S A S K A T C H E W A N O P P O R T U N I T I E S C O R P O R A T I O N

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TABLE OF CONTENTS1 Strategic Direction

3 Management's Discussion and Analysis

7 Management’s Responsibility for Financial Statements

8 Financial Report

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STRATEGIC DIRECTIONVISIOn

Through partnerships and collaboration, Saskatchewan Opportunities Corporation (SOCO) is providing the foundation for innovation, research and technology that supports Saskatchewan’s economic prosperity.

MISSIOn

To support and facilitate the advancement and success of Saskatchewan’s technology and key growth sectors through the development and operations of research parks.

VALUES

Innovation

Innovation in all our business activities.

collaboration

Open and accountable in all our partnerships.

Excellence

The pursuit of excellence in design, operations and administration.

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gOALS

Public Purpose

To create awareness, attract and support the development of new technology opportunities by providing world class scientific and social infrastructure that promotes collaboration growth and innovation.

Stakeholders

To enhance innovation and partnerships thereby allowing engagement of stakeholders to achieve their goals and objectives. SOcO recognizes our key stakeholders include: tenants, post-secondary education institutions, industry associations, business communities, government and our employees.

Financial

Maintain profitability at a level that supports the success of our parks by prudently managing expenditures and enhancing revenues while providing superior value to our tenants.

Innovation

SOcO will promote and utilize innovation practices to empower our stakeholders to stimulate high performing commercial successes.

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MANAGEMENT'S DISCUSSION AND ANALYSISInTRODUcTIOn

The following management’s discussion and analysis for Saskatchewan Opportunities corporation (SOcO or the corporation) should be read in conjunction with the corporation’s unaudited condensed consolidated interim financial statements and notes to those statements for the nine months ended December 31, 2016. What follows will provide the context within which the Corporation’s unaudited condensed consolidated interim financial statements should be analyzed. The Board of Directors for SOcO has approved these unaudited condensed consolidated interim financial statements. For additional information relative to the operations and financial position of SOCO, refer to the Annual Report for the fifteen month period ended March 31, 2016.

FORWARD LOOKIng InFORMATIOn

This discussion includes forward looking statements about SOcO’s corporate direction and financial objectives. Due to the risks and uncertainties inherent in any forecast, actual results could differ materially from those anticipated.

cORPORATE OVERVIEW

SOcO operates under the business name Innovation Place. The corporate mission is to support the growth and success of Saskatchewan’s technology and key growth sectors. Innovation Place fulfills this mission through the development and operation of technology parks on the campuses of the province’s two universities in Saskatoon and Regina.

The Saskatoon campus began operations in 1980 and presently is home to 113 tenants that occupy approximately 1.3 million square feet in 20 separate buildings. The Regina campus, opened in 2000, consists of 6 buildings housing 31 tenants and totaling approximately 465,000 square feet.

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cORE BUSInESS

Innovation Place manages specialized buildings primarily for technology companies and the service organizations that support them. Building specialization includes research greenhouses, laboratory buildings and industrial pilot plants. Specialized infrastructure includes laboratory utilities such as pure water and steam, process utilities such as high pressure steam and chilled water as well as a high performance data network.

Revenue is generated from leasing space in these buildings to a wide range of tenants that support each other’s success. A typical lease arrangement would include a five year term with fixed revenue, adjusted annually for any increase in operating costs. Historical vacancy within buildings is approximately five percent. Major categories of operating costs include utilities, municipal property taxes, building and grounds maintenance and corporate administration. In general, both revenue and expenses are not subject to rapid change. Profitability is tightly linked to local real estate market conditions.

