AGF Management Limited Reports Second Quarter Financial Results



    
    AGF reports net income of $17.2 million, an increase of 41% over the
    first quarter of 2009

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    AGF MANAGEMENT LIMITED
    Second Quarter Report to Shareholders for the three and six months ended
    May 31, 2009
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    TORONTO, June 24 /CNW/ - AGF Management Limited (AGF) today announced
financial results for the second quarter ended May 31, 2009 with net income of
$17.2 million, up $5.0 million from net income reported in the first quarter
ended February 28, 2009. Net income was down from $44.0 million in the same
period in 2008 as a result of declines in Investment Management Operations
revenue primarily related to declines in global markets and an increase in
Trust Company Operations provision for loan losses. This was partly offset by
reductions in Investment Management Operations expenses and lower income tax
and amortization expenses.
    Earnings per share in the second quarter of 2009, on a fully diluted
basis, were $0.19 compared with $0.14 in the first quarter of 2009 and $0.49
in the second quarter of last year.
    Although the global economy still faces strong challenges which will
continue to impact the industry, the second quarter did show signs of
improvement over the first quarter of 2009 with AGF reporting a 14.7% increase
in assets under management (AUM), a 4.0% increase in revenue, and a 14.5%
increase in earnings before interest, taxes, depreciation and amortization
(EBITDA). Year-over-year results, however, show that the economy has yet to
normalize as evidenced by second quarter numbers that show a 27.7% decline in
AUM, a 26.1% decline in revenue and a 44.7% decrease in EBITDA compared with
the same period a year earlier.
    "The second quarter saw an improvement in global markets with higher
indices contributing to our increased AUM levels and improved profitability
compared to the first quarter," said Chairman and CEO Blake C. Goldring.
"While encouraged by these trends, we remain committed to strengthening the
business by rationalizing costs, improving our future operating capabilities
and focusing on risk management to ensure we remain well positioned for future
long-term growth."
    In the second quarter, the 2009 Canadian Lipper Awards honoured AGF with
nine recognitions including two coveted group awards. AGF was awarded the Best
Overall Fund Family and the Best Mixed Asset Fund Family for having the best
overall risk-adjusted performance, relative to its peers in both categories.
AGF Canadian Balanced Fund was a triple winner recognized for having the best
one-, three- and five-year returns. Four other AGF funds were also recognized
for performance.
    During this quarter, total consolidated revenue decreased to $143.5
million compared with $194.3 million in the second quarter of the prior year.
EBITDA totalled $49.0 million for the three months ended May 31, 2009,
compared with $88.6 million for the three months ended May 31, 2008. For the
second quarter of 2009, EBITDA margins declined to 34.1% from 45.6% in the
same period a year earlier.
    Total AUM decreased 27.7% to $37.4 billion at May 31, 2009 from $51.8
billion as at May 31, 2008. Over the same period, mutual fund assets declined
by 27.0% primarily as a result of market depreciation combined with net
redemptions. However, the level of net redemptions has shown improvement on a
year-over-year basis. Institutional and high-net-worth client assets declined
28.6% year-over-year primarily as a result of market depreciation.
    Also in the quarter, in keeping with our stated strategy to slow loan
growth and suspend new originations of lower margin lending products, our
Trust Company Operations loan assets declined 5.3% over May 31, 2008 to $4.1
billion as at May 31, 2009. AGF Trust remained focused on credit and
collections activities in the second quarter of 2009 to mitigate potential
future loan losses.

    Caution Regarding Forward-Looking Statements

    This Management's Discussion and Analysis (MD&A) includes forward-looking
statements about the Company, including its business operations, strategy and
expected financial performance and condition. Forward-looking statements
include statements that are predictive in nature, depend upon or refer to
future events or conditions, or include words such as 'expects',
'anticipates', 'intends', 'plans', 'believes' or negative versions thereof and
similar expressions, or future or conditional verbs such as 'may', 'will',
'should', 'would' and 'could'. In addition, any statement that may be made
concerning future financial performance (including revenues, earnings or
growth rates), ongoing business strategies or prospects, and possible future
action on our part, is also a forward-looking statement. Forward-looking
statements are based on certain factors and assumptions, including expected
growth, results of operations, business prospects, performance and
opportunities. Forward-looking statements are based on current expectations
and projections about future events and are inherently subject to, among other
things, risks, uncertainties and assumptions about our operations, economic
factors and the financial services industry generally. They are not guarantees
of future performance, and actual events and results could differ materially
from those expressed or implied by forward-looking statements made by us due
to, but not limited to, important factors such as level of assets under our
management, volume of sales and redemption of our investment products,
performance of our investment funds and of our investment managers and
advisors, competitive fee levels for investment management products and
administration, and competitive dealer compensation levels, size and default
experience on our loan portfolio and cost efficiency in our loan operations,
as well as interest and foreign exchange rates, taxation, changes in
government regulations, unexpected judicial or regulatory proceedings, and our
ability to complete strategic transactions and integrate acquisitions. We
caution that the foregoing list is not exhaustive. The reader is cautioned to
consider these and other factors carefully and not place undue reliance on
forward-looking statements. Other than specifically required by applicable
laws, we are under no obligation (and expressly disclaim any such obligation)
to update or alter the forward-looking statements, whether as a result of new
information, future events or otherwise. For a more complete discussion of the
risk factors that may impact actual results, please refer to the 'Managing
Risk - Overview' section of this MD&A and to the 'Risk Factors and Risk
Management' section of our 2008 annual MD&A.

    Dear fellow shareholders

    Before getting into the highlights of the second quarter, I would like to
pay tribute to our co-founder and Honorary Chairman C. Warren Goldring who
passed on April 14, 2009. Warren co-founded AGF with the introduction of the
American Growth Fund in 1957 - the first U.S. equity fund for Canadian
investors. He saw mutual funds as a way for all Canadians to build wealth and
achieve their dreams and aspirations. And today, we, at AGF, believe as firmly
as Warren did that mutual funds are and will continue to be an integral part
of all Canadians' financial planning and success. Warren's values of
innovation, hard work and integrity are firmly entrenched in the way we do
business at AGF. His legacy is a culture that focuses on the long term and
fosters a spirit of independence in thought and in action that continues to
guide us in our mission of helping investors succeed.
    One of the highlights of our second quarter was the announcement of the
realignment of our corporate structure. This realignment involves combining
our retail, institutional and high-net-worth businesses to create a
consolidated investments structure. This new, more streamlined structure
better reflects our core focus on investment management and our commitment to
clients and excellence in money management. As part of the realignment, we
also announced a number of executive management changes. Our executive
management team comes with a wealth and diversity of experience and expertise
and is truly committed and enthusiastic about leading AGF into the future.
    In the quarter, AGF was honoured with nine recognitions at the 2009
Canadian Lipper Awards including two coveted group awards. AGF was awarded the
Best Overall Fund Family and the Best Mixed Asset Fund Family for having the
best overall risk-adjusted performance, relative to its peers in both
categories. AGF Canadian Balanced Fund was a triple winner recognized for
having the best one-, three- and five-year returns. Four other AGF funds were
also recognized for performance.
    The mutual fund industry appeared to show some early signs of recovery
during the second quarter. The rally in stock markets lifted mutual fund
assets and net sales of long-term funds showed an improving trend in April and
May. Total assets under management (AUM) at AGF were $37.4 billion at the end
of the second quarter of fiscal 2009, down 27.7% from May 2008 levels but up
14.7% since the end of February 2009. On a year-over-year basis, Investment
Management revenues were down 30.6% for the quarter. Accordingly, we will
continue to focus on improving gross mutual fund sales while taking further
action to reduce costs in a manner that enhances our future operating
capabilities and sustainability.
    Our Trust Company Operations continued to focus on responsible management
of our lending portfolios through the second quarter of 2009. Loan assets
declined 5.3% year-over-year at May 31, 2009 and net interest income increased
2.4%. This deceleration of growth in our Trust business reflects our stated
strategy to ensure that AGF Trust remains well-capitalized during the economic
downturn and focuses on increased credit and collection activities, reducing
operating expenses and managing liquidity. AGF Trust remained a profitable
contributor to AGF during the second quarter of fiscal 2009 in spite of the
increased provision for loan losses.
    Consolidated revenue was $143.5 million, compared with $194.3 million in
the second quarter of the prior year. Earnings before interest, taxes,
depreciation and amortization(1) (EBITDA) from continuing operations declined
to $49.0 million from $88.6 million for the three months ended May 31, 2008 as
declining revenue outpaced expense savings. Selling, general and
administrative (SG&A) expenses of $47.3 million were 16.7% lower compared to
$56.8 million in the second quarter of last year. We continue to target
permanent SG&A expense savings compared with 2008.
    For the three months ended May 31, 2009, AGF reported cash flow from
continuing operations(1) (before net change in non-cash balances related to
operations) of $44.7 million, compared with $71.5 million one year ago. Free
cash flow(1) (cash flow from continuing operations less selling commissions
paid) for the same period was $29.3 million, compared with $43.6 million one
year ago.
    With over 50 years in business, we have lived through many bull and bear
markets and our key focus continues to be providing excellence in the
investment management business. We believe that prudent management of our
expenses and balance sheet will allow AGF to continue to weather the downturn
and positions us appropriately for the future. We remain committed to
achieving our long-term objectives and delivering superior value to our
shareholders, clients and unitholders.

    
    (signed)

    Blake C. Goldring, M.S.M., CFA
    Chairman and Chief Executive Officer
    June 24, 2009

    (1) Cash flow from continuing operations, free cash flow and EBITDA are
        non-GAAP measures. Please refer to pages 5 and 6 of this report for
        definitions of these metrics.

    Management's Discussion and Analysis of Financial Condition and Results
    of Operations

    For the three and six months ended May 31, 2009
    

    This Management's Discussion and Analysis (MD&A) presents an analysis of
the financial condition of AGF Management Limited and its subsidiaries (AGF)
as at May 31, 2009, compared with November 30, 2008. The MD&A also includes
the results of operations for the three and six months ended May 31, 2009,
compared with the corresponding periods of 2008. This discussion should be
read in conjunction with our 2008 annual MD&A and 2008 annual audited
Consolidated Financial Statements and Notes. Certain comparative amounts in
these financial statements have been reclassified to conform with the current
year's presentation. The financial information presented herein has been
prepared on the basis of Canadian Generally Accepted Accounting Principles
(GAAP). Percentage changes are calculated using numbers, rounded to the
decimals that appear in this MD&A. All dollar amounts are in Canadian dollars
unless otherwise indicated.
    There have been no material changes to the information discussed in the
following sections of the 2008 annual MD&A: "Risk Factors and Risk
Management", "Controls and Procedures", "Contractual Obligations",
"Intercompany and Related Party Transactions" and "Government Regulations".
The "Key Performance Indicators and Non-GAAP Measures" section contains a
reconciliation of non-GAAP measures to GAAP measures.

    Overview

    With $37.4 billion in assets under management (AUM) as at May 31, 2009,
AGF is one of Canada's premier investment management companies, with
operations and investments in Canada, the United States, the United Kingdom,
Ireland and Asia. The origin of our Company dates back to 1957 with the
introduction of the American Growth Fund, the first mutual fund available to
Canadians seeking to invest in the United States. As of May 31, 2009, our
products and services include a diversified family of award-winning mutual
funds, AGF Elements portfolios, the Harmony asset management program, services
for institutional and high-net-worth clients, as well as AGF Trust GICs, loans
and mortgages.
    For purposes of this discussion, the operations of AGF and our subsidiary
companies are referred to as "we", "us", "our" or "the Company". The financial
results relating to the operations have been reported in three segments:
Investment Management Operations, Trust Company Operations and Other.
    The Investment Management Operations segment includes the results of our
retail mutual fund, institutional and high-net-worth client businesses. The
Trust Company Operations segment includes the results of AGF Trust Company,
and the Other segment includes our equity interest in Smith and Williamson
Holdings Limited (S&WHL).

    Strategy and Quarterly Overview

    As stated in our 2008 annual MD&A, our overall business strategy is to
foster the development of best-in-class operating segments to provide
world-class financial services to investors in Canada and internationally.
During the second quarter of 2009, we announced the realignment of our
organizational structure to combine our retail, institutional and
high-net-worth businesses to operate under one banner: AGF Investments. While
the organizational realignment of resources has occurred, the legal structural
change and associated name change to our new "AGF Investments" banner is
expected to be completed later in 2009 or early 2010. This realignment better
reflects our core focus on investment management and will allow us to more
effectively execute our overall strategy. We continue to identify
opportunities within our business segments to ensure that the appropriate
resources are allocated to each of these segments to maximize shareholder
value over the long term. Our strategy also recognizes that our investment
management and trust businesses operate in cyclical industries and our
financial results will be affected by global stock markets, credit
availability, employment levels and other economic factors.
    Operating conditions improved in the second quarter of 2009 compared to
the first quarter, resulting in improved profitability and increasing AUM
levels. However, operating conditions in the second quarter of 2009 compared
to the same quarter in 2008 remained challenging. During the second quarter of
2009:

    
    -   Revenue decreased 26.1% as compared with the same period in 2008,
        driven primarily by a 30.6% decline in Investment Management
        Operations revenue which was directly related to lower year-over-year
        AUM levels. Earnings before interest, taxes, depreciation and
        amortization (EBITDA) decreased 44.7% during the same period to
        $49.0 million as declining revenue outpaced expense savings.

    -   EBITDA margin increased to 34.1% in the second quarter of 2009 as
        compared to 31.0% in the first quarter of 2009.

    -   Net income decreased 60.9% over the same period in 2008 primarily due
        to a decline in Investment Management Operations revenue and an
        increase in Trust Company Operations provision for loan losses. This
        was partly offset by declines in selling, general and administrative
        (SG&A) and trailing commissions expenses and lower income tax and
        amortization expenses.

    -   Total AUM declined 27.7% from $51.8 billion at May 31, 2008 to
        $37.4 billion as at May 31, 2009. AUM increased by 14.7% from
        $32.6 billion at February 28, 2009 due to improving stock markets
        during the second quarter of 2009.

    -   SG&A expenses declined 16.7% in the quarter ended May 31, 2009 as
        compared to the corresponding period in 2008 as a result of cost
        reduction initiatives across the Company.

    -   AGF Trust real estate secured loan assets declined 9.1% over the
        previous year and investment loans declined 2.2% with total loan
        assets declining 5.3% year-over-year. This decline in loan assets is
        reflective of our strategy to suspend new originations of lower
        margin lending products and slow loan growth in 2009.

    -   In spite of a higher provision for loan losses, AGF Trust remained
        profitable in the second quarter of 2009, representing 18.2% of AGF
        Management Limited's pre-tax income.

    -   We delivered value directly to our shareholders through dividend
        payments. Dividends paid, including dividends reinvested, on Class A
        voting common shares (Class A shares) and Class B non-voting shares
        (Class B shares) remained steady at $22.2 million in the second
        quarter of 2009 compared to $22.3 million in the same period in 2008.
    

    Key Performance Indicators and Non-GAAP Measures

    We measure the success of our business strategies using a number of key
performance indicators (KPIs), which are outlined below. With the exception of
revenue, the following KPIs are not measurements in accordance with Canadian
GAAP. They should not be considered as an alternative to net income or any
other measure of performance under Canadian GAAP. Segment discussions include
a review of KPIs that are relevant to each segment.

    (a) Consolidated Operations

    Revenue

    Revenue is a measurement defined by Canadian GAAP and is recorded net of
fee rebates, sales taxes and distribution fees paid to limited partnerships.
Revenue is indicative of the potential to deliver cash flow.
    We derive our revenue principally from a combination of:

    
    -   management and advisory fees based on AUM

    -   deferred sales charges (DSC) earned from investors when mutual fund
        securities sold on a DSC basis are redeemed

    -   net interest income earned on AGF Trust's loan portfolio
    

    EBITDA

    We define EBITDA as earnings before interest, taxes, depreciation and
amortization. EBITDA is a standard measure used in the mutual fund industry by
management, investors and investment analysts to understand and compare
results. We believe this is an important measure because it allows us to
assess our investment management businesses without the impact of
amortization. EBITDA for the Trust Company Operations segment includes
interest expense related to deposits. These deposits fund our investment loan
and real estate secured loan programs and are therefore considered an
operating cost directly related to generating interest revenue. We include
this interest expense in Trust Company Operations EBITDA to provide a
meaningful comparison to our other business segments and our competitors.
    Please see the "Consolidated Operating Results" section on page 12 of
this MD&A for a schedule showing how EBITDA reconciles to our GAAP financial
statements.

    Cash Flow from Operations

    We report cash flow from operations before net changes in non-cash
balances related to operations. Cash flow from operations helps to assess the
ability of the business to generate cash, which is used to pay dividends,
repurchase shares, pay down debt and fund other needs.


    
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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Net cash provided by
     continuing operating
     activities               $     52.0  $    174.9  $     58.0  $    187.0
    Less: net changes in
     non-cash balances
     related to operations           7.3       103.4       (33.4)       32.1
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    Cash flow from
     continuing operations    $     44.7  $     71.5  $     91.4  $    154.9
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    Free Cash Flow from Operations

    We define free cash flow as cash flow from operations before net changes
in non-cash balances related to operations less selling commissions paid. This
is a relevant measure in the investment management business since a
substantial amount of cash is spent on upfront commission payments. Free cash
flow represents cash available for distribution to our shareholders or for
general corporate purposes.


    
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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Cash flow from continuing
     operations
     (defined above)          $     44.7  $     71.5  $     91.4  $    154.9
    Less: selling
     commissions paid               15.4        27.9        27.9        54.7
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    Free cash flow            $     29.3  $     43.6  $     63.5  $    100.2
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    EBITDA Margin

    EBITDA margin provides useful information to management and investors as
an indicator of our overall operating performance. We believe EBITDA margin is
a valuable measure because it assesses the extent we are able to earn profit
from each dollar of revenue. We define EBITDA margin as the ratio of EBITDA to
revenue.


