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INVESTMENT SASKATCHEWAN • THE YEAR IN REVIEW 2004Fundamentals

T A B L E O F C O N T E N T S1 2004 Highlights2 Message from the CEO4 Corporate Profile6 2004 Financial Highlights7 2004 Environmental Scan10 Investment Stategy13 Assets – Portfolio15 Awareness and Reputation16 Corporate Information20 Economic Overview

2 0 0 4 H I G H L I G H T S2004 2003 2002 ($ millions)300274.030200209.4199.42019.311.6100107.500Total revenue (consolidated) – 3-yearNet income – 3-year150144.41001005065.741.330.87550259.830.8 65.708.82002 2003 2004Dollars invested9.8Sale of investments and repaymentsDollars invested vs proceeds fromsale of investments and repayments(non-consolidated) – 3 year0New investments (non-consolidated)– 3-yearStrong portfolio management has led to good financial performance for InvestmentSaskatchewan. Strategic investments continue to increase total revenue, especially as investeecompanies have seen demand for their products increase, and in some cases, prices forproducts increase dramatically. Although the level of investment activity dropped in 2004, thereorganization of the Corporation is nearing completion and a revitalized focus on new deals willdominate activity in 2005. During 2004, strong earnings, proceeds from the sale of investmentsand repayments, demonstrated the current portfolio's ability to consistently return value.1

Chief Executive Officer’s Messagewas a year of building – building the organization, its business profile and its fundamental2004 infrastructure. The organization was in its first full year of operations as a stand-aloneentity and had assumed a legacy portfolio from its parent, Crown Investments Corporation of Saskatchewan(CIC). The portfolio was created through the amalgamation of a number of different governmententities, each operating under different mandates and all with a view to stimulating economic development.The mandate given to InvestmentSaskatchewan continues the focus onstimulating economic activity in the province,but with a slight twist. The Board ofDirectors has been delegated the authorityfor investment decisions in order to maintainan arms-length relationship with theshareholder and to ensure that decisionsare made by those best qualified. Inaddition, the mandate for the primaryfund is to operate on commercial termsand to leverage public capital with thatof private sector or other partners.Investment Saskatchewan can and may elect to establishsub-funds which would be driven more directly by public policyinterests than pure commercial returns and may take thisapproach where gaps exist in the Province’s financial markets.Unlike the past however, where sub-funds are created, they willbe branded differently and each will possess defined mandatesand clearly identified objectives for both returns and leverage sothat performance expectations on these particular funds are clear.When he established the organization, Premier Lorne Calvertstated that his government did not accept the view that publiccapital is unnecessary in the provincial marketplace andexpressed the opinion that through partnering on commercialterms, Investment Saskatchewan would be able to leveragepartners’ investments in the Province, replacing the need forpublic capital over the long-term.To put this mandate into action, Investment Saskatchewanmust build a foundation of fundamentals. This focus began midwaythrough the year in 2004 after I joined the organizationas President and CEO.At Investment Saskatchewan, wedefine fundamentals in tangible andintangible ways. Financially, it means astrong asset base, sound principles ofinvestment management – specificallybalancing risk with reward, operatingunder a well-defined governance andpolicy framework, achieving sustainablegrowth, and reporting on performance ina manner consistent with best-practices.It also means building fundamentalswhich are slightly less tangible – thevalues by which we operate, credibilityand a reputation as a partner who can be trusted.Even if an organization can achieve a top-quartileinvestment track record and has a compelling story to tell, theintangibles can derail the strongest. It is not sufficient to simplytalk strategy, investments and valuations in the private equityworld. A track record of results is demanded as “table stakes”– those elements that are the most basic requirements ofsucceeding in this business. Partners and potential investeesalso want to see behavioural evidence of a company that livesits values and to hear from others about the credibility andstrong reputation which comes from delivering results andbehaving with integrity.Building these fundamentals is the single-minded focus forInvestment Saskatchewan’s evolution. From this, we will translatethese fundamentals into results – we will grow our investmentportfolio, attract new capital to invest in business enterprises inSaskatchewan, divest at strategic opportunities and earn a returncommensurate with risk.As I review the operations in 2004, I am proud to report2

net earnings for the year of $19.3 million, up from $7.5 million We face a number of challenges and most revolve aroundin 2003. Not surprisingly, the majority of consolidated revenue, the fundamentals. With the results demonstrated in 2004, weearnings and assets are from the corporation’s largest investments. are on the way to strengthening our financial performance withNew relationships were developed with investees which have improved cash flows, strong portfolio performance, recognitionresulted in a positive and growing dynamic.of the need for relevant reporting, and provisions whereDuring 2004 several of our investees faced a number of prudent to protect the company’s balance sheet.economic uncertainties caused by such factors as changes in Our challenges ahead lie in strengthening our reputation andthe U.S./Canadian dollar exchange rates, fluctuating commodity credibility in a complicated and competitive market. Investmentprices, high natural gas and electricity costs and significant decisions are often made with partners – those who will acceptchallenges in the agricultural industry. Despite these uncertainties and share risk with similar interests. Our goal is to makeseveral of our major investments experienced strong financial significant improvements in educating stakeholders about theresults led most notably by Meadow Lake OSB Limited Partnership mandate and capacity of Investment Saskatchewan, who we areand Saskferco Products Inc.and how we operate, so as to encourageCash flows were enhanced bya wider array of partners.payments received from a number ofour investees including HARO FinancialCorporation, Mitchell’s Gourmet Foods,Saskferco Products Inc., SGI CANADAInsurance Ltd., Great Western BrewingCompany Ltd., and from the sale of anumber of properties.In 2004 the organization wasentirely self-supporting in terms of cashrequirements and after converting $190.2million of advances due to CIC intoshare capital, it is now almost entirelyInvestmentSaskatchewan’s goalis to make significantimprovements inimproving awarenessabout our mandateand capacity.To achieve this, we will buildrelationships with venture capital andprivate equity firms, merchant bankersand others in the financial services sector,industry leaders in target sectors, andintermediaries in law firms, accountingfirms, and business support firms. Thesegroups need to know what InvestmentSaskatchewan can offer and with anincreased profile, partners will think ofus first when considering business opportunitiesin Saskatchewan.equity financed. Investments of $9.8 million were made during The environment for investment continues to change inthe year as add-ons to support the growth of companies in Canada and statistics show that the investment climate is pickingthe portfolio.up after its downturn several years ago. Our commitment toTwo dividends were declared at year end to Crown the investment potential of Saskatchewan remains unaltered.Investments Corporation for 2004. The first dividend of $17.3 We will become the local partner of choice for investors withinmillion represents 90 per cent of net income for the year and and outside the province and we will set our sights on nothingthe second is a $25 million special dividend requested by the short of top quartile performance. Our mandate is clear –shareholder. Both amounts are payable in March of 2005. “enhance Saskatchewan’s long-term economic growth…” OverAs President and CEO, I have seen first hand the commitment time, private capital investors will more frequently considerand dedication that Investment Saskatchewan professionals this province as the site of much potential.demonstrate every day. With their ongoing contribution we aresuccessfully advancing our business plan and our vision for Janet Wightmanthe future.Chief Executive Officer3

