CANN GROUP LIMITED
ANNUAL
REPORT 2017
AND ITS CONTROLLED ENTITIES
ABN 25 603 949 739
Note: to be read in conjunction with the
Appendix 4E: Preliminary Final Report
lodged with the Australian Securities
Exchange on 29 August 2017
Corporate Information
These are the full financial statements of Cann Group Ltd
(the Company) and its 100% owned subsidiaries, including
Cannproducts Pty Ltd (incorporated and domiciled in
Victoria, Australia), Cannoperations Pty Ltd (incorporated
and domiciled in Victoria, Australia), Cann IP Pty Ltd
(incorporated and domiciled in Victoria, Australia) and
Botanitech Pty Ltd (incorporated and domiciled in Victoria,
Australia), (together, the Group). These financial statements
are for the year ended 30 June 2017. Unless otherwise
stated, all amounts are presented in $AUD.
A description of the Group’s operations and of its principal
activities is included in the review of operations and
activities in the attaching directors’ report.
Corporate
DireCtory
COMPANY
Cann Group Limited
ACN 603 949 739
Registered Office
Level 2, 409 St Kilda Road
Melbourne, Victoria, 3004
DIRECTORS
Allan McCallum
Philip Jacobsen
Doug Rathbone
Geoff Pearce
SHARE REGISTRY
Link Market Services Limited
Tower 4,
727 Collins Street,
Melbourne, Victoria, 3008
Ph: 1300 554 474
COMPANY SECRETARY
Richard Baker
CEO
Peter Crock
AUDITORS
William Buck Audit (VIC) Pty Ltd
Level 20,
181 William Street
Melbourne, Victoria, 3000
Ph: 03 9824 8555
LAWYERS
William Ross Lawyers & Advisers
Level 27,
101 Collins Street
Melbourne, Victoria, 3000
Ph: 03 9653 9400
B
CONTENTS
IFC Corporate Directory
2 Message From Chairman
and Chief Executive Officer
Directors’ Report
4
20 Annual Financial Statements
21 Consolidated Statement of Profit or Loss
and other Comprehensive Income
22 Consolidated Statement of Financial Position
23 Consolidated Statement of Changes in Equity
24 Consolidated Statement of Cash Flows
25 Notes to the financial statements
41 Directors’ Declaration
42
47 Shareholder Information
Independent Auditor’s Report
MESSAGE FROM CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
On behalf of our board, we present the 2017 Annual Report
for Cann Group Limited, reflecting on a year in which our
Company has achieved many important milestones in its
development and is continuing to show substantial growth
as a market leader.
secure storage room, all of which will be commissioned
by the end of 2017. This expansion is part of a three-phase
growth strategy to build our cultivation capability, and we
have adequate funds to complete these first two phases
through to commissioning of the Northern facility.
Cann listed on the Australian Securities Exchange (ASX)
in May 2017 following completion of a fully underwritten
Initial Public Offer (IPO). The Company issued 45,000,000
new shares at 30 cents per share to raise $13.5 million
before costs. The support and enthusiasm of investors
ahead of our listing on the ASX was quite gratifying, and
we are pleased to have seen significant growth in our
share price since we started trading.
Medicinal cannabis has the potential to revolutionize the
way a range of medical conditions are treated and change
the lives of possibly hundreds of thousands of Australians,
and Cann wants to be the leader in the field. We are
focused on breeding, cultivating and manufacturing
medicinal cannabis for sale and use within Australia. We
see a market opportunity for medicinal cannabis driven by
demand from patients with various conditions, and expect
the industry will see initial demand for about 8,000kg of
highly-refined, pharmaceutical cannabis products that
could provide more than A$100m potential revenue in year
one – growing to A$380m in 2018 and A$1.3bn in 2026.
The Narcotic Drugs Amendment Bill passed by Australia’s
Federal Parliament in February 2016 was an integral step
to Cann, as it allowed cannabis cultivation for medicinal
and related scientific purposes.
Cann was the first Company to secure both the necessary
licences (research & cultivation) and permits (one medicinal
cannabis permit and two cannabis research permits) from
the Office of Drug Control (ODC). The permits have allowed
for the establishment of breeding plants for propagation
purposes; a research program being undertaken with
CSIRO to develop unique cannabis extracts; and the
supply of plant material for manufacturing into medicinal
cannabis products for patient use.
In late May, the Company received its first plant material
to start cultivation of medicinal cannabis. The first plants
cultivated at our Southern facility in Melbourne were
harvested in August after an eight week flowering cycle.
The harvested material was cured and dried in preparation
for delivery under Cann’s medicinal cannabis licence and
permits. The plants have been cultivated under a
confidential commercial agreement. Cannabis grown by
Cann will be manufactured into a product that can be
accessed by patients via clinical trials, or through the
TGA’s Authorised Prescriber or Special Access Scheme.
We have continued preparations for expanded growing
capabilities, with our Northern facility, also in Melbourne to
more than quadruple our initial cultivation and production
capacity. The Company is in the process of extending its
licences and permits for the new facility so it is ready for
use in the first half of FY2018. The Company is also adding
capacity at its Southern facility with the construction of
three new secure cultivation rooms, a drying room, and
We see medicinal cannabis as a high-value agribusiness
opportunity after conducting extensive research on the
product and market in the lead-up to our listing on the
ASX. Our internal research will be further supported by a
Technical Services Agreement (TSA) with Aurora Cannabis
Inc, Canada’s second largest publicly listed medicinal
cannabis producer and the first Canadian company to
establish purpose built cultivation facilities. The TSA with
Aurora, a 19.9% shareholder of Cann, will facilitate an
exchange of information and support across areas
including the cultivation and processing of medicinal
cannabis (particularly the Aurora Sky Project); extraction
and manufacturing technology; and analysis of cannabis
extracts. Canada has a well-established medicinal cannabis
industry, and Aurora is one of its leaders, so this partnership
will be very beneficial to Cann in an industry which is still
finding its feet in Australia.
This relationship with Aurora demonstrates the skills of
Cann’s highly motivated and experienced board and
management team, which has developed a strategy
to build the capabilities and collaborative relationships
necessary to capitalise on the opportunities emerging
in the industry.
We thank our board members for their leadership, and our
management team and staff for their efforts in fulfilling the
ASX listing requirements and the achievements made in
the months since then. We also thank our shareholders for
their support and belief that Cann Group can be a leader
in its market, a position we are determined to maintain.
The year ahead will be an exciting one for our Company,
as we have already arranged delivery our first plant
material after harvesting it from our Southern facility
for analytical testing. In the next year, we expect to:
• Commission the Northern facility by the end of 2017
• Deliver first revenues with provision of product for
clinical trials in Victoria
• Target and secure research grants with various
non-government organisations and/or industry bodies
• Develop our portfolio of intellectual property
We are ramping-up rapidly and Cann will keep our
shareholders informed of our progress as we lead the
way in Australia’s emerging medicinal cannabis sector.
Allan McCallum
Chairman
Peter Crock
Chief Executive Officer
2
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
DEVELOPING A WORLD-CLASS,
AUSTRALIA-FOCUSED MEDICINAL
CANNABIS OPERATION
3
DIRECTORS’
REPORT
4
DIRECTORS’ REPORT
Your directors present their report on the Group for the year ended 30 June 2017.
Information on Directors
The names and details of the directors in office during the year and until the date of this report are as follows. Directors
have been in office for this entire year unless otherwise stated.
Allan McCallum, Dip. Ag Science, FAICD (Non-executive Chairman)
Allan has broad experience as a public company director in agribusiness and healthcare who has strong ethics,
proven leadership capabilities and extensive experience in strategy development and implementation and mergers
and acquisitions. Allan is the current Chair of Tassal Group Ltd (ASX TGR –) from 7 October 2003 Australia’s largest
producer of Atlantic salmon and a Director of Medical Developments International Ltd (ASX MVP) from 27 October 2003,
a pharmaceutical and device manufacturer, marketing nationally and internationally. His previous board roles include
Incitec Pivot Ltd (ASX IPL) from 30 January 1998 to 19 December 2013 and Graincorp Ltd (ASX GNR) from 26 February
1998 to 26 August 2005.
