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A S O L I D F O U N D A T I O N

V I T A L C O N N E C T I O N S

I N N O V A T I V E S O L U T I O N S

AG-WEST BIO INC.2008 ANNUAL REPORT

OUR VISION:Creating value in agriculture,

food, health and bio-based

industries through leadership

in the application of science &

technology for the benefit of

Saskatchewan people.

OUR MISSION:To lead and support the

development of an economically

viable bio-sciences cluster in

Saskatchewan in a way that will

translate into significant economic

benefits and spin-offs to the

Saskatchewan and Canadian

economy. Ag-West Bio Inc. will

expedite the commercialization of

value-added products by linking

knowledge and investment with

science and enterprise in the

development of products that

satisfy market needs.

As with any new position, there are always surprises; fortunately they have for the most partbeen positive with Ag-West. One positive surprise is the depth of competencies within thestaff. I have been impressed also with the expertise and support of the board of directors,Saskatchewan Ministry of Agriculture and Ag-West Bio members.I have found Ag-West Bio to be a unique arm’s length organization that can transitiongovernment priorities to business, business priorities to government while maintaining theindependent capacity to commercialize emerging technologies and foster the developmentof small and medium size enterprises (SMEs). Saskatchewan, with the cultivation of Ag-West and the research and development cluster that surrounds it, is well placed to benefitfrom the investment it has made in its core agricultural-based businesses. As with allinvestments, the return depends upon the ability to translate the investment meaningfullyinto the marketplace.In the last four months, Ag-West has been restructured to make its operations more efficient

and cost-effective. Ag-West has developed a number of initiatives with complementary organizations to increase itsmentoring and investment capacity for new technologies and SMEs.Ag-West Bio’s focus will remain on pathfinding for new technologies and providing support to its members forcommercialization. Ag-West represents its members and associated industries as a collective voice to government,encouraging economic development and addressing regulatory and other issues. Ag-West acts as a catalyst, connectingSaskatchewan organizations to emerging global opportunities. Through these initiatives Ag-West creates value for itsmembers.I look forward to meeting more of our members to share with you Ag-West Bio’s vision for the future.Perry Lidster

A message from the president

A letter from the chairIt was another exciting year for Ag-West Bio. Although the retirement of Dr. Ashley O’Sullivanleft difficult shoes to fill, we are pleased to welcome Dr. Perry Lidster to the team. Hisdiverse experience in science, business and government will help guide Saskatchewancompanies into the future.Ag-West Bio continues to be one of the leading biotechnology industry organizations in theworld. Over the years, our focus on programs has evolved and we are now going throughanother strategic planning process which places increased emphasis on commercialization.We will continue to gather input from government, our members and stakeholders in theindustry during this strategic planning process. Our dynamic board is filled with industryleaders working to build the bio-sector in the province.

Last year, we organized workshops in the bioproducts and health areas, hosted a numberof company and government delegations, and provided input on various panels discussing

topics of innovation and government policy relating to science and agriculture. We participated in conferences addressingareas of importance to our mandate and invested in innovation through local companies.From a personal perspective, I am pleased that we have been able to recruit a high calibre board and staff that aremotivated and care about Ag-West Bio and the province.John Hyshka

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A SOLID FOUNDATION

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Ag-West Bio’s Staff: Dr. Perry Lidster, President and CEO ! Ron Kehrig, , , , , VP Biofuels and Bioproducts !Dr. Lisette Mascarenhas, , , , , VP Investments & Health ! Deb Shutiak, , , , , General Manager ! Darcy Pawlik, , , , , Directorof Regulatory Affairs ! Terry-Lynn Quadri, , , , , Manager, Biofuels & Bioproducts Centre ! Shelby Sluth, , , , , Research/Project Assistant ! Jackie Robin, , , , , Communications Director ! Marilyn Wood-Sparrow, Accountant ! KristenDubé/Lori Raine Receptionist/Administrative Assistant