Corporate ProfileInvestment Saskatchewan Inc. is a designated subsidiary crown corporation under TheCrown Corporations Act, 1993 and an incorporated entity under the Saskatchewan BusinessCorporations Act. Formerly known as CIC Industrial Interests Inc. (CIC III), InvestmentSaskatchewan was established as a stand-alone entity, wholly owned by the Crown InvestmentsCorporation of Saskatchewan. The Corporation presently holds a portfolio of over $458million of investments in a variety of businesses. Investment Saskatchewan’s head office islocated in Regina, Saskatchewan with a satellite office located in Saskatoon, Saskatchewan.MANDATEInvestment Saskatchewan’s mandate is to enhanceSaskatchewan’s long-term economic growth and diversificationthrough the provision of investment capital andfinancing, and to prudently manage portfolios of commerciallyviable investments.VISIONAs the steward of the Province’s portfolio, InvestmentSaskatchewan will be an acknowledged leader and catalystfor the development of the Saskatchewan economy and avibrant business community.MISSIONInvestment Saskatchewan’s mission is to ensure thatopportunities to develop the provincial economy arerealized through the availability of investment capitalwhere return is commensurate with risk. We will exerciseour fiduciary responsibility for the portfolio through thedevelopment of an investment management corporationand a resulting strategic partnership. Through this entity,we will achieve innovative and proactive deal sourcingand structuring and attract new capital to the provincewhile concurrently building the private sector investmentmanagement industry in Saskatchewan.VALUESThe Board of Directors and staff established thecorporate values. At Investment Saskatchewan we believethat these values define how we work together, and howwe deal with our clients and stakeholders.These values define behavioural expectations, clarifyour obligations and responsibilities, and serve as a benchmarkfor accountability in everything we do.Customer Service: We make it easy for our customers,investees, shareholders, stakeholders, and internal colleagues.We go the extra mile to create a smooth experience forpeople dealing with us.Honesty and Trust: We are honest, up front andhonorable. We are transparent in that we say what we meanand mean what we say. We respect each other and arebrave enough to have tough conversations in an appropriatemanner. We believe that through trust we will achieve asafe environment conducive to open communications.Integrity: We do the “right” thing - the “ethical” thing– which earns us the respect of people with whom wedeal. We believe that integrity is foundational in businessand that its absence will cause people not to deal with us.Achievement: We understand that “big things” are expectedof us and that in order to be a leader we must achieve.Our competence will be evident through our results and inorder to “raise the bar” we will continue learning and developingour expertise and keep current with industry trends.Accountability: We follow through on commitments,report on results achieved, and are held responsible forwhat we say we will do and what we have done.Innovation: We believe that innovation is key to gettingdeals done. Our innovation will be notable in how we sourcedeals in Saskatchewan or deals which could be brought toSaskatchewan; structure deals and achieve win/win results;maximize the returns which can be achieved; and in howwe increase the depth of the investment managementindustry in the province.Teamwork: The value of working together is greaterthan the value of working individually. We share information,help and depend on each other which results in betterservice to our customers and a better work environment.4

“Our strategy has always been to create valuefor our shareholders. As a shareholder, InvestmentSaskatchewan has been supportive of initiativesto be the best fertilizer company in North Americathrough the ongoing expansion of our facilityand the diversification of our product offerings.”Fred Gill, President CEO, SaskfercoAbove: Guy Roy, Investment Saskatchewan (left)and Brad DeLorey, Saskferco Products Inc.Saskferco produces nitrogen fertilizer in the form of granular urea, anhydrous ammonia, and liquid ureaammonium nitrate (UAN), for customers throughout Canada and the United States. The plant near Belle Plainehas operated since 1992 and is currently benefiting from high fertilizer prices. Elsewhere in North Americahigher cost competitor plants are shutting down due to high natural gas prices. However, Saskferco operatesthe most efficient plant in North America and is able to continue operations, even in the current environmentof high natural gas prices. Investment Saskatchewan’s investment helped ensure this very efficient plantwas able to establish itself in the heart of the Western Canadian and U.S. northern plains markets.

I N V E S T M E N T S T R A T E G YFundamental OpportunitiesInvestment Saskatchewan’s capital allocation in 2005 will be directed according to it’srenewed focus and mandate. It takes strong fundamentals to grow a company. These strongfundamentals ensure every opportunity is captured to maximize returns from investments whilebalancing the risk and reward equation. The organization envisions an investment environmentwhere the “no surprises” rule prevails, but recognizes that environment is elusive at best.The nature of financial investment,and private equity in particular, is totake educated risks while utilizing bestefforts and knowledge to mitigate thoserisks. Not all investments are equal.The challenge our investment professionalsaccept every day is to makequalified, knowledgeable decisions aimedat producing a financial return forthe province.In addition, we continually reviewthe current state of our investments.Our risk management policies includeregular assessment by our investmentstaff to review the appropriateness of the carrying value of ourinvestments. Based on their review, the Corporation will writedown certain investments if management determines animpairment exists to an investment.INVESTMENT FOCUSInvestment Saskatchewan’s capital for new investmentsis directed towards business opportunities in the province.Early stage, start-up, expansion financing, managementbuyouts, restructuring or turnarounds are various segmentsthat may be attended to by Investment Saskatchewan’s directinvestments, its fund-of-funds, or through strategic relationshipswith third-party fund managers.Currently, Investment Saskatchewan limits its role in theprovision of seed capital and smaller investments (less than $3million) to participation in pools of capital or funds managedby third parties where possible.InvestmentSaskatchewan’scapital for newinvestments isdirected towards keysectors that drivethe Saskatchewaneconomy.Investment Saskatchewan’s directinvestments are generally targeted tomedium and larger projects (greater thanapproximately $3 million).TARGET SECTORSInvestment Saskatchewan’s targetsectors flow from the province’s overalleconomic development strategy.Investment activity supports Saskatchewan’soverall economic developmentstrategy including a focus on the followingsectors:Agri-value and Agri-related–Food, crop and beverage processing (e.g., frozen foodprocessing, specialty crop processing);– Meat processing (e.g., pork and poultry processing);– Nutraceuticals (e.g., health food, “natural” products); and–Agricultural equipment (e.g., power train equipment).Advanced Technology–Agricultural biotechnology (e.g., new seed and bio-inputs,new oils, improved livestock feed, biodegradable plastics,fermentation); and– Life sciences (e.g., new pharmaceuticals, health research,nanotechnology).Information Technology– Electronics and instrumentation (e.g., Canadian Light SourceSynchrotron-enabled research and technology); and– Bio-products and processing (e.g., agriculture and healthcare enabling technology).10

I N V E S T M E N T S T R A T E G YEnvironmental Technology CommercializationIn assessing potential projects and managing its existing–Renewable energy technology;investments, Investment Saskatchewan will evaluate business– Ethanol production; andplans against the following criteria which we consider to be–Waste management systems.fundamental for success:Forestry• thorough and complete business plans which yield the– Engineered wood products;conclusion that the business will be commercially viable–Value-added wood fibre processing; andwhile providing a return commensurate with risk;–Lumber mills.• strong management team with a proven track record andResource Extractiona balance of required skills, experience and competencies;– Minerals extraction and processing.• sustainable competitive market position as a result of superiorEnergyproducts, technology, service or cost advantage with growth– Development, processing, and use of the resource base prospects;including heavy oil, natural gas, wind, and solar.• expectation of earnings growth based on past track record ofThis targeted sector approach, however, does not preclude solid financial performance or on the strong likelihood ofinvestments in other industries and sectors if the investment new market success for new or expanding businesses;is determined to be commercially viable and meets other • operational practices which ensure compliance with regulatorystrategic objectives.environment within which the enterprise operates andenvironmental requirements;INVESTMENT POLICYInvestment Saskatchewan investsIn addition to an analysis of the businesswith a variety of equity and debt instrumentsin enterprises which will increaseeconomic activity in Saskatchewan.Investment Saskatchewan will employ avariety of equity and debt instrumentsas follows:• equity (common and preferred shares);• near equity (convertible instruments);and• mezzanine debt (subordinated debt, etc.).Investment Saskatchewan will considerprovision of senior debt in circumstanceswhere appropriate securityand debt service capacity exist, and partnershipsin senior and subordinateddebt syndicates.Opportunitiescome from strongfundamentals:complete businessplans; strongmanagement;sustainable marketpositions; andthe expectationof growth.proposal, Investment Saskatchewan entersinto investments which:• are long-term in nature and allowreasonable opportunities for an exitafter a holding period appropriate forthe stage of investment;• include commercial terms and willnot underwrite, guarantee or backstopprivate sector investment in anuncommercial manner;• establish a partnership with and leverthird-party investment capital; and• result in less than majority ownershipposition.11

“It’s important in the agri-food sector for investment fundslike Foragen to have a group of professional investorssupporting them. Investment Saskatchewan’s interest incontributing to investment capital pools translates directlyinto regional success, as evidenced by our currentinvestment in MCN Bioproducts in Saskatoon.”Murray F McLaughlin PhD, P Ag, President and CEO, Foragen Technologies Management Inc.Above: Murray Mucha, Investment Saskatchewan (back), David Maenz, MCN BioProducts Inc. (left),Murray McLaughlin, Foragen Technologies Management Inc. (right).Foragen Technologies Limited Partnership was created to help commercialize early-stage, advanced agriculturaltechnologies from Canadian sources. The management firm believes that innovation and science need to move outof laboratories, and through investment, help support the creation of new companies. The firm achieves this bysupplying seed capital, business and technology management expertise, and networking opportunities to itsportfolio companies. Foragen investments are highly diversified in terms of market sector, stage of developmentand anticipated time to liquidity. Investment Saskatchewan's participation in the fund helps address the gapthat exists for availability of capital for early stage agricultural technology companies in Saskatchewan. Foragenhas offices in Guelph, Ontario; Montreal, Quebec; and at Innovation Place in Saskatoon, Saskatchewan.