Special Responsibilities
Member – Audit and Risk Committee
Interest in Shares
5,480,000 Ordinary Shares
Philip Robert Nicholas Jacobsen, CPA (Deputy Chairman)
An experienced public company director, he co-founded Premier Artists in 1975 and The Frontier Touring Company
in 1979. He serves as a director of Liberation Music, Premier Artists, The Harbour Agency and Jacobsen Bloodstock.
Former Chair of MCM Entertainment Group, Philip brings to the Board a 45 plus year history of applying solid fiscal
accounting perspectives to an emerging business model in a constantly changing, high demand market place.
Special Responsibilities
Chairman – Audit and Risk Committee
Interest in Shares
3,773,334 Ordinary Shares
Douglas John Rathbone, AM, FATSE, FI ChemE, ARMIT B Comm, TTC
An experienced public company director, he is the former Managing Director and CEO of Nufarm Limited (ASX NUF)
from 21 August 1987 to 4 February 2015 – an ASX 200 listed company and is a former Board member of the FERNZ
Corporation and the CSIRO. He Chairman of the Rathbone Wine Group, Director of Cotton Seed Distributors, Leaf
Resources Ltd (ASX LER) from 1 November 2016, Go Resources, Queenscliff Harbour Pty Ltd and AgBiTech. He is
also an Honorary Life Governor of the Royal Children’s Hospital and a former Director of the Burnett Centre for Medical
Research. Doug brings to the Board experienced management and corporate governance skills together with a passion
to grow the business having successfully transformed Nufarm to become one of the world’s leading crop protection and
seed companies with an extensive global footprint.
Special Responsibilities
Member – Audit and Risk Committee
Interest in Shares and Performance Rights
2,193,334 Ordinary Shares
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
5
DIRECTORS’ REPORT
Geoffrey Ronald Pearce
Geoff is a successful entrepreneur and businessman with more than 40 years’ experience in the personal care industry.
He established and owned Scental Pacific Pty Ltd and grew the business to become Victoria’s largest manufacturer of
personal care products before selling it to the Smorgon Family. He later built a contract manufacturing business, Beautiworx
Australia Pty Ltd, which was also sold. Geoff currently owns The Continental Group, which supplies pharmaceutical
packaging and raw materials and has developed alliances with some of the world’s leading herbal extract manufacturers.
He has extensive experience in areas including manufacturing, procurement, distribution and regulatory affairs. He is
Chairman of Probiotec Ltd (ASX PBP) since 28 November 2016.
Special Responsibilities
Member – Audit and Risk Committee
Interest in Shares
1,200,000 Ordinary Shares
Michael Kenneth Murchison, MAICD (resigned 28 October 2016)
Michael is an experienced project manager, with direct experience and business interests in the US regulated cannabis
industry. He holds certifications under Californian medicinal cannabis laws and is a long term advocate for the
development of a regulated medicinal cannabis industry in Australia. Michael founded the first Cann Group company
in early 2014 after a successful career in the music and entertainment promotions industry. Apart from his extensive
knowledge of the international medicinal cannabis industry, Michael brings experience in logistics, international
business and technology licensing.
Special Responsibilities
Member – Audit and Risk Committee
Interest in Shares
260,000 Ordinary Shares
Chief Executive Officer
Peter Crock – CEO, B.Ag.Sci (Hon); MBA
Peter is an experienced public company senior manager with strong skills in marketing and technology development.
In a 28-year career at Nufarm Limited (ASX NUF), Peter held senior management roles in marketing, business development,
and information technology, most recently heading up the group’s new technologies division which involved the licensing
and commercial development of several new agribusiness technologies. He has project managed the successful integration
of newly acquired businesses and has extensive experience working with regulators in Australia and overseas.
Company Secretary and Chief Financial Officer
Richard Baker, M.Commrcl Law, B.Ec., CPA
A senior experienced Financial Controller and Company Secretary, with extensive ASX experience, in terms of governance,
capital raisings and reporting including implementing internal controls, accounting and ERP systems in established and
start-up enterprises. He has had public practice experience in business services, taxation and audit to a diverse range
of clients involved in FMCG, manufacturing, professional services and transport and gained a variety of experience
as Financial Controller with previous employers including mineral exploration, import and distribution, FMCG and
professional consulting.
6
DIRECTORS’ REPORT
Dividends
No dividends have been paid or have been recommended during the year.
Principal activities
The principal activities of the Group during the year consisted of developing and testing of Cann’s cannabis cultivation
technology of controlled growing environments with a view to substantially increasing capacity of the growing environments
for both research and cultivation purposes and to commercialise the outputs for medicinal uses.
No significant change in the nature of these activities occurred during the year.
Operating results for the year
The Group made a loss of $2,588,445 for the year ended 30 June 2017.
The Group’s basic and diluted earnings per share is ($0.05) (2016:($0.053)). The Weighted Average number of Shares
used to calculate the basic and diluted earnings per share is 52,328,805 (2016: 27,592,420).
The net assets of the Group are $14.66 million as at 30 June 2017 (2016: $1.69 million).
For further detail please refer to the Message from Chairman and Chief Executive Officer which forms part of this
annual report.
Significant changes in the state of affairs
Capital raising
During the year the Company issued an Initial Public Offering (IPO) Prospectus dated 28 March 2017 (and Supplementary
Prospectus dated 12 April 2017). The IPO was for an offer of 45,000,000 New Shares in the Company at 30 cents
per New Share to raise a minimum of $13,500,000 before costs (Offer). The Offer was fully underwritten and closed
on 26 April 2017.
Listing on Australian Securities Exchange (ASX)
As a result of the successful IPO above the Company applied for and was granted admission to the Official List
of the ASX on 4 May 2017.
There were no other significant changes in the state of affairs of the Group during the year.
Future developments, prospects and business strategies
Other than matters referred to elsewhere in this report and above, further information as to likely developments
in the operations of the Group and the expected results of operations have not been included in this report because
the directors believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation and performance
The Group’s operations are not subject to any particular environmental regulations.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
7
DIRECTORS’ REPORT
Directors’ meetings
The number of meetings of the Company’s Board of Directors and Audit and Risk Committee members held during
the year ended 30 June 2017 and the number of meetings attended by each Director / member were:
Name
Allan McCallum
Philip Jacobsen
Douglas Rathbone
Geoff Pearce
Michael Murchison (resigned 28 October 2016)
Board Meetings
Audit and Risk
Committee Meetings
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
9
9
9
9
3
8
9
9
8
3
2
2
2
2
1
2
2
2
2
1
Options
During the year the Group issued 13,486,667 ordinary shares resulting from the exercise of 13,486,667 options over
shares issued pursuant to the Information Memorandum dated 12 April 2016. The exercise price to exercise the options
for the issue of ordinary shares was $0.15 each. The options were exercise throughout March 2017 and all options
were exercised on or before 31 March 2017. Allotment of ordinary shares from the exercise of those options occurred
on 21 March 2017 (6,646,667 shares), 27 March 2017 (3,800,000 shares and 4 April 2017 (3,040,000 shares).
The Group presently has on issue 2,000,000 options to purchase ordinary fully paid shares. The options were issued
to the Underwriters of the Initial Public Offering Prospectus dated 28 March 2017 and the associated Supplementary
Prospectus dated 12 April 2017.
The options are exercisable at $0.37 at any time during the period commencing from the date of their issue and expiring
on 30 June 2019.
8
DIRECTORS’ REPORT
Remuneration Report
Introduction
Cann’s Remuneration Report for the year ended 30 June 2017 (financial year).
Since being admitted to the Official List of the ASX Cann has actively been recruiting a team to ensure the successful
implementation of the Company’s business plan.
CEO remuneration outcomes
Mr Peter Crock was appointed as Chief Executive Officer commencing as an employee on 1 September 2016 on a salary
of $200,000 plus Superannuation Guarantee. Prior to this date Mr Crock was paid $55,088 as a consultant to Cann.
Mr Crock was also paid a bonus of $50,000 in May 2017 for development of strategic relationships and the business
plan for inclusion in the IPO Prospectus which enabled the Company to successfully list on the Australian Securities
Exchange (ASX). Listing on the ASX was the event required to trigger the bonus payment.
It is anticipated that Mr Crock will participate in both Short Term Incentive and Long Term Incentive schemes when they
are formalised during the 2018 financial year. Any incentive schemes formulated by the Company will be performance
based with determination of success by the Board.
