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INVESTING IN THE FUTURE ANNUAL REPORT 2013 History of PIC . . . . . . . . . . . . . . . . 1 Presidents Message . . . . . . . . . 2 Caron Transport . . . . . . . . . . . . . 4 ClearTech . . . . . . . . . . . . . . . . . . . 6 Panther Industries . . . . . . . . . . . 8 Kipp Zonen . . . . . . . . . . . . . . . 9 Hydor-Tech . . . . . . . . . . . . . . . . . 10 G Mechanical . . . . . . . . . . . . . 11 Kreos Aviation . . . . . . . . . . . . . 12 Adventure Destinations . . . . . 13 Round Table Management . 14 Minority Investments . . . . . . . 15 Financial Report . . . . . . . . . . . . 18 Charitable Contributions . . . . 20 DONT JUDGE EACH DAY BY THE HARVEST YOU REAP BUT BY THE SEEDS THAT YOU PLANT. Robert Louis Stevenson ANNUAL REPORT 2013 In 1976 Prairie Industrial Chemicals Ltd. opened its doors. It was a start-up chemical distribution company with one supplier and four available products. The founders grew the business by being open for business twenty-four hours per day and seven days per week all year round. They understood their customersneeds often before the customer identified the need on their own. Just four years later the company had annual sales in excess of 5 million and established branch offices and warehouses across the prairie provinces. By its fifteenth year combined sales surpassed 26 million dollars annually and the company had diversified into chemical packaging chemical manufacturing transportation importexport and property management. With a view to future growth through delegation and acquisition it underwent a major reorganisation. Separate companies were formed each with its own core business. Ownership remained with Prairie Industrial Chemicals but the name changed to more accurately reflect a broader corporate mandate. Today PIC Investment Group Inc is a diversified holding company that uses venture capital investment and provides hands-on management in order to grow. Through a set of investments including joint ventures wholly-owned partially-owned Operating Companies loans bridge financing and minority investments we provide service and support to all of the companies we invest in. We look for every opportunity to find synergy facilitate acquisitions and finance internal growth within existing companies. Analysis of new opportunities compares the return on investment against our best alternative for creating lift during the period of time we hold the investment. We seek to maximise lift by predicting our partners needs and help keep their business safe from the unexpected. HISTORY OF PIC 1 IN 2013 WE PUSHED FOR INVESTMENT IN FUTURE GROWTH OPPORTUNITIES. 2 PRESIDENTS MESSAGEWell lets not go through that again. However 2013 was the most impressive effort from the PIC Group team that I could have ever hoped for. The workload was immense and the stress intense. We managed our way through very difficult circumstances while aggressively investing in the future so that our Operating Companies would have the greatest possible jump on their competition in the future. We started the year with Portfolio Managers doing the most difficult part of their job taking personal responsibility for the inadequacies within the companies they are responsible for and having to make a change at the top or shut the business down. This is a huge undertaking. The decision is made business management becomes the portfolio managersresponsibility while a replacement is searched for and then oriented to the job. It requires everyone in the PIC Group to grab the rope and help pull. The entire time almost every decision is questioned and the experience is all-consuming which personally effects those involved. At the same time we pushed for investment in future growth opportunities. We spent more money on bigger projects than my imagination can comprehend. We spent the lionsshare of over 60000000 in commitments in 2013. Every company shared in this new property acid transload CTS head office truck scale Air Ambulance CAM Wild TV G Mechanical systems and personnel calibration rooms Advance and minority investments. By the end of the year we experienced the cash flow crunch that the above effort would obviously result in. So we all had to pull the rope even harder and it has put us in an incredible position. We have rock solid management and no outstanding gaps or issues. We are able to return to engaging in our Operating Companies and Minority Investments through a governance system. Through the establishment of Boards filled with competent people that reflect the expertise of the direction each company is heading toward we can provide the leader with insight oversight intelligence and best-practises so the leader can plan and grow their business with confidence. PIC continues to provide theback officeservices to many operating companies that would otherwise be required from a third-party. Thank you to all of the employees and their families whose homes we invaded with our business issues this year. You will be rewarded in 2014 with the fun of us taking advantage of the opportunities that we created by investing in the future last year. Greg Yuel 3 OUR FOCUS ON TRAINING AND DEVELOPMENT CONTINUES TO MOVE INTO ALL AREAS OF THE COMPANY... 