Ag-West Bio’s Board of Directors: John Hyshka (Chair), CFO Phenomenome Discoveries Inc. ! Armand Lavoie,,,,,VP Western Canada, Foragen Technology Ventures Inc.! Abdul Jalil, , , , , Director of Research Branch, SaskatchewanMinistry of Agriculture ! Pete Desai, , , , , President, Desai & Desai Inc.! Ian McPhadden, , , , , Producer ! Kevin Gellatly,,,,,VP Alliances, Performance Plants Inc. ! Karen Chad, , , , , Associate VP Research, University of Saskatchewan ! SusanMilburn, , , , , VP and Investment Advisor, Raymond James Ltd.! Ron Styles, , , , , President & CEO, Crown InvestmentsCorporation ! Joe Vidal, , , , , President & CEO, Bioriginal Food & Science Corp. ! Calvin Sonntag, President, NovozymesBioAg Group

STRENGTH INTEAMWORK:NEW FACES,

FRESH IDEASThe past year has been a timeof change at Ag-West Bio, with

fresh faces coming on boardand others moving on to newopportunities. We appreciate

everyone who has contributedtheir talents to the organization.The qualified and conscientiousgroup is working hard to ensure

Ag-West is effective in fulfilling itsgoals. In May, with the retirementof Dr. Ashley O’Sullivan, Dr. Perry

Lidster stepped into the role ofPresident and CEO. With the

Board of Directors, he hasimplemented a number of

organizational changes aimedat making Ag-West more

efficient and streamlined: LiseyMascarenhas, formerly VP Health

and Nutrition, has addedcompany investments to her

duties, becoming VP Investmentsand Health. Deb Shutiak is

General Manager, moving fromthe position of CommunicationsDirector. Terry-Lynn Quadri holds

a term position, working withstakeholders to create a Biofuels

and Bioproducts Centre.

Quality raw materials. Outstanding science infrastructure.A talented workforce. A solid business environment.Agriculture and science have roots that grow deep in Saskatchewan. With over 40 percent of Canada’s arable land,agriculture has traditionally been the economic mainstay in the province. Life sciences have played a parallel role inthe province: the University of Saskatchewan (U of S) has been central to the creation of the life-science cluster.

Merging these essential areas has created huge opportunities in the life-sciences industry. Particulary in agriculturalbiotechnology, major advances have occurred, with Saskatchewan often taking the lead. New, hardier crops, morenutritious food and better feeds are giving farmers more options in their businesses. Resourceful entrepreneurs areexploring the potential of native plant species and developing innovative products. Environmentally friendly bioproductsare becoming commercially viable, as researchers develop efficient technologies to produce them.

The health sector is also being affected by advances in biotechnology. Using locally grown crops, companies aredeveloping nutraceuticals and researching the effects of functional foods on human health. Saskatchewan hasbecome a major player in the areas of vaccines and genomics research. Bio-diagnostics tools are being developed asless invasive options for medical care.

Today, the ‘science cluster’ in Saskatchewan has grown to encompass two university campuses and three researchparks, as well as a number of provincially and nationally funded research institutions and technical training centres.These provide a stable base for high level research in the life sciences. As Alanna Koch, Deputy Minister of Agriculture,puts it, “The biotechnology research advantages today didn’t happen overnight; they are the result of expandingscientific capacity that has been building for more than a century.”

Building on Saskatchewan’s historical strengths in agriculture and life-science, Ag-West Bio is working to create asolid foundation where life-science organizations can turn great ideas into viable businesses. We work with start-upand early-stage companies to help them develop sound business plans and secure financing. Our commercializationfund is a source of start-up capital, launching several successful businesses. We also work with all levels of governmentto encourage a business-friendly environment in the province, by providing an industry perspective to government,and supporting the development of a transparent and efficient framework of policies and regulations.

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VITAL CONNECTIONS

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The science cluster in Saskatchewanis a network of cooperative centres and institutionsessential for the healthy development of the bio-economy. At the University of Saskatchewan (U of S)the Colleges of Agriculture and Bioresources,Medicine, Pharmacy and Nutrition, Kinesiology,Engineering, as well as the Western College of

Veterinary Medicine, are focused on life sciences. TheCollege of Arts and Science delivers a sound base in

all the sciences. The U of S Edwards School of Businessoffers a variety of commerce programs, including abachelor of science in agribusiness. The department ofApplied Research and Innovation at the SaskatchewanInstitute of Applied Science and Technology (SIAST)ensures skilled technicians are available for life-sciencecompanies. At the University of Regina, faculty membersare involved in a number of research initiatives relatedto energy and the life sciences, including CO2technologies and other projects designedto develop new methods of producingbiodiesel and hydrogen fuel fromrenewable resources.