OPERATIOnAL HIgHLIgHTS

For the Nine Months ending December 31,

2016 2016/17 Target

Vacancy 8.0% 7.7%

number of startups locating at Innovation Place 9 10

Vacancy

During the third quarter, the vacancy rate increased slightly to 8.0% from 7.9% reported at September 30, 2016. The parks’ vacancy rate is below the current reported market vacancy of over 15% in Saskatoon and Regina. While additional tenant movement is expected during the year, it is anticipated the year end rate will be in line with the target.

number of Startups Locating at Innovation Place

During the third quarter, three new startup companies occupied space at Innovation Place bringing the total to nine for the year. negotiations are currently underway with additional new entities and the annual target of 10 is expected to be met.

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FInAncIAL HIgHLIgHTS

Results of Operations(in thousands $ - unaudited)

December 31, 2016

3 months

December 31, 2015

3 months Change

December 31, 2016

9 months

December 31, 2015

9 months Change

Revenue $ 9,473 $ 9,399 $ 74 $ 29,251 $ 28,940 $ 311

Operating expenses (8,456) (9,262) 806 (28,048) (27,237) (811)

net finance expense (547) (370) (177) (1,198) (1,261) 63

net (Loss) / Income $ 470 $ (233) $ 703 $ 5 $ 442 $ (437)

Total revenue for the nine month period ended December 31, 2016 increased $311 from the prior year due to slightly higher rental revenue from buildings and the parking lots. Parking rates were increased in June 2016.

The $811 increase in operating expenses for the nine month period ended December 31, 2016 is primarily due to recording an allowance for potentially uncollectable receivables in the second quarter net of expense reductions implemented in the third quarter.

Net finance expense decrease of $63 for the nine month period is due to the fair market value change of the investments that the debt retirement fund holds. The current year reflects a smaller unrealized loss in this fund when compared to December 31, 2015.

Financial Position(in thousands $)

As at December

31, 2016 unaudited

As at March

31, 2016 audited Change

Total assets $ 181,393 $ 188,876 $ (7,483)

Total liabilities 43,884 41,372 2,512

Equity 137,509 147,504 (9,995)

Total assets at December 31, 2016 has decreased mainly due to the $10 million equity repayment to SOcO’s parent company, crown Investments corporation of Saskatchewan along with lower receivables for the allowance that was set up during the second quarter.

The increase in liabilities is due to higher notes payable for the SRC project, increase for financial lease obligation for leased equipment, and higher rental revenue received in advance of its due date. Offsetting these increases are lower trade and accrued payables and lower dividends payable at December 31, 2016.

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Outlook

A net loss of $600 is forecasted for the year, a decrease of $681 from the $81 net income budgeted. The decrease in net income is due to allowing for potentially uncollectable accounts receivable offset by reductions in all expenditures due to implementing expenditure restraints for the remainder of fiscal 2016/17. Higher than average vacancy is expected to continue in the last quarter of fiscal 2016/17 with an anticipated decrease to more historical levels during the latter part of 2017/18.

capital expenditures other than on the SRc project for the year are forecasted to be $6,606, which is below the amount originally budgeted of $8,472 as the timing for three significant projects have been extended to 2017/18. The SRC project’s forecasted capital expenditures at March 31, 2017 is $8,145, $8,705 lower than budget as it has taken longer than expected to complete initial design and tendering for the components of this project.

Total forecasted additions to notes payable is $7,000, $10,000 below what was budgeted for the year. The reduction in borrowing is directly correlated to the work being done on the SRc project.

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTSThe accompanying unaudited condensed consolidated interim financial statements of the Saskatchewan Opportunities corporation have been prepared by corporate management in accordance with International Accounting Standards (IAS) 34, Interim Financial Reporting, and necessarily include amounts based on informed judgment and management estimates. Financial information presented elsewhere in this quarterly report is consistent with that in the financial statements.

Ensuring the integrity and objectivity of financial information is an integral part of management’s responsibility to the ongoing operation. Management maintains an appropriate system of internal controls, policies and procedures to provide reasonable assurance that all financial transactions are recorded on a timely basis with proper approvals and result in reliable financial statements.