4 The cautious optimism referred to in last years report is the reoccurring theme this year. A number of the plans included last year did play out and others didnt. Its interesting that when summing up the year we can reflect on how many positive things have happened in spite of a financial year with results that did not meet our expectations. Weve appreciated the new Head Office expansion allowing the management team to literally work together more efficiently. We did expand the HR Department with the welcome addition of our new Director of HR and new support positions. Because our biggest resource at Caron is our people the management of those people is and must be a priority. With the restructuring of HR we are seeing the benefits early on. Making that move was not an easy decision since we had a less than stellar year financially. Our sales results were flat our profits down by over 30 due to the softening of the oilfield business in the beginning of the year in addition to wet weather in all parts of Alberta and BC.The challenge of filling our trucks with professional drivers was not being met to our satisfaction another reason for the changes in our HR Department. We are also in the final stages of opening a location in Williston. The new fleet will consist of 20 trucks and 20 trailers managed locally with support from Head Office. A new Sleep Apnea Program for professional drivers and employees in safety sensitive positions was successfully introduced this year. Caron is once again a leader in the industry being one of the first bulk carriers to move forward with this program. Our focus on training and development continues to move into all areas of the company while ensuring our Professional Driver Training component stays fresh and current. In order to support each of these initiatives it was important to re-evaluate our IT needs another project that has seen positive results and continues to move forward. Training and development plays a key part for our employees in using and supporting the new systems that are introduced. Our employees have again worked through all these changes challenges and results. And were not done the foundation continues to be supported and challenged to ensure that we can manage the growth anticipated for 2014. Thank you to each of you who have contributed Bruno Muller CARON TRANSPORTATION SYSTEMS 5 WE STRIVE TO PUT THE BEST TEAM POSSIBLE IN FRONT OF OUR CUSTOMER THROUGHOUT THEIR ENTIRE CLEARTECH EXPERIENCE. 6 2013 was an exciting year at ClearTech. Total revenues exceeded the 100 million mark for the first time in company history securing a significant new milestone. Furthermore we increased our business at a near record 23 year-over-year by continuing to strengthen our market position and execute on our strategic initiatives. Sales developed favorably thanks to the hard work of our entire team and the commitment of our supplier partners. Growth was achieved across most of our traditional product lines and throughout our geography. Many things contributed to our success including the forward momentum of newer product offerings increased product availability from a key partner and the acquisition of Advance Chemicals Ltd in Port Coquitlam BC.These all participated in helping accelerate us to the record revenue level. The recent success and our continued growth are not only reliant on the products we sell but also on the customer relationships we establish and the specific people who establish them. We have worked hard to get the right people in every area of our business throughout the organization. The fiscal results of this past year are testament to the effectiveness of these efforts. We strive to put the best team possible in front of our customer throughout their entireClearTech Experience. Why do we do this To ensure that the customer will have a positive outcome and return to us time after time. We are proud of the people we have proud of our employeessuccesses individually and as members of local teams. The relationship between ClearTech and our customers stands on more than just our sales group it is supported by operations administration customer service and everyone else who touches the customer directly or indirectly throughout the process. Together they pull us towards our goals. Gross revenue is not the only area that we made gains. Capital infrastructure continued to improve this year with new tanks chemical handling equipment racking systems process equipment control systems and improved packaging lines in many of our production facilities. The operations team continues to demonstrate their ability to glean higher efficiencies from our current assets to support our growth and to provide us the ability to look forward. 