www.fondsftq.com FINANCIAL STATEMENTS A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0

www.fondsftq.com FINANCIAL STATEMENTS A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0

INDEPENDENT AUDITORS REPORT To the Shareholders of the Fonds de solidarité des travailleurs du Québec (F.T.Q.) We have audited the accompanying financial statements of the Fonds de solidarité des travailleurs du Québec (F.T.Q.), which comprise the balance sheets as at May 31, 2011 and 2010, and the statements of operations, changes in net assets and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fonds de solidarité des travailleurs du Québec (F.T.Q.) as at May 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. 1 2 1 Chartered accountant auditor permit No. 10881 2 Chartered accountant auditor permit No. 22092 Montréal, June 29, 2011 FONDS DE SOLIDARITÉ FTQ 2011 1

BALANCE SHEETS A S AT M AY 3 1 2011 2010 (In thousands, except net assets per share) $ $ Assets Development capital investments (Note 4) 4,269,537 3,920,407 Other investments (Note 5) 4,190,196 3,670,163 Accounts receivable and other assets (Note 8) 264,248 177,201 Cash 6,372 8,536 Capital assets (Note 9) 62,323 62,011 Income taxes 4,156 Future income taxes (Note 17) 685 8,792,676 7,843,159 Liabilities Notes (Note 10) 349,503 363,810 Accounts payable and other liabilities (Note 12) 260,894 184,169 Income taxes 1,170 Future income taxes (Note 17) 3,298 828 614,865 548,807 Net assets (Note 13) 8,177,811 7,294,352 Number of Class A shares, Series 1 and Series 2 outstanding (Note 13) 315,504 305,951 Net assets per Class A share, Series 1 and Series 2 25.92 23.84 Contingencies (Note 14) The accompanying notes form an integral part of these financial statements. On behalf of the Board of Directors, YVON BOLDUC, DIRECTOR MICHEL ARSENAULT, DIRECTOR 2 FONDS DE SOLIDARITÉ FTQ 2011

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED MAY 31 2011 2010 (In thousands, except earnings per share) $ $ Revenues Interest (Note 15) 188,403 169,051 Dividends 67,116 52,912 255,519 221,963 Expenses (Note 16) Corporate expenses 38,364 37,558 Development capital investment and other investment expenses 32,111 29,428 Shareholder Services and Economic Training development and administration expenses 41,954 38,522 Capital tax 1,064 5,314 Amortization of property and equipment and information systems development 4,307 4,467 117,800 115,289 Net investment income before income taxes 137,719 106,674 Income taxes (Note 17) 26,080 21,806 Net investment income 111,639 84,868 Gains on development capital investments and other investments Realized 79,708 65,717 Change in unrealized appreciation or depreciation 460,234 451,504 Transaction costs (1,298) (1,830) 538,644 515,391 Net earnings 650,283 600,259 Weighted average number of Class A shares, Series 1 and Series 2 310,228 298,740 Earnings per Class A share, Series 1 and Series 2 2.10 2.01 The accompanying notes form an integral part of these financial statements. FONDS DE SOLIDARITÉ FTQ 2011 3

STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED MAY 31 Contributed Surplus Retained Earnings Share Capital (Note 13) (Note 13) (Deficit) Net Assets Class A Class G Subscribed Realized Unrealized Series 1 Series 2 (In thousands) $ $ $ $ $ $ $ $ 2011 Balance at beginning of year As previously reported 6,276,688 76,876 442 1,249,106 32,527 (341,287) 7,294,352 Restatement (Note 13) (134,701) 134,701 As restated 6,276,688 76,876 442 1,114,405 167,228 (341,287) 7,294,352 Net earnings 190,049 460,234 650,283 Share issues 688,157 10,092 698,249 Net change in share subscriptions 285 285 Share redemptions (391,217) (8,540) (62,075) (3,526) (465,358) Transfers (Note 13) 103,000 (103,000) Balance at end of year 6,676,628 78,428 727 1,052,330 250,751 118,947 8,177,811 2010 Balance at beginning of year As previously reported 5,844,350 72,019 20,125 443 1,230,575 (792,791) 6,374,721 Restatement (Note 13) (104,279) 104,279 As restated 5,844,350 72,019 20,125 443 1,126,296 104,279 (792,791) 6,374,721 Net earnings 148,755 451,504 600,259 Share issues 649,311 10,774 660,085 Net change in share subscriptions (1) (1) Share redemptions (301,973) (5,917) (32,016) (806) (340,712) Transfers (Note 13) 85,000 (20,125) 20,125 (85,000) Balance at end of year 6,276,688 76,876 442 1,114,405 167,228 (341,287) 7,294,352 The accompanying notes form an integral part of these financial statements. 4 FONDS DE SOLIDARITÉ FTQ 2011

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MAY 31 2011 2010 (In thousands) $ $ Operating activities Net investment income 111,639 84,868 Non-cash items and change in non-cash items Interest capitalized on development capital investments (8,113) (4,738) Interest capitalized on notes 16,008 14,418 Amortization of property and equipment and information systems development 4,307 4,467 Future income taxes 3,155 423 Accounts receivable and other assets (61,110) 402,999 Accounts payable and other liabilities 1,553 (409,111) Income taxes 5,326 1,245 Other 3,186 7,009 Transaction costs (1,297) (1,893) 74,654 99,687 Financing activities Issuance of notes 100,828 83,257 Repayment of notes (172,177) (105,065) Shares issued and subscribed 698,534 660,084 Shares redeemed (466,038) (341,940) 161,147 296,336 Investing activities Acquisition of development capital investments (649,431) (642,054) Proceeds of disposal of development capital investments 557,469 356,787 Acquisition of other investments (11,997,154) (15,173,076) Proceeds of disposal of other investments 11,855,568 15,056,648 Property and equipment (3,119) (1,433) Information systems development (1,298) (875) (237,965) (404,003) Decrease in cash (2,164) (7,980) Cash at beginning of year 8,536 16,516 Cash at end of year 6,372 8,536 Cash flows from operating activities include income taxes paid of $20 million (2010: $20.7 million). The accompanying notes form an integral part of these financial statements. FONDS DE SOLIDARITÉ FTQ 2011 5

NOTES TO FINANCIAL STATEMENTS A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 1. INCORPORATION ACT STATUTES AND OBJECTIVES OF THE FONDS The Fonds de solidarité des travailleurs du Québec (F.T.Q.) (the Fonds ), incorporated by an Act of the Québec National Assembly, is a joint-stock company with the following objectives: a) to invest in Québec business enterprises and provide them with services in order to create, maintain or protect jobs; b) to promote the training of workers in economic matters to enable them to increase their influence on Québec s economic development; c) to stimulate the Québec economy by making strategic investments that will be of benefit to Québec workers and business enterprises; d) to promote the development of qualified business enterprises by inviting workers to participate in that development by purchasing the Fonds shares. To this end, the Fonds endeavours to concentrate most of its development capital investments in unsecured investments, mainly in small and medium-sized enterprises ( SMEs ), located in Québec. As a general rule, the Fonds will take a minority interest in the projects in which it invests. 60% RULE The Fonds may make development capital investments in any business enterprise with or without security. However, in any given financial year, the proportion of unsecured development capital investments made in qualified business enterprises must represent an average of at least 60% of the Fonds average net assets of the previous financial year. If the Fonds fails to reach this percentage, the share issues giving rise to tax credits for the following financial year are limited to a prescribed percentage of the total value of shares issued in the preceding financial year, except for shares acquired through payroll deductions and employer contributions stipulated in agreements concluded at the end of the preceding financial year. The percentage of average qualified development capital investments to the average net assets of the preceding year is 71.0% as at May 31, 2011 (2010: 66.2%). Since the minimum percentage prescribed by the 60% rule has been reached as at May 31, 2011, the amount of share issues will not be limited for the 2011-2012 financial year. 2. SIGNIFICANT ACCOUNTING POLICIES The Fonds is an investment company as defined in the Accounting Guideline on investment companies contained in the Canadian Institute of Chartered Accountants ( CICA ) Handbook and, as such, applies the accounting principles stated therein. A Statement of Comprehensive Income is not provided as there are no items to include therein. USE OF ESTIMATES The preparation of financial statements in accordance with Canadian generally accepted accounting principles ( GAAP ) requires management to make estimates and assumptions, in particular when determining allowances and the fair value of development capital investments and other investments, that affect the reported amounts in the financial statements. Actual results could differ from those estimates. RECOGNITION OF FINANCIAL INSTRUMENTS Financial instruments are recognized at fair value on the transaction date. Accounts receivable and other assets are classified as loans and receivables, and Notes and Accounts payable and other liabilities, excluding derivative financial instruments, are classified as other liabilities. These instruments are recognized at amortized cost, which approximates their fair value. 6 FONDS DE SOLIDARITÉ FTQ 2011

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) MEASUREMENT OF FINANCIAL INSTRUMENTS All development capital investments and other investments are measured at fair value, established as follows: a) Unlisted financial instruments Unlisted financial instruments consist of shares, partnership units, loans and advances and guarantees and suretyships. These instruments are measured at fair value using appropriate valuation techniques and models that may not be principally based on observable market information. Observable market information is used in valuation models if they are available. The fair value is established based on reasonable assumptions that would be considered by parties to an arm s length transaction. Certain assumptions may have a significant impact on fair value, including those used to determine characteristic cash flows and the level of risk and future growth rate associated with such cash flows considering economic conditions, the outlook for the relevant industry segment and conditions specific to the business entreprise. Units of funds of hedge funds are valued at the value set by their respective manager at the date closest to the Fonds year-end. b) Listed financial instruments Listed financial instruments consist of shares, partnership units, bonds and money market instruments. These instruments are valued at bid price at the close of trading at balance sheet date. In exceptional instances, when the market for a financial instrument is not active, such instrument is then valued using appropriate valuation techniques, including the techniques used for unlisted financial instruments. c) Derivative financial instruments These instruments are valued using appropriate valuation techniques, including option pricing models using in particular the bid price for assets and the ask price for liabilities at the close of trading at balance sheet date. SECURITIES LENDING, SECURITIES PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS To generate additional revenues, the Fonds participates in the securities lending program put in place by its trustee for securities of which it is the custodian. Under this program, the Fonds can enter into securities lending transactions and transactions involving the purchase of securities with a simultaneous commitment to resell them in the short-term at a specified price and date. In addition, the program allows the Fonds to enter into transactions involving the sale of securities with a simultaneous commitment to repurchase them in the short-term at a specified price and date. The resulting revenues are recorded under Interest in the Statement of Operations. CAPITAL ASSETS Capital assets are stated at cost and are amortized over their estimated useful life using the following methods and annual rates: Methods Rates Buildings straight-line 2.5% Office furniture and equipment diminishing balance 20.0% Computer hardware straight-line 25.0% Information systems development straight-line 33.3% Property and equipment comprise buildings, office furniture and equipment and computer hardware. Capital assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recorded when their carrying amount exceeds the undiscounted cash flows that would result from their use and eventual disposition. The recognized impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. FONDS DE SOLIDARITÉ FTQ 2011 7

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE RECOGNITION a) Interest Interest is recorded on an accrual basis. b) Dividends Dividends are recorded as income when they are declared, except for cumulative dividends which are recorded on an accrual basis. c) Gains and losses on development capital investments and other investments Realized gains and losses on disposals of development capital investments and other investments, including derivative financial instruments, are recorded at the time of sale and presented under Gains on development capital investments and other investments in the Statement of Operations. The amount is the difference between the proceeds of disposal and the average cost, without considering the unrealized appreciation or depreciation recorded in prior years, which is reversed and taken into account under Change in unrealized appreciation or depreciation. INCOME TAXES The Fonds uses the asset and liability method of accounting for income taxes. Under this method, future income taxes are recognized based on the expected future tax consequences of differences between the carrying amounts of balance sheet items and their tax bases, multiplied by the enacted or substantively enacted income tax rates for the years in which the differences are expected to reverse. Future income tax assets are recognized to the extent that it is more likely than not that they will be realized. FOREIGN CURRENCY TRANSLATION Monetary assets and liabilities and assets and liabilities measured at fair value are translated into Canadian dollars at the year-end exchange rate. Revenues and expenses denominated in foreign currencies are translated at the exchange rate prevailing at the transaction date. Foreign exchange gains and losses are recognized in the Statement of Operations. EMPLOYEE FUTURE BENEFITS The cost of pensions and other retirement benefits earned by managers and employees is actuarially determined using the projected benefit method prorated on service and management s best estimate of expected return on plan assets, salary escalation and retirement ages of employees. For the purposes of calculating the expected return on plan assets, those assets are valued at fair value. Net actuarial gains or losses which are greater than 10% of the accrued benefit obligation or the fair value of the plan assets, whichever is higher, are amortized over the average remaining service period of active employees. The average remaining service period of covered active employees is between 8.8 and 12.2 years (2010: between 9.8 and 12.8 years). 3. FUTURE CHANGES IN ACCOUNTING POLICIES INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) In 2008, the Accounting Standards Board of Canada (AcSB) confirmed that Canadian GAAP will be replaced by IFRS for the years beginning on or after January 1, 2011. In January 2011, the AcSB confirmed that investment companies, as defined in the Accounting Guideline on investment companies of the CICA Handbook, will have to apply IFRS for the first time to interim and annual financial statements for the years beginning on or after January 1, 2013. The Fonds therefore deferred its first-time adoption date and will prepare its first interim financial statements in accordance with IFRS as at November 30, 2013. The Fonds complies with its IFRS conversion plan. Additional information is presented in the Recent development section of the Management Discussion and Analysis for the year ended May 31, 2011, which is available at the Fonds head office, on its Website at www.fondsftq.com or at www.sedar.com. 8 FONDS DE SOLIDARITÉ FTQ 2011

4. DEVELOPMENT CAPITAL INVESTMENTS The Audited Statement of Development Capital Investments, at Cost, is available at the Fonds head office, on its Website at www.fondsftq.com or at www.sedar.com. 2011 2010 Unrealized Unrealized appreciation appreciation Cost (depreciation) Fair value Cost (depreciation) Fair value (In thousands) $ $ $ $ $ $ Unsecured Listed shares and units 564,727 134,799 699,526 592,198 10,728 602,926 Unlisted shares and units 2,051,802 46,032 2,097,834 1,904,449 (25,623) 1,878,826 Loans, bonds and advances 1,488,162 (47,146) 1,441,016 1,485,819 (77,495) 1,408,324 Secured Loans, bonds and advances 65,534 (34,373) 31,161 45,548 (15,217) 30,331 4,170,225 99,312 4,269,537 4,028,014 (107,607) 3,920,407 Development capital investments include securities denominated in foreign currencies, mainly the U.S. dollar, with a fair value of $258.6 million (2010: $251 million). Investment agreements may include clauses providing for conversion and redemption options. BREAKDOWN OF LOANS, BONDS AND ADVANCES BY MATURITY Loans, bonds and advances at fair value Variable rates Fixed rates Total Maturity Less than 1 year 1 to 5 years 5 years and more (In thousands) $ $ $ $ $ 2011 2010 Unsecured 51,303 259,882 393,688 736,143 1,441,016 Average effective rate 11.8% 1.1 1 % 9.7% 7.7% Secured 19,188 4,816 4,477 2,680 31,161 Average effective rate 6.9% 12.4% 11.8% 9.3% Unsecured 37,838 253,315 441,944 675,227 1,408,324 Average effective rate 12.0% 1.6 1 % 9.5% 7.4% Secured 963 18,328 11,040 30,331 Average effective rate 4.3% 12.0% 12.4% 7.2% 1. This average rate includes non-interest bearing advances repayable on demand of $235.1 million (2010: $236.1 million) to a wholly-owned company. Excluding these advances, the average effective rate would be 10.0% (2010: 9.1%). FONDS DE SOLIDARITÉ FTQ 2011 9

