Report Card

1. Report Card Quarter Ending December 31, 2012 Date: December 31, 2012 Compliments of: Frank Dakos IPC Investment Corporation 1100-100 Conestoga College Blvd. Kitchener, ON N2P 2N6 Phone: 519-578-2591 Email: fdakos@ipckitchener.com Website: www.moneytipswithfrank.com The Report Card provides a comprehensive review of past, current and potential factors that may impact your investments. Our goal is to continuously monitor your investments to help you meet your financial objectives.

2. About This Report • Comments in Report Card refer to last three and 12 months. • Market discussion are related to indices and do not analyze or reflect personal investments. • We review performance, risk management and overall effectiveness of each sub-advisor and underlying fund manager. • Counsel investment solutions adopt a long-term approach to investing. Each portfolio solution diversified to reflect appropriate: • Asset mix • Geographic allocation • Investment style • Benchmarks for each Counsel investment solution can be found at end of presentation.

3. Agenda • Market and economic overview • What our investment specialists say • Review of Counsel investment solutions • Benchmarks and Disclaimers

4. 1. Market and Economic Overview

5. Global Stock Markets: Index Movements • Generally a good quarter for equities: • Particularly Europe, with Germany providing largest gains for the year. Eurozone debt crisis seems to be on back burner ever since Draghi’s strong pro-euro comments in June • However, the U.S. declined – gave back of some of gains made in Q3 • Japan had strong recovery on back of change of government • Canada remained stable Performance is calculated using local currency. Data as at: December 31, 2012 Source: Morningstar Direct, Counsel Portfolio Services

6. Canadian Dollar Performance CAD vs. U.S. Dollar CAD vs. Euro • Canadian dollar retreated against U.S. dollar and euro in Q4, primarily because of falling commodity prices, and investor sentiment that eurozone and the U.S. are bouncing back • There was no negative news on Canada, just buoyancy in other markets - this can be deceptive as none of the underlying problems in these areas have been resolved • Canadian dollar remains above par against U.S. dollar, due to continuous stimulation being injected into the U.S. economy. Source: Bank of Canada

7. Canada: Equities vs. Bonds Equities outperformed bonds last year, mainly based on fear of increasing interest rates Caution recommended as there are still significant head winds - U.S. debt, eurozone crisis still has not been resolved. Kicking can down the road seems very much in vogue Short-term: Equities vs. Bonds Long-term: Equities vs. Bonds Source: Globe and Mail

8. S&P TSX 60 Total Return S&P TSX Completion Total Return S&P TSX Small Cap Total Return MSCI Canada Growth Index MSCI Canada Value Index. Canadian Market Overview Investment Style Market Cap Source: Morningstar Direct Source: Morningstar Direct IT was largest contributor to returns, based on expectations of a recovery in market share for RIM Energy was weakest based on slowdown in oil prices due to China focusing on internal growth as opposed to exports

9. S&P 500 Total Return S&P Mid Cap 400 Total Return S&P Small Cap 600 Total Return Russell 1000 Value Index Russell 1000 Growth Index U.S. Market Overview Investment Style Market Cap Banking stocks provided largest gains, expectations are that housing is now on recovery path, and this will lead to more mortgage financing IT and telecoms were weaker in Q4 primarily due to a drop in Apple – sales have been disappointing Utilities were negative as there was more attraction to growth areas Source: Morningstar Direct Source: Morningstar Direct Returns measured in U.S. dollar terms

10. MSCI EAFE Value MSCI EAFE Growth International Market Overview Investment Style • International markets continued to do well on back of Draghi’s strong pro-euro comments in June • Germany continues to be Europe’s economic driver • U.K. could be experiencing triple-dip recession • Caution: eurozone still struggling with high debt and sluggish growth • Financials supported by more stimulus and support from central banks • Energy impacted by falling oil prices due to slowdown in China Source: Morningstar Direct Returns measured in Canadian dollar terms

11. Looking Ahead: Key Investment Themes For 2013 • Macro risks not fully resolved • U.S. debt ceiling and budget debate • European economic and political uncertainties • European banking • Regional instability • Debt deleveraging is incomplete • Deflationary conditions pushing down on growth • Increase in market volatility • Monetary policies are becoming less effective • Inflationary - low rates, bond purchases, money printing • Upward pressure on commodity prices, asset prices • Policymakers have greater influence on markets • Longer term issues = headwinds • Demographic challenges - Europe, China, North America • How do slow growing developed economies maintain entitlements? • Implication: interest rates and bond yields will remain low

12. Headwinds: Europe Has Lots Of Work To Do Necessary steps to end eurozone debt crisis seem years away • Direct recapitalization of eurozone banks • EU-wide system of deposit insurance • EU-wide system of supervision and regulation • Structural reforms • Debt mutualization

15. The period we are going through now is eerily similar to the 1966 to 1982 period. Despite the factors being different – interest rates, inflation etc. The reaction of the markets has been the same.