Three research parks are located in theprovince’s largest cities: Innovation Placein Saskatoon, the Forest Centre in PrinceAlbert and the Regina Research Park. TheU of S campus houses a number of vitalresearch stations: Vaccine and InfectiousDiseases Organization (VIDO) andCanada’s only synchrotron, the CanadianLight Source (CLS). Construction of InterVac, aContainment Level 3 vaccine research lab which will beled by VIDO, is expected to be completed in 2010. Twonationally funded research organizations are located inSaskatoon: Agriculture and Agri-food Canada SaskatoonResearch Centre and National Research Council – Plant

Biotechnology Institute. POS Pilot Plant, theSaskatchewan Research Council, Innovation PlaceBioprocessing Centre, Prairie Agricultural MachineryInstitute and the Saskatchewan Food Research Centreare other integral players in the cluster. Scientists fromaround the globe are enticed to Saskatchewan with theopportunity of conducting their research at thesesuperlative research centres.

Ag-West Bio has built relationships with each one of theseorganizations, acting as a catalyst to facilitate the flowof knowledge and ideas through to the commercializationof products and services. A cooperative atmospheremeans organizations collaborate on projects and worktogether to promote the province at outside events.

Communication is an essential role forAg-West Bio. We maintain a number of publicationsto deliver the message of Saskatchewan’s successes inthe bio-economy and to try to keep our members abreastof new discoveries, technologies and issues.

In September 2007, Ag-West collaborated with theCollege of Agriculture and Bioresources, SIAST, Ag in theClassroom, Genome Prairie and Eclecthink International,to organize a series of events for National Biotechnology

Week. The events included alecture series, public tours, andan Outreach Day geared tograde-school children.

“A Night in the Lab” was hostedby Ag-West at ABIC 2007 inCalgary. The event was a funopportunity for delegates tomake connections and provedto be a great way to promoteSaskatchewan’s capacity andinterest in doing business with

companies and researchers from around the world.

In June, Ag-West Bio and the Saskatchewan Ministry ofEnterprise and Innovation worked together to bring adelegation to BIO 2008 in San Diego. The impact wasmonumental. Promoting their businesses to a targetedaudience garnered signif icant deals for the

From the top:Regina Research Park,Canadian Light Source,Innovation Place,NRC-PBI, College ofAgriculture andBioresources (U of S)

AG-WEST BIO:HELPING SASKATCHEWANCOMPANIES ON THEIRPATH TO SUCCESS

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Saskatchewan participants. The show also broughtSaskatchewan organizations together as graciousambassadors, unified by the goal of showcasing theprovince.

Also in June 2008, Ag-West collaborated with STEP tosend our SOLUTIONS booth and three companies toInternational Food Technologists Conference in NewOrleans. Betty Forbes, president and CEO of NorthernVigor Berries says, “As a new company, we found IFTinvaluable in introducing ourselves and our products tocompanies from all over the world. We are now in theprocess of following up on the great deal of interestshown.”

E-neE-neE-neE-neE-newswswswsws is a clipping service available exclusively to Ag-West members. New science and technologies, issuesand trends as well as events and opportunities areposted in this electronic, bi-weekly publication.

Ag-West’s third edition ofBio-Solutions Bio-Solutions Bio-Solutions Bio-Solutions Bio-Solutions magazinewas published in May.Articles included updateson the progress of anumber of membercompanies, the value ofinvesting in infrastructureto attract research andthe promise of success inthe Saskatchewan bio-economy. The publicationarticulated the optimismof those in the life

sciences and the enthusiasm for business.

SUCCESSSUCCESSSUCCESSSUCCESSSUCCESS continues to be our communications vehicledirected at decision-makers. We highlight membercompanies, discuss regulatory and policy issues, andpresent new areas of business development.

Bio-BulleBio-BulleBio-BulleBio-BulleBio-Bulletintintintintin is a bimonthly, on-line newsletter with over2000 copies distributed around the world. Bio-Bulletinincludes articles that inform stakeholders aboutregulatory topics, reviews of Ag-West’s activities andevents, as well as information about local innovations

and opportunities. This publication is available on ourwebsite: www.agwest.sk.ca.