Non-Executive Director remuneration outcomes
The Board resolved that there would be no remuneration of any form paid to Non-Executive Directors for their service
as Directors until such time as Cann was admitted to the Official List of the ASX. Non-Executive Directors Fees are set on
an annual basis within the limit set by Shareholders at the General Meeting of 19 October 2016. Non-executive Directors
Fees were paid for the two months of May and June 2017.
In line with ASX Corporate Governance Principles and Recommendations, Cann has continued Board review activities,
including ensuring the Board contains an appropriate mix of skills and experience as well as assessing the independence
of each Non-Executive Director.
Remuneration Report
The Directors of Cann Group Limited (Cann or the Company) are pleased to present the Remuneration Report (Report)
for the Company and its subsidiaries (Group) for the financial year ended 30 June 2017. This Report has been prepared
and audited in accordance with the requirements of the Corporations Act 2011.
For the purpose of this Report Key Management Personnel (KMP) are defined as persons having authority and
responsibility for planning, directing and controlling major activities of the Group and include all Non-Executive Directors
of the Company and Executives who are listed in the table below.
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Geoff Pearce
Mr Doug Rathbone
Chairman
Deputy Chairman
Non-Executive Director
Non-Executive Director
Mr Michael Murchison
Non-Executive Director (resigned 28 October 2016)
Executives
Mr Peter Crock
Chief Executive Officer
The above Non-Executive Directors and Executives were the KMP for the whole of the financial year, unless
otherwise indicated.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
9
DIRECTORS’ REPORT
Remuneration Governance
The Board is responsible for determining Non-Executive Director and Senior Executive remuneration. The Company
has not appointed a Remuneration Committee, rather the Board conducts the activities of the Remuneration Committee.
In accordance with section 206K of the Corporations Act 2001, the Board has a process for engaging remuneration
consultants. The Board commissions and receives information, advice and recommendations directly from remunerations
consultants, ensuring remuneration recommendations are free of undue influence by management.
No consultants were engaged with respect to providing remuneration recommendations for the Non-Executive Directors
and Executives during the Financial Year.
Executive Remuneration
Executive remuneration is based on total reward structure comprising fixed remuneration and at-risk remuneration.
For the year ended 30 June 2017 at-risk remuneration was made up of Short Term Incentives (STI’s) only and was
designed to align Executive remuneration with achievement of strategic and financial objectives that lead to the creation
of shareholder value. Long Term Incentives (LTI’s) will be developed during the 2018 financial year and will be designed
to align Executive remuneration with achievement of strategic and financial objectives that lead to the creation of
shareholder value.
The reward structure has the strategic objectives of:
• Attracting, retaining and motivating suitably qualified and experienced executives;
• Encouraging a strong focus on performance; and
• Supporting the delivery of outstanding results for the Group over the short and (future) long term.
Fixed Remuneration
The fixed remuneration component of an Executive’s total remuneration package is expressed as a total package
consisting of base salary and statutory superannuation contributions.
Fixed remuneration reflects the complexity of the individual’s role and their experience, knowledge and performance.
Internal and external benchmarking is regularly undertaken and fixed remuneration levels are set with regard to the external
market median, with scope for incremental increase for superior performance.
Fixed remuneration is reviewed annually on the anniversary dates of the individual’s commencement date, taking into
account the performance of the individual and the Group. There are no guaranteed increases to fixed remuneration
in any contracts of employment.
Short Term Incentive
The STI component of an Executive’s total remuneration is an annual cash incentive plan. The STI links a portion of Executive
remuneration opportunity to specific financial and non-financial measures.
The performance measures are described in the table above. From a governance perspective, all performance measures
under the STI must be clearly defined and measurable. The Board approves the targets and assesses the performance
outcome of the CEO. The CEO sets the targets and assesses the performance of other Executives. The Board approves
STI payments for the CEO and other Executives. Under the STI plan, the Board has discretion to adjust STI outcomes
based on the achievements which are consistent with the Group’s strategic priorities and, in the opinion of the Board,
enhance shareholder value.
One hundred percent (100%) of awarded STI is paid in cash at a time determined by the Board, however for future years
the timing will be upon Board approval of the audited year-end accounts. In future years the financial performance measures
will be implemented and then for the Executive’s to qualify for a payment of an STI a pre-agreed level of Group profit
must first be achieved. Once this has been achieved, the level of payment the Executive receives is determined based
on the achievement of their pre-determined financial and non-financial measures.
10
DIRECTORS’ REPORT
Long Term Incentive
The LTI component of an Executive’s total remuneration is yet to be determined however it will be an equity incentive plan
that is designed to encourage Executives to focus on key performance drivers which underpin sustainable growth in
shareholder value. The LTI will facilitate share ownership by Executive’s and links a significant proportion of their at-risk
remuneration to the Group’s ongoing share price and returns to shareholders over the performance period. This will be
achieved by motivating and rewarding the Executives to drive share price growth via improvements to Total Shareholder
Returns and Return on Invested Capital.
Other Remuneration Disclosures
Non-Executive Director Remuneration
Non-Executive Directors are paid Directors Fees that are treated as salaries with tax withheld and superannuation
guarantee paid at statutory amounts. Non-Executive Director Remuneration is not performance based and as such
no Non-Executive Director has received performance based remuneration during the year. At the General Meeting of
19 October 2016 Non-Executive Director remuneration was fixed at a total annual aggregate of $175,000 inclusive of
superannuation guarantee. At a Board Meeting held 30 November 2016 it was resolved that Non-Executive Chairman
remuneration would be $30,000 per annum and Non-Executive Director remuneration would be $20,000 per annum,
both exclusive of superannuation guarantee and that Non-Executive Directors would only be paid remuneration after
the Company was admitted to the Official List of the Australian Securities Exchange.
Service Agreements
The employment conditions and remuneration of the Executives are formalised in individual contracts of employment.
No fixed terms are specified within these employment contracts and the following termination provisions apply:
Executive
Mr P Crock
Notice Period by Company
Notice Period by Employee
4 months
4 months
The Company may terminate an employment contract without cause by providing written notice or making a payment
in lieu of the notice period based on the individual’s fixed annual remuneration. Each employment contract provides
for termination of employment without notice in circumstances sufficient to warrant summary termination.
Transactions with Directors
Mr Michael Murchison and his Director-related entities purchased two subsidiary companies from Cann Group Limited,
being Cann Global LLC and Cannproducts NZ Limited. Cannproducts NZ Limited was registered but never operated
within the Group. Both subsidiaries were sold to Mr Murchison and his related entities for $1 each which the Directors
believe to be on commercial terms.
Other transactions entered into by the Group with Directors and their Director-related entities are within normal employee,
customer or supplier relationships on terms and conditions no more favourable than those available in similar arm’s
length dealings.
Performance Evaluations of Board and Senior Executives
During the year the Board conducted reviews of the Board itself, its Committees and of Senior Executives which included
feedback on performance and training arranged where deemed appropriate.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
11
DIRECTORS’ REPORT
Table 1: Remuneration Disclosure for Key Management Personnel of the Group for years ended
30 June 2017 and 30 June 2016
Short-term Benefits
Post-
employment
Benefits
Salary and
Fees
$
STI cash
bonus
$
Super-
annuation
$
Other KMP
related
payments**
$
Share-based
remun-
eration***
$
Perfor-
mance
related
%
Total
$
2017 Financial Year
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Michael Murchison
(resigned 28 October 2016)
Mr Geoff Pearce
Subtotal for
Non-Executive Directors
Executives
Mr Peter Crock
Subtotal for Executives
Total 2017 Financial Year
2016 Financial Year
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Alberto Mariani
(resigned 11 April 2016)
Mr Michael Murchison
Mr Geoff Pearce
(appointed 11 April 2016)
Mr Douglas Rathbone
Subtotal for
Non-Executive Directors
Executives
Mr Peter Crock
Subtotal for Executives
5,000
3,650
3,333
103,210
3,333
118,526
194,224
194,224
312,750
8,000
8,000
8,000
120,000
–
8,000
152,000
39,069
39,069
Total 2016 Financial Year
191,069
Notes:
–
–
–
–
–
–
50,000
50,000
50,000
–
–
–
–
–
–
–
–
–
–
475
–
317
–
317
1,109
15,712
15,712
16,821
760
760
760
24,785
–
760
–
–
–
–
–
–
–
–
–
11,686
5,843
6,778
3,038
4,207
17,161
9,493
10,428
106,248
7,857
31,552
151,187
–
–
–
–
–
–
2,921
2,921
262,857
252,857
34,473
414,044
19.0%
19.0%
12.1%
2,086
4,108
11,986
5,993
22,832
18,861
–
–
–
–
4,315
13,075
51,062
195,847
–
959
–
9,719
27,825
6,194
74,315
260,334
–
–
–
–
–
–
39,069
39,069
27,825
6,194
74,315
299,403
–
–
–
–
–
–
–
–
–
–
* Mr Crock FY2017 Salary and Allowances includes a bonus paid of $50,000 and Mr Murchison FY2016 Salary and Allowances includes a living away
from home allowance of $34,124.