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 4. DEVELOPMENT CAPITAL INVESTMENTS (CONTINUED) BREAKDOWN OF DEVELOPMENT CAPITAL INVESTMENTS BY INDUSTRY SEGMENT Industry Segment Regional or Manufacturing Services local and real Technology and primary and tourism estate funds Total (In thousands) $ $ $ $ $ 2011 2010 Cost 864,934 1,069,118 1,456,434 779,739 4,170,225 Unrealized appreciation (depreciation) (212,465) (82,573) 244,297 150,053 99,312 Fair value 652,469 986,545 1,700,731 929,792 4,269,537 Allocation of investments made by the regional or local funds 23,153 76,346 71,973 (171,472) Funds committed but not disbursed 1 445,769 101,283 290,703 81,023 918,778 Guarantees and suretyships 2 11,190 7,324 18,514 Maximum risk 1,121,391 1,175,364 2,070,731 839,343 5,206,829 Cost 859,021 1,117,891 1,368,965 682,137 4,028,014 Unrealized appreciation (depreciation) (279,397) (119,456) 143,699 147,547 (107,607) Fair value 579,624 998,435 1,512,664 829,684 3,920,407 Allocation of investments made by the regional or local funds 18,814 72,673 63,821 (155,308) Funds committed but not disbursed 1 508,889 116,837 113,623 82,519 821,868 Guarantees and suretyships 2 11,985 8,431 21,500 41,916 Maximum risk 1,107,327 1,199,930 1,698,539 778,395 4,784,191 1. Funds committed but not disbursed represent development capital investments that have already been agreed to and for which amounts have been committed by the Fonds but have not been disbursed as at year-end. Disbursements are subject to compliance with the agreement s terms and conditions. Of funds committed but not disbursed, an amount of $251 million (2010: $180.3 million) represents credit facilities and project financing for operating companies, having a weighted average maturity of 6 months (2010: 18 months); and an amount of $667.8 million (2010: $641.6 million) represents commitments that will be disbursed to specialized funds in tranches, having a weighted average maturity of 8.5 years (2010: 9 years). Commitments amounting to $153.8 million (2010: $193.5 million) are denominated in foreign currencies, mainly the U.S. dollar. 2. Under Section 17 of its Incorporation Act, when the Fonds makes a development capital investment in the form of a guarantee or a suretyship, it must establish and maintain a reserve equal to at least 50% of the guarantee or suretyship amount for the term thereof. This reserve is established from Other investments. The Fonds granted guarantees and suretyships that do not generally include a specific maturity and that are irrevocable commitments by the Fonds to make the payments of partner companies that cannot meet their obligations to third parties for an undiscounted total maximum amount and for the following purposes: 2011 2010 (In thousands) $ $ Loans on real estate projects with recourse 21,500 Operating activities and operating lines of credit without recourse 1,250 4,028 Operating activities and operating lines of credit with recourse 17,264 16,388 18,514 41,916 As at May 31, 2011, the unrealized depreciation related to guarantees and suretyships amounts to $3.7 million (2010: $2.6 million) and is presented under Accounts payable and other liabilities. As well, in the normal course of business, the Fonds enters into various indemnification agreements, usually related to sales of development capital investments, for the representations and warrantees made as well as to the liability of the Fonds directors, officers or representatives toward partner companies. The latter liability is covered, subject to certain conditions, by liability insurance. Due to the nature of these agreements, it is impossible to reasonably estimate the maximum amount that the Fonds may have to pay to counterparties. In management s opinion, it is highly unlikely that these commitments will result in material additional expenses, taking into consideration the provisions recorded. 10 FONDS DE SOLIDARITÉ FTQ 2011

5. OTHER INVESTMENTS The Unaudited Statement of Other Investments is available at the Fonds head office, on its Website at www.fondsftq.com or at www.sedar.com. 2011 2010 Unrealized Unrealized appreciation appreciation Cost (depreciation) Fair value Cost (depreciation) Fair value (In thousands) $ $ $ $ $ $ Shares and units 1,390,782 118,857 1,509,639 1,390,033 (101,870) 1,288,163 Units of funds of hedge funds 230,053 (13,614) 216,439 230,307 (9,813) 220,494 Bonds 2,246,336 56,749 2,303,085 2,011,697 10,605 2,022,302 Money market instruments 153,622 218 153,840 116,487 103 116,590 4,020,793 162,210 4,183,003 3,748,524 (100,975) 3,647,549 Derivative financial instruments 7,193 7,193 1,692 20,922 22,614 4,020,793 169,403 4,190,196 3,750,216 (80,053) 3,670,163 Other investments include securities denominated in foreign currencies with a fair value of $1,267.7 million (2010: $1,109.9 million), mainly including $710 million (2010: $636.3 million) in U.S. dollars, $201.1 million (2010: $167.7 million) in Euros and $165.6 million (2010: $135.8 million) in pounds sterling. BREAKDOWN BY MATURITY BONDS Maturity Less than 1 year 1 to 5 years 5 to 10 years 10 to 20 years 20 to 30 years 30 years and more Total (In thousands) $ $ $ $ $ $ $ 2011 Fair value 145,987 811,191 629,487 232,977 330,815 152,628 2,303,085 Cost 148,286 807,981 607,105 222,395 309,499 151,070 2,246,336 Par value 144,576 784,732 593,012 192,101 288,934 146,062 2,149,417 Average effective rate 2.2% 2.9% 4.3% 4.9% 5.0% 3.7% 3.8% Average nominal rate 3.9% 4.0% 4.6% 6.2% 5.5% 3.9% 4.6% 2010 Fair value 74,752 818,245 519,571 160,384 357,869 91,481 2,022,302 Cost 75,684 825,837 507,745 156,387 349,633 96,411 2,011,697 Par value 73,979 801,934 499,854 150,853 331,605 93,669 1,951,894 Average effective rate 4.6% 3.0% 4.6% 5.2% 5.2% 4.1% 4.1% Average nominal rate 5.8% 4.1% 4.7% 5.5% 5.7% 4.3% 4.7% MONEY MARKET INSTRUMENTS Maturity Less than 1 month 1 to 6 months 6 months and more Total (In thousands) $ $ $ $ 2011 Fair value 400 141,548 11,892 153,840 Average effective rate 1.0% 1.2% 1.5% 1.2% 2010 Fair value 36,519 60,183 19,888 116,590 Average effective rate 0.4% 1.0% 0.7% 0.8% FONDS DE SOLIDARITÉ FTQ 2011 11