The Board of Directors has reviewed and approved these unaudited condensed consolidated interim financial statements at their meeting held February 22, 2017.

On behalf of management,

S.P. (Van) Isman Brent Sukenik, cPA, cAPresident and chief Executive Officer chief Financial Officer

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FINANCIAL REPORTCONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME(in thousands $ - unaudited)

NOTE

December 31, 2016

3 months

December 31, 2015

3 months

December 31, 2016

9 months

December 31, 2015

9 months

REVEnUE

Rental $ 9,500 $ 9,321 $ 29,126 $ 28,722

Other (27) 78 125 218

9,473 9,399 29,251 28,940

EXPEnSES 6

Administration 917 1,189 3,019 3,369

Rental operations 7,539 8,073 25,029 23,868

8,456 9,262 28,048 27,237

RESULTS BEFORE THE FOLLOWIng 1,017 137 1,203 1,703

Finance income (107) 69 114 50

Finance expenses (440) (439) (1,312) (1,311)

nET FInAncE EXPEnSE (547) (370) (1,198) (1,261)

nET IncOME / (LOSS) AnDTOTAL cOMPREHEnSIVE IncOME $ 470 $ (233) $ 5 $ 442

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CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION(in thousands $)

NOTE

At December 31, 2016

unaudited

At March31, 2016audited

ASSETS

current

cash and cash equivalents $ 8,114 $ 12,854

Trade and other receivables 1,629 4,301

Inventory 152 117

Prepaid expenses 122 355

Assets held-for-sale 5 5,637 –

15,654 17,627

Trade and other receivables 278 267

Property, plant and equipment 1,256 1,145

Investment property 160,446 166,424

Debt retirement fund 3,148 2,771

Other assets 611 642

$ 181,393 $ 188,876

LIABILITIES AnD PROVIncE’S EQUITy

current

Trade and other payables $ 3,058 $ 3,724

Dividends payable – 318

notes payable 3,000 –

Deferred revenue 963 646

7,021 4,688

Finance lease obligation 179 –

Long term debt 36,684 36,684

43,884 41,372

PROVIncE OF SASKATcHEWAn'S EQUITy

Retained earnings 30,822 30,817

Equity advances 106,687 116,687

137,509 147,504

$ 181,393 $ 188,876

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CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY(in thousands $ - unaudited)

Equity advances

Retained earnings

Total equity

BALAncE AT DEcEMBER 31, 2014 $ 118,687 $ 30,660 $ 149,347

net income for the period – 1,646 1,646

Dividends declared for the period – (1,489) (1,489)

Equity repayment (2,000) – (2,000)

BALAncE AT MARcH 31, 2016 $ 116,687 $ 30,817 $ 147,504

net income for the period – 5 5

Equity repayment (10,000) – (10,000)

BALAncE AT DEcEMBER 31, 2016 $ 106,687 $ 30,822 $ 137,509

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CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS(in thousands $ - unaudited)

December 31, 2016

3 months

December 31, 2015

3 months

December 31, 2016

9 months

December 31, 2015

9 months

OPERATIng AcTIVITIES

net (loss) / income $ 470 $ (233) $ 5 $ 442

non-cash adjustments:

Amortization of property, plant and equipment 92 87 265 250

Amortization of investment property 2,225 2,650 6,769 6,984

Finance income 107 (69) (114) (50)

Finance expense 440 439 1,312 1,311

3,334 2,874 8,237 8,937

Working capital adjustments:

Trade and other receivables 374 (431) 2,673 (1,173)

Inventory (1) 38 (35) (24)

Prepaid expenses 865 791 233 140

Trade and other payables, excluding interest (172) 429 (843) (121)

Deferred revenue (190) 317 317 (163)

cash provided by operating activities 4,210 4,018 10,582 7,596

InVESTIng AcTIVITIES

Purchase of property, plant and equipment (79) (145) (150) (205)