**
Interest and Guarantee Fees paid to Mr McCallum and Mr Jacobsen in respect to loans to the Company provided by Mr McCallum and Mr Jacobsen.
*** Vesting charge reflecting change in value of Class B Performance Rights granted or otherwise acquired by KMP. Class A Performance Rights were
cancelled effective 1 March 2017 and therefore no vesting charge is included. The Class A Performance Rights were share-based payments when
granted and were cancelled with the consent of all of the holders of those Rights.
12
DIRECTORS’ REPORT
Table 2: Shares held by Key Management Personnel of the Group for years ended 30 June 2017
and 30 June 2016
The movement during the reporting period in the number of shares in Cann Group Limited held, directly, indirectly
or beneficially, by each key management person, including their related parties, is as follows:
2017
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geo ff Pearce
Mr Michael Murchison
Balance
1 July 2016
Net Change
Other*
Issued on
conversion of
Performance
Rights
Issued
on exercise
of Options
Balance
30 June 2017
3,840,000
–
1,000,000
640,000
5,480,000
2,300,000
173,334
500,000
800,000
3,773,334
1,120,000
173,334
580,000
320,000
2,193,334
520,000
–
360,000
320,000
1,200,000
13,600,000
(13,600,000)
260,000
–
260,000
Subtotal for Non-Executive Directors
21,380,000
(13,253,332)
2,700,000
2,080,000
12,906,668
Executives
Mr Peter Crock
Subtotal for Executives
Total
2016
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geoff Pearce
Mr Michael Murchison
–
–
86,667
86,667
250,000
250,000
–
–
336,667
336,667
21,380,000
(13,166,665)
2,950,000
2,080,000
13,243,335
Balance
1 July 2015
Net Change
Other*
Issued on
conversion of
Performance
Rights
Net Change
Share Split**
Balance
30 June 2016
800,000
160,000
375,000
200,000
50,000
50,000
180,000
80,000
3,400,000
–
–
–
–
–
–
–
–
–
–
2,880,000
3,840,000
1,725,000
2,300,000
890,000
1,120,000
390,000
520,000
10,200,000
13,600,000
16,085,000
21,380,000
–
–
–
–
16,085,000
21,380,000
Subtotal for Non-Executive Directors
4,675,000
670,000
Executives
Mr Peter Crock
Subtotal for Executives
Total
Notes:
–
–
–
–
4,675,000
670,000
* Net Change Other refers to shares purchased or sold or otherwise transferred during the year.
** Net Change Share-split refers to the share-split on the basis that every share be divided into four fully paid ordinary shares with effect from 5:00pm
(Melbourne time) on 30 June 2016 approved at the Annual General Meeting held that day.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
13
DIRECTORS’ REPORT
Table 3: Options held by Key Management Personnel of the Group for years ended 30 June 2017
and 30 June 2016
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geoff Pearce
Total
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geoff Pearce
Total
Notes:
Balance
1 July 2016
Net Change
Other*
Exercised
Balance
30 June 2017
640,000
800,000
320,000
320,000
2,080,000
–
–
–
–
–
(640,000)
(800,000)
(320,000)
(320,000)
(2,080,000)
–
–
–
–
–
Balance
1 July 2015
Net Change
Other*
Net Change
Share Split**
Balance
30 June 2016
–
–
–
–
–
160,000
480,000
640,000
200,000
600,000
800,000
80,000
80,000
240,000
320,000
240,000
320,000
520,000
1,560,000
2,080,000
* Net Change Other refers to Options purchased or sold or otherwise transferred during the year.
** Net Change Share-split refers to the share-split on the basis that every share be divided into four fully paid ordinary shares with effect from
5:00pm (Melbourne time) on 30 June 2016 approved at the Annual General Meeting held that day, applied in the same basis to all securities
on issue including options and performance rights.
14
DIRECTORS’ REPORT
Table 4: Performance Rights Class A held by Key Management Personnel of the Group for years ended
30 June 2017 and 30 June 2016
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Michael Murchison
Total
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Michael Murchison
Total
Notes:
Balance
1 July 2016
Net Change
Other* Cancelled***
Balance
30 June 2017
2,000,000
1,000,000
80,000
6,480,000
9,560,000
–
–
–
–
–
(2,000,000)
(1,000,000)
(80,000)
(6,480,000)
(9,560,000)
–
–
–
–
–
Balance
1 July 2015
Net Change
Other*
Net Change
Share Split**
Balance
30 June 2016
500,000
250,000
20,000
–
–
–
1,500,000
2,000,000
750,000
1,000,000
60,000
80,000
1,487,000
133,000
4,860,000
6,480,000
2,257,000
133,000
7,170,000
9,560,000
* Net Change Other refers to Performance Rights Class A purchased or sold or otherwise transferred during the year.
** Net Change Share-split refers to the share-split on the basis that every share be divided into four fully paid ordinary shares with effect from 5:00pm
(Melbourne time) on 30 June 2016 approved at the Annual General Meeting held that day, applied in the same basis to all securities on issue including
options and performance rights.
*** Cancelled refers to Class A Performance Rights were cancelled effective 1 March 2017.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
15
DIRECTORS’ REPORT
Table 5: Performance Rights Class B held by Key Management Personnel of the Group for years
ended 30 June 2017 and 30 June 2016
Subtotal for Non-Executive Directors
5,840,000
(3,140,000)
(2,700,000)
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geoff Pearce
Mr Michael Murchison
Executives
Mr Peter Crock
Subtotal for Executives
Total
Name
Non-Executive Directors
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Michael Murchison
Total
Notes:
–
–
–
–
–
–
–
–
–
Balance
1 July 2016
Net Change
Other*
Converted
to Ordinary
Shares
Balance
30 June 2017
1,000,000
500,000
–
–
(1,000,000)
(500,000)
80,000
500,000
(580,000)
–
360,000
(360,000)
4,260,000
(4,000,000)
(260,000)
–
–
250,000
(250,000)
250,000
(250,000)
5,840,000
(2,890,000)
(2,950,000)
Balance
1 July 2015
Net Change
Other*
Net Change
Share Split**
Balance
30 June 2016
250,000
125,000
20,000
–
–
–
750,000
1,000,000
375,000
500,000
60,000
80,000
932,500
132,500
3,195,000
4,260,000
1,327,500
132,500
4,380,000
5,840,000
* Net Change Other refers to Performance Rights Class B purchased or sold or otherwise transferred during the year.
** Net Change Share-split refers to the share-split on the basis that every share be divided into four fully paid ordinary shares with effect from 5:00pm
(Melbourne time) on 30 June 2016 approved at the Annual General Meeting held that day, applied in the same basis to all securities on issue including
options and performance rights.
This concludes the Remuneration Report, which has been audited.
16
DIRECTORS’ REPORT
Indemnifying Officers or Auditor
No indemnities have been given however a Directors and Officers insurance premium totalling $23,977 has been paid,
during or since the end of the year, for any person who is or has been an officer of the Group. No indemnities have been
given during or since the end of the year for any person who has been an auditor of the Group.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings
to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of
those proceedings.
There were no proceedings during the year.
Events after the end of the reporting period
There were no other matters or circumstances have arisen since the end of the year which significantly affected or may
significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in future
financial years.
Non-Audit services
The Company’s Audit and Risk Committee (“the Committee”) is responsible for the maintenance of audit independence.
Specifically, the Committee Charter ensures the independence of the auditor is maintained by:
• Limiting the scope and nature of non-audit services that may be provided; and
• Requiring that permitted non-audit services must be pre-approved by the Chairman of the Committee.
