ANNUAL REPORT 2019
ADVANCING THE CAUSE
CONTENTS
PROGRESSING THE PLAN
BUSINESS MODEL AND THE INDUSTRY VALUE CHAIN
1
2
4 MESSAGE FROM CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
5 OPERATIONS REVIEW
7
DIRECTORS’ REPORT
18 AUDITOR’S INDEPENDENCE DECLARATION
19 CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
20 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
21 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
22 CONSOLIDATED STATEMENT OF CASH FLOWS
23 NOTES TO THE FINANCIAL STATEMENTS
41 DIRECTORS’ DECLARATION
42
46 SHAREHOLDER INFORMATION
48 CORPORATE DIRECTORY
INDEPENDENT AUDITOR’S REPORT
DIRECTORS
CORPORATE INFORMATION
Mr Allan McCallum (Chairman)
Mr Philip Jacobsen (Deputy Chairman)
Mr Douglas Rathbone
Mr Geoffrey Pearce
Mr Neil Belot
CANN GROUP LIMITED
and its controlled entities
ABN 25 603 949 739
ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note: to be read in conjunction with the
Appendix 4E: Preliminary Final Report lodged
with the Australian Securities Exchange on
27 August 2019.
These are the full financial statements of Cann Group Ltd
(the Company) and its 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 2019. 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.
PROGRESSING
THE PLAN
FIVE-YEAR OFFTAKE
AGREEMENT WITH
AURORA CANNABIS
FOCUS ON STRATEGIC
PARTNERSHIPS &
RESEARCH
LARGE-SCALE
CULTIVATION
FACILITY UNDER
CONSTRUCTION
IN MILDURA
MANUFACTURING
PARTNERSHIP WITH
IDT AUSTRALIA FOR
CANNABIS-BASED
PRODUCT
FORMULATIONS
AUSTRALIA’S
MOST
EXPERIENCED
CULTIVATOR
OF MEDICINAL
CANNABIS
DHHS CANNABIS
RESIN CONTRACT
FIRST SIGNIFICANT
REVENUES FROM
MEDICINAL
CANNABIS SALES
CANN GROUP LimiTEd ANNUAL REPORT 2019
1
BUSINESS MODEL AND
THE INDUSTRY VALUE CHAIN
A FULLY INTEGRATED BUSINESS MODEL BUILT FOR GROWTH
CANN’S COMPETITIVE STRENGTHS LIE
IN THESE SEGMENTS OF THE VALUE CHAIN …
RESEARCH
& DEVELOPMENT
CULTIVATION
& PRODUCTION
MANUFACTURING
• Accessing and storing
elite genetics and tissue
culture program
• Developing ‘next
generation’ cannabis
strains
• Internal R&D capabilities
supplemented with
key partnerships &
collaborations
• Product development
program to deliver
innovative product forms
• Secure indoor grow
rooms and glasshouse
cultivation facilities
• Ongoing programs
to establish optimised
growing conditions
• Importation and
propagation of new
international genetics
• Expansion program
underway involving
new facility
• Leading extraction
& analysis technology
• Formulations and
delivery systems
• Value-added and
higher margin treatments
in development
• Robust GMP
manufacturing standards
2
A FULLY INTEGRATED BUSINESS MODEL BUILT FOR GROWTH
… WITH A CLEAR PATHWAY TO SECURE
INVOLVEMENT IN THESE SEGMENTS
PACKAGING
& DISTRIBUTION
CLINICAL
EVALUATION/
END USE
DEMAND
• Active Medicinal
Cannabis Medicines
Portal
• High volume export
capability
• Australian pharmacy
distribution
• Evolving clinical
trial program
• Medical education
and community
awareness
initiatives
• Partnership
with Medicinal
cannabis clinic
After listing on the ASX in may 2017,
Cann Group has established itself as a
leader in the quickly evolving medicinal
cannabis industry in Australia.
The company is pursuing a fully integrated business
model, with resources and capabilities spanning research
& development; cultivation & production; manufacturing;
packaging & distribution; clinical evaluation; and
distribution/supply to patients in both Australia and
in export markets where a legal framework exists for
medicinal cannabis treatment.
In the 2019 financial reporting period, Cann Group
continues to secure positions across the full value
chain, through its own investments and via important
collaborations and partnerships that will add significant
value to the company’s business plans.
The Olivia Newton-John Cancer Research
Institute is integrated within the ONJ Cancer
Centre and is a leader in the development
of immunotherapies, targeted therapeutics
and personalised cancer medicine.
Our research laboratories are only metres
away from where patients are cared for
and receive treatment. This inspires, and
enables the rapid translation of scientific
discovery into clinical trial of new and
better cancer treatments.
Olivia Newton John’s personal experience
has made her a strong advocate for the
legalised use of medicinal cannabis to help
treat cancer-related pain. Cann Group is
working with the ONJ to explore opportunities
to undertake clinical research that will help
establish the benefits of medicinal cannabis
treatment and optimum treatment regimes.
CANN GROUP LimiTEd ANNUAL REPORT 2019
3
MESSAGE FROM CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
During the 2019 financial year, Cann Group continued
to execute on its growth strategy and consolidated
its position as Australia’s leading medicinal
cannabis company.
Over the 12-month period, we secured important
additional regulatory approvals; acquired the site
for our major production expansion near Mildura
and entered into a valuable offtake agreement
with our strategic shareholder, Aurora Cannabis Inc.
Cann Group was also the first company in Australia
to supply locally sourced and commercially grown
medicinal cannabis resin for use by Australian patients
and we entered into a manufacturing agreement with
Melbourne-based IDT Australia which ensures we
have a fully integrated pathway from cultivation through
product development and manufacturing to patient supply.
The regulatory licences are now in place to allow Cann
Group to import and export product and to manufacture
product at its two existing facilities. With IDT also securing
a manufacturing licence, we now have significant flexibility
as we progress our product development program.
After a considered review, the decision was taken to
relocate our planned state-of-the-art cultivation and
production facility from the Tullamarine precinct to a
site near Mildura in regional Victoria. This site offers a
number of important advantages including the provision
of important ancillary services and the ability to capitalise
on local climatic conditions which will reduce production
costs. Site works are now underway and we remain on
course to commission the facility in the third quarter
of calendar year 2020.
The investment risk associated with the expansion
plans have been underwritten via an offtake agreement
with Aurora which involves the supply of GMP processed
products through until 2024. Importantly, this agreement
is structured to ensure Cann Group meets Australian
domestic demand before committing product for
export supply to Aurora.
The Company also made a number of strategic
investments during the year. Our minority investment
in Pure Cann NZ Limited gives Cann Group a broader
regional position, with anticipated regulatory changes
in New Zealand expected to legalise medicinal use
in that country in the near future.
We have also made a small strategic investment
in Emerald Clinics, which plans to establish a
network of independent medicinal cannabis
clinics throughout Australia.
4
MILDURA
CONSTRUCTION SITE
Our confidence to continue these expansion and
commercial investment initiatives is underpinned by
consistent success in our plant genetics and cultivation
programs. We remain focused on producing high quality
product that will address the varying needs of patients
here in Australia and in markets elsewhere.
The past year has seen an increase in the number of
industry participants. Cann Group has played a leadership
role in the formation of a peak industry group in Australia
that is promoting high industry standards and promoting
greater awareness of the benefits of medicinal cannabis
to a range of stakeholders including Government, the
medical community and consumers generally.
We are encouraged to see an ongoing commitment on
the part of the Federal Government to streamline approval
processes and improve access for patients who can
benefit from medicinal cannabis treatment.
As we look ahead, the next 12 months will be an important
and exciting time for Cann Group. The construction of the
Mildura facility and the continued development and supply
of our products will be key priorities. We look forward
to keeping you, our shareholders, updated on progress
across those and other fronts as the year unfolds.
Allan McCallum
Chairman
Peter Crock
Chief Executive Officer
OPERATIONS REVIEW
Production
Cann Group Limited (“Cann”) has continued harvesting
medicinal cannabis at its Southern and Northern facilities
in Melbourne during the year with more than 40 harvests
now having been completed from a base of genetics that
now includes 24 imported varieties.
In addition to this Cann Group harvested its first large
scale crop of internationally sourced genetics, as the
Company continues to expand its capabilities as a
commercial medicinal cannabis cultivator.
As the existing facilities continue to operate at full capacity,
harvested material at the Southern facility is being
supplied for manufacture of resin for reformulating and
supply to the Victorian Government Department of Health.
Harvested material from the Northern facility supports
several research programs being conducted by Cann both
independently and with third party research organisations.
Facilities
During the year Cann announced the purchase of a site
in Mildura, North West Victoria, for the Company’s third
planned facility, a state-of-the-art greenhouse for large
scale cultivation and production of medicinal cannabis.
Groundworks have commenced at the site in addition to
remodeling of the existing manufacturing area, while the
first prefabricated elements required for the greenhouse
structure have arrived from Cann’s supplier in the
Netherlands. The Mildura site is well serviced with power,
gas and other necessary amenities, including provisions
for wastewater treatment.