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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    EBITDA                    $     49.0  $     88.6  $     91.8  $    178.2
    Divided by revenue             143.5       194.3       281.5       388.7
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    EBITDA margin                   34.1%       45.6%       32.6%       45.8%
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    Pre-Tax Profit Margin

    Pre-tax profit margin provides useful information to management and
investors as an indicator of our overall operating performance. We believe
pre-tax profit margin is a valuable measure because it assesses the extent we
are able to earn profit from each dollar of revenue. We define pre-tax profit
margin as the ratio of income before taxes to revenue.


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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Net income                $     17.2  $     44.0  $     29.4  $    106.7
    Add: income taxes                5.8        13.7         9.9         7.5
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    Income before taxes             23.0        57.7        39.3       114.2
    Divided by revenue             143.5       194.3       281.5       388.7
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    Pre-tax profit margin           16.0%       29.7%       14.0%       29.4%
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    Return on Equity (ROE)

    We monitor ROE to assess the profitability of the consolidated Company on
an annual basis. We calculate ROE by dividing net income in the quarter
annualized by average shareholders' equity.


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    For the three months ended                            May 31,     May 31,
    ($ millions)                                            2009        2008
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    Net income (annualized)                           $     68.8  $    176.0
    Divided by average shareholders' equity              1,094.3     1,127.9
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    Return on equity                                         6.3%       15.6%
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    Long-term Debt to EBITDA Ratio

    Long-term debt to EBITDA ratio provides useful information to management
and investors as an indicator of our ability to service our long-term debt. We
define long-term debt to EBITDA ratio as long-term debt at the end of the
period divided by EBITDA in the quarter annualized.


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    For the three months ended                            May 31,     May 31,
    ($ millions)                                            2009        2008
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    Long-term debt                                    $    194.7  $    172.0
    EBITDA (annualized)                                    196.0       354.4
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    Long-term debt to EBITDA                                99.3%       48.5%
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    (b) Investment Management Operations

    Assets Under Management (AUM)

    The amount of AUM is critical to our business since it is from these
assets that we generate fees from our mutual fund, institutional, strategic
accounts and high-net-worth relationships. AUM will fluctuate in value as a
result of investment performance, sales and redemptions. Mutual fund AUM
determine a significant portion of our expenses because we pay upfront
commissions and trailing commissions to financial advisors, as well as
investment advisory fees based on the value of AUM.

    Investment Performance

    Investment performance, which represents market appreciation
(depreciation) of fund portfolios and is shown net of management fees
received, is a key driver of the level of AUM and is central to the value
proposition that we offer advisors and unitholders. Growth in AUM resulting
from investment performance increases the wealth of our unitholders, and, in
turn, we benefit from higher revenues. Alternatively, poor relative investment
performance will reduce our AUM levels and result in lower management fee
revenues. Strong relative investment performance may also contribute to gross
sales growth or reduced levels of redemptions. Conversely, poor relative
investment performance may result in lower gross sales and higher levels of
redemptions. Refer to the Managing Risk section of this report for further
information.

    Net Sales

    One of the goals of our mutual fund business is to generate positive net
sales on an annual basis, which allows for increasing revenues. Gross sales
and redemptions as a percentage of AUM are monitored separately and the sum of
these two amounts comprises net sales. Net sales, together with investment
performance and fund expenses, determine the level of average daily mutual
fund AUM. This is the basis on which management fees are charged. The average
daily mutual fund AUM is equal to the average daily net asset value of the AGF
mutual funds.
    We monitor inflows and outflows in our high-net-worth client and
institutional businesses separately. We do not compute an average daily AUM
figure for them.

    EBITDA Margin

    EBITDA margin provides useful information to management and investors as
an indicator of our operating performance in our Investment Management
Operations segment. We believe EBITDA margin is a valuable measure since it
assesses the extent we are able to earn profit from each dollar of revenue. We
define EBITDA margin as the ratio of EBITDA to revenue.


    
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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    EBITDA                    $     41.8  $     71.5  $     76.6  $    146.3
    Divided by revenue             113.0       162.9       222.9       328.1
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    EBITDA margin                   37.0%       43.9%       34.4%       44.6%
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    Pre-Tax Profit Margin

    Pre-tax profit margin provides useful information to management and
investors as an indicator of our operating performance in our Investment
Management Operations segment. We believe pre-tax profit margin is a valuable
measure because it assesses the extent we are able to earn profit from each
dollar of revenue. We define pre-tax profit margin as the ratio of income
before taxes and non-segmented items to revenue.


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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Income before taxes and
     non-segmented items      $     18.3  $     43.6  $     28.9  $     89.0
    Divided by revenue             113.0       162.9       222.9       328.1
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    Pre-tax profit margin           16.2%       26.8%       13.0%       27.1%
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    (c) Trust Company Operations

    Loan Asset Growth

    In the Trust Company Operations segment (AGF Trust), we focus on
long-term, profitable growth and credit quality in our investment and real
estate secured loans. New originations, net of repayments, drive the
outstanding balance of loans on which we charge interest. Loan asset growth
increases our revenue and assists with our ability to grow our profits in AGF
Trust.

    Net Interest Income

    Net interest income is a common lending industry performance indicator.
We monitor this figure to evaluate the growth of the financial contribution of
AGF Trust. The figure is calculated by subtracting interest expense from
interest income earned from AGF Trust loan assets.


    
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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Interest income           $     58.6  $     76.0  $    125.3  $    152.8
    Less: interest expense          32.9        50.9        73.1       104.9
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    Net interest income       $     25.7  $     25.1  $     52.2  $     47.9
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    Net Interest Margin

    Net interest margin is equal to annualized net interest income divided by
the average quarterly total loan balance.


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    For the three months ended                            May 31,     May 31,
    ($ millions)                                            2009        2008
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    Annualized net interest income                    $    102.8  $    100.4
    Divided by average quarterly total loan balance      4,171.1     4,252.4
    -------------------------------------------------------------------------
    Net interest margin                                      2.5%        2.4%
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    Efficiency Ratio

    The efficiency ratio is a lending industry KPI that measures the
efficiency of the organization. We use this ratio to ensure that expenses are
in line with revenues. The ratio is calculated from AGF Trust results by
dividing non-interest expenses by the total of net interest income and
non-interest income.


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                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
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    Selling, general and
     administrative
     expenses                 $      8.4  $     10.9  $     17.0  $     22.2
    Add: amortization
     expense                         0.7         0.6         1.4         1.0
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    Non-interest expense      $      9.1  $     11.5  $     18.4  $     23.2
    -------------------------------------------------------------------------
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    Other revenue             $      2.0  $      2.3  $      4.1  $      6.0
    RSP loan securitization
     income (loss), net of
     impairment                      0.5        (0.7)       (1.0)        0.1
    -------------------------------------------------------------------------
    Non-interest income       $      2.5  $      1.6  $      3.1  $      6.1
    -------------------------------------------------------------------------

    Net interest income       $     25.7  $     25.1  $     52.2  $     47.9
    Add: non-interest income         2.5         1.6         3.1         6.1
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    Total of net interest
     income and non-interest
     income                   $     28.2  $     26.7  $     55.3  $     54.0
    -------------------------------------------------------------------------
    Efficiency ratio               32.3%       43.1%       33.3%       43.0%
    -------------------------------------------------------------------------

    EBITDA Margin

    EBITDA margin provides useful information to management and investors as
an indicator of AGF Trust's operating performance. We believe EBITDA margin is
a valuable measure because it assesses the extent we are able to earn profit
from each dollar of revenue. We define EBITDA margin as the ratio of EBITDA to
revenue.


    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
    -------------------------------------------------------------------------

    EBITDA                    $      4.9  $     12.4  $     11.9  $     25.3
    Divided by revenue              28.2        26.7        55.3        54.0
    -------------------------------------------------------------------------
    EBITDA margin                  17.4%       46.4%       21.5%       46.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Pre-Tax Profit Margin

    Pre-tax profit margin provides useful information to management and
investors as an indicator of AGF Trust's operating performance. We believe
pre-tax profit margin is a valuable measure because it assesses the extent we
are able to earn profit from each dollar of net interest income. We define
pre-tax profit margin as the ratio of income before taxes and non-segmented
items to total revenue.


    
    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
    -------------------------------------------------------------------------

    Income before taxes and
     non-segmented items      $      4.2  $     11.8  $     10.5  $     24.3
    Divided by revenue              28.2        26.7        55.3        54.0
    -------------------------------------------------------------------------
    Pre-tax profit margin          14.9%       44.2%       19.0%       45.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Assets-to-Capital Multiple

    Federally regulated deposit-taking institutions (DTI) are expected to meet
an assets-to-capital multiple test. The assets-to-capital multiple is
determined by dividing the DTI's total assets by its total regulatory capital.


    -------------------------------------------------------------------------
    As at May 31,
    ($ millions)                                            2009        2008
    -------------------------------------------------------------------------

    Total assets per OSFI guidelines                  $  4,992.4  $  5,247.6
    Divided by adjusted Tier 1 and Tier 2 capital          363.2       344.5
    -------------------------------------------------------------------------
    Assets-to-capital multiple                              13.7        15.2
    -------------------------------------------------------------------------

    Loan-to-Value Ratio

    Loan-to-value ratio on our conventional mortgage loans is calculated using
outstanding balance of conventional mortgage loans divided by the estimated
fair value of the real estate serving as collateral for the conventional
mortgage loans as at the date the loans were funded.


    -------------------------------------------------------------------------
    As at May 31,
    ($ millions)                                            2009        2008
    -------------------------------------------------------------------------

    Conventional mortgage loans(1)                    $    671.9  $    808.2
    Divided by fair value of collateral                  1,074.1     1,277.9
    -------------------------------------------------------------------------
    Loan-to-value ratio                                    62.6%       63.2%
    -------------------------------------------------------------------------
    (1) Includes loan provision and deferred sales commission of
        $12.5 million.
    

    Significant Accounting Policies

    A summary of AGF's significant accounting policies can be found in Note 1
of our 2008 audited Consolidated Financial Statements.

    Significant Accounting Estimates

    Goodwill and other intangibles are subject to impairment tests on an
annual basis or more frequently if events or changes in circumstances indicate
that the assets may be impaired. AGF's ongoing review of the valuation of
goodwill and other intangibles resulted in a writedown of $46.3 million in the
fourth quarter of 2008. During the three and six months ended May 31, 2009,
AGF assessed the need for an impairment test to be performed in light of the
current economic climate. It was determined that there is no event or
circumstance that has indicated that fair value is lower than carrying value.
The annual impairment test will be performed during the third quarter of 2009,
consistent with the prior year.

    Changes in Significant Accounting Policies

    Goodwill, Intangible Assets and Financial Statement Concepts

    Effective December 1, 2008, the CICA's new accounting standard "Handbook
Section 3064, Goodwill and Intangible Assets" was adopted. The standard
clarifies that costs can be deferred only when they relate to an item that
meets the definition of an asset, and as a result, start-up costs must be
expensed as incurred. "Section 1000, Financial Statements Concepts" was also
amended to provide consistency with Section 3064. These standards did not have
any impact on the financial position or earnings of the Company.

    Credit Risk and Fair Value

    Effective December 1, 2008, EIC-173 "Credit Risk and the Fair Value of
Financial Assets and Financial Liabilities" was adopted. EIC-173 requires the
Company's own credit risk and the credit risk of the counterparty to be taken
into account in determining the fair value of financial assets and financial
liabilities, including derivatives. The new guidance did not have a material
effect on the financial position or earnings of the Company.

    Future Accounting Changes

    Conversion to International Financial Reporting Standards in Fiscal 2012

    In February 2008, the Canadian Accounting Standards Board (AcSB)
confirmed that all Canadian publicly-accountable enterprises will be required
to adopt International Financial Reporting Standards (IFRS) for years
beginning on or after January 1, 2011. AGF will adopt IFRS for the year
beginning December 1, 2011 and will present the interim and annual
consolidated financial statements, including comparative prior year financial
statements in accordance with IFRS.
    AGF is currently assessing the differences between IFRS and GAAP, as well
as the alternatives available upon adoption. The impact these differences may
have on the financial results has not yet been determined and will be part of
an ongoing process as the International Accounting Standards Board and the
AcSB issue new standards and recommendations.

    Managing Risk

    AGF is subject to a number of company and non-company specific risk
factors that may impact our operating and financial performance. These risks
and the management of those risks are detailed in our 2008 annual MD&A in the
section entitled 'Risk Factors and Risk Management'. The Company has not
identified any material changes to the risk factors affecting its business or
in the management of those risks. Refer to Note 14 of the Consolidated
Financial Statements and Notes for risks arising from the use of financial
instruments.

    Changes in Internal Controls over Financial Reporting

    The Chief Executive Officer and the Chief Financial Officer have designed
or caused the design of the Internal Controls over Financial Reporting (ICFR)
and Disclosure Controls and Procedures. There have been no material weaknesses
identified relating to the design of the ICFR and there have been no changes
to AGF's internal controls for the quarter ended May 31, 2009 that have
materially affected or are reasonably likely to materially affect the internal
controls over financial reporting.

    Consolidated Operating Results

    The table below summarizes our consolidated operating results for the
three and six months ended May 31, 2009, and May 31, 2008.


    
    -------------------------------------------------------------------------
                      Three months ended May 31,     Six months ended May 31,
                   ----------------------------------------------------------
    ($ millions,
     except per
     share
     amounts)           2009      2008 % change      2009      2008 % change
    -------------------------------------------------------------------------
    Revenue
      Investment
       Management
       Operations   $  113.0  $  162.9   (30.6%) $  222.9  $  328.1   (32.1%)
      Trust Company
       Operations       28.2      26.7     5.6%      55.3      54.0     2.4%
      Other              2.3       4.7   (51.1%)      3.3       6.6   (50.0%)
    -------------------------------------------------------------------------
                       143.5     194.3   (26.1%)    281.5     388.7   (27.6%)

    Expenses
      Investment
       Management
       Operations       71.2      91.4   (22.1%)    146.3     181.8   (19.5%)
      Trust Company
       Operations       23.3      14.3    62.9%      43.4      28.7    51.2%
    -------------------------------------------------------------------------
                        94.5     105.7   (10.6%)    189.7     210.5    (9.9%)

    EBITDA(1)           49.0      88.6   (44.7%)     91.8     178.2   (48.5%)
      Amortization      24.3      28.3   (14.1%)     49.2      58.3   (15.6%)
      Interest
       expense           1.6       2.4   (33.3%)      3.1       5.4   (42.6%)
      Non-controlling
       interest          0.1       0.2   (50.0%)      0.2       0.3   (33.3%)
      Income taxes       5.8      13.7   (57.7%)      9.9       7.5    32.0%
    -------------------------------------------------------------------------
    Net income      $   17.2  $   44.0   (60.9%) $   29.4  $  106.7   (72.4%)
    -------------------------------------------------------------------------
    Earnings per
     share -
     diluted        $   0.19  $   0.49   (61.2%) $   0.33  $   1.19   (72.3%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For the definition of EBITDA, see the "Key Performance Indicators and
        Non-GAAP Measures" section. The items required to reconcile EBITDA to
        net income, a defined term under Canadian GAAP, are detailed above.
    

    Revenue for the three and six months ended May 31, 2009, declined by
26.1% and 27.6% from the corresponding periods in 2008. Revenue in the
Investment Management Operations segment declined 30.6% and 32.1% for the
three and six months ended May 31, 2009. This corresponds to lower average
levels of AUM. The Trust Company Operations segment revenue increased by 5.6%
and 2.4% for the three and six months ended May 31, 2009. This was due in part
to the increase in net interest margin. Revenue from Other, which represents
the results of our 30.3% equity interest in S&WHL, was lower for the three and
six months ended May 31, 2009, due to the impact of the economic environment
in the U.K.
    Expenses for the three and six months ended May 31, 2009, decreased by
10.6% and 9.9% compared with the same periods in 2008. Expenses in the
Investment Management Operations segment declined 22.1% and 19.5%, primarily
attributable to lower trailing commissions and investment advisory fees as a
result of the decline in AUM, as well as lower SG&A related to expense
reductions. Trust Operations experienced higher overall expenses related to
increased provisions for loan losses partly offset by reduced SG&A expenses.
For further details, refer to the segment discussions.
    The impact of revenue declining at a faster rate than expenses served to
decrease EBITDA by 44.7% and 48.5% for the three and six months ended May 31,
2009, from the corresponding periods of 2008.
    Amortization expense decreased 14.1% and 15.6% for the three and six
months ended May 31, 2009, compared to the same periods in 2008. The decline
was attributable to lower amortization of deferred selling commissions in the
Investment Management Operations segment. Amortization of deferred selling
commissions for the three and six months ended May 31, 2009 accounted for
$21.1 million and $43.4 million (2008 - $24.8 and 50.9 million) of the total
amortization expense.
    Interest expense was $1.6 million and $3.1 million for the three and six
months ended May 31, 2009, as compared with $2.4 and $5.4 million in the same
periods of 2008. Lower interest expense in the quarter is reflective of
declining interest rates.
    For the three and six months ended May 31, 2009, the income tax expense
was $5.8 million and $9.9 million as compared with $13.7 million and $7.5
million in the same periods in 2008. Results for the six months ended May 31,
2008 included an income tax reduction of $19.5 million related to the
reduction in the federal income tax rate to 15% from 18.5% by January 1, 2012.
The effective tax rate for the first six months of 2009 was 25.0% compared
with 23.6% in the same period in 2008, excluding the impact of the above $19.5
million tax reduction in 2008.
    The impact of the above revenue and expense items resulted in net income
of $17.2 million and $29.4 million for the three and six months ended May 31,
2009 compared with $44.0 million and $106.7 million in the same periods of
2008. Diluted earnings per share were $0.19 and $0.33 for the three and six
months ending May 31, 2009, compared with $0.49 and $1.19 per share in the
same periods of 2008. Excluding the impact of the $19.5 million tax reduction
in the first quarter of 2008, net income in the six months ended May 31, 2008
was $87.2 million or $0.97 per share diluted.
    A further discussion follows of the results of each business segment for
the three and six months ended May 31, 2009, compared with May 31, 2008.