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 5. OTHER INVESTMENTS (CONTINUED) BREAKDOWN BY MATURITY (CONTINUED) DERIVATIVE FINANCIAL INSTRUMENTS 1 Maturity Less than 1 month 1 to 6 months 6 months and more Total (In thousands) $ $ $ $ 2011 Fair value Foreign currency forward contracts Purchases (14) (5) (19) Sales (7,846) 116 (7,730) Interest rate futures Interest rate forward contracts (2,077) (2,077) Stock index futures Commodity futures Interest rate swaps (2,475) (2,475) (9,937) 111 (2,475) (12,301) Notional amount Foreign currency forward contracts Purchases 570,838 16,280 587,118 Sales 884,647 541,922 1,426,569 Interest rate futures 26,918 100,057 883,231 1,010,206 Interest rate forward contracts 615,689 615,689 Stock index futures 20,067 20,067 Commodity futures 1,191 1,191 Interest rate swaps 25,000 25,000 1. The net fair value of these derivative financial instruments is $-12.3 million (2010: $-14.9 million). The fair value of instruments with positive values is $7.2 million (2010: $22.6 million) and is presented under Other investments, whereas those with negative values is $19.5 million (2010: $37.5 million) and is presented under Accounts payable and other liabilities. 12 FONDS DE SOLIDARITÉ FTQ 2011

5. OTHER INVESTMENTS (CONTINUED) BREAKDOWN BY MATURITY (CONTINUED) DERIVATIVE FINANCIAL INSTRUMENTS (Continued) Maturity Less than 1 month 1 to 6 months 6 months and more Total (In thousands) $ $ $ $ 2010 Fair value Stock option contracts Written call options (323) (696) (1,019) Purchased put options 20 1,030 1,050 Written put options (332) (332) Stock index option contracts Written put options (920) (920) Purchase call options 348 348 Written call options (191) (191) Foreign currency forward contracts Purchases (3,548) (118) (3,666) Sales (5,165) 3,267 (1,898) Interest rate futures Interest rate forward contracts (6,813) 157 (6,656) Stock index futures Commodity futures Interest rate swaps (1,600) (1,600) (15,526) 2,240 (1,598) (14,884) Notional amount Stock option contracts Written call options 727 11,462 12,189 Purchased put options 691 10,096 10,787 Written put options 380 8,355 8,735 Stock index option contracts Written put options 11,840 11,840 Purchase call options 5,022 5,022 Written call options 8,108 8,108 Foreign currency forward contracts Purchases 589,954 44,691 634,645 Sales 845,027 599,803 1,444,830 Interest rate futures 3,220 388,797 358,296 750,313 Interest rate forward contracts 1,099,752 22,470 1,122,222 Stock index futures 30,082 30,082 Commodity futures 641 641 Interest rate swaps 158,000 158,000 FONDS DE SOLIDARITÉ FTQ 2011 13

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 5. OTHER INVESTMENTS (CONTINUED) BREAKDOWN OF FAIR VALUE BY INDUSTRY SEGMENT 1 Shares Money market and units Bonds instruments Total (In thousands) $ $ $ $ 2011 2010 Government and government agencies 1,583,968 32,370 1,616,338 Financial institutions 86,676 420,593 74,662 581,931 Technology 218,947 81,271 19,863 320,081 Manufacturing and primary 897,869 116,151 26,945 1,040,965 Services and tourism 522,586 101,102 623,688 Fair value 1,726,078 2,303,085 153,840 4,183,003 Funds committed but not disbursed 2 22,648 22,648 Maximum risk 1,748,726 2,303,085 153,840 4,205,651 Government and government agencies 1,344,493 9,290 1,353,783 Financial institutions 77,927 423,613 48,159 549,699 Technology 186,999 49,230 9,299 245,528 Manufacturing and primary 768,730 127,109 49,842 945,681 Services and tourism 475,001 77,857 552,858 Fair value 1,508,657 2,022,302 116,590 3,647,549 Funds committed but not disbursed 2 36,321 36,321 Maximum risk 1,544,978 2,022,302 116,590 3,683,870 1. This breakdown does not take into account changes in asset allocation resulting from derivative financial instruments. 2. Funds committed but not disbursed to international infrastructure funds represent other investments that have already been agreed to and for which amounts have been committed by the Fonds but have not been disbursed as at year-end. Disbursements are subject to compliance with the agreement s terms and conditions. These commitments, having a weighted average maturity of 2.2 years (2010: 3 years), are denominated in U.S. dollars. 14 FONDS DE SOLIDARITÉ FTQ 2011

6. FAIR VALUE HIERARCHY Financial instruments measured at fair value are classified using a hierarchy that reflects the significance of the inputs used in making the measurements. This hierarchy has the following levels: Level 1: Fair value based on quoted market prices (unadjusted) observed on active markets for identical financial instruments. Level 2: Fair value based on quoted prices for similar financial instruments or based on valuation techniques for which all significant inputs are based on observable market information. Level 3: Fair value based on valuation techniques for which all significant inputs are not based on observable market information. Level 1 2 3 Total (In thousands) $ $ $ $ 2011 Development capital investments Unsecured Listed shares and units 697,562 1,964 699,526 Unlisted shares and units 2,097,834 2,097,834 Loans, bonds and advances 443,257 997,759 1,441,016 Secured Loans, bonds and advances 31,161 31,161 Other investments 697,562 445,221 3,126,754 4,269,537 Shares and units 1,432,897 76,742 1,509,639 Units of funds of hedge funds 216,439 216,439 Bonds 2,291,343 11,742 2,303,085 Money market instruments 153,840 153,840 Derivative financial instruments 7,193 7,193 1,432,897 2,452,376 304,923 4,190,196 2,130,459 2,897,597 3,431,677 8,459,733 Cash 6,372 6,372 Derivative financial instruments (19,494) (19,494) 2,136,831 2,878,103 3,431,677 8,446,611 2010 Development capital investments Unsecured Listed shares and units 591,434 8,642 2,850 602,926 Unlisted shares and units 6,587 1,872,239 1,878,826 Loans, bonds and advances 250,892 1,157,432 1,408,324 Secured Loans, bonds and advances 30,331 30,331 Other investments 591,434 266,121 3,062,852 3,920,407 Shares and units 1,224,600 63,563 1,288,163 Units of funds of hedge funds 220,494 220,494 Bonds 2,014,021 8,281 2,022,302 Money market instruments 116,590 116,590 Derivative financial instruments 348 22,266 22,614 1,224,948 2,152,877 292,338 3,670,163 1,816,382 2,418,998 3,355,190 7,590,570 Cash 8,536 8,536 Derivative financial instruments (1,112) (36,386) (37,498) 1,823,806 2,382,612 3,355,190 7,561,608 FONDS DE SOLIDARITÉ FTQ 2011 15