The new greenhouse facility is expected to have a
production capacity of up to 50,000 kilograms of dry flower
per annum and is expected to be fully commissioned in
the third quarter of calendar year 2020. The project will
be funded with a mix of debt and existing cash reserves.
Currently, incorporation of design enhancements and
scope changes from Aurora Larssen Projects are being
finalised.
When completed, it is expected that the greenhouse will be
the largest purpose-built medicinal cannabis production
facility in Australia. The raw cannabis flower produced at
the Mildura site will be processed by Cann’s manufacturing
contractor IDT Australia into downstream products ready
for supply to Australian patients and exports.
When fully operational, the expanded production capacity
will have the ability to generate annual revenues of
approximately $160 million to $200 million based on the
current wholesale price of cannabis dry flower.
During the year Cann negotiated for, and in July 2019
completed the purchase of its Southern facility site in
Melbourne, having previously leased the property.
During August 2018, Cann and IDT Australia (“IDT”)
executed a manufacturing agreement that will see IDT
provide manufacturing support in relation to medicinal
cannabis-based product formulations intended for supply
to patients in Australia and overseas.
Following IDT receiving its manufacturing license from
the Office of Drug Control (ODC) the company installed
Cann’s supercritical CO2 extraction equipment required
for the processing of medicinal cannabis, with an audit
required by the Therapeutics Goods Administration (TGA)
also successfully completed.
Commissioning and validation works are now underway
with IDT preparing to be the key manufacturing partner in
relation to Cann’s cannabis-based product formulations
intended for supply both locally and overseas.
Regulatory
Cann benefited from several important updates to its
regulatory position during the year.
Shortly after year end, the ODC approved manufacturing
licenses for Cann Group’s existing Northern and Southern
medicinal cannabis facilities in Melbourne. The licenses
relate to the manufacturing, packaging, storage, transport
and disposal of medicinal cannabis in final dose and
intermediate forms. Cann Group now holds all cultivation,
production and manufacturing licenses under the
Narcotics Drug Act, along with import and export licenses
under the Customs Act.
In May it was also announced that IDT had been granted
a medicinal cannabis manufacturing licence by the ODC,
which was another key step given the manufacturing
arrangement Cann established with the Melbourne-based
pharmaceutical manufacturer.
In late June Aurora Cannabis received an import
permit from Health Canada for cannabis cultivated by
Cann Group. The permit enables Cann to deliver medicinal
cannabis material for process validation purposes.
Cann Group has delivered material to IDT for GMP testing,
labelling and packing before it is exported to Aurora.
Commercial
The Victorian Government has taken delivery of the first
Australian sourced and commercially grown cannabis
resin for use by Australian patients. The cannabis resin
was extracted from dry cannabis flower produced at Cann
Group’s Southern Facility in Melbourne as part of the
Company’s supply contract with the Victorian Department
of Health and Human Services (DHHS), announced in
October 2018.
Pivotal to Cann’s ability to cultivate at scale, Cann secured
an offtake agreement with Aurora Cannabis that will
CANN GROUP LimiTEd ANNUAL REPORT 2019
5
OPERATiONS REViEW (CONTINUED)
see Good Manufacturing Practice (GMP) processed
dry flower, extracted resin and manufactured medicinal
cannabis products supplied to Aurora by Cann until 2024.
This covers Cann’s full current and planned production
capacity beyond that produced for domestic needs.
units under the umbrella agreement, which will see
technology development activities undertaken for use
in the commercial manufacture and sale of medicinal
cannabis products. All resulting intellectual property
will be owned by Cann Group.
Canada-based Aurora hold a strategic 22.54%
shareholding in Cann and is one of the world’s largest
and fastest growing cannabis companies, with funded
capacity in excess of 625,000kg per annum and sales and
operations in 24 countries across five continents.
Cann marked a significant milestone in August 2018 by
supplying the first patient with Aurora cannabis oil through
the Therapeutic Goods Administration (TGA) Special
Access Scheme.
Cann acted as a sponsor to import the first products
from its strategic partner and major shareholder,
with the product supplied being ‘Aurora 1:1 Drops’
comprising an equal ratio of THC and CBD.
Partnerships and Research
Cann Group completed a strategic investment in
New Zealand based medicinal cannabis company,
Pure Cann NZ Limited in April 2019. Pure Cann is rapidly
establishing itself as a leading player in the NZ market
and is anticipating regulatory changes that will permit the
cultivation and broader supply of its medicinal cannabis
in New Zealand.
Cann Group’s strategic investment of NZ$6 million in
Pure Cann secures a 20% ownership stake, accruing over
stages, with an option to increase that position to 30%.
Following the investment Cann Group and Pure Cann
entered into a Technical Service Agreement (TSA) with
the primary objective of accelerating Pure Cann’s growth
plans and path to market. The TSA provides for the mutual
exchange of intellectual property between Cann Group
and Pure Cann and the companies will work together to
capitalise on the growing domestic demand for medicinal
cannabis in New Zealand.
During August 2018, Cann signed a Memorandum of
Understanding with Agriculture Victoria to undertake further
medicinal cannabis research. Cann and Agriculture Victoria’s
areas of focus will include activities relating to medicinal
cannabis cultivation, medicinal cannabis extraction,
cannabis strain genome analysis and strain identification,
accelerated precision breeding, and development of novel
and designer medicinal cannabis strains that will add to
Cann’s growing intellectual property portfolio.
Another R&D collaboration was executed with the CSIRO,
with the broad three-year agreement to investigate
numerous opportunities across medicinal cannabis
technologies. Cann will work with multiple CSIRO business
Cann welcomed news from Federal Education and
Training Minister Simon Birmingham that government
funding would help establish Australia’s first research
hub for medicinal agriculture at La Trobe University’s
Bundoora campus in Melbourne. Cann is an industry
partner to the project.
Cann completed a $250,000 investment in independent
medicinal cannabis clinic group Emerald Clinics. The
investment formed part of a $2.5 million capital raising
completed by Emerald to support the ongoing national
roll-out program of its clinics.
Emerald’s focus is to provide high-quality care and
improve clinical outcomes for patients who are seeking
to manage conditions such as chronic neuropathic
pain. Emerald opened its first clinic in Subiaco, Perth in
December 2018, and second clinic in Woolloomooloo,
Sydney in early February 2019.
Patients referred to Emerald Clinics undergo a thorough
medical examination to ascertain their clinical history and
suitability for medicinal cannabis. If deemed appropriate,
the clinician will develop a cannabinoid treatment plan
with the patient.
Outlook
Progressing the construction and development of the new
Mildura facility will remain a major focus for management,
as Cann Group accelerates toward operating at scale.
The debt funding required for completion of the facility
has progressed well and is expected to be confirmed
in due course.
The Company expects to commence exports under the
supply and offtake agreements with Aurora Cannabis.
At present, Cann Group is assessing and testing available
export pathways for medicinal cannabis product which
will allow the Company to meet domestic demand and
validate its supply chain and export procedures while the
new Mildura facility is constructed and commissioned.
Cann Group will continue progression towards the
establishment of its third-party GMP product manufacturing
capability with IDT, enabling production of value-added
formulations which can be supplied to Australian patients,
and under the offtake agreement with Aurora.
In line with this the Company is maintaining a focus on its
commercial strategy including planned delivery of product
to Australian patients and involvement in clinical studies.
6
DIRECTORS’ REPORT
Your directors present their report on the Group for the
year ended 30 June 2019.
Douglas John Rathbone,
AM, FATSE, FI ChemE, ARMIT B Comm, TTC
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. His previous board roles
include Medical Developments International Ltd (ASX
MVP) from 27 October 2003 to 17 December 2018,
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.
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 and Chairman since 1 April 2018,
Go Resources, Queenscliff Harbour Pty Ltd and AgBiTech.
He is also a former member of the RABO Bank Advisory
Board, 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
Director since 16 March 2015
Special Responsibilities – Member of Audit and Risk,
Remuneration and Capital Committees
Director since 30 January 2015
Special Responsibilities – Member of Audit and
Risk Committee and Chairman of the Remuneration
and Capital Committees
Interest in Shares
2,331,185 Ordinary Shares
Geoffrey Ronald Pearce
Interest in Shares
5,580,000 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.
Director since 30 January 2015
Special Responsibilities – Chairman of Audit and Risk
Committee and Member of the Remuneration Committee
Interest in Shares
4,094,518 Ordinary Shares
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 and a Director of McPherson’s Limited (ASX MCP)
since 20 February 2018.