A S S E T S – P O R T F O L I OFundamental ValueInvestment Saskatchewan has invested in and currently manages a number of jointventures, partnerships, equity investments, fund investments, and direct loans witha book value of over $458 million at December 31, 2004. These investments have beenmade in companies that generated $274.0 million in consolidated revenues for InvestmentSaskatchewan in 2004 and net income of $19.3 million.Investments are spread through a variety of Saskatchewaneconomic sectors including forestry, fertilizer,manufacturing, processing, agri-business, insurance andfinancial, bio-technology, and advanced and informationtechnology.Investment Saskatchewan's complete portfolio canbe further segmented into direct investments, fund-offunds,small portfolios now managed by third parties,and properties (see page 14).DIRECT INVESTMENTSSince 1999, Investment Saskatchewan (formerly CICIII) directly invested or committed to eight projects totaling$93.4 million. These investments levered $284.4 million ofprivate sector capital in Saskatchewan. Direct investmentsconsist of equity and debt. The six largest direct investmentsaccount for approximately 83 per cent of the totalbook value of Investment Saskatchewan’s portfolio.The asset book value does not necessarily represent themarket value. There are significant constraints on liquidityfor many of the portfolio investmentsthat are managed under variousterms and related shareholder andpartnership agreements.FUND-OF-FUNDINVESTMENTSCurrently Investment Saskatchewanhas $51.6 million in commitmentsto four venture capital fundsin Canada. Investment SaskatchewanAg andAg Related8%Fertilizer29%Manufacturingand Processing7%participates in four funds ranging in size from $10 to $60million. Total commitments by Investment Saskatchewanhave been matched with $148.4 million in private sectorcommitments.The bulk of the funds have investment conditions toensure that every effort is made to direct InvestmentSaskatchewan’s capital to businesses in the province.SMALL PORTFOLIOSThe management of investments individually less than$3 million in size was outsourced to two Saskatchewanbased,private sector investment fund managers in 2003.They are reported as part of PCF Investments Ltd. andWTC Investments Ltd.Investment Saskatchewan’s decision to outsource these71 investments valued at $22.9 million at time of outsourcing,was a strategic decision to provide the province’sprivate sector managers with additional investments,thereby strengthening the province’s capacity to manageventure capital.Adv. Tech,Biotechand Pharma3%Other(Tourism/Culture,Mining,Real Estate)7%Financial/Insurance19%Forestryand Related27%PROPERTIES, CAPITALASSETS AND LEASESIn addition to the above definedportfolios, Investment Saskatchewanmanages a number of propertiesinherited from other Crown corporationsand departments. Theseholdings are varied and include propertiesheld for sale, and a smallportfolio of lease options.13

A S S E T S – P O R T F O L I OFOLLOWING IS A BREAKDOWN OF INVESTMENT SASKATCHEWAN’SPORTFOLIO CARRYING VALUES AT DECEMBER 31, 2004:Direct Investments Accounted for on an Equity Basis ($ millions) (Non-consolidated)Book Value at Dec. 31/04Meadow Lake Pulp Limited Partnership $78.8Saskferco Products Inc. 136.6Meadow Lake OSB Limited Partnership 43.9Centennial Foods Partnership 20.1Big Sky Farms Inc. 21.6Investment Saskatchewan Swine Inc. 0.1CIC Swine Genetics Holdings Inc. 12.6Saskatchewan Valley Potato Corporation 1.5Total $315.2Direct Investments Accounted for on a Cost Basis ($ millions) (Non-consolidated)Book Value at Dec. 31/04Premium Brands Inc. $12.2Minds Eye Entertainment Ltd. —Pangaea Systems Inc. —Other Small Investments 0.1Total $12.3Fund of Fund Investments ($ millions) (Non-consolidated)Book Value at Dec. 31/04Foragen Technologies Limited Partnership $3.0Western Life Sciences Venture Fund Limited Partnership 2.8Prairie Ventures Limited Partnership 10.8Primaxis Technology Ventures Incorporated 5.0Total $21.6Small Portfolio ($ millions) (Non-consolidated)Book Value at Dec. 31/04PCF Investments Ltd. $7.9WTCInvestments Ltd. 7.3Total $15.2Debentures, Loans and Other Advances ($ millions) (Non-consolidated)Book Value at Dec. 31/04HARO Financial Corporation $83.4Canadian Western Bank – Debenture 3.1Great Western Brewing Company Limited – Debenture 1.0Miscellaneous Small Loans 2.3Total $89.8Properties ($ millions) (Non-consolidated)Book Value at Dec. 31/04Properties Held for Sale $4.514