During the year William Buck, the Group’s auditor, has performed certain other services in addition to the audit and review
of the financial statements. The Board has considered the non-audit services provided during the year by the auditor and
in accordance with the advice provided by the Committee, is satisfied that the provision of those non-audit services during
the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Group and have been
reviewed by the Committee to ensure they do not impact the integrity and objectivity of the auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants as they did not involve reviewing or auditing the auditors
own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group
or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Group. William Buck, for audit and non-audit services provided during
the year are set out in Note 5.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
17
DIRECTORS’ REPORT
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 19.
CEO and CFO declaration
The CEO and CFO have given a declaration to the Board concerning the Group’s financial statements under section 295A(2)
of the Corporations Act 2001 and recommendations 4.2 and 7.2 of the ASX Corporate Governance Council Principles of
Good Corporate Governance and Best Practice Recommendations in regards to the integrity of the financial statements.
Corporate Governance Statement
In accordance with Listing Rule 4.10.3 and the Appendix 4G lodged by the Company, the Company’s 2017 Corporate
Governance Statement can be found on its website https://www.canngrouplimited.com
Signed in accordance with a resolution of the Board of Directors:
Allan McCallum
Chairman
Date: 25 August 2017
18
AUDITOR’S INDEPENDENCE
DECLARATION
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
19
ANNUAL
FINANCIAL
STATEMENTS
20
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Other income
Administration and corporate costs
Research and development costs
Note
3
3
2017
$
8,421
2016
$
6,662
(1,642,100)
(1,104,217)
(547,782)
(348,923)
Loss before transaction costs, finance costs and income tax expense
(2,181,461)
(1,446,478)
Transaction costs of the IPO
Finance costs
Loss before income tax expense
Income tax expense
Loss attributable to members of the Group
Other comprehensive income
(406,435)
–
(549)
(15,533)
(2,588,445)
(1,462,011)
–
–
(2,588,445)
(1,462,011)
–
–
Total comprehensive loss attributable to members of the Group
(2,588,445)
(1,462,011)
Basic and Diluted Earnings Per Share (EPS)
Weighted Average number of Shares used to calculate EPS*
(0.05)
(0.053)
52,328,805
27,592,420
*
The potentially dilutive effects of any contingently issuable ordinary shares have not been considered in the diluted loss per share calculation,
because the Group is in a loss-making position and such an effect would be anti-dilutive.
The accompanying notes form part of these statements.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
21
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Prepayments
Stock on hand
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Investments in term deposits
Rental bonds
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Unsecured trade and other payables
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liability
TOTAL NON-CURENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Performance rights reserve
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these statements.
22
Note
2017
$
2016
$
11,113,964
1,344,055
133,453
5,519
24,927
–
11,272,344
1,349,574
6
716,672
486,758
3,000,000
–
85,000
35,000
3,801,672
521,758
15,074,016
1,871,332
389,103
181,849
4,198
–
393,301
181,849
20,567
20,567
–
–
413,868
181,849
14,660,148
1,689,483
8
10
20,187,092
4,376,271
–
515,409
(5,526,944)
(3,202,197)
14,660,148
1,689,483
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Vesting of Class B performance rights
–
110,904
Conversion of Class B performance rights and issue of shares
362,615
(362,615)
Cancellation of Class A performance rights
–
(263,698)
263,698
Transactions with owners in their capacity as owners
20,187,092
Comprehensive loss for the period ended 30 June 2017
Balance at 30 June 2017
–
20,187,092
–
–
–
(2,938,499)
17,248,593
(2,588,445)
(2,588,445)
(5,526,945)
14,660,148
Performance
Rights
reserve
$
Accumulated
losses
$
Issued equity
$
Total equity
$
4,376,271
515,409
(3,202,197)
1,689,483
16,485,465
(1,037,259)
–
–
–
–
–
–
16,485,465
(1,037,259)
110,904
–
–
Performance
Rights
reserve
$
Accumulated
losses
$
Issued equity
$
Total equity
$
1,957,006
431,505
(1,740,186)
648,325
2,527,000
(107,735)
–
–
–
–
–
2,527,000
(107,735)
83,904
Balance at 1 July 2016
Issue of shares
Costs of issuing shares
Balance at 1 July 2015
Issue of shares
Costs of issuing shares
Vesting of Class B performance rights
–
83,904
Transactions with owners in their capacity as owners
4,376,271
515,409
(1,740,186)
3,151,494
Comprehensive loss for the period ended 30 June 2016
–
–
(1,462,011)
(1,462,011)
Balance at 30 June 2016
4,376,271
515,409
(3,202,197)
1,689,483
The accompanying notes form part of these statements.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
23
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Other income received
Payments to suppliers and employees
Interest receipted
Note
2017
$
2016
$
382
420
(2,307,271)
(1,253,428)
8,038
6,280
Net cash flows provided used in operating activities
14
(2,298,851)
(1,246,728)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of plant and equipment
Acquisition of other assets
Investment in term deposits
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of shares
Costs of issuing shares
Net cash flows provided by financing activities
Net increase/ (decrease) in cash held
Cash and cash equivalents at the beginning of the year
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
The accompanying notes form part of these statements.
(329,446)
(344,305)
(50,000)
(35,000)
(3,000,000)
–
(3,379,446)
(379,305)
15,619,000
2,627,000
(170,794)
(107,736)
15,448,206
2,519,264
9,769,909
893,231
1,344,055
450,824
11,113,964
1,344,055
24
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
These are the financial statements of Cann Group Limited (the Company) and its 100% owned subsidiaries, including
Cannproducts Pty Ltd, Cannoperations Pty Ltd, Cann IP Pty Ltd (formerly Anslinger Holdings Pty Ltd) and Botanitech
Pty Ltd (formerly Cann Investments Pty Ltd), all incorporated and domiciled in Victoria, Australia (together, the Group).
Cann Group Limited is an ASX-listed public company incorporated and domiciled in Victoria, Australia. These financial
statements are for the year ended 30 June 2017. Unless otherwise stated, all amounts are presented in $AUD, which is
the functional and presentation currency of all entities in the Group. The financial statements were authorised for issue
by the Directors on the date of signing the attached Directors’ Declaration.
2. Summary of significant accounting policies
(a) Basis of preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative announcements of the Australian
Accounting Standards Board (“AASB”) and the Corporations Act 2001 as appropriate for for-profit oriented entities.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial
statements containing relevant and reliable information about transactions, events and conditions. Compliance
with Australian Accounting Standards ensures that the financial statements and notes also comply with International
Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements
are presented below. They have been consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs.
The amounts presented in the financial statements have been rounded to the nearest dollar.
Accounting Standards and Interpretations
(i)
Changes in accounting policy and disclosures
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period and there was
no material impact arising from the adoption of the new, revised and amending Accounting Standards.
(ii)
Accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the annual reporting period ending 30 June 2017 are outlined
in the table below.
Standard
Mandatory date for
annual reporting periods
beginning on or after)
Reporting period standard
adopted by the Company
AASB 9 Financial Instruments and related standards
1 January 2018
1 July 2018
AASB 15 Revenue from Contracts with Customers and AASB 2014-5
Amendments to Australian Accounting Standards from AASB 15
AASB 16 Leases
1 January 2018
1 January 2019
1 July 2018
1 July 2018
Management have assessed that standards AASB 9: Financial Instruments and related standards and AASB 15:
Revenue from Contracts with Customers (and AASB 2014-5 Amendments to Australian Accounting Standards from
AASB 15) will not materially impact these financial statements.
Management has assessed that the standard AASB 16: Leases will have a material effect on these financial statements
impacting through the capitalisation of right to use leased assets and the corresponding lease liability connected with
the current rental arrangement.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
25
Notes to the fiNaNCial statemeNts
2. Summary of significant accounting policies (continued)
(b) Principles of Consolidation
These consolidated financial statements comprise the financial statements of the Company and its controlled entities
throughout reporting period. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial
statements from the date on which control commences until the date on which control ceases.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ends when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the
year are included in the Consolidated Statement of Profit or Loss and Other Comprehensive Income from the date the
Company gains control until the date when the Company ceases to control the subsidiary.
The financial statements of the controlled entities used in the preparation of the consolidated financial statements are
prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions
and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions
and dividends are eliminated in full.
Income Tax
(c)
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled and their measurement also reflects the manner in which management expects to
recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
(d) Cash and cash equivalents
Cash in the Statement of Financial Position comprise cash at bank and in hand.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above.