Director since 11 April 2016
Special Responsibilities – Member of Audit and Risk,
Remuneration and Capital Committees
Interest in Shares
1,554,195 Ordinary Shares
CANN GROUP LimiTEd ANNUAL REPORT 2019
7
diRECTORS’ REPORT (CONTINUED)
Neil Belot
Neil is presently the Chief Global Business Development
Officer of Aurora Cannabis Inc. (“Aurora”) responsible
for developing and executing business opportunities on
behalf of Aurora to create shareholder value and drive
long term growth utilising his comprehensive knowledge
of the global regulated cannabis industry, commodity
markets, cannabis cultivation, stakeholder relations,
branding and marketing. He has also held the position
of Chief Brand Officer at Aurora with responsibility for
strategic and operational oversight of sales, marketing,
client and stakeholder relations, digital technology and
business development. Prior to his roles with Aurora
Neil was an Executive Director of the Canadian Medical
Cannabis Industry Association and the Gas Portfolio
and Energy Services Manager at the Housing Services
Corporation, both Canadian entities. He has post-graduate
qualifications including Masters of Business Administration
in Finance and International Exchange obtained from
Dalhousie University (Nova Scotia, Canada) and the
Copenhagen Business Scholl (Denmark) and graduate
qualifications of a Bachelor of Business Administrative
from Acadia University (Nova Scotia, Canada).
He is a Canadian citizen.
Director since 26 February 2018
Special Responsibilities – Nil
Interest in Shares – Nil (nominee Director of Aurora
Cannabis Inc.)
Chief Executive Officer
Peter Crock,
CEO, B.Ag.Sci (Hon); MBA
Peter is an experienced public company senior manager
with deep knowledge and expertise in marketing and
technology development. Since joining Cann Group in
May 2016, Peter has reset the business plan as directed by
the board and led the company through a successful initial
public offering (IPO) to list on the Australian Securities
Exchange (ASX), raising $13.5 million while bringing
outstanding institutional and cornerstone investor support.
This was followed by a subsequent $70m+ capital
raising within the same year to accelerate the company’s
expansion program. In a 28-year career at Nufarm
Limited (ASX: NUF), Peter held senior management roles
in marketing, business development, and information
technology and led Nufarm’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., FGIA, 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.
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 cultivation of medicinal cannabis for
both medicinal and research purposes pursuant to
the licenses and permits issued to Group members
and commercialising the outputs for medicinal uses,
as well as developing Cann’s cannabis cultivation
technology of controlled growing environments with a
view to substantially increasing capacity of the growing
environments. Cann also actively sought and entered
in various agreements with strategic collaborators
to further commercialisation of Cann’s outputs for
medicinal purposes.
No significant change in the nature of these activities
occurred during the year.
Operating Results for the Year
The Group made an operating loss of $10.93 million for
the year ended 30 June 2019 (2018: $4.73 million).
The Group’s basic and diluted loss per share is $0.078
(2018: $0.038). The Weighted Average number of Shares
used to calculate the basic and diluted earnings per share
is 139,689,868 (2018: 125,281,943).
The net assets of the Group are $77.30 million as at
30 June 2019 (2018: $85.87 million).
For further detail please refer to the Message from
Chairman and Chief Executive Officer and the Operations
Review which forms part of this annual report.
8
diRECTORS’ REPORT (CONTINUED)
Significant Changes in the State of Affairs
Offtake agreement signed with Aurora
Cannabis Inc.
The Group signed a five-year offtake agreement to supply
Good Manufacturing Process (GMP) processed dry flower,
extracted resin and manufactured medicinal cannabis
products. The offtake agreement relates to the Group’s
production in excess of Australian supply requirements.
The offtake agreement includes a price review mechanism
and allows for the inclusion of further product forms
(subject to mutual agreement) as these products are
developed by Cann.
This agreement is expected to underpin the investment
risk and the value to be generated from Cann’s large-scale
cultivation expansion program in Mildura, and is expected
to assist Aurora in its endeavours with meeting the growing
global demand for GMP grade medicinal cannabis products.
Mildura facility
During the year the Group’s major expansion program led
to the acquisition of acquiring a site at Mildura in Victoria
for construction of a facility comprising a world scale
greenhouse and associated support areas.
Cann has completed siteworks and commenced
construction of the facility, which is expected to produce
70,000kg of medicinal cannabis dried flower per annum.
Based on current wholesale prices the Group expects
to generate annual revenues of approximately $220 to
$280 million once the facility is operating at full capacity.
Having upgraded the scope of the facility, Cann is
undertaking extensive modelling to determine what impact
the revised design and expanded production will have on the
project budget for the facility. The Group has executed a term
sheet with a major Australian bank for debt financing, which
will be formalised upon finalisation of construction costs.
Completion of the facility is estimated to occur in Q4 CY2020.
First revenue from commercially
grown cannabis
During the year the Group delivered and derived revenue
from Australian sourced and commercially grown cannabis
resin for use by Australian patients. The cannabis resin was
supplied pursuant to a contract signed with the Victorian
Department of Health and Human Services (DHHS)
however the commercial terms cannot be disclosed.
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 entity.
Environmental Regulation and Performance
The Group’s operations are not subject to any particular
environmental regulations.
Directors’ Meetings
The number of meetings of the Company’s Board of Directors, Audit and Risk Committee and Remuneration
Committee members held during the year ended 30 June 2019 and the number of meetings attended by each
Director/member were:
Board Meetings
Audit and Risk
Committee Meetings
Remuneration
Committee Meetings
Capital
Committee Meetings
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
9
9
9
9
9
9
9
9
9
7
2
2
2
2
0
2
2
1
1
0
1
1
1
1
0
1
1
1
1
0
3
0
3
3
0
3
0
3
3
0
Name
Allan McCallum
Philip Jacobsen
Douglas
Rathbone
Geoff Pearce
Neil Belot
CANN GROUP LimiTEd ANNUAL REPORT 2019
9
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd)
3. Relationship between the Remuneration
Policy and Company Performance
At the present stage of the Company’s evolution, the group
assesses its performance from achievement of operational
goals and shareholder value. The performance measures
for both the Company’s Short-term Incentive Plan (STI
Plan) and Long-term Incentive Plan (LTI Plan) have been
tailored to align at-risk remuneration and performance
hurdle thresholds to the delivery of operational and
future financial objectives and sustained shareholder
value growth.
4. Components of Remuneration –
Non-executive Directors
The Constitution of the Company and the ASX Listing
Rules require that the aggregate remuneration of non-
executive Directors shall be determined from time to
time by a resolution approved by shareholders at a
general meeting. Currently the aggregate remuneration
threshold is set at $500,000 per annum as approved by
shareholders at the AGM held on 14 November 2018.
Legislated superannuation conditions made on behalf of
non-executive Directors are included within the aggregate
remuneration threshold.
Non-executive Directors receive a cash fee for their service
and have no entitlement to any performance-based
remuneration or any participation in any share-based
incentive schemes. Presently no additional fee is paid
to non-executive Directors for being a member of any
Board committees.
Fees payable to the non-executive Directors for the 2019
financial year inclusive of superannuation contributions
were as follows:
Chairman
Each other non-executive Director
$
90,950
47,300
1. Introduction
This Remuneration Report outlines the Company’s
remuneration strategy for the financial year ended
30 June 2019 and provides detailed information on the
remuneration outcomes for the year for the Directors,
Chief Executive Officer (CEO) and other Key Management
Personnel. For the purpose of this Report Key
Management Personnel 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.
The Directors of the Company are pleased to present the
Remuneration Report (Report) for the Company and its
subsidiaries (Group) for the financial year ended 30 June
2019. This Report forms part of the Directors’ Report and
has been prepared and audited in accordance with the
requirements of the Corporations Act 2001.
2. Remuneration Philosophy
During the year the Cann Board of Directors formed a
Remuneration Committee consisting of four of the five
members of the Board. The Remuneration Committee is
responsible for making recommendations to the Board
on remuneration policies and packages applicable to
Directors, the CEO and Key Management Personnel.
The Remuneration Committee is subject to the
Remuneration Policy and that Policy having the objectives
to provide a competitive, benchmarked and flexible
structure and is tailored to the specific circumstances
of the Company and which reflects the person’s duties
and responsibilities so as to attract, motivate and retain
people of the appropriate quality.
The Company’s Remuneration Policy is reviewed at least
once a year and is subject to amendment to ensure it
reflects market best practice.
Remuneration levels are competitively set to attract
appropriately qualified and experienced Directors and
executives. The Remuneration Committee obtains market
data on remuneration levels. The remuneration packages
of the Chief Executive Officer and Senior Executives may
include a short-term incentive component that is based
on specific Company goals pertaining to financial and
operational performance. The Chief Executive Officer
and Senior Executives may also be invited to participate
in the Company’s Long-term Incentive Plan, the benefits
of which are conditional upon the Company achieving
certain performance criteria, the details of which are
outlined below.
In accordance with the ASX Corporate Governance
Principles and Recommendations, the structure of
Non-executive Director remuneration is separate from
executive remuneration.