A W A R E N E S S A N D R E P U T A T I O NFundamental PerspectiveInvestment Saskatchewan undertook a number of activities in 2004 to raise its profile andbuild awareness. A number of industry conferences and tradeshows were sponsored including:the Canadian Venture Capital Association Conference; the Calgary Society of FinancialAnalysts and Houston Society of Financial Analysts “Investing in Oil and Gas Conference”;The World Meat Congress; the Canadian IT Financing Forum; BioScience Week; BIO2004; andthe Steven Covey Leadership Conference.In addition to industry awareness,Investment Saskatchewan sponsored anumber of community events and activitiesInvestmentSaskatchewan's• an Angel Investors Network Sessionwhere interested organizations andindividuals discussed “Building Busi-in Saskatchewan including the Sasknessesof the Future” in an openfundamental valueatchewan Chamber of Commerce’s ABEXforum;Awards, the Aboriginal Government is built on a strong• presentations from Blair Richardson,Employees Network, the 10th Annual First asset base, soundPresident and CEO of Bow RiverNations Award Ceremony, the Canadianmanagement, andCapital Partners, Denver CO; IlseLight Source Opening Gala, the GlobeTreurnicht, President & CEO PrimaxisTheatre, and the United Way of Regina. growing awarenessTechnology Ventures Inc.; andInvestment Saskatchewan was also in the industry.Dr. Paul Guild, Vice-President ofpleased to convene the 2nd Annual InvestmentFuture Forum in Regina. During theUniversity Research, University ofWaterloo; andtwo-day event, over 200 people attended and 16 companies• a luncheon presentation by Deirdre McMurdy, co-host ofpresented their business proposals to over 20 investor companies.Global TV’s Money Wise and Tony Wilson-Smith, Maclean’sThe Investment Future Forum brought together someEditor and Director of On-line Media for Maclean Hunter.of Canada’s top speakers, venture capital companies, financialinstitutions and entrepreneurs. Some highlights of the 2004Forum included:• an Investee Boot Camp conducted by Deloitte & Touche withThe event, co-sponsored by Saskatchewan Industry andResources, was well received by investors and investees andprovided a rare opportunity for private and public networking.select growth companies to help them prepare for and targetappropriate sources of capital at the event;15

C O R P O R A T E I N F O R M A T I O NCorporate OfficersJanet WightmanChief Executive OfficerJanet Wightman was appointed President and Chief Executive Officer ofInvestment Saskatchewan on May 1, 2004. Prior to joining Investment Saskatchewan,Ms. Wightman was the Executive Vice-President and Chief Operating Officer withFarm Credit Canada (FCC). In that role, she was accountable for all operationaldivisions within FCC including an overall portfolio of $10 billion and annualdisbursements of approximately $3 billion. She was also responsible for establishingtwo new businesses with FCC - FCC Ventures and Business Services.Previously, Ms. Wightman was Vice-President of Agribusiness and Eastern Operationswith Farm Credit and VP, Human Resources, Administration and Business Processes.Prior to moving to Saskatchewan and joining FCC, Ms. Wightman was theDirector, Resource Management with the Grain Transportation Agency in Winnipeg.Ms. Wightman is a member of the Board of Governors of the Canadian UnityCouncil and a past director of SaskPower Corporation.Laurie PowersChief Financial OfficerLaurie Powers was appointed Chief Financial Officer of Investment Saskatchewanin September 2004. Prior to joining Investment Saskatchewan Ms. Powers was theChief Financial Officer with Information Services Corporation of Saskatchewan (ISC)for four and one-half years. As one of the four chief officers of ISC, she wasresponsible for providing strategic organizational leadership and stewardship for ISCduring the organization’s first five years of existence, focusing on areas of financialoperations and financial strategies.Previously, Ms. Powers was Vice-President of Finance with National Alfalfa andExecutive Manager, Finance with Saskatchewan Crop Insurance Corporation.Prior to joining Saskatchewan Crop Insurance Corporation, Ms. Powers articledfor her Chartered Accountants designation with Deloitte and Touche in Saskatoon.16