2013 was an interesting year in our market. When talking to people in the industry you will hear many complaining about being flat or justokthis past year they say that it has been tough to make headway. I would suggest that the people the culture the tools the past investments and the attitude drove ClearTech to their largest growth in memorable history while others in our business struggled to make gains. My sincere gratitude and appreciation goes out to all of those that helped achieve this success. Randy Bracewell CLEARTECH 7 When things get tough people gain the real experience of growth in a company. It shows us the true nature of pain anxiety wit charm defeat and success. 2013 was a year like that and it showed us exactly what we are made of Coming off a record breaking year in 2012 Panther had some exciting plans for the future. To keep this momentum moving forward we saw opportunities for expansion in the HCL market and we acted on it. We are in the process of building a state of the art facility that will be used mostly for the Transloading of HCL. This wont be your ordinary Transload station as we have it designed to be able to load two trucks in 20 minutes while at the same time having the maximum safety features in the design. Its been a slow process. It has taken two years to pin down track design and approval. Its seems that key decision people fall off the face of the earth delaying decisions that would only take minutes in our good company. When they say patience is a virtue it really is. Once our planning and commitment to build the HCL facility were in place the HCL market turned off without warning and supply became greater than the demand. If that was not enough Panther was forced to face the worst nightmare of any company involved with dangerous chemicals. December 9 2012 was Panthers September 11th and a day we will never forget. It was late afternoon when the call came that Panther Edmonton had an HCL spill. Companies spend millions of dollars on procedures safety instrumentations protocol emergency response plans training etc. for times like this and hope that they work. Panther was put to the test and we passed. We will never forget the experience and the knowledge we learned from this experience. Our worst nightmare gave us invaluable information which is the reason why I am sharing this experience with all of you. Thank God there were no injuries. We did however find out what we were good at what we need to work on and most importantly we used this experience and applied it to our future. Getting through such an experience made us stronger and simply a better company. We were tested times got very rough and we learned that we are a company that sticks together and that with each other we can accomplish anything even face our worst nightmares. This year has taught us how to invest in our future and I look forward to writing about it in next years annual report. Jack Schneider PANTHER INDUSTRIES PANTHER WAS PUT TO THE TEST AND WE PASSED. WE WILL NEVER FORGET THE EXPERIENCE AND THE KNOWLEDGE WE LEARNED... 8 2013 was planned to be the year for consolidation of the organization enabling the company to continue the growth of previous years. The growth requires expansion of the customer service support department worldwide. The sales offices outside the Netherlands are now equipped with a fully automated calibration facility allowing ISO9001-2008 certified calibration for local markets with a quick response turn-around time. We expect strong growth in service and maintenance in the coming years. Doing business worldwide requires worldwide marketing. In September 2013 we have launched a restyled edition of our very appreciated website including full versions in French and Spanish. The ChineseMandarin version is on its way. We have started to participate in solar energy conferences for local markets in various South American countries.The growth potential in BRIC countries is tremendous. Although the traditional West European market showed a slowdown success could be seen in the markets in Turkey South Africa Brazil and Mexico while markets as China Japan and Korea continued to be strong. The exceptional growth in the USA has been driven by a strong solar energy market. Highlights for 2013 included 2 nice orders from Saudi Arabia for 20 stations and Argentina for 30 stations and the increased interest in the Brewer double Spectrophotometer. The Brewer double Spectrophotometer a product manufactured under license of Environment Canada invented by Dr. Brewer from Canada experienced a renewed interest from the world scientific community.The instrument is capable of monitoring solar UV-radiation with the highest accuracy available allowing for studies of the ozone layer quality and other studies. After its success in the 90s when the ozone was high on the public agenda the instrument has seen a real comeback with a huge project list reaching into 2015 and 2016. The comeback is caused by the political agenda to increase the network density with more stations focusing on the effects of UV radiation on both public health and crop yield. Because many instruments date back to more than 20 years ago a market for replacements has started to develop as well. At the end of September Kipp Zonen launched the new solar radiation sensor CMP10 targeted for the solar energy market offering a maintenance free sensor with a warranty period of 5 years helping the operators of solar energy power plants to reduce operational costs. 