17. History Suggests A 6% to 9% Total Return From Here Source: Vitaliy N. Katsenelson “Active Value Investing – Making Money in Range Bound Markets”, 2007

19. Intra-Year Declines vs. Calendar Years Returns Reality is there will always be lows in a year

21. The Original Value Investor…500 Year Old Advice “Divide your fortune into four equal parts: stocks, real estate, bonds and gold coins. Be prepared to lose on one of them most of the time. During inflation, you will lose on bonds and win on gold and real estate : during deflation, you lose on real estate and win on bonds, while your stocks will see you through both periods, though in a mixed fashion. Whenever performance differences cause a major imbalance, rebalance your fortunes back to the four equal parts.” Jacob Fugger the Rich1459-1525

22. 2. What our Investment Specialists say

23. Short Term Bond “Government bond yields are very low, and we expect short-term rates to stay very low for an extended period. Higher yields in the credit market relative to government bonds lend support to our current preference for investment grade corporate bonds over government bonds.” “On the whole, we expect low single-digit returns in bonds in the coming years.”

24. Canadian Value “We don’t believe we have seen the full and complete capitulation necessary to start the next secular bull market in equities, but we do believe conditions have been moving in the right direction.” “As stocks continue to drift out of favour and capital continues to exit equity funds, Sionna grows more optimistic about the future of equities.”

25. Canadian Growth “Financial markets typically rejoice in the early stages of an economic recovery as confidence grows and uncertainty wanes. We think that we may have reached the peak of uncertainty — a time where economic growth goes from being driven by low interest rates and government deficits, to a self-sustaining economy powered by the spending of corporations and consumers.” “We believe that during the first half of 2013, markets will be driven by hope. During the second half of 2013, that hope will need to translate into reality, supported by hard data and difficult decisions.”

26. U.S. Growth “We believe that various important U.S. economic yardsticks are improving. These include employment, housing, manufacturing, vehicle sales and bank lending.  We see a great deal of pent up demand which could be unleashed – particularly with regard to housing and capital expenditures – as both consumers and businesses gain confidence in the economic environment.” “Equity valuations remain very compelling on both an absolute and relative basis.  In fact, it is difficult to identify another period in modern history in which stocks have been so attractively priced compared to bonds and other major asset classes.”

27. International Value “After a pause in 2012, Asian economies will look to 2013 to resume their normalized growth trajectory. Much of the concern about a hard landing in China seems to be dissipating quickly. In fact, there is a growing consensus that the new Chinese leadership is keen to balance investment led growth with consumption led growth.” “This is the preferred route for a sustainable economic recovery over the medium to long term.”

28. Global Real Estate “Performance in the year 2012, was to a large extent driven by global macroeconomic policies and political interference. Continued global quantitative easing, an interim resolution on the crisis in Europe and an avoidance of a hard lending scenario in China were positive factors for investors in general and in particular the fixed income space and global real estate securities.” “In 2013 we expect the global gradual macroeconomic recovery to continue. This combined with the resolution of the fiscal cliff situation in the U.S. and a continued easy monetary environment, particularly in Japan and the U.S., should continue to be positive for investors.”

29. Global Small Cap “With larger cap stocks having outperformed smaller cap stocks in 2012, we believe valuations in the small cap space are looking increasingly compelling. And with the overall global macro economic picture improving, we think the tone is set for improving risk appetite.” “What this all amounts to is a compelling environment for strong small cap performance, and the potential for outperformance versus the overall market. As well, we wouldn’t be surprised to see M&A activity picking up as corporate acquirers take advantage of the attractive small cap valuations, which could further enhance returns in the small cap space.”

30. 3. Review Of Counsel Investment Solutions

31. Counsel Balanced Portfolio * Target asset allocation weights adjusted following annual review of Counsel portfolios and with the renewal of the simplified prospectus. This Portfolio is managed using a multi-manager process. The current sub-advisor or underlying mutual fund managerfor each mandate is listed beside the mandate for which it provides portfolio management / sub-advisory services. This Portfolio invests in underlying mutual funds (which may be managed by Counsel) currently sub-advised by the sub-advisors listed beside each investment mandate. For information on the underlying funds, please refer to the prospectus, which is available on our website at www.counselservices.com or on the SEDAR website at www.sedar.com.

32. Counsel Balanced Portfolio Effective Asset Class Mix Effective Top 10 Sector Allocation Effective Geographic Mix

33. Counsel Balanced Portfolio Positive and negative attribution for Q4 2012 Positive and negative attribution for the 12 months ended December 31, 2012 + Positive attribution to overall Portfolio, reflecting that the mandate outperformed its relative benchmark on a gross returns basis. - Negative attribution to overall Portfolio, reflecting that the mandate underperformed its relative benchmark on a gross returns basis.

34. Counsel Short Term Bond Effective Investment Mix Effective Bond Maturity

35. Counsel Short Term Bond

36. Counsel Fixed Income Effective Investment Mix Effective Bond Maturity

37. Counsel Fixed Income

38. Counsel Canadian Value

39. Counsel Canadian Value Effective Asset Class Mix Effective Top 10 Sector Allocation

40. Counsel Canadian Growth

41. Counsel Canadian Growth Effective Asset Class Mix Effective Top 10 Sector Allocation

42. Canadian Growth Equities

43. Canadian Quantitative Growth Equities

44. Counsel U.S. Value

45. Counsel U.S. Value Effective Asset Class Mix Effective Top 10 Sector Allocation

46. Counsel U.S. Growth

47. Counsel U.S. Growth Effective Asset Class Mix Effective Top 10 Sector Allocation

48. Counsel International Value

49. Counsel International Value Effective Asset Class Mix Effective Top 10 Sector Allocation

50. Counsel International Growth