C O R P O R A T E I N F O R M A T I O NBoard of DirectorsSitting (left to right): Anne Parker, Director; Gordon Tallman, Director; Ray McKay, Director.Standing (left to right): Don Black, Director; Don Wilson, Corporate Secretary; Susan Milburn, Vice-Chair; R.T. (Bob) Reid, Director;Neil Henneberg, Board Secretary; Paul Martin, Director; Maurice Delage, Chair.The current structure and composition of the InvestmentSaskatchewan Board of Directors was initiated in 2003. TheBoard is composed of eight directors.The Board of Directors is responsible for establishing theoverall strategic direction for the organization and ensuringthe strategy becomes operationalized through the organization’sbusiness plans. It has the authority and obligation to protectand enhance the assets of the Corporation in the interestsof the shareholder and carries out this responsibility in anactive manner.Investment Saskatchewan uses an Annual PerformanceManagement model that starts with the Board of Directors andthe establishment of the organizational strategy. The modelincludes involvement of management and all employees whichresults in a Strategic Plan. The Corporation has established aBalanced Scorecard which is the framework used to set objectives,measure and evaluate its overall business performance.The Board is responsible for the stewardship of the Corporation.In fulfilling its stewardship responsibilities, the principalduties of the Board are to:• set the long-term strategic direction of the Corporation,approve annual plans and performance targets, and monitorthe Corporation’s performance against plan;• ensure compliance with the Corporation’s statutoryresponsibilities;• identify with management the risks to the Corporation andset policies and procedures to manage those risks;• ensure the integrity of the Corporation’s internal controlsand financial systems;• review the performance of the CEO, and ensure that successionplans are in place; and• adopt policies for effective communications with the shareholder,stakeholders, and the public.17

C O R P O R A T E I N F O R M A T I O NBoard of DirectorsMaurice DelageRegina, SaskatchewanMr. Delage is Chair of the Board of Directors of InvestmentSaskatchewan. He is the former President and Chief ExecutiveOfficer of Aventis Crop Science in North America, a globalagri-business company focused on high technology cropprotection, animal health, seeds and biotechnology. As amember of the global management boards of Aventis, AgrEvo,Hoechst Celenese, and Hoechst Canada, his emphasis was oncapital investment, business development, strategic planning,mergers and acquisitions. Mr. Delage retired from Aventisin 2001.Susan MilburnSaskatoon, SaskatchewanMs. Milburn is Vice-Chair of the Board of Directors.Currently Saskatchewan Vice-President of Raymond JamesLtd., a full-service investment dealer, she had previouslyworked with the predecessor firms of Midland Walwyn andRBC Dominion Securities. She is Chair of the InvestmentDealers Association-Saskatchewan Chapter, past Chair of theBoard of SaskEnergy and past member of the Board ofSaskPower. As well, Ms. Milburn has affiliations with theSaskatoon Economic Development Board, Saskatoon CommunityBond Corporation, and Crown Life Pension Plan asan independent trustee.Donald W. Black CMRegina, SaskatchewanMr. Black is the Chief Executive Officer of GreystoneManaged Investments Inc., an independent investmentcounselingfirm. He has nearly 40 years of experience ininvestment and finance, the majority of which is at seniormanagement and strategic direction levels. Mr. Black hasbeen a director of a number of public and private companiesand currently is a board member of TGS North AmericanReal Estate Trust; a director and Chair of the CanadianScholarship Trust Foundation; and is a public director of theInvestment Dealers Association of Canada. In addition, he isthe former Chair, Farm Credit Corporation Board of Directorsand has served on the boards of numerous charities andcommunity organizations. Mr. Black was appointed a Memberof the Order of Canada in 2002; and, in 2003 was awardedthe Queen Elizabeth II Golden Jubilee Medal.Paul MartinRegina, SaskatchewanMr. Martin is President, Paul Martin CommunicationsLtd. He is Chair of the Regina Regional Economic DevelopmentAuthority and is an active member of the businessmedia in Saskatchewan. Specializing in coverage of businessand politics, his journalism career has spanned radio,television and print media. Mr. Martin is a director of BigSky Farms Inc.18