10
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
5. Components of Remuneration –
Chief Executive Officer and Other
Senior Executives
(a) Structure
The Company aims to reward the Chief Executive Officer
and Senior Executives with a level and mix of remuneration
commensurate with their position and responsibilities
within the Group, so as to:
• reward them for Company and individual performance
against targets set by reference to appropriate
benchmarks and key performance indicators;
• align their interest with those of shareholders; and
• ensure total remuneration is competitive by
market standards.
Remuneration consists of both fixed and variable
remuneration components. The variable remuneration
consists of the STI Plan and the LTI Plan.
The proportion of fixed and variable remuneration is
established for the Chief Executive Officer by the Board
and for each Senior Executive by the Board following
recommendations from the Chief Executive Officer and
the Remuneration Committee.
The Chief Executive Officer’s and Senior Executives’
remuneration packages are all subject to Board approval.
(b) Fixed remuneration
The fixed remuneration component of the Chief Executive
Officer and Senior 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, taking into
account the performance of the individual and the Group.
There are no guaranteed increases to fixed remuneration
in any contracts of employment.
The Chief Executive Officer and Senior Executives have
the option to receive their fixed annual remuneration in
cash and a limited range of prescribed fringe benefits.
The total cost of any remuneration package, including
fringe benefits tax, is taken into account in determining
an employee’s fixed annual remuneration.
(c) Variable remuneration – STI Plan
The STI Plan component of an Executive’s total
remuneration is an annual cash incentive plan. The STI
Plan links a portion of Executive remuneration opportunity
to specific financial and non-financial measures.
From a governance perspective, all performance
measures under the STI Plan must be clearly defined and
measurable. The Remuneration Committee approves the
targets and assesses the performance outcome of the
Chief Executive Officer. The Board and the Chief Executive
Officer set the targets and assesses the performance of
Senior Executives. The Board approves STI Plan payments
for the Chief Executive Officer and Senior Executives.
Under the STI Plan, the Board has discretion to adjust
STI Plan 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.
The target STI Plan percentage range for the Chief
Executive Officer, Key Management Personnel and other
employees that report directly to the Chief Executive
Officer in respect of the financial year ended 30 June 2019
is detailed below:
Executive
P. Crock
G. Aldred
R. Baker
A. Borobokas
S. Duncan
N. Gripper
M. Mendola
S. Notaro
B. Walsh
STI range
calculated on
fixed annual
remuneration
20% – 40%
10% – 20%
10% – 20%
10% – 20%
10% – 20%
10% – 20%
10% – 20%
10% – 20%
10% – 20%
CANN GROUP LimiTEd ANNUAL REPORT 2019
11
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
(d) Variable remuneration – LTI Plan
The LTI component of the Chief Executive Officer and
other Senior Executives total remuneration is an equity
incentive plan that is designed to encourage the Chief
Executive Officer and Senior Executives to focus on
key performance drivers which underpin sustainable
growth in shareholder value. The LTI Plan facilitates share
ownership by the Chief Executive Officer and Senior
Executives 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. It
is intended that any future LTI’s will focus on driving key
performance outcomes that underpin sustainable growth
and the creation of shareholder wealth in the longer term.
This will be achieved by motivating and rewarding the
Chief Executive Officer and Senior Executives to drive
share price growth via improvements to Total Shareholder
Returns and Return on Invested Capital.
Under the LTI Plan, the Chief Executive Officer and other
Senior Executives are granted performance rights which
will only vest on the achievement of certain performance
hurdles and service conditions.
Each grant of performance rights is subject to specific
performance hurdles and the degree to which those
hurdles have been met is assessed by the Board at the
end of the relevant performance period. The Board may,
at its discretion, vary the performance hurdles for each
offer made under the LTI Plan, however once the Board
has prescribed the performance hurdle(s) for a specific
offer, those hurdles cannot be varied in respect of
that offer.
If a change of control occurs during a performance
period, the pro-rated number of performance rights
held by a participant (calculated according to the part
of the performance period elapsed prior to the change of
control) is determined and to the extent the performance
hurdles have been met those pro-rated performance
rights will vest.
LTI Plan for the financial year ended 30 June 2019
The performance hurdles for the grant of performance
rights to the Chief Executive Officer and other key
management personnel were based on specific
milestones relating to construction of the then proposed
Tullamarine facility. The LTI minimum was based on
construction and commissioning of the proposed
glasshouse at the proposed Tullamarine location and
the LTI maximum was based on the aforementioned
LTI minimum plus construction and commissioning of
an associated Good Manufacturing Process compliant
support building for the production of cannabis flower into
medicinal cannabis products for sale. The LTI minimum
for eligible participants was based on 20% of Fixed Annual
Remuneration for the Chief Executive Officer and 10% of
Fixed Annual Remuneration for other key management
personnel. The LTI maximum for eligible participants was
based on 40% of Fixed Annual Remuneration for the Chief
Executive Officer and 20% of Fixed Annual Remuneration
for other key management personnel.
On 19 March 2019 the Company announced that the
initial state-of-the-art greenhouse would be constructed
at Mildura with the resultant effect that the performance
hurdles of the LTI Plan could no longer be met. The
Remuneration Committee recommended and the Board
approved the transition of the LTI Plan to a pro-rata cash
payment in lieu of the issue of performance rights.
(e) Contract for services
– Chief Executive Officer
The structure of the Chief Executive Officer’s
remuneration is in accordance with his employment
agreement. The Chief Executive Officer’s employment
agreement is for an indefinite term. The Company may
terminate the agreement by providing four months’
notice and the Chief Executive Officer may terminate
the agreement by providing four months’ notice. There
are no termination benefits beyond statutory leave and
superannuation entitlements associated with termination
in accordance with the above notice requirements or in
circumstances where notice is not required pursuant to the
employment agreement.
(f) Contract for services – Senior Executives
The terms on which the Senior Executives are engaged
provide for termination by either the Executive of the
Company on notice periods ranging from the minimum
statutory notice period as required under Australian
law to specified periods up to four months. There
are no termination benefits beyond statutory leave
and superannuation entitlements associated these
notice requirements.
12
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
6. Key Management Personnel Remuneration
(a) Identity of Key Management Personnel
The following were Key Management Personnel of the group at any time during the financial year.
Directors:
Name
A. McCallum
P. Jacobsen
D. Rathbone
G. Pearce
N. Belot
Other Key Management Personnel
Name
P. Crock
Title
Chairman
Deputy Chairman
Non-executive Director
Non-executive Director
Non-executive Director
Title
Chief Executive Officer
R. Baker (from 1 July 2018)
Company Secretary and Chief Financial Officer
S. Notaro (from 1 July 2018)
Head of Legal
S. Duncan (commenced 10 December 2018)
General Manager, Commercial
N. Gripper (commenced 16 July 2018)
General Manager, Operations
CANN GROUP LimiTEd ANNUAL REPORT 2019
13
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
(b) Remuneration of Key Management Personnel
Details of the nature and amount of each major element of remuneration of each Key Management Personnel and the
group are set out below. The remuneration tables are calculated on an accruals basis and only include remuneration
relating to the relevant period that the employees is a Key Management Personnel of the Company.
Short-term employment
benefits
Post-
employment
Benefits
Share-based
remuneration
Salary and
Fees
$
STI cash
bonus
$
Super-
annuation
$
Performance
Rights
$
Total
$
83,059
30,000
43,830
21,900
43,196
20,000
43,196
20,000
46,667
6,667
–
–
–
–
–
–
–
–
–
–
7,891
2,850
3,470
–
4,104
1,900
4,104
1,900
–
–
–
–
–
–
–
–
–
–
–
–
90,950
32,850
47,300
21,900
47,300
21,900
47,300
21,900
46,667
6,667
231,677
105,600
22,009
1,232,500
1,591,786
230,178
156,285
156,285
123,077
184,615
–
20,571
742,877
993,626
32,880
32,880
–
–
14,847
14,847
11,692
17,538
–
–
–
–
204,012
204,012
134,769
202,153
1,111,887
171,360
100,502
1,232,500
2,616,249
328,745
–
27,221
742,877
1,098,843
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2019
2019
2019
2019
2018
2019 Financial Year
Non-Executive Directors
A. McCallum
P. Jacobsen
D. Rathbone
G. Pearce
N. Belot
Other Key Management
Personnel and Executive Officers
P. Crock
R. Baker (from 1 July 2018)
S. Notaro (from 1 July 2018)
S. Duncan
(commenced 10 December 2018)
N. Gripper
(commenced 16 July 2018)
Total
Total
14
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
Equity Holdings
2019
Directors
A. McCallum
P. Jacobsen
D. Rathbone
G. Pearce
N. Belot
Other Key Management Personnel
P. Crock
R. Baker
S. Notaro
S. Duncan
N. Gripper
Total
2018
Directors
A. McCallum
P. Jacobsen
D. Rathbone
G. Pearce
N. Belot
Other Key Management Personnel
P. Crock
Total
Balance at
appointment
date
(if applicable)
On
conversion of
performance
rights
Balance as at
1 July 2018
Acquisitions,
disposal
or transfers*
Balance as at
30 June 2019
Number
Number
Number
Number
5,580,000
4,064,518
2,331,185
1,554,195
–
340,395
10,464
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
–
–
–
–
5,580,000
30,000
4,094,518
–
–
–
–
–
–
–
2,331,185
1,554,195
–
340,395
110,464
100,000
–
2,500
2,500
13,980,757
100,000
32,500
14,113,257
Balance as at
1 July 2017
Balance at
appointment
date (if
applicable)
On
conversion of
performance
rights
Acquisitions,
disposal or
transfers*
Balance as at
30 June 2018
Number
Number
Number
Number
Number
5,480,000
3,773,334
2,193,334
1,200,000
–
336,667
12,983,335
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
5,580,000
291,184
4,064,518
137,851
2,331,185
354,195
1,554,195
–
–
3,728
340,395
886,958
13,870,293
* The purchases, disposal or transfers of shares are in compliance with the Company’s Securities Trading Policy.