2013 provided us stable business new interesting projects in new markets and upcoming challenges for the years to come. Ben Dieterink KIPP ZONEN KIPP ZONEN EXPECTS STRONG GROWTH IN SERVICE AND MAINTENANCE BUSINESS FOR THE COMING YEARS. 9 Hydor-Tech had another strong year in 2013.The objective for 2013 was to maintain our solid customer base while optimizing our production facility both of which were accomplished.We are very pleased with the execution of our business plan which allowed us to exceed our sales and profit targets set out at the beginning of the year. Our performance can be attributed to several factors but are not limited to customers suppliers great quality staff and poor wet weather. Mother Nature certainly had a helping hand in our results with the very wet weather we experienced and longer than normal run-off creating increased demand for our water treatment products. We can also thank our strong network of distributors who are very knowledgeable of their markets and have helped us to grow our base of end users of our products. Our results are reflected in their belief in the Hydor-Tech brand and we look forward to continuing to foster these strong relationships. The year did come with a number of challenges that we were able to overcome.People are a companys greatest assetis a common phrase but one that certainly holds true and was demonstrated at Hydor-Tech this past year. 2013 saw a complete revamping of the administrative team with new leadership and customer service as well as a period of staff shortage on the operational side. We have a maturing operational team that continues to find solutions for process and quality improvements and a business development team that will be working in conjunction with our newly created research and product development department to optimize and broaden our current product line. This will allow us to invest in the future and expand our markets with current products as well as newly developed chemistries in order to maximize our production capacity. We move into 2014 with great optimism.We intend to intensify our market focused research and development to ensure we are aligned with our ever changing customers needs. New products play a fundamental role in our growth plans. Our goal is to remain a responsible company that is always taking steps towards continuous improvement. Regardless of the scope of our aspirations or the scale of our achievements HTL future rests on its principals of commitment service quality and safety. Dan Malbeuf HYDORTECH NEW PRODUCTS PLAY A FUNDAMENTAL ROLE IN OUR GROWTH PLANS. 10 For G Mechanical Saskatoon 2013 has been filled with trials tribulations and successes. G Mechanical has changed drastically from the end of 2012 to the end 2013 and its difficult to believe that it could all be done within a mere 12 months But without the trials and tribulations of not only the past 12 months but the past 24 months we could not have matured into the company of today and to what we will evolve into in future years. A failure is only a failure if you do not learn from it and it has become very apparent that our failures are as important as our successes and accomplishments. We have reaffirmed the adageprojects are never made on the job site but rather built in the office.As we moved through the past twelve months we have sharpened our estimating proficiencies. We are consistently within 2 5 of our capable competition on tenders. This has been accomplished by not only constantly upgrading our estimating expertise and software but also by developing deeper relationships with our suppliers and our sub-trades. We have also discovered from our past that our site people demand more support not only knowledge and training but also precise labour management. Our past clearly shows that labour burn is a killer. We now support our foremen with training in labour forecasting and tracking. We provide them with all of the valuable information from our estimates from which we built the project. We also provide them with all the technology tools and training required which will help support them to reach success. G Mechanical is constantly reminded not all work is good work. Through a lot of discipline we are now choosing our work and whom we work for.This has enabled us to venture into the designbuildarena. It has required us to market ourselves better and develop stronger relationships with better clients. Without realizing our past our future would not be so optimistic. Without the past adversities G Mechanical would not have developed to be in the prime position we are now fortunately in and we are poised for a great year. Randy Black G MECHANICAL THROUGH A LOT OF DISCIPLINE WE ARE NOW CHOOSING OUR WORK AND WHOM WE WORK FOR. 11 Looking at the past as an indicator of the future if not kept in context limits our forward vision. If we set goals based on the past we simply admit that we are limited. In saying this new eyes and a 40000-foot view bring a fresh perspective. 