Ag-West Bio creates vital connectionsthrough pathfinding and networking activities. Weconduct countless meetings with business people,government representatives and researchers acrossCanada and around the world to promote Saskatchewanas the place to do business in the bio-economy. We helpindividuals and organizations make the connections theyneed, whether it be researchers sharing ideas,businesses finding skilled technicians, or entrepreneursconnecting with funding organizations to take the nextstep into commercialization.

We host external delegations, arrange meetings to bringpeople face to face and organize tours of facilities toshowcase Saskatchewan’s state of the art infrastructure.We also encourage local companies to attend importantconferences as par t of ‘Team Saskatchewan.’Involvement increases the member’s visibility and oftenleads to establishing vital business contacts, whilereducing expenses. Throughout the year, we invite avariety of speakers from bio-based industries to sharetheir expert insight and advice at seminars andworkshops.

In March, we launched go-BiOgo-BiOgo-BiOgo-BiOgo-BiO, a searchable databasethat lists Saskatchewan organizations active in thebiofuels and bioproducts sector. (See page 11 for moreinformation on go-BiO).

In the last year, Ag-West Biocooperated with stakeholdersto further a variety of projects,ranging from increasingannual R&D expenditurelimits from $2M to $3M underthe Scientific Research andExperimental Development(SR&ED) tax program toensuring the New SubstancesNotification Requirements forOrganisms does not handicapCanadian R&D effor ts atpublic and private institutions.

Ag-West Bio contributes itsperspectives on federalobjectives by participatingwith BIOTECanada’s Industrial& Environmental committee,Agriculture Nutrition AdvisoryBoard and the BiotechnologyAccord. As part of CropLifeCanada’s BiotechnologyScience and RegulatoryCommittee, Ag-West addedinput on a variety of policytopics which were thensubmitted to the Governmentof Canada for consideration.As a result of cooperation, newstandards for low-levelpresence of modified seeds incommodity shipments wassupported by the CodexAlimentarius Commission. Ag-West also participates on thePlant Inoculants CanadaBoard, which strives to reducethe regulatory burden on theinoculant industry, largelylocated in Saskatchewan.

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KEEPINGMEMBERS

CONNECTEDIS ONE OF

OUR MOSTIMPORTANT

GOALS.Our publications, an in-house

library, a members-only sectionon our website, and bi-weekly

E-news clipping service areresources available to our

members. Member profiles andcontact information are posted to

our website. Networking events,workshops and ambassadorship

opportunities are offeredat a discounted rate.

Ag-West can offer membersassistance in finding matching

grants and investments.Members also have an

opportunity to access directinvestment capital through our

commercialization fund.

Join Ag-West Bio. We’ll keep youinformed about the issues,

challenges and opportunities intoday’s bio-economy. Title page illustrations: Cover: Agriculture and science both have solid roots in Saskatchewan. Page 2: A Solid Foundation: A composite photo-

graph of the Stone Barn and the Agriculture building, both on the U of S Campus. Page 5: Vital Connections: The Galleria at Innovation Place inSaskatoon, superimposed on a field of canola. Page 8: Innovative Solutions: Saskatchewan has the resources along with the knowledge, skilland creativity necessary to build the bio-economy.

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Associate membersAusBiotechBioAlbertaBioMed SABIOTECanadaCanadian Health Food AssociationCanadian Institute of Food Science

and TechnologyFeeds Innovation InstituteGreater Saskatoon Chamber

of CommerceLife Science Association of ManitobaManitoba Food Processors AssociationPOS Pilot Plant CorporationSaskatchewan Trade

and Export PartnershipWestern Canadian Functional Food and

Nutraceutical NetworkSaskatchewan Advanced Technology

AssociationSaskatchewan Environmental Industry &

Managers AssociationSaskatchewan Food Processors

AssociationSaskatchewan Herb & Spice AssociationSaskatchewan Fruit Growers

Association

Corporate membersAgriculture and Agri-Food CanadaAdvance-Tek Consulting Inc.Alberta Research CouncilBanda Marketing GroupBASF Plant Sciences Ltd.Becker Underwood Inc.Bioriginal Food and Science Corp.Canadian Bioenergy CorporationCanadian Light Source Inc., U of SCanMar Grain Products Ltd.

