Distribution Policy

Holders of ROC Preferred Shares are entitled to receive quarterly fixed cumulative preferential tax efficient distributions equal to $0.1718 per ROC Preferred Share. The Company?s Capital Yield Share distribution policy is to pay a quarterly distribution on the Capital Yield Shares equal to the distributions received on the royalty trust portfolio minus the distributions payable on the ROC Preferred Shares and all administrative and operating expenses provided the net asset value per Unit at the time of declaration, after giving effect to the distribution, would be greater than the issue price of the ROC Preferred Shares. For historical dividend amounts, please see distribution information.

Retraction Rights

The following provides a summary of the retraction rights available to shareholders. Please refer to the prospectus for complete details.

Unlike most mutual funds the Capital Yield and ROC Preferred Shares are listed allowing holders to exit by selling their Shares on the market. In addition, they are also retractable at any time. Because of the manner in which the retraction prices are calculated, investors are almost always better off selling their Shares on the market rather than retracting them. It should be noted that all the retractions listed below constitute a taxable disposition of the Company's Shares at the time of the retraction whether the retraction is received in the form of cash or portfolio shares.

Regular Retraction

Capital Yield and ROC Preferred Shares may be surrendered for retraction at any time for payment on the sixteenth day of each month or the preceding business day. A Capital Yield Shareholder who surrenders two Capital Yield Shares is entitled to receive 95% of the unit value less the cost of purchasing an ROC Preferred Share, less $1.00. ROC Preferred Shareholders who elect to retract are entitled to a payment equal to 95% of the unit value less the cost of purchasing two Capital Yield Shares in the market, less $1.00.

Concurrent Retraction

A holder who concurrently retracts two Capital Yield Shares and one ROC Preferred Share will be entitled to receive 95% of the unit value, less $1.00.

Special Annual Retraction

The special annual retraction date occurs on December 16th of each year. On that date Capital Yield Shareholders who surrender two Capital Yield Shares are entitled to receive the amount, if any, by which the unit value exceeds $13.74. If the holder tenders two Capital Yield Shares and one ROC Preferred Share, then the holder is entitled to receive an amount equal to the unit value.

Redemption

The Company may redeem ROC Preferred Shares on any annual retraction date at a price per share equal to $13.74 to the extent that unmatched Capital Yield Shares have been tendered for retraction under a special annual retraction.

Taxation

All return of capital distributions paid to a holder of ROC Preferred Shares or Capital Yield Shares will not be included in computing the income of the holder but will reduce the holder's adjusted cost base of the shares. To the extent that the adjusted cost base of a share would otherwise be less than zero, the negative amount will be deemed to be a capital gain realized by the holder from a disposition of the shares and the holder's adjusted cost base will be increased by the amount of such deemed capital gain.

Dividends other than the capital gains dividends received by individuals on the ROC Preferred or Capital Yield Shares will be subject to the normal gross-up and dividend tax credit rules applicable to dividends received on shares of a taxable Canadian corporation.

The amount of any capital gains dividend received by a holder of ROC Preferred Shares or Capital Yield Shares will be considered to be a capital gain of the holder in the taxation year in which the capital gains dividend is received.

The Company qualifies as a "mutual fund corporation" and a "financial intermediary corporation" as defined in the Income Tax Act (Canada). As a result thereof and after deduction of expenses in computing its income, the Company does not anticipate that it will be subject to any material non-refundable income tax liability.

Directors and Officers

The following are the names, office(s) held and principal occupations of the directors and officers of the Company:

Name	Office(s) Held	Principal Occupation
Brian D. McChesney	President, Chief Executive Officer and Director	Managing Director, Scotia Capital Inc.
Michael K. Warman	Chief Financial Officer, Secretary and Director	Chief Financial Officer, Scotia Capital Inc.
Robert C. Williams	Director	Corporate Director
Thomas C. Dawson	Director	Corporate Director
Michael Edwards	Director	Corporate Director
Robert J. Gunn	Director	Corporate Director