2013 was a comfortable altitude to level off at after a steep three-year accent. It was a time to reflect internally and externally so we could lead Kreos forward with authenticity purpose and with a contribution to all stakeholders. It was a time to create a new normal. It is easy to talk about all we accomplished and how it has positioned us for the years to come. Our accomplishments are not simply defined by the two aircraft we acquired the two we sold the multimillion dollar lease to Saskatchewan Air Ambulance the upgrade and new home of CAM at Hangar 7 the temporary welcome of STARS the increased FBO traffic nor our growing number of new customers. Rather the accomplishment has truly been in how our people juggled and positioned ourselves to take advantage of the new opportunities. It wasnt always pretty but we never let a ball hit the ramp. Each one of these opportunities have created areas for growth and creativity for our people. We have individuals positioned to take us higher. During the year we took a hard look at our personnel requirements. We created a Financial Controller position and hired a new Director of Maintenance and SMSQA Manager. Our Kreos team is willing to take ownership to learn to create and to collaborate and these are people who want to be part of a unique opportunity. Simply allowing people to recognize and understand that we dont have to struggle to get to where we want to go and then allowing this energy to flow in the right direction is a constant theme. Building a culture around the concept of intent and belief that growth is imminent has accelerated our need for preparedness. Why we do things is crystal clear. We are now building systems and procedures to handle whatever weather we fly into. Reflection is enjoyable only when you realize it got you to a better place and that the future holds nothing but excitement. This statement is so true for the Kreos Group of Companies. This year has been a great exercise in helping us understand how good we really are. The knowledge and belief that our potential is unlimited makes everything we did this past year very exciting and our future even more so. Wes Ramsay KREOS AVIATION INC EACH ONE OF THESE OPPORTUNITIES HAVE CREATED AREAS FOR GROWTH AND CREATIVITY FOR OUR PEOPLE. 12 Looking back at this past year Adventure Destinations positioned itself to meet the demands of the growing market. Adventure Destinations had an exciting year with Wild TV filming over the summer at all three locations under the ADI banner for the upcoming realitydocumentary series Fish Camp Past the Pavement. The series showcases the day to day challenges faced in the outfitting industry along with the opinions and views of guests and staff members. Twin Falls Lodge recorded the best year in guest numbers in over 10 years with a margin 30 above its previous best year and it is showing promise to top those numbers in 2014. Manager Ron Cojacar had a challenging end to his season with the demolition and replacement of three cabins dealing with a load of materials dropped from the helicopter halfway to the destination along with other unforeseen challenges which will make the completion of this project that much more rewarding. Selwyn Lake Lodge saw a significant increase in guest numbers over the previous year but continues to fall short of the numbers required to have a break-even year. Fishing at Selwyn Lake was the best in years with highlights including eleven Trophy Trout caught during the filming of the fishing show Flatliners. With the exception ofThe Bear destroying the outpost again this spring Selwyn had very little in the way of challenges. Thompsons Camps enjoyed another very good season although revenues were down 9 from the previous year mostly accounted for by the reduced mining and exploration crews that TCLP supports year round. Guest numbers were down slightly due to the high water and flooding issues in June which closed the highway north of Prince Albert combined with poorly marked detours resulting in some guests changing plans and cancelling trips. A new addition to the facility at Thompsons includes a new generator to supply power during the many power outages that TCLP experiences every year. Churchill River Trading Post has solid new management in place this year. Dean and Crystal chose to uproot and move to the North with their 10 year old son in the hope to spend more quality time together. Churchill River Trading Post is positioning to supply the local community of Otter Lake and Grandmothers Bay with excellent service and products that our customers need. Ron Striker ADVENTURE DESTINATIONS INTERNATIONAL ... AN EXCITING YEAR WITH WILD TV FILMING OVER THE SUMMER AT ALL THREE LOCATIONS. 