    Business Segment Performance

    We report on three business segments: Investment Management Operations,
Trust Company Operations and Other. AGF's reportable segments are strategic
business units that offer different products and services. The Investment
Management Operations segment provides investment management and advisory
services. It is responsible for the management and distribution of AGF
investment products and services, including retail mutual fund operations,
institutional investment management and high-net-worth client investment
counselling services. The Trust Company Operations segment offers GICs, real
estate secured loans and investment loans. The Other segment includes the
results of S&WHL, which is accounted for by the equity method, as well as our
interest expense.

    
    Investment Management Operations

    Business and Industry Profile
    

    Our Investment Management Operations segment provides products and
services across the wealth continuum, including mutual funds, wrap products,
institutional investment services and high-net-worth investment management.
Our products are delivered through multiple channels, including advisors,
financial planners, banks, life insurance companies, brokers and consultants.
    We compete with numerous domestic and foreign players within the Canadian
investment management industry. We believe our status as an independent fund
manufacturer without distribution conflict will benefit us and our
shareholders as the industry continues to evolve. We also remain focused on
building our reputation internationally as an institutional investment
management firm and we continue to attract a significant amount of interest in
our investment strategies from international investors.

    Segment Strategy and Quarterly Overview

    We have remained consistent in our strategy of enhancing the
client-centric model in our investment management business and continue to
maintain a high level of communication with our clients and strong
partnerships with advisors. During the second quarter of 2009, we announced an
organizational realignment to better reflect our core focus on investment
management. This realignment combines the retail, institutional and
high-net-worth businesses under one banner: AGF Investments. While the
organizational realignment of resources has occurred, the legal structural
change and associated name change to our new "AGF Investments" banner is
expected to be completed later in 2009 or early 2010. This realignment
supports our commitment to excellence in investment management, relationship
management and product management and will allow us to better leverage our
investment management competency across all distribution channels. We are
focused on growing our institutional business and continue to promote
international investment management competency across multiple channels.
    Global stock markets staged a rally in the second quarter of 2009, and
led to a sequential increase in our mutual fund AUM, although gross mutual
fund sales remained weak as investors continued to favour more conservative
investment products like GICs and segregated funds. To simplify and improve
our retail product offering, better align it with investor preferences and
reduce costs, we announced the following changes during the second quarter of
2009:

    
    -   The mergers of AGF Global Health Sciences Class and AGF Global
        Technology Class into AGF Global Equity Class, AGF Global Financial
        Services Class and AGF Global Perspective Class into AGF Global Value
        Class, AGF Special U.S. Class and AGF U.S. Value Class into AGF
        American Growth Class, and AGF Diversified Dividend Income Fund into
        AGF Monthly High Income Fund and the closures of AGF World
        Opportunities Fund and AGF Global Balanced High Income Fund.

    -   The internalization of portfolio management responsibilities of AGF
        U.S. Risk Managed Class and AGF U.S. Risk Managed Fund and the
        internalization of portfolio advisory responsibilities of AGF China
        Focus Class, AGF Japan Class and AGF Japan Fund.

    -   The removal of the AGF Elements Advantage feature on AGF Elements
        Products sold subsequent to June 22, 2009.
    

    We continually strive to deliver excellence in investment management and
in this quarter, AGF was honoured with nine recognitions at the 2009 Canadian
Lipper Awards including two coveted group awards. AGF was awarded the Best
Overall Fund Family and the Best Mixed Asset Fund Family for having the best
overall risk-adjusted performance, relative to its peers in both categories.
AGF Canadian Balanced Fund was a triple winner recognized for having the best
one-, three- and five-year returns. Four other AGF funds were also recognized
for performance.
    In May, we opened an office in Boston with a primary focus on business
development as we continue to build relationships with sponsors, pension plans
and consultants in the institutional space through our sales and marketing
efforts.

    Assets Under Management

    The primary sources of revenue for AGF's Investment Management Operations
segment are management and advisory fees. The amount of management and
advisory fees depends on the level and composition of AUM. Under the
management and investment advisory contracts between AGF and each of the
mutual funds, we are entitled to monthly fees. These fees are based on a
specified percentage of the average daily net asset value of the respective
fund. In addition, we earn fees on our institutional, strategic accounts and
high-net-worth client AUM. As a result, the level of AUM has a significant
influence on financial results.
    The following table illustrates the composition of the changes in total
AUM during the three and six months ended May 31, 2009 and May 31, 2008:


    
    -------------------------------------------------------------------------
                      Three months ended May 31,     Six months ended May 31,
                   ----------------------------------------------------------
    ($ millions,
     except per
     share amounts)     2009      2008 % change      2009      2008 % change
    -------------------------------------------------------------------------

    Mutual fund AUM,
     beginning of
     period         $ 18,062  $ 27,703   (34.8%) $ 19,761  $ 30,052   (34.2%)

    Gross sales of
     mutual funds        694       945   (26.6%)    1,338     2,073   (35.5%)
    Redemptions of
     mutual funds       (819)   (1,204)  (32.0%)   (1,677)   (2,557)  (34.4%)
    -------------------------------------------------------------------------
    Net mutual fund
     sales              (125)     (259)  (51.7%)     (339)     (484)  (30.0%)

    Market
     appreciation
     (depreciation)
     of fund
     portfolios        2,970     1,183   151.1%     1,485      (941)     n/m
    -------------------------------------------------------------------------

    Mutual fund AUM,
     end of period  $ 20,907  $ 28,627   (27.0%) $ 20,907  $ 28,627   (27.0%)

    Institutional
     and strategic
     accounts AUM     13,728    19,226   (28.6%)   13,728    19,226   (28.6%)
    High-net-worth
     AUM               2,794     3,927   (28.9%)    2,794     3,927   (28.9%)
    -------------------------------------------------------------------------

    Total AUM, end
     of period      $ 37,429  $ 51,780   (27.7%) $ 37,429  $ 51,780   (27.7%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Average daily
     mutual fund
     AUM for the
     period         $ 19,652  $ 28,357   (30.7%) $ 19,404  $ 28,489   (31.9%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Global market declines and an industry trend of reduced gross sales of
long-term funds resulted in a decrease in mutual fund AUM to $20.9 billion at
May 31, 2009 from $28.6 billion as at May 31, 2008. The average daily mutual
fund AUM for the six months ended May 31, 2009, decreased 31.9% to $ 19.4
billion compared with the same period in 2008. Institutional and strategic
accounts AUM decreased by $5.5 billion to $13.7 billion from $19.2 billion at
May 31, 2008 as a result of market volatility, client rebalancing and
redemptions. High-net-worth AUM decreased by $1.1 billion to $2.8 billion due
to market volatility. These decreases resulted in total AUM decreasing by
27.7% to $37.4 billion at May 31, 2009.
    Market performance influences the level of AUM. During the three and six
months ended May 31, 2009, the Canadian-dollar-adjusted S&P 500 Index
increased 8.5% and decreased 8.0%, respectively. The Canadian-dollar-adjusted
NASDAQ Index increased 11.1% and 2.2%, respectively, for the three and six
months ended May 31, 2009, and the S&P/TSX Composite Index increased 28.9% and
14.1%, respectively, for those same time periods. The aggregate market
appreciation of our mutual fund portfolios for the six months ended May 31,
2009, divided by the average daily mutual fund AUM for the period, was 7.7%
after management fees and expenses paid by the funds.
    The impact of the U.S. dollar decrease relative to the Canadian dollar on
the market value of AGF mutual funds for the three months ended May 31, 2009
has been a decrease in AUM of $0.6 billion. For the six months ended May 31,
2009, the impact of the U.S. dollar decrease has been a decrease in AUM of
$0.5 billion.

    Financial and Operational Results

    The Investment Management Operations segment results for the three and
six months ended May 31, 2009, and May 31, 2008, are as follows:


    
    -------------------------------------------------------------------------
                      Three months ended May 31,     Six months ended May 31,
                   ----------------------------------------------------------
    ($ millions)        2009      2008 % change      2009      2008 % change
    -------------------------------------------------------------------------

    Revenue
      Management
       and advisory
       fees         $  105.2  $  153.9   (31.6%) $  207.9  $  310.3   (33.0%)
      Deferred sales
       charges           5.6       6.0    (6.7%)     11.6      12.2    (4.9%)
      Investment
       income and
       other revenue     2.2       3.0   (26.7%)      3.4       5.6   (39.3%)
    -------------------------------------------------------------------------
                       113.0     162.9   (30.6%)    222.9     328.1   (32.1%)

    Expenses
      Selling,
       general and
       administrative   38.7      46.0   (15.9%)     83.2      90.6    (8.2%)
      Trailing
       commissions      30.0      41.6   (27.9%)     57.5      83.4   (31.1%)
      Investment
       advisory fees     2.5       3.8   (34.2%)      5.6       7.8   (28.2%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        71.2      91.4   (22.1%)    146.3     181.8   (19.5%)
    -------------------------------------------------------------------------

    EBITDA(1)           41.8      71.5   (41.5%)     76.6     146.3   (47.6%)
    Amortization        23.5      27.9   (15.8%)     47.7      57.3   (16.8%)
    -------------------------------------------------------------------------
    Income before
     taxes and
     non-segmented
     items          $   18.3  $   43.6   (58.0%) $   28.9  $   89.0   (67.5%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For the definition of EBITDA, see the "Key Performance Indicators and
        Non-GAAP Measures" section. The items required to reconcile EBITDA to
        net income, a defined term under Canadian GAAP, are detailed above.
    

    Revenue

    For the three- and six-month periods ended May 31, 2009, revenue for the
Investment Management Operations segment decreased by 30.6% and 32.1% compared
with the previous-year periods with changes in the following categories:

    Management and Advisory Fees

    The 30.7% decline in average daily mutual fund AUM in the three months
ended May 31, 2009, contributed to a 31.6% decrease in management and advisory
fee revenue from the same period in 2008.

    Deferred Sales Charges (DSC)

    We receive DSC upon redemption of securities sold on the contingent DSC
or low-load commission basis for which we finance the selling commissions paid
to the dealer. The DSC ranges from 3.0% to 5.5%, depending on the commission
option, of the original subscription price of the funds purchased if the funds
are redeemed within the first two years, and declines to zero after three or
seven years. DSC revenue fluctuates based on the level of redemptions, the age
of the assets being redeemed and the proportion of redemptions composed of
back-end assets. DSC revenues for the three and six months ended May 31, 2009,
decreased by 6.7% and 4.9% from the same periods in 2008, reflecting lower
retail mutual fund redemptions of DSC AUM that are subject to a charge.

    Expenses

    For the three and six month periods ended May 31, 2009, expenses
decreased by 22.1% and 19.5% from the previous-year periods. Changes in
specific categories are described in the discussion that follows.

    Selling, General and Administrative Expenses

    Selling, general and administrative (SG&A) expenses for the three and six
month periods ended May 31, 2009 were $38.7 million and $83.2 million. This
represents a 15.9% and 8.2% decrease over the same periods in 2008 and is the
result of cost reduction initiatives. The decrease is made up of the following
amounts:


    
    -------------------------------------------------------------------------
                                                  Three months    Six months
                                                  ended May 31, ended May 31,
                                                 ----------------------------
    ($ millions)                                          2009          2009
    -------------------------------------------------------------------------

    Increase in fund absorption expenses            $        -    $      2.3
    Decrease in compensation-related expenses             (9.4)        (12.4)
    Decrease in other expenses                            (1.5)         (1.6)
    Increase in severance and restructuring expenses       3.6           4.3
    -------------------------------------------------------------------------
                                                    $     (7.3)   $     (7.4)
    -------------------------------------------------------------------------

    The following explains expense changes in the three- and six-month periods
ended May 31, 2009 compared with the previous-year period:

    -   Absorption expense estimates remained flat quarter over quarter and
        were up $2.3 million in the six month period. Lower transactional
        volumes, improved contractual pricing and removal of the management
        expense ratio (MER) caps have contributed to our improving absorption
        expenses.

    -   Compensation-related expenses decreased due to staff reductions,
        lower estimates for performance-based payouts and stock-based
        compensation expense.

    -   Severance and restructuring expenses increased $3.6 million and
        $4.3 million for the three and six months ended May 31, 2009 as a
        result of longer-term cost savings initiatives.
    

    Trailing Commissions

    Trailing commissions paid to investment dealers depend on total AUM, the
proportion of mutual fund AUM sold on a front-end versus back-end commission
basis and the proportion of equity fund AUM versus fixed-income fund AUM.
Annualized trailing commissions as a percentage of average daily mutual fund
AUM were 0.61% and 0.59% for the three and six months ended May 31, 2009,
compared to 0.59% and 0.59% in the same 2008 periods.

    Investment Advisory Fees

    External investment advisory fees decreased 34.2% and 28.2% for the
three- and six-month periods ended May 31, 2009, compared with the
previous-year periods. The year-over-year decrease relates to the reduced
level of AUM.

    EBITDA

    EBITDA for the Investment Management Operations segment were $41.8
million and $76.6 million for the three and six months ended May 31, 2009.
This represents a decrease of 41.5% and 47.6% from $71.5 million and $146.3
million for the same periods of fiscal 2008. The decrease is directly
attributable to lower revenue levels resulting from lower average AUM. EBITDA
for the Investment Management Operations increased 20.1% from the first
quarter of 2009 due to lower SG&A expenses and higher revenue.

    Amortization

    The largest item in this category is amortization of deferred selling
commissions. The category also represents amortization of property, equipment,
customer contracts and other intangible assets. We internally finance all
selling commissions paid. These selling commissions are capitalized and
amortized on a straight-line basis over a period that corresponds with their
applicable DSC schedule. Amortization expense related to deferred selling
commissions was $21.1 million and $43.4 million in the three and six months
ended May 31, 2009, compared with $24.8 million and $50.9 million in the same
periods in 2008.
    During the second quarter of fiscal 2009, we paid $15.4 million in
selling commissions compared with $27.9 million in 2008. The decline is due to
lower gross sales of retail funds and a slightly higher percentage of funds
paid on a front-end basis in 2009 versus 2008. As at May 31, 2009, the
unamortized balance of deferred selling commissions stood at $288.9 million.
This is a decrease of $15.5 million from the balance of $304.4 million as at
November 30, 2008. The contingent DSC that would be received if all of the DSC
securities were redeemed at May 31, 2009, were estimated to be approximately
$384.8 million (May 31, 2008 - $418.7 million).

    
    Trust Company Operations

    Business and Industry Profile
    

    Through AGF Trust, we offer financial solutions that include GICs, real
estate secured loans and investment loans.
    AGF Trust investment loans consist of secured investment loans and RSP
loans distributed through financial advisors who continue to broaden their
suite of products to meet the needs of their clients. AGF Trust has a
competitive edge in the advisor channel as we leverage AGF's mutual fund
wholesaler relationships. Our mutual fund wholesalers have operated
successfully in the advisor channel for many years and our reputation for
quality service is widely acknowledged, as demonstrated by our recognition as
Advisors' Choice Investment Fund Company of the Year at the 2008 Canadian
Investment Awards.
    We offer real estate secured loans to Canadians who have sound credit,
but whose circumstances may not meet the traditional requirements of Canada's
large banks to qualify for their lowest rate real estate secured loan
products. Real estate secured loan products are distributed primarily through
the mortgage broker channel. Borrowers have chosen to deal with mortgage
brokers to take advantage of independent advice and competitive rates. Lenders
have provided real estate secured loans in this channel to reduce distribution
costs.

    Segment Strategy and Highlights

    AGF Trust, similar to other financial institutions in Canada, continues
to be impacted by the current recession. Our strategy has been to effectively
manage through the current economic downturn and slow loan growth to improve
our regulatory capital position. In the latter part of 2008, we repositioned
our lending programs to focus on higher margin products and suspended new
originations of certain business lines, including our Home Equity Line of
Credit (HELOC) and 100% No Margin Investment loan products. During the second
quarter of 2009, we continued to focus on responsible management of our loan
portfolio and increased our collections capacity and activities in an effort
to mitigate default risk and reduce potential losses. The majority of funding
for the lending and investment activity continues to be through the sale of
GICs and we remain confident in our ability to raise funds through this
channel.
    For the three and six months ended May 31, 2009, loan originations were
$13.3 million and $63.5 million, compared to $452.0 million and $977.0 million
in the same periods in the previous year. Net loan writeoffs were $10.0
million and $14.3 million for the three and six months ended May 31, 2009,
compared to $2.0 million and $3.5 million in the same periods in the previous
year. The increase in writeoffs was largely attributable to writeoffs in our
RSP, secured investment loan and mortgage loan portfolio. Net loan writeoffs
for the three and six months ended May 31, 2009 were $7.4 million and $10.0
million, respectively, in our RSP loan portfolio, $1.1 million and $2.1
million, respectively, in our secured investment loan portfolio and $1.5
million and $2.2 million, respectively, in our mortgage loan portfolio.
    As at May 31, 2009, collateral value declines have resulted in
approximately $445.3 million of unsecured exposures in our secured investment
loan portfolio compared to $662.5 million of unsecured exposures as at
February 28, 2009. This improvement was directly related to rising equity
markets. Our investment loan program is used by independent investment
advisors as part of their overall investment strategy for their clients. We
believe that the investment advisor is an integral part of their clients'
investment strategies. Combined with other mitigating factors such as
relatively high credit scores, sound underwriting and historical experience of
other financial institutions with this type of product with little evident
correlation between collateral values and propensity to default, we expect
that clients will continue to service their debt in spite of a decline in
equity values. Our weighted average loan-to-value ratio on our conventional
mortgage loan portfolio, as at May 31, 2009, was 62.6%.

    Financial and Operational Results

    The Trust Company Operations segment results for the three and six months
ended May 31, 2009 and May 31, 2008 are as follows:


    
    -------------------------------------------------------------------------
                      Three months ended May 31,     Six months ended May 31,
                   ----------------------------------------------------------
    ($ millions)        2009      2008 % change      2009      2008 % change
    -------------------------------------------------------------------------

    Interest income
      Loan interest $   53.9  $   68.7   (21.5%) $  114.9  $  135.2   (15.0%)
      Investment
       interest          4.7       7.3   (35.6%)     10.4      17.6   (40.9%)
    -------------------------------------------------------------------------
                        58.6      76.0   (22.9%)    125.3     152.8   (18.0%)

    Interest expense
      Deposit interest  46.6      50.2    (7.2%)     94.9      97.4    (2.6%)
      Other interest
       expense         (13.7)      0.7      n/m     (21.8)      7.5      n/m
    -------------------------------------------------------------------------
                        32.9      50.9   (35.4%)     73.1     104.9   (30.3%)
    -------------------------------------------------------------------------
    Net interest
     income             25.7      25.1     2.4%      52.2      47.9     9.0%
    Other revenue        2.0       2.3   (13.0%)      4.1       6.0   (31.7%)
    RSP loan
     securitization
     income (loss),
     net of impairment   0.5      (0.7)     n/m      (1.0)      0.1      n/m
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue       28.2      26.7     5.6%      55.3      54.0     2.4%

    Expenses
      Selling,
       general and
       administrative    8.4      10.9   (22.9%)     17.0      22.2   (23.4%)
      Provision for
       loan losses      14.9       3.4   338.2%      26.4       6.5   306.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        23.3      14.3    62.9%      43.4      28.7    51.2%

    EBITDA(1)            4.9      12.4   (60.5%)     11.9      25.3   (53.0%)
    Amortization         0.7       0.6    16.7%       1.4       1.0    40.0%
    -------------------------------------------------------------------------
    Income before
     taxes and
     non-segmented
     items          $    4.2  $   11.8   (64.4%)  $  10.5  $   24.3   (56.8%)
    -------------------------------------------------------------------------
    (1) For the definition of EBITDA, see the "Key Performance Indicators and
        Non-GAAP Measures" section. The items required to reconcile EBITDA to
        net income, a defined term under Canadian GAAP, are detailed above.
    

    Revenue, Net Interest Income and Net Interest Margin

    Net interest income, which is expressed net of interest on deposits and
other interest expense, increased 2.4% and 9.0% in the three and six months
ended May 31, 2009 over the same periods in 2008. The average net interest
margin on lending products was 2.5% (2008 - 2.4%). This increase in margin is
primarily due to slightly wider margins on lending products, partly offset by
higher funding costs on GICs. AGF Trust manages its interest rate risk through
the use of interest rate swaps. The average loan balances were approximately
1.9% lower for the three months ended May 31, 2009 compared to 2008. Other
interest expense includes $19.9 million and $34.1 million of interest income
related to changes in fair value on interest rate swaps for the three and six
months ended May 31, 2009 (2008 - $5.2 million and $4.2 million). Other
revenue decreased 13.0% and 31.7% in the three and six months ended May 31,
2009 primarily due to a $4.6 million and $3.3 million decrease related to
hedge ineffectiveness. During the quarter, the Trust Company recognized a $0.3
million writedown of its retained interest in securitized RSP loans compared
to $1.5 million in 2008. These factors resulted in an overall revenue increase
of 5.6% and 2.4% in the three and six months ended May 31, 2009 as compared
with 2008.

    Selling, General and Administrative Expenses

    SG&A expenses decreased 22.9% and 23.4% in the three- and six-month
periods ended May 31, 2009 over the same period in 2008, primarily due to
reduced staffing levels and reduced estimates for performance-based payouts.

    Provision for Loan Losses

    The total provision for loan losses increased to $14.9 million during the
second quarter of 2009 compared to $3.4 million in 2008. During the fourth
quarter of 2008, AGF Trust reviewed its methodology for allowance for loan
losses as a result of the current market and economic conditions. As a result,
the methodology was refined to be more responsive to changes in the economy
and increases in delinquency. The allowance for specific loan losses was
refined to include specific allowances for loans past due but not impaired.
Previously, this allowance only included loans identified as impaired. As a
result of this change, combined with increases in arrears and impaired loans,
the total provision for loan losses increased by $11.5 million in the second
quarter of 2009, compared with the same period in 2008.
    Based on our analysis of the RSP portfolio, we had approximately $25.0
million of loan accounts which, based on certain loan characteristics, were
assessed as having a significantly higher risk of default. Accordingly, we
have recorded an allowance for loan losses of $10.5 million against these
accounts and in addition, we have written off $5.8 million of these loans as
at May 31, 2009, resulting in an existing net exposure of approximately $9.0
million.
    Loan writeoffs, net of recoveries for the three months ended May 31, 2009
were $10.0 million compared with $2.0 million for the three-month period ended
May 31, 2008, with the increase attributable to RSP, secured investment loan
and mortgage loan writeoffs. Loan writeoffs, net of recoveries, for the three
months ended May 31, 2009, were $7.4 million in the RSP loan portfolio, $1.1
million in the secured investment loan portfolio and $1.5 million in the
mortgage loan portfolio. Impaired loans expressed as a percentage of loans
outstanding were 1.5% as at May 31, 2009, compared with 1.0% at November 30,
2008 and 0.7% at May 31, 2008 due to worsening economic conditions and the
fact that, as indicated above, we have identified approximately $25.0 million
of RSP loan accounts which, based on certain characteristics, were assessed as
having a significantly higher risk of default. As at May 31, 2009, $9.1
million of these loans were identified as impaired compared with $4.4 million
at November 30, 2008.

    EBITDA and EBITDA Margin

    An increase in the loan provision contributed to a decline in EBITDA for
the three and six months ended May 31, 2009 of 60.5% and 53.0% to $4.9 million
and $11.9 million compared to the same periods of 2008. EBITDA margin for the
three and six months ended May 31, 2009 declined to 17.4% and 21.5% from 46.4%
and 46.9% over the same periods of 2008.

    Pre-Tax Profit Margin

    As a result of the factors outlined above, pre-tax profit margin of 14.9%
in the second quarter 2009 declined from 44.2% in the second quarter of 2008.

    Operational Performance

    The table below highlights our key operational measures for the Trust
Company Operations segment for the three and six months ended May 31, 2009 and
May 31, 2008.


    
    -------------------------------------------------------------------------
                      Three months ended May 31,     Six months ended May 31,
                   ----------------------------------------------------------
    ($ millions)        2009      2008 % change      2009      2008 % change
    -------------------------------------------------------------------------
    Real estate
     secured loans(1)
      Insured
       mortgage
       loans        $  573.2  $  607.5    (5.6%) $  573.2  $  607.5    (5.6%)
      Conventional
       mortgage loans  671.9     808.2   (16.9%)    671.9     808.2   (16.9%)
      HELOCs           550.8     559.3    (1.5%)    550.8     559.3    (1.5%)
    -------------------------------------------------------------------------
                     1,795.9   1,975.0    (9.1%)  1,795.9   1,975.0    (9.1%)

    Investment
     loans(1)
      Secured
       investment
       loans         1,768.2   1,683.9     5.0%   1,768.2   1,683.9     5.0%
      RSP loans        491.1     618.5   (20.6%)    491.1     618.5   (20.6%)
      Other loans        7.9      14.8   (46.6%)      7.9      14.8   (46.6%)
    -------------------------------------------------------------------------
                     2,267.2   2,317.2    (2.2%)  2,267.2   2,317.2    (2.2%)
    Other assets       932.3     964.8    (3.4%)    932.3     964.8    (3.4%)
    -------------------------------------------------------------------------
    Total Assets    $4,995.4  $5,257.0    (5.0%) $4,995.4  $5,257.0    (5.0%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net interest
     income         $   25.7  $   25.1     2.4%  $   52.2  $   47.9     9.0%
    RSP loan
     securitization
     income (loss),
     net of
     impairment          0.5      (0.7)     n/m      (1.0)      0.1      n/m
    Other revenue        2.0       2.3   (13.0%)      4.1       6.0   (31.7%)
    Non-interest
     expenses(2)        (9.1)    (11.5)  (20.9%)    (18.4)    (23.2)  (20.7%)
    Provision for
     loan losses       (14.9)     (3.4)     n/m     (26.4)     (6.5)     n/m
    -------------------------------------------------------------------------
    Income before
     taxes and
     non-segmented
     items          $    4.2  $   11.8   (64.4%) $   10.5  $   24.3   (56.8%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Efficiency
     ratio(3)          32.3%     43.1%              33.3%     43.0%
    Assets-to-capital
     multiple(3)        13.7      15.2               13.7      15.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes loan provision and deferred sales commission.
    (2) Includes SG&A and amortization expenses.
    (3) For the definition of efficiency ratio and assets-to-capital
        multiple, see the "Key Performance Indicators and Non-GAAP Measures"
        section.
    

    Loan Asset Growth

    Loan originations decreased significantly from the second quarter of 2008
as a result of amendments to our lending programs. Real estate secured loan
assets decreased by 9.1% year-over-year. Secured investment loans increased
5.0% to $1.8 billion as at May 31, 2009, over the same period in 2008 while
RSP loan balances and other loans decreased $134.3 million or 21.2%.

    Efficiency Ratio

    The efficiency ratio is defined as non-interest expenses divided by the
total of net interest income and non-interest income. It is a key industry
performance indicator used to ensure expenses are contained as the Trust
business grows. In the second quarter of 2009, the efficiency ratio
experienced a favourable change to 32.3% from 43.1% in the same period of
2008. The efficiency ratio for the six-month period ended May 31, 2009,
decreased to 33.3% from 43.0% in the same period of 2008.

    Balance Sheet

    Total assets decreased 5.0% to $5.0 billion as at May 31, 2009, compared
with the previous year. As at May 31, 2009, our assets-to-capital multiple
stood at 13.7 times, compared with 15.2 times at the same time last year. Our
risk-based capital ratio was 16.5% as at May 31, 2009 compared to 14.7% at
November 30, 2008. During the six-month period ended May 31, 2008, AGF Trust
received $35.0 million in debt and equity capital from AGF Management Limited
to support increased asset levels. AGF Trust has not required capital from AGF
Management since the first quarter of 2008. Liquid assets were high with
$768.7 million in cash and cash equivalents as well as investments available
for sale as at May 31, 2009 (2008 - $879.2 million).

    Loan Portfolio Credit

    The credit risk factors considered when assessing the collectability of
the various loan portfolios are primarily based on the individuals' ability
and willingness to make future loan payments, coupled with the underlying
collateral security held for each of the loan categories. The key risk factors
considered include:

    
    -   Employment rates: higher unemployment rates will likely result in
        higher default rates as individuals' ability to pay deteriorates.
    -   Residential property prices and sales volume: declining residential
        property prices and reduced volumes of residential property sales may
        result in lower resale prices and longer disposal times, therefore,
        increasing losses incurred on the disposition of the property.
    -   Equity market performance: declining global equity markets present
        increased risk on the secured investment loan portfolio as the value
        of the underlying collateral is lower. While Trust has recourse to
        the personal assets of clients with respect to investment loans, the
        global macro-economic situation and employment levels may impede
        Trust's ability to realize on the full value of the loan.
    

    The general allowance for real estate secured loan losses remained
consistent year over year at $8.8 million as compared to $9.0 million a year
ago. The general allowance for investment loan losses increased to $17.3
million from $9.1 million in the 2008 quarter, due to a refinement in
provisioning methodology combined with higher experience of loan writeoffs.
Approximately 45.5% of real estate secured loan assets, excluding HELOCs, are
insured. We have security for non-RSP investment loans, consisting of mutual
funds and other investments. The value of this collateral fluctuates with the
changes in the underlying investments. The amount of RSP loans written off,
net of recoveries (excluding securitized RSP loans) was $10.0 million for the
six months ended May 31, 2009 (2008 - $1.8 million). For the balance of our
loan products, the amount written off net of recoveries was $4.3 million (2008
- $1.7 million).

    Liquidity and Capital Resources

    For the three and six months ended May 31, 2009, consolidated cash flow
generated from continuing operating activities, before net change in non-cash
balances related to operations, was $44.7 million and $91.4 million compared
to $71.5 million and $154.9 million in the prior year.
    During the three- and six-month period ended May 31, 2009, we paid $15.4
million and $27.9 million in selling commissions, which were capitalized and
amortized for accounting purposes, compared with $27.9 million and $54.7
million in 2008. Accordingly, our free cash flow (defined as cash flow from
continuing operations less selling commissions paid) was $29.3 million and
$63.5 million for the three and six months ended May 31, 2009, compared with
$43.6 million and $100.2 million in the prior year.
    Our free cash flow was used primarily to fund the following:


    
    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ millions)                    2009        2008        2009        2008
    -------------------------------------------------------------------------

    Payment of dividends      $     21.4  $     19.7  $     43.0  $     37.0
    Acquisitions of
     subsidiaries                   19.9           -        19.9        20.8
    Purchase of property,
     equipment and other
     intangible assets               0.3         1.2         1.0         2.7
    Investments(1)                   0.3        (3.4)        3.8         1.3
    Bank credit facility
     repayment (borrowing)         (16.8)       87.1       (70.9)      (12.1)
    Investment in Trust
     Operations (eliminated
     on consolidation)                 -           -           -        35.0
    -------------------------------------------------------------------------
                                 $  25.1     $ 104.6     $  (3.2)    $  84.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes $264.3 million and $274.2 million of cash invested by AGF
        Trust into investments available for sale during the three and six
        months ended May 31, 2009 (2008 - $25.0 million and $140.0 million).
    

    During the three months ended May 31, 2009, our revolving term loan
balance increased $16.8 million to $194.7 million (2008 - decreased $87.1
million) due to the final payment related to the Highstreet acquisition.
    Consolidated cash and cash equivalents of $348.0 million decreased by
$236.2 million from November 30, 2008 levels of $584.2 million (2008 -
decreased by $79.4 million) primarily due to an increase in investments
available for sale held by AGF Trust of $274.2 million.
    We have a six-year prime-rate-based revolving term loan facility to a
maximum of $300.0 million, of which $99.9 million was available to be drawn as
at May 31, 2009. Aside from cash held in the Trust Company Operations segment,
which is held to fund loans to clients and GIC maturities, AGF had $24.6
million of cash as at May 31, 2009 (May 31, 2008 - $40.7 million). The loan
facility will be available to meet future operational and investment needs. We
anticipate that cash flow from operations, together with the available loan
facility, will be sufficient in the foreseeable future to implement our
business plan, finance selling commissions, satisfy regulatory requirements,
service debt repayment obligations, meet capital spending needs and pay
quarterly dividends.

    Capital Management Activities

    We actively manage our capital to maintain a strong and efficient capital
base to maximize risk-adjusted returns to shareholders, invest in future
growth opportunities, including acquisitions, and to ensure that the
regulatory capital requirements are met for each of our subsidiary companies.
AGF's management of its capital and its capital requirements are detailed in
the section entitled 'Capital Management Activities' in the Company's Annual
MD&A as at November 30, 2008. There have been no material changes to the
management of capital or required regulatory amounts. Refer to Note 13 of the
Q2 2009 Financial Statements for details of capital measures at AGF Trust.

    Normal Course Issuer Bid

    In February 2009, the Company's Board of Directors authorized the renewal
of AGF's normal course issuer bid for the purchase of up to 7,108,630 Class B
shares, or 10% of the public float for such shares. The Company received
approval from the Toronto Stock Exchange on February 24, 2009, for the renewal
of its normal course issuer bid. This allows AGF to purchase up to 7,108,630
Class B shares through the facilities of the Toronto Stock Exchange (or as
otherwise permitted by the Toronto Stock Exchange) between February 26, 2009
and February 25, 2010. The Class B shares may be repurchased from time to time
at prevailing market prices or such other price as may be permitted by the
Toronto Stock Exchange.
    As at May 31, 2009, under this current normal course issuer bid, no Class
B shares have been repurchased. AGF's previous normal course issuer bid
allowed for the repurchase of up to 7,253,822 Class B shares between February
26, 2008, and February 25, 2009, at prevailing market prices. Under the
previous normal course issuer bid, AGF purchased an aggregate of 1,000,000
Class B shares, for a total consideration of $7.8 million at an average price
of $7.79 per share.

    Dividends

    For the three months ended May 31, 2009, we declared a 25-cents-per-share
dividend on Class A and Class B shares. This dividend will be payable on July
20, 2009, to shareholders of record on July 9, 2009.
    The holders of Class B shares are entitled to receive cash dividends.
Dividends are paid in equal amounts per share on all Class B and Class A
shares at the time outstanding, without preference or priority of one share
over another. No dividends may be declared if there is a default of a
condition of our loan facility or where such payment of dividends would create
a default.
    Our Board of Directors may determine that Class B shareholders shall have
the right to elect to receive part or all of such dividend in the form of a
stock dividend. They also determine whether a dividend in Class B shares is
substantially equal to a cash dividend. This determination is based on the
weighted average price at which the Class B shares traded on the Toronto Stock
Exchange during the 10 trading days immediately preceding the record date
applicable to such dividend.
    The following table sets forth the dividends paid by AGF on Class B and
Class A shares for the period indicated:


    
    -------------------------------------------------------------------------
    Years ended
     November 30          2009((*))    2008       2007       2006       2005
    -------------------------------------------------------------------------

    Per share           $  0.750   $  0.950   $  0.780   $  0.690   $  0.560
    -------------------------------------------------------------------------
    Percentage increase       NA        22%        13%        23%        37%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) The total of dividends paid in January and April 2009 and to be paid
        in July 2009.

    We review our dividend distribution policy on a quarterly basis, taking
into account our financial position, profitability, cash flow and other
factors considered relevant by our Board of Directors.

    Outstanding Share Data

    Set out below is our outstanding share data as at May 31, 2009 and May 31,
2008. For additional details, see Note 9 of the Q2 2009 Consolidated Financial
Statements.


    -------------------------------------------------------------------------
    As at May 31,                                         2009          2008
    -------------------------------------------------------------------------

    Shares
    Class A voting common shares                        57,600        57,600
    Class B non-voting shares                       88,822,218    89,372,650

    Stock Options
    Outstanding options                              6,089,149     4,053,698
    Exercisable options                              2,383,233     2,095,942
    -------------------------------------------------------------------------

    During the three and six months ended May 31, 2009, 94,143 and 153,670
Class B shares were issued through the dividend reinvestment plan.


    Selected Quarterly Information

    -------------------------------------------------------------------------
    ($ millions, except per
     share amounts)
    For the three-month           May 31,     Feb 28,    Nov. 30,    Aug. 31,
     period ended                   2009        2009        2008        2008
    -------------------------------------------------------------------------

    Revenue (continuing
     operations)              $    143.5  $    138.0  $    152.2  $    184.7
    Cash flow from
     continuing
     operations(1)                  44.7        46.7        57.5        66.2
    EBITDA (continuing
     operations)(2)                 49.0        42.8        54.0        81.5
    Pre-tax income
     (continuing operations)        23.0        16.3       (24.1)       51.3
    Net income                      17.2        12.2       (19.3)       41.1

    Earnings per share
      Basic                   $     0.19  $     0.14  $    (0.21) $     0.46
      Diluted                 $     0.19  $     0.14  $    (0.21) $     0.46

    Weighted average
     basic shares             88,826,605  88,564,160  89,446,562  89,451,578
    Weighted average fully
     diluted shares           89,234,015  88,564,160  90,679,048  89,870,475
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    ($ millions, except per
     share amounts)
    For the three-month           May 31,     Feb 29,    Nov. 30,    Aug. 31,
     period ended                   2008        2008        2007        2007
    -------------------------------------------------------------------------

    Revenue (continuing
     operations)              $    194.3  $    194.3  $    199.1  $    199.2
    Cash flow from
     operations(1)                  71.5        83.5        90.7        69.7
    EBITDA (continuing
     operations)(2)                 88.6        89.5        87.5        91.3
    Pre-tax income
     (continuing operations)        57.9        56.6        53.9        57.3
    Net income                      44.0        62.7        49.4        39.4

    Earnings per share
      Basic                   $     0.49  $     0.70  $     0.55  $     0.44
      Diluted                 $     0.49  $     0.70  $     0.54  $     0.43

    Weighted average
     basic shares             89,349,275  89,039,394  90,200,924  90,299,033
    Weighted average fully
     diluted shares           89,785,796  89,807,506  91,566,659  91,847,103
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Cash flow from operations before net change in non-cash balances
        related to operations.
    (2) For the definition of EBITDA, see the "Key Performance Indicators and
        Non-GAAP Measures" section.
    

    Additional Information

    Additional information relating to the Company can be found in our
Consolidated Financial Statements and accompanying Notes for the three and six
months ended May 31, 2009, our 2008 annual MD&A and Consolidated Financial
Statements, our 2008 Annual Information Form (AIF) and other documents filed
with applicable securities regulators in Canada. They may be accessed at
www.sedar.com.



    
                           AGF Management Limited
                         Consolidated Balance Sheets

    -------------------------------------------------------------------------
    As at                                               May 31,  November 30,
                                                          2009          2008
    ($ thousands)                                   (unaudited)     (audited)
    -------------------------------------------------------------------------

    Assets
      Current Assets
        Cash and cash equivalents                  $   348,010   $   584,168
        Investments available for sale (note 2(a))     470,715       188,435
        Accounts receivable, prepaid expenses and
         other assets                                   93,723        78,403
        Current portion of retained interest from
         securitization (note 3)                         2,868         5,487
        Real estate secured and investment loans
         due within one year (note 5)                  569,349       606,844
    -------------------------------------------------------------------------
                                                     1,484,665     1,463,337

      Retained interest from securitization
       (note 3)                                         39,384        39,460
      Real estate secured and investment loans
       (note 5)                                      3,493,670     3,824,006
      Investment in associated company (note 2(b))      93,872        98,338
      Management contracts                             504,269       504,269
      Customer contracts, net of accumulated
       amortization                                     16,747        18,783
      Goodwill                                         172,985       172,985
      Trademarks                                         1,935         1,935
      Deferred selling commissions, net of
       accumulated amortization                        288,860       304,406
      Property, equipment and computer software,
       net of accumulated amortization                  16,714        19,423
      Other assets (note 6)                             63,577        87,017
    -------------------------------------------------------------------------
    Total assets                                   $ 6,176,678   $ 6,533,959
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity
      Current Liabilities
        Accounts payable and accrued liabilities   $   268,060   $   306,834
        Future income taxes                             24,196        26,240
        Long-term debt due within one year (note 7)          -        21,171
        Deposits due within one year (note 5(f))     2,379,719     2,486,635
    -------------------------------------------------------------------------
                                                     2,671,975     2,840,880

      Deposits (note 5(f))                           2,044,268     2,275,426
      Long-term debt (note 7)                          194,654       123,740
      Future income taxes                              161,926       171,293
      Other long-term liabilities (note 8)               8,869        14,995
    -------------------------------------------------------------------------
    Total liabilities                                5,081,692     5,426,334
    -------------------------------------------------------------------------

      Non-controlling interest                             402           203

      Shareholders' equity
        Capital stock (note 9)                         434,814       431,897
        Contributed surplus                             18,803        17,127
        Retained earnings                              661,267       676,190
        Accumulated other comprehensive income         (20,300)      (17,792)
    -------------------------------------------------------------------------
    Total shareholders' equity                       1,094,584     1,107,422
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity     $ 6,176,678   $ 6,533,959
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (The accompanying notes are an integral part of these Consolidated
    Financial Statements.)



                           AGF Management Limited
                      Consolidated Statement of Income

    -------------------------------------------------------------------------
                       Three months ended May 31,    Six months ended May 31,
    ($ thousands)     -------------------------------------------------------
    (unaudited)               2009          2008          2009          2008
    -------------------------------------------------------------------------

    Revenue
      Management and
       advisory fees   $   105,242   $   153,957   $   207,895   $   310,374
      Deferred sales
       charges               5,533         6,047        11,582        12,222
      RSP loan
       securitization
       income (loss),
       net of impairment
       (note 3)                560          (672)         (981)           87
      Investment income
       and other revenue     6,516         9,941        10,809        18,140
    -------------------------------------------------------------------------
                           117,851       169,273       229,305       340,823
    -------------------------------------------------------------------------
        AGF Trust
         interest income
          (note 11)         58,580        76,003       125,319       152,755
        AGF Trust interest
         expense (note 11) (32,903)      (50,935)      (73,129)     (104,891)
    -------------------------------------------------------------------------
      Trust Company net
       interest income      25,677        25,068        52,190        47,864
    -------------------------------------------------------------------------
    Total Revenue          143,528       194,341       281,495       388,687
    -------------------------------------------------------------------------

    Expenses
      Selling, general
       and administrative   47,288        56,814       100,327       112,773
      Trailing commissions  29,907        41,609        57,453        83,445
      Investment advisory
       fees                  2,460         3,846         5,600         7,797
      Amortization of
       deferred selling
       commissions          21,076        24,799        43,365        50,853
      Amortization of
       customer contracts    1,263         1,817         2,036         3,969
      Amortization of
       property, equipment
       and computer
       software              1,891         1,832         3,753         3,493
      Interest expense       1,571         2,374         3,131         5,396
      Provision for AGF
       Trust loan losses
       (note 5(e))          14,885         3,399        26,353         6,461
    -------------------------------------------------------------------------
                           120,341       136,490       242,018       274,187

    Income before income
     taxes and non-
     controlling interest   23,187        57,851        39,477       114,500

    Income tax expense
     (reduction) (note 12)
      Current               14,484        12,362        21,081        24,468
      Future                (8,687)        1,291       (11,212)      (16,970)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                             5,797        13,653         9,869         7,498
    -------------------------------------------------------------------------

    Non-controlling
     interest (note 4)         134           151           200           296

    -------------------------------------------------------------------------
    Net income for the
     period            $    17,256   $    44,047   $    29,408   $   106,706
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
     (note 9(g))
      Basic            $      0.19   $      0.49   $      0.33   $     1.20
      Diluted          $      0.19   $      0.49   $      0.33   $     1.19
    -------------------------------------------------------------------------
    (The accompanying notes are an integral part of these Consolidated
    Financial Statements.)



                           AGF Management Limited
          Consolidated Statement of Changes in Shareholders' Equity

    -------------------------------------------------------------------------
                       Three months ended May 31,    Six months ended May 31,
    ($ thousands)     -------------------------------------------------------
    (unaudited)               2009          2008          2009          2008
    -------------------------------------------------------------------------

    Common shares
      Balance, beginning
       of period       $   432,478   $   431,393   $   431,897   $   421,923
      Issued through
       dividend
       reinvestment plan       800         2,637         1,381         3,170
      Stock options
       exercised                 -           591             -         4,412
      Issued on
       acquisition of
       Highstreet
       Partners Limited
       (note 4)              1,536             -         1,536         5,116
    -------------------------------------------------------------------------
      Balance, end of
       period              434,814       434,621       434,814       434,621
    -------------------------------------------------------------------------

    Contributed surplus
      Balance, beginning
       of period            17,978        13,818        17,127        14,948
      Stock options            825         1,144         1,676            14
    -------------------------------------------------------------------------
      Balance, end of
       period               18,803        14,962        18,803        14,962
    -------------------------------------------------------------------------

    Retained earnings
      Balance, beginning
       of period           666,208       680,222       676,190       635,369
      Net income for
       the period           17,256        44,047        29,408       106,706
      Dividends on AGF
       Class A voting
       common shares and
       AGF Class B
       non-voting shares   (22,197)      (22,322)      (44,331)      (40,128)
    -------------------------------------------------------------------------
      Balance, end of
       period              661,267       701,947       661,267       701,947
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive income
     (loss)
      Balance, beginning
       of period           (22,657)      (10,621)      (17,792)       (3,238)
      Other comprehensive
       income (loss)         2,357           177        (2,508)       (7,206)
    -------------------------------------------------------------------------
      Balance, end of
       period              (20,300)      (10,444)      (20,300)      (10,444)
    -------------------------------------------------------------------------

    Total shareholders'
     equity            $ 1,094,584   $ 1,141,086   $ 1,094,584   $ 1,141,086
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (The accompanying notes are an integral part of these Consolidated
    Financial Statements.)



                           AGF Management Limited
               Consolidated Statement of Comprehensive Income

    -------------------------------------------------------------------------
                       Three months ended May 31,    Six months ended May 31,
    ($ thousands)     -------------------------------------------------------
    (unaudited)               2009          2008          2009          2008
    -------------------------------------------------------------------------

    Net income         $    17,256   $    44,047   $    29,408   $   106,706
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Other comprehensive
     income (losses),
     net of tax
      Foreign currency
       translation
       adjustments
       related to net
       investments in
       self-sustaining
       foreign
       operations(1)        (1,935)          875        (5,642)       (3,976)
    -------------------------------------------------------------------------
                            (1,935)          875        (5,642)       (3,976)
    -------------------------------------------------------------------------
    Net unrealized gains
     (losses) on
     available for
     sale securities
      Unrealized gains
       (losses)(2)           4,118          (721)        2,660        (2,164)
      Reclassification
       of realized loss
       or other than
       temporary
       impairment to
       earnings                116           (77)          350           (77)
    -------------------------------------------------------------------------
                             4,234          (798)        3,010        (2,241)
    -------------------------------------------------------------------------
    Net unrealized gains
     (losses) on cash
     flow hedges
      Unrealized gains
       (losses)(3)               -          (148)            -        (1,237)
      Reclassification of
       realized gain on
       cash flow hedges         58           248           124           248
    -------------------------------------------------------------------------
                                58           100           124          (989)
    -------------------------------------------------------------------------
    Total other
     comprehensive
     income (loss),
     net of tax        $     2,357   $       177   $    (2,508)  $    (7,206)
    -------------------------------------------------------------------------

    Comprehensive
     income            $    19,613   $    44,224   $    26,900   $    99,500
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Net of income tax reduction of $0.4 million and $1.0 million for
        the three and six months ended May 31, 2009. Net of income tax
        expense of $0.1 million and net of income tax reduction of
        $0.7 million for the three and six months ended May 31, 2008.
    (2) Net of income tax expense of $1.6 million and $0.6 million for the
        three and six months ended May 31, 2009. Net of income tax reduction
        of $0.3 million and $0.5 million for the three and six months ended
        May 31, 2008.
    (3) Net of income tax reduction of $0.1 million and $0.6 million for the
        three and six months ended May 31, 2008.

    (The accompanying notes are an integral part of these Consolidated
    Financial Statements.)



                           AGF Management Limited
                    Consolidated Statements of Cash Flow

    -------------------------------------------------------------------------
                       Three months ended May 31,    Six months ended May 31,
    ($ thousands)     -------------------------------------------------------
    (unaudited)               2009          2008          2009          2008
    -------------------------------------------------------------------------

    Operating Activities
      Net income for
       the period      $    17,256   $    44,047   $    29,408   $   106,706
      Items not
       affecting cash
        Amortization        24,230        28,448        49,154        58,315
        Future income
         taxes              (8,687)        1,291       (11,212)      (16,970)
        RSP loan
         securitization
         income (loss),
         net of impairment    (560)          672           981           (87)
        Provision for
         AGF Trust loan
         losses             14,885         3,399        26,353         6,461
        Stock-based
         compensation        1,495         2,100         2,806         4,459
        Equity investment
         in S&WHL           (2,261)       (4,797)       (3,259)       (6,605)
        Dividends from
         S&WHL                   -             -         1,031         1,116
        Other               (1,629)       (3,669)       (3,819)        1,564
    -------------------------------------------------------------------------
                            44,729        71,491        91,443       154,959
      Net change in
       non-cash balances
       related to
       operations (note 10)  7,316       103,383       (33,417)       32,078
    -------------------------------------------------------------------------
      Net cash provided
       by operating
       activities           52,045       174,874        58,026       187,037
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Financing Activities
      Issue of Class B
       non-voting shares         -           492             -         1,902
      Dividends            (21,397)      (19,685)      (42,950)      (36,958)
      Increase in bank
       loan                 16,838       (87,139)       70,914        12,076
      Net increase
       (decrease) in AGF
       Trust deposits     (290,118)      324,594      (333,952)      594,123
    -------------------------------------------------------------------------
      Net cash provided by
       (used in) financing
       activities         (294,677)      218,262      (305,988)      571,143

    Investing Activities
      Deferred selling
       commissions paid    (15,387)      (27,902)      (27,905)      (54,668)
      Proceeds from sale
       of discontinued
       operations              702             -           702             -
      Acquisition of
       subsidiaries, net
       of cash acquired    (19,924)            -       (19,924)      (20,784)
      Purchase of property,
       equipment and
       computer software      (334)       (1,202)       (1,044)       (2,743)
      Purchase of
       investments available
       for sale           (264,594)      (21,597)     (278,041)     (141,282)
      Net (decrease)
       increase in AGF
       Trust real estate
       secured and
       investment loans    247,224      (284,316)      338,016      (618,086)
    -------------------------------------------------------------------------
      Net cash provided by
       (used in) investing
       activities          (52,313)     (335,017)       11,804      (837,563)
    -------------------------------------------------------------------------

    Increase (decrease) in
     cash and cash
     equivalents          (294,945)       58,119      (236,158)      (79,383)

    Balance of cash and
     cash equivalents,
     beginning of period   642,955       690,372       584,168       827,874
    -------------------------------------------------------------------------

    Balance of cash and
     cash equivalents,
     end of period     $   348,010   $   748,491   $   348,010   $   748,491
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Represented by:
      Cash and cash
       equivalents                                 $    24,558   $    40,726
      AGF Trust cash and cash equivalents              323,452       707,765
    -------------------------------------------------------------------------
                                                   $   348,010   $   748,491
    -------------------------------------------------------------------------
    Refer to Note 10 for supplemental cash flow information.

    (The accompanying notes are an integral part of these Consolidated
    Financial Statements.)



    Notes to Consolidated Financial Statements

    For the three and six months ended May 31, 2009 (tabular amounts in
    thousands of dollars, except per share amounts) (unaudited)

    These unaudited Q2 2009 Consolidated Financial Statements of AGF
    Management Limited (AGF or the Company) have been prepared in accordance
    with Canadian generally accepted accounting principles (GAAP), using the
    same significant accounting policies as AGF's Consolidated Financial
    Statements for the year ended November 30, 2008. These financial
    statements do not contain all the disclosures required by Canadian GAAP
    for annual financial statements and should be read in conjunction with
    the Consolidated Financial Statements for the year ended November 30,
    2008. Certain comparative amounts in these financial statements have been
    reclassified to conform to the current year's presentation.

    Note 1: Changes in Accounting Policy

    Goodwill, Intangible Assets and Financial Statement Concepts

    Effective December 1, 2008, the CICA's new accounting standard "Handbook
    Section 3064, Goodwill and Intangible Assets" was adopted. The standard
    clarifies that costs can be deferred only when they relate to an item
    that meets the definition of an asset, and as a result, start-up costs
    must be expensed as incurred. "Section 1000, Financial Statements
    Concepts" was also amended to provide consistency with Section 3064.
    These standards did not have any impact on the financial position or
    earnings of the Company.

    Credit Risk and Fair Value

    Effective December 1, 2008, EIC-173 "Credit Risk and the Fair Value of
    Financial Assets and Financial Liabilities" was adopted. EIC-173 requires
    the Company's own credit risk and the credit risk of the counterparty to
    be taken into account in determining the fair value of financial assets
    and financial liabilities, including derivatives. The new guidance did
    not have a material effect on the financial position or earnings of the
    Company.

    Future Accounting Changes

    Conversion to International Financial Reporting Standards in Fiscal 2012

    In February 2008, the Canadian Accounting Standards Board (AcSB)
    confirmed that all Canadian publicly-accountable enterprises will be
    required to adopt International Financial Reporting Standards (IFRS) for
    years beginning on or after January 1, 2011. AGF will adopt IFRS for the
    year beginning December 1, 2011 and will present the interim and annual
    consolidated financial statements including comparative prior year
    financial statements in accordance with IFRS.

