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2002 Annual Report

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Schedule I - Pension Custody Brief Prepared by Royal Trust.

Royal Trust is the Court Appointed Trustee and Custodian of the Hepatitis C Trust Fund.

Information Brief

Prepared for:
The Joint Committee
Of the Hepatitis C Trust Fund

Prepared by:
Nicole Kenward, Manager Client Service
RBC Global Services

April 26, 2002


About RBC Global Services and The Royal Trust Company

The Royal Trust Company, a unit of RBC Global Services, is a part of the RBC Financial Group. RBC Global Services is a world leader in providing specialized investment administration solutions for institutional clients. With more than $1.4 trillion in assets under administration, and over 100 years experience serving our clients, we are Canada's largest provider of these services and the 11th largest in the world. Our service offering consists of global custody, securities lending and finance, treasury, portfolio analytics, unitholder recordkeeping, investment administration and accounting, with full outsourcing capabilities. RBC Global Services' success is highlighted by client satisfaction surveys, in which we are consistently ranked among the best in the world. RBC Global Services has offices in Toronto, Montreal, Halifax, St. John's, Calgary, Vancouver, London, Tokyo, Singapore, Sydney, Melbourne and Dubai. For more information, visit our web site at www.royalbank.com/gss.

The Royal Trust Company (RBC Global Services) was appointed Trustee and Custodian of the Hepatitis 'C' Trust Fund by the Superior Courts of B.C., Ontario and Quebec. A front-line service team of administration and operations managers is responsible for the day-to-day activities of the Trust Fund. Together with specialized support from professionals with particular expertise with regulatory requirements, a wide and unique range of services is delivered to the Hepatitis 'C' Trust Fund.

Duties and Responsibilities of the Trustee/Custodian

Custody and Safeguarding of Securities

RBC Global Services holds in trust the cash and securities of the Trust Fund. The assets of the Trust Fund are invested and reinvested by RBC Global Services strictly in accordance with the directions of the Joint Committee or the Investment Manager appointed by the Courts. RBC Global Services ensures the safe custody of the assets and reconciles the securities positions in its books daily using the services of the Canadian Depository for Securities.

Processing of Investment Transactions

RBC Global Services completes all securities transactions - all acquisitions and all dispositions of assets - as per authorized instructions received from the Investment Manager.

Collection of Income

RBC Global Services collects and accounts for all items of principal and income. Stock dividends and bond interest are credited to the account on the day they are payable regardless of whether RBC Global Services actually receives the funds. RBC Global Services tracks stock dividends and splits, bond maturities and redemptions. For cash balances held in the fund, interest is automatically credited. The interest is calculated daily and paid to accounts on the last business day of the month.


RBC Global Services receives all contributions flowing into the Trust Fund. Each month RBC Global Services notifies the Provinces and the Territories of their respective required proportionate contribution. RBC Global Services credits receipts of those contributions to the appropriate accounts.

Plan Disbursements

All plan disbursements are processed in a timely manner in accordance with the terms of our appointment and/or Court Order. Payments to Service Providers are made pursuant to applicable Court Order.

Maintenance of Records

RBC Global Services maintains accurate records with respect to the assets of the Trust Fund and provides timely reports to various parties, including:

Monthly Investment Statements: These statements provide the full financial picture of the Trust Fund including cash reconciliation investment activity, receipts and disbursements for the reporting period. These reports also provide a list of assets held at a certain date with book and market value, accrued income and also detail the day-to-day activity in chronological order.

Quarterly Notional Reports: RBC Global Services maintains notional accounts for each of the Provincial and Territorial Governments. These accounts are maintained on the basis of the sharing percentage provided by the Federal Government. The report records the Governments' proportionate contributions, proportionate interest amount and proportionate disbursements. It also reflects when payments are due and when they are actually received.

Monthly Financial Summary: This report summarizes, at a high level, the Market Value of the Trust Fund, the investment income earned, payouts to claimants and service providers and recoveries from the Provinces and Territories for those payouts since the inception of the Fund.

Summary of Trust Activity

Payments to the Trust Fund

During 2001, the second year of operation of the Hepatitis 'C' Trust Fund, the Trust Fund received contributions totaling $41,049,659 representing payments from Provincial and Territorial Governments.
In addition, the Hepatitis 'C' Trust Fund has earned $28,784,162 (includes investment income, realized and unrealized capital gains and losses). The closing market value of the fund at March 31, 2002 was $788,027,774.

Payments from the Trust Fund

Disbursements from the Trust Fund in 2001 totaled $154,913,044 representing $138,095,539 to the Administrator for the claimants and $16,817,505 to service providers for fees and expenses.
The Courts approved an annual budget of $166,870 for RBC Global Services' Trustee and Custodial fees for the year 2001. The actual charge to the Trust Fund for performing the various activities and delivering the services was $103,824, $63,046 under budget.