CANN GROUP LimiTEd ANNUAL REPORT 2019
15
diRECTORS’ REPORT (CONTINUED)
diRECTORS’ REPORT (CONTINUED)
REmUNERATiON REPORT (AUdiTEd) (CONTiNUEd)
Long-term Incentive Plan – Performance Rights
Balance
as at
1 July 2018
Balance at
appointment
date (if
applicable)
Granted
Vested
Lapsed
Net other
change
Balance as
at 30 June
2019
Balance
held
nominally
2019
Number
Number
Number
Number
Number
Number
Number
Number
P. Crock
1,000,000
Total
1,000,000
–
–
–
–
–
–
–
–
–
–
1,000,000
1,000,000
–
Balance
as at
1 July 2017
Balance at
appointment
date (if
applicable)
Granted
Vested
Lapsed
Net other
change
Balance as
at 30 June
2018
Balance
held
nominally
Number
Number
Number
Number
Number
Number
Number
Number
–
–
–
–
1,000,000
1,000,000
–
–
–
–
–
–
1,000,000
1,000,000
–
2018
P. Crock
Total
There were no performance rights granted to Key Management Personnel through a Long-term Incentive Plan during
the financial year ended 30 June 2019.
Indemnifying Officers or Auditor
Events After the End of the Reporting Period
No indemnities have been given, however a Directors and
Officers insurance premium totalling $83,250 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.
Acquisition of Southern Facility
On 12 July 2019 settlement for the acquisition of property
being the Southern Facility by Cann Group Limited
was finalised. The Contract of Sale of Real Estate was
entered into on 13 May 2019. The property was acquired
for $1.9 million plus costs amounting to $0.1 million.
The Company commenced leasing the property on
4 September 2015 and had subsequently renewed
for three years on 4 March 2019 prior to entering into
negotiations with the vendor to acquire the property.
The lease was terminated effective 12 July 2019.
Manufacturing licences obtained
On 26 July 2019 the Company announced that the
Federal Department of Health’s Office of Drug Control
had granted manufacturing licences for the Company’s
existing Northern and Southern medicinal cannabis
facilities however an estimate of its financial effect cannot
be made at this time.
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.
16
diRECTORS’ REPORT (CONTINUED)
Non-Audit Services
Auditor’s Independence Declaration
The Company’s Audit and Risk Committee (“the
Committee”) is responsible for the maintenance of
audit independence.
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act 2001
is set out on page 18.
Specifically, the Committee Charter ensures the
independence of the auditor is maintained by:
CEO and CFO Declaration
• 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 7.
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 2019
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: 27 August 2019
CANN GROUP LimiTEd ANNUAL REPORT 2019
17
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF CANN GROUP LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2019
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (VIC) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Dated this 27th day of August, 2019
18
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENdEd 30 JUNE 2019
Revenue
Other income
Administration and corporate costs
Research and development costs
Fair value adjustment of biological assets
Note
2019
$
2018
$
3
3
4
2,347,668
560,000
1,904,975
943,391
(13,466,524)
(5,549,257)
(1,047,608)
(776,430)
(465,919)
104,820
Loss before transaction costs, finance costs and income tax expense
(10,727,408)
(4,717,476)
Finance costs
Loss before income tax expense
Income tax expense
Loss attributable to members of the Group
Other comprehensive income
(198,909)
(8,381)
(10,926,317)
(4,725,857)
–
–
(10,926,317)
(4,725,857)
–
–
Total comprehensive loss attributable to members of the Group
(10,926,317)
(4,725,857)
Basic and Diluted loss per share (EPS)
5
(0.078)
(0.038)
The accompanying notes form part of these statements.
CANN GROUP LimiTEd ANNUAL REPORT 2019
19
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Investment in term deposits
Trade Receivables
Prepayments
Inventories
Biological assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investments
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-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued equity
Performance rights reserve
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these statements.
20
Note
2019
$
2018
$
46,388,192
49,566,890
–
30,082,849
1,115,436
–
722,197
137,693
8
3,088,624
1,405,286
391,138
205,301
51,705,587
81,398,019
9
29,010,258
5,232,518
112,594
84,971
10
1,200,570
–
85,000
85,000
30,408,422
5,402,489
82,114,009
86,800,508
4,815,530
907,107
–
4,198
4,815,530
911,305
–
–
16,369
16,369
4,815,530
927,674
77,298,479
85,872,834
12
14
96,502,220
95,081,758
1,975,377
1,043,877
(21,179,118)
(10,252,801)
77,298,479
85,872,834
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENdEd 30 JUNE 2019
Issued equity
$
Performance
Rights
reserve
$
Accumulated
losses
$
Total equity
$
95,081,758
1,043,877
(10,252,801)
85,872,834
1,119,462
–
–
–
–
1,119,462
1,232,500
–
Balance at 1 July 2018
Issue of shares
Issue and vesting of Class C performance rights
–
1,232,500
Conversion of Class D Performance Rights
301,000
(301,000)
Transactions with owners in their capacity as owners
Comprehensive loss for the period ended 30 June 2019
–
–
(10,926,317)
(10,926,317)
Balance at 30 June 2019
96,502,220
1,975,377
(21,179,118)
77,298,479
Balance at 1 July 2017
Issue of shares
Costs of issuing shares
Issue and vesting of Classes C and D performance rights
Transactions with owners in their capacity as owners
Comprehensive loss for the period ended 30 June 2018
Issued equity
$
20,187,092
77,983,243
(3,088,577)
–
–
Performance
Rights
reserve
$
Accumulated
losses
$
Total equity
$
–
–
–
1,043,877
(5,526,944)
14,660,148
–
–
–
77,983,243
(3,088,577)
1,043,877
–
(4,725,857)
(4,725,857)
Balance at 30 June 2018
95,081,758
1,043,877
(10,252,801)
85,872,834
The accompanying notes form part of these statements
CANN GROUP LimiTEd ANNUAL REPORT 2019
21
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENdEd 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Revenue from customers
Other income including research and
development tax incentive refund received
Payments to suppliers and employees
Interest receipted
Note
2019
$
2018
$
1,475,795
616,000
258,086
45,646
(10,763,369)
(5,313,902)
1,606,941
897,745
Net cash flows provided by/(used in) operating activities
18
(7,422,547)
(3,754,511)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Acquisition of other assets
Withdrawal of / (Investment in) term deposits
Acquisition of investments
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
(25,325,174)
(5,579,380)
(53,256)
(25,000)
30,082,849
(27,082,849)
(1,200,570)
–
3,503,849
(32,687,229)
740,000
77,983,243
–
(3,088,577)
740,000
74,894,666
(3,178,698)
38,452,926
49,566,890
11,113,964
46,388,192
49,566,890
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENdEd 30 JUNE 2019
1. CORPORATE INFORMATION
These are the financial statements of Cann Group Limited (the Company) and its 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 2019. 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 2019 are outlined in the
table below.
Standard
AASB 16 Leases
Mandatory date for
annual reporting periods
beginning on or after)
1 January 2019
Interpretation 23 Uncertainty over Income Tax Treatments
1 January 2019
Reporting period standard
adopted by the Company
1 July 2019
1 July 2019
Management has assessed that the standard AASB 16: Leases will have a material effect on the financial statements
impacting through the capitalisation of right to use leased assets and the corresponding lease liability connected with
the current rental arrangement. The right of use asset for the lease of the Northern Facility at 1 July 2019 is $1.37 million.
Refer to Note 19 for the Group’s current lease commitments.
CANN GROUP LimiTEd ANNUAL REPORT 2019
23
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
(b) Principles of Consolidation
These consolidated financial statements comprise the financial statements of the Company and its controlled entities
throughout reporting period. Controlled entities refers to entities over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.
The existence and effect of the potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
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.
(c) Income Tax
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) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade
discounts and volume rebates allowed and is stated net of goods and services tax or value-added tax charges.
Revenue is recognised at a point in time being when the goods are shipped to the customer.
