Canaccord Genuity Group Annual Report 2022

Plain-text annual report

C a n a c c o r d G e n u i t y G r o u p I n c . F i s c a l 2 0 2 2 A n n u a l R e p o r t FISCAL 2022 ANNUAL REPORT BUILDING VALUE FINANCIAL OVERVIEW Selected financial information(1)(2)(7) (C$ thousands, except per share and % amounts, and number of employees) Canaccord Genuity Group Inc. (CGGI) Revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Total revenue Expenses Compensation expense Other overhead expenses(3) Acquisition-related costs Restructuring costs(4) Change in derivative liability fair value Costs associated with redemption of convertible debentures(5) Share of loss (gain) of an associate Total expenses Income before income taxes Net income Net income attributable to CGGI shareholders Net income attributable to non-controlling interests Earnings per common share – basic Earnings per common share – diluted Dividends per common share Dividends per Series A Preferred Share Dividends per Series C Preferred Share Excluding significant items(6) Total revenue Total expenses Income before income taxes Net income Net income attributable to CGGI shareholders Net income attributable to non-controlling interests Diluted earnings per common share Balance sheet data Total assets Total liabilities Non-controlling interests Total shareholders’ equity Number of employees For the years ended March 31 2022 2021 2020 2022/2021 change $ 761,843 $ 735,239 $ 586,884 $ 26,604 561,725 493,057 158,978 36,028 34,371 761,551 197,092 246,801 26,288 40,717 236,962 206,507 108,834 63,690 20,990 2,046,002 2,007,688 1,223,867 1,248,184 1,227,895 395,709 9,197 — 8,519 5,932 192 398,693 5,922 — — 4,354 922 738,313 383,527 (124) 1,921 — — 207 1,667,733 1,637,786 378,269 270,565 246,314 24,251 2.50 2.16 0.32 0.9981 1.2482 $ $ $ $ $ $ $ $ 369,902 269,802 263,786 6,016 2.30 2.04 0.25 0.9712 1.2482 $ $ $ $ $ $ $ $ 1,123,844 100,023 86,554 86,490 64 0.78 0.65 0.20 0.9712 1.2482 $ $ $ $ $ $ $ $ $ 2,040,602 $ 1,993,488 $ 1,223,867 $ 1,623,036 $ 1,607,398 $ 1,100,810 $ $ $ $ $ 417,566 305,827 284,069 21,758 2.51 $ $ $ $ $ 386,090 285,887 279,871 6,016 2.48 $ $ $ $ $ 123,057 106,323 105,895 428 0.81 $ 7,250,245 $ 7,631,801 $ 5,956,195 $ 5,833,476 $ 6,516,517 $ 5,027,421 $ 238,700 $ 8,190 $ 1,178,069 $ 1,107,094 2,587 2,356 $ $ 156 928,618 2,308 (199,826) 295,965 (87,823) 9,740 (6,346) 38,314 20,289 (2,984) 3,275 — 8,519 1,578 (730) 29,947 8,367 763 (17,472) 18,235 0.20 0.12 0.07 0.03 — 47,114 15,638 31,476 19,940 4,198 15,742 0.03 (381,556) (683,041) 230,510 70,975 231 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3.6% (26.2)% 150.2% (35.6)% 37.1% (15.6)% 1.9% 1.7% (0.7)% 55.3% — n.m. 36.2% (79.2)% 1.8% 2.3% 0.3% (6.6)% n.m. 8.7% 5.9% 28.0% 2.8% — 2.4% 1.0% 8.2% 7.0% 1.5% 261.7% 1.2% (5.0)% (10.5)% n.m. 6.4% 9.8% (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) The operating results of the Australian operations have been fully consolidated, and a 15% non-controlling interest has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. The operating results of CGWM UK have been fully consolidated, and excluding the effect of the Convertible Preferred Shares issued by CGWM UK, a 1.6% non-controlling interest has been recognized for the period from August 1, 2021 to December 31, 2021 and 4.3% for the fourth quarter of fiscal 2022 [March 31, 2021 – $nil]. (3) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization of tangible, intangible and right of use assets, and development costs. (4) Restructuring costs for the year ended March 31, 2020 were incurred in connection with CGWM UK, as well as real estate and other integration costs related to the acquisition of Patersons. (5) During the year ended March 31, 2022, the Company entered into a credit agreement for a senior secured first lien term loan facility (“loan facility”) to partially fund the redemption of the convertible debentures. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures for the year ended March 31, 2022. (6) Net income and earnings per common share excluding significant items reflect tax-effected adjustments related to such items. See the Selected Financial Information Excluding Significant Items table on page 25. (7) Data includes the operating results of Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya Partners since December 31, 2021. n.m.: not meaningful (percentages over 300% are indicated as n.m.) Contents Introduction Global Performance Letter from the President & CEO Letter from the Chairman Canaccord Genuity Wealth Management Canaccord Genuity Capital Markets ESG: Our Commitment to Sustainability and Corporate Social Responsibility MD&A and Financials 1 2 4 7 8 10 12 13 Shareholder Information Inside Back Cover About Canaccord Genuity Group Inc. Through its principal subsidiaries, Canaccord Genuity Group Inc. (the Company) is a leading independent, full-service financial services firm with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has wealth management offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. The international capital markets division operates in North America, the UK & Europe, Asia, Australia and the Middle East. Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX. 1 With the benefit of a clear strategy, and disciplined investments over several years in the expansion of our global wealth management and advisory platforms, we delivered our sixth consecutive year of revenue and earnings per share growth. Revenue (C$ millions, fiscal years ended March 31) 2022(1) 2021(1) 2020 2019 2018 Income before Income Taxes(1) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 Diluted Earnings Per Share(1) (C$, fiscal years ended March 31) 2022 2021 2020 2019 2018 $2,040.6 $1,993.5 $1,223.9 $1,190.6 $1,022.9 $417.6 $386.1 $123.1 $135.6 $110.6 $2.51 $2.48 $0.81 $0.80 $0.59 (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25.Canaccord Genuity Group Inc. Fiscal 2022 Annual Report2 GLOBAL PERFORMANCE Despite the onset of a broad market downturn in the second half of fiscal 2022, all of our businesses continued to perform at strong levels. $2.0 billion fiscal 2022 revenue $2.51 fiscal 2022 diluted earnings per share(1) 28% year-over-year increase in common share dividend payout $100 million substantial issuer bid completed in fiscal 2022 $176 million returned to shareholders in fiscal 2022 through dividends and share buybacks (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. Fiscal 2022 Annual Report Canaccord Genuity Group Inc.Our strong balance sheet supports our ability to deliver market-leading services for our clients, while maintaining ample liquidity and flexibility to invest in our business and deploy capital in ways that we expect will provide lasting benefits for our shareholders. Fiscal 2022 Revenue by Operating Division 36% 64% Income before Income Taxes(1) – Contributions by Business Segment (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 CG Capital Markets CG Wealth Management CG Capital Markets CG Wealth Management 3 $324.6 | $148.5 $324.9 | $135.3 $59.8 | $80.2 $80.4 | $75.4 $62.5 | $57.5 Total Expenses as a Percentage of Revenue(1) (Fiscal years ended March 31) Non-Compensation Expenses as a Percentage of Revenue(1) (Fiscal years ended March 31) 89.2% 88.6% 89.9% 80.6% 79.5% 28.0% 28.4% 29.6% 19.0% 18.4% Revenue by Geography (Fiscal years ended March 31) 34% 2022 40% 2021 36% 2020 41% 2019 39% 2018 33% 21% 12% 29% 19% 12% 29% 31% 25% 31% 4% 3% 23% 32% 6% Canada United States UK, Europe and Dubai Australia 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. Canaccord Genuity Group Inc. Fiscal 2022 Annual Report4 LETTER FROM THE PRESIDENT & CEO Fellow Shareholders, Fiscal 2022 began on strong footing, with a continuance of the robust market for growth stocks that began in 2020. In the first half of the year, our operating revenue, net income, and adjusted earnings per share surpassed the fiscal 2021 comparison period on every measure. The second half presented several industry-wide challenges, which led to increased volatility and a substantial decline in capital raising activity that had been broadly expected after two years of unprecedented activity levels. Through this, CG employees continued to demonstrate remarkable creativity and resilience. We continued to gain market share in our wealth management and capital markets businesses by leveraging our expanded resources to attract new clients and deepen our existing relationships. As markets became more challenging, we seized every opportunity to execute for our clients while building a solid pipeline for the coming year. Firm-wide revenue for the fiscal year amounted to $2.0 billion, an increase of 1.9% compared to fiscal 2021. Excluding significant items(1), pre-tax net income increased 8.2% year over year to $418 million, and this translated to adjusted diluted earnings per share(1) of $2.51. The advantages of our diversified platform have never been clearer. In fiscal 2022, more than 60% of our revenue was earned outside of Canada. Despite a substantial mid- year decline in investment banking activity, we materially increased contributions from higher margin advisory activities, and our wealth management businesses continued to increase recurring revenue and net income contributions. These achievements reflect years of careful planning and disciplined investment. Turning to the performance of our operating businesses, our combined global capital markets businesses earned revenue of $1.3 billion for the fiscal year. While contributions from our investment banking segment decreased from the unprecedented levels of the prior year, it was still a very productive year by historical standards for our equity capital markets (ECM) activities. Over the fiscal year, we helped raise $61 billion for growth companies with continued strong activity levels in the technology, life sciences, and mining sectors. When ECM activity began to decline, our M&A teams rose to the occasion and delivered a record performance, reflecting the confidence of the executives, financial sponsors and boards of the growing companies that we advise. Revenue from this segment increased over 2.5 times year over year, led by our US capital markets business, which tripled advisory revenue year over year. The adjusted pre-tax profit margin(1) in our global capital markets business was in line with the record set in fiscal 2021, at 25% for the fiscal year. These results reflected the constructive backdrop for capital raising activities that we experienced, and the benefits of our previous investments in growing our advisory segment to complement our ECM focus. Building on the successful deployment of this strategy, we welcomed leading consumer-focused advisory firm Sawaya Partners in Fiscal 2022 Annual Report Canaccord Genuity Group Inc.5 December, an acquisition that materially enhances our consumer vertical and intersects with several of our core focus sectors globally. Throughout the year, our teams upheld our long- standing commitment to providing exceptional aftermarket support and experiences for our clients through our unparalleled global distribution capabilities, innovative research, conferences and specialized trading solutions. As we support our clients through new market realities, we are having discussions about their future needs and taking steps to add ancillary products and services that complement our core mid-market verticals and foster productive, long-term relationships. Looking ahead, we see numerous opportunities to continue to grow our market share, expand our platform capabilities, and ultimately elevate our earnings capacity across market environments. Our global wealth management businesses continued to deliver impressive growth. Client assets at the end of the fiscal year amounted to $96.1 billion, a year-over- year increase of 8.2%, but a modest decrease from the high reached in our third fiscal quarter, reflecting lower market valuations at the end of the 12-month period. Notably, commissions and fees revenue increased by 12% to a new record of $587 million, reflecting record levels from all geographies. Excluding significant items, our combined global wealth management businesses contributed record pre-tax net income(1) of $148.5 million, a year-over-year increase of 10%. Throughout the fiscal year, we continued to invest in the growth of our wealth management businesses in all regions, which protects our ability to deliver predictable results during less certain times. In the UK & Crown Dependencies, we entered the Scottish market with our acquisition of Adam & Company, and after our fiscal year end we also completed our acquisition of Punter Southall Wealth, which will increase the scale of both our financial planning and investment management businesses. Our integration efforts to date have been positive and productive, and we maintain a strong focus on organic growth priorities. With strong local leadership and increased support from our strategic and financial partner HPS, we have also established a higher valuation for this business. While we expect that approximately 67% of the net income contribution from this business will be allocated to group results going forward, we are well positioned to expand our presence in this market while driving stronger net income contributions to our overall results. We have continued to attract talented teams who see differentiated opportunities to grow their businesses with CG. This year, we ranked very strongly in an independent survey of Canada’s Top Wealth Advisors, with the total number of CG advisors exceeding representation from all other independent firms by a wide margin. This business was also recently recognized as a top ranked Canadian wealth management firm in a national survey of investment advisors. Over fiscal 2022, the average book per Advisory Team grew 17% year over year to $260 million, and this business also continued to grow discretionary assets under management by 35% compared to last year. Finally, our Australian wealth business continues to grow client assets and related revenue, benefiting from its alignment with our leading capital markets business in the region. Since our acquisition to expand this operation in 2019, managed client assets have more than doubled to $5.4 billion. This exceptional performance is helping to establish CG as the premier brand for small- and mid- cap investors in the region and is also driving advisor recruiting momentum. Whether through acquisitions or recruiting, the businesses and professionals that join CG Wealth Management have been able to unlock greater value on our platform, which is driving exciting growth opportunities in all regions. Looking ahead, we continue to explore a range of opportunities for profitable growth in this important segment. (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. Canaccord Genuity Group Inc. Fiscal 2022 Annual Report6 We are committed to advancing our strategic priorities in ways that provide benefits for both our business and our communities. We know that there will be increased uncertainty and volatility in our future, but also opportunity. We know that our ability to contribute to positive and lasting change can be effective only if we incorporate our principles of corporate social responsibility into every aspect of our business activities. This year, environmental, social and governance (ESG) oversight was added to the formal mandate for our Board of Directors, and we published our first ESG report. In capital markets, our global sustainability practice is supporting increasing numbers of growth companies in accelerating their sustainable development and energy transition priorities. I am pleased to report that the aggregate value of our underwriting and advisory engagements in this vitally important segment amounted to $16 billion this year. Within the organization, we are progressively advancing our hiring and retention practices to foster a more diverse workforce. While we have prioritized training, measurement and reporting, some of our most impactful diversity and inclusion initiatives have been shaped by people throughout CG, a testament to our enduring partnership culture. We have also identified several opportunities to support continued growth and success for all employees, and we are working to implement action plans across regions and businesses. Over the course of fiscal 2022, we conducted employee surveys in all geographies, and I am pleased to report that CG employee engagement levels came in well above the average for financial services firms in our peer group. Many of our employees highlighted that CG excels in offering tools for success and a strong collective vision. The start of fiscal 2023 has presented new challenges with a combination of surging inflation, increased volatility, higher interest rates and recession fears. While many countries and businesses are still charting their recovery from the pandemic, we are also confronted with the economic and humanitarian impacts of the Russia- Ukraine war. While it is first and foremost a humanitarian crisis, and our thoughts are with the people of Ukraine, this developing crisis will also have wide-ranging implications for economies and trade. We have proven in the past that we can use challenging markets as an incentive to do things differently. We have a strong balance sheet to fuel our future, and we are advantageously positioned to grow in unique ways that allow us to increase the breadth and depth of capabilities for our targeted client base across our wealth management and capital markets businesses. I have never been as confident in our strategic position as I am today. With support from my partners on the Global Operating Committee, our Board of Directors and over 2,500 CG colleagues, we are committed to using this period productively so that we can continue building value for our shareholders for many years to come. Thank you for your continued support. (signed) Dan Daviau President & CEO Canaccord Genuity Group Inc. Fiscal 2022 Annual Report Canaccord Genuity Group Inc.7 LETTER FROM THE CHAIRMAN Fiscal 2022 was a rewarding year for CG, although in the final months of the year we entered a more challenging environment for our business and our shareholders, and this has continued into the start of our new fiscal year. With the benefit of a clear strategy and disciplined investments to strengthen recurring revenue streams and create a lower risk, less capital-intensive business model, we delivered our sixth consecutive year of revenue and earnings per share growth. This performance was achieved in a year where we were still navigating a confluence of challenges driven by the COVID-19 pandemic and the abrupt reversal in demand for growth stocks that began in January. Each of our businesses is now a meaningful contributor to earnings, and by increasing alignment across regions and capabilities, we are capable of delivering better outcomes for both our clients and our shareholders. As a result of our investments in the growth of our wealth management and advisory businesses, we enter this challenging backdrop with confidence that our increasingly stable and defensive business mix will continue to provide operational resilience. It was also an important year for strategic activities. During the year, we took steps to deploy capital in ways that are expected to provide lasting benefits for our shareholders. We completed acquisitions to increase the long-term value and market position of our wealth management and capital markets businesses. Underscoring our commitment to enhancing shareholder returns, we also remained active in our normal course issuer bid (NCIB) program and completed a $100 million substantial issuer bid. And finally, we increased our common share dividend payout by 28%. In total, we returned $176 million to shareholders through dividends and share buybacks in fiscal 2022. By increasing our market position in all our geographies, we also recognize that we have a greater impact on the communities where we live and work. While we have historically factored various environmental, social and governance considerations into our decision-making processes, this year ESG was added to the formal mandate of the Board of Directors. Going forward, we are committed to intensifying our efforts and increasing our transparency on issues such as diversity and inclusion, ethics and integrity, risk management, and sustainable business practices. We continue to increase the diversity of our talent mix across the organization, with an acute focus on building a diverse pipeline of future leaders to power our business into its next phase. In our efforts to increase development opportunities for diverse talent, we have also extended our efforts externally, through partnerships with organizations such as Youth INC and the Schulich School of Business, in addition to launching our third year of the Canaccord Genuity Advisory Program for Women Entrepreneurs. As our business has evolved, we have prioritized strong governance in our efforts to continually advance the best interests of our shareholders. This year marks the retirement from our Board of two of our longest serving directors, Mike Harris and Terry Lyons, who have both reached the end of their terms with Canaccord Genuity Group. Terry has been Lead Independent Director and Chair of the Audit Committee, as well as serving on several of CG’s subsidiary boards. He has contributed greatly to the success of CG through vigilance and experience over countless hours of service since 2004. Mike has been Chair of the Corporate Governance and Compensation Committee and has provided invaluable advice, judgment and wisdom over his tenure of 18 years. Also leaving the Board is Merri Jones, who has provided the Board and senior management with the benefit of extensive experience in the Canadian wealth management segment. We had anticipated these changes, and in recent years we recruited exemplary talent to ensure an effective succession process. We are also looking forward to nominating Michael Auerbach as an Independent Director at our upcoming Annual General Meeting. Michael is an accomplished entrepreneur, investor, business consultant and private diplomat with deep expertise in financial services, strategic intelligence, advisory and risk management. With these changes, and with your support, we will have seven deeply experienced Independent Directors, with four women and three men. On behalf of my fellow directors, I extend our deep gratitude to Terry, Mike and Merri for their years of remarkable service. We do not expect fiscal 2023 to resemble 2022 or 2021. Alongside our clients, we will navigate a challenging and uncertain backdrop which includes rising interest rates, inflation, a continued tightening of monetary policy, and ongoing market disruptions driven by the devastating war in Ukraine. Having said that, we begin fiscal 2023 with confidence that our business has stronger downside protection than at any time in our history. Just as our recent successes were many years in the making, we have spent years shaping our business to deliver predictable performance for our shareholders in uncertain times. Consistent with what we have done in the past, we will use the challenging period ahead to further entrench our position as the leading independent wealth management and capital markets business dedicated to the needs of growth companies and investors. We see several opportunities to increase our relevance in our core focus areas, and we are seizing opportunities for targeted and disciplined growth. We have a strong and properly managed balance sheet which supports our ability to deliver market-leading services for our clients, while maintaining ample liquidity and flexibility. In closing, I would like to thank Dan and the Global Operating Committee for their dedication to advancing and executing on our long-term strategy. And of course, none of this would be possible without the 2,500+ CG employees who uphold a remarkable culture of agility and partnership every day. We are thankful for all that you do. To my fellow shareholders, I thank you for your continued support. (signed) David Kassie Chairman Canaccord Genuity Group Inc. Canaccord Genuity Group Inc. Fiscal 2022 Annual Report8 CANACCORD GENUITY WEALTH MANAGEMENT Throughout the fiscal year, we continued to invest in the growth of our wealth management businesses in all regions. Alongside our investments in talent and acquisitions, we are actively pursuing organic growth initiatives and advancing our technology and infrastructure to keep pace as investors continue to reshape their investment needs. $96.1 billion in total client assets Client assets grew by 8% year over year but decreased modestly from the third fiscal quarter high of $102 billion, reflecting lower market valuations at the end of the 12-month period. 