audited annual statements and notes included in the Company's last Annual Report. Certain comparative figures have been reclassified to conform with the presentation adopted at last fiscal year-end.

Accounting changes

On March 1, 2009, in accordance with the applicable transitional provisions, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants, ("CICA") Handbook Section 3064, "Goodwill And Intangible Assets" and the amendments to CICA Handbook Section 3862 "Financial Instruments- Disclosures".

Goodwill and Intangible Assets

In February 2008, the CICA issued Section 3064, "Goodwill And Intangible Assets", which superseded Section 3062, "Goodwill and Other Intangible Assets" and Section 3450, "Research and Development Costs". Section 3064 sets out standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. This accounting standard is effective for fiscal years beginning on or after October 1, 2008. The Company has adopted this Section as of March 1, 2009. Section 1000, "Financial Statement Concepts" was also amended to provide consistency with this new Section. The implementation of this new standard had no impact on the Company's consolidated financial results and position.

Financial Instruments disclosures and presentation

In June 2009, the CICA amended Section 3862, "Financial Instruments - Disclosures", to include additional disclosure requirements about fair value measurement for financial instruments and liquidity risk. These amendments require a three-level hierarchy that reflects the significance of the inputs used in making the fair value measurements. The amendments to Section 3862 apply for annual financial statements relating to fiscal years ending after September 30, 2009. The implementation of this new standard had no impact on the Company's consolidated financial results and position.

Future accounting standards

As at April 16, 2010, new primary sources of GAAP ("standards") have been published but are not yet in effect. These standards are not expected to have a significant impact on the Company consolidated financial statements.

2- Financial Instruments and Financial Risk factors

Hierarchy of Financial Instruments

The Company categorizes its financial assets and liabilities, measured at fair value into one of three levels depending on the observability of the inputs used in the measurement as follows:

    
    - Level 1: This level includes assets and liabilities measured at fair
      value based on unadjusted quoted prices in active markets that are
      accessible at the measurement date. The financial assets included in
      this level are marketable securities.

    - Level 2: This level includes valuations determined using directly or
      indirectly observable inputs other than quoted prices included within
      Level 1. Financial instruments in this category are valued using models
      or other industry standard valuation techniques derived from observable
      market inputs. This level includes the Company's derivative financial
      instruments composed of its interest rate swap agreement.

    - Level 3: This level includes valuations based on inputs which are less
      observable, unavailable or where the observable data does not support a
      significant portion of the instruments' fair value. As at February 28,
      2010, the Company does not have any financial assets, financial
      liabilities or derivative financial instruments, which should be
      included in this level.
    

Derivative Financial Instruments

The Company uses derivative financial instruments to manage its exchange risk and interest rate risk as necessary. The derivative financial instruments are recognized at their fair value on the balance sheet and changes in fair value are recognized in earnings for the year.

The Company uses an interest rate swap arrangement, for a notional amount of $3,500,000 through its bankers to effectively fix the variable rate pertaining to the Reducing term loan which matures in February 2012. This arrangement has fixed the interest rate at 5.83% to maturity. The swap contract had a negative fair value of $58,000 at February 28, 2010 and as such, has been recorded in long-term liabilities under fair value of interest rate swap and recognized in Consolidated Earnings and Comprehensive Income under other expenses. The Company does not enter into derivative financial instruments for trading or speculative purposes.

Fair Value and Classification of Financial Instruments

The following methods and assumptions were used to determine the estimated fair value of each class of financial instruments:

    
    - The fair value of bank indebtedness, trade accounts receivable and
      accounts payable and accrued liabilities is comparable to their
      carrying amount, given their short maturity periods;

    - The fair value of marketable securities has been determined based on
      the current bid price at the balance sheet date;

    - The fair value of the long-term debt which bears interest at a variable
      rate approximates its carrying amount;

    - The fair value of the interest rate swap agreement was determined by
      the bank and represents the amounts required to realize favorable
      contracts or settle unfavorable ones.
    

As at February 28, 2010, the financial instruments presented at fair value on the Company's consolidated balance sheet by level of the fair value hierarchy are as follows:

    
    (amounts are in thousands of dollars)        Level 1   Level 2   Level 3
                                                 -------   -------   -------
    Financial Assets
    Marketable securities                          4,425         -         -
    Financial Liabilities
    Interest rate swap                                 -       (58)        -
    

The Company is exposed to a number of different financial risks arising from normal course business exposure, as well as the Company's use of financial instruments. These risks include credit risk, interest rate risk, liquidity risk, currency risk, price risk and other price risk. The Company's management is responsible for setting acceptable levels of risk and reviewing management activities as necessary.

Currency risk

The Company is exposed to foreign currency risks due to its imports of bulk rice from the USA and overseas. These risks are partially offset by sales in U.S. funds and by the purchase of forward exchange futures. As at February 28, 2010, there were no forward exchange future contracts pending. The Company uses the fair value accounting method for such instruments. Under this method any unrealized gains or losses caused by fluctuation to the market value are recorded in income for the year.

As at February 28, 2010, assets denominated in foreign currencies consisting of cash, trade accounts receivable and marketable securities totaled US$3,331,520 or its Canadian equivalent of $3,506,758 (US$4,331,721 and (euro)25,677 respectively or its Canadian equivalent of $5,545,757 as at February 28, 2009). Bank indebtedness and accounts payable and accrued liabilities denominated in U.S. dollars totaled US$3,781,970 or its Canadian equivalent of $3,980,902 (US$4,735,904 or its Canadian equivalent of $6,017,913 as at February 28, 2009).

Based on the net U.S. dollar exposure as of February 28, 2010, a 1 percent increase/(decrease) in the U.S. exchange rate will increase/(decrease) equity by approximately $5,000 ($5,000).

Credit risk

Credit risk relates to the risk that a party to a financial instrument will not fulfill some or all of its obligations, thereby, causing the Company to sustain a financial loss. In the normal course of business, the Company is exposed to credit risk from its customers, substantially all of which are in the retail and processing markets. Generally, the carrying amount reported on the Company's consolidated balance sheet for its financial assets exposed to credit risk, net of applicable provisions for losses, represents the maximum amount exposed to credit risk. The Company performs ongoing credit evaluations of new and existing customers' financial conditions and reviews the collectibility of its trade and other accounts receivable in order to mitigate any possible credit losses. The Company maintains an allowance for doubtful accounts that represents its estimate of uncollectible amounts. This allowance is related to specific losses estimated on individually significant exposures.

Interest rate risk

Receivables and payables are non-interest bearing. Bank indebtedness bears interest at the Canadian prime rate for Canadian loans and U.S. base rates for U.S. loans and, optionally, the Company may take advantage of Bankers Acceptances. The interest rate risk relating to the reducing term loan is as described under Fair value above. For this quarter, a 0.5% hypothetical increase in the prime rate on bank indebtedness would increase interest expense by approximately $2,000. A 0.5% decrease in the prime rate would have had a reverse effect. The Company's investment in bonds bear interest at fixed rates and the Company is, therefore, exposed to the risk of changes in fair value resulting from interest rate fluctuations.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial liabilities and obligations as they become due. The Company is exposed to this risk mainly through its accounts payable and accrued liabilities, its long term debt and its contractual commitments. The Company finances its operations through a combination of cash flows from operations and its line of credit.

The Company believes that future cash flows from operations and availability under existing credit facilities from banking institutions will be sufficient to meet its obligations. Under senior management's supervision, the Company manages its liquidity according to financial forecast and expected cash flows.

Price risk

The Company's price risk arises from changes in raw material prices, which are significantly influenced by the underlying markets. The Company's objectives in managing its price risk are three fold: i) to protect its financial results for the period from significant fluctuations in raw material costs, ii) to anticipate, to the extent possible, and plan for significant changes in the raw material markets and iii) to ensure sufficient availability of raw materials required to meet the Company's manufacturing requirements. To manage its exposure to price risks, the Company closely monitors current and anticipated changes in market prices and develops pre-buying strategies and patterns, and seeks to adjust its selling prices when market conditions permit. Historical results indicate management's ability to rapidly identify fluctuations in raw material prices and, to the extent possible, incorporate such fluctuations in the Company's selling prices and as such, any impact to consolidated earnings is not significant.

Other price risk

The Company is exposed to fluctuations in the market prices of its marketable securities that are classified as held-for-trading. Changes in the fair value of marketable securities are recorded in consolidated earnings. The risk is managed by ensuring a relatively conservative and diversified asset mix. For this quarter, the effect before income taxes represents an increase in income of $54,000 and a decrease of $171,000 for the same period last year. As at February 28, 2010, a 10% increase/(decrease) in the bid prices of the marketable securities would increase/(decrease) equity by approximately $442,000 ($372,000 in 2009).

    
                    For the TWELVE Months Ending      For the Quarter Ending
                    ----------------------------      ----------------------
                       February 28,  February 28,  February 28,  February 28,
                       ------------  ------------  ------------  ------------
                              2010          2009          2010          2009
                              ----          ----          ----          ----
                              '000          '000          '000          '000

    3 - Information
         included in
         the Statement
         Of Earnings

          Income taxes
           paid
           (received)         $137           $19          $168         ($154)
                              ----           ---          ----         ------
                              ----           ---          ----         ------
          Investment
           tax credits        $115          $160            $0           $62
                              ----          ----            --           ---
                              ----          ----            --           ---
    

During the year, the Company recorded investment tax credits on qualifying research and development costs in the amount of $115,000 ($160,000 in 2009). The amount recorded in 2010 is related to the 2009 income tax filings. In 2009, $49,000 related to 2009 filings and $111,000 related to 2008 filings.

    
          Interest on
           long-term
           debt               $111          $149           $25           $33
          Interest on
           bank
           indebtedness
           and other            99           179            20            38
                                --           ---            --            --
                                --           ---            --            --
          Interest paid
           and expensed       $210          $328           $45           $71
                              ----          ----           ---           ---
                              ----          ----           ---           ---

    4 - Income Taxes

          Tax at combined
           basic federal
           and provincial
           income tax
           rate               $531           $16          $137          ($41)
          Non-taxable
           portion of
           capital losses       20             9             2            18
          Tax-free income      (25)          (30)           (3)            3
          Non-taxable
           portion of
           (Increase)
           decrease in
           fair value of
           investments        (118)          143            (8)           23
          Non-deductible
           expenses             32            32            10            10
          Reduction in
           future income
           tax due to
           decrease in
           rates              (216)          (11)         (216)          (11)
          Other                (19)           35           (21)          110
                               ----           --           ----          ---
                              $205          $194          ($99)         $112
                              ----          ----          -----         ----
                              ----          ----          -----         ----

          Effective tax
           rate               11.9%         -%(X)        (12.3)%        -%(X)

          (X) The effective tax rate for this period is not meaningful and
              has been omitted.

          The Company's
           future income
           tax
           liabilities
           (assets) are
           as follows:

          Employee
           future
           benefits           (187)        ($210)          $15          ($22)
          Research and
           development
           tax credits         270           315           (18)          (10)
          Property,
           plant and
           equipment         1,968         2,018           (86)          152
          Loss carry
           forwards             (8)          (47)           39            37
          Other                 70           (87)           60            26
                                --           ----           --            --
                            $2,113        $1,989           $10          $183
                            ------        ------           ---          ----
                            ------        ------           ---          ----
          Comprising
          Current             ($15)         ($15)           $0            $0
          Non-current        2,128         2,004            10           183
                             -----         -----            --           ---
                            $2,113        $1,989           $10          $183
                            ------        ------           ---          ----
                            ------        ------           ---          ----

    5 - Supplemental
         Cash Flow
         Information:

          Changes in
           non-cash
           working
           capital
           items

            Accounts
             receivable       $632       ($2,630)       $1,549        $2,166
            Inventories      3,060        (3,420)          (11)         (415)
            Income Tax
             receivable        (35)            0           (35)            0
            Tax credits
             receivable        144          (211)           92            83
            Prepaids            30            32            39            16
            Accounts
             payable
             and accrued
             liabilities      (502)        3,682           699        (1,638)
            Income taxes
             payable           (21)           (2)         (180)         (225)
                               ----           ---         -----         -----
                            $3,308       ($2,549)       $2,153          ($13)
                            ------       --------       ------          -----
                            ------       --------       ------          -----

    6 - Segmented
         Information

          Revenue

            Food
             processing
             and selling   $61,659       $58,734       $14,138       $16,044
            Ship agency
             services        3,365         3,182           956           708
                             -----         -----           ---           ---
            Operating       65,024        61,916        15,094        16,752
            Corporate          784          (799)           87          (250)
                               ---          -----           --          -----
                           $65,808       $61,117       $15,181       $16,502
                           -------       -------       -------       -------
                           -------       -------       -------       -------

          Earnings (loss)

            Food
             processing
             and selling      $809          $756          $325          $253
            Ship agency
             services          349           275            83           (52)
                               ---           ---            --           ----
            Operating        1,158         1,031           408           201
            Corporate          567          (979)           55          (289)
                               ---          -----           --          -----
            Earnings
             (loss)
             before
             income taxes    1,725            52           463           (88)
            Income Taxes       205           194           (99)          112
                               ---           ---           ----          ---
            Net earnings
             (loss)         $1,520         ($142)         $562         ($200)
                            ------         ------         ----         ------
                            ------         ------         ----         ------