Revenue from credits received from the ATO for research and development activities is recognised when it can be
reliably measured and the probability of meeting the criteria for receipt of these credits is probable.
(e) Cash and cash equivalents
Cash in the Statement of Financial Position comprise cash at bank and in hand. Cash at bank includes term deposits
with a term of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above.
(f) Inventory
Inventory is valued depending upon the specific purpose of that inventory class. Costs incurred for inventory held as
(i) research and development is expensed as incurred;
(ii) bearer plant inventory held is valued at cost less accumulated depreciation and impairment losses; and
non-bearer plant inventory is valued at fair value less costs to sell, and where fair value is not readily available,
at cost or Net Realisable Value.
24
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
(g) Investments
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based on
both the business model within which such assets are held and the contractual cash flow characteristics of the financial
asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it’s carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified
as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading,
where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or
(ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the consolidated entity’s assessment at the end of each reporting period as to whether the financial
instrument’s credit risk has increased significantly since initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is
attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit
impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the
asset’s lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the
probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original
effective interest rate.
(h) Biological assets
The valuation methodology of biological assets relates to the forecast harvest weights, forecast sale prices, forecast feed
costs, labour and overheads, as well as discount rate. Discounted cash flows consider the present value of the net cash
flows expected to be generated by the crop at maturity, the expected additional biological transformation and the risks
associated with the asset; the expected net cash flows are discounted using risk-adjusted discount rates.
(i) 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.
(j) Trade and other payables
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.
CANN GROUP LimiTEd ANNUAL REPORT 2019
25
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
(k) Trade and other receivables
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 their transaction price provided they do not contain a significant
financing component and subsequently measured at amortised cost using the effective interest method.
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.
(l) Property, plant and Equipment
Each class of property, plant and equipment is carried at cost less any accumulated depreciation and
impairment losses.
The carrying amount of property,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 property, 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 property, 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 2019, the Group’s asset classes had effective useful lives as follows:
Asset Class
Cultivation plant and equipment
Manufacturing plant and equipment
Computer and network equipment
Other plant and equipment
Land
Useful Life
(years)
1 to 7
2 to 7
1 to 3
1 to 3
N/a
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.
(m) Impairment of Assets
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.
At each reporting date, the Group’s directors assess whether the credit risk on a financial instrument has increased
significantly since initial recognition. If after assessing a credit risk exists that results in a credit loss allowance, an
impairment gain or loss of the amount of the expected credit loss (or reversal) is recognised in the statement of profit
or loss and other comprehensive income.
26
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
(n) 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.
(o) Operating Segments
Determination and Presentation of Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. An operating segment’s results are regularly reviewed by the Chief Executive Officer CEO) to
make decisions about resources to be allocated to the segment and assess its performance, and for which discrete
information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses,
and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment,
and intangible assets other than goodwill.
The Group operates in one operational sector and has identified only one reportable segment being cultivation
of medicinal cannabis and further processing into manufactured medicinal cannabis products, as well as the
corporate office. Revenue came from one major customer.
(p) 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 $2,050,238 (2018: $1,560,494) arising from current year tax losses
of $10,926,317 (2018: $4,725,857) and timing differences has not been recognised as an asset because it is not clear
when the losses will be recovered. The cumulative future income tax benefit estimated to be $4,687,856, 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 – valuation of Performance Rights
Performance rights issued are measured at the fair value from grant date. These were independently valued using a
Binomial valuation model. The data input into this model included the volatility rate of 100%, and risk free rate of 1.92%.
CANN GROUP LimiTEd ANNUAL REPORT 2019
27
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
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 incentive and it is successful
in registering for the research and development tax incentive;
(ii) the Company continues to comply with the conditions for registration of the research and development tax incentive
imposed by law; and
(iii) no changes in tax legislation adversely affecting the Company realising the tax incentive from research
2019
$
2018
$
2,347,668
560,000
1,644,702
897,745
257,786
2,487
44,102
1,544
4,252,643
1,503,391
2019
$
2018
$
(1,449,684)
(831,757)
(4,519,784)
(2,223,666)
(422,303)
(176,635)
(1,611,962)
(1,043,877)
(138,046)
(544,412)
and development.
3. REVENUE
Revenue from customers
Interest
Research and development tax incentive
Other revenue
4. EXPENSES
Contained within administration and corporate expenses are the following:
Depreciation
Employee salaries
Employee superannuation
Share-based payments
Occupancy expenses
28
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
5. BASIC AND DILUTED LOSS PER SHARE
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are
as follows:
2019
$
2018
$
Net loss attributable to ordinary equity holders (used in calculating basic and diluted EPS)
(10,926,317)
(4,725,857)
Number of
shares
Number of
shares
Weighted average number of ordinary shares for the purpose of earnings per share
139,689,868
125,281,943
Performance Rights have not been included in the weighted average number of ordinary shares as the Group presently
has accumulated losses and no certainty of future profits to offset those losses.
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.
6. 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
Mr Neil Belot
Mr Peter Crock
Position
Chairman
Deputy Chairman
Director
Director
Director
Chief Executive Officer
Mr Richard Baker (from 1 July 2018)
Company Secretary and Chief Financial Officer
Mr Steven Notaro (from 1 July 2018)
Head of Legal
Mr Shane Duncan (commenced 10 December 2018)
General Manager, Commercial
Mr Neil Gripper (commenced 16 July 2018)
General Manager, Operations
(b) Remuneration paid to Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
$
2018
$
1,283,247
328,745
100,502
27,221
1,232,500
742,877
2,616,249
1,098,843
CANN GROUP LimiTEd ANNUAL REPORT 2019
29
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
7. 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
Other audit and assurance related services
Total remuneration for audit and other assurance services
(ii) Consulting services
Consulting fees regarding Research and Development Tax Incentive
Consulting fees regarding tax services
Total remuneration for consulting services
Total remuneration of William Buck
8. Inventories
Finished goods – biomass
Finished goods – oil
Cultivation materials and work-in-progress
2019
$
2018
$
58,200
28,000
620
460
58,820
28,460
31,745
15,000
46,745
105,565
29,990
–
29,990
58,450
2019
$
2018
$
3,034,431
1,371,366
–
33,920
54,193
–
3,088,624
1,405,286
30
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT
(a) Property, plant and equipment
Cultivation
plant and
equipment
$
Land
$
Manu-
facturing
plant and
equipment
$
Other
plant and
equipment
$
Capital
work in
progress
$
Cultivation
plant and
equipment
$
Other
plant and
equipment
$
Total
$
2019
2018
Total
$
Cost
11,404,084
6,750,332
447,610
302,699 12,442,699 31,347,424
5,075,150
1,374,117
6,449,267
Accumulated
depreciation
Loss on
disposal
Closing
Balance
–
(2,049,050)
–
(132,229)
–
–
(149,557)
–
(2,198,607)
(706,823)
(278,148)
(984,971)
(6,330)
–
(138,559)
(231,777)
–
(231,777)
11,404,084 4,569,053
447,610
146,812 12,442,699 29,010,258 4,136,550 1,095,969
5,232,519
(b) Movements in property, plant and equipment
Cultivation
plant and
equipment
$
Land
$
Manu-
facturing
plant and
equipment
$
Other
plant and
equipment
$
Capital
work in
progress
$
Cultivation
plant and
equipment
$
Other
plant and
equipment
$
Total
$
2019
2018
Total
$
Opening
Balance
Reclassifications
–
–
4,136,550
(1,166,771)
–
–
1,095,969
–
5,232,519
622,223
94,449
716,672
(889,136) 2,055,907
–
–
–
–
Additions
11,404,084
2,304,970
447,610
61,641
11,147,752 25,366,057
4,346,553
1,232,828
5,579,381
Transfers
Depreciation
Loss on
disposal
Closing
Balance
–
–
–
760,960
(1,334,427)
(132,229)
–
–
–
–
(760,960)
–
–
–
–
(115,332)
–
(1,449,759)
(600,448)
(231,309)
(831,757)
(6,330)
–
(138,559)
(231,777)
–
(231,777)
11,404,084 4,569,053
447,610
146,812 12,442,699 29,010,258 4,136,550 1,095,969
5,232,519
Due to an increase in the Company’s operational areas the number of fixed asset classifications increased accordingly
to add land and buildings, manufacturing plant and equipment and capital work-in-progress. There was some
reclassification during the year between the classes existing at 30 June 2018 to capital work-in-progress. None of the
assets reclassified to capital work-in-progress had been depreciated during the financial year ended 30 June 2018.
During the year the Company acquired land and building at Mildura for construction of a greenhouse facility and
support building. Acquisitions of building materials to construct the greenhouse and to modify the existing building
plus preliminary design and other services are classified as capital-work-in-progress until such time as the facility is
completed and commissioned for use.
Manufacturing equipment was acquired during the year with commissioning to be completed in the second half of the
2019 calendar year.