13 2013 was another year of heavy investment for Round Table Management. This past year saw a move to diversification which led us to expand our holdings in the United States and British Columbia on top of additional acquisitions to the portfolio in Saskatchewan and Alberta. RTM has expanded into pure investment development and has pushed beyond our traditional markets but we still exist to primarily serve our sister companies and that was the focus for 2013 as every investment that was made was with an eye to securing the future for the PIC Group of Companies. This year will see the completion of the shell of our biggest development to date 220 Wall Street in Saskatoon. This was originally designed to include the new home of PIC Investment Group as well as serve other local office needs but a large international organization leased the entire building leaving PIC and RTM to search for a new home. This is a great problem to have and one that should be solved in early 2014. RTM also worked with Panther Industries on managing their exciting development in the Sturgeon Industrial Park in Alberta. This should be operational in early 2014 and will be a great asset to Panther in helping them meet their growing business needs in Northern Alberta. In the last few years RTM has worked to build a strength in project management and this will continue to benefit all of the PIC companies as well as RTM. It was also the biggest year of expenditures and capital spending and we will see some of that paying off in 2014 and certainly beyond. There are a number of locations where the future real estate needs of sister companies are secured for the next 10 to 20 years. 2013 was a year of ups and downs and victories and defeats and many many unavoidable delays but it certainly was the year of investing for the future. The small team that works at RTM is always focused on uncovering opportunities and dealing with challenges. We have a long way to go to become the company we need to be but 2013 saw our small organization take some big steps towards fulfilling our potential. Craig Bell ROUND TABLE MANAGEMENT ... EVERY INVESTMENT THAT WAS MADE WAS WITH AN EYE TO SECURING THE FUTURE FOR THE PIC GROUP OF COMPANIES. 14 ADVANTAGE TOWER LTD. Allison Earl Box 26 2 Alberta Ave. Aldersyde AB T0L 0A0 Advantage Tower is an integrated tower company providing state-of-the-art telecommunication solutions. It provides design implementation construction and maintenance services to the wireless and communications tower industry. CLUBMYNX FITNESS INC. Dawn Wotherspoon 619 1st Ave N Saskatoon SK S7K 2C6 In 2008 PIC entered into an Angel Investment partnership and loan with a young entrepreneur and former PIC Group employee DawnWotherspoon.To date the results have been a testament to both the Angel Investment process and Dawns dedication to the business.This past year was exciting for ClubMynx as Dawn and her team renovated and relocated to a new studio with two gyms allowing for an expansion of its alternative fitness offerings. DEFYRUS Peter Blaney 150 William Street Kingston ON K7L 2C9 Participation with other minority investors under the management of Tancho Innovation Capital provided the opportunity for PIC to participate in technology commercialization. Defyrus is a private life sciences biodefence company that collaborates with domestic and international military R D partners to develop a range of therapeutics as medical countermeasures for civilians and military personnel. The reason PIC Investment Group Inc. negotiates and participates in minority investments is to facilitate entrepreneurship and help existing businesses grow. PIC assesses risk and makes investment decisions based on the criteria listed on our website. Our intention is always to maximize our return either long-term or short-term by bringing some expertise to the business. Our basic underlying motive is a belief that a strong and vibrant economy is constructed by growing one business at a time. The focus of the Portfolio was on maintenance this past year. Two new minority investments were made along with one follow-up investment. From an angel investor perspective this year provided PIC with many important lessons learned. Although there were challenges this past year there were also successes. Several companies in the portfolio experienced significant growth and profitability. The year ahead will be interesting as we determine how to most effectively work with our portfolio companies and assist them in reaching a successful PIC exit. MINORITY INVESTMENT PORTFOLIO 15 DOEPKER INDUSTRIES LTD. Dave Doepker PO Box 10 Anaheim SK S0K 0G0 Doepker is a Canadian bulk trailer manufacturer with particular strength in the agriculture market. Our involvement helped Doepker through the economic crisis and intends to position the business to take advantage of growth opportunities going forward. Our participation has been active in the aspects of asset management and corporate finance. Through the Board we contribute business strategy and planning expertise. MPT MUSTARD PRODUCTS TECHNOLOGIES INC. John Cross 101 111 Research Drive Saskatoon SK S7N 3R2 We have invested in a Board and Management with a proven track record in agriculture. MPTs innovative technology converts the unique properties of mustard seed