Inventory
(e)
Plant-based inventory is classified at initial recognition depending upon its specific designated purpose by the Group.
Plants held for research purposes
Plants held for research purposes are expensed as incurred.
Bearer plants
Bearer plants are those which include a range of genetic varieties from which non-bearer plants are propagated from
and are maintained to ensure genetic consistency. These are held at cost and incrementally capitalised throughout their
life cycle to reflect the cost value of direct and indirect activities undertaken to grow the plants, less any accumulated
depreciation or amortization.
26
Notes to the fiNaNCial statemeNts
Non-bearer plants
Non-bearer plants are those which are grown to maturity (flowering) and then the full plant is harvested from which a
product will be derived. These plants are recognized as biological assets and are held at fair value less costs to sell, or
where fair value cannot be reliably measured, at cost and incrementally capitalized throughout their life cycle to reflect
the direct and indirect activities undertaken to grow the plants, provided that such cost plus incremental gain does not
exceed their net realizable value.
Research and development
(f)
Research and development activities include all costs involved in researching and testing different cultivation methods
and equipment in a quest to obtain optimal outcomes with regard to the chemical make-up and quantity of harvested
and/or manufactured produce. Research and development activities may include specific experiments that may be
registered for the Research and Development Tax Incentive or general research and development activities conducted
as part of the Group’s general operations. The Group maintains a quantity of both bearer and non-bearer plants
specifically under its Cannabis Research Licence for use solely in research and development activities and they are
destroyed upon conclusion of those activities.
Research and development costs are expensed as incurred.
(g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts
from customers or payments to suppliers.
Trade and other payables
(h)
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of these goods and services.
Trade and other receivables
(i)
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary
course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified
as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment.
At each reporting date, the Group’s directors assess whether there is objective evidence that trade and other receivables
have been impaired. Impairment losses are recognised in the profit or loss.
Cann Group Limited annuaL report 2017
27
NOTES TO THE FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
(j)
Each class of plant and equipment is carried at cost less any accumulated depreciation and impairment losses.
Plant and Equipment
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be
received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to
their present values in determining recoverable amounts.
The cost of plant and equipment constructed within the Group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable overheads.
Depreciation
The depreciable amount of all plant and equipment is depreciated on a diminishing value basis over the asset’s useful
life to the Group commencing from the time the asset is held ready for use.
As at 30 June 2017, the Group’s asset classes had effective useful lives as follows:
Asset Class
Growth facilities
Other plant and equipment (includes computer equipment, network equipment, security equipment,
leasehold improvements, furniture, cultivation tools and workshop equipment)
Useful Life
(years)
7
1 to 3
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the statement of profit of loss and other comprehensive income.
Impairment of Assets
(k)
At each reporting date, the Group’s directors review the carrying values of the Group’s tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less cost to sell and value in use, is compared to the assets
carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the statement of profit
or loss and other comprehensive income.
Leases
(l)
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases, net of any incentives received from the lessor, are charged to
the Consolidated Statement of Profit or Loss and Other Comprehensive Income on a straight-line basis over the period of
the lease.
(m) Share Based Payments
The Company reflects in its comprehensive income (or loss) and its financial position the effects of share-based
payment transactions, including expenses associated with transactions in which shares are granted to related parties,
key management personnel and employees.
For share-based payments received by employees and key management personnel of the Group, fair value is measured
by reference to the fair value of the equity instruments granted at their grant date, being the date that both the recipient
and the Company have a shared understanding of the terms and conditions connected to the share-based payment.
Any market-based vesting conditions are incorporated into the valuation of the share-based payment arrangement as
at the grant date of the share-based payment. Share-based payments with non-market based performance conditions
vest according to the pro-rata achievement of those conditions. Share-based payments with non-performance based
conditions are valued using the Black-Scholes model and payments with market-based performance conditions are
valued using a binomial model which incorporates from both the performance rights arrangement and market data
that existed at grant date.
28
NOTES TO THE FINANCIAL STATEMENTS
(n) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the entity.
Key Judgement – non-recognition of carry-forward tax losses
The balance of future income tax benefit estimated as $703,351 (2016: $359,222) arising from current year tax losses
of $2,588,445 (2016: $1,198,314) and timing differences has not been recognised as an asset because recovery is not
regarded as probable. The cumulative future income tax benefit estimated to be $1,428,739, which has not been recognised
as an asset, will only be obtained if:
(i) the Company derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised;
(ii) the Company continues to comply with the conditions for deductibility imposed by law; and
(iii) no changes in tax legislation adversely affecting the Company realising the benefit.
Key Judgement – non-recognition of research and development tax incentive benefits
The balance of research and development tax incentive arising from operations of the Company has not been recognised
as an asset because receipt as at this stage as it cannot be reliably calculated. The research and development tax
incentive, which has not been recognised as an asset, will only be obtained if:
(i) the Company’s activities fulfil the eligibility criteria of the research and development tax initiative and it is successful
in registering for the research and development tax initiative;
(ii) the Company continues to comply with the conditions for registration of the research and development tax initiative
imposed by law; and
(iii) no changes in tax legislation adversely affecting the Company realising the tax incentive from research and development.
Key Judgement – valuation of Underwriter Options
The Underwriter Options issued to Underwriters to the Initial Public Offering received as part of their remuneration for
services were independently valued using the Black-Scholes valuation methodology. The data input into the Black-Scholes
valuation methodology included the Option tenure period of 2.167 years from grant date of 4 May 2017, a risk-free rate
of 1.74% and an expected volatility rate of 80%.
3. Expenses
Depreciation
Employee salaries
Employee superannuation
Share based payments
Lease expense
Occupancy expenses
2017
$
2016
$
(124,297)
(28,917)
(569,945)
(169,624)
(53,147)
(47,154)
(110,904)
(83,904)
(834)
–
(269,690)
(79,754)
(1,128,817)
(409,353)
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
29
NOTES TO THE FINANCIAL STATEMENTS
4. Key management personnel
(a) Names and positions held of key management personnel in office at any time during the year are:
Key Management Person
Mr Allan McCallum
Mr Philip Jacobsen
Mr Douglas Rathbone
Mr Geoff Pearce
Position
Chairman
Deputy Chairman
Director
Director
Mr Michael Murchison (resigned 28 October 2016)
Director
Mr Peter Crock
Chief Executive Officer
(b) Remuneration paid to Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
2017
$
2016
$
362,750
191,069
16,821
34,473
27,825
74,315
414,044
293,209
5. Auditor’s remuneration
During the year the following fees were paid or payable for services provided by the auditor of Group, its related
practices and non-related audit firms:
(i) Audit and other assurance services
Audit and review of financial statements
Assistance with Due Diligence
Total remuneration for audit and other assurance services
(ii) Consulting services
Consulting fees regarding Research and Development Tax Incentive
Total remuneration for consulting services
Total remuneration of William Buck
2017
$
2016
$
24,000
11,000
1,365
–
25,365
11,000
800
800
–
–
26,165
11,000
30
NOTES TO THE FINANCIAL STATEMENTS
6. Plant and equipment
Plant and equipment
(a)
2017
2016
Growth
Facilities
$
Other plant
& equipment
$
Total
$
Growth
Facilities
$
Other plant
& equipment
$
Total
$
Cost
728,597
141,288
869,855
469,489
46,186
515,675
Accumulated Depreciation
(106,374)
(46,839)
(153,213)
(17,117)
(11,800)
(28,917)
Closing Balance
622,223
94,449
716,672
452,372
34,386
486,758
(b) Movements in plant and equipment
2017
2016
Growth
Facilities
$
Other plant
& equipment
$
Total
$
Growth
Facilities
$
Other plant
& equipment
$
Total
$
Opening Balance
452,372
34,386
486,758
171,369
–
171,369
Additions
Depreciation
259,109
95,104
354,213
298,120
46,186
344,306
(89,258)
(35,039)
(124,297)
(17,117)
(11,800)
(28,917)
Closing Balance
622,223
94,451
716,672
452,372
34,386
486,758
During the year Secure Cultivation Rooms 01 and 02 were completed to operational levels and were available for use as
at 1 August 2016. Secure Cultivation Rooms 03, 04 and 05 to 07 were in various stages of construction as at 30 June 2017.
As at 30 June 2017 the Directors reviewed the overall progress of the Secure Cultivation Rooms and the Directors conducted
an impairment test which was applied as at 30 June 2017 whereby the Directors compared the carrying values of all of
the Secure Grow Rooms plus the Research & Development / Nursery Room and the Laboratory / Drying Room to the
selling values of comparable assets and concluded that no impairment existed relating to these assets.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
31
NOTES TO THE FINANCIAL STATEMENTS
7. Controlled entities
Cann Group Limited has four wholly-owned subsidiaries as at 30 June 2017 as follows:
Subsidiary Name
Principle Activity
Cannproducts Pty Ltd
(ACN 600 887 189)
To market and distribute the Group’s medicinal
cannabis products.
Cannoperations Pty Ltd
(ACN 603 323 226)
To hold all relevant licences and permits required
to conduct all operations relating to research and
development, cultivation and seed acquisition/
importation. Owns all cultivation and other assets
used throughout the Group.
Date Acquired
27 February 2015
27 February 2015
Number of
Shares held
Percentage
Shareholding
100
100
100%
100%
Cann IP Pty Ltd (formerly
Anslinger Holdings Pty Ltd)
(ACN 169 764 407)
To hold all intellectual property for Group members.
27 February 2015
100
100%
Botanitech Pty Ltd (formerly
Cann Investments Pty Ltd)
(ACN 604 834 488)
To hold any investments undertaken by the Group
in the future that are relevant or complimentary to
the vertical integration of the Group’s business.
18 March 2015
100
100%
During the year the Group disposed of two wholly-owned subsidiaries. Those entities were as follows:
Subsidiary Name
Principle Activity
Cann Global Inc
Corporate shell
Cannproducts NZ Limited
Corporate shell
Date Disposed
28 October 2016
23 November
2016
Number of
Shares held
Percentage
Shareholding
100
100
100%
100%
Both entities were disposed for the purpose of internally structuring the legal form of the Group. As these transactions
only related to the structure of the Group and did not influence its operations, the Directors have assessed that these
disposals, sold to related parties for $1 each at arm’s-length terms, did not meet the definition of a business, being
corporate shells, and therefore they have not been classified as a discontinued operation in these financial statements.
8.
Issued capital
Ordinary shares – fully paid
Total issued capital
30 June 2017
Number of
Shares
30 June 2016
Number of
Shares
30 June 2017
$
30 June 2016
$
108,353,335
39,346,668
20,187,092
4,376,271
108,353,335
39,346,668
20,187,092
4,376,271
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands.
32
NOTES TO THE FINANCIAL STATEMENTS
Movements in issued capital:
Issue Date
Balance 1 July 2016
29 September 2016 – placement
22 November 2016 – placement
21 February 2017 – placement
31 March 2017 – issued pursuant to exercise of options
Issue Price
$
Number of
Shares and
Options
2017
$
39,346,668
4,376,271
320,000
160,000
160,000
48,000
24,000
24,000
13,486,667
2,023,000
0.15
0.15
0.15
0.15
20 April 2017 – issued pursuant to vesting of Performance Rights
–
7,180,000
362,615
3 May 2017 – issued pursuant to Initial Public Offering (net of costs)*
0.30
47,700,000
13,091,206
Total Issued Shares as at 30 June 2017
Total Options on issue**
Total Issued Capital as at 30 June 2017
* Costs of the issue of shares pursuant to the Initial Public Offering are as follows:
108,353,335
19,949,092
–
2,000,000
238,000
110,353,335
20,187,092
Cost
Underwriting fee
Legal fees
Printing and design costs
Total
Corporate advisory, investigating accountant and other consulting fees
103,901
Settlement method
Cash
$
Shares
$
Options
$
Total
$
–
810,000
238,000***
1,048,000
108,660
14,697
–
–
–
–
–
–
108,660
103,901
14,697
227,258
810,000
238,000
1,275,258
** Refer Note 9 regarding total number of Options on issue as at 30 June 2017.
*** Included in the Underwriter Fees is an amount of $238,000 representing the value of 2,000,000 Underwriter Options which the Underwriters to the
Initial Public Offering received as part of their remuneration for services. For the Key Judgements regarding the Option valuation refer to Note 2(l).
Issue Date
Balance 1 July 2015
13 August 2015 – placement
30 October 2015 – placement
12 May 2016 – issued pursuant to Information Memorandum
30 June 2016
30 June 2016 – Costs of issuing shares
Total Issued Capital as at 30 June 2016
Issue Price
$
Number of
Shares
2016
$
1.00
1.00
0.60
–
–
6,025,000
1,957,006
150,000
150,000
450,000
450,000
3,211,667
1,880,533
29,510,001
–
–
(61,268)
39,346,668
4,376,271
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
33
NOTES TO THE FINANCIAL STATEMENTS
9. Options
During the year the Group had two classes of options on issue, being options issued pursuant to the Information
Memorandum dated 11 April 2016 and Underwriter Options issued pursuant to the Initial Public Offering Prospectus
dated 28 March 2017 (and the Supplementary Prospectus dated 12 April 2017).
Options issued pursuant to Information Memorandum dated 11 April 2016
All options were exercised at fifteen ($0.15) cents each before the expiration date of 4.00pm (Melbourne, Victoria time)
on 31 March 2017.
Issue Date
Balance 1 July 2016
29 September 2016*
22 November 2016*
21 February 2017*
31 March 2017**
Balance 30 June 2017
Issue Date
Balance 1 July 2015
12 May 2016***
30 June 2016****
Balance 30 June 2016
Issue Price
$
Number
of Options
12,846,668
–
320,000
160,000
160,000
–
(13,486,668)
–
Issue Price
$
Number of
Options
–
–
–
3,211,667
9,635,001
12,846,668
* On 29 September 2016, 22 November 2016 and 21 February 2017 the Company issued a total of 640,000 Ordinary Shares at fifteen cents ($0.15)
per Share (post share-split) by placements on the same terms as those issued pursuant to the Information Memorandum dated 11 April 2016, hence
issuing one attaching Option at no additional cost for each new share subscribed for under those placements.
** On 31 March 2017 the Company issued 13,486,668 Ordinary Shares pursuant to all holders of options exercising all of their options.
*** On 12 May 2016 the Company issued 3,211,667 Ordinary Shares at sixty cents ($0.60) per Share pursuant to the Information Memorandum dated
11 April 2016 and issued one attaching Option at no additional cost for each new share subscribed for under that Information Memorandum.
**** On 30 June 2016, at the Annual General Meeting held on that day, shareholders passed the resolution that in accordance with section 254H of the
Corporations Act 2001 (Cth), the fully paid ordinary shares in the issued capital of the Company be split on the basis that every share be divided into
four fully paid ordinary shares with effect from 5.00pm (Melbourne time) on 30 June 2016. Options and performance rights on issue at the effective
date of the share split were also adjusted which involved an increase in the number of these securities in the same ratio as the share split, and a
decrease in the exercise price in the inverse ratio.
Underwriter Options issued pursuant to the Initial Public Offering Prospectus dated 28 March 2017
(and the Supplementary Prospectus dated 12 April 2017)
The Underwriters (or their respective nominees) to the Initial Public Offering were issued 2,000,000 Underwriter Options
in the Company. The Underwriter Options will have an exercise price $0.37 and expire on 30 June 2019.
Refer to Note 2(l) and Note 8 regarding the value of these Options at the date of issue.
The Underwriter Options (and any underlying Shares issued as a result of the exercise of any of these Underwriter
Options) will be subject to a 24-month escrow period.
Upon conversion, the underlying Shares issued will be subject to the same rights and liabilities of all other Shares.
34
NOTES TO THE FINANCIAL STATEMENTS
Issue Date
Balance 1 July 2016
Issued 2 May 2017
Balance 30 June 2017
Issue Price
$
Number of
Options
–
–
2,000,000
2,000,000
10. Performance Rights
The Company has no Performance Rights on issue as at 30 June 2017. The Performance Rights Reserve reflects the
vesting of the fair value of Performance Rights, which were issued by the Group prior to the IPO and of which all were
either cancelled or converted by the completion of the IPO. Performance Rights solely with market conditions which
were cancelled were taken directly to accumulated losses and not recycled through profit and loss.
Movement in Performance Rights Reserve
PERFORMANCE RIGHTS CLASS A
Date
Balance 1 July 2016
1 March 2017*
Balance 30 June 2017
Number of
Performance
Rights
2017
$
11,000,000
263,698
(11,000,000)
(263,698)
–
–
* On 1 March 2017 all Performance Rights Class A were cancelled with the agreement of all holders and was credited to the Statement of Profit or Loss
and Other Comprehensive Income.
PERFORMANCE RIGHTS CLASS A
Date
Balance 1 July 2015
Balance 30 June 2016
Number of
Performance
Rights
2016
$
11,000,000
263,698
11,000,000
263,698
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
35
NOTES TO THE FINANCIAL STATEMENTS
10. Performance Rights (continued)
PERFORMANCE RIGHTS CLASS B
Date
Balance 1 July 2016
1 July 2016**
20 April 2017^
20 April 2017^^
Balance 30 June 2017
Number of
Performance
Rights
2017
$
7,000,000
251,711
180,000
–
21,600
89,304
(7,180,000)
(362,615)
–
–
** On 1 July 2016 180,000 Performance Rights Class B were issued to contractors to the Group.
^
Vesting of Performance Rights Class B to conversion due to increase in probability of conversion milestone being achieved attributed to the
Statement of Profit or Loss and Other Comprehensive Income.
^^ On 20 April 2017 all Performance Rights Class B were converted into Ordinary Shares, having fulfilled the vesting requirements, being the milestone
of the Company applying to be admitted to the Official List of the ASX. Refer Note 8 Issued Capital.
CLASS B
Date
Balance 1 July 2015
30 June 2016^^^
Balance 30 June 2016
Number of
Performance
Rights
2016
$
7,000,000
167,807
–
83,904
7,000,000
251,711
^^^ Vesting of Performance Rights Class B during year due to increase in probability of conversion milestone being achieved attributed to the Statement
of Profit or Loss and Other Comprehensive Income.
36
NOTES TO THE FINANCIAL STATEMENTS
11. Related party information
Transactions between the Consolidated Group and related parties are on normal commercial terms
and conditions no more favourable than those available to other parties unless otherwise stated.
Related party transactions not otherwise disclosed in these financial statements include the following:
All shares in Cann Global LLC were transferred from Cann Group Limited to Mr Michael Murchison
on an arm’s-length basis
All shares in Cannproducts NZ Limited were transferred from Cann Group Limited to entities
associated with Mr Michael Murchison on an arm’s-length basis
Fees for United States representative services were paid to BPI Inc., a company of which
Mr Michael Murchison is a Director and shareholder.
Fees for hire of office equipment and furniture were paid to Odd Couple Productions Pty Ltd,
a company of which Mr Michael Murchison is a Director and shareholder.
Purchase of office equipment and furniture from Odd Couple Productions Pty Ltd, a company
of which Mr Michael Murchison is a Director and shareholder.
2017
$
2016
$
1
1
–
–
–
–
41,100
35,500
1,500
1,502
24,495
101,095
12. Contingent liabilities and commitments
The Company has a bank guarantees of $35,000 and $50,000 for the operating premises lease of the Company’s
Southern and Northern premises respectively. With the exception of these bank guarantees, the Company currently
has no contingent liabilities or commitments at the date of signing this report.
13. Events after the end of the reporting period
There were no other matters or circumstances arising since the end of the year which significantly affected or may
significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
37
NOTES TO THE FINANCIAL STATEMENTS
14. Cash flow information
Reconciliation of net loss after tax to net cash flows from operations
Profit/(loss) for the year
Non-cash flows in profit
Vesting of performance rights Class B
Depreciation
Movements in working capital
(Increase)/decrease in trade receivables and other assets
(Decrease)/increase in trade and other payables
(Increase)/decrease in stock on hand
Net cash outflows from operating activities
2017
$
2016
$
(2,588,445)
(1,462,011)
110,904
124,297
83,904
28,917
(127,934)
(1,558)
207,254
104,021
(24,927)
–
(2,298,851)
(1,246,728)
15. Leases
Operating Leases
On 3 March 2017 the Group entered into an operating lease for premises known as the Northern Facility for a period of
three years commencing 1 April 2017. As disclosed in the 2016 Annual Report the Group had entered into an operating
lease for premises at the Southern Facility with the term of the lease being three years and six months and which allows
for two further terms of three years each. Both Facilities are located in Melbourne, Victoria.
Operating lease commitments are:
Period
Less than 12 months
From one to five years
2017
$
2016
$
518,021
110,000
834,138
183,333
1,352,159
293,333
38
NOTES TO THE FINANCIAL STATEMENTS
Finance Lease
On 24 May 2017 the Group entered into a finance lease with Crown Equipment Pty Ltd trading as Crown Credit for lifting
equipment known as a walkie stacker.
Finance lease commitments are:
Period
Less than 12 months
From one to five years
2017
$
4,198
20,567
24,765
2016
$
–
–
–
16. Financial risk management
The consolidated Group’s material financial instruments consist of deposits with banks and its accounts payable and
other liabilities. The Board is responsible for managing the Group’s only significant financial risk, which is its liquidity risk,
which it does through regularly reviewing rolling cash flow forecasts and examining its levels of available working capital
against such forecasts.
Liquidity risk arises from the possibility that the Group may encounter difficulty in meeting its obligations for its financial
liabilities, which at 30 June 2017 were accounts payable with due terms from 0 – 45 days.
The Directors have assessed that the fair values of the Group’s financial assets and liabilities reasonably approximate
their carrying values, as represented in these financial statements.
17. Capital management
The Board of Directors are charged with determining the optimal mix of debt and equity which is suitable for the needs
of the Group. For the year ended 30 June 2017 the Group held no material commercial borrowings or material facilities
for credit as the board considered that, at this point of time, that funds sourced through equity would be most appropriate.
The Group’s Chief Financial Officer reports to the board periodically with forecast cash flow information that enables
the Board to conduct its capital raising activities in an orderly fashion at a dilutive cost to existing shareholders that
is appropriate and reasonable.
18. Segment information
The Group operates in one segment being the medicinal cannabis industry with operations only in Australia.
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
39
NOTES TO THE FINANCIAL STATEMENTS
19. Parent entity disclosures
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2017
$
2016
$
16,911,629
1,378,747
25,314
1,693,207
16,936,943
3,071,954
227,298
157,662
20,567
–
247,865
157,662
20,187,092
4,376,270
–
515,409
(3,498,014)
(1,977,417)
16,689,078
2,914,262
2017
$
2016
$
(1,784,294)
(930,503)
–
–
(1,784,294)
(930,503)
The subsidiary companies have expenditure commitments under the premises lease. The parent entity has
committed to providing funds to ensure the subsidiary companies can fulfil these commitments as well as any
other operating commitments.
40
DIRECTORS’ DECLARATION
1. The Directors declare that the financial statements and notes set out on pages 22 to 40 are in accordance with
the Corporations Act 2001 and:
a. comply with International Financial Reporting Standards, as stated in Note 2 to the financial statements;
b. comply with Accounting Standards, the Corporations Regulations 2001; and
c. give a true and fair view of the financial position as at 30 June 2017 and of the performance for the year ended
30 June 2017 of the consolidated group.
2. The Chief Executive Officer and Company Secretary have each declared that:
a. the financial records of the Company for the year ended 30 June 2017 have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
b. the financial statements and notes for the year comply with the Accounting Standards; and
c. the financial statements and notes for the year give a true and fair view.
3. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
Allan McCallum
Chairman
Date: 25 August 2017
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
41
INDEPENDENT AUDITOR’S REPORT
42
INDEPENDENT AUDITOR’S REPORT
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
43
INDEPENDENT AUDITOR’S REPORT
44
INDEPENDENT AUDITOR’S REPORT
CaNN GrOup LimiTEd aNNuaL rEpOrT 2017
45
INDEPENDENT AUDITOR’S REPORT
46
SHAREHOLDER INFORMATION
Equity security holders
As at 23 August 2017 the Company had 108,353,335 ordinary shares on issue. Further details of the Company’s equity
securities are as follows:
Largest holders
The following table shows the 20 largest registered shareholders as at 23 August 2017 (as named on the register
of shareholders:
Rank Name
AURORA CANNABIS INC
23 Aug 2017
% of
Issued
Shares
21,562,314
19.90
1
2
3
4
5
6
7
8
9
10
11
12
13
13
13
14
15
16
17
18
19
19
19
19
20
MULLACAM PTY LTD
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