College of Agriculture andBioresources, U of S

Cypress Agri Energy Inc.Dow AgroScience Canada Inc.Edwards School of Business, U of SEmerald Seed Products Ltd.Foragen Technologies

Management Inc.Farmers of North AmericaForeign Affairs and International

Trade CanadaHeads-Up Plant ProtectantsGenome PrairieGuardian BiotechnologiesIndustry Liaison Office, U of SInnovation PlaceIndustry CanadaMaple Leaf Bio-ConceptsMarch Consulting Associates Inc.MCN BioProducts Inc.Milligan Bio-Tech Inc.Mold Solutions LLC CanadaMustard Capital Inc.National Research Council -

Plant Biotechnology InstituteNatraceutical Canada Inc.Northern Vigor BerriesPfizer Canada Inc.Phenomenome DiscoveriesPhilom Bios Inc.Prairie Agriculture

Machinery InstitutePrairie Plant Systems Inc.Quantum Genetics Canada Inc.Ridout & Maybbe LLPSaskEnergy Corp.Saskatchewan Biofuels

Development Council

Saskatchewan CanolaDevelopment Commission

Saskatchewan FlaxDevelopment Commission

Saskatchewan Pulse GrowersSaskatchewan Research CouncilSaskatoon Regional Economic

Development Authority Inc.Saskatchewan Food Industry

Development Centre Inc.Saskatchewan Ministry of Enterprise

and InnovationTitan Clean Energy Projects

CorporationThe Pathfinders Research and

Management Ltd.The Saskatoon Colostrum Company Inc.Vaccine and Infectious Disease

Organization, U of S

Individual MembersLes BeresPete DesaiJack GrushcowMorris JohnsonIan McPhaddenGarnet MartinSusan MilburnElizabeth NashMichael OelckJoanne PostG.V. ShankarRon StylesNeil Wagner

Ag-West Bio Members

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INNOVATIVE SOLUTIONS

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INVESINVESINVESINVESINVESTMENTSTMENTSTMENTSTMENTSTMENTSAND HEALAND HEALAND HEALAND HEALAND HEALTHTHTHTHTH

A message from Dr. Lisette MascarenhasThe time of reactive medicine practice is slowly but steadily moving tomiddle ground to accommodate the evolution of proactive, personalizedand preventive medicine. Advances in information technology, combinedwith a burst of activity on the natural products side, have brought aboutgood news that many chronic health conditions can be prevented, managedand even treated better by subscribing to a healthier, holistic lifestyle. Atthe heart of the prevention and management of chronic diseases, especiallymetabolic disorders such as type 2 diabetes, is nutrition, and all theelements of good nutrition can be found right here in Saskatchewan.

In Saskatchewan, many aspects of nutrition are being discussed and dealtwith. From its ‘Canada quality’ raw ingredients to its bioprocessingcapabilities, the province provides contamination and contention-free rawmaterials for large manufacturers and cutting edge solutions for novelproduct creation. The strategically-created research cluster inSaskatchewan offers a one-of-a-kind environment for human and animalhealth product and process development, eliminating the need for self-sustained vertical integration.

We undertook a significant step in our education campaign to highlightthe link between agriculture, nutrition and chronic illness by hosting thefirst Metabolic Syndrome (pre-diabetes) workshop. Through eloquent andwell-known researchers, we stressed the importance of preventing type 2

diabetes using a number of strategiesoutside the traditional pharmaceuticalstream. The attendance, enthusiasm andfeedback received from our participants andthe larger science and R&D community wasvery gratifying.

The keynote speaker for AWB‘sImproving Human Health MetabolicSyndrome Workshop was nutritionexpert Leslie Beck.

Above: The diversity of health research inSaskatchewan covers everything from humanand animal health, feeds and food research,natural health products, nutraceuticals, bio-diagnostics, vaccines and genomics.

Top: Seabuckthorn has incredible nutritionalvalue and is one of the crops with greatpotential in the natural health products market.