    AGF is currently assessing the differences between IFRS and GAAP, as well
    as the alternatives available upon adoption. The impact these differences
    may have on the financial results has not yet been determined and will be
    an ongoing process as the International Accounting Standards Board and
    the AcSB issue new standards and recommendations.

    Note 2: Investments Available for Sale and Investment in S&WHL

    (a) The following table presents a breakdown of available for sale
        investments, excluding retained interest from securitization:


    -------------------------------------------------------------------------
                                                        May 31,  November 30,
    ($ thousands)                                         2009          2008
    -------------------------------------------------------------------------

    Trust:
      Canadian government debt(1)
       debt(1)
        Federal                                     $   10,258    $   10,233
        Provincial                                     239,255        45,767
      Deposits with regulated institutions              85,629        83,498
      Other securities                                 110,068        28,992
    -------------------------------------------------------------------------
                                                       445,210       168,490

    Investment Management:
      Canadian government debt
        Federal                                            296           294
      AGF mutual funds and other                        19,418        15,013
      Equity securities                                  5,791         4,638
    -------------------------------------------------------------------------
                                                        25,505        19,945

    -------------------------------------------------------------------------
                                                    $  470,715    $  188,435
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes investments issued and/or guaranteed by the Canadian
        government

    (b) The Company holds a 30.3% investment in S&WHL accounted for using the
        equity method. At May 31, 2009, the carrying value was $93.9 million
        (November 30, 2008 - $98.3 million). During the three and six months
        ended May 31, 2009, the Company recognized $2.3 million and
        $3.3 million (2008 - $4.8 million and $6.6 million) in revenue from
        S&WHL. During the first quarter of 2009, the Company received
        $1.0 million in dividends (2008 - $1.1 million) from S&WHL. No
        dividends were received from S&WHL during the second quarter of 2009.

    Note 3: Securitization of AGF Trust Loans

    On March 30, 2007, AGF Trust securitized $263.6 million of RSP loans.
    Cash flows of $252.9 million were received on the securitization and a
    gain of $8.0 million was recorded, net of transaction fees of
    $0.1 million. As at May 31, 2009, $133.6 million (November 30, 2008 -
    $166.6 million) of securitized loans were outstanding.

    When RSP loan receivables are sold in securitization to a securization
    trust under terms that transfer control to third parties, the transaction
    is recognized as a sale and the related loan assets are removed from the
    Consolidated Balance Sheet. As part of the securitization, certain
    financial assets are retained. The retained interests are carried at fair
    value and are determined using the present value of future expected cash
    flows. A gain or loss on the sale of loan receivables is recognized
    immediately in income. The amount of the gain or loss is determined by
    estimating the fair value of future expected cash flows using
    management's best estimates of key assumptions: excess spread, discount
    rate on the interest-only strip, expected credit losses, prepayment rates
    and the expected weighted average life of RSP loans that are commensurate
    with the risks involved. The current fair value of retained interests is
    determined using the present value of future expected cash flows as
    discussed above. During the three and six months ended May 31, 2009, a
    $0.3 million and $2.8 million writedown was booked as an other than
    temporary impairment (2008 - $1.5 million and $1.7 million).

    The Company has recorded retained interests of $42.3 million (November
    30, 2008 - $44.9 million) made up of i) the rights to future excess
    interest on these RSP loans after investors in the securitization trust
    have received the return for which they contracted, valued at
    $8.7 million (November 30, 2008 - $12.4 million), ii) cash collateral of
    $12.5 million (November 30, 2008 - $12.0 million) and iii) over-
    collateralization of $21.0 million (November 30, 2008 - $20.5 million).

    As at May 31, 2009, the impaired loans included in the securitized
    balances were equal to $0.3 million (November 30, 2008 - $0.2 million),
    and during the three and six months ended May 31, 2009, $0.8 million and
    $1.5 million of securitized RSP loans were written off (2008 -
    $0.9 million and $1.6 million).

    The Company's claim on the retained interests is subordinate to
    investors' interests. Recourse available to investors and the
    securitization trust are limited to the retained interests. For the three
    months ended May 31, 2009, cash flows of $1.3 million (2008 -
    $1.9 million) related to the interest-only strip were received on the
    securitized loans. For the six months ended May 31, 2009, cash flows of
    $2.9 million (2008 - $4.2 million) related to the interest-only strip
    were received on the securitized loans. The total other income recognized
    from securitization, net of securitization writedown, during the three
    months ended May 31, 2009, was $0.6 million (2008 - $0.7 million loss).
    The total other loss recognized from securitization, net of
    securitization writedown, during the six months ended May 31, 2009, was
    $1.0 million (2008 - $0.1 million income).

    The significant assumptions used to value the retained interests were as
    follows:


       Excess spread                                        4.6% - 4.8%
       Discount rate on interest-only strip                 7.5%
       Expected credit losses                               1.7% - 2.0%
       Prepayment rate                                      16.3% - 18.3%
       Expected weighted average life of RSP loans          1.9 years

    AGF Trust retained servicing responsibilities for the securitized loans.
    A servicing liability of $0.8 million was recorded as at May 31, 2009
    (November 30, 2008 - $1.1 million). This amount represents the estimated
    future cost of servicing the securitized loans. The amount amortized
    related to the servicing liability during the three and six months ended
    May 31, 2009 was $0.1 million (2008 - $0.2 million) and $0.3 million
    (2008 - $0.4 million).

    The following table presents key economic assumptions and the sensitivity
    of the current fair value of retained intereststo two adverse changes in
    each key assumption as at May 31, 2009. Since the sensitivity is
    hypothetical, it should be used with caution. The effect of changes in
    the fair value of retained interests was calculated using a discounted
    cash flow analysis.


    -------------------------------------------------------------------------
                                                     Impact on fair value of
    ($ thousands)                                         retained interests
    -------------------------------------------------------------------------

    Discount rate
      +10%                                                        $      (65)
      +20%                                                              (129)
    Prepayment rate
      +10%                                                        $     (112)
      +20%                                                              (208)
    Expected credit losses
      +10%                                                        $     (429)
      +20%                                                              (858)
    Excess spread
      -10%                                                        $     (899)
      -20%                                                            (1,795)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 4: Acquisition of Highstreet Partners Limited

    On December 1, 2006, AGF acquired 79.9% of Highstreet Partners Limited
    (Highstreet). The purchase consideration was payable in a combination of
    cash and the issue of Class B non-voting shares (Class B shares). On
    March 2, 2009, a final payment of $21.5 million was paid, consisting of
    $20.0 million in cash and the issuance of 188,444 Class B shares valued
    at $1.5 million. The total consideration paid, including acquisition
    costs and imputed interest, was $65.4 million in cash and the issuance of
    629,443 Class B shares valued at $12.3 million. In addition, a contingent
    consideration will be paid in 2010 if certain financial profitability
    targets are achieved by Highstreet. At this time, the amount of the
    contingent consideration is not determinable.

    Note 5: AGF Trust

    AGF Trust's principal business activities are originating real estate
    secured loans and investment loans and deposit taking. Details relating
    to these activities are as follows:


    -------------------------------------------------------------------------
                        Term to contractual repricing
                      -------------------------------------------------------
                        Variable  1 year or     1 to 5        May   November
    ($ thousands)           rate       less      years   31, 2009   30, 2008
    -------------------------------------------------------------------------

    Mortgage loans    $    1,566 $  516,605 $  738,704 $1,256,875 $1,394,499
    Home equity lines
     of credit (HELOC)   547,320          -          -    547,320    651,893
    -------------------------------------------------------------------------
    Total real estate
     secured loans       548,886    516,605    738,704  1,804,195  2,046,392
    Investment loans   2,292,543      3,677      4,176  2,300,396  2,411,968
                      -------------------------------------------------------
    Total loans        2,841,429    520,282    742,880  4,104,591  4,458,360
                      ---------------------------------
    Less: allowance
     for loan losses                                      (49,210)   (37,130)
    Add: net deferred
     sales commissions
     and commitment fees                                    7,638      9,620
                                                      -----------------------
                                                        4,063,019  4,430,850
    Less: current portion                                (569,349)  (606,844)
                                                      -----------------------
                                                       $3,493,670 $3,824,006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Real Estate Secured and Investment Loans

        The table represents the period of contractual repricing of interest
        rates on outstanding amounts. Principal repayments due on real estate
        and investment loans due within one year as at May 31, 2009 were
        $569.3 million (November 30, 2008 - $606.8 million).

        As at May 31, 2009, AGF Trust's mortgage portfolio comprises a
        combination of fixed rate and variable rate residential mortgages
        with a weighted average term to repricing of 1.9 years (November 30,
        2008 - 2.0 years) and a weighted average yield of 6.9% (November 30,
        2008 - 7.1%). Insured mortgage loans, excluding loan loss allowance,
        deferred commissions and pending representment, were $572.4 million
        as at May 31, 2009 (November 30, 2008 - $616.6 million). Investment
        loans have interest rates based on prime. As at May 31, 2009, the
        average interest rate on HELOCs was 4.2% (November 30, 2008 - 4.5%)
        and on investment loans was 4.4% (November 30, 2008 - 5.8%). Mortgage
        and HELOC loans are secured primarily by residential real estate.
        Investment loans, excluding RSP loans, of $1.8 billion (November 30,
        2008 - $1.8 billion), are secured primarily by the investment made
        using the initial loan proceeds. The market value of this investment
        loan collateral is approximately $1.3 billion (November 30, 2008 -
        $1.2 billion).

    (b) Loans by Province and by Type

        The following tables are a breakdown of the total value and total
        number of loans by province and by type:


    -------------------------------------------------------------------------
    As at               Conven-  Secured
     May 31,   Insured   tional  Invest-             HELOC
     2009 ($  Mortgage Mortgage     ment      RSP  Receiv-  Finance
     millions)   Loans    Loans    Loans    Loans    ables    Loans    Total
    -------------------------------------------------------------------------

    British
     Columbia $  11.3  $  42.7  $  333.9  $  48.9  $  64.3   $ 0.4  $  501.5
    Alberta      66.2    186.7     214.3     52.1    383.9     2.1     905.3
    Ontario     352.9    293.4     864.3    180.5     44.5     1.3   1,736.9
    Quebec      142.0    161.7     130.3    189.7      0.3     1.9     625.9
    Other           -        -     235.2     43.3     54.3     2.2     335.0
    -------------------------------------------------------------------------
    Total
     value of
     loans    $ 572.4  $ 684.5  $1,778.0  $ 514.5  $ 547.3   $ 7.9  $4,104.6
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at               Conven-  Secured
     May 31,   Insured   tional  Invest-             HELOC
     2009     Mortgage Mortgage     ment      RSP  Receiv-  Finance
                 Loans    Loans    Loans    Loans    ables    Loans    Total
    -------------------------------------------------------------------------

    British
     Columbia      63      178     4,891    5,311      270     193    10,906
    Alberta       814    1,099     3,697    4,422    1,691     844    12,567
    Ontario     2,292    1,763    13,785   19,803      250     438    38,331
    Quebec        308      869     2,387   17,611        5     709    21,889
    Other           -        -     3,397    3,769      366   1,031     8,563
    -------------------------------------------------------------------------
    Total
     number of
     loans      3,477    3,909    28,157   50,916    2,582   3,215    92,256
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at
     Novem-             Conven-  Secured
     ber 30,   Insured   tional  Invest-             HELOC
     2008 ($  Mortgage Mortgage     ment      RSP  Receiv-  Finance
     millions)   Loans    Loans    Loans    Loans    ables    Loans    Total
    -------------------------------------------------------------------------

    British
     Columbia $  12.8  $  48.2  $  340.2  $  57.8  $  84.7   $ 0.6  $  544.3
    Alberta      68.1    214.6     217.9     59.8    446.0     3.0   1,009.4
    Ontario     388.3    335.9     879.9    216.1     60.9     2.0   1,883.1
    Quebec      147.4    179.2     132.5    208.1      0.3     2.6     670.1
    Other           -        -     240.1     48.5     60.0     2.9     351.5
    -------------------------------------------------------------------------
    Total
     value of
     loans    $ 616.6  $ 777.9  $1,810.6  $ 590.3  $ 651.9   $11.1  $4,458.4
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at
     Novem-             Conven-  Secured
     ber 30,   Insured   tional  Invest-             HELOC
     2008     Mortgage Mortgage     ment      RSP  Receiv-  Finance
                 Loans    Loans    Loans    Loans    ables    Loans    Total
    -------------------------------------------------------------------------

    British
     Columbia      66      201     4,944    6,985      354     244    12,794
    Alberta       327      997     3,735    5,551    1,990   1,020    13,620
    Ontario     2,518    2,000    13,930   25,198      327     543    44,516
    Quebec        834    1,221     2,411   19,939        5     857    25,267
    Other           -        -     3,452    4,488      407   1,193     9,540
    -------------------------------------------------------------------------
    Total
     number of
     loans      3,745    4,419    28,472   62,161    3,083   3,857   105,737
    -------------------------------------------------------------------------

    (c) Loans Past Due but Not Impaired

        Loans are considered to be past due where repayment of principal or
        interest is contractually in arrears. Loans are classified as
        impaired when, in the opinion of management, there is reasonable
        doubt as to the collectability, either in whole or in part, of
        principal or interest, or when principal or interest is 90 days past
        due, except where the loan is both well-secured and in the process of
        collection. As at May 31, 2009, impaired loans were $60.9 million
        (November 30, 2008 - $45.4 million) and $37.8 million (November 30,
        2008 - $31.3 million) net of the specific allowance for loan losses.


    -------------------------------------------------------------------------
                                                        May 31,  November 30,
    ($ thousands)                                         2009          2008
    -------------------------------------------------------------------------

    Impaired Loans:
      Insured mortgage loans                        $    6,063    $    5,483
      Conventional mortgage loans                       41,559        33,628
      Secured investment loans                           2,256           988
      RSP loans                                         10,273         4,846
      HELOC receivables                                    703           478
    -------------------------------------------------------------------------
                                                    $   60,854    $   45,423
    -------------------------------------------------------------------------

    The following table provides an aging of loans:


    -------------------------------------------------------------------------
    As at May 31, 2009                                 1 to 29      30 to 60
    ($ thousands)                        Current          days          days
    -------------------------------------------------------------------------

    Insured mortgage loans            $  494,746    $   36,394    $    9,796
    Conventional mortgage loans          569,157        50,993        15,826
    Secured investment loans           1,751,481        18,287         3,482
    RSP loans                            495,045         7,172         4,942
    HELOC receivables                    541,911         2,826         1,224
    Finance loans                          7,853             -             -
    -------------------------------------------------------------------------
                                      $3,860,193    $  115,672    $   35,270
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at May 31, 2009                  61 to 90       Over 90
    ($ thousands)                           days          days         Total
    -------------------------------------------------------------------------

    Insured mortgage loans            $    4,076    $   27,421    $  572,433
    Conventional mortgage loans            6,870        41,596       684,442
    Secured investment loans               2,866         1,901     1,778,017
    RSP loans                              1,832         5,535       514,526
    HELOC receivables                        620           739       547,320
    Finance loans                              -             -         7,853
    -------------------------------------------------------------------------
                                      $   16,264    $   77,192    $4,104,591
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at November 30, 2008                            1 to 29      30 to 60
    ($ thousands)                        Current          days          days
    -------------------------------------------------------------------------

    Insured mortgage loans            $  551,772    $   29,567    $    6,085
    Conventional mortgage loans          670,763        53,741        12,176
    Secured investment loans           1,790,788        15,284         2,220
    RSP loans                            574,049         9,958         4,435
    HELOC receivables                    646,891         3,847           658
    Finance loans                         11,061             -             -
    -------------------------------------------------------------------------
                                      $4,245,324    $  112,397    $   25,574
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at November 30, 2008             61 to 90       Over 90
    ($ thousands)                           days          days         Total
    -------------------------------------------------------------------------

    Insured mortgage loans            $    3,313    $   25,878    $  616,615
    Conventional mortgage loans            7,537        33,668       777,885
    Secured investment loans               1,510           790     1,810,592
    RSP loans                              1,120           752       590,314
    HELOC receivables                          -           497       651,893
    Finance loans                              -             -        11,061
    -------------------------------------------------------------------------
                                      $   13,480    $   61,585    $4,458,360
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (d) Mortgages in Legal Action

        The following table provides a summary of conventional mortgages in
        legal action which includes demand for payment, power of sale and
        foreclosures. The table details opening mortgages in legal action for
        the period and related changes to the pool, being additions,
        discharged mortgages other than sold, proceeds on foreclosed
        mortgages discharged and related losses, to arrive at the ending
        balance of mortgages in legal action.