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 6. FAIR VALUE HIERARCHY (CONTINUED) The following table shows the reconciliation of Level 3 fair values from May 31, 2010 to May 31, 2011. DEVELOPMENT CAPITAL INVESTMENTS Shares and units Loans, bonds and advances Total Listed Unlisted Unsecured Secured (In thousands) $ $ $ $ $ 2011 Fair value as at May 31, 2010 2,850 1,872,239 1,157,432 30,331 3,062,852 Realized gains (losses) (15,853) 30,970 (24,800) (1,182) (10,865) Change in unrealized appreciation or depreciation 13,208 69,241 20,511 (19,156) 83,804 Purchases 1,500 363,647 333,117 46,736 745,000 Sales and settlements (7,987) (238,263) (285,992) (25,568) (557,810) Transfers of financial instruments to (out of) Level 3 6,282 (202,509) 1 (196,227) Fair value as at May 31, 2011 2,097,834 997,759 31,161 3,126,754 2010 Change in unrealized appreciation or depreciation of development capital investments held as at May 31, 2011 8,553 29,954 (19,176) (23,893) (4,562) Fair value as at May 31, 2009 20,404 1,645,238 1,019,656 36,461 2,721,759 Realized losses (14,743) (94,199) (13,674) (2,144) (124,760) Change in unrealized appreciation or depreciation 101,606 50,415 57,419 (12,090) 197,350 Purchases 14,022 364,804 185,639 19,070 583,535 Sales and settlements (108,635) (94,019) (91,608) (10,966) (305,228) Transfers of financial instruments out of Level 3 (9,804) (9,804) Fair value as at May 31, 2010 2,850 1,872,239 1,157,432 30,331 3,062,852 Change in unrealized appreciation or depreciation of development capital investments held as at May 31, 2010 (11,677) (7,572) 38,039 (12,444) 6,346 1. Certain unsecured debentures have been transferred from Level 3 to Level 2 since their measurement method is now based on observable market data. 16 FONDS DE SOLIDARITÉ FTQ 2011

6. FAIR VALUE HIERARCHY (CONTINUED) OTHER INVESTMENTS Shares Units of funds and units of hedge funds Bonds Total (In thousands) $ $ $ $ 2011 Fair value as at May 31, 2010 63,563 220,494 8,281 292,338 Realized losses (703) (703) Change in unrealized appreciation or depreciation 2,804 (3,802) 3,726 2,728 Purchases 14,309 10,890 25,199 Sales and settlements (3,934) (10,440) (265) (14,639) Fair value as at May 31, 2011 76,742 216,439 11,742 304,923 Change in unrealized appreciation or depreciation of other investments held as at May 31, 2011 2,804 (3,691) 3,720 2,833 2010 Fair value as at May 31, 2009 44,050 221,715 8,077 273,842 Realized losses (1,951) (407) (2,358) Change in unrealized appreciation or depreciation 1,285 18,173 1,634 21,092 Purchases 18,228 1,378 19,606 Sales and settlements (18,821) (1,023) (19,844) Fair value as at May 31, 2010 63,563 220,494 8,281 292,338 Change in unrealized appreciation or depreciation of other investments held as at May 31, 2010 1,285 18,173 1,634 21,092 All Level 3 financial instruments, except for units, are measured at fair value using valuation techniques and models whose outputs depend on significant assumptions that are based on unobservable data. Even though management believes that its fair value measurements are appropriate, using reasonably possible alternative assumptions could result in different fair values. Whenever possible, a sensitivity analysis of changes in significant assumptions is performed. Management assessed the situation and determined that using reasonably possible alternative assumptions would not result in significantly different fair values. Since the Fonds does not have access to information on the underlying investments, the fair value of Level 3 units is based on the value provided by the general partner or the external manager. Therefore no other reasonably possible assumption could be used. 7. SECURITIES LENDING As part of the securities lending program, the trustee receives, in exchange for the securities loaned, guarantees or assets equivalent to the minimum percentage prescribed by law or to a percentage that may vary according to best practices. Depending on the securities loaned, this percentage range from 102% to 104% as at May 31, 2011 (2010: from 102% to 105%), and the fair value of the securities loaned is $98 million (2010: $99 million). 8. ACCOUNTS RECEIVABLE AND OTHER ASSETS 2011 2010 (In thousands) $ $ Accounts receivable relating to development capital investments and other investments sold 102,270 76,326 Accrued dividends and interest 81,072 71,513 Other 80,906 29,362 264,248 177,201 FONDS DE SOLIDARITÉ FTQ 2011 17

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 9. CAPITAL ASSETS Accumulated Cost amortization Net book value (In thousands) $ $ $ 2011 2010 Buildings 70,368 15,858 54,510 Office furniture and equipment 17,169 15,324 1,845 Computer hardware 11,688 7,413 4,275 Information systems development 15,348 13,655 1,693 114,573 52,250 62,323 Buildings 70,048 13,951 56,097 Office furniture and equipment 16,979 14,919 2,060 Computer hardware 9,575 6,864 2,711 Information systems development 14,081 12,938 1,143 110,683 48,672 62,011 The net book value of the portion of building held for rental amounts to $24.3 million (2010: $24.7 million). 10. NOTES Notes are repayable on demand and bear interest at a rate based on the rate of return of Other investments. Consequently, the fair value of these notes arising from excess liquidities of regional and local funds and of certain specialized funds corresponds to their carrying amount. As at May 31, 2011, the interest rate is 4.25% (2010: 4.00%). 11. CREDIT FACILITIES As at May 31, 2011 and 2010, the Fonds has credit facilities amounting to $80 million, bearing interest at prime rate and renewable annually. As at May 31, 2011 and 2010, these facilities are unused. 12. ACCOUNTS PAYABLE AND OTHER LIABILITIES 2011 2010 (In thousands) $ $ Accounts payable relating to development capital investments and other investments purchased 142,626 49,871 Derivative financial instruments 19,494 37,498 Share redemptions payable 13,274 13,802 Accrued expenses and other 85,500 82,998 260,894 184,169 18 FONDS DE SOLIDARITÉ FTQ 2011

13. NET ASSETS SHARE CAPITAL Authorized CLASS A SHARES Unlimited number of Class A shares to be issued in Series 1 and 2, without par value, voting, redeemable and inalienable unless approved by a resolution of the Board of Directors. Class A shares, Series 1 and 2 can be exchanged for shares of another series and rank pari passu. However, Class A shares, Series 1 may be issued only to an individual requesting their transfer to a trustee under a registered retirement savings plan. CLASS G SHARES Unlimited number of Class G shares, without par value, non-voting, without dividends, non-transferable and non-redeemable. In the event of a dissolution, liquidation or any other distribution of the Fonds assets in whole or in part, these shares entitle their holders the right to be reimbursed after all Class A and B shareholders have been reimbursed. During the year, the Fonds statutes were amended to cancel the Class G shares. CLASS B SHARES Unlimited number of Class B shares, without par value, non-voting, entitled to a preferential dividend at the rate determined by the Board of Directors. In the event of liquidation, the Class B shares rank prior to Class A and G shares. Subscribed Subscribed capital is money cashed but for which no Class A share can be issued in consideration thereof pursuant to the Fonds purchase-by-agreement policy. These Class A shares will be issued at the time set out in such policy at the share price in effect at that date. Redemption terms The Fonds is required to redeem shares in the circumstances set out in its Incorporation Act or to redeem them by mutual agreement in exceptional situations provided under a policy for such purpose adopted by the Fonds Board of Directors and approved by the Minister of Finance of Québec. The redemption price is determined semi-annually based on the value of the Fonds. Contributed surplus Contributed surplus arises from the reduction in issued and paid-up capital resulting from transfers and the excess of the average value of share capital over the redemption price. This excess is reduced when shares are redeemed at a price exceeding the average value of issued share capital, prorata to the redeemed shares. Restatement A change was made to the calculation of the proportion applicable to contributed surplus when shares are redeemed at a price exceeding the average value of issued share capital. As a result of the retrospective restatement, contributed surplus was reduced and retained earnings were increased by $134.7 million as at June 1, 2010 (June 1, 2009: $104.3 million). Contributed surplus was reduced and retained earnings were increased by $30.4 million with respect to shares redeemed during the year ended May 31, 2010. This restatement had no impact on net assets per Class A share, Series 1 and Series 2. FONDS DE SOLIDARITÉ FTQ 2011 19

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 13. NET ASSETS (CONTINUED) Transfers During the year, the Board of Directors approved an increase in the issued and paid-up capital on Class A shares, Series 1 of $103 million through transfers from retained earnings (2010: $85 million). As at May 31, 2011, the Fonds had transferred a cumulative amount of $1,620 million from retained earnings to share capital. During the year ended May 31, 2009, the Board of Directors of the Fonds approved a resolution to reduce the issued and paid-up capital on Class A shares, Series 1 by $1 billion through a transfer to contributed surplus. Afterwards, an amount of $126.6 million was transferred from contributed surplus to eliminate the realized deficit as at May 31, 2009. On May 31, 2010, the holders of Class G shares, namely the Minister of Finance of Québec and the Fédération des travailleurs et travailleuses du Québec (FTQ), waived the right to receive any distribution or return of capital attached to their shares. Accordingly, the issued and paid-up capital on Class G shares was reduced by $20.1 million through a transfer to contributed surplus. In consideration, By-Law 69, allowing the cancellation of Class G shares in exchange of equivalent unsecured debentures for an amount of $10 million for the Minister of Finance of Québec and $10.1 million for the Fédération des travailleurs et travailleuses du Québec (FTQ), was adopted during the Fonds special shareholders meeting held on October 2, 2010. These issued debentures do not bear interest, are payable only upon the Fonds dissolution and are presented under Accounts payable and other liabilities. NET ASSETS BY SHARE CLASS AND SERIES Class A Class G Subscribed Total Series 1 Series 2 Number (In thousands) Number $ Number $ and $ $ $ 2011 Net assets at beginning of year 302,413 7,209,561 3,538 84,349 442 7,294,352 Share issues 28,124 688,157 416 10,092 698,249 Net change in share subscriptions 285 285 Share redemptions (18,596) (455,778) (391) (9,580) (465,358) Net earnings 642,780 7,503 650,283 Net assets at end of year 311,941 8,084,720 3,563 92,364 727 8,177,811 2010 Net assets at beginning of year 288,407 6,281,708 3,326 72,445 20,125 443 6,374,721 Share issues 28,725 649,311 485 10,774 660,085 Net change in share subscriptions (1) (1) Share redemptions (14,719) (334,512) (273) (6,200) (340,712) Net earnings 593,162 7,097 600,259 Transfer 19,892 233 (20,125) Net assets at end of year 302,413 7,209,561 3,538 84,349 442 7,294,352 20 FONDS DE SOLIDARITÉ FTQ 2011