CANN GROUP LimiTEd ANNUAL REPORT 2019
31
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT (continued)
During the year Secure Cultivation Room 8 at the Company’s Southern Facility was commissioned and made available
for use.
The Directors conducted an impairment test of the cultivation plant and equipment which was applied as at 30 June 2019
whereby the Directors compared the carrying values of all of the cultivation plant and equipment to the selling values of
comparable assets and concluded that no impairment existed relating to these assets.
10. INVESTMENTS
Subscription shares Pure Cann NZ Limited
Convertible notes Emerald Clinics Limited
2019
$
950,570
250,000
1,200,570
2018
$
–
–
–
The investments listed above were acquired during the year and cost is the fair value.
11. CONTROLLED ENTITIES
Cann Group Limited has four wholly-owned subsidiaries as at 30 June 2019 as follows:
Subsidiary Name
Cannproducts Pty Ltd (ACN 600 887 189)
Cannoperations Pty Ltd (ACN 603 323 226)
Date Acquired
27 February 2015
27 February 2015
Cann IP Pty Ltd (formerly Anslinger Holdings Pty Ltd) (ACN 169 764 407)
27 February 2015
Botanitech Pty Ltd (formerly Cann Investments Pty Ltd) (ACN 604 834 488)
18 March 2015
Number of
Shares held
Percentage
Shareholding
100
100
100
100
100%
100%
100%
100%
12. ISSUED CAPITAL
Ordinary shares – fully paid
Total issued capital
30 June 2019
Number of
Shares
30 June 2018
Number of
Shares
30 June 2019
$
30 June 2018
$
141,804,248
139,546,632
96,502,220
95,081,758
141,804,248
139,546,632
96,502,220
95,081,758
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 (CONTINUED)
Movements in issued capital:
Issue Date
Balance 1 July 2018
7 September 2018 – settlement of invoices for services
21 December 2018 – employee share purchase plan
24 December 2018 – settlement of invoices for services
4 May 2019 – conversion of performance rights
13 June 2019 – exercise of options
21 June 2019 – exercise of options
25 June 2019 – exercise of options
27 June 2019 – exercise of options
Total Issued Capital as at 30 June 2019
Movements in issued capital:
Issue Date
Balance 1 July 2017
12 December 2018 – placement (net of costs)
22 January 2018 – share purchase plan (net of costs)
23 January 2018 – placement (net of costs)
24 January 2018 – placement (net of costs)
Issue Price
$
Number of
Shares and
Options
2019
$
139,546,632
95,081,758
2.86
2.19
2.20
3.01
0.37
0.37
0.37
0.37
50,000
142,901
16,452
36,000
91,164
200,561
100,000
301,000
100,000
37,000
350,000
129,500
1,000,000
370,000
550,000
203,500
141,804,248
96,502,220
Issue Price
$
Number of
Shares and
Options
2018
$
108,353,335
19,949,092
2.50
23,480,000
56,172,622
2.50
2.50
2.50
3,999,264
9,499,813
520,000
1,241,858
3,194,033
7,980,373
Total Issued Capital on an undiluted basis as at 30 June 2018
139,546,632
94,843,758
Total Options on issue
–
2,000,000
238,000
Total Issued Capital on a diluted basis as at 30 June 2018
141,546,632
95,081,758
CANN GROUP LimiTEd ANNUAL REPORT 2019
33
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
13. OPTIONS
During the year the Group had 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 had an exercise price $0.37 with an expiry date of 30 June 2019, and all were
exercised prior to that date (refer Note 12).
The Shares issued from the exercise of the Underwriter Options have the same rights and liabilities of all other Shares.
Balance 1 July 2018
Exercised during 2019 financial year
Balance 30 June 2019
14. PERFORMANCE RIGHTS
Performance Rights Class C
Date
Balance 1 July 2018
Movement in Performance Rights Reserve
Balance 30 June 2019
Date
Balance 1 July 2017
21 November 2017^
Balance 30 June 2018
Number of
Options
2,000,000
2,000,000
–
Number of
Performance
Rights
2019
$
1,000,000
742,877
–
1,232,500
1,000,000
1,975,377
Number of
Performance
Rights
–
2018
$
–
1,000,000
742,877
1,000,000
742,877
^ On 21 November 2017 1,000,000 Performance Rights Class C were issued to the Chief Executive Officer with a total vesting value of $2,465,000 to
21 November 2019.
The Performance Rights Class C are subject to the following vesting conditions:
• 250,000 Performance Rights Class C subject to the offeree being continuously employed for a period of two years
from the grant date and the 30-day Volume Weighted Average Price of Cann Group Limited’s ordinary shares as
traded on the Australian Securities Exchange (ASX) is greater than $1.00;
• 350,000 Performance Rights Class C subject to the offeree being continuously employed for a period of two years
from the grant date and the 30-day Volume Weighted Average Price of Cann Group Limited’s ordinary shares as
traded on the ASX is greater than $1.50; and
• 400,000 Performance Rights Class C subject to the offeree being continuously employed for a period of two years
from the grant date and the 30-day Volume Weighted Average Price of Cann Group Limited’s ordinary shares as
traded on the ASX is greater than $2.00.
The grant date was 21 November 2017.
34
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
Shares issued on exercise of the Performance Rights Class C will be subject to a restriction period of two years during
which the shares issued on exercise of the Performance Rights cannot be transferred or otherwise dealt with.
The total vested value as at 30 June 2019 for Class C Performance Rights totals $1,975,377.
Performance Rights Class D
Date
Balance 1 July 2018
4 May 2019 – conversion into ordinary shares
Balance 30 June 2019
Date
Balance 1 July 2017
19 January 2018
Balance 30 June 2018
Number of
Performance
Rights
2019
$
100,000
301,000
(100,000)
(301,000)
–
–
Number of
Performance
Rights
–
2018
$
–
100,000
301,000
100,000
301,000
15. 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:
Payment for consulting fees to Pearce Pharmaceuticals Pty Ltd, an entity related to Mr Geoff Pearce, a Director of
the Company
Total
2019
$
240,000
240,000
16. CONTINGENT LIABILITIES AND COMMITMENTS
The Company has entered into a subscription agreement with Pure Cann NZ Limited (“Pure Cann”) to acquire shares
in tranches with each tranche pending achievement of specific milestones by Pure Cann. The Group has acquired
subscription shares in Pure Cann as a result of the first milestone being satisfied (refer Note 10). There are two remaining
tranches with the Group required to pay the amounts of $2,000,000 New Zealand dollars (tranche 2) and $3,000,000
New Zealand dollars (tranche 3) for the acquisition of subscription shares. Each tranche is dependent upon the
completion of each prior tranche.
The Group has a bank guarantee of $50,000 for the operating premises lease of the Company’s Northern Facility.
With the exception of the Pure Cann subscription agreement and the bank guarantee, the Group currently has no
contingent liabilities or commitments at the date of signing this report. In July 2019 the Group signed a surrender of lease
with the landlord to the Southern Facility acquired by the Company of 12 July 2019 and expects the bank guarantee
totalling $35,000 to be returned within the coming months.
CANN GROUP LimiTEd ANNUAL REPORT 2019
35
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
17. EVENTS AFTER THE END OF THE REPORTING PERIOD
Acquisition of Southern Facility
On 12 July 2019 settlement for the acquisition of property being the Southern Facility by Cann Group Limited was
finalised. The Contract of Sale of Real Estate was entered into on 13 May 2019. The property was acquired for $1.9 million
plus costs amounting to $118,773. The Company commenced leasing the property on 4 September 2015 and had
subsequently renewed for three years on 4 March 2019 prior to entering into negotiations with the vendor to acquire the
property. The lease was terminated effective 12 July 2019.
Manufacturing licences obtained
On 26 July 2019 the Company announced that the Federal Department of Health’s Office of Drug Control had granted
manufacturing licences for the Company’s existing Northern and Southern medicinal cannabis facilities however an
estimate of its financial effect cannot be made at this time.
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.
18. 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
Share-based payments (movement in Performance Rights Reserve)
Depreciation and loss on sale of assets
Amortisation
Movements in working capital
(Increase)/decrease in trade receivables and other assets
(Increase)/decrease in prepayments
(Decrease)/increase in trade and other payables
(Increase)/decrease in stock on hand and biological assets
Net cash outflows from operating activities
2019
$
2018
$
(10,926,317)
(4,725,857)
1,232,500
1,043,877
1,669,006
1,063,534
25,633
15,029
(1,115,436)
(4,239)
(584,504)
–
3,754,609
438,805
(1,478,037)
(1,585,660)
(7,422,547)
(3,754,511)
36
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
19. OPERATING LEASE
The Group has three existing operating leases for premises as follows:
Southern Facility
The term of the lease was for three years and six months commencing 4 September 2015 and the Company renewed the
lease effective 4 March 2019 for a further term of three years. On 13 May 2019 the Company entered into a contract with
the landlord to purchase the property and settlement occurred on 12 July 2019. The lease was terminated at settlement.