          Assets

            Food
             processing
             and selling   $28,345       $33,273       ($1,345)        ($872)
            Ship agency
             services        1,475           934          (598)         (999)
                             -----           ---          -----         -----
            Operating       29,820        34,207        (1,943)       (1,871)
            Corporate        4,483         3,716           150          (289)
                             -----         -----           ---          -----
                           $34,303       $37,923       ($1,793)      ($2,160)
                           -------       -------       --------      --------
                           -------       -------       --------      --------

          Capital
           expenditures

            Food
             processing
             and selling      $660          $597           $55          $260
            Ship agency
             services           12             6             0             0
                                --             -             -             -
            Operating          672           603            55           260
            Corporate            0             0             0             0
                                 -             -             -             -
                              $672          $603           $55          $260
                              ----          ----           ---          ----
                              ----          ----           ---          ----

          Amortization

            Food
             processing
             and selling    $1,129        $1,144          $281          $287
            Ship agency
             services           32            51             8            11
                                --            --             -            --
                            $1,161        $1,195          $289          $298
                            ------        ------          ----          ----
                            ------        ------          ----          ----

    7 - Capital disclosures

          The Company defines its capital as long-term debt (including the
          current portion), shareholders' equity, minus cash and cash
          equivalents. Capital is calculated as follows:

            Bank
             indebtedness
             and current
             portion of
             long-term
             debt           $1,661        $5,295       ($2,419)        ($210)
            Long-term
             debt and
             fair value
             of interest
             rate swap
             contract          842         1,642          (205)          (60)
                               ---         -----          -----          ----
            Total debts      2,503         6,937        (2,624)         (270)
            Shareholders'
             equity         17,924        16,658           308          (200)
                            ------        ------           ---          -----
            Total
             capitaliza-
             tion          $20,427       $23,595       ($2,316)        ($470)
                           -------       -------       --------        ------
                           -------       -------       --------        ------
            Debt as % of
             capitaliza-
             tion               12%           29%          113%           57%
                                ---           ---          ----           ---
                                ---           ---          ----           ---
    

The Company's objectives for managing its capital structure are to ensure financial capacity, liquidity and flexibility to maintain a strong capital base to sustain ongoing development and operations.

The Company's credit facilities are subject to a number of covenants and these have been met as indicated under "Liquidity risk". These covenants are as follows: i) A revolving line of credit secured by accounts receivable and marketable securities; and ii) Maintain a Debt Service Coverage ratio of not less than 1.00 on a pre and post-dividend basis to May 31, 2010 and revert thereafter to not less than 1.25 on a pre-dividend basis and 1.0 on a post-dividend basis.

The primary source of capital is shareholders' equity. The credit facilities available and reported at last year-end remain substantially unchanged. The facilities are comprised of a revolving line of credit for $6,750,000 CDN {or its US equivalent} and a 5 year reducing term facility initially borrowed at fiscal year-end 2007 for $3,500,000. The revolving line of credit bears interest at the Canadian prime rate plus 0.25% for Canadian loans and U.S. base rate plus 0.25% for U.S. loans and, optionally, the Company may take advantage of Bankers Acceptances. The reducing term facility is at a combined fixed rate for interest and fees of 5.83% for the term of the loan. The financial covenants and arrangements relating to these facilities are detailed in the Notes to the audited consolidated financial statements filed for last year-end. These covenants are being respected and have been met. The Corporation is not subject to any external capital restrictions and has no commitments to sell common shares.

    
    8 - Geographic
         Information

          External
           customer
           revenues(1)

            Canada         $52,294       $50,351       $12,290       $12,100
            U.S.A.          13,514        10,766         2,891         4,402
                            ------        ------         -----         -----
                           $65,808       $61,117       $15,181       $16,502
                           -------       -------       -------       -------
                           -------       -------       -------       -------

    (1) Revenues from external customers are attributed to countries based on
        the location where goods or services were provided.

        All of the Company' s assets are located in Canada.
    

%SEDAR: 00009058EF

SOURCE MRRM Inc.

For further information: For further information: Lou Younan, Vice-President Finance & CFO, MRRM Inc., (514) 908-7777, Fax: (514) 906-0220, mr@mrrm.ca

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