14. CONTINGENCIES In the normal course of business, the Fonds is party to claims and litigations that could result in losses. A contingent loss is recognized when it is likely and can be estimated. Management believes that the aggregate amount of contingent losses, net of losses recognized, would not have a material adverse effect on the Fonds financial position. 15. REVENUES Interest totalling $16.0 million (2010: $14.4 million) on the notes is recorded against Interest and is capitalized under Notes. 16. OPERATING EXPENSES 2011 2010 (In thousands) $ $ Salaries and benefits 71,266 65,770 Occupancy expenses and rent 11,115 10,802 Advertising and information 13,613 12,791 Management fees 7,287 7,271 Professional fees 7,545 8,933 Travel and entertainment 3,360 2,988 Stationery and office supplies 3,388 3,188 Shareholder reporting costs 2,597 2,500 Custodial fees and trustee s fees 931 904 Fees and other income (4,414) (5,786) Rental income (4,259) (3,853) Capital tax 1,064 5,314 Amortization of property and equipment 3,590 3,501 Amortization of information systems development 717 966 117,800 115,289 17. INCOME TAXES For purposes of the Income Tax Act (Canada), the Fonds is subject to the rules applicable to mutual fund corporations. As such, the Fonds can receive a refund of the income taxes paid on its capital gains by redeeming its shares or by increasing its issued and paid-up share capital through a transfer from retained earnings. Since these income taxes are refundable and that, in management s opinion, the issued and paid-up share capital will be increased sufficiently to recover them, these income taxes are not presented in the Statement of Operations, but are included in Accounts receivable and other assets. The balance of these income taxes is $9.0 million as at May 31, 2011 (2010: $6.5 million). The Fonds, as a private company, can receive a refund of a portion of the income taxes paid on its investment income through the refundable dividend tax on hand (RDTOH). The RDTOH is recoverable by increasing the issued and paid-up share capital through transfers from retained earnings. These income taxes of $33.9 million (2010: $26.4 million) were entirely applied against income taxes payable following transfers approved by the Board of Directors during the year in order to recover these taxes. FONDS DE SOLIDARITÉ FTQ 2011 21

NOTES TO FINANCIAL STATEMENTS (CONTINUED) A S AT M AY 3 1, 2 0 1 1 A N D 2 0 1 0 17. INCOME TAXES (CONTINUED) Under the Taxation Act (Québec), the Fonds is an open-ended investment company. As such, the Fonds can, in calculating its Québec taxes, deduct taxable capital gains from its taxable income. Consequently, capital gains realized by the Fonds are not subject to taxes in Québec. Income taxes on net investment income before income taxes are detailed as follows: 2011 2010 (In thousands) $ $ Current 22,925 21,383 Future 3,155 423 26,080 21,806 The above income taxes are different from the amounts that would be obtained by applying the combined basic tax rate (federal and provincial) to net investment income before income taxes. The difference is explained as follows: 2011 2010 (In thousands) $ $ Income taxes based on combined income tax rate of 46.6% 64,177 49,710 Non-taxable dividends (13,242) (8,213) Refundable dividend tax on hand (33,903) (26,356) Other items 9,048 6,665 26,080 21,806 Items giving rise to future income taxes are as follows: Development capital investments Capital assets and other Total (In thousands) $ $ $ 2011 2010 Future income tax liabilities 1,548 1,750 3,298 Future income tax assets (334) 1,019 685 Future income tax liabilities 776 52 828 22 FONDS DE SOLIDARITÉ FTQ 2011

18. EMPLOYEE FUTURE BENEFITS On January 1, 2001, the Fonds implemented funded and unfunded defined benefit pension plans, which guarantee pension benefits to most of its employees. Pension benefits under these plans are based on years of service and average annual salary, which represents the average annual salary over the period of 36 months of consecutive service which results in the highest average. Also, since July 1, 2003, the Fonds has had an optional personal insurance plan for retired employees. The accrued benefit obligation of these plans as determined by independent actuaries and the fair value of plan assets are as at March 31, 2011. The most recent actuarial valuation of the pension plans for funding and solvency purposes was as of December 31, 2010 and the next valuation will take place as of December 31, 2011. Information about the plans is as follows: 2011 2010 Pension plans Insurance plan Pension plans Insurance plan (In thousands) $ $ $ $ Accrued benefit obligation Balance at beginning of year 102,189 1,679 65,000 1,194 Current service cost 13,377 87 9,246 58 Interest cost 5,950 92 5,098 87 Benefits paid (2,097) (25) (1,101) (13) Actuarial loss 1,407 23,946 353 Balance at end of year 120,826 1,833 102,189 1,679 Plan assets Balance at beginning of year 74,118 52,978 Fonds contributions 6,945 25 4,864 13 Employee contributions 5,755 4,445 Benefits paid (2,097) (25) (1,101) (13) Actual return on plan assets 8,525 12,932 Balance at end of year 93,246 74,118 Reconciliation of accrued benefit obligation and plan assets Funded status deficit (27,580) (1,833) (28,071) (1,679) Unamortized net actuarial loss 13,858 452 16,671 480 Unamortized past service cost (gain) 535 (178) 708 (218) Accrued benefit liabilities (13,187) (1,559) (10,692) (1,417) These accrued benefit liabilities are presented under Accounts payable and other liabilities. FONDS DE SOLIDARITÉ FTQ 2011 23