into fertilizers that support soil health and formulated biopesticides that control soil borne pests and diseases. PHENOMENOME DISCOVERIES INC. John Hyshka 204 407 Downey Road Saskatoon SK S7N 4L8 A world-leading human health research company focusing on the discovery and development of novel disease screening treatment and health monitoring products to address diseases such as cancer multiple sclerosis and Alzheimers. PRAIRIE PLANT SYSTEMS INC. Brent Zettl 1 Plant Technology Road Saskatoon SK S7K 3J8 Prairie Plant Systems Inc. is a biotechnology company with Canadian and United States facilities dedicated to the principle of manufacturing pharmaceuticals derived from harvestable plants grown in biosecure GMP production facilities. TEXT2CAR INC. Vince Hardy 904 Central Avenue Saskatoon SK S7N 2G8 Text2Car offers innovative products to consumers and businesses that provide the ability to control monitor and track vehicle activity through a cell-phone or computer from any distance anywhere. PIC was made aware of this minority investment opportunity through our involvement with the Saskatchewan Capital Network. 16 TINYEYE TECHNOLOGIES CORPORATION Greg Sutton 127 116 Research Drive Saskatoon SK S7N 3R3 TinyEYE provides speech-language pathology and occupational therapy services to school districts health regions and private individuals over the Internet using software web cameras and headsets. TinyEYE is a leading provider of online speech therapy telepractice by individual professionals working independently all over the world. Therapy has been provided to clients throughout the world. TITANSTAR PROPERTIES INC. TSX VENTURE TSP-V Rick Turner 950 789 West Pender Street Vancouver BC V6C 1H2 The Company is a TSXV-listed issuer in the business of identifying and acquiring real property interests consistent with its investment policy.It seeks to create and grow a portfolio of income producing stabilized real estate assets in the United States.The Companys strategy is to lever its existing contact base to grow the business. WARMAN HOME CENTRE Rick Casavant 601 South Railway Street West Warman SK S0K 4S1 Golden Opportunities Fund Inc. Golden led a major transaction to complete the management buyout of Warman Homes. PIC partnered with Golden and other leading institutional investors including Lex Capital Partners LP and Hathersage Holdings Inc.Warman Home Center is a leader in the building supplies industry including five divisionsWarman MetalsWarmanTrussWarman CabinetsWarman Homes andWarman Home Centre. 101178518 SASKATCHEWAN LTD. Aaron Wignes PO Box 1901 Saskatoon SK S7L 3S5 We entered into a partnership with a local general contractor whom we have known for approximately ten years. We provided an opportunity to our partner to build a bigger project than what he could accomplish on his own. In exchange PIC gained an opportunity to work with a partner in residential construction on a limited basis. 101178518101178518 17 FINANCIAL REPORTAs stated in previous years PIC is primarily an owner-operator of the companies that are featured in the preceding pages. Other opportunities outside of the companies in which PIC enjoys direct majority ownership include investments as a minority shareholder and the participation in other financing options such as syndicated loans bridge financing capital asset lending and inventory financing. Investments of this type can take place at any time throughout the year and although small and risky they can be rewarding. A wide variety of terms are possible depending on the needs of the recipient party and the level of risk and resources PIC must commit. Participation in this manner serves to keep PIC Investment Group connected to the markets in which these opportunities are revealed and allows PIC Investment Group to function as an operating company. It is interesting to report on the 2013 financial results. 2013 represents the largest decrease in reported net income in the history of PIC yet it felt like a very successful year. 2013 was extremely busy. As I go down the list of our operating companies they were all involved in significant events outside of normal operations. Whether it be the purchase of a company the largest reinvestment in their history the largest financing transaction in their history changes in key personal negotiating transactions that may or may not have been completed it was busy. There is no doubt that it is our people that drive the success of PIC. In the past several years we have really added to our bench strength and it is our people that enabled such a busy and stressful year to be as successful as it was. PIC has many great attributes and one I am proudest of is our long-term focus. We are committed to our companies to our leaders our employees and our business partners. We demonstrated this in 2013. Our consolidated assets grew by over forty-seven million dollars this is almost double what was our previous record year over year asset growth. The year started off slowly and at various periods our operating results were down by over 40 compared to 2012. I admire this level of investment and commitment when we were staring at some tough operating results. I am confident that these investments will prove to be sound. I would like to congratulate Randy Bracewell and his team at ClearTech for reaching one-hundred million in annual revenues and for the successful acquisition and integration of Advance Chemicals Ltd. PIC has been on a tremendous run for the past several years. 