20.6% fiscal 2022 pre-tax profit margin(1) AN IMPORTANT CONTRIBUTOR TO FIRM-WIDE EARNINGS GROWTH AND STABILITY The investments we have made to increase the scale of our wealth management businesses will continue to enhance our earnings foundation and long-term resilience as we navigate shifting market dynamics. Global Wealth Management Revenue(2) (C$ millions, fiscal years ended March 31) Global Wealth Management Income before Income Taxes(1)(2) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 $720.4 $663.6 2022 2021 $511.4 2020 $461.8 2019 $370.3 2018 $148.5 $135.3 $80.2 $75.4 $57.5 (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. (2) Beginning in Q3/20, amounts include Australia wealth management. Fiscal 2022 Annual Report Canaccord Genuity Group Inc.9 UK & CROWN DEPENDENCIES Fiscal 2022 revenue in this business increased 12% year over year to $310.5 million, and the adjusted pre-tax profit margin(1) was 27.3%. With increased support from our strategic and financial partner HPS, we expanded our footprint in the UK and increased the scale of our financial planning capability through our acquisitions of the investment management business of Adam & Company and Punter Southall Wealth(2). UK & Crown Dependencies Wealth Management Client Assets(3) (C$ billions and £ billions, fiscal years ended March 31) UK & Crown Dependencies Wealth Management Income before Income Taxes(1) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 CANADA $52.8 | £32.1 $52.3 | £30.2 2022 2021 $39.9 | £22.7 2020 $44.2 | £25.4 2019 $44.9 | £24.8 2018 $84.8 $65.3 $56.5 $48.5 $37.4 Fiscal 2022 revenue in this business grew 3.5% year over year to $335.3 million, and the adjusted pre-tax profit margin(1) was 16.8%. While the anticipated reduction in new issue activity led to softer net income contributions compared to the prior fiscal year, client assets have continued to strengthen and we continue to build upon our Investment Advisor recruiting and organic growth initiatives. Canada Wealth Management Client Assets(3) (C$ billions, fiscal years ended March 31) Canada Wealth Management Income before Income Taxes(1) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 AUSTRALIA $37.9 $32.2 2022 2021 $18.4 2020 $20.7 2019 $15.6 2018 $56.3 $62.6 $22.7 $26.8 $20.2 Our Australian wealth business continues to grow client assets and related revenue, benefiting from its alignment with a leading capital markets business in the region. Fiscal 2022 revenue in this business grew 19.9% year over year to $74.6 million, and the adjusted pre- tax profit margin(1) was 9.8%. The number of Investment Advisors in this business increased by 5% year over year, reflecting strong recruiting momentum. Australia Wealth Management Client Assets(3) (C$ billions and A$ billions, fiscal years ended March 31) Australia Wealth Management Income before Income Taxes(1)(4) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 $5.3 | A$5.7 $4.2 | A$4.4 2022 2021 $2.4 | A$2.8 2020 $0.9 | A$0.9 $0.8 | A$0.8 $7.3 $7.4 $1.0 (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. (2) Acquisition of Punter Southall Wealth completed May 31, 2022. (3) Assets under administration, management and management contract. (4) Australia wealth management revenue was previously recorded as part of Canaccord Genuity Capital Markets Australia. Commencing in Q3/20, it is disclosed as a separate operating segment. Fiscal 2020 income before income taxes reflects results only subsequent to the completion of the Patersons acquisition on October 19, 2019. Canaccord Genuity Group Inc. Fiscal 2022 Annual Report10 CANACCORD GENUITY CAPITAL MARKETS We continued to experience a constructive backdrop for capital raising activities in our core sectors and geographies, despite the broadly anticipated declines from the previous year’s record levels. When market-wide new issue activity began to decline, our M&A teams rose to the occasion and delivered a record performance, reflecting the confidence of the executives, financial sponsors and boards of the growing companies that we advise. Global Capital Markets Revenue (C$ millions, fiscal years ended March 31) Global Capital Markets Income before Income Taxes(1) (C$ millions, fiscal years ended March 31) 2022 2021 2020 2019 2018 $1,303.1 2022 $1,312.2 2021 $689.5 2020 $704.4 2019 $637.5 2018 $324.6 $324.9 $59.8 $80.4 $62.5 Capital markets revenue and earnings reflect diverse contributions from geographies and practice areas. By increasing alignment across regions and capabilities, we can deliver stronger outcomes for our clients and improve our earnings stability through market cycles. Capital Markets Revenue by Geography (Fiscal years ended March 31) Capital Markets Revenue by Activity (Fiscal years ended March 31) 26% 2022(2) 34% 2021(2) 30% 2020(2) 37% 34% 2019 2018 51% 45% 51% 43% 37% 9% 14% 38% 2022 36% 12% 13% 1% 7% 14% 15% 49% 2021 19% 16% 1% 14% 5% 15% 5% 30% 2020 20% 2019 28% 16% 22% 4% 35% 18% 25% 2% 2% 20% 9% 19% 37% 18% 24% 2018 Canada United States UK, Europe and Dubai Australia Advisory Investment Banking Principal Trading Commissions and Fees Interest and Other (1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures on page 25. (2) Australia wealth management revenue was previously recorded as part of Canaccord Genuity Capital Markets Australia. Commencing in Q3/20, it is disclosed as a separate operating segment. Fiscal 2022 Annual Report Canaccord Genuity Group Inc.11 $61.2 billion proceeds raised in fiscal 2022 By maintaining a strong focus in key growth and value sectors of the global economy, we are capturing new market share and are ranked among the league table leaders in each of our geographies. 153% year-over-year increase in advisory revenue Growing contributions from advisory activities helps to offset the inherent volatility of our investment banking segment. Total advisory revenue in fiscal 2022 increased to a new record of $489 million. Notwithstanding the onset of broad market headwinds in the second half of fiscal 2022, we continued to execute for our clients while building a solid pipeline of opportunities for the coming year. Our enhanced business mix and strong cross-border collaboration supported a productive fiscal year for our global capital markets division. We have materially added to the strength of our advisory segment with our acquisition of Sawaya Partners. Our global capital markets businesses earned revenue of $1.3 billion, which was in line with the record set in the prior year, albeit with a very different revenue mix. Almost 40% of fiscal 2022 capital markets revenue was contributed by our advisory segment, and a substantial portion of this was contributed by our US business, with meaningful year-over-year increases from our Canadian and UK businesses. Notwithstanding the broad market decline in new issue activity that impacted Canada, the US and the UK in the latter half of the fiscal year, investment banking revenue in these regions remained strong by historical standards and our Australian business achieved record results, bolstered by an increase in mining sector financings. With support from a globally unified network of sales, trading and research professionals, we are continually improving the client experience and capturing new market share. Across our capital markets businesses, we continue to pursue opportunities for expanding our product capabilities and developing ancillary products intended to complement our mid-market offering and enhance our long-term earnings potential. This acquisition builds on our track record of increasing contributions from higher margin advisory activities, and materially enhances our consumer and health & wellness verticals. Integration efforts have been positive and productive, and we are looking forward to further expanding our client offering and reach with this team. We see numerous opportunities to expand our capabilities and continue to grow our market share. While new market realities point to a difficult period ahead for our industry, we see no reason to retrench on our commitment of fully supporting growth companies and investors. Regardless of the market backdrop, we are driven to identify the clients who need us most and do everything we can to support them. Canaccord Genuity Group Inc. Fiscal 2022 Annual Report12 ESG: OUR COMMITMENT TO SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY We understand that increasing the long-term value of our Company requires us to advance our strategic priorities in ways that provide benefits for both business and our communities. Consistent with our commitment to serving the dynamic growth sectors of the global economy, we are also supporting growing numbers of innovators and investors in advancing their ESG priorities. $16 billion aggregate value of our underwriting and advisory engagements in sustainability-linked transactions 59 sustainability-linked transactions completed in fiscal 2022 3 dedicated ESG portfolios designed to cater to a range of objectives and attitudes toward investment risk Committed to responsible investment as a signatory to the UN’s Principles for Responsible Investment (PRI) CG Principles of Corporate Social Responsibility and Sustainability OPERATE WITH INTEGRITY RESPECT PEOPLE AND COMMUNITIES RESPECT OUR PLANET Learn more at www.cgf.com/investor-relations. Fiscal 2022 Annual Report Canaccord Genuity Group Inc.Fiscal 2022 MD&A 13 Contents 14 19 20 24 29 31 33 33 36 40 42 45 47 48 Management’s Discussion And Analysis Market Environment During Fiscal 2022 Core Business Performance Highlights For Fiscal 2022 Financial Overview Quarterly Financial Information Fourth Quarter Fiscal 2022 Performance Business Segment Results – Year Ended March 31, 2022 Compared With The Year Ended March 31, 2021 Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate And Other Segment Financial Condition Outstanding Share Data Related Party Transactions Critical Accounting Policies And Estimates 52 52 52 52 53 57 57 57 58 61 106 112 114 116 Financial Instruments Adoption Of New And Revised Standards Future Changes In Accounting Policies And Estimates Disclosure Controls And Procedures And Internal Control Over Financial Reporting Risk Management Dividend Policy Dividend Declaration Additional Information Independent Auditor’s Report Consolidated Financial Statements And Notes Supplemental Information Glossary Corporate Governance Board of Directors CAUTION REGARDING FORWARD-LOOKING STATEMENTS This document contains “forward-looking statements” (as defined under applicable Canadian securities laws). These statements relate to future events or future performance and reflect management’s expectations, beliefs, plans, estimates, intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward looking statements include, but are not limited to, statements about the Company’s objectives, strategies, business prospects and opportunities; the execution of management’s plans and potential outcomes; the impacts of global events and economic conditions on the Company’s operations and business; and the outlook for the Company’s business and for the global economy. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “target”, “intend”, “could” or the negative of these terms or other comparable terminology. Disclosure identified as an “Outlook” including the section entitled “Fiscal 2023 Outlook” contains forward-looking information. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement. These factors include, but are not limited to, market and general economic conditions; the dynamic nature of the financial services industry; the continued impacts of the coronavirus (COVID-19) pandemic on the Company’s business operations and on the global economy; and the impact of the war in Ukraine and the resulting humanitarian crisis on the global economy, in particular, its effect on global oil, commodity and agricultural markets. Additional risks and factors that could cause actual results to differ materially from expectations are described in the Company’s interim condensed and annual consolidated financial statements and the Company’s Annual Report and Annual Information Form (AIF) filed on www.sedar.com as well as the factors discussed in the sections entitled “Risk Management” in this Management’s Discussion and Analysis (MD&A) and “Risk Factors” in the AIF, which include market, liquidity, credit, operational, legal, cyber and regulatory risks. Material factors or assumptions that were used by the Company to develop the forward-looking information contained in this document include, but are not limited to, those set out in the fiscal 2023 Outlook section in this MD&A and those discussed from time to time in the Company’s interim condensed and annual consolidated financial statements and its Annual report and AIF filed on www.sedar.com. Readers are cautioned that the preceding lists of material factors and assumptions are not exhaustive. Although the forward-looking information contained in this document is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward- looking statements contained in this document are made as of the date of this document and should not be relied upon as representing the Company’s views as of any date subsequent to the date of this document. Certain statements included in this MD&A may be considered a “financial outlook” for the purposes of applicable Canadian securities laws. The financial outlook may not appropriate for purposes other than this MD&A. Except as may be required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking information, whether as a result of new information, further developments or otherwise. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 14 Management’s Discussion and Analysis Fiscal year 2022 ended March 31, 2022 – this document is dated June 2, 2022 The following discussion of Canaccord Genuity Group Inc.’s financial condition, financial performance and cash flows is provided to enable a reader to assess material changes in the financial condition, financial performance and cash flows for the fiscal year ended March 31, 2022 compared to the preceding fiscal year, with an emphasis on the most recent year. Unless otherwise indicated or the context otherwise requires, the “Company” or “Canaccord Genuity Group” refers to Canaccord Genuity Group Inc. and its direct and indirect subsidiaries. The Management’s Discussion and Analysis (MD&A) should be read in conjunction with the audited consolidated financial statements for the years ended March 31, 2022 and March 31, 2021 beginning on page 61 of this report. The Company’s financial information is expressed in Canadian dollars unless otherwise specified. The Company’s consolidated financial statements for the years ended March 31, 2022 and March 31, 2021 are prepared in accordance with International Financial Reporting Standards (IFRS). Non-IFRS Measures Certain non-IFRS measures, non-IFRS ratios and supplementary financial measures are utilized by the Company as measures of financial performance. Non-IFRS measures, non-IFRS ratios and supplementary financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Management believes that these non-IFRS measures, non-IFRS ratios and supplementary financial measures allow for a better evaluation of the operating performance of the Company’s business and facilitate meaningful comparison of results in the current period to those in prior periods and future periods. Non-IFRS measures presented in this MD&A include certain figures from our Statement of Operations that are adjusted to exclude significant items. Although figures that exclude significant items provide useful information by excluding certain items that may not be indicative of the Company’s core operating results, a limitation of utilizing these figures that exclude significant items is that the IFRS accounting effects of these items do in fact reflect the underlying financial results of the Company’s business. Accordingly, these effects should not be ignored in evaluating and analyzing the Company’s financial results. Therefore, management believes that the Company’s IFRS measures of financial performance and the respective non-IFRS measures should be considered together. Non-IFRS Measures (Adjusted Figures) Figures that exclude significant items provide useful information by excluding certain items that may not be indicative of the Company’s core operating results. Financial statement items that exclude significant items are non-IFRS measures. To calculate these non-IFRS financial statement items we exclude certain items from our financial results prepared in accordance with IFRS. The items which have been excluded are referred to herein as significant items. The following is a description of the composition of the non-IFRS measures used in this MD&A (note that some significant items excluded may not be applicable to the calculation of the non-IFRS measure for each comparative period): (i) revenue excluding significant items, which is composed of revenue per IFRS less any applicable fair value adjustments on certain illiquid or restricted marketable securities as recorded for IFRS reporting purposes but which are excluded for management reporting purposes and are not used by management to assess operating performance; (ii) expenses excluding significant items, which are composed of expenses per IFRS less any applicable amortization of intangible assets acquired in connection with a business combination, acquisition-related expense items, which includes costs recognized in relation to both prospective and completed acquisitions, certain incentive-based costs related to the acquisitions and growth initiatives of CGWM UK and US Capital Markets, costs associated with the redemption of convertible debentures, costs associated with the reorganization of CGWM UK, and fair value adjustments to the derivative liability component of non-controlling interests in CGWM UK; (iii) overhead expenses excluding significant items which are calculated as expenses excluding significant items less compensation expense; (iv) net income before taxes and after intersegment allocations and excluding significant items, which is composed of revenue excluding significant items less expenses excluding significant items; (v) income taxes (adjusted), which is composed of income taxes per IFRS adjusted to reflect the associated tax effect of the excluded significant items; (vi) net income excluding significant items, which is composed of net income before income taxes excluding significant items less income taxes (adjusted); (vii) non-controlling interests (adjusted), which is composed of the non-controlling interests per IFRS less the amortization of the equity component of the non-controlling interests in CGWM UK; and (viii) net income attributable to common shareholders excluding significant items, which is composed of net income excluding significant items less non-controlling interests (adjusted) and preferred share dividends paid on the Series A and Series C Preferred Shares. Other items which have been excluded as significant items in prior periods for purposes of determining expenses, net income before taxes and net income attributable to common shareholders all excluding significant items include impairment of goodwill and other assets, gains or losses related to business disposals including recognition of realized translation gains on the disposal of foreign operations, certain accounting charges related to the change in the Company’s long-term incentive plan (LTIP) as recorded with effect on March 31, 2018, and loss related to the extinguishment of convertible debentures as recorded for accounting purposes. A reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures from the audited consolidated financial statements for fiscal 2022 can be found in the table entitled “Selected Financial Information Excluding Significant Items” on page 25. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 15 Non-IFRS Ratios Non-IFRS ratios are calculated using the non-IFRS measures defined above. For the periods presented herein, we have used the following non-IFRS ratios: (i) total expenses excluding significant items as a percentage of revenue excluding significant items which is calculated by dividing expenses excluding significant items by revenue excluding significant items; (ii) earnings per common share excluding significant items which is calculated by dividing net income attributable to common shareholders excluding significant items by the weighted average number of common shares outstanding (basic); (iii) diluted earnings per common share excluding significant items which is calculated by dividing net income attributable to common shareholders excluding significant items by the weighted average number of common shares outstanding (diluted), and (iv) pre-tax profit margin which is calculated by dividing net income before taxes excluding significant items by revenue excluding significant items. Supplementary Financial Measures Client assets is a supplementary financial measure that does not have any definition prescribed under IFRS and does not meet the definition of a non-IFRS measure or non-IFRS ratio. Client assets, which include both assets under management (AUM) and assets under administration (AUA), is a measure that is common to the wealth management business. Client assets is the market value of client assets managed and administered by the Company from which the Company earns commissions and fees. This measure includes funds held in client accounts as well as the aggregate market value of long and short security positions. The Company’s method of calculating client assets may differ from the methods used by other companies and therefore these measures may not be comparable to other companies. Management uses these measures to assess the operational performance of the Canaccord Genuity Wealth Management business segment. Business Overview Through its principal subsidiaries, Canaccord Genuity Group Inc. is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. Canaccord Genuity Group has wealth management offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. Canaccord Genuity Capital Markets, the Company’s international capital markets division, operates in North America, the UK & Europe, Asia, Australia, the Bahamas and the Middle East. Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX. Canaccord Genuity Series A Preferred Shares are listed on the TSX under the symbol CF.PR.A. Canaccord Genuity Series C Preferred Shares are listed on the TSX under the symbol CF.PR.C. ABOUT CANACCORD GENUITY GROUP INC.’S OPERATIONS Canaccord Genuity Group Inc.’s operations are divided into two business segments: Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management. Together, these operations offer a wide range of complementary investment banking services, investment products and brokerage services to the Company’s institutional, corporate and private clients. The Company’s administrative segment is referred to as Corporate and Other. Canaccord Genuity Capital Markets Canaccord Genuity Capital Markets is the global capital markets division of Canaccord Genuity Group Inc. (TSX: CF), offering institutional and corporate clients idea-driven investment banking, merger and acquisition, research, sales and trading services with capabilities in North America, the UK & Europe, Asia, Australia, and the Middle East. We are committed to providing valued services to our clients throughout the entire lifecycle of their business and operating as a gold standard independent investment bank – expansive in resources and reach, but targeted in industry expertise, market focus and individual client attention. Canaccord Genuity Wealth Management Canaccord Genuity Wealth Management operations provide comprehensive wealth management solutions, brokerage and financial planning services to individual investors, private clients, charities and intermediaries through a full suite of services tailored to the needs of clients in each of its markets. The Company’s wealth management division has Investment Advisors (IAs) and professionals in Canada, the UK, Jersey, Guernsey, the Isle of Man and Australia. Corporate and Other Canaccord Genuity Group’s administrative segment, described as Corporate and Other, includes revenues and expenses associated with providing correspondent brokerage services, bank and other interest, and activities not specifically allocable to either the Canaccord Genuity Capital Markets or Canaccord Genuity Wealth Management divisions. Also included in this segment are the Company’s operations and support services, which are responsible for front- and back-office information technology systems, compliance and risk management, operations, legal, finance, and other administrative functions of Canaccord Genuity Group Inc. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 16 Management’s Discussion and Analysis BUSINESS ACTIVITY Our business is affected by the overall condition of the worldwide debt and equity markets. The timing of revenue recognition can also materially affect the Company’s quarterly results. The majority of revenue from underwriting and advisory transactions is recorded when the transaction has closed and, as a result, quarterly results can also be affected by the timing for the recognition of such transactions in our capital markets business. The Company has taken steps to reduce its exposure to variances in the equity markets and local economies by diversifying its industry sector coverage and its international scope. To improve recurring revenue streams and offset the inherent volatility of the capital markets business, the Company has taken steps to increase the scale of its global wealth management operations. Historically, the Company’s diversification across major financial centres has allowed us to benefit from strong equity markets in certain regions and improve our capability for identifying and servicing opportunities in regional centres and across our core focus sectors. The following chart depicts firmwide revenue contributions by geography for the fiscal year ended March 31, 2022: Firmwide revenue by geography Australia 12% UK, Europe & Crown Dependencies 21% Canada 34% U.S. 33% IMPACT OF CHANGES IN CAPITAL MARKETS ACTIVITY As a brokerage firm, the Company derives its revenue primarily from sales commissions, underwriting and advisory fees, and trading activity. As a result, the Company’s business is materially affected by conditions in the financial marketplace and the economic environment, primarily in North America and Europe, and to some degree Asia and Australia. Canaccord Genuity Group’s long- term international business development initiatives over the past several years have laid a solid foundation for revenue diversification. A disciplined capital strategy allows the Company to remain competitive in today’s changing financial landscape. During fiscal 2022, the Company’s capital markets activities were focused on the following sectors: Healthcare & Life Sciences (which include cannabis-related companies), Technology, Transportation & Industrials, Financials, Metals & Mining, Energy, Diversified, Consumer & Retail, Real Estate and Sustainability. Coverage of these sectors included investment banking, mergers and acquisitions (M&A) and advisory services, and institutional equity activities, such as sales, trading and research. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT BUSINESS SEGMENT Management’s Discussion and Analysis 17 Canaccord Genuity Group Inc. (TSX: CF, CF.PR.A, CF.PR.C) CANACCORD GENUITY CAPITAL MARKETS CANACCORD GENUITY WEALTH MANAGEMENT CORPORATE & OTHER Canaccord Genuity Capital Markets (Canada) Canaccord Genuity Wealth Management (North America) Corporate & Other Canaccord Genuity Capital Markets (US) Canaccord Genuity Capital Markets (UK & Europe) Canaccord Genuity Wealth Management (UK & Crown Dependencies) Canaccord Genuity Capital Markets (Australia) Canaccord Genuity Wealth Management (Australia) Operating entities included in the business units described above are: Canaccord Genuity Capital Markets (Canada) Canaccord Genuity Capital Markets (UK & Europe) Canaccord Genuity Corp. (capital markets division) Canaccord Genuity Limited JitneyTrade Inc. Canaccord Genuity Asia (Beijing) Limited Canaccord Genuity Emerging Markets Ltd. Canaccord Genuity Wealth Management (North America) Canaccord Genuity Corp. (wealth management division) Canaccord Genuity Wealth Management (USA) Inc. Canaccord Genuity Wealth & Estate Planning Services Ltd. Corporate and Other Canaccord Genuity Corp. (corporate & other division) Canaccord Genuity Group Inc. Finlogik Inc. Canaccord Genuity Capital Markets (US) Canaccord Genuity LLC. Canaccord Genuity Dubai Ltd. Canaccord Genuity SAS Canaccord Genuity Wealth Management (UK & Crown Dependencies) Canaccord Genuity Wealth Limited CG Wealth Planning Ltd. Canaccord Genuity Financial Planning Limited Adam & Company Investment Management Limited Hargreave Hale Limited Canaccord Genuity Wealth (International) Limited Canaccord Genuity Wealth Group Holdings (Jersey) Limited Canaccord Genuity Capital Markets (Australia) Canaccord Genuity (Australia) Limited Canaccord Genuity (Hong Kong) Limited Canaccord Genuity Petsky Prunier LLC Canaccord Genuity Wealth Management (Australia) CG Sawaya, LLC Canaccord Genuity Financial Limited 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 18 Management’s Discussion and Analysis On July 29, 2021, HPS Investment Partners, LLC, on behalf of certain investment accounts and funds it manages (collectively, “HPS”), completed its investment in the Company’s UK wealth management UK & Crown Dependencies division. HPS acquired convertible preferred shares (the “Convertible Preferred Shares”) in the amount of £125.0 million (C$218.0 million) issued by the Company’s subsidiary, Canaccord Genuity Wealth Group Holdings (Jersey) Limited (CGWM UK). A portion of the proceeds was used to repay the senior secured first lien term loan facility of £69.0 million obtained on April 9, 2021 which was used to partially fund the redemption of the Company’s 6.25% convertible unsecured senior subordinated debentures at that time. On an as converted basis the Convertible Preferred Shares represented 21.93% of the outstanding equity interest in CGWM UK as of March 31, 2022. Cumulative dividends, when, as and if declared by the board of directors of CGWM UK, are payable by CGWM UK on the Convertible Preferred Shares at the greater of an annual 7.5% coupon and the proportionate share that such shares would receive, on an as converted basis, in respect of any dividends declared and paid in respect of ordinary shares of CGWM UK. No dividends may be paid on any other class of shares of CGWM UK unless and until the cumulative dividends on the Convertible Preferred Shares are declared and paid. If a liquidity event occurs before the end of five years the Convertible Preferred Shares will carry a liquidation preference equal to the greatest of (i) the amount of principal plus accrued but unpaid dividends attributable to the Convertible Preferred Shares had they been issued five years prior, (ii) an amount equal to 1.5 multiplied by the issue price of the Convertible Preferred Shares (less any previously paid dividends), or (iii) the amount which the holders of the Convertible Preferred Shares would receive on an as converted basis. If a liquidity event occurs on or after the fifth anniversary then the Convertible Preferred Shares will carry a liquidation preference equal to the greater of (i) the amount of principal plus accrued but unpaid dividends attributable to the Convertible Preferred Shares or (ii) the amount which the holders of the Convertible Preferred Shares would receive on an as converted basis. If a liquidity event has not occurred after five years, then CGWM UK has an option to acquire the Convertible Preferred Shares at the greater of the applicable liquidation preference amount and the amount which would provide the holders of the Convertible Preferred Shares with an internal rate of return of 11.5% (including all previously paid dividends). After the fifth anniversary the holders of the Convertible Preferred Shares have certain rights in respect of initiating a liquidity event. The Convertible Preferred Shares carry customary minority rights in respect of CGWM UK governance and financial matters, including representation on the CGWM UK board of directors. In connection with the issuance of the Convertible Preferred Shares, CGWM UK provided for the purchase of certain equity instruments in CGWM UK by management and employees of CGWM UK which reflect an approximate 4.6% equity-equivalent interest in CGWM UK. As of March 31, 2022, £24.6 million (CAD$42.7 million) of such equity instruments in CGWM UK were purchased in connection with this equity program. Included in these equity instruments of CGWM UK were preferred shares with the same economic attributes as the Convertible Preferred Shares (the “Preference Shares”). Preference Shares in the amount of £7.5 million (C$13.0 million) were issued to management as of March 31, 2022. The other equity interests purchased by management and employees of CGWM UK are ordinary shares of CGWM UK with certain restrictions on transfer and limited governance rights. In connection with the purchase of the ordinary shares, a limited recourse loan of £4.0 million (C$6.9 million) as well as certain full recourse employee loans were made. Subject to certain minimum thresholds a management incentive plan has been implemented which will provide for certain payments if a liquidity event occurs within six years or after six years if a liquidity event has not occurred and the Convertible Preferred Shares are no longer outstanding. On January 3, 2022, the Australia operations through the issuance of partly paid shares reorganized its share structure and as a result the Company’s ownership in Canaccord Financial Group (Australia) Pty Ltd. (“CFGA”) decreased from 80% to 65%. For accounting purposes, the Company’s ownership interest changed from 85% to 67% commencing in the fourth quarter of fiscal 2022 because of shares held in an employee trust controlled by CFGA. Operating results of Jitneytrade Inc. and Finlogik Inc. (collectively referred to as “Jitneytrade”) since the closing date of June 6, 2018 are included as part of Canaccord Genuity Capital Markets Canada. In addition, operating results of Petsky Prunier LLC (“Petsky Prunier”) since the closing date of February 13, 2019 and operating results of Sawaya Partners (“Sawaya”) since the closing date of December 31, 2021 are included as part of Canaccord Genuity Capital Markets US. Included as part of CGWM UK are the operating results of McCarthy Taylor Limited (renamed as CG McCarthy Taylor Limited) (“McCarthy Taylor”) since the closing date of January 29, 2019, the operating results of Thomas Miller Wealth Management Limited (renamed as CG Wealth Planning Limited) (“Thomas Miller”) since the closing date of May 1, 2019, and the private client investment management business of Adam & Company (including the acquisition of the entire issued capital of Adam & Company Investment Management Limited) since the closing date of October 1, 2021. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 19 Market Environment During Fiscal 2022 Economic backdrop During our 2022 fiscal year, government transfers and continued improvements in employment and wages supported economic activity despite successive waves of COVID-19 infections. Meanwhile, commodity supply was restrained owing to muted capex growth from commodity producers, production and transportation bottlenecks, depleted inventories, and the war in Ukraine. The ensuing disconnect between supply and demand for manufactured goods and commodities led to a swift increase in producer and consumer prices. Against this backdrop several central banks, including the Federal Reserve, began hiking policy rates while also ending bond buying programs. As a result, bond yields rebounded from pandemic lows and the US dollar appreciated versus major currencies, most notably the Euro and the Yen, with central banks remaining highly accommodative despite inflation fears. Over the fiscal 2022 12-month period, the S&P 500, the S&P/TSX, and the MSCI World Index returned 15.6%, 20.2%, and 7.7% respectively. Commodity prices surged 64.6% over the same period while US Treasury bonds declined by 2.8% as investors discounted interest rate increases against a backdrop of rapidly rising inflation. Investment banking and advisory Despite increased macro and geopolitical uncertainties over the course of fiscal 2022, it was another active year for investment banking and advisory activities. A key driver of these activities was the ongoing M&A cycle which was driven by high levels of cash on corporate balance sheets and at private equity firms. More recently, M&A volumes will face challenges compared to last year’s strong levels as rising corporate bond yields have increased the cost of debt for levered transactions. Index Value at End of Fiscal Quarter S&P IFCI Global Small Cap S&P IFCI Global Large Cap Q4/21 Q1/22 Q2/22 2021-03-31 (Y/Y) 2021-06-30 (Y/Y) 2021-09-30 (Y/Y) 2021-12-31 320.7 67.1% 296.7 52.9% 355.0 50.4% 307.5 36.2% 340.0 31.6% 279.2 14.8% Q3/22 Q4/22 (Y/Y) (Q/Q) (Y/Y) 2022-03-31 311.7 -2.8% -8.3% 254.9 -14.1% -7.3% 339.8 11.7% 274.8 -5.8% Our capital-raising and advisory activities are primarily focused on small- and mid-capitalization companies in specific growth sectors of the global economy. These sectors may experience growth or downturns independent of broader economic and market conditions. As well, government regulation can also have an impact on capital formation for smaller companies. Volatility in the business environment for these industries, or in the market for securities of companies within these industries in the regions where we operate could adversely affect our financial results and ultimately, the market value of our shares. Advisory revenues are primarily dependent on the successful completion of merger, acquisition and restructuring mandates. Trading Over the course of fiscal 2022, trading volumes in our core focus segments decreased modestly when compared to the previous fiscal year. A key driver of relatively sustained trading volumes has been the marked increase in bond yields and commodity prices, which has prompted many investors to rebalance portfolios. Average Value During Fiscal Quarter/Year Russell 2000 S&P 400 Mid Cap FTSE 100 MSCI EU Mid Cap S&P/TSX Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 FY22 31-Mar-21 (Y/Y) 30-Jun-21 (Y/Y) 30-Sep-21 (Y/Y) 31-Dec-21 (Y/Y) 31-Mar-22 (Y/Y) (Q/Q) 31-Mar-22 (Y/Y) 2195.5 45.6% 2498.9 33.5% 6664.3 -3.0% 1257.7 14.8% 2208.5 30.3% 2716.6 33.5% 7192.7 15.6% 1365.7 22.4% 18256.2 12.7% 19574.5 32.1% 20381.7 25.6% 21050.8 24.9% 21308.0 16.7% 1.2% 20577.0 24.5% 2056.8 -6.3% -9.7% 2670.8 6.9% -4.4% 7443.0 11.7% 2.8% 4.5% -6.0% 1314.8 2263.9 71.6% 2705.3 62.6% 7008.1 17.2% 1342.8 37.1% 2232.6 47.8% 2695.9 44.1% 7083.9 16.9% 1405.4 30.3% 2276.9 28.9% 2792.7 31.9% 7240.6 16.8% 1398.1 21.6% Source: Refinitiv Datastream, Canaccord Genuity estimates 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 20 Management’s Discussion and Analysis Global wealth management Despite a marked decline in initial public offerings and the heightened market volatility in the second half of fiscal 2022, broad equity market gains and the outperformance of Canadian equities supported the value of client assets in our wealth management businesses. Q4/21 Change (Q/Q) 6.2% 8.1% 4.0% 4.7% 13.5% -6.7% 1.4% 5.6% Q1/22 Change (Q/Q) 8.5% 8.5% 3.9% 7.5% 15.7% 3.8% 1.3% 0.2% Q2/22 Change (Q/Q) 0.6% 0.2% -6.6% -1.0% 5.2% -0.1% -2.2% 0.1% Q3/22 Change (Q/Q) 11.0% 6.5% -0.8% 6.8% 1.5% 0.9% 0.3% 2.2% Q4/22 Change (Q/Q) -4.6% 3.8% -6.1% -5.3% 33.1% -7.0% 1.1% 3.8% Fiscal 2022 Change (Y/Y) 15.6% 20.2% -9.6% 7.7% 64.6% -2.8% 0.5% 6.5% Total Return (excl. currencies) S&P 500 S&P/TSX MSCI EMERGING MARKETS MSCI WORLD S&P GS COMMODITY INDEX US 10-YEAR T-BONDS CAD/USD CAD/EUR Source: Refinitiv Datastream, Canaccord Genuity estimates Fiscal 2023 Outlook The run-up in inflation during the second half of fiscal 2022 led several central banks to end their bond-buying programs and initiate a monetary tightening cycle. Though markets appear to have discounted several interest rate increases by central banks, uncertainties remain as to whether the rate hikes will translate into a soft or hard economic landing. Our outlook for fiscal 2023 calls for a downshift in global economic activity and earnings growth. As well, factors such as tight labor markets, pent-up demand for services, and excess savings built by consumers through the pandemic will impact 2023 activity levels. Against this backdrop, we expect that equities, bonds, and commodities could remain volatile during the first half of fiscal 2023. Heightened market volatility and a more uncertain economic outlook have the potential to reduce capital raising activity levels in our capital markets and wealth management operations. Activity levels in our trading operations will increase as we help clients navigate periods of market volatility. We continue to enjoy strong levels of activity in our M&A practice, and we expect that with tightening labour markets and narrowing profit margins current activity levels should continue. Core Business Performance Highlights for Fiscal 2022 The following charts depict revenue, pre-tax net income and earnings per share contributions from our primary business segments for the fiscal year ended March 31, 2022: Revenue by business segment Pre-tax net income contribu(cid:2)on by business segment Earnings per share contribu(cid:2)on by business segment Wealth Management 36% Wealth Management 31% Wealth Management, $0.79 Capital Markets 64% Capital Markets 69% Capital Markets, $1.72 CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 21 CANACCORD GENUITY WEALTH MANAGEMENT Globally, Canaccord Genuity Wealth Management generated revenue of $720.4 million during fiscal 2022 and, excluding significant items, recorded net income before taxes of $148.5 million(1). • Canaccord Genuity Wealth Management (North America) generated $335.3 million in revenue and, after intersegment allocations, recorded net income before taxes of $56.3 million. • Wealth management operations in the UK & Crown Dependencies generated $310.5 million in revenue and, after intersegment allocations and excluding significant items, recorded net income before taxes of $84.8 million in fiscal 2022(1). • Wealth management operations in Australia generated revenue of $74.6 million and, after intersegment allocations and excluding significant items, recorded net income before taxes of $7.3 million in fiscal 2022(1). Firmwide client assets were $96.1 billion at March 31, 2022 representing an increase of $7.3 billion or 8.2% from $88.8 billion at March 31, 2021(1) client assets across the individual business units as at March 31, 2022 were as follows: • $37.9 billion in North America, an increase of $5.6 billion or 17.5% from March 31, 2021(1) • $52.8 billion (£32.1 billion) in the UK & Crown Dependencies, an increase of $0.5 billion (£1.9 billion) or 1.0% from $52.3 billion (£30.2 billion) at the end of the previous fiscal year(1) • $5.4 billion in Australia held in our investment management platform, an increase of $1.1 billion or 26.6% from March 31, 2021(1) CANACCORD GENUITY CAPITAL MARKETS Globally, Canaccord Genuity Capital Markets generated revenue of $1.3 billion during fiscal 2022, and, excluding significant items, recorded net income before taxes of $324.6 million(1) • Canaccord Genuity Capital Markets led 329 transactions globally, each over $1.5 million, to raise total proceeds of $13.5 billion for mid-market companies in our key focus sectors. • Canaccord Genuity Capital Markets participated in a total of 596 investment banking transactions globally, raising total proceeds of $61.2 billion. The following table depicts revenue contributions from our capital markets business activities as a percentage of total capital markets revenue for the year ended March 31, 2022: Revenue by activity as a percentage of Canaccord Genuity Capital Markets total revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Canaccord Genuity Capital Markets (total) Further detail is provided in the Business Segment results beginning on page 33. For the years ended March 31 2022 13.4% 35.5% 37.5% 12.1% 0.8% 0.7% 100% 2021 16.2% 49.1% 14.7% 18.7% 0.5% 0.8% 100% 2022/2021 change (2.8) p.p. (13.6) p.p. 22.8 p.p. (6.6) p.p. 0.3 p.p. (0.1) p.p. — (1) See Non-IFRS Measures on page 14. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 22 Management’s Discussion and Analysis SUMMARY OF CORPORATE DEVELOPMENTS DURING FISCAL 2022 On July 29, 2021, HPS Investment Partners, LLC, on behalf of certain investment accounts and funds it manages (collectively, “HPS”), completed its investment in the Company’s UK wealth management division. HPS acquired convertible preferred shares (the “Convertible Preferred Shares”) in the amount of £125.0 million (C$218.0 million) issued by the Company’s subsidiary, Canaccord Genuity Wealth Group Holdings (Jersey) Limited (CGWM UK). On an as converted basis the Convertible Preferred Shares represented 21.93% of the outstanding equity interest in CGWM UK as of March 31, 2022. A portion of the proceeds was used to repay the senior secured first lien term loan facility of £69.0 million which was used to partially fund the redemption of the Company’s 6.25% convertible unsecured senior subordinated debentures on April 9, 2021. In connection with the transaction, CGWM UK has provided for the purchase by management of certain equity instruments in CGWM UK within the context of the transaction value and which will reflect an approximate 4.6% equity-equivalent interest in CGWM UK. A management incentive arrangement has also been implemented which will provide for certain incentives with performance thresholds related to the future growth of CGWM UK. In connection with the reset of the dividend rate applicable to the Cumulative 5-Year Rate Reset First Preferred Shares, Series A of the Company (the “Series A Preferred Shares”) for the five-year period commencing on October 1, 2021, and ending on and including September 30, 2026, the Company did not exercise its right to redeem all or any part of the outstanding Series A Preferred Shares on September 30, 2021. On August 18, 2021, the Company filed a notice to renew the normal course issuer bid (NCIB) to provide the Company with the choice to purchase up to a maximum of 5,342,990 of its common shares during the period from August 21, 2021 to August 20, 2022 through the facilities of the TSX and on alternative trading systems in accordance with the requirements of the TSX. The purpose of the purchase of common shares under the NCIB is to enable the Company to acquire shares for cancellation. The maximum number of shares that may be purchased under the current NCIB represents 5.0% of the Company’s outstanding common shares at the time of the notice. During the year ended March 31, 2022, there were 3,401,116 shares purchased under the NCIB, of which 83,300 shares have not been cancelled as of March 31, 2022. There were also 70,000 shares purchased under the NCIB during the year ended March 31, 2021 and cancelled during the year ended March 31, 2022. On October 1, 2021, the Company announced that CGWM UK had completed the acquisition of the private client investment management business of Adam & Company (including the acquisition of the entire issued capital of Adam & Company Investment Management Limited). This acquisition marks the Company’s entry into Scotland with a leading and well-established franchise and a strong brand. On December 31, 2021, the Company completed its acquisition of Sawaya Partners, a leading M&A advisory firm to the consumer sector based in New York. Sawaya Partners now operates with Canaccord Genuity branding as CG Sawaya LLC recognizing the significant goodwill and awareness of the Sawaya name in the consumer sector. All existing employees of Sawaya Partners will continue with the Company’s US capital markets business. In a substantial issuer bid that commenced on December 22, 2021 and expired on January 27, 2022, the Company made an offer (the “Offer”) to purchase for cancellation up to $100.0 million of its common shares. The Offer was made by way of a “modified Dutch auction”, which allowed shareholders who chose to participate in the offer to individually select the price, within a price range of not less than $15.50 per common share and not more than $16.50 per common share (in increments of $0.10 per common share), at which they were willing to sell their common shares. Upon expiry of the offer, the Company determined that $15.50 was the lowest purchase price that allowed it to purchase the maximum number of common shares properly tendered to the offer, and not properly withdrawn, having an aggregate purchase price of approximately $100.0 million. The Company purchased for cancellation 6,451,612 of its common shares at a purchase price of $15.50 per share. On January 3, 2022, the share structure for our Australia operations was reorganized through the sale of partly paid shares to selected employees of Canaccord Financial Group (Australia) Pty Ltd. (CFGA) and as a result the Company’s ownership in CFGA decreased from 80% to 65%. For accounting purposes, the Company’s ownership interest changed from 85% to 67% commencing in the fourth quarter of fiscal 2022 because of shares held in an employee trust controlled by CFGA. The purpose of the change in the ownership structure was to provide further alignment with our employee base in the Australian region and to provide the business with capital and access to capital for growth. On May 24, 2022, the Company announced that it does not intend to exercise its option to redeem the Series C Preferred Shares on June 30, 2022. The Company has the option to redeem on June 30 every five years, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. On June 1, 2022, the Company announced the reset of the dividend rate on its Series C Preferred Shares. Quarterly cumulative cash dividends, as declared, are paid at an annual rate of 4.993% for the five years ending on and including June 30, 2022. Commencing July 1, 2022 and ending on and including June 30, 2027, quarterly cumulative dividends, if declared, will be paid at an annual rate of 6.837% on the Series C Preferred Shares. The dividend rate will be reset every five years at a rate equal to the five-year Government of Canada yield plus 4.03%. Up until June 15, 2022, holders of the Series C Preferred Shares have the option to convert these shares into Series D Preferred Shares which will carry a quarterly floating rate equal to the three-month Government of Canada treasury bill rate plus 4.03%. The issuance of the Series D Preferred Shares is subject to a certain minimum. On May 31, 2022, the Company announced that through its wealth management business in the UK (“CGWM UK”), it has completed its previously announced acquisition of Punter Southall Wealth (“PSW”), including the intermediary-facing brand Psigma CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 23 from Punter Southall Wealth Group. In connection with completion of the acquisition, CGWM UK added £100 million (C$169.2 million) to its existing bank facility. In addition, HPS Investment Partners, LLC on behalf of investment accounts and funds it manages made an additional investment in CGWM UK through the purchase of a new series of convertible preferred shares of CGWM UK in the amount of £65.3 million (C$110.5 million). Cumulative dividends will be payable by CGWM UK on the additional convertible preferred shares at the greater of an annual 7.5% coupon and the proportionate share that such shares would receive on an as converted basis. The additional convertible preferred shares will also carry customary minority rights in respect of CGWM UK governance and financial matters, a liquidation preference, and call protections. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 24 Management’s Discussion and Analysis FINANCIAL OVERVIEW SELECTED FINANCIAL INFORMATION(1)(2)(7) (C$ thousands, except per share and % amounts, and number of employees) 2022 2021 2020 2022/2021 change For the years ended March 31 Canaccord Genuity Group Inc. (CGGI) Revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Total revenue Expenses Compensation expense Other overhead expenses(3) Acquisition-related costs Restructuring costs(4) Change in derivative fair value Costs associated with redemption of convertible debentures(5) Share of loss (gain) of an associate Total expenses Income before income taxes Net income Net income attributable to CGGI shareholders Net income attributable to non-controlling interests Earnings per common share – basic Earnings per common share – diluted Dividends per common share Dividends per Series A Preferred Share Dividends per Series C Preferred Share Excluding significant items(6) Total revenue Total expenses Income before income taxes Net income Net income attributable to CGGI shareholders Net income attributable to non-controlling interests Diluted earnings per common share Balance sheet data Total assets Total liabilities Non-controlling interests Total shareholders’ equity Number of employees $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 761,843 $ 561,725 493,057 158,978 36,028 34,371 $ 735,239 761,551 197,092 246,801 26,288 40,717 $ 586,884 236,962 206,507 108,834 63,690 20,990 26,604 (199,826) 295,965 (87,823) 9,740 (6,346) 2,046,002 2,007,688 1,223,867 38,314 1,248,184 395,709 9,197 — 8,519 1,227,895 398,693 5,922 — — 5,932 192 4,354 922 738,313 383,527 (124) 1,921 — — 207 1,667,733 1,637,786 1,123,844 378,269 270,565 $ 246,314 $ 24,251 $ 2.50 $ 2.16 $ 0.32 $ 0.9981 $ 1.2482 $ 369,902 269,802 263,786 6,016 2.30 2.04 0.25 0.9712 1.2482 $ $ $ $ $ $ $ $ 100,023 86,554 86,490 64 0.78 0.65 0.20 0.9712 1.2482 2,040,602 $ 1,993,488 1,623,036 $ 1,607,398 386,090 285,887 279,871 6,016 2.48 417,566 $ 305,827 $ 284,069 $ 21,758 $ 2.51 $ $ 1,223,867 $ 1,100,810 123,057 $ 106,323 $ 105,895 $ 428 $ 0.81 $ 7,250,245 $ 7,631,801 5,833,476 $ 6,516,517 8,190 1,178,069 $ 1,107,094 2,356 238,700 $ 2,587 $ 5,956,195 $ 5,027,421 $ 156 928,618 $ 2,308 20,289 (2,984) 3,275 — 8,519 1,578 (730) 29,947 8,367 763 (17,472) 18,235 0.20 0.12 0.07 0.03 — 47,114 15,638 31,476 19,940 4,198 15,742 0.03 (381,556) (683,041) 230,510 70,975 231 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 3.6% (26.2)% 150.2% (35.6)% 37.1% (15.6)% 1.9% 1.7% (0.7)% 55.3% — n.m. 36.2% (79.2)% 1.8% 2.3% 0.3% (6.6)% n.m. 8.7% 5.9% 28.0% 2.8% — 2.4% 1.0% 8.2% 7.0% 1.5% 261.7% 1.2% (5.0)% (10.5)% n.m. 6.4% 9.8% (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) The operating results of the Australian operations have been fully consolidated, and a 15% non-controlling interest has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. The operating results of CGWM UK have been fully consolidated, and excluding the effect of the Convertible Preferred Shares issued by CGWM UK, a 1.6% non-controlling interests has been recognized for the period from August 1, 2021 to December 31, 2021 and 4.3% for the fourth quarter of fiscal 2022 [March 31, 2021 – $nil]. (3) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization of tangible, intangible and right of use assets, and development costs. (4) Restructuring costs for the year ended March 31, 2020 were incurred in connection with CGWM UK, as well as real estate and other integration costs related to the acquisition of Patersons. (5) During the year ended March 31, 2022, the Company entered into a credit agreement for a senior secured first lien term loan facility (“loan facility”) to partially fund the redemption of the convertible debentures. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures for the year ended March 31, 2022. (6) Net income and earnings per common share excluding significant items reflect tax-effected adjustments related to such items. See the Selected Financial Information Excluding Significant Items table below. (7) Data includes the operating results of Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya Partners since December 31, 2021. n.m.: not meaningful (percentages over 300% are indicated as n.m.) CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 25 Selected financial information excluding significant items(1) (C$ thousands, except per share and % amounts) 2022 2021 2020 2022/2021 change For the years ended March 31 Revenue Revenue per IFRS Significant items recorded in Corporate and Other Fair value adjustments on certain illiquid and restricted marketable $ 2,046,002 $ 2,007,688 $ 1,223,867 $ 38,314 1.9% securities Total revenue excluding significant items $ 5,400 $ 14,200 — $ $ 2,040,602 $ 1,993,488 $ 1,223,867 $ (8,800) 47,114 (62.0)% 2.4% Expenses Expenses per IFRS Significant items recorded in Canaccord Genuity Capital Markets Amortization of intangible assets Incentive based costs related to acquisitions(2) Acquisition-related costs Significant items recorded in Canaccord Genuity Wealth Management Amortization of intangible assets Acquisition-related costs Incentive based costs related to acquisitions(2) Restructuring costs Costs associated with reorganization of CGWM UK Significant items recorded in Corporate and Other Costs associated with redemption of convertible debentures(3) Change in derivative liability fair value(4) Total significant items Total expenses excluding significant items Net income before taxes – adjusted Income taxes – adjusted Net income – adjusted Significant items impacting net income attributable to common shareholders Non-controlling interests – IFRS Amortization of equity component of the non-controlling interests in CGWM UK and other adjustment Non-controlling interests (adjusted) Net income attributable to common shareholders excluding significant items Earnings per common share excluding significant items(1) – basic Diluted earnings per common share excluding significant items(1) – diluted $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,667,733 $ 1,637,786 $ 1,123,844 $ 29,947 1.8% 1,843 $ 364 537 $ 2,970 — 4,644 $ $ 9,167 $ — $ $ 1,806 14,629 $ 8,660 $ 3,419 $ — 794 13,087 1,278 4,055 $ $ $ — $ — 5,932 $ 8,519 4,354 — 13,940 (1,930) (1,870) 1,921 $ $ $ — $ — $ — $ 44,697 $ 30,388 $ $ 1,623,036 $ 1,607,398 23,034 $ $ 1,100,810 417,566 $ 111,739 $ 305,827 $ 386,090 100,203 285,887 $ $ $ 123,057 16,734 106,323 $ $ $ $ $ (1,127) 364 (4,107) 1,542 7,382 (636) — 794 1,578 8,519 14,309 15,638 31,476 11,536 19,940 (37.9)% n.m. (88.4)% 11.8% n.m. (15.7)% — n.m. 36.2% n.m. 47.1% 1.0% 8.2% 11.5% 7.0% 24,251 $ 6,016 $ 64 $ 18,235 n.m. 2,493 21,758 $ — 6,016 274,585 $ 270,467 2.92 $ 2.80 2.51 $ 2.48 $ $ $ $ — $ $ 428 2,493 15,742 n.m. 261.7% 96,491 0.98 0.81 $ $ $ 4,118 0.12 0.03 1.5% 4.3% 1.2% (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. (2) Incentive-based costs related to the acquisitions and growth initiatives in the US capital markets and UK & Europe wealth management business. (3) During the year ended March 31, 2022, the Company entered into a credit agreement for a senior secured first lien term loan facility (“loan facility”) to partially fund the redemption of the convertible debentures. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures for the year ended March 31, 2022. (4) Fair value adjustment related to the derivative liability component of the non-controlling interests related to the Convertible Preferred Shares issued by CGWM UK. n.m.: not meaningful (percentages over 300% are indicated as n.m.) IMPACT OF CONVERTIBLE PREFERRED SHARES ON EPS Diluted earnings per common share (“diluted EPS”) is computed using the treasury stock method, giving effect to the exercise of all dilutive elements. The Convertible Preferred Shares issued by CGWM UK are factored into the diluted EPS by adjusting net income attributable to common shareholders of the Company to reflect our proportionate share of CGWM UK’s earnings on an as converted basis if the calculation is dilutive. For the year ended March 31, 2022, the effect of reflecting our proportionate share of CGWM UK’s earnings is anti-dilutive under IFRS for diluted EPS purposes but dilutive for the purpose of determining diluted EPS excluding significant items(1). As such, the diluted EPS under IFRS is computed based on net income attributable to common shareholders less accrued dividends on the Convertible Preferred Shares issued by CGWM UK. Net income attributable to common shareholders excluding significant items(1)reflects the Company’s proportionate share of CGWM UK’s net income excluding significant items(1) on an as converted basis. (1) See Non-IFRS Measures on page 14 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 26 Management’s Discussion and Analysis FOREIGN EXCHANGE Revenues and expenses from our foreign operations are initially recorded in their respective functional currencies and translated into Canadian dollars at exchange rates prevailing during the period. Fluctuations in foreign exchange contributed to certain changes in revenue and expense items in Canadian dollars when compared to the applicable prior periods and should be considered when reviewing the following discussion in respect of our consolidated results as well as the discussion in respect of Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management. GEOGRAPHIES Our Dubai operation is included as part of Canaccord Genuity Capital Markets UK & Europe. For purposes of the discussion provided herein the Canaccord Genuity Capital Markets operations in the UK, Europe and Dubai are referred to as “UK & Europe”. Starting in Q1/20, our Asian based operations, comprising China and Hong Kong, have been combined with our Canadian and Australian capital markets operations to reflect management of these operating units. Also, commencing in Q3/20, our Australian wealth management business, comprising the operating results of Patersons since October 21, 2019 and the wealth management business of Australia previously included as part of Canaccord Genuity Capital Markets Australia, is disclosed as a separate operating business in the discussions below. Comparatives have not been restated. GOODWILL Utilizing management’s estimates for revenue and operating performance, growth rates and other assumptions typically required in connection with discounted cash flow models, the Company determined that there was no impairment in the goodwill associated with any of its wealth management business units in the UK & Crown Dependencies and Australia or its goodwill and indefinite life intangible assets recorded in Canaccord Genuity Capital Markets Canada and US. Notwithstanding this determination as of March 31, 2022, changes or uncertainty in the economic environment may cause this determination to change. If the business climate changes and the Company is unable to achieve its internal forecasts the Company may determine that there has been impairment and the Company may be required to record a goodwill impairment charge in future periods in respect of CGWM UK, Canaccord Genuity Wealth Management Australia, Canaccord Genuity Capital Markets Canada or Canaccord Genuity Capital Markets US. Adverse changes in the key assumptions utilized for purposes of impairment testing for goodwill and indefinite life intangible assets may result in the estimated recoverable amount of some or all of the applicable business units declining below the carrying value with the result that impairment charges may be required. The amount of any impairment charge would affect some or all of the amounts recorded for goodwill and indefinite life intangible assets. Any such impairment charges would be determined after incorporating the effect of any changes in key assumptions including any consequential effects of such changes on estimated operating income and on other factors. In addition, notwithstanding that there may be no change in the performance estimates used by the Company for purposes of determining whether there has been any impairment in its indefinite life intangible asset related to the Genuity brand name, in the event that the Company changes the way in which it uses that asset the Company may be required to record an impairment charge. REVENUE On a consolidated basis, revenue in our capital markets and wealth management businesses is generated through six activities: commissions and fees associated with agency trading and private client wealth management activity, investment banking, advisory fees, principal trading, interest and other. Revenue for fiscal 2022 was $2.0 billion, an increase of 1.9% or $38.3 million from fiscal 2021, with a reduction in capital markets revenue of $9.2 million, which was more than offset by an increase in wealth management revenue of $56.8 million. Revenue in our Canaccord Genuity Capital Markets segment decreased by $9.2 million or 0.7% compared to fiscal 2021. In the US, revenue increased by $76.6 million or 13.0% year over year primarily due to increased advisory revenue which was up by $217.5 million or 218.8%. In Canada, a reduction in investment banking revenue was the main driver for the $102.0 million or 23.0% decrease in overall revenue compared to the prior year. Our Australian operations generated $174.1 million in revenue compared to $182.7 million in fiscal 2021 with the shortfall due to a modest decline in investment banking revenue compared to the exceptionally strong prior year performance. In the UK, total revenue amounted to $120.4 million, $24.8 million or 26.0% higher than the prior year due to a 117.8% growth in advisory revenue to $66.6 million. Revenue from our global wealth management operations increased by $56.8 million or 8.6% compared to fiscal 2021. Our Canadian wealth management operations generated $335.3 million of revenue in fiscal 2022, representing an increase of $11.2 million or 3.5% over the prior year. Revenue in our wealth management operations in the UK & Crown Dependencies increased by $33.2 million or 12.0% compared to the year ended March 31, 2021, due to higher commission and fees revenue during the fiscal year. In addition, $74.6 million of revenue was generated by our Australian wealth management operations, an increase of $12.4 million compared to fiscal 2021, reflecting the continued expansion of these operations through ongoing recruitment. Commissions and fees revenue is primarily generated from private client investment management trading activity and institutional sales and trading. Firmwide revenue generated from commissions and fees increased by $26.6 million or 3.6% from fiscal 2021 to $761.8 million in fiscal 2022. The increase was mainly driven by higher commissions and fees revenue generated in our global wealth management operations. Partially offsetting the increase was a decline of $37.6 million or 17.7% in commissions and fees revenue generated in our capital markets operations compared to fiscal 2021. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 27 Revenue generated from firmwide investment banking activities decreased by $199.8 million or 26.2% to $561.7 million in fiscal 2022, compared to the record $761.6 million in fiscal 2021. All of our core operating regions experienced decreases in investment banking revenue, with the most significant decreases recorded in our Canadian and US capital markets operations. In Canada, our wealth management operations also recorded a decrease in investment banking revenue, declining by $25.6 million or 23.8% to $81.6 million in fiscal 2022 due to lower new issue activity. Advisory fees revenue increased by $296.0 million or 150.2% compared to the prior year to $493.1 million for fiscal 2022. While our US operations recorded the most significant year over year increase of $217.5 million or 218.8%, our Canadian and UK operations also generated increases of $41.5 million or 65.5% and $36.0 million or 117.8%, respectively. Revenue derived from principal trading activities decreased by $87.8 million or 35.6% to $159.0 million for the year ended March 31, 2022, mainly as a result of decreased market volatility and trading activity in our US and Canadian capital markets operations compared to the same period in the prior year reducing opportunities for trading profits. Interest revenue was $36.0 million in fiscal 2022, representing an increase of $9.7 million or 37.1% from the prior year, mostly attributable to our Canadian wealth management operations. Other revenue was $34.4 million, a decrease of $6.3 million or 15.6% from the prior year. Included in other revenue in our Corporate & Other segment was $5.4 million of fair value adjustments on certain illiquid or restricted securities recorded for IFRS reporting purposes. This adjustment is excluded for management reporting purposes as it is not used by management to assess operating performance and is excluded for purposes of determining net income excluding significant items(1). Future changes in the unrealized fair value of the marketable securities as determined under applicable accounting standards may be significant and will be recorded through the consolidated statements of operations. EXPENSES Expenses as a percentage of revenue Compensation expense Other overhead expenses(1) Acquisition-related costs Change in derivative fair value Costs associated with redemption of convertible debentures Share of loss (gain) of an associate Total For the years ended March 31 2022 61.0% 19.4% 0.4% 0.4% 0.3% 0.0% 81.5% 2021 61.2% 19.9% 0.3% 0.0% 0.2% 0.0% 81.6% 2022/2021 change (0.2) p.p. (0.5) p.p. 0.2 p.p. 0.4 p.p. 0.1 p.p. (0.0) p.p. (0.1) p.p. (1) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization and development costs. p.p.: percentage points Total firmwide expenses for fiscal 2022 were $1.7 billion, an increase of $29.9 million or 1.8% compared to fiscal 2021. Excluding significant items(1), total expenses were $1.6 billion, up $15.6 million or 1.0% from fiscal 2021. Total expenses excluding significant items(1) as a percentage of revenue decreased by 1.1 percentage points compared to the year ended March 31, 2021. Compensation expense Compensation expense was $1.2 billion, an increase of $20.3 million or 1.7% from the prior year, which was in line with the increase in incentive-based revenue. Total compensation expense was 61.0% in fiscal 2022, a decrease of 0.2 percentage points from the prior year. Other overhead expenses (C$ thousands, except % amounts) Trading costs Premises and equipment Communication and technology Interest General and administrative Amortization(1) Amortization of right of use assets Development costs Total overhead expenses (1) Includes amortization of intangible assets. See the Selected Financial Information Excluding Significant Items table on page 25. (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. For the years ended March 31 2022 $ 102,824 $ 20,074 73,873 23,598 101,431 27,593 23,894 22,422 2021 122,154 19,948 67,475 28,364 82,310 26,156 25,040 27,246 $ 395,709 $ 398,693 2022/2021 change (15.8)% 0.6% 9.5% (16.8)% 23.2% 5.5% (4.6)% (17.7)% (0.7)% 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 28 Management’s Discussion and Analysis Total overhead expenses were $395.7 million or 0.7% lower in fiscal 2022, with the most significant reductions being in trading costs, interest expense and development costs partially offset by higher communication and technology and general administrative expense. Trading costs decreased by $19.3 million or 15.8% to $102.8 million for the year ended March 31, 2022. The reduction was mostly due to the decrease in trading activity in our US operations. Development costs decreased by $4.8 million or 17.7% largely due to lower costs in our US capital markets and UK & Crown Dependencies wealth management operations. Interest expense also decreased by $4.8 million or 16.8% primarily as a result of the redemption of the 6.25% convertible unsecured senior subordinated debentures on April 9, 2021 which resulted in lower interest expense in our Corporate & Other segment, partially offset by higher interest expense in our CGWM UK operations due to an additional bank loan obtained in connection with the acquisition of Adam & Company. General and administrative expense, which includes reserves, promotion and travel expense, office expense, professional fees and donations, was up by $19.1 million or 23.2% due to higher promotion and travel expense as activity levels increased following the easing of COVID-19 restrictions. Amortization expense also increased by $1.4 million or 5.5% mainly due to the amortization of intangible assets in connection with the acquisitions of Adam & Company and Sawaya completed during the fiscal year. There were acquisition-related costs of $9.2 million recorded for the year ended March 31, 2022, comprised of professional fees related to the acquisitions of Sawaya and Adam & Company, as well as the acquisition of Punter Southwall Wealth Limited completed on May 31, 2022. There were acquisition-related costs of $5.5 million recorded for the year ended March 31, 2021 related to re-measurement of the contingent consideration for the acquisitions of Jitneytrade and Thomas Miller, as well as acquisition-related costs of $0.4 million incurred in our UK & Crown Dependencies wealth management operations. In order to partially fund the redemption of the 6.25% convertible unsecured senior subordinated debentures and pursuant to the terms of the commitment letter entered into with investment funds and accounts managed or advised by HPS on March 18, 2021, the Company entered into a credit agreement on April 6, 2021 with the lenders, Lucid Agency Services Limited as administrative agent and Lucid Trustee Services Limited as security agent for a senior secured first lien term loan facility (“loan facility”) in an aggregate principal amount of £69.0 million. This loan was repaid from the proceeds of the issuance of the Convertible Preferred Shares by CGWM UK to investment funds and accounts managed by HPS. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures of $5.9 million for year ended March 31, 2022. INCOME TAX The effective tax rate for fiscal 2022 was 28.5% compared to the effective tax rate of 27.1% in the prior year. Increased profitability in higher tax rate jurisdictions such as the US in the current fiscal year and the impact of certain non-deductible expenses contributed to the increase in the effective tax rate, when compared to the year ended March 31, 2021. NET INCOME Net income for fiscal 2022 was $270.6 million compared to net income of $269.8 million in fiscal 2021, an increase of $0.8 million or 0.3%. Net income attributable to common shareholders was $236.8 million for fiscal 2022 compared to $254.4 million for fiscal 2021. Diluted earnings per common share was $2.16 in fiscal 2022 compared to earnings per common share of $2.04 in the prior fiscal year. Excluding significant items(1), net income for fiscal 2022 was $305.8 million and net income attributable to common shareholders was $274.6 million, compared to net income of $285.9 million and net income attributable to common shareholders of $270.5 million in fiscal 2021. Diluted earnings per share excluding significant items(1) was $2.51 for fiscal 2022 compared to $2.48 for the prior year. (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 29 Quarterly Financial Information(1)(2) The following table provides selected quarterly financial information for the eight most recently completed financial quarters ended March 31, 2022. This information is unaudited but reflects all adjustments of a recurring nature that are, in the opinion of management, necessary to present a fair statement of the results of operations for the periods presented. Quarter-to-quarter comparisons of financial results are not necessarily meaningful and should not be relied upon as an indication of future performance. (C$ thousands, except per share amounts) Revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Total revenue Total expenses Net income before income taxes Net income Earnings per common share – basic Earnings per common share – diluted Excluding significant items(3) Net income Earnings per common share – basic Earnings per common share – diluted Q4 Q3 Fiscal 2022 Q1 Q2 Q4 Q3 Fiscal 2021 Q1 Q2 $ 196,976 $ 197,009 $ 185,105 $ 182,753 195,638 77,994 52,648 7,667 2,131 108,801 122,353 41,960 10,264 19,439 106,261 139,413 30,390 8,458 5,534 151,025 153,297 33,980 9,639 7,267 499,793 403,245 552,217 457,234 475,161 388,124 518,831 419,130 $ 214,476 305,939 66,761 87,830 7,487 24,033 706,526 518,810 $ 184,186 213,419 72,004 51,113 5,791 6,564 533,077 433,803 $ 167,575 131,625 37,281 42,746 6,005 5,125 390,357 344,499 $ 169,002 110,568 21,046 65,112 7,005 4,995 377,728 340,674 96,548 68,995 $ 94,983 66,732 $ 87,037 61,785 $ 99,701 73,053 187,716 $ 139,394 0.62 $ 0.59 $ 0.56 $ 0.72 0.53 $ 0.52 $ 0.49 $ 0.63 $ $ 1.07 0.93 66,822 $ 84,632 $ 69,719 $ 84,654 $ 137,128 0.62 $ 0.80 $ 0.66 $ 0.84 0.52 $ 0.69 $ 0.58 $ 0.73 $ $ 1.38 1.20 99,274 68,451 0.67 0.54 78,971 0.78 0.62 $ $ $ $ $ $ 45,858 32,993 0.30 0.25 36,891 0.34 0.28 $ $ $ $ $ $ 37,054 28,964 0.26 0.22 32,897 0.30 0.25 $ $ $ $ $ $ $ $ $ $ $ $ (1) Data is in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 15% has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. (3) Figures excluding significant items are non-IFRS measures. See the Quarterly Financial Information Excluding Significant Items table on page 30. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 30 Management’s Discussion and Analysis QUARTERLY FINANCIAL INFORMATION EXCLUDING SIGNIFICANT ITEMS(1)(2) (C$ thousands, except per share amounts) Total revenue per IFRS Total expenses per IFRS Revenue Significant items recorded in Corporate and Other Fair value adjustments on certain illiquid and restricted marketable securities Total revenue excluding significant items Expenses Significant items recorded in Canaccord Genuity Capital Markets Amortization of intangible assets Acquisition-related costs Incentive based costs related to acquisitions(3) Significant items recorded in Canaccord Genuity Wealth Management Amortization of intangible assets Restructuring costs Acquisition-related costs Incentive based costs related to acquisitions(3) Costs associated with reorganization of CGWM UK(3) Significant items recorded in Corporate and Other Costs associated with redemption of convertible debentures(4) Change in derivative fair value Total significant items – expenses Total expenses excluding significant items Net income before income taxes – adjusted Income tax expense – adjusted Net income – adjusted Net income attributable to common shareholders Earnings per common share adjusted – basic(5) Diluted earnings per common share adjusted – diluted(5) Q4 Q3 Q2 $ 499,793 $ 403,245 552,217 $ 457,234 475,161 $ 388,124 Fiscal 2022 Q1 518,831 $ 419,130 Q4 Q3 Q2 706,526 $ 518,810 533,077 $ 433,803 390,357 $ 344,499 Fiscal 2021 Q1 377,728 340,674 9,000 1,400 — (5,000) 14,200 — — — $ 490,793 $ 550,817 $ 475,161 $ 523,831 $ 692,326 $ 533,077 $ 390,357 $ 377,728 1,283 — 364 107 537 — 160 — — 293 — — 738 — — 741 4,644 — 743 — — 748 — — 4,190 4,113 3,178 3,148 3,260 3,213 3,288 3,326 515 625 — — — 6,225 1,920 348 2,095 — 351 — 794 — 418 953 — — 8,519 468 — 5,464 4,354 — — 860 1,842 — — — — 625 — — — — 635 — — — 6,977 19,849 8,615 9,256 9,723 11,300 4,656 4,709 396,268 437,385 379,509 409,874 509,087 422,503 339,843 335,965 $ $ $ $ $ 94,525 $ 113,432 $ 95,652 $ 113,957 $ 183,239 $ 110,574 $ 50,514 $ 41,763 27,703 66,822 $ 28,800 84,632 $ 25,933 69,719 $ 29,303 84,654 $ 46,111 137,128 $ 31,603 78,971 $ 13,623 36,891 $ 8,866 32,897 54,678 $ 75,098 $ 63,326 $ 81,251 $ 133,260 $ 75,160 $ 32,982 $ 29,065 0.62 $ 0.80 $ 0.66 $ 0.84 $ 1.38 $ 0.78 $ 0.34 $ 0.52 $ 0.69 $ 0.58 $ 0.73 $ 1.20 $ 0.62 $ 0.28 $ 0.30 0.25 (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. (2) The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 15% has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. Incentive-based costs related to the acquisitions and growth initiatives in the US capital markets and UK & Crown Dependencies wealth management business. (3) (4) On March 18, 2021, the Company announced its intention to redeem the entire $132.7 million principal amount of its 6.25% convertible unsecured senior subordinated debentures. The redemption was completed on April 8, 2021. The Company recorded $4.2 million of loss and other costs in connection with the extinguishment of the convertible debentures during the three months ended March 31, 2021 and $0.5 million for the three months ended June 30, 2021. (5) Due to the change in the number of fully diluted shares resulting from the convertible debenture redemption in Q4 fiscal 2021 as well as the impact of the Convertible Preferred Shares issued in Q2 fiscal 2022, rounding and the dilutive impact of share issuance commitments in the quarterly and year to date EPS figures, the sum of the quarterly earnings per common share figures may not equal the annual earnings per share figure. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 31 Diluted earnings per common share (“diluted EPS”) is computed using the treasury stock method, giving effect to the exercise of all dilutive elements. The Convertible Preferred Shares issued by CGWM UK are factored into the diluted EPS by adjusting net income attributable to common shareholders of the Company to reflect our proportionate share of CGWM UK’s earnings on an as converted basis if the calculation is dilutive. For the quarter ended March 31, 2022, the effect of reflecting our proportionate share of CGWM UK’s earnings is dilutive for diluted EPS purposes under IFRS as well as for the purpose of determining diluted EPS excluding significant items(1). Net income attributable to common shareholders under IFRS and on an excluding significant items(1) basis reflects the Company’s proportionate share of CGWM UK’s net income excluding significant items(1) on an as converted basis. The effect of reflecting the proportionate share of CGWM UK’s net income excluding significant items(1) is only dilutive for the third and fourth quarters of fiscal 2022 and the year ended March 31, 2022 for the purpose of determining the diluted EPS excluding significant items(1). It was anti-dilutive for Q2 fiscal 2022. Quarterly trends and risks Our quarterly results are generally not significantly affected by seasonal factors. However, the Company’s revenue and income can experience considerable variations from quarter to quarter and from year to year due to factors beyond the Company’s control. The business is affected by the overall condition of the global capital markets and by activity in our core focus sectors, as well as by changes in the market for growth companies and companies in emerging markets and sectors. The Company’s revenue from an underwriting transaction is recorded only when a transaction has been substantially completed or closed. Consequently, the timing of revenue recognition can materially affect Canaccord Genuity Group Inc.’s quarterly results. Fourth Quarter Fiscal 2022 Performance REVENUE – FOURTH QUARTER FISCAL 2022 Consolidated revenue Firmwide revenue for the fourth quarter was $499.8 million, a decrease of $206.7 million or 29.3% compared to the record revenue earned in the same period in the previous year. On a consolidated basis, commissions and fees revenue decreased by $17.5 million or 8.2% to $197.0 million compared to the same period in the previous year, predominantly attributable to lower revenue earned in our capital markets operations. Investment banking revenue earned by our capital markets and wealth management businesses decreased by $197.1 million or 64.4% compared to the same period of the prior year due to lower activity in our Canadian, US and UK operations, partially offset by higher revenue generated in Australia. Fourth quarter firmwide advisory revenue grew by $55.6 million or 83.3% year-over-year, to $122.4 million, largely driven by our US operations. Principal trading revenue decreased by 52.2% to $42.0 million in the fourth fiscal quarter, reflecting lower volatility when compared to the same period a year ago. Firmwide interest revenue increased by 37.1% when compared to the fourth quarter of the prior year, to $10.3 million, due to higher client interest earned in our Canadian and UK & Crown Dependencies wealth management operations. During the three months ended March 31, 2022, an IFRS fair value adjustment of $9.0 million was recorded on certain illiquid or restricted marketable securities. This adjustment is excluded for management reporting purposes as it is not used by management to assess operating performance and is excluded for purposes of determining net income excluding significant items(1). Future changes in the unrealized fair value of the marketable securities as determined under applicable accounting standards may be significant and will be recorded through the consolidated statements of operations. Global Capital Markets Our global capital markets segment recorded fourth quarter revenue of $312.0 million, a decrease of 35.9% or $174.9 million compared to the record revenue earned in Q4/21. Fourth quarter investment banking revenue decreased by $170.7 million or 64.2% compared to the record quarter in Q4/21, partially offset by a substantial increase in advisory fees of $56.1 million or 85.6%. Principal trading revenue also decreased by $45.7 million or 52.3% compared to the fourth quarter of fiscal 2021 due to reduced market volatility. Our US business was the largest contributor of fourth quarter advisory revenue with a total of $64.8 million, a year-over-year increase of 195.3%. Overall revenue in our US operations decreased by $57.0 million or 28.0%, as the higher advisory fee revenue was offset by lower investment banking, principal trading and commission and fees revenue. In Canada, there was a $111.9 million or 83.5% decrease in investment banking revenue compared to the exceptionally strong quarter in Q4/21. Our UK & Europe operations generated revenue of $29.2 million for Q4/22, a decrease of $6.9 million or 19.1% compared to the same period in the prior year as the increase in advisory fees revenue was offset by a decrease in investment banking activity. The Australian capital markets business recorded a year-over-year revenue increase of $13.9 million or 29.0% compared to the fourth quarter of the prior year, reflecting stronger investment banking activity from our focus sectors, as well as higher unrealized gains in certain inventory and warrant positions earned in respect of investment banking activity. (1) See Non-IFRS Measures on page 14. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 32 Management’s Discussion and Analysis Global Wealth Management Fourth quarter revenue earned by our combined global wealth management businesses amounted to $174.3 million, a decrease of 12.5% compared to Q4/21 largely due to a reduction in investment banking revenue in the Canadian wealth management business in comparison to the very strong new issue activity in Q4/21. Revenue in our UK & Crown Dependencies operations increased by $5.4 million or 7.2%, partially due to higher fee-related revenue from managed assets as well as higher client interest revenue. Our Australian operations generated revenue of $17.8 million in the fourth quarter of fiscal 2022, a slight increase of 3.1% over the same quarter in the prior year. EXPENSES – FOURTH QUARTER FISCAL 2022 Firmwide expenses in the fourth fiscal quarter were $403.2 million, down $115.6 million or 22.3% from Q4/21. Total expenses excluding significant items(1) were $396.3 million, a decrease of $112.8 million or 22.2% from the same period last year. Total expenses as a percentage of revenue excluding significant items(1) was 80.7%, an increase of 7.2 percentage points from Q4/21 due to an increase in the compensation ratio and certain overhead expenses that do not vary with revenue. Compensation expense decreased by $100.9 million or 25.5% compared to the same period in the prior year. Total compensation expense as a percentage of revenue was 59.0% in Q4/22, an increase of 3.0 percentage points compared to the three months ended March 31, 2021 partially due to changes in the composition of revenue and the associated variable compensation associated with the different revenue streams. Non-compensation overhead expenses as a percentage of revenue were 21.7%, an increase of 4.3 percentage points from Q4/21. The largest increases in non-compensation expenses compared to the same period in the prior year were communication and technology, amortization and general and administrative expense partially offset by declines in trading costs, interest expense and development costs. Communication and technology expense increased by $2.9 million or 16.7% in order to expand the infrastructure required to support our business growth and increased headcount. Amortization expense increased by $2.4 million or 37.2% due to amortization recorded on intangibles acquired in connection with the acquisitions of Adam & Company and Sawaya Partners which were completed during fiscal 2022. General and administrative expense increased by $5.9 million or 25.1% due to higher conference and other promotion and travel resulting from the continued easing of COVID-19 restrictions. Partially offsetting these increases was a decline in trading costs of $15.8 million or 40.2%, mainly driven by lower trading activity in our US capital markets operations. Development costs decreased by $4.6 million over the same period in the prior year partially due to the acceleration of certain technology intangibles recorded in the Corporate & Other segment in the fourth quarter of fiscal 2021. There were acquisition-related costs of $0.5 million recorded during Q4 fiscal 2022 related to the acquisition of Punter Southwall Wealth Limited completed on May 31, 2022. During Q4 fiscal 2021, there were acquisition-related costs of $0.4 million recorded in our UK & Crown Dependencies wealth management operations. INCOME TAX EXPENSE – FOURTH QUARTER FISCAL 2022 Income tax expense was $27.6 million in Q4/22 compared to $48.3 million for the three months ended March 31, 2021. Excluding significant items(1), the effective tax rate for Q4/22 was 29.3% compared to 25.2% in Q4/21. The increase in the effective tax rate for the current quarter was partially due to various adjustments not deductible for tax purposes as well as higher proportion of income earned in jurisdictions with higher tax rates. NET INCOME – FOURTH QUARTER FISCAL 2022 Net income for the fourth quarter of fiscal 2022 was $69.0 million compared to net income of $139.4 million in Q4/21. Net income attributable to common shareholders was $56.3 million for Q4/22 compared $135.5 million in Q4/21. Diluted income per common share in the current quarter was $0.53, compared to diluted income per common share of $0.93 in Q4/21. Excluding significant items(1), net income for Q4/22 was $66.8 million compared to $137.1 million in Q4/21, a decline of $70.3 million or 51.3%, primarily due to the decrease in revenue compared to the same period in the prior year. Net income attributable to common shareholders excluding significant items(1) was $54.7 million compared to $133.3 million in the same period of the prior year. Diluted EPS excluding significant items(1) was $0.52 in Q4/22 compared to $1.20 in Q4/21. (1) See Non-IFRS Measures on page 14. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 33 Business Segment Results(1)(2) – Year Ended March 31 2022 Compared with the Year Ended March 31, 2021 (C$ thousands, except number of employees) Revenue Canada UK & Europe US Australia Total revenue Expenses Intersegment allocations Income (loss) before income taxes Excluding significant items(3) Revenue Expenses Intersegment allocations Income (loss) before income taxes Number of employees For the years ended March 31 Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate and Other 2022 Total Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate and Other 2021 Total $ 341,453 $ 120,355 667,176 174,090 1,303,074 961,236 20,007 328,458 $ 310,495 6,821 74,633 720,407 576,728 22,670 22,521 $ — — — 22,521 129,769 (42,677) 692,432 $ 430,850 673,997 248,723 2,046,002 1,667,733 — 443,444 $ 95,535 590,534 182,715 1,312,228 976,646 18,263 314,529 $ 277,329 9,512 62,249 663,619 529,476 17,288 31,841 $ — — — 31,841 131,664 (35,551) 789,814 372,864 600,046 244,964 2,007,688 1,637,786 — $ 321,831 $ 121,009 $ (64,571) $ 378,269 $ 317,319 $ 116,855 $ (64,272) $ 369,902 1,303,074 958,492 20,007 720,407 549,226 22,670 17,121 115,318 (42,677) 2,040,602 1,623,036 — 1,312,228 969,032 18,263 663,619 511,056 17,288 17,641 127,310 (35,551) 1,993,488 1,607,398 — 324,575 890 148,511 1,292 (55,520) 405 417,566 2,587 324,933 808 135,275 1,186 (74,118) 362 386,090 2,356 (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14 Detailed financial results for the business segments are shown in Note 25 of the audited consolidated financial statements on page 101. (2) The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 15% has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. (3) See the Selected Financial Information Excluding Significant Items table on page 25. Canaccord Genuity Group’s operations are divided into three segments: Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management are the main operating segments while Corporate and Other is mainly an administrative segment. CANACCORD GENUITY CAPITAL MARKETS Overview Canaccord Genuity Capital Markets provides a full range of investment banking, advisory, equity research, and sales and trading services to corporate, institutional and government clients and also conducts principal trading activities in Canada, the US, the UK & Europe, Australia, Asia and the Middle East. The Company has capital markets has offices and employees in 21 locations over four continents worldwide. Our capital markets division has 890 capital markets professionals who are organized into product, industry and geographic coverage groups. Our industry coverage groups are focused in key growth sectors of the global economy and are primarily focused in the Technology, Life Sciences, Metals and Mining, and Consumer sectors, with additional exposure to the Diversified, Transportation & Industrials, Energy, and Structured Products & Sustainability sectors. Our capabilities include private placements, equity and debt underwriting, initial public offerings, follow-on offerings, at-the-market offerings, debt finance and restructuring, advisory (which includes mergers, acquisitions, and private capital/financial sponsor advisory services), principal trading, block trades and market making. Our disciplined mid-market focus and global alignment efforts are helping to firmly entrench Canaccord Genuity Capital Markets as a leading global independent investment bank in our core focus sectors and geographies. We believe Canaccord Genuity Capital Markets’ integrated global platform and disciplined focus in key growth sectors of the global economy provide a competitive advantage for our business compared to many of the domestically focused firms that we compete with. We are focused on providing differentiated expertise and execution capabilities in a segment that is relatively underserviced by other global investment banks. Our operating results demonstrate the strength of our global mid-market capabilities and the success of our efforts to diversify our revenue streams and improve alignment across our businesses and regions. Outlook Canaccord Genuity Capital Markets continues to advance its market position as a mid-market leader in many of the Company’s key markets. Management intends to focus on capturing operating efficiencies and strengthening profitability through further integration of our global capital markets platform and by further enhancing cross-border coordination among our global offices. The Company expects continued benefits from its investments to grow contributions from higher-margin advisory activities. The acquisition of US consumer focused M&A firm Sawaya Partners builds upon our existing consumer practice, while providing a strong intersection with the core focus sectors of technology/media, life sciences, and sustainability. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 34 Management’s Discussion and Analysis The dynamic nature of the operating environment for global mid-market capital markets activities requires us to maintain a level of agility in our business mix that allows us to stay competitive and meet the evolving needs of our clients. For this reason, the Company will continue to make disciplined investments with the addition of small teams in specific sector verticals or key service offerings, to further strengthen our operations in areas where we believe we can capture additional market share. The Company continues to expand product capabilities and ancillary services aimed at enhancing its offering for its targeted midmarket client base and providing a deeper focus in its proven areas of strength. We strive to balance investments in growth with our ability to generate profit in various market environments. The Company remains committed to operating our capital markets businesses as efficiently as possible in order to protect our capacity to deliver market-leading expertise and execution services during periods of market volatility and/or reduced activity levels in our core focus sectors and geographies. A culture of cost containment continues to be reinforced throughout the Company, and strategies to lower operating costs over the long term continue to be explored. The prolonged remote working environment driven by the COVID-19 pandemic has led to productivity enhancements with respect to conferences, deal/non-deal roadshows and cross-border collaboration, and we expect that certain efficiencies and cost savings will continue longer-term as in-person work and events resume. The management team believes the steps that the Company has taken to improve the international presence of Canaccord Genuity Capital Markets and focus its service offering in key growth sectors of the global economy have positioned the business very well for the future. FINANCIAL PERFORMANCE(1)(2) (C$ thousands, except number of employees) Revenue Expenses Year ended March 31, 2022 Year ended March 31, 2021 Canada UK(5) US Australia Total Canada UK(5) US Australia Total 341,453 120,355 667,176 174,090 1,303,074 443,444 95,535 590,534 182,715 1,312,228 Compensation expense 168,942 78,963 385,975 107,906 741,786 224,429 63,467 335,907 119,194 742,997 Other overhead expenses 53,675 28,205 120,831 14,836 217,547 50,514 27,874 131,890 12,872 223,150 Development costs Acquisition-related costs Total expenses Intersegment allocations(3) Income (loss) before income taxes(3) Non-controlling interests(2) Excluding significant items(4) 60 — — — 1,263 537 43 — 1,366 537 (393) 4,644 — — 5,206 1,042 — — 5,855 4,644 222,677 107,168 508,606 122,785 961,236 279,194 91,341 473,003 133,108 976,646 14,526 1,484 3,248 749 20,007 12,449 1,027 4,392 395 18,263 $ 104,250 $ 11,703 $ 155,322 $ 50,556 $ 321,831 $ 151,801 $ 3,167 $ 113,139 $ 49,212 $ 317,319 — — — 6,581 6,581 — — — 5,301 5,301 Total revenue 341,453 120,355 667,176 174,090 1,303,074 443,444 95,535 590,534 182,715 1,312,228 Total expenses Intersegment allocations(3) Income (loss) before income taxes(3) 222,301 107,168 506,238 122,785 958,492 271,998 91,341 472,585 133,108 969,032 14,526 1,484 3,248 749 20,007 12,449 1,027 4,392 395 18,263 $ 104,626 $ 11,703 $ 157,690 $ 50,556 $ 324,575 $ 158,997 $ 3,167 $ 113,557 $ 49,212 $ 324,933 Number of employees 278 143 378 91 890 274 131 319 84 808 (1) Financial measures are s in accordance with IFRS except for figures excluding significant. See Non-IFRS Measures on page 14. (2) The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 15% has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. Income before income taxes includes intersegment allocations and excludes non-controlling interests. See the Intersegment Allocated Costs section on page 41. (3) (4) Refer to the Selected Financial Information Excluding Significant Items table on page 25. (5) Includes our Dubai based operations. REVENUE – CANACCORD GENUITY CAPITAL MARKETS REVENUE BY GEOGRAPHY AS A PERCENTAGE OF CANACCORD GENUITY CAPITAL MARKETS REVENUE Revenue generated in: Canada UK & Europe US Australia Canaccord Genuity Capital Markets (total) p.p.: percentage points CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT For the years ended March 31 2022 2021 2022/2021 change 26.2% 9.2% 51.2% 13.4% 100% 33.8% 7.3% 45.0% 13.9% 100% (7.6) p.p 1.9 p.p 6.2 p.p (0.5) p.p Management’s Discussion and Analysis 35 Canaccord Genuity Capital Markets generated revenue of $1.3 billion, a decrease of $9.2 million or 0.7% compared to fiscal 2021. Our US capital markets business was the largest contributor for the twelve-month period and generated $667.2 million in revenue, an increase of 13.0% compared to the prior year. Revenue earned by the capital markets business in the UK & Europe increased by 26.0% to $120.4 million, reflecting increased contributions from the advisory businesses in the UK & Europe. Revenue earned in our Canadian and Australian businesses declined by 23.0% and 4.7% respectively when compared to the prior year’s record results but remained above historic levels. Investment banking The Company’s focus sector mix in fiscal 2022 showed continued diversity. Revenue from the Metals & Mining sector, a historic area of strength for the Company, reflects contributions from Australia and Canada. Revenue from the Technology and Life Sciences sectors was led by our US capital markets business. Investment banking revenue for the twelve-month period was $463.1 million, our second highest revenue achieved in this segment on record. Underwriting activities slowed from the elevated pace of the prior year and deals were postponed due to the uncertain backdrop, but client engagement remains high, however, and our backlog remains robust. Canaccord Genuity Capital Markets’ transactions and revenue by focus sectors are detailed below. Investment banking revenue by sector (as a % of investment banking revenue for each geographic region) Sectors Life Sciences Technology Metals & Mining Consumer & Retail Other Total For the year ended March 31, 2022 Global Canada 18% 34% 22% 5% 21% 19% 43% 14% 3% 21% US 37% 54% 2% 1% 6% UK 0% 21% 5% 19% 55% Australia 7% 11% 60% 4% 18% 100.0% 100.0% 100.0% 100.0% 100.0% Note for reference in the tables above: transactions with companies in the cannabis sector in Canada are included under the Life Sciences sector. Advisory Increasing contributions from higher-margin advisory activities continues to be an important strategic priority for the Company. Our specialized expertise in key sectors of the economy and track record of success in equity capital markets activities positions us well to unlock opportunities for our clients as they grow. We lead a wide variety of sell-side and buy-side strategic advisory mandates both domestically and cross border, and we have established leadership in alternative financing vehicles. Fiscal 2022 revenue earned through capital markets advisory activities increased 152.5% year-over-year to a new record of $488.6 million. Our US business was the largest contributor in this segment, with advisory revenue of $317.0 million, a year-over-year increase of 218.8% and a record for this business. Fiscal 2022 advisory revenue contributed by our Canadian business increased by 65.5% or $41.5 million to $105.0 million. Our UK & Europe capital markets business earned record advisory revenue of $66.6 million, a year- over-year increase of 117.8%. Advisory fees revenue by sector (as a % of advisory fees revenue for each geographic region) Sectors Life Sciences Technology Industrials Metals & Mining Consumer & Retail Other Total Principal trading For the year ended March 31, 2022 Global Canada 15% 66% 4% 6% 7% 2% 36% 23% 0% 27% 9% 5% US 9% 85% 5% 0% 1% — UK 3% 12% 0% 3% 60% 22% 100.0% 100.0% 100.0% 100.0% Revenue earned from principal trading activity amounted to $158.2 million, a decrease of $87.4 million or 35.6% compared to the prior fiscal year, primarily a reflection of lower market volatility which decreased market activity and revenue opportunities when compared to the record levels set in the prior year. Our US business contributed $144.1 million of trading revenues largely attributable to the International Equities Group. Commissions and Fees Commissions and Fees revenue was $174.8 million, a decrease of 17.7% compared to the prior fiscal year reflecting lower client trading activity and reduced issuer activity. Our US and Canadian operations recorded the largest decreases in commission and fees revenue compared to record levels in Q4/21. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 36 Management’s Discussion and Analysis EXPENSES – CANACCORD GENUITY CAPITAL MARKETS Expenses in our global capital markets division for fiscal 2022 were $961.2 million, a decrease of $15.4 million or 1.6% compared to the prior year. Excluding significant items, total expenses for fiscal 2022 were $958.5 million, a decrease of $10.5 million or 1.1% compared to fiscal 2021. As a percentage of revenue, total expenses excluding significant items decreased slightly by 0.3 percentage points compared to the year ended March 31, 2021. Compensation expense Compensation expense in our global capital markets division for fiscal 2022 decreased by $1.2 million or 0.2% compared to fiscal 2021. Total compensation expense as a percentage of revenue was 0.3 percentage points higher than in fiscal 2021, at 56.9% for the year ended March 31, 2022. In Canada, Australia and UK & Europe, total compensation as a percentage of revenue decreased compared to fiscal 2021 due to changes in relative levels of fixed and variable compensation. In our US operations, total compensation expense as a percentage of revenue increased by 1.0 percentage points compared to fiscal 2021 due to changes in the composition of revenue and the variable compensation associated with different revenue streams. Canaccord Genuity Capital Markets compensation expense as a percentage of revenue by geography Canada UK & Europe US Australia Canaccord Genuity Capital Markets (total) p.p.: percentage points Other overhead expenses For the years ended March 31 2022 49.5% 65.6% 57.9% 62.0% 56.9% 2021 50.6% 66.4% 56.9% 65.2% 56.6% 2022/2021 change (1.1) p.p (0.8) p.p 1.0 p.p (3.2) p.p 0.3 p.p Other overhead expenses in this division were $217.5 million for fiscal 2022 compared to $223.2 million in fiscal 2021, a decrease of $5.6 million or 2.6%. The most significant decrease was in trading costs, which decreased by $19.9 million or 19.3% compared to fiscal 2021, primarily due to lower trading costs in our US operations. Development costs also decreased by $4.5 million or 76.7% as a result of lower costs incurred in our US operations. Partially offsetting the decreases in trading and development costs was an increase in general and administrative expense of $12.5 million or 34.4% compared to fiscal 2021 largely due to a growth in promotion and travel and conference expenses as a result of the easing of COVID-19 restrictions imposed during the year. There were $0.5 million of acquisition-related costs in fiscal 2022 in respect of the acquisition of Sawaya. There were $4.6 million of acquisition-related costs in the prior year relating to the remeasurement of contingent consideration in connection with the Jitneytrade acquisition. INCOME BEFORE INCOME TAXES Income before income taxes in fiscal 2022 was $321.8 million for our combined capital markets businesses, an increase of $4.5 million compared to fiscal 2021. Excluding significant items, income before income taxes, including allocated overhead expenses, decreased from $324.9 million in fiscal 2021 to $324.6 million in fiscal 2022. CANACCORD GENUITY WEALTH MANAGEMENT Overview The Company has wealth management operations in Canada, the UK & Crown Dependencies, and Australia. Canaccord Genuity Group’s wealth management division provides a range of comprehensive financial services and investment products to individual investors (private clients), institutions and intermediaries, and charities. Revenue from wealth management operations is generated through traditional commission-based brokerage services; the sale of fee-based products and services; and client-related interest. Additionally, Investment Advisors (IAs) in Canada and Australia earn fees and commissions revenue from investment banking and venture capital transactions. In the UK & Crown Dependencies, Canaccord Genuity Wealth Management had 16 offices in the UK, Guernsey, Jersey and the Isle of Man on March 31, 2022. Revenue earned by this business is largely generated through fee-based accounts, portfolio management, and financial planning activities. Fee-related revenue as a percentage of total revenue in this business was 78.6% for fiscal 2022. The business offers services to domestic (UK), international and European clients and provides investing options from both third party and proprietary financial products, including investment funds managed by Canaccord Genuity Wealth Management portfolio managers. This business had 220 Investment Professionals on March 31, 2022. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 37 On March 31, 2022, Canaccord Genuity Wealth Management had 9 offices located across Canada, including Investment Advisors who are registered in the US. Fee-related revenue as a percentage of total revenue in this business increased to 39.5% for the year ended March 31, 2022 compared to 28.5% for fiscal 2021. This business had 146 Advisor teams on March 31, 2022. In Australia, Canaccord Genuity Wealth Management had 9 offices on March 31, 2022. This business had 115 Advisor teams on March 31, 2022. Outlook Our strategic shift to strengthening contributions from our global wealth management segment will continue to be a major strategic focus for the Company. Management’s priorities for Canaccord Genuity Wealth Management will be focused on growing assets under administration and management and increasing the proportion of fee-based revenue as a percentage of total revenue. By increasing recurring revenue streams, we expect to meaningfully make our business less sensitive to changes in market conditions and trading activity associated with transaction-based revenue. We continue to explore a range of opportunities for profitable growth in our global wealth management segment. Alongside investments in talent and acquisitions, we are actively building our specialist network in technology, sustainability, and other growth areas, to keep pace as investors continue to reshape their investment needs. The Company will continue to pursue strategic opportunities to increase the scale of its wealth management business in the UK & Crown Dependencies. On December 14, 2021, the Company, through CGWM UK, entered into a share purchase agreement to acquire Punter Southall Wealth (“PSW”), including the intermediary facing brand Psigma from Punter Southall Group. This acquisition represented an opportunity for CGWM UK to build upon its exceptional growth to date and advance its priority of becoming an integrated wealth manager of scale. Completion of this acquisition was announced on May 31, 2022. In connection with the closing of the acquisition, CGWM UK added £100 million (C$169.2 million) to its existing bank facility. In addition, HPS on behalf of investment accounts and funds it manages made an additional investment in CGWM UK on closing of the acquisition through the purchase of a new series of convertible preferred shares of CGWM UK in the amount of £65.3 million (C$110.5 million). With this investment, and with the small equity component to be issued in connection with the acquisition, the Company’s effective as-converted interest in CGWM UK will be reduced from approximately 73.5% to approximately 66.9%. In Canada, the Company continues to pursue opportunities for profitable growth with a focus on enhancing margins, managing costs, and growing the business through targeted recruitment and other initiatives aimed at increasing client assets. An important focus is the recruiting and retention of investment advisors. While the recruiting environment remains competitive, our ability to attract and retain high quality advisors is based on the benefits of our independent platform, which provides access to global resources and expertise, supported by investments to advance our technology and product offering, and a multi-year track record of revenue and profitability growth. Investment Advisors have found opportunities to grow their businesses faster and more sustainably on our platform. We offer Investment Advisors resources to help them grow their businesses and the opportunity to participate in conferences and industry events. We maintain a strong focus on investing in technology and training programs and building a comprehensive suite of premium products targeted at attracting high net worth investors and helping advisors grow their businesses. In Australia, the Company intends to continue to build upon the success of its expanded wealth management operations. Continued expansion is expected to occur through targeted recruiting and the build-out of wealth management services and products in this market, in addition to the leveraging of the benefits provided by its connection to Canaccord Genuity’s leading capital markets business in the region. The robust market for financing activities for small-cap companies during fiscal 2022 drove increased collaboration with our capital markets group in the region, and we expect this will drive future benefits as we advance our strategic priorities. We will also endeavour to convert an additional $17.5 billion held on this business’ trading platform to higher revenue- generating assets. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 38 Management’s Discussion and Analysis FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT NORTH AMERICA(1)(2) (C$ thousands, except AUM and AUA (in C$ millions), number of employees, Advisory Teams and % amounts) Revenue Expenses Compensation expense Other overhead expenses Total expenses Intersegment allocations(3) Income before income taxes(3) AUM (discretionary)(4) AUA(5) Number of Advisory Teams Number of employees Excluding significant items(6) Total expenses Intersegment allocations(3) Income before income taxes(3) For the years ended March 31 2022 2021 2022/2021 change $ 335,279 $ 324,041 $ 11,238 3.5% 198,197 60,079 258,276 $ 20,659 56,344 $ 8,482 37,881 146 489 193,934 51,423 245,357 16,065 62,619 6,307 32,240 145 454 $ $ 258,276 $ 20,659 245,357 16,065 $ 56,344 $ 62,619 $ $ $ $ $ 4,263 8,656 12,919 4,594 (6,275) 2,175 5,641 1 35 12,919 4,594 (6,275) 2.2% 16.8% 5.3% 28.6% (10.0)% 34.5% 17.5% 0.7% 7.7% 5.3% 28.6% (10.0)% (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) Includes Canaccord Genuity Wealth Management operations in Canada and the US. (3) Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 41. (4) AUM include all assets managed on a discretionary basis under programs that include CGWM’s Managed Solutions Programs as well as its Private Investment Management Program. Services provided include the selection of investments and the provision of investment advice. See Non-IFRS Measures on page 14. (5) AUA is the market value of client assets administered by the Company, for which the Company earns commissions or fees. AUA includes AUM. (6) Refer to the Selected Financial Information Excluding Significant Items table on page 25. Revenue from Canaccord Genuity Wealth Management North America was $335.3 million, an increase of $11.2 million or 3.5% from fiscal 2021, driven by higher commissions and fees revenue partially offset by lower investment banking revenue resulting from lower new issue activity. AUA in Canada increased by 17.5% to $37.9 billion on March 31, 2022 from $32.2 billion on March 31, 2021, as a result of a growth in market values as well as net inflow of new assets. There were 146 Advisory Teams in Canada, an increase of one from a year ago. The fee-based revenue in our North American operations was 10.9 percentage points higher than in the prior year and accounted for 39.5% of the wealth management revenue earned in Canada during the year ended March 31, 2022. Expenses for fiscal 2022 were $258.3 million, an increase of $12.9 million or 5.3% from fiscal 2021. Total expenses as a percentage of revenue increased slightly by 1.3 percentage points compared to last year. Compensation expense increased by $4.3 million or 2.2% compared to the prior year. Total compensation expense as a percentage of revenue decreased slightly by 0.7 percentage points compared to last year to 59.1% in fiscal 2022. Other overhead expenses as a percentage of revenue increased by 2.0 percentage points compared to fiscal 2021. General and administrative expense increased by $3.3 million or 38.4% due to higher conference costs. Communication and technology costs also increased by $2.5 million or 56.2% in order to support the increased headcount in this operation. Development costs increased by $1.8 million as a result of the amortization of incentive-based payments to new recruits. Income before income taxes for fiscal 2022 was $56.3 million, a decrease of $6.3 million or 10.0% compared to the prior year primarily due to the increase in overhead expenses as described above. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 39 FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT UK & CROWN DEPENDENCIES(1)(5) (C$ thousands, except AUM (in C$ millions), number of employees, investment professionals and fund managers, and % amounts) Revenue Expenses Compensation expense Other overhead expenses Acquisition-related costs Total expenses Intersegment allocations(2) Income before income taxes(2) Non-controlling interest(6) AUM(3) Number of investment professionals and fund managers Number of employees Excluding significant items(4) Total expenses Intersegment allocations(2) Income before income taxes(2) Non-controlling interest(6) For the years ended March 31 2022 2021 2022/2021 change $ 310,495 $ 277,329 $ 33,166 12.0% 162,618 79,645 8,660 250,923 1,758 57,814 16,879 52,830 220 581 149,095 78,423 1,278 228,796 1,208 47,325 — 52,298 202 528 $ $ 223,895 $ 1,758 84,842 210,862 1,208 65,259 14,386 — 13,523 1,222 7,382 22,127 550 10,489 16,879 532 18 53 13,033 550 19,583 14,386 9.1% 1.6% n.m. 9.7% 45.5% 22.2% n.m. 1.0% 8.9% 10.0% 6.2% 45.5% 30.0% n.m. (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) (3) AUM in the UK & Europe is the market value of client assets managed and administered by the Company, for which the Company earns commissions or fees. This measure includes both discretionary Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 41. and non-discretionary accounts. (4) Refer to the Selected Financial Information Excluding Significant Items table on page 25. (5) (6) The non-controlling interests is the portion of the net income after income taxes of GWM UK not attributable to the Company Includes the operating results of Thomas Miller since the acquisition date of May 1, 2019 and Adam & Company since the acquisition date of October 1, 2019. Revenue generated by our UK & Crown Dependencies operations is largely produced through fee-based accounts and portfolio management activities, and, as such, is less sensitive to changes in market conditions. Revenue for fiscal 2022 was $310.5 million, an increase of $33.2 million or 12.0% compared to fiscal 2021. Measured in local currency (GBP), revenue was £181.4 million for fiscal 2022, an increase of £20.9 million or 13.0% compared to the previous year. AUM in the UK & Crown Dependencies as of March 31, 2022 was $52.8 billion, an increase of 1.0% compared to $52.3 billion as of March 31, 2021 Measured in local currency (GBP), AUM increased by 6.4% compared to March 31, 2021. The fee-related revenue in our UK & Crown Dependencies wealth management operations accounted for 78.6% of total revenue in this geography in fiscal 2022, an increase of 6.5 percentage points compared to last year. With over three quarters of the business’ revenue derived from recurring, fee-based activities, the revenue generated through CGWM UK helps to improve the stability of its overall performance. Client holdings in our in-house investment management products exceed $1 billion and are attracting growing interest from both domestic and international intermediaries. Compensation expense was $162.6 million, a $13.5 million increase from $149.1 million in fiscal 2021. Total compensation expense as a percentage of revenue decreased slightly by 1.4 percentage points from 53.8% in fiscal 2021 to 52.4% in fiscal 2022. Other overhead expenses for the year ended March 31, 2022 increased by $1.2 million or 1.6% compared to the prior year. The largest increase in overhead expenses was interest expense, which increased by $2.3 million or 62.3% year over year as a result of additional borrowing costs in connection with the bank loan obtained for the acquisition of Adam & Company. Premises and equipment expense increased by $1.7 million or 45.7% due to the reorganization of certain office locations. Amortization expense also increased by $1.2 million or 7.3% compared to fiscal 2021 as a result of the amortization of intangible assets related to the Adam & Company acquisition. Offsetting the increased expenses discussed above is a reduction in general and administrative expense of $1.2 million or 6.0%, largely due to lower professional fees and a reduction in reserves in connection with legal matters. Development costs decreased by $0.8 million or 12.8% compared to the prior year due to lower incentive-based costs related to prior acquisitions. There were acquisition-related costs of $8.7 million recorded during fiscal 2022 related to the acquisition of Adam & Company and the acquisition of Punter Southwall Wealth Limited completed on May 31, 2022 in our UK wealth management operation. During the year ended March 31, 2021, the Company also recorded $1.3 million of acquisition-related costs in connection with various acquisitions and reorganization. Income before income taxes was $57.8 million compared to $47.3 million in the prior year largely due to the increased revenue, along with a modest decline in compensation ratio and overhead costs. Excluding significant items(1), income before income taxes was $84.8 million, an increase of $19.6 million or 30.0% from the prior year, reflecting the growth in net contribution from this region. (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 40 Management’s Discussion and Analysis FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT AUSTRALIA(1) (C$ thousands, except AUM (in C$ millions), number of employees, investment professionals and fund managers, and % amounts) Revenue Expenses Compensation expense Other overhead expenses Total expenses Intersegment allocations(2) Income before income taxes(2) Non-controlling interest(5) AUM(3) Number of investment professionals and fund managers Number of employees Excluding significant items(4) Total expenses Intersegment allocations(2) Income before income taxes(2) Non-controlling interest(5) For the years ended March 31 2022 74,633 $ 2021 62,249 $ 2022/2021 change $ 12,384 51,505 16,024 67,529 253 6,851 791 5,352 115 222 $ 67,055 $ 253 7,325 791 42,084 13,239 55,323 15 6,911 715 4,228 110 204 54,837 15 7,397 726 $ 9,421 2,785 12,206 238 (60) 76 1,124 5 18 12,218 238 (72) 76 19.9% 22.4% 21.0% 22.1% n.m. (0.9)% 10.6% 26.6% 4.5% 8.8% 22.3% n.m. (1.0)% 10.6% (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) (3) AUM is the market value of client assets managed and administered by the Company, for which the Company earns commissions or fees. This measure includes both discretionary and non- Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 41. discretionary accounts. (4) Refer to the Selected Financial Information Excluding Significant Items table on page 25. (5) The non-controlling interest is the portion of the net income after income taxes of Canaccord Genuity Wealth Management Australia not attributable to the Company. n.m.: not meaningful (percentages over 300% are indicated as n.m.) During the year ended March 31, 2022, Canaccord Genuity Wealth Management Australia generated revenue of $74.6 million compared to $62.2 million in fiscal 2021. AUM increased to $5.4 billion at March 31, 2022, an increase of $1.1 billion or 26.6% compared to March 31, 2021. In addition, client assets(1) totalling $17.5 billion are also held on record in other less active accounts on our Australian wealth management platforms compared to $15.8 billion as of March 31, 2021. Fee-related revenue in our Australian operations as a percentage of total revenue accounted for 27.1% of the wealth management revenue during fiscal 2022, an increase of 1.0 percentage point compared to the prior year. Total expenses were $67.5 million, an increase of $12.2 million or 22.1% compared to the year ended March 31, 2021. Compensation expense was $51.5 million in fiscal 2022 compared to $42.1 million in fiscal 2021. Total compensation expense as a percentage of revenue was 69.0% for the year ended March 31, 2022, an increase of 1.4 percentages points compared to the prior year due to compensation costs related to new recruits hired during the fourth quarter of fiscal 2022. Overhead costs as a percentage of revenue increased slightly by 0.2 percentage points compared to the prior year. The most significant increases in overhead costs include a $1.1 million or 34.4% increase in general and administrative expense to support the growth in this operation, as well as a $2.3 million increase in development costs which resulted from amortization of incentive- based payments to new recruits and other recruiting costs. Income before income taxes was $6.9 million, unchanged from the prior year. Excluding significant items(1), income before income taxes was $7.3 million, a decrease of $0.1 million from the prior year. CORPORATE AND OTHER SEGMENT Overview The Corporate and Other segment includes Pinnacle Correspondent Services, interest, foreign exchange revenue, and expenses not specifically allocable to Canaccord Genuity Capital Markets or Canaccord Genuity Wealth Management. Pinnacle Correspondent Services provides trade execution, clearing, settlement, custody, and other middle- and back-office services to other introducing brokerage firms, portfolio managers and financial intermediaries. This business unit was developed as an extension and application of the Company’s substantial investment in its information technology and operating infrastructure. Also included in this segment are the Company’s administrative, operational and support services departments, which are responsible for front- and back-office information technology systems, compliance and risk management, operations, legal, finance, and other administrative functions. The Company has 405 employees in the Corporate and Other segment. Most of the Company’s corporate support functions are based in Vancouver and Toronto, Canada. Our operations group is responsible for processing securities transactions, including the clearing and settlement of securities transactions, account administration and custody of client securities. The finance department is responsible for internal financial accounting and controls, and external financial and regulatory reporting, while the compliance department is responsible for client credit and account monitoring in relation to certain legal and financial regulatory requirements. The Company’s risk management and compliance activities include procedures to identify, control, measure and monitor the Company’s risk exposure at all times. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT FINANCIAL PERFORMANCE- CORPORATE AND OTHER SEGMENT(1) (C$ thousands, except number of employees and % amounts) Revenue Expenses Compensation expense Other overhead expenses Change in fair value of derivative liability Costs associated with redemption of convertible debentures(3) Share of loss of an associate Total expenses Intersegment allocations(2) Loss before income taxes(2) Number of employees Excluding significant items(4) Revenue Total expenses Intersegment allocations(2) Loss before income taxes(2) Management’s Discussion and Analysis 41 For the years ended March 31 2022 22,521 $ 2021 31,841 $ 2022/2021 change $ (9,320) (29.3)% 94,078 21,048 8,519 5,932 192 129,769 (42,677) (64,571) 405 $ 17,121 $ 115,318 (42,677) (55,520) 99,785 26,603 — 4,354 922 131,664 (35,551) (64,272) 362 17,641 127,310 (35,551) (74,118) (5,707) (5,555) 8,519 1,578 (730) (1,895) (7,126) (299) 43 $ (520) (11,992) (7,126) 18,598 (5.7)% (20.9)% n.m. 36.2% (79.2)% (1.4)% (20.0)% (0.5)% 11.9% (2.9)% (9.4)% (20.0)% 25.1% (1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. (2) Loss before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 41. (3) During the year ended March 31, 2022, the Company entered into a credit agreement for a senior secured first lien term loan facility (“loan facility”) to partially fund the redemption of the convertible debentures, completed on April 8, 2022. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures for the year ended March 31, 2022. During the year ended March 31, 2021, the Company recorded $4.2 million of loss and other costs in connection with the extinguishment of the convertible debentures. (4) Refer to the Selected Financial Information Excluding Significant Items table on page 25. n.m.: not meaningful (percentages over 300% are indicated as n.m.) Revenue from this segment for fiscal 2022 was $22.5 million, a decrease of $9.3 million or 29.3% from fiscal 2021. During the year ended March 31, 2022, there was $5.4 million of fair value adjustment recorded on certain illiquid or restricted marketable securities. This reversal is excluded for management reporting purposes as it is not used by management to assess operating performance and is excluded for purposes of determining net income excluding significant items(1). Future changes in the unrealized fair value of the marketable securities as determined under applicable accounting standards may be significant and will be recorded through the consolidated statements of operations. Total expenses in this segment were $129.8 million for the year ended March 31, 2022, a decrease of $1.9 million or 1.4% compared to the prior year. The largest single contributor was a decline in interest expense of $9.7 million following the redemption of the 6.25% convertible unsecured senior subordinated debentures (convertible debentures) on April 9, 2021. Compensation costs also decreased by $5.7 million or 5.7% partially due to a lower fair value adjustment of the Company’s PSU plan. Development costs decreased by $3.7 million due to accelerated amortization of certain technology intangibles recorded in the prior year. Offsetting these declines was an increase in general and administrative expense of $3.4 million or 24.8% related to higher professional fees and promotion and travel expense incurred to support our growing operations. As discussed earlier in this MD&A, in order to partially fund the redemption of the convertible debentures, the Company entered into a loan facility of £69.0 million. Transaction costs incurred in connection with the loan facility are recognized on an amortized cost basis and included in the effective interest rate of the facility. Interest associated with this loan facility is included in costs associated with redemption of convertible debentures of $5.9 million for the year ended March 31, 2022. During fiscal 2021, the Company recorded $4.4 million of accounting loss and other costs in connection with the extinguishment of the convertible debentures. The Convertible Preferred Shares issued to certain institutional investors and the Preference Shares issued to management and employees of CGWM UK are treated as a compound instrument comprising of an equity component, representing discretionary dividends and a liquidation preference, and a liability component that reflects a derivative to settle the instrument by delivering the economic equivalent of a variable number of common shares of CGWM UK. During the year ended March 31, 2022, there was an $8.5 million fair value adjustment recorded in connection with the derivative liability. Loss before income taxes was $64.6 million for fiscal 2022 compared to a loss before income taxes of $64.3 million for the prior year. Excluding significant items(1), loss before income taxes was $55.5 million for the year ended March 31, 2022 compared to a loss before income taxes of $74.1 million last year. INTERSEGMENT ALLOCATED COSTS Included in the Corporate and Other segment are certain support services and other expenses that have been incurred to support the activities within the Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management segments in Canada. Certain trading, clearing and settlement charges are included as a trading cost in the applicable business units and as a trading cost recovery in Corporate and Other. In addition, certain overhead costs are charged by Canaccord Genuity Capital Markets UK & Europe to Canaccord Genuity Wealth Management UK & Crown Dependencies and included in intersegment allocated costs for these business units. (1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 42 Management’s Discussion and Analysis Financial Condition Below are selected balance sheet items for the past five years: (C$ thousands) Assets Cash and cash equivalents Securities owned Accounts receivable Income taxes recoverable Deferred tax assets Investments Equipment and leasehold improvements Goodwill and other intangibles Right of use asset Total assets Liabilities and shareholders’ equity Bank indebtedness Securities sold short Accounts payable, accrued liabilities and provisions Income taxes payable Current portion of bank loan Current portion of lease liability Current portion of contingent consideration Promissory note Lease liability Other liabilities Bank loan Deferred tax liabilities Subordinated debt Convertible debentures Shareholders’ equity Non-controlling interests Balance sheet summary as at March 31 2022 2021 2020 2019 2018 $ 1,788,261 $ 1,883,292 1,041,583 3,973,442 738 81,229 12,193 23,070 531,038 85,216 1,051,229 3,438,655 1,967 98,224 22,928 34,643 697,272 117,066 $ 997,111 931,467 3,275,841 5,603 39,487 10,105 24,860 565,587 106,134 $ 820,739 690,499 2,656,664 2,502 22,117 6,224 25,792 524,757 — $ 862,838 469,217 2,215,837 1,170 19,941 2,035 30,967 418,731 — $ 7,250,245 $ 7,631,801 $ 5,956,195 $ 4,749,294 $ 4,020,736 $ — $ — $ — $ 567,290 4,853,894 15,952 6,574 23,928 10,618 — 101,620 75,758 145,467 24,875 7,500 — 1,178,069 238,700 889,607 5,170,957 56,285 12,119 24,311 17,706 — 70,591 19,577 66,200 13,552 7,500 168,112 1,107,094 8,190 875,017 3,680,186 11,721 7,042 23,417 57,859 — 88,922 58,340 79,192 9,903 7,500 128,322 928,618 156 9,639 373,419 3,141,977 5,415 9,294 — — 5,832 — 132,285 50,370 7,978 7,500 127,225 876,363 1,997 $ — 301,006 2,647,382 7,851 9,679 — — — — 59,841 61,758 13,715 7,500 57,081 841,352 13,571 Total liabilities and shareholders’ equity $ 7,250,245 $ 7,631,801 $ 5,956,195 $ 4,749,294 $ 4,020,736 ASSETS Cash and cash equivalents were $1.8 billion at March 31, 2022 compared to $1.9 billion at March 31, 2021. Refer to the Liquidity and Capital Resources section for more details. Securities owned were $1.1 billion at March 31, 2022, an increase of $9.6 million from the prior year due to an increase in equities and convertible debentures. Accounts receivable were $3.4 billion at March 31, 2022 compared to $4.0 billion at March 31, 2021, mainly due to an increase in receivables from brokers and investment dealers. Goodwill was $510.3 million and intangible assets were $187.0 million at March 31, 2022. At March 31, 2021, goodwill was $380.1 million and intangible assets were $150.9 million. These amounts represent the goodwill and intangible assets acquired through the purchases of Genuity Capital Markets, Collins Stewart Hawkpoint plc (CSHP), Eden Financial Ltd., Hargreave Hale, Jitneytrade, McCarthy Taylor, Petsky Prunier, Patersons, Adam & Company and Sawaya. Right-of-use assets were $117.1 million compared to $85.2 million at March 31, 2021, mainly due to new offices in our Canadian and Australian operations, partially offset by amortization taken during the year. Other assets, consisting of income taxes receivable, deferred tax assets, equipment and leasehold improvements, and investments were $157.8 million at March 31, 2022 compared to $117.2 million at March 31, 2021, mainly due to an increase in deferred tax assets and investments. LIABILITIES AND SHAREHOLDERS’ EQUITY Securities sold short were $567.3 million at March 31, 2022 compared to $889.6 million at March 31, 2021, mostly due to an increase in short positions in corporate and government debt. Accounts payable and accrued liabilities, including provisions, were $4.9 billion, a decrease of $0.3 billion from March 31, 2021, mainly due to a decrease in payables to brokers and investment dealers. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 43 Income taxes payable decreased by $40.3 million to $16.0 million on March 31, 2022 due to tax installments made during the year. There were also lease liabilities of $125.5 million recorded as of March 31, 2022 compared to $94.9 million as of March 31, 2021 primarily due to new offices in our Canadian and Australian operations. As discussed earlier in this MD&A, on July 29, 2021, Convertible Preferred Shares in the amount of £125.0 million (C$218.0 million) were issued by the Company’s subsidiary, CGWM UK. The Convertible Preferred Shares and the Preference Shares issued to management and employees of CGWM UK were treated as a compound instrument comprising of an equity component, representing discretionary dividends and a liquidation preference, and a liability component that reflects a derivative to settle the instrument by delivering the economic equivalent of a variable number of common shares of CGWM UK. The equity component of the Convertible Preferred Shares and Preference Shares is included in shareholders’ equity and the derivative liability component of £25.0 million (C$41.1 million) is included in other liabilities in the statement of financial position as of March 31, 2022. During the year ended March 31, 2022, the Company paid the remaining contingent consideration in connection with the purchase of Petsky Prunier [March 31, 2021 - $29.2 million] and the deferred consideration related to the acquisition of Hargreave Hale [March 31, 2021 - $8.1 million]. As part of the acquisition of Sawaya, there was contingent consideration of $42.5 million included as other liabilities and deferred consideration of $11.4 million included as equity on the condensed consolidated statements of financial position as of March 31, 2022. A subsidiary of the Company entered into a senior credit facility to finance a portion of the cash consideration for its acquisitions of Hargreave Hale, Thomas Miller and Adam & Company. The loan is repayable in instalments of principal and interest and matures in September 2024. The interest rate on this loan is 3.375% per annum as at March 31, 2022 [March 31, 2021 – 2.1288% per annum]. Excluding the bank loan in connection with the acquisitions of Hargreave Hale, Thomas Miller and Adam & Company as described above, subsidiaries of the Company have other credit facilities with banks in Canada and the UK for an aggregate amount of $657.0 million [March 31, 2021 – $637.1 million]. These credit facilities, consisting of call loans, letters of credit and daylight overdraft facilities, are collateralized by unpaid client securities and/or securities owned by the Company. As of March 31, 2022, there was no bank indebtedness outstanding [March 31, 2021 – $nil]. Non-controlling interests were $238.7 million at March 31, 2022 compared to $8.2 million as at March 31, 2021, an increase of $230.5 million related to the equity portion of the Convertible Preferred Shares component issued in CGWM UK. The non-controlling interests also represent 32.7% [March 31, 2021 – 15%] of the net assets of our operations in Australia. Off-Balance Sheet Arrangements A subsidiary of the Company has entered into secured irrevocable standby letters of credit from a financial institution totaling $3.7 million (US$2.9 million) [March 31, 2021 – $3.3 million (US$2.3 million)] as rent guarantees for its leased premises in New York. Bank Indebtedness and Other Credit Facilities The Company enters into call loans or overdraft positions primarily to facilitate the securities settlement process for both client and Company securities transactions. The bank indebtedness is collateralized by unpaid client securities and/or securities owned by the Company. As of March 31, 2022 and 2021, the Company had no bank indebtedness outstanding. In the normal course of business, the Company enters into contracts that give rise to commitments of future minimum payments that affect its liquidity. The following table summarizes Canaccord Genuity Group’s long-term contractual obligations on March 31, 2022: (C$ thousands) Premises and equipment operating leases Bank loan(1) Total contractual obligations Total Fiscal 2023 156,805 167,171 323,976 30,351 11,810 42,161 Fiscal 2024 – Fiscal 2025 54,651 155,361 210,012 Fiscal 2026 and fiscal 2027 26,882 — 26,882 Thereafter 44,921 — 44,921 (1) Bank loan obtained to finance a portion of the cash consideration for the acquisitions of Hargreave Hale, Thomas Miller and Adam & Company . The bank loan bears interest at 3.375% [March 31, 2021 – 2.6584%] per annum and is repayable in instalments of principal and interest and matures in September 2024. Liquidity and Capital Resources The Company has a capital structure comprised of the equity portion of the convertible debentures, preferred shares, common shares, contributed surplus, retained earnings and accumulated other comprehensive income. On March 31, 2022, cash and cash equivalents were $1.8 billion, a decrease of $95.0 million from $1.9 billion as of March 31, 2021. During the year ended 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 44 Management’s Discussion and Analysis March 31, 2022 cash used in financing activities amounted to $142.9 million due to the redemption of the convertible debenture of $168.1 million, payment of ordinary and preferred dividends of $40.3 million, payment of dividends on Convertible Preferred Shares of $7.1 million, and lease payments of $29.5 million. Partially offsetting these amounts was a net $80.0 million inflow from bank loans. Cash used in investing activities amounted to $202.0 million and included the acquisitions of Adam & Company and Sawaya at $93.3 million and $45.5 million respectively, the purchase of investments of $14.2 million and equipment and leasehold improvements purchases of $12.1 million, as well as payments of deferred and contingent consideration of $32.9 million. Cash provided by operations totalled $263.3 million principally due to cash operating profit. There was also a cash outflow of $13.4 million due to foreign exchange. The Company’s business requires capital for operating and regulatory purposes. The majority of current assets reflected on the Company’s audited consolidated statements of financial position are highly liquid. The majority of the positions held as securities owned are readily marketable, and all are recorded at their fair value. Securities sold short are highly liquid securities. The fair value of these securities fluctuates daily as factors such as changes in market conditions, economic conditions and investor outlook affect market prices. Client receivables are secured by readily marketable securities and are reviewed daily for impairment in value and collectability. Receivables and payables from brokers and dealers represent the following: current open transactions that generally settle within the normal two-day settlement cycle; collateralized securities borrowed and/or loaned in transactions that can be closed within a few days on demand; and balances on behalf of introducing brokers representing net balances in connection with their client accounts. Preferred Shares SERIES A PREFERRED SHARES In fiscal 2012, the Company issued 4,540,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series A (Series A Preferred Shares) at a purchase price of $25.00 per share for gross proceeds of $113.5 million. The aggregate net amount recognized after deducting issue costs, net of deferred taxes of $1.0 million, was $110.8 million. On September 1, 2021, the Company announced the reset of the dividend rate on its Series A Preferred Shares. Quarterly cumulative cash dividends, as declared, were paid at an annual rate of 3.885% for the five years ended September 30, 2021. Commencing October 1, 2021 and ending on and including September 30, 2026, quarterly cumulative dividends, if declared, will be paid at an annual rate of 4.028%. The dividend rate will be reset every five years at a rate equal to the five-year Government of Canada yield plus 3.21%. Holders of Series A Preferred Shares had the option to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Shares, Series B (Series B Preferred Series), subject to certain conditions, on September 30, 2021 and have the option on September 30 every five years thereafter. The number of shares tendered for conversion by the conversion deadline of September 30, 2021 was below the minimum required to proceed with the conversion and, accordingly, no Series B Preferred Shares were issued. Series B Preferred Shares would entitle any holders thereof to receive floating rate, cumulative, preferential dividends payable quarterly, if declared, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 3.21%. The Company had the option to redeem the Series A Preferred Shares on September 30, 2021 and has the option to redeem on September 30 every five years thereafter, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. SERIES C PREFERRED SHARES In fiscal 2013, the Company issued 4,000,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series C (Series C Preferred Shares) at a purchase price of $25.00 per share for gross proceeds of $100.0 million. The aggregate net amount recognized after deducting issue costs, net of deferred taxes of $1.0 million, was $97.5 million. On June 1, 2022, the Company announced the reset of the dividend rate on its Series C Preferred Shares. Quarterly cumulative cash dividends, as declared, are paid at an annual rate of 4.993% for the five years ending on and including June 30, 2022. Commencing July 1, 2022 and ending on and including June 30, 2027, quarterly cumulative dividends, if declared, will be paid at an annual rate of 6.837% on any outstanding Series C Preferred Shares. The dividend rate will be reset every five years at a rate equal to the five-year Government of Canada yield plus 4.03%. Holders of Series C Preferred Shares have the option to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Shares, Series D (Series D Preferred Shares), subject to certain conditions, on June 30, 2022 and have the option on June 30 every five years thereafter. Series C Preferred Shares will only be converted into Series D Preferred Shares if the prescribed minimum number of Series C Preferred Shares elects to convert to Series D Preferred Shares by the election deadline. Series D Preferred Shares would entitle any holders thereof to receive floating rate, cumulative, preferential dividends payable quarterly, if declared, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.03%. On May 24, 2022, the Company announced that it does not intend to exercise its option to redeem the Series C Preferred Shares on June 30, 2022. The Company has the option to redeem on June 30 every five years thereafter, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 45 CONVERTIBLE DEBENTURES On April 9, 2021, the Company completed the redemption of its 6.25% convertible unsecured senior subordinated debentures for $168.1 million. Outstanding Share Data Preferred shares Series A – issued shares outstanding Series C – issued shares outstanding Common shares Issued shares excluding unvested shares(1) Issued shares outstanding(2) Issued shares outstanding – diluted(3) Average shares outstanding – basic Average shares outstanding – diluted(4) Outstanding shares as of March 31 2022 2021 4,540,000 4,000,000 4,540,000 4,000,000 88,057,175 99,697,799 104,500,074 94,871,398 109,434,474 95,791,083 108,191,331 112,567,757 96,658,863 108,618,446 (1) Excludes 122,355 outstanding unvested shares related to share purchase loans for recruitment, 11,023,169 unvested shares purchased by the employee benefit trusts for the LTIP and 495,100 shares committed to repurchase under NCIB. (2) Includes 122,355 unvested shares related to share purchase loans for recruitment, 11,023,169 unvested shares purchased by the employee benefit trusts for the LTIP and 495,100 shares committed to repurchase under the NCIB (3) Includes 4,802,275 of share issuance commitments net of forfeitures. (4) This is the diluted share number used to calculate diluted EPS. In a substantial issuer bid that commenced on December 22, 2021 and expired on January 27, 2022, the Company made an offer (the “Offer”) to purchase for cancellation up to $100.0 million of its common shares. The Offer was made by way of a “modified Dutch auction”, which allowed shareholders who chose to participate in the offer to individually select the price, within a price range of not less than $15.50 per common share and not more than $16.50 per common share (in increments of $0.10 per common share), at which they were willing to sell their common shares. Upon expiry of the offer, the Company determined that $15.50 was the lowest purchase price that allowed it to purchase the maximum number of common shares properly tendered to the offer, and not properly withdrawn, having an aggregate purchase price of approximately $100.0 million. The Company therefore purchased for cancellation 6,451,612 of its common shares at a purchase price of $15.50 per share. Common shares are reduced by the number of shares estimated to be repurchased at the weighted average share value, with the excess recorded as a reduction to contributed surplus and retained earnings. On August 18, 2021, the Company filed a notice to renew the normal course issuer bid (NCIB) to provide the Company with the choice to purchase up to a maximum of 5,342,990 of its common shares during the period from August 21, 2021 to August 20, 2022 through the facilities of the TSX and on alternative trading systems in accordance with the requirements of the TSX. The purpose of the purchase of common shares under the NCIB is to enable the Company to acquire shares for cancellation. The maximum number of shares that may be purchased under the current NCIB represents 5.0% of the Company’s outstanding common shares at the time of the notice. During the year ended March 31, 2022, there were 3,401,116 shares purchased under the NCIB, of which 83,300 shares have not been cancelled as of March 31, 2022. There were also 70,000 shares purchased under the NCIB during the year ended March 31, 2021 and cancelled during fiscal 2022. The Company has entered into a predefined plan with a designated broker to allow for the repurchase of its common shares under this NCIB. The Company’s broker may repurchase the common shares under the plan on any trading day during the NCIB, including at any time during the Company’s internal trading blackout periods. The plan has been reviewed by the TSX and will terminate on the earlier of the termination of the plan by the Company in accordance with its terms and the expiry of the NCIB. The ability to make purchases under the current NCIB commenced on August 21, 2021 and will continue for one year (to August 20, 2022) at the discretion of the Company. The maximum consideration will be the market price of the securities at the time of acquisition. In order to comply with the trading rules of the TSX, the daily purchases are limited to 105,393 common shares of the Company (which is 25% of the average daily trading volume of common shares of the Company on the TSX (ADTV) in the six calendar months from February 2021 to July 2021 (25% of the ADTV of 421,574)). During the period of the substantial issuer bid described above, no purchases of common shares under the NCIB were effected. As of May 31, 2022, the Company has 99,194,132 common shares issued and outstanding. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 46 Management’s Discussion and Analysis ISSUANCE AND CANCELLATION OF COMMON SHARE CAPITAL Balance, March 31, 2021 Shares issued in connection with settlement of Petsky Prunier deferred consideration Shares issued in connection with exercise of performance stock options Shares purchased and cancelled under the substantial course issuer bid Shares purchased and cancelled under the normal course issuer bid Balance, March 31, 2022 Share-Based Payment Plans LONG-TERM INCENTIVE PLAN 108,191,331 736,850 609,046 (6,451,612) (3,387,816) 99,697,799 Under the long-term incentive plan (LTIP), eligible participants are awarded restricted share units (RSUs), which generally vest over three years. For employees in Canada, the United States, the Channel Islands, Australia and the United Kingdom, employee benefit trusts (the Trusts) have been established. The Company or certain of its subsidiaries, as the case may be, fund the Trusts with cash which is used by the trustees to purchase common shares on the open market that will be held in the Trusts until the RSUs vest. INDEPENDENT DIRECTOR DEFERRED SHARE UNITS Beginning April 1, 2011, the Company adopted a deferred share unit (DSU) plan for its independent directors. From August 7, 2020, half of the independent directors’ annual fee was paid in the form of DSUs. Directors may elect annually to use more of their directors’ fees for DSUs. When a director leaves the Board of Directors, outstanding DSUs are paid out in cash with the amount equal to the number of DSUs held multiplied by the volume weighted average price of the Company’s common shares for the ten trading days immediately preceding a date elected in advance by the outgoing director as the valuation date at any time between their ceasing to be a director and December 1 of the following calendar year. Under the plan, the directors are not entitled to receive any common shares in the Company, and under no circumstances will DSUs confer on any participant any of the rights or privileges of a holder of common shares. EXECUTIVE EMPLOYEE DEFERRED SHARES UNITS On June 1, 2021, the Company adopted a deferred share unit (DSUs) plan for certain key senior executives. All DSU awards will be cