Investment Questions
Unitholder Questions
Tax Questions
Questions about General Donlee

Investment Questions

1. When are distributions paid?

Under the Fund’s distribution policy, distributable cash has been paid out to investors monthly. The monthly cash distribution was paid on or about the last business day of the month, for the prior month, with a record date a few days earlier. Click here to be automatically notified when a new distribution has been announced.

The first distribution was paid on June 28, 2002. The Fund has paid a cash distribution each month since then. The amount of the monthly distribution is one-twelvth of the estimated annual distribution amount. Please click here to view the summary of cash distributions paid.

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2. Where are your units listed and traded?

General Donlee Income Fund’s units are listed and traded on the Toronto Stock Exchange under the symbol GDI.UN.

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3. Where can I find General Donlee Income Fund’s unit price?

Click here to view our stock quote and historical trading values. The unit price and trading data are quoted in the financial information section of daily newspapers as well as many financial Web sites.

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4. When are General Donlee Income Fund’s financial results released?

General Donlee’s business quarters are based on calendar quarters and results release dates will not be later than 45 days after the quarter's end for the first, second and third quarters. For the fourth quarter and full year results, the time will be approximately 70-75 days. All results are announced in a public press release, which is available on our Web site and are published in the financial section of daily newspapers. You may sign up to be automatically notified of the release by clicking here.

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5. How can I receive a copy of General Donlee Income Funds’s latest financial documents?

All press releases, financial reports and other regulatory filings are available on www.sedar.com under the General Donlee Income Fund heading. These documents are available and may be downloaded on this Web site under the appropriate headings. If preferred, you may also obtain a copy of these documents by contacting General Donlee Income Fund investor relations at gthain@generaldonlee.com.

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6. Does the Fund offer a DRIP (Distribution Reinvestment Plan)?

Not at this time. Investors interested in purchasing additional units at the current market price may do so through their broker.

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7. How can I contact General Donlee Income Fund?

All questions related to investing in the General Donlee Income Fund can be addressed to:

Gerald Thain
Chief Financial Officer
9 Fenmar Drive
Toronto ON M9L 1L5
tel: 416.743.4417
fax: 416.743.8998
email: gthain@donleeprecision.com

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Unitholder Questions

1. Can I have my cash distributions deposited directly into my bank account?

Not at present. Currently monthly cash distributions are deposited in your brokerage account.

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2. What do I do if I don’t receive my monthly cash distribution?

As a first alternative, please ask your broker to look into the situation. Your broker can follow up both internally, in the securities firm, and then with Computershare Trust Company, if necessary.

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3. When was your most recent cash distribution?

Please click here for a summary of all distributions.

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Tax Questions

1. What is the tax treatment of General Donlee’s cash distributions?

A significant portion of the Fund's distributions is considered to be taxable to the Unitholder as income. Click here for the 2002 and 2003 tax allocations. The remaining, much smaller percentage of the distributions has been classed as a return of capital, although this amount does fluctuate on an annual basis.

The specific tax treatment of distributions will be reported to Unitholders annually.

Adjusted Cost Base (ACB) is used in calculating capital gains or losses on the disposition of units held outside a tax sheltered plan. Unitholders are required to reduce the ACB of their units by any distributions received in the form of a return of capital (see Tax item 2. below).

For further details, investors should contact their tax advisor.

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2. When are tax receipts for distributions sent out?

A tax receipt (T3 Supplementary) for the current year is expected to be sent out by March 31 of the following year to any investor who received distributions in the current tax year.

Where units are held in a tax sheltered plan (e.g., RRSP, RRIF or RESP), there is likely no income to be reported. In addition there will likely be no capital gain or loss to report.

For further details, investors should contact their tax advisor.

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Questions about General Donlee

1. What is the General Donlee Income Fund?

The General Donlee Income Fund is a trust established in March, 2002 to hold the securities of General Donlee Limited (its operating subsidiary). The Fund intends to make cash distributions to Unitholders of amounts received as interest and/or dividends on the General Donlee Common Shares and Notes, less estimated amounts required for the payment of Fund expenses.

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2. What is General Donlee Limited’s business?

General Donlee is a leading diversified manufacturer of precision-machined products for the military, commercial and general aviation industries and also is a specialist in the manufacture of precision-machined products for the industrial products and power generation industries. The company markets its products in the United States, Canada and Europe, selling over 275 specialized products to 100 high quality customers.

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3. What is the Company’s strategy?

General Donlee follows a business strategy to capitalize on its competitive strengths and industry trends. This includes:

• targeting niche markets,
• focusing on expanding product offerings to existing customers,
• increasing participation in military and power generation programs, and
• maintaining and enhancing its reputation as a reliable supplier of top-quality products.

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4. What are the Company’s main competitive advantages?

General Donlee believes it has the following competitive strengths:

• Extensive Manufacturing Capabilities – management believes that it is the only Canadian company and one of few North American companies currently capable of producing such a broad range of precision cylindrical shafts and complex gearing products.
• Reliability as a Supplier – management believes that the Company has continued to win contracts, many of which are awarded on a sole source basis, because it has earned the confidence and loyalty of its customers by consistently satisfying their quality, service and delivery requirements.
• Strategic Marketing – the Company targets strategic, niche markets, focusing on identifying sophisticated, high value-added products that fit with its manufacturing capabilities and are likely to result in long-term revenue generating programs.
• Skilled Workforce – of the 150 employees, over 60 are highly-skilled machinists, having accumulated an average of over 16 years experience.
• Competitive Cost Structure – General Donlee has continued to win new business from its customers by offering high-quality products at competitive prices. In-house expertise, state-of-the-art equipment, and the ability to perform substantially all of its machining operations internally all help to achieve this result.
• Strong Customer Base – The Company’s customer base consists predominantly of well-established, large, credit-worthy corporations in diverse industries, who have been in business for numerous years and tend to be market leaders in their respective industries.
• Product Diversity – General Donlee manufactures over 275 products, which are used in a variety of customer applications and programs spanning a range of industries. Over the past decade, General Donlee has used this product and customer diversification to insulate itself from periodic declines that may have affected any single industry.

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