2008 was a break out year and then we just kept setting higher levels for financial success. For most of those years we were truly firing on all cylinders. The results for 2013 are more varied two of our largest companies had their best financial years and others had tough years. 2013 establishes a new plateau for our minority investments being accretive to income. It is a real tribute to the strength of our operating companies that PIC was able to complete 2013 without any outside equity coming into the company. Although our consolidated debt to equity ratio has increased we still have a balance sheet to be envied and we have maintained our conservative financing and accounting practices. The performance of all involved with PIC just continues to reinforce my optimistic vision for our future. Hugh MacGowan 18 Year ending September 30 2013 thousands 2013 2012 Current assets 66388 57031 Total assets 259612 211997 Current liabilities 65583 42288 Total liabilities 109916 75706 Minority interest 38012 35726 Shareholdersinterest 111684 100565 Sales 286356 274826 Profit before taxes and pref dividends 24836 29573 Income taxes 4922 5227 Net profit 12819 16454 Retained earnings beginning 92744 77236 Dividends 1804 946 Retained earnings ending 103759 92744 Shares outstanding 23991 23991 Book value per share 4333 3869 Earnings per share 514 665 NET PROFIT 20082013 millions SALES 20082013 millions CASHFLOW FROM OPERATIONS 20082013 millions 19 350 300 250 200 150 100 50 0 2008 2009 2010 2011 2012 2013 18 16 14 12 10 8 6 4 2 0 2008 2009 2010 2011 2012 2013 35 30 25 20 15 10 5 0 2008 2009 2010 2011 2012 2013 Our 2013 contributions were significantly over the Canadian and Provincial averages in-part due to the substantial need in our communities. We continue to focus on five main categories disease research youth development municipal provincial economic development nature and community quality of life. Our participation within each category will fluctuate each year depending on what is required and our ability to affect the outcome. Our multi-year contributions towards the Ducks Unlimited Chappell Marsh project as well as the Meewasin River Landing project continued to excellent feedback from both organisations. The PIC Group also committed to a 1 million donation for the Rick Hansen Foundation supporting the Rick Hansen School Program. 2013 also saw the announcement of a 2.25 million donation to the Capital Campaign of the Childrens Hospital Foundation of Saskatchewan which will result in the construction of an Outdoor Patients Play Area at the Childrens Hospital. In a world where the needs are so great we have difficulty in choosing who we could and should support. Many credible reputable organisations would benefit from our assistance therefore we must discern where our support for those in need is best allocated. CHARITABLE CONTRIBUTIONS Canada 20 21 ANNUAL REPORT 2013 OPERATING COMPANIES Caron Transportation Systems 301 Streambank Avenue Sherwood Park AB T8H 1N1 ClearTech Industries Inc. 1500 Quebec Ave Saskatoon SK S7K 1V7 Panther Industries Inc. PO Box 698 Davidson SK S0G 1A0 Kipp Zonen B.V. Delftechpark 36 2628 XH Delft The Netherlands Hydor-Tech Limited 11750 - 180 Street Edmonton AB T5S 1N9 G Mechanical Ltd. 229 Avenue I South Saskatoon SK S7M 1X8 Kreos Aviation Hangar 16 16 Wayne Hicks Lane Saskatoon SK S7L 6S2 Round Table Management Ltd. 255 Robin Crescent Saskatoon SK S7L 6M8 Adventure Destinations International Hangar 11 J.G. Diefenbaker Airport Saskatoon SK S7L 5X4 MINORITY INTERESTS Advantage Tower Ltd. Box 26 2 Alberta Ave Alderside AB T0L 0A0 ClubMynx Fitness Inc. 619 1st Ave N Saskatoon SK S7K 2C6 Defyrus 150 William Street Kingston ON K7L 2C9 Doepker Industries Ltd. PO Box 10 Anaheim SK S0K 0G0 MPT Mustard Products Technologies Inc. 101 111 Research Drive Saskatoon SK S7N 3R2 Phenomenome Discoveries Inc. 204 407 Downey Road Saskatoon SK S7N 4L8 Prairie Plant Systems Inc 1 Plant Technology Road Saskatoon SK S7K 3J8 Text2Car Inc. 904 Central Avenue Saskatoon SK S7N 2G8 TinyEYE Technologies Corporation 127 116 Research Drive Saskatoon SK S7N 3R3 TitanStar Properties Inc. 950 789 West Pender Street Vancouver BC V6C 1H2 Warman Home Centre 601 South Railway Street West Warman SK S0K 4S1 101178518 Saskatchewan Ltd. PO Box 1901 Saskatoon SK S7L 3S5 SOLICITOR Stevenson Hood Thornton Beaubier 500 - 123 2nd Avenue South Saskatoon SK S7K 7E6 AUDITOR Ernst Young LLP 1200 - 410 22nd Street East Saskatoon SK S7K 5T6 PRIMARY FINANCIAL SERVICES PROVIDER BMO 101 - 2nd Avenue Saskatoon SK S7K 3L4 255 Robin Crescent Saskatoon SK S7L 6M8 Tel 306 664-3955 PrintedinCanadaDesignedbyDarkHorseCommunications PIC Investment Group Inc.