Dr. Lisey Mascarenhas, Vice PresidentHealth and Investments at Ag-West Bio.

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Investments and commercializationOne of our key objectives in identifying and hostingmeetings of relevance to our membership and to thelarger stakeholder community is bio-economicdevelopment in Saskatchewan. Bio-economicdevelopment can come in several forms: attractingcompanies from other jurisdictions; by out-licensingSaskatchewan grown technologies for fur therdevelopment; vertical integration of new technologycompanies; growth and expansion of existing companiesand others.

Last year we were involved in attracting severalcompanies from other jurisdictions to Saskatchewan inthe human and animal health space. While some ofthese companies, such as Bio-Extraction Inc., join theclass of companies specializing in animal health andnutrition, others, such as ARC Pharmaceuticals, fall intothe disease prevention category. We also mentoredseveral of our companies in pathfinding, businessdevelopment and marketing. For example, we assistedtwo Saskatchewan companies, Northern Vigor Berriesand Mustard Capital Inc., take new product conceptsand new products to IFT 2008 in New Orleans. Asdiscovered at IFT 2008, these companies carved out aniche in the high plant protein and the super fruitcategories.

In January, Ag-West approved a $300,000 investmentin Titan Clean Energy Project Corporation (Titan) formarket research and infrastructure scale-up. This cameafter Ag-West worked with Titan to help them buildrelationships with suppliers and researchers. JasonPraski, Titan’s President and COO stated, “We aregrateful for the support of Ag-West Bio and are delightedto have the mentorship and on-going collaboration withthe entire Ag-West team.”

Investment and company attraction in the life sciencespace doesn’t merely add to the list of Saskatchewanlife sciences companies. It is a commitment to beingpart of a larger cluster, to engage all appropriate coreand peripheral technical and non-technical service

2007- 2008 has been a busytime for policy reform inCanada’s health and nutritionsector. Health Canada consultedwith stakeholders to determineCanada’s path forward. Focuswas directed on developingstandard operating proceduresto improve efficiencies, adoptingGenerally Regarded as Safe(GRAS) criteria for foods andkeeping labels simple andunambiguous.

Consultations were held onHealth Canada’s Draft Guidanceon the Management of Pre-Market Submissions to the fooddirectorate. Ag-West supportsthe continued work of HealthCanada on the modernization ofthe regulatory framework sur-rounding food and nutrition. Wealso support the creation ofstandard operating proceduresto improve evaluation timelines.

Ag-West Bio has been involved onproposed bills such as Bill C-571(labeling of GMOs) and C-51(therapeutics and ensuringconsumer safety). When workingon these and other regulatoryissues in the health sector, theexpertise of BIOTECanada staffis utilized to ensure informationis accurate, updates are receivedand the best possible outcomefor Saskatchewan stakeholdersis realized.

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providers such as the Saskatchewan Research Council,Innovation Place Bioprocessing Centre, the University ofSaskatchewan (U of S), the U of S Vaccine and InfectiousDiseases Organization and Canadian Light Source, POSPilot Plant and others. By adding to our list of uniquecompanies that have made Saskatchewan their homewe are enabling and enhancing the profile of our researchcluster in Saskatchewan.

Moving into the future, we hope to build on our strengthsin investment and company attraction and grow the bio-economic potential and reality of the province.

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BIOFUELS &BIOFUELS &BIOFUELS &BIOFUELS &BIOFUELS &BIOPRBIOPRBIOPRBIOPRBIOPRODUCTSODUCTSODUCTSODUCTSODUCTS

Saskatchewan is fortunate to be enjoying therewards of our solid foundation in commodityagriculture and biosciences research.On this foundation, a new bioeconomy is being builtthrough the actions and contributions of the manyinnovative researchers and companies in Saskatchewan.

Biofuels and bioproducts were the center of media andindustry attention in the past year as the price of oil andfood commodities surged to highs never before seen.Certainly, the two topics (food and the price of oil) aresolidly linked. The impact of rising energy costs ontransportation (and almost everything else) are verycomplex issues and not without connection to othertopics, such as climate change, environmentalsustainability and challenges around productivity andland use.