Purchase of investment property (3,000) (705) (6,425) (2,186)

Interest received 29 27 91 86

Increase in other assets 13 88 31 207

cash used in investing activities (3,037) (735) (6,453) (2,098)

FInAncIng AcTIVITIES

Debt retirement fund installments – – (367) (367)

Proceeds from notes payable 2,000 – 3,000 –

Interest paid (312) (310) (1,184) (1,182)

Dividends paid – (58) (318) (592)

Equity repayment (10,000) – (10,000) (2,000)

cash used in financing activities (8,312) (368) (8,869) (4,141)

nET cHAngE In cASH AnD cASH EQUIVALEnTS DURIng THE PERIOD (7,139) 2,915 (4,740) 1,357

cASH AnD cASH EQUIVALEnTS, BEgInnIng OF PERIOD 15,253 9,733 12,854 11,291

cASH AnD cASH EQUIVALEnTS, EnD OF PERIOD $ 8,114 $ 12,648 $ 8,114 $ 12,648

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NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS(in thousands $ - unaudited)

1. general Information

Saskatchewan Opportunities corporation (the corporation), which operates under the business name of Innovation Place, was incorporated under The Saskatchewan Opportunities Corporation Act, which was proclaimed and came into force in 1994. The corporation is an agent of Her Majesty in Right of the Province of Saskatchewan and has been designated a subsidiary of crown Investments corporation of Saskatchewan (CIC), a provincial Crown corporation. The financial results of the Corporation are included in the consolidated financial statements of CIC. As a provincial Crown corporation, the corporation is subject to neither federal nor provincial income taxes.

The corporation’s mandate is to create, encourage and facilitate business opportunities in the Saskatchewan technology sector, primarily through the development and operation of technology parks.

The Corporation’s head office is located at 114 – 15 Innovation Boulevard in Saskatoon, Saskatchewan.

2. Basis of Preparation

a) Statement of compliance

These unaudited condensed consolidated interim financial statements for the nine months ended December 31, 2016 have been prepared in accordance with the recognition and measurement requirements of IFRS and the presentation and disclosure requirements of International Accounting Standards 34, Interim Financial Reporting. These unaudited condensed consolidated interim financial statements do not include all of the information required for full annual financial statements, and accordingly should be read in conjunction with the March 31, 2016 audited consolidated financial statements.

These unaudited condensed consolidated interim financial statements were authorized for issue by the Board of Directors on February 22, 2017.

b) Basis of measurement

These unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis except for held-for-trading financial instruments which are measured at fair value.

c) Functional and presentation currency

These unaudited condensed consolidated interim financial statements are presented in Canadian dollars, which is the Corporation’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest thousand.

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d) Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant items subject to estimates and assumptions include the carrying amounts of property, plant and equipment and investment property, and the underlying estimations of useful lives, capitalization of interest, disposal of long-lived assets, asset retirement obligations, and labour and directly attributable overhead; provision for unpaid claims; the carrying amounts of accounts receivable, inventory and investments.

Areas of judgments in applying accounting policies that have the most effect on the amounts recognized in these condensed consolidated interim financial statements include the accounting for special purpose entities and the determination of cash generating units.

3. Significant Accounting Policies

The accounting policies applied by the corporation in these unaudited condensed consolidated interim financial statements are consistent with those disclosed by the Corporation in its March 31, 2016 audited consolidated financial statements except for the following:

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the Corporation. All other leases are classified as operating leases.

Assets held under a finance lease are initially recognized as assets of the Corporation and are measured at their fair value at the inception of the lease, or if lower, the present value of the minimum lease payments. The corresponding liability is included in the condensed consolidated statement of financial position as a finance lease obligation.

Lease payments are apportioned between interest expense and a reduction to the finance lease obligation so as to achieve a constant rate on the remaining balance of the liability. The interest component is included in finance expense.

Operating lease payments are recognized as an expense based on the lease payment over the lease term.