    -------------------------------------------------------------------------
    Six months ended May 31,                              2009          2008
    ($ thousands)
    -------------------------------------------------------------------------

    Balance outstanding, beginning of the period    $   44,987    $   35,070
      Additions                                         27,058        19,730
      Discharged mortgages other than sold             (11,425)      (16,165)
      Proceeds on foreclosed mortgages discharged       (9,518)       (4,179)
      Loss on foreclosed mortgages discharged           (1,049)         (483)
    -------------------------------------------------------------------------
                                                    $   50,053    $   33,973
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (e) Allowance for Credit Losses

        During 2008, as a result of economic and market indicators, the
        Company refined its provision for specific allowances to include
        loans in arrears of one to 90 days in addition to impaired loans. The
        change in the allowance for loan losses is as follows:


    -------------------------------------------------------------------------
    Six months ended May 31, 2009       Specific       General         Total
    ($ thousands)                     allowances    allowances    allowances
    -------------------------------------------------------------------------

    Balance, beginning of the period  $   14,163    $   22,967    $   37,130
    Amounts written off                  (15,020)            -       (15,020)
    Recoveries                               747             -           747
    Provision for loan losses             23,216         3,137        26,353
    -------------------------------------------------------------------------
                                      $   23,106    $   26,104    $   49,210
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Breakdown by category as at
     May 31, 2009:
      Conventional mortgage loans     $    6,359    $    7,453    $   13,812
      Secured investment loans             3,690         6,884        10,574
      RSP loans                           12,995        10,427        23,422
      HELOCs receivables                      62         1,340         1,402
    -------------------------------------------------------------------------
                                      $   23,106    $   26,104    $   49,210
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Six months ended May 31, 2008       Specific       General         Total
    ($ thousands)                     allowances    allowances    allowances
    -------------------------------------------------------------------------

    Balance, beginning of the period  $    1,860    $   15,277    $   17,137
    Amounts written off                   (3,915)            -        (3,915)
    Recoveries                               414             -           414
    Provision for loan losses              3,676         2,785         6,461
    -------------------------------------------------------------------------
                                      $    2,035    $   18,062    $   20,097
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Breakdown by category as at
     May 31, 2008:
      Conventional mortgage loans     $    1,139    $    7,572    $    8,711
      Secured investment loans               103         4,218         4,321
      RSP loans                              793         4,884         5,677
      HELOC receivables                        -         1,388         1,388
    -------------------------------------------------------------------------
                                      $    2,035    $   18,062    $   20,097
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (f) AGF Trust Deposits


    -------------------------------------------------------------------------
                             Term to maturity
                  -----------------------------------
                               1 year or      1 to 5         May    November
    ($ thousands)     Demand        less       years    31, 2009    30, 2008
    -------------------------------------------------------------------------

    Deposits      $    5,389  $2,374,330  $2,056,182  $4,435,901  $4,776,511
    Less: deferred
     selling
     commissions                                         (11,914)    (14,450)
    Less: current
     portion                                          (2,379,719) (2,486,635)
    -------------------------------------------------------------------------
    Long-term deposits                                $2,044,268  $2,275,426
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        As at May 31, 2009, deposits were substantially comprised of GICs
        with a weighted average term to maturity of 1.3 years (November 30,
        2008 - 1.4 years) and a weighted average interest rate of 3.94%
        (November 30, 2008 - 4.22%). Approximately 8.5% of deposits mature
        within 90 days (November 30, 2008 - 11.7%).

    (g) Interest Rate Swaps

        To hedge its exposure to fluctuating interest rates, AGF Trust has
        entered into interest rate swap transactions with four Canadian
        chartered banks, as noted below. The swap transactions expire between
        June 2009 and October 2012. They involve the exchange of either the
        one-month bankers' acceptance (BA) rate or the three-month BA rate to
        receive fixed interest rates. The swap contracts designated as fair
        value hedging instruments for deposits are used by AGF Trust for
        balance sheet matching purposes and to mitigate net interest revenue
        volatility. As at May 31, 2009, the aggregate notional amount of the
        swap transactions was $2.6 billion (November 30, 2008 -
        $3.2 billion). The aggregate fair value of the swap transactions,
        which represents the amount that would be received by AGF Trust if
        the transactions were terminated at May 31, 2009, was $78.2 million
        (November 30, 2008 - $85.0 million).


    -------------------------------------------------------------------------
                                                              Fixed interest
    Notional amount of swap      Fair value   Maturity date    rate received
    -------------------------------------------------------------------------
         ($ thousands)         ($ thousands)
          $ 1,022,000           $     7,602        2009        0.70% - 4.97%
              945,000                32,204        2010        0.84% - 5.05%
              445,000                27,968        2011        0.85% - 5.08%
              160,000                10,468        2012        1.60% - 5.01%
    -------------------------------------------------------------------------

    Note 6: Other Assets


    -------------------------------------------------------------------------
                                                        May 31,  November 30,
    ($ thousands)                                         2009          2008
    -------------------------------------------------------------------------
    Long-term portion of derivatives used to manage
     interest rate exposure                         $   60,188    $   85,097
    Other                                                3,389         1,920
    -------------------------------------------------------------------------
                                                    $   63,577    $   87,017
    -------------------------------------------------------------------------

    The current portion of derivatives used to manage interest rate exposure
    is included under accounts receivable and prepaid expenses. As at May 31,
    2009, the current portion was $18.1 million (November 30, 2008 - nil).
    Refer to Note 5(g) for details on the derivatives used to manage interest
    rate exposure. Refer to Note 14 for further details of the Company's
    derivative instruments.

    Note 7: Long-Term Debt


    -------------------------------------------------------------------------
                                                        May 31,  November 30,
    ($ thousands)                                         2009          2008
    -------------------------------------------------------------------------
    Revolving term loan                             $  194,654    $  123,740
    Payment related to acquisition of Highstreet
     Partners Limited (note 4)                               -        21,171
    -------------------------------------------------------------------------
                                                       194,654       144,911

    Less: amount included in current liabilities             -        21,171
    -------------------------------------------------------------------------
                                                    $  194,654    $  123,740
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Revolving Term Loan

        The Company has arranged a six-year prime-rate-based revolving term
        loan to a maximum of $300.0 million (November 30, 2008 - $300.0
        million) with a Canadian chartered bank. Under the loan agreement,
        AGF is permitted to draw down the revolving term loan by direct
        advances and/or bankers' acceptances (BAs). The revolving term loan
        is available at any time for a period of 364 days from commencement
        of the loan (the commitment period). The expiration of the current
        commitment period is July 31, 2009. However, AGF may request within
        75 to 90 days prior to the end of the commitment period a
        recommencement of the six-year term at the expiry of the then-current
        commitment period. As at May 31, 2009, AGF has requested a
        recommencement of the loan. No repayment of the principal amount
        outstanding pursuant to the revolving term loan is required during
        the first three years of the then applicable term. Thereafter, the
        loan balance shall be repaid in minimum monthly instalments of at
        least one-thirty-sixth of the amount of principal outstanding. As at
        May 31, 2009, AGF has drawn $194.7 million (November 30, 2008 -
        $177.8 million) against the facility in the form of three to 32 day
        BAs at an effective average interest rate of 2.3% (November 30, 2008
        - 2.9%) per annum.

        Security for the bank loans include a specific claim over the
        management fees owing from the mutual funds (subject to the existing
        claims of related limited partnerships) for which AGF acts as manager
        and a pledge of assets by AGF Management Limited and certain
        subsidiaries, including AGF Funds Inc. and 20/20 Financial
        Corporation.

    (b) Payments Due Related to Acquisition of Highstreet Partners Limited

        On December 1, 2006, AGF acquired 79.9% of Highstreet (refer to Note
        4). On March 2, 2009, a final payment of $21.5 million was paid. The
        payment consisted of $20.0 million in cash and the issuance of
        188,444 Class B shares valued at $1.5 million.

    Note 8: Other Long-term Liabilities


    -------------------------------------------------------------------------
                                                        May 31,  November 30,
    ($ thousands)                                         2009          2008
    -------------------------------------------------------------------------

    Long-term portion of derivative used to manage
     changes in share-based compensation            $    3,550    $    7,755
    Long-term compensation liabilities                     408         2,668
    Long-term portion of Elements Advantage              3,110         3,808
    Other                                                1,801           764
    -------------------------------------------------------------------------
                                                    $    8,869    $   14,995
    -------------------------------------------------------------------------

    The current portion of the derivative used to manage changes in share-
    based compensation is included under accounts payable and accrued
    liabilities. As at May 31, 2009, the current portion was $2.3 million
    (November 30, 2008 - nil). The notional amount of the derivative used to
    manage share-based compensation is $10.3 million or 334,457 share units
    and matures in 2010. Refer to Note 14 for further details on the
    Company's derivative instruments.

    The current portion of the Elements Advantage liability is included under
    accounts payable and accrued liabilities. As at May 31, 2009, the current
    portion was $4.8 million (November 30, 2008 - $4.0 million).

    Note 9: Capital Stock

    (a) Authorized Capital

        The authorized capital of AGF consists of an unlimited number of AGF
        Class B non-voting common shares (Class B shares) and an unlimited
        number of AGF Class A voting common shares (Class A shares). The
        Class B shares are listed for trading on the Toronto Stock Exchange.

    (b) Change During the Period

        The change in capital stock is summarized as follows:


    -------------------------------------------------------------------------
    Six months ended May 31,             2009                    2008
                                ---------------------------------------------
    ($ thousands, except                      Stated                  Stated
     share amounts)               Shares       value      Shares       value
    -------------------------------------------------------------------------

    Class A shares                57,600  $        -      57,600  $        -
    -------------------------------------------------------------------------

    Class B shares
      Balance, beginning
       of period              88,480,104  $  431,897  88,922,157  $  421,923
      Issued through dividend
       reinvestment plan         153,670       1,381     134,460       3,170
      Stock options exercised          -           -     100,150       4,412
      Issued on acquisition
       of Highstreet Partners
       Limited (note 4)          188,444       1,536     215,883       5,116
    -------------------------------------------------------------------------
      Balance, end of period  88,822,218  $  434,814  89,372,650  $  434,621
    -------------------------------------------------------------------------

    (c) Class B Shares Purchased for Cancellation

        AGF has obtained applicable regulatory approval to purchase for
        cancellation, from time to time, certain of its Class B shares
        through the facilities of the Toronto Stock Exchange (or as otherwise
        permitted by the Toronto Stock Exchange). Under its normal course
        issuer bid, AGF may purchase up to 10% of the public float
        outstanding on the date of the receipt of regulatory approval or up
        to 7,108,630 shares through to February 25, 2010. No Class B shares
        were purchased during the three and six months ended May 31, 2009
        (2008 - nil).

    (d) Stock Option Plans

        AGF has established stock option plans for senior employees under
        which stock options to purchase an aggregate maximum of 4,581,801
        Class B shares could have been granted as at May 31, 2009 (2008 -
        6,647,252). The stock options are issued at a price not less than the
        market price of the Class B shares immediately prior to the grant
        date. Stock options are vested to the extent of 25% to 33% of the
        individual's entitlement per annum, or in some instances, vest at the
        end of the term of the option.

        The change in stock options during 2009 and 2008 is summarized as
        follows:


    -------------------------------------------------------------------------
    Six months ended May 31,             2009                    2008
                              -----------------------------------------------
                                            Weighted                Weighted
                                             average                 average
                                            exercise                exercise
                                 Options       price     Options       price
    -------------------------------------------------------------------------

    Class B share options
      Balance, beginning
       of period               6,576,948  $    16.59   4,268,765  $    22.50
      Options granted                  -           -           -         n/m
      Options forefeited/
       expired                  (487,799)      20.58    (114,917)      25.04
      Options exercised                -           -    (100,150)      18.99
    -------------------------------------------------------------------------
      Balance, end of period   6,089,149  $    16.27   4,053,698  $    22.51
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        During the three months ended May 31, 2009 and 2008, no stock options
        were granted and compensation expense and contributed surplus of $0.8
        million (2008 - $1.2 million) were recorded.

        During the six months ended May 31, 2009 and 2008, no stock options
        were granted and compensation expense and contributed surplus of $1.7
        million (2008 - $2.5 million) were recorded.

    (e) Restricted Share Unit (RSU) and Performance Share Unit (PSU) Plans

        The changes in share units during the six months ended May 31, 2009
        and May 31, 2008, are as follows:


    -------------------------------------------------------------------------
    Six months ended May 31,             2009                    2008
                              -----------------------------------------------
                               Number of share units   Number of share units
    -------------------------------------------------------------------------

    Outstanding, beginning
     of period
      Non-vested                             680,889                 345,257
    Issued
      Initial allocation                           -                       -
      In lieu of dividends                    35,339                   6,303
    Settled in cash                           (4,332)                      -
    Forfeited and cancelled                  (36,381)                (16,560)
    -------------------------------------------------------------------------
    Outstanding, end of period               675,515                 335,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        Compensation expense for the three months ended May 31, 2009 related
        to these share units was $0.4 million (2008 - $0.8 million), and for
        the six months ended May 31, 2009, was $0.8 million (2008 - $1.7
        million). During the year ended November 30, 2008, it was determined
        that the achievement of certain performance criteria necessary for
        the PSUs to be paid was unlikely. As a result, the Company no longer
        records a liability for PSUs. AGF has entered into a swap agreement
        to fix the cost of compensation related to certain RSUs and PSUs. As
        at May 31, 2009, AGF has economically hedged 171,607 share units at a
        fixed cost of $30.72. Refer to Note 14 for further details on the
        Company's derivative instruments.

    (f) Deferred Share Unit (DSU) Plan

        There is no unrecognized compensation expense related to directors'
        DSUs since these awards vest immediately upon grant. As at May 31,
        2009, 39,254 (2008 - 14,245) DSUs were outstanding. Compensation
        expense related to these DSUs for three months ended May 31, 2009 was
        $0.2 million (2008 - $0.1 million), and for the six months ending May
        31, 2009, was $0.3 million (2008 - $0.2 million).

    (g) Earnings per Share

        The following table sets forth the calculation of both basic and
        diluted earnings per share and earnings per share and diluted
        earnings per share from continuing operations.

    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
    ($ thousands, except     ------------------------------------------------
     per share amounts)             2009        2008        2009        2008
    -------------------------------------------------------------------------

    Numerator
      Net income for the
       period                 $   17,256  $   44,047  $   29,408  $  106,706

    Denominator
      Weighted average
       number of shares
       - basic                88,826,605  89,349,275  88,696,825  89,194,845
      Dilutive effect of
       employee stock
       options                   407,410     436,521     198,179     573,495
    -------------------------------------------------------------------------
      Weighted average
       number of shares
       - diluted              89,234,015  89,785,796  88,895,004  89,768,340

    Earnings per share
      Basic                   $     0.19  $     0.49  $     0.33  $     1.20
      Diluted                 $     0.19  $     0.49  $     0.33  $     1.19
    -------------------------------------------------------------------------

    Note 10: Supplemental Disclosure of Cash Flow Information

    (a) Changes in Non-Cash Operating Working Capital Items


    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ thousands)                   2009        2008        2009        2008
    -------------------------------------------------------------------------

    (Increase) decrease in
      accounts receivable     $  (29,972) $   14,075  $  (15,370) $   25,001
    Decrease in other assets      19,149      46,400      21,724       2,787
    Increase (decrease) in
     accounts payable and
     accrued liabilities          18,579      41,990     (40,327)      3,108
    Increase (decrease) in
     deposits and other
     liabilities                    (440)        918         556       1,182
    -------------------------------------------------------------------------
                              $    7,316  $  103,383  $  (33,417) $   32,078
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (b) Income Taxes and Interest Paid


    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ thousands)                   2009        2008        2009        2008
    -------------------------------------------------------------------------

    Income taxes paid         $    9,894  $    7,088  $   37,799  $   21,100
    Interest paid                 28,067      47,213      63,446      97,885
    -------------------------------------------------------------------------
                              $   37,961  $   54,301  $  101,245  $  118,985
    -------------------------------------------------------------------------

    Note 11: AGF Trust Net Interest Income

    The breakdown of net interest income is as follows:


    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                              May 31,                 May 31,
                             ------------------------------------------------
    ($ thousands)                   2009        2008        2009        2008
    -------------------------------------------------------------------------

    AGF Trust interest income
      Loan interest           $   53,901  $   68,711  $  114,871  $  135,208
      Investment interest          4,679       7,292      10,448      17,547
    -------------------------------------------------------------------------
                                  58,580      76,003     125,319     152,755

    AGF Trust interest expense
      Deposit interest            46,575      50,225      94,864      97,368
      Other interest expense     (13,672)        710     (21,735)      7,523
    -------------------------------------------------------------------------
                                  32,903      50,935      73,129     104,891

    -------------------------------------------------------------------------
    AGF Trust net interest
     income                   $   25,677  $   25,068  $   52,190  $   47,864
    -------------------------------------------------------------------------

    Note 12: Income Tax

    In December 2007, a reduction of the federal corporate income tax rate
    from 18.5% to 15.0% by January 1, 2012 was substantively enacted.
    Accordingly, during the six months ended May 31, 2008, the Company
    recognized a $19.5 million reduction in future income tax liabilities.

    Note 13: Capital Management

    Detailed disclosure of the Company's capital, including management
    objectives and policies and regulatory capital requirements, are included
    in Note 23 to the 2008 Audited Consolidated Financial Statements.  The
    cumulative amount of minimum regulatory capital in the Investment
    Management business remains unchanged from November 30, 2008 at
    approximately $6.0 million.

    Capital measures at AGF Trust are detailed as follows:


    -------------------------------------------------------------------------
                                                              Basel II
    As at                                           -------------------------
     ($ thousands, except for risk-                     May 31,  November 30,
     weighted assets in $ millions)                       2009          2008
    -------------------------------------------------------------------------

    Risk-weighted assets(1)
      Credit risk                                   $  2,010.8    $  2,244.3
      Operational risk                                   197.4         172.6
    -------------------------------------------------------------------------
    Total risk-weighted assets                         2,208.2       2,416.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Tier 1 capital
      Common shares                                 $   82,768    $   82,768
      Contributed surplus                                1,492         1,338
      Retained earnings                                108,370       101,432
      Non-cumulative preferred shares                   64,000        64,000
      Less: securitization and other                   (12,967)      (15,567)
    -------------------------------------------------------------------------
                                                       243,663       233,971

    Tier 2 capital
      Subordinated debentures                          109,500       109,500
      General allowances                                17,594        19,638
      Less: securitization and other                    (7,565)       (8,295)
    -------------------------------------------------------------------------
                                                       119,529       120,843

    -------------------------------------------------------------------------
    Total capital                                   $  363,192    $  354,814
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For operational risk, AGF Trust uses the Basic Indicator Approach -
        calculated as 15% of the previous three-year average of net interest
        income and other income, excluding gain or loss on investments.
        The risk-weighted equivalent is determined by multiplying the capital
        requirement for operational risk by 12.5.

    Note 14: Financial Instruments

    The carrying amounts for the Company's financial instruments classified
    based on categories according to CICA Handbook "Section 3855 Financial
    Instruments - Recognition and Measurement" are as follows:


    -------------------------------------------------------------------------
    As at May 31, 2009                                             Loans and
                                                                 Receivables
                                                                    or Other
                                       Available      Held for     Financial
    ($ thousands)                       for Sale       Trading   Liabilities
    -------------------------------------------------------------------------

    Cash and cash equivalents        $         -   $   348,010   $         -
    Investments                          470,715             -             -
    Retained interest from
     securitization                       42,252             -             -
    Accounts receivable                        -             -        72,693
    Real estate secured and
     investment loans                          -             -     4,063,019
    Derivatives                                -        78,242             -
    Other assets                               -             -         3,389
    -------------------------------------------------------------------------
    Total financial assets           $   512,967   $   426,252   $ 4,139,101
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accounts payable and accrued
     liabilities                     $         -   $         -   $   265,733
    Long-term debt                             -             -       194,654
    Deposits                                   -             -     4,423,987
    Derivatives                                -         5,877             -
    Other long-term liabilities                -             -         5,319
    -------------------------------------------------------------------------
    Total financial liabilities      $         -   $     5,877   $ 4,889,693
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at November 30, 2008                                        Loans and
                                                                 Receivables
                                                                    or Other
                                       Available      Held for     Financial
    ($ thousands)                       for Sale       Trading   Liabilities
    -------------------------------------------------------------------------

    Cash and cash equivalents        $         -   $   584,168   $         -
    Investments                          188,435             -             -
    Retained interest from
     securitization                       44,947             -             -
    Accounts receivable                        -             -        76,316
    Real estate secured and
     investment loans                          -             -     4,430,850
    Derivatives                                -        85,097             -
    Other assets                               -             -         1,920
    -------------------------------------------------------------------------
    Total financial assets           $   233,382   $   669,265   $ 4,509,086
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accounts payable and accrued
     liabilities                     $         -   $         -   $   306,834
    Long-term debt                             -             -       144,911
    Deposits                                   -             -     4,762,061
    Derivatives                                -         7,755             -
    Other long-term liabilities                -             -         7,240
    -------------------------------------------------------------------------
    Total financial liabilities      $         -   $     7,755   $ 5,221,046
    -------------------------------------------------------------------------

    Risk Management

    In the normal course of business, the Company manages risks that arise as
    a result of its use of financial instruments. These risks include market,
    liquidity and credit risk.

    Market Risk

    Market risk is the risk that the fair value of financial instruments will
    fluctuate due to changes in market factors. Market risk includes fair
    value risk, interest rate risk and foreign currency risk. The Company is
    exposed to these risks directly through its financial instruments.

    Fair Value Risk

    Fair value risk is the risk of loss due to adverse changes in equity
    prices. The Company is exposed to fair value risk on its investments
    available for sale related to mutual funds and equity securities,
    retained interest from securitization and derivative positions used to
    manage changes in share-based compensation. Any unrealized gains or
    losses arising from changes in the fair value of the financial
    instruments available for sale are recorded in other comprehensive
    income. Based on the carrying value of the investments referred to above
    at May 31, 2009, the effect of a 10% decline or increase in the value of
    investments would result in a $2.5 million annualized unrealized gain or
    loss to other comprehensive income (2008 - $2.4 million). Refer to Note 3
    for the effect of changes to key assumptions on the fair value of
    retained interests.

    Interest Rate Risk

    Interest rate risk, inclusive of credit spread risk, is the risk of loss
    due to the following: changes in the level, slope and curvature of the
    yield curve; the volatility of interest rates; mortgage prepayment rates;
    changes in the market price of credit and the creditworthiness of a
    particular client.

    The Company, through AGF Trust, is exposed to interest rate risk through
    its real estate secured and investment loans receivable, managed and
    supervised by AGF Trust's Asset and Liability Committee. AGF Trust
    employs a number of techniques to manage this risk, including the
    matching of asset and liability terms. AGF Trust also uses interest rate
    swaps to manage any residual mismatches. In addition, AGF Trust has
    assessed the interest rate risk for investment loans, RSP loans and HELOC
    receivables, to be low due to the variable rate nature of these products.
    AGF Trust is also exposed to interest rate risk through its investments
    available for sale. As at May 31, 2009, a 1% increase in interest rates
    would result in an increase in annual net interest income of
    approximately $5.1 million (2008 - $3.1 million), while a 1% decrease in
    interest rates will result in an increase in net interest income of
    approximately $0.2 million (2008 - $3.1 million).

    The Company is also exposed to interest rate risk through its floating-
    rate debt and cash balances. As at May 31, 2009, the effect of a 1%
    change in the variable interest rates on the average loan balance
    outstanding for the six months would have resulted in an annualized
    change in interest expense of approximately $1.6 million (2008 - $2.1
    million).

    Foreign Currency Risk

    Foreign currency risk is the risk of loss due to changes in spot and
    forward rates and the volatility of currency exchange rates. The Company
    is subject to foreign exchange risk on its integrated foreign
    subsidiaries in Ireland and Singapore, which provide investment advisory
    services. These subsidiaries retain minimal monetary exposure to the
    local currency, as the majority of revenues are earned in Canadian
    dollars and salaries and wages are primarily paid on a monthly basis and
    represent the majority of the local currency expenses. As such, these
    foreign subsidiaries have limited use of financial instruments
    denominated in local currencies, thus resulting in minimal foreign
    exchange risk.

    Derivative Instruments

    Details of the Company's derivative instruments are as follows:


    -------------------------------------------------------------------------
    As at May 31, 2009                  Hedging item
                                             maximum
                                            maturity    Notional        Fair
    ($ thousands)          Interest Rate        date      amount       Value
    -------------------------------------------------------------------------

    Derivatives used to
     manage interest rate
     exposure              0.70% - 5.08%        2012   2,572,000      78,242
    Derivatives used to
     manage changes in
     share-based
     compensation                      -        2010      10,275      (5,877)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    As at November 30, 2008             Hedging item
                                             maximum
                                            maturity    Notional        Fair
    ($ thousands)          Interest Rate        date      amount       Value
    -------------------------------------------------------------------------

    Derivatives used to
     manage interest rate
     exposure              1.31% - 5.08%        2012   3,167,000      85,097
    Derivatives used to
     manage changes in
     share-based
     compensation                      -        2010      10,275     (7,755)
    -------------------------------------------------------------------------

    Liquidity Risk

    Liquidity risk arises from the possibility that the Company cannot meet a
    demand for cash resources when required or meet its financial
    obligations.

    The Company manages its liquidity risk through the management of its
    capital structure and financial leverage as outlined in Notes 9 and 13.
    In its Investment Management and Other segment, the Company manages its
    liquidity by monitoring actual and projected cash flows to ensure that it
    has sufficient liquidity through cash received from operations, as well
    as borrowings under its credit facility. The key liquidity requirements
    within this segment are the funding of commissions paid on mutual funds
    and dividends paid to shareholders. The Company is subject to certain
    financial loan covenants under its credit facility and has met all of
    these conditions.

    AGF Trust manages liquidity risk through deposit-taking activities and
    through the securitization of loans. The key liquidity requirements
    within this segment are the funding of mortgages and loans and the
    ability to pay out maturing GICs. AGF Trust's overall liquidity risk is
    managed by its treasury department and is supervised by AGF Trust's Asset
    and Liability Committee in accordance with the policies for management of
    assets and liabilities, liquidity and loan financing activities. These
    policies aim to ensure that AGF Trust has sufficient cash resources to
    meet its current and future financial obligations in the regular course
    of business and under a variety of conditions.

    Management monitors cash resources daily to ensure that AGF Trust's
    liquidity measurements are within the limits established by policies. In
    addition, management meets regularly to assess the timing of cash inflows
    and outflows related to loan and deposit maturities, and to review
    various possible stress scenarios. AGF Trust aims to maintain a prudent
    reserve of unencumbered liquid assets that are readily available if
    required. It strives to maintain a stable volume of base deposits that
    originate from its deposit brokerage clientele.

    The Government of Canada introduced a guarantee program on debt issuances
    of deposit-taking institutions. Under that program, AGF Trust can issue
    up to $900.0 million of debt with a government backstop and a term of up
    to three years.

    The Company's internal audit department reviews the compliance of AGF
    Trust's liquidity policies. Internal audit reports are presented to the
    Audit Committee of the Trust Board for review.

    Credit Risk

    Credit risk is the potential of financial loss arising from the failure
    of a borrower or counterparty to honour its financial or contractual
    obligations to the Company. The Company's overall credit risk strategy
    and credit risk policy are developed by its Executive Committee and
    further refined at the business unit level, through the use of policies,
    processes and internal controls. They are designed to promote business
    activities while ensuring these activities are within the standards of
    risk tolerance levels. As at May 31, 2009, financial assets of $5.1
    billion (November 30, 2008 - $5.4 billion), consisting of cash and cash
    equivalents, investments, retained interests from securitization, real
    estate secured loans and investment loans, accounts receivable and other
    assets, were exposed to credit risk up to the maximum of their respective
    carrying value.

    Cash and cash equivalents consist primarily of highly liquid temporary
    deposits with Canadian and Irish banks, as well as commercial paper,
    bank-sponsored ABCP, bank deposit notes, reverse re-purchase agreements,
    BAs and floating-rate notes.

    Investments subject to credit risk consist primarily of floating-rate
    notes, senior debt instruments, investments in mutual funds of AGF and
    other securities. For investing activities done through AGF Trust,
    policies have been established that identify the types and rating of debt
    investments in which AGF Trust can invest. These policies also restrict
    AGF Trust's transactions primarily to major chartered banks and
    recognized investment dealers who are members of the Investment Industry
    Regulatory Organization of Canada (IIROC). AGF Trust Executive Committee
    (EXCO) maintains a list of the approved securities dealers and
    counterparties, which are reviewed at least annually by the Trust Board.
    AGF Trust uses external credit rating agencies in assessing the credit
    quality of certain investments in financial assets. The credit rating
    agencies used include DBRS, S&P and Moody's.  As at May 31, 2009, AGF
    Trust held investments with long term ratings from DBRS of A (high) to
    AAA (or the equivalent from other credit rating agencies). AGF Trust held
    investments with short term ratings from DBRS of R-1 (high) (or the
    equivalent from other credit rating agencies).

    The Company's most significant credit risk is through AGF Trust's real
    estate secured loans and investment loans. AGF Trust mitigates this risk
    through stringent credit policies and lending practices. These policies
    aim to ensure that the authority to approve credit applications is
    appropriately delegated by senior management or the Investment Committee
    of AGF Trust, depending on the risk and the amount of the credit
    application. The credit policies also provide guidelines for pricing
    based on risk, for reviewing any collateral pledged for a credit
    application, monitoring of impaired loans and for establishing and
    reviewing loan loss provisions to ensure they are adequate. The policies
    establish risk limits for credit concentration by counterparty,
    geographic location and other risk factors that would impact AGF Trust's
    credit risk profile. AGF Trust has adjusted its policies and criteria
    related to its loan provisions and lending practices to reflect the
    higher probability of default that occurs during a weaker economy.

    At May 31, 2009, AGF Trust's loan assets totalled $4.1 billion (November
    30, 2008 - $4.5 billion) and were comprised of mortgage loans, investment
    loans, RSP loans, finance loans and HELOC receivables. Of this amount,
    $1.2 billion (November 30, 2008 - $1.4 billion) was represented by
    mortgage loans and $0.6 billion (November 30, 2008 - $0.7 billion) was
    represented by HELOC receivables, both of which are secured by
    residential real estate. At May 31, 2009, 45.5% (November 30, 2008 -
    44.2%) of mortgage loans were insured by Canada Mortgage and Housing
    Corporation (CMHC) or another insurer. Conventional uninsured mortgages
    have loan-to-value ratios of less than 80% of the appraised value of the
    property at the time the mortgage loan was granted. The average loan-to-
    value ratio of uninsured mortgage loans was 62.6% as at May 31, 2009
    (2008 - 63.3%).

    Residential mortgages represent the largest component of the total
    mortgage portfolio, comprising 97.4% as at May 31, 2009 (November 30,
    2008 - 97.5%). AGF Trust's credit risk on these loans is also mitigated
    through the use of collateral, primarily in the form of residential real
    estate. Under AGF Trust's lending criteria, management reviews all
    mortgage loans on a regular basis to determine the appropriate allowance
    for loss required by AGF Trust. Risk is also mitigated through
    residential mortgage insurance through CMHC or another insurer. As at May
    31, 2009, $572.4 million of AGF Trust's residential mortgage portfolio
    was insured (November 30, 2008 - $616.6 million).

    Credit risk for HELOCs and investment loans is mitigated by collateral in
    the form of residential mortgages and investment funds, respectively.
    Investment loans, excluding RSP loans, of $1.8 billion (November 30, 2008
    - $1.8 billion), are secured primarily by the investment made using the
    initial loan proceeds. The market value of this investment loan
    collateral is approximately $1.3 billion (November 30, 2008 - $1.2
    billion).

    RSP loans are used by borrowers to purchase assets in a retirement
    savings plan. The creditworthiness of each borrower is assessed prior to
    approval of the loan. Predictive scorecards are used to determine the
    probability of default and bankruptcy of the borrowers. On a regular
    basis, AGF Trust reviews the credit quality in the portfolio. Loans in
    arrears are also reviewed regularly to determine the appropriate loan
    loss reserves.

    Derivative financial instruments expose AGF Trust to credit risk to the
    extent that if a counterparty default occurs, market conditions are such
    that AGF Trust would incur a loss in replacing the defaulted transaction.
    AGF Trust negotiates derivative master netting agreements with
    counterparties with which it contracts. These agreements reduce credit
    risk exposure. AGF Trust assesses the creditworthiness of the
    counterparties to minimize the risk of counterparty default under the
    agreements. AGF Trust only uses major Chartered banks as counterparties
    with a minimum credit rating of AA.

    Note 15: Segment Information

    AGF has three reportable segments: Investment Management Operations,
    Trust Company Operations and Other. The Investment Management Operations
    segment provides investment management and advisory services and is
    responsible for the management and distribution of AGF investment
    products. AGF Trust offers a range of trust services including GICs, term
    deposits, real estate secured loans and investment loans. The results of
    Smith & Williamson Holdings Limited have been included in Other.

    The results of the reportable segments are based on the internal
    financial reporting systems of AGF. The accounting policies used in these
    segments are generally consistent with those described in the "Summary of
    Significant Accounting Policies" detailed in AGF's 2008 Annual Report.


    -------------------------------------------------------------------------
    Three months ended        Investment       Trust
     May 31, 2009             Management     Company
    ($ thousands)             Operations  Operations     Other(1)      Total
    -------------------------------------------------------------------------

    Revenue                   $  112,982  $   28,285  $    2,261  $  143,528
    Operating expenses            71,197      23,343           -      94,540
    Amortization and other        23,506         724       1,571      25,801
    -------------------------------------------------------------------------
    Segment income before
     taxes                    $   18,279  $    4,218  $      690  $   23,187
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Three months ended        Investment       Trust
     May 31, 2008             Management     Company
    ($ thousands)             Operations  Operations     Other(1)      Total
    -------------------------------------------------------------------------

    Revenue                   $  162,878  $   26,666  $    4,797  $  194,341
    Operating expenses            91,350      14,318           -     105,668
    Amortization and other        27,877         571       2,374      30,822
    -------------------------------------------------------------------------
    Segment income before
     taxes                    $   43,651  $   11,777  $    2,423  $   57,851
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Six months ended          Investment       Trust
     May 31, 2009             Management     Company
    ($ thousands)             Operations  Operations     Other(1)      Total
    -------------------------------------------------------------------------

    Revenue                   $  222,899  $   55,337  $    3,259  $  281,495
    Operating expenses           146,310      43,423           -     189,733
    Amortization and other        47,727       1,427       3,131      52,285
    -------------------------------------------------------------------------
    Segment income before
     taxes                    $   28,862  $   10,487  $      128  $   39,477

    Total Assets              $1,181,328  $4,995,350  $        -  $6,176,678
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Six months ended          Investment       Trust
     May 31, 2008             Management     Company
    ($ thousands)             Operations  Operations     Other(1)      Total
    -------------------------------------------------------------------------

    Revenue                   $  328,106  $   53,976  $    6,605  $  388,687
    Operating expenses           181,773      28,703           -     210,476
    Amortization and other        57,292       1,023       5,396      63,711
    -------------------------------------------------------------------------
    Segment income before
     taxes                    $   89,041  $   24,250  $    1,209  $  114,500

    Total Assets              $1,188,400  $5,257,031  $  103,388  $6,548,819
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Other revenue relates to S&WHL.

    This report contains forward-looking statements with respect to AGF,
    including its business operations and strategy, as well as financial
    performance and condition. Although Management believes that the
    expectations reflected in such forward-looking statements are reasonable,
    such statements involve risks and uncertainties. Actual results may
    differ materially from those expressed or implied by such forward-looking
    statements. Factors that could cause results to differ materially
    include, among other things, general economic and market factors,
    including interest rates, business competition, changes in government
    regulations or in tax laws, and other factors discussed in materials
    filed with applicable securities regulatory authorities from time to
    time.
    

    About AGF Management Limited

    AGF Management Limited is one of Canada's premier investment management
companies with offices across Canada and subsidiaries around the world. AGF's
products and services include a diversified family of award-winning mutual
funds, AGF Elements portfolios, the Harmony asset management program, services
for institutional and high-net-worth clients, as well as AGF Trust GICs, loans
and mortgages. With approximately $37.4 billion in total assets under
management, AGF serves more than one million investors. AGF trades on the
Toronto Stock Exchange under the symbol "AGF.B".





For further information:

For further information: AGF Management Limited shareholders and
analysts, please contact: Greg Henderson, CA, Senior Vice-President and Chief
Financial Officer, (416) 865-4156, greg.henderson@AGF.com; Deirdre Neary,
Director, Investor Relations, (416) 815-6268, deirdre.neary@AGF.com; Media,
please contact: Lucy Becker, Vice-President, Corporate Communications, (416)
865-4284, lucy.becker@AGF.com


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