The commercial development scene for biofuels isevolving to second generation biofuels and an integratedbiorefinery approach. Emerging technologies are leadingto new products and integrated processing solutions. Thissort of product integration, like turning canola meal intoaquatic feeds and energy integration from oat hulls orgrain screenings, is already happening in Saskatchewan.Transformation in agriculture is occurring as biomass isviewed now as a cost-competitive source for energy and

Ron Kehrig, Vice President Biofuels andBioproducts at Ag-West Bio.

In March, Ag-West launched wwwwwwwwwwwwwww.go-BiO.ca.go-BiO.ca.go-BiO.ca.go-BiO.ca.go-BiO.ca, a user-friendly, self-entry internet database of Saskatchewanorganizations involved in bioproducts, biofuels andbioprocessing. Funding for the go-BiO project wasprovided by Agriculture Council of Saskatchewanthrough Agriculture and Agri-Food Canada’s CanadianAdaptation and Rural Development in Saskatchewan(CARDS) program. Industry Canada provided fundingwith the idea that the go-BiO site would serve as aprototype for other provinces to create a similardatabase. To date, the database contains 127 listings– all organizations currently operating with an on-the-ground presence in Saskatchewan.

at least some industry chemicals and materials. Manyindustries are looking to source renewable andsustainable materials as cost-effective alternatives topetroleum products.

The task now will be commercializing technologies todeliver these new biofuels and bioproducts to market.Ag-West has taken an active a role in the developmentof a viable biofuels and bioproducts industry inSaskatchewan. Through the Biofuels and BioproductsCentre initiative, we are focusing on inter-institutionalcapacity in research and aligning efforts to commercialopportunities.

Saskatchewan is a powerhouse when it comes totemperate oilseeds and lipids - from biotech and plantbreeding capacity to developing new crop platforms andcommercializing new traits to turning all fractions intoproducts and scale-up. Another area of strength inCanada, which is no less a Saskatchewan strength, isthe area of lignocellulosic conversion to fuels andchemicals. If the ‘sugar platform’ of bioconversion makesBrazil the Saudi Arabia of Biomass, ‘Lignocellulosics’ isCanada’s sustainable version of Oil Sands. Challengingbut possible!

Ag-West is also active on the NRC/AAFC NationalBioproducts Program Committee, the Saskatchewan

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conducted an analysis on the distillers grains(DGs) from ethanol production and found a smallnumber of unapproved substances, Ag-West andthe Saskatchewan Biofuels DevelopmentCommission conducted a consultation in order tounderstand current practices and to ensureoperations could remain viable while upholdingstrict safety standards. To ensure the sustainabilityof the industry, we successfully recommended agreater alignment with the U.S. use of a risk-basedapproach when determining safety of productsand for DGs to be given a flexible definition.

Ag-West Bio participates on a variety ofcommittees through CropLife Canada andBIOTECanada to ensure plant biotechnology canbe used to capture opportunities in the greeneconomy. Given our climate, talented producersand resources, Saskatchewan needs to recaptureits place as the agricultural biotechnology hub ofthe world. Ag-West works with other organizationsand the provincial government to create awelcoming policy environment for biotech R&D andcommercialization, essential to solve globalproblems of drought, nutrient deficiency andsustainability.

To capture the benefits of agricultural biotechnologyfor Saskatchewan, Ag-West Bio participates in avariety of high-level meetings and workshops. TheCFIA’s workshop on risk assessment detailed theneed for science-based regulations. Biotechnologywas recognized as a tool to reduce risks andimprove Canada’s economic and social prosperity.Agriculture Canada’s Growing Forward policyframework and the Canadian Grains CouncilCommercialization of Canadian Innovation bothpromote the use of biotechnology in agriculture,manufacturing, environment and other greenindustries.

Biofuels Development Council, the Feeds InnovationInstitute, the Canadian GreenCrop Network and federalS&T roundtable consultations.