C O R P O R A T E I N F O R M A T I O NBoard of DirectorsRaymond A. (Ray) McKayLa Ronge, SaskatchewanMr. McKay is Chief Executive Officer of Kitsaki ManagementLimited Partnership and a member of the Lac La RongeIndian Band. Kitsaki is a Lac La Ronge Indian Band-ownedcompany that manages a diverse portfolio of active businessinvestment interests in trucking, mining, catering, hotels,meat processing, wild rice and environmental monitoring.Previously he held senior positions in the public sector wherehe was key in developing important strategies for northernaffairs and development.Anne ParkerRegina, SaskatchewanMs. Parker is the Executive Director of Communities ofTomorrow Partners for Sustainability Inc., a multi-milliondollar community development and research investmententity. Previously, she held progressively senior positionswith IPSCO Inc., most recently as Vice President of TradePolicy and Communications. In her 15 years with IPSCOshe also served as legal counsel and Director CorporateCommunications. Ms. Parker has completed the CanadianSecurities Course and is on the Board of Governors of theCanadian Unity Council and on numerous community andcharitable organizations.R.T. (Bob) ReidVancouver, British ColumbiaMr. Reid is a Corporate Director and Chair of B.C.Transmission Corporation. He held positions as President ofDuke Energy Gas Transmission’s Canadian operations,Executive Vice President and Chief Operating Officer,Westcoast Energy Inc. and President and Chief ExecutiveOfficer of Union Gas. Prior to joining Westcoast, Mr. Reidheld senior executive positions in both government serviceand the natural gas industry including with Pan-AlbertaGas, Foothills Pipe Lines Limited, Sceptre Resources, andthe Independent Petroleum Association of Canada. He is aboard member of Greystone Capital Management Inc. and theCanadian Education Centre Network; former board memberof Cameco Corporation, Rigel Energy, and the Canada LifeAssurance Company; and former Chair of the Canadian GasAssociation and the Ontario Energy Association. Mr. Reid isa life-member of the Canadian Gas Association.Gordon G. TallmanCalgary, AlbertaMr. Tallman retired as the Senior Vice President, RoyalBank, Prairies Region, after a banking career spanning 42years. He is a member of the Boards of Directors/Trusteesof Big Rock Brewery Income Trust, Canadian Utilities Ltd.,ECL Group of Companies Ltd., PFB Corporation, Chair ofthe Board of CV Technologies Inc., and Chair of the Boardof Trustees of Enbridge Income Fund. Mr. Tallman is alsocurrently Chair of the Mount Royal College Foundation andserves on a number of other community organizations.19

Economic OverviewSASKATCHEWAN 2003 REAL GROSS DOMESTIC PRODUCT,AT BASIC PRICES, BY INDUSTRY.Education,Health andSocial ServicesIndustries11.9%Other ServiceIndustries5.3%Agriculture, Forestry,Fishing and Hunting6.8%GovernmentServiceIndustries5.8%BusinessServiceIndustries6.5%Mining andPetroleum13.0%ManufacturingIndustries7.7%Finance,Insurance,Real Estateand Leasing17.1%ConstructionIndustries5.0%Wholesale andRetail Trade11.7%Transportation,Communicationand Utility9.1%ECONOMIC OVERVIEWAccording to Statistics Canada’s revised estimates,Saskatchewan’s Gross Domestic Product (GDP), inflationadjusted, stood at $32 billion in 2003. In the last decade(from 1994 to 2003), Saskatchewan’s real GDP grew, onaverage, at a rate of 2.2 per cent annually.Over the 1994-2003 period, Saskatchewan’s realGDP per capita increased at an annual rate of 2.3 per centand Saskatchewan’s productivity (real GDP per employedperson) was tied at third highest among the 10 provinces(1.4 per cent a year).NOTES:Business services industries include: information andcultural industries, professional, scientific, technical,administrative and support services.Other service industries include: arts, entertainmentand recreation industries, and accommodations and foodservices industries.Source: Statistics Canada, Preliminary Provincial GDPby Industry, Catalogue No. 15-203-XIB or CANSIM table379-0025.20

C U R R E N T P O R T F O L I OHAROFinancial CorporationLIMITED PARTNERSHIPE N T E R T A I N M E N TMillar Western Pulp (Meadow Lake) Ltd.

C O R P O R A T E O F F I C E SInvestment Saskatchewan Inc.Corporate Office1800 - 1874 Scarth StreetRegina, SaskatchewanCanadaS4P 4B3phone: (306) 787.7200Investment Saskatchewan Inc.Saskatoon Office101 - 116 Research DriveSaskatoon, SaskatchewanCanadaS7N 3R3phone: (306) 933.7890www.investsask.com