2004 Crown Investments Corporation of Saskatchewan Annual Report

Policy and ProgramsReporting of Significant TransactionsIn 1997 CIC developed guidelines for reportingon significant transactions. The guidelines wereapproved by the CIC Board and the Legislature’sStanding Committee on Crown Corporations,now known as the Crown and Central AgenciesCommittee.A significant transaction is broadly defined as onethat is material (value greater than one per centof the Crown’s assets), and outside the ordinarycourse of business. This includes the purchaseor sale of a major asset or investment, assuminga major liability, or a major change in the termsand conditions of an existing investment. Crownsmust also report transactions that do not fallunder these conditions if they are judged to beof a sensitive nature or likely to be of interest tolegislators and the public. Examples would includeexternal investments or the creation of a subsidiary.Crowns are exempted from reporting details oftransactions in some cases where there is a needfor confidentiality regarding commercially sensitiveand/or competitive information.The policy requires that CIC, its Crowns, and theirsubsidiaries, report significant transactions to theCrown and Central Agencies Committee within90 days of the transaction. Reports, which may begiven to the Committee verbally, must describethe objectives of the transaction, its financialimplications, and the authority for the transaction.The following significant transactions were reportedto the Crown and Central Agencies Committee in2004:mmmmmmInvestment Saskatchewan Inc. – Changes togovernance and structure of CIC IndustrialInterests Inc. (CIC III).Investment Saskatchewan Inc. – Merger ofthe Swine Genetics Business of Genex SwineGroup Inc. and Nutreco International B.V., andthe purchase of $2.2 million of shares in GenexSwine Group Inc.Investment Saskatchewan Inc. – Financialrestructuring.SaskEnergy – Incremental acquisition of equityinterest in Heritage Gas Limited.SOCO – Transfer of Research Park assets andliabilities to General Revenue Fund (GRF).SaskTel – Sale of operating assets of Retx, Inc.Independent Reviews of Proposed InvestmentsAs of April 2004, all significant new investmentsby Crown corporations must be reviewed by anindependent third party before being approved bythe Crown Management Board and Cabinet. Thepurpose of the policy is to improve due diligenceand to provide advice that will help CrownManagement Board and Cabinet make informeddecisions about proposed investments.The policy applies to any new investment that’sintended to generate revenue or to diversify,whether inside or outside of Saskatchewan. Thepolicy does not apply to investments related toa Crown’s core mandate, such as enhancing itsbasic utility infrastructure in Saskatchewan. If aninvestment is ultimately approved by Cabinet, theCrown will make public as much detail as possibleabout the review.Investment Saskatchewan is exempt from thepolicy because investments are its core mandate,and it has an independent board of directors whosemembers have specific expertise in venture capitaland other kinds of investments.In 2004 there were two independent third partyreviews of proposed investments. One was relatedto an incremental investment by SaskTel in NavigataCommunications, a company that provides a fullrange of telecommunications products and services.The other was related to SaskTel’s establishment ofa company in the United Arab Emirates which willprovide professional consulting services.21 C I C