Ag-West is a catalyst in the biofuels and bioproductsindustry, creating connections and pathfinding for bothstart-up and existing organizations. Last year, we hosteda number of international visitors and seminars. Webrought in representatives from leading companies suchas BioGasol ApS (Denmark), Elevance RenewableScience (U.S.) and Verenium Corporation (U.S.) toaddress diverse topics, from novel research to the

challenges of commercialization. In February, the 4th PlantBio Industrial Oils Workshop, co-hosted by Ag-West Bioand NRC-PBI, was very well received. Companies fromaround the world were represented, such as ADM (U.S.A.),Agrisoma Biosciences and the Canola Council (Canada),PBI Lipid Technologies Group (Sweden), BASF PlantScience and BBK (Germany), and Palm Oil Board(Malaysia) among others. Information shared andconnections formed at the meeting led to some interestingcommercial development.

Saskatchewan has particularly strong connections withIndia in the biofuels and bioproducts area and continuesto grow with this new developing market and technologypartner. Ag-West Bio has been working with theSaskatchewan Research Council and the University ofSaskatchewan to foster research and business connections with India.

The commercialization of technology is at the heart of Ag-West Bio’s mandate. Increasingly, businesssuccess depends on far more than a single technology. Collaboration and the development ofbusiness relationships and business structures, in addition to financing, are key ingredients.

Ag-West Bio helps organizations make these vital connections and assemble financing to bringtheir innovative solutions to life.

Just a fewexamples of the

wide range ofbioproducts

manufactured inSaskatchewan.

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The accompanying summarized statement of financial position and statement of operations are derived from thecomplete financial statements of Ag-West Bio Inc. as at March 31, 2008 and for the year then ended on which weexpressed an opinion without reservation in our report dated May 16, 2008. The fair summarization of thecomplete financial statements is the responsibility of management. Our responsibility, in accordance with theapplicable Assurance Guideline of The Canadian Institute of Chartered Accountants, is to report on thesummarized financial statements.

In our opinion, the accompanying financial statements fairly summarize, in all material respects, the relatedcomplete financial statements in accordance with the criteria described in the Guideline referred to above.

These summarized financial statements do not contain all the disclosures required by generally acceptedaccounting principles. Readers are cautioned that these statements may not be appropriate for their purposes.For more information on the Foundation’s financial position, results of operations and cash flows, referenceshould be made to the related complete financial statements.

Chartered AccountantsSaskatoon, CanadaMay 16, 2008

Complete financial statements are available on request.

KPMG LLP Chartered AccountantsTelephone: 306-924-6200Fax: 306-934-6233600-128 4th Avenue SouthSaskatoon, SK S7K 1M8Website: www.kpmg.ca

AUDITORS’REPORT TO THEDIRECTORS ON

SUMMARIZEDFINANCIAL

STATEMENTS

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AG-WEST BIO INC.SummarizedFinancial Statements

To request a copy of the full financialstatements, contact Ag-West Bio at306-975-1939.

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SUMMARIZED STATEMENT OF FINANCIAL POSITIONMarch 31, 2008, with comparative figures for 2007

2008 2007

AssetsCash and short-term investments $ 4,119,282 $ 4,082,495Long-term investments 1,402,105 1,201,683Other assets 396,137 543,108

$ 5,917,524 $ 5,827,286

Liabilities and Fund BalancesCurrent liabilities $ 288,124 $ 662,183Fund balances 5,629,400 5,165,103

$ 5,917,524 $ 5,827,286

SUMMARIZED STATEMENT OF OPERATIONSYear ended March 31, 2008, with comparative figures for 2007

2008 2007

Revenue $ 1,962,053 $ 2,291,194Expenses:Operations 1,112,643 1,153,240Workshops and events 213,351 284,530Funded projects 139,848 187,843Investment fund 125,876 150,712Regulatory 81,474 80,287

1,673,192 1,856,612

Excess of revenue over expenses 288,861 434,582Write-down of long-term investments (72,750) (232,356)

Net earnings $ 216,111 $ 202,226

Photo sources include:Vaccine Infectious DiseaseOrganization (VIDO)Canadian Light Source Inc.University of SaskatchewanPOS Pilot PlantNational Research Council-Plant

Biotechnology InstituteSaskatchewan Research CouncilUniversity of Regina

Funding for Ag-West Bio isprovided by the SaskatchewanMinistry of Agriculture.

Ag-West Bio Inc.101-111 Research DriveSaskatoon, SK, CanadaS7N 3R2Web: www.agwest.sk.caEmail: agwest@agwest.sk.caTel: 306-975-1939Fax: 306-975-1966