Northern Facility
The term of the lease is three years finishing on 31 March 2020, however it is probable that the Company will request that
the lease be renewed for a further three year term.
Corporate Office
The term of the lease is one year commencing 1 July 2019.
All of the leased premises are located in Melbourne, Victoria.
Operating lease commitments are:
Period
Less than 12 months
From one to five years
2019
$
2018
$
572,715
669,945
1,185,000
664,610
1,757,715
1,334,555
20. CAPITAL COMMITMENTS
The Group has entered into an Early Works Contract to the value of $2,096,368 with Qanstruct (Aust) Pty Ltd to conduct
early works at the Mildura site pending entry into a full construction contract at a future date. This amount has been
accrued in the financial statements. The Group has not yet entered into formal contracts with material suppliers and
construction contractors for the specialty components of the Mildura Facility construction however it has provided funds
to those suppliers and contractors for materials subject to a longer lead time for production and classified as capital
work-in-progress (refer Note 9).
CANN GROUP LimiTEd ANNUAL REPORT 2019
37
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
21. 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 significant financial risks, which are its liquidity risk,
which it does through regularly reviewing rolling cash flow forecasts and examining its levels of available working capital
against such forecasts and its interest rate risk exposure.
Liquidity risk
Liquidity risk arises from the possibility that the Group may encounter difficulty in meeting its obligations for its financial
liabilities, which at 30 June 2019 were accounts payable with due terms from 0 – 45 days.
Interest rate risk exposure
The group’s exposure to interest rate risk, which is the risk that a financial instrument’s market value will fluctuate as a
result of changes in market interest rates, and the effective weighted average interest rates on classes of financial assets
and financial liabilities are as follows:
Weighted
average
effective
interest rate
%
Floating
interest rate
$
1 year or less
$
1 to 5 years
$
over 5 years
$
Non-interest
bearing
$
Total
$
Fixed interest rate maturing
1.49
0.00
2.19
0.00
9,501,570
27,236,325
–
–
–
–
85,000
–
9,501,570
27,321,325
–
–
–
–
9,501,570
27,321,325
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,650,297
46,388,192
1,115,436
1,115,436
85,000
1,200,570
1,200,570
11,966,303
48,789,198
4,815,530
4,815,530
4,815,530
4,815,530
7,150,773
43,973,668
2019
From 1 July 2018
to 30 June 2019
ASSETS:
Cash and bank
balances
Receivables
Rental bonds
Investments
Total financial
assets
LIABILITIES:
Trade and other
creditors
Total financial
liabilities
Net financial
assets (liabilities)
38
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
Weighted
average
effective
interest rate
%
Floating
interest rate
$
1 year or less
$
1 to 5 years
$
over 5 years
$
Non-interest
bearing
$
Total
$
Fixed interest rate maturing
1.34
2.62
2.62
3,252,971
–
–
–
75,272,392
85,000
3,252,971
75,357,392
–
–
–
–
3,252,971
75,357,392
–
–
–
–
–
–
–
–
–
–
–
–
1,124,176
4,377,147
–
75,272,392
85,000
1,124,176
79,734,539
927,674
927,674
927,674
927,674
196,502
78,806,865
2018
From 1 July 2017
to 30 June 2018
Assets:
Cash and bank
balances
Term deposits
Rental bonds
Total financial
assets
LIABILITIES:
Trade and other
creditors
Total financial
liabilities
Net financial
assets (liabilities)
Sensitivity analysis for interest rate risk:
$
50bps
decrease
2019
$
50bps
increase
$
50bps
decrease
2018
$
50bps
increase
Effect on profit
(136,182)
136,182
(376,787)
376,787
Market Risk
The Group does not believe it has any material market risk of loss arising from adverse movements of market instruments
including foreign exchange and interest rates.
Credit Risk
The Group does not believe it has any material risk from a counterparty defaulting on its contractual obligations
or commitments resulting in financial loss as such risk is managed by implementing a policy of only dealing with
creditworthy counterparties in accordance with established credit limits for all future transactions with customers.
The Group also reviews the overall financial strength of its customers by monitoring publicly available credit information.
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.
CANN GROUP LimiTEd ANNUAL REPORT 2019
39
NOTES TO THE FiNANCiAL STATEmENTS (CONTINUED)
22. 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 2019 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 treasury function 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.
23. 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
2019
$
2018
$
84,346,795
90,407,525
1,732,016
14,789
86,078,811
90,422,314
295,231
484,073
–
16,369
295,231
500,442
96,502,220
95,081,758
1,975,377
1,043,877
(12,694,017)
(6,203,763)
85,783,580
89,921,872
2019
$
2018
$
(6,490,255)
(2,705,749)
–
–
(6,490,255)
(2,705,749)
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 19 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 2019 and of the performance for the year ended
30 June 2019 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 2019 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: 27 August 2019
CANN GROUP LimiTEd ANNUAL REPORT 2019
41
INDEPENDENT AUDITOR’S REPORT
Independent auditors report to the members of Cann
Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cann Group Limited (the Company) and its
controlled entities (the Group), which comprises the consolidated statement of financial
position as at 30 June 2019, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that we have complied with the independence requirements of the
Corporations Act 2001.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
42
iNdEPENdENT AUdiTOR’S REPORT (CONTINUED)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
CAPITALISATION OF PROPERTY, PLANT AND EQUIPMENT
Refer also to notes 2 and 9
During the financial year the Group significantly
invested in its cultivation capacity through the
enhancement of its Southern and Northern growth
facilities, through the acquisition of plant and
equipment.
In addition, the group has also acquired land and
buildings at a site in Mildura for construction of an
additional greenhouse and support buildings. The
works have been classified as capital-work-in
progress until such time as the facility is
completed.
How our audit addressed it
Our audit procedures included:
— Vouching material acquisition of land and
buildings to supporting contracts;
— Examining the underlying material plant and
equipment costs which have been capitalised
in the year to determine whether or not such
plant and equipment is held and ready for use
and therefore subject to depreciation;
— Assessing the classification of property, plant
and equipment between categories, including
capital-work-in progress; and
Subsequent to year end the Group has also
acquired the land and buildings for the Southern
facility, which was leased at 30 June 2019.
— Recalculating the arithmetic accuracy of the
depreciation charge taken to the financial
report.
The Group’s accounting policy for depreciating
such property, plant and equipment is over the
term of the useful life of the asset, from when it is
held ready for use. During the year management
has not changes its estimation of useful life of its
assets.
INVENTORY
Refer also to notes 2 and 8
The Group’s inventory of $3.09 million; consisting
primarily of biomass, is significant to the financial
statements and has increased by $1.68 million
from the prior year.
The biomass is valued at fair value less costs to
sell as at the date of harvest.
The valuation of inventory involves judgement by
management when determining the value per gram
of biomass. In particular consideration is given to
directly attributable costs which can be capitalised
to the into cost of inventory.
We have also assessed the adequacy of
disclosures in relation to property, plant and
equipment in the Notes to the financial report.
How our audit addressed it
Our audit procedures included:
— Agreeing physical inventory to the independent
stock count reports to ensure the existence of
inventory;
— Agreeing all material transfers in and out of the
secured inventory locations to supporting
transfer documentation;
— An evaluation of managements judgements
and assumptions used in calculation cost per
gram of biomass; and
— An evaluation of management’s judgements
and assumptions used in determining the need
for inventory provisions and inventory write
downs.
We have also assessed the adequacy of
disclosures in relation to inventory in the Notes to
the financial report.
CANN GROUP LimiTEd ANNUAL REPORT 2019
43
iNdEPENdENT AUdiTOR’S REPORT (CONTINUED)
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2019 but does not include the financial
report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to fraud
or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report accompanying these financial
statements for the year ended 30 June 2019.
In our opinion, the Remuneration Report of Cann Group Limited, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
44
iNdEPENdENT AUdiTOR’S REPORT (CONTINUED)
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 27 August 2019
CANN GROUP LimiTEd ANNUAL REPORT 2019
45
SHAREHOLDER INFORMATION
Equity security holders
As at 21 August 2019 the Company had 141,804,247 ordinary shares on issue. Further details of the Company’s equity
securities are as follows:
20 Aug 2019
31,956,347
6,011,014
% of Issued
Capital
22.54
4.24
5,580,000
4,094,518
3,644,577
3,483,161
2,567,793
2,331,185
1,977,930
1,925,344
1,812,500
1,681,852
1,554,195
1,420,000
1,350,000
1,220,000
1,106,047
1,000,000
1,000,000
920,000
3.94
2.89
2.57
2.46
1.81
1.64
1.39
1.36
1.28
1.19
1.10
1.00
0.95
0.86
0.78
0.71
0.71
0.65
76,636,463
65,167,784
54.04
45.96
141,804,247
100.00
Largest Holders
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
AURORA CANNABIS INC
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MULLACAM PTY LTD
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