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4. new Standards and Interpretations not yet Adopted

A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended December 31, 2016, and have not been applied in preparing these unaudited condensed consolidated interim financial statements.

IFRS 9, Financial Instruments

The final version of IFRS 9 was issued by the IASB in July 2014 and will replace IAS 39, Financial Instruments: Recognition and Measurement. The standard is to be applied prospectively.

IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. Under IFRS 9, financial assets will generally be measured initially at fair value plus particular transaction costs, and subsequently at either amortized cost or fair value. Financial liabilities measured at fair value will present any change in its fair value due to changes in the entity’s credit risk in other comprehensive income, rather than within net earnings. This standard is effective for annual periods beginning on or after January 1, 2018. As directed by cIc, the Corporation will early adopt this standard for its fiscal year commencing April 1, 2017.

The impact on these financial statements upon adoption will be: to add a new Consolidated Statement of comprehensive Income; to move the unrealized gains/losses on the debt retirement fund from Finance income on the consolidated Statement of Operations to the consolidated Statement of Comprehensive Income; and to modify the Consolidated Statement of Retained Earnings to reflect the changes to the above statements. Amounts involved in these restatements may be material to the consolidated financial statements.

IFRS 15, Revenue from Contracts with Customers

On May 28, 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers. The new standard establishes principles to record revenues from contracts for the sale of goods or services, unless the contracts are in the scope of other IFRS standards. Under IFRS 15, revenue is recognized at an amount that reflects the expected consideration receivable in exchange for transferring goods or services to a customer, applying a new five step model.

The new standard also provides guidance relating to contract costs and for the measurement and recognition of gains and losses on the sale of certain non-financial assets such as property and equipment. Additional disclosures will also be required under the new standard. IFRS 15 must be adopted for annual periods beginning on or after January 1, 2018 using either a full retrospective approach for all periods presented in the period of adoption, a modified retrospective approach, or a retrospective cumulative effect approach. The corporation continues its assessment of the impact of the adoption of this standard on the consolidated financial statements.

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IFRS 16, Leases

IFRS 16 was issued on January 13, 2016 and replaces IAS 17, Leases. The new standard has significant changes for lessees, as most leases will be recognized on-balance sheet, subject to specific exemptions for short term leases or low lease value, under a single measurement model with recorded assets and liabilities. Lessor accounting remains largely unchanged and retains the distinction between operating and finance leases but essentially removes the sale and leaseback option. As well, the definition of what is a lease has been revised, with an increased focus on who controls the leased asset.

This standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted if IFRS 15 has also been adopted. The corporation has assessed its existing leases as at December 31, 2016 and has determined the impact of adopting this standard to be not material for the consolidated financial statements.

5. Assets Held-For-Sale

Effective December 2016, the corporation accepted a conditional offer to sell the building located in Prince Albert during fiscal 2017/18. Accordingly, this asset has been classified as Assets held-for-sale and is no longer being depreciated commencing December 1, 2016. It is measured at carrying value, which is lower than the fair value less costs to sell.

6. Operating and Administration Expenses

Total operating and administration expenses were as follows:

December 31, 2016

3 months

December 31, 2015

3 months

December 31, 2016

9 months

December 31, 2015

9 months

Employee benefits $ 2,449 $ 2,466 $ 7,430 $ 7,420

Utilities 940 1,167 3,371 3,641

grants in lieu of property taxes 790 731 3,220 2,763

Amortization 2,317 2,737 7,034 7,234

Inventory consumed in the provision of services 138 162 468 483

Other 1,822 1,999 6,525 5,696

$ 8,456 $ 9,262 $ 28,048 $ 27,237

CORPORATE OFFICE

Innovation Place

114 - 15 Innovation Boulevard

Saskatoon, Saskatchewan

S7N 2X8

306.933.6295

saskatoon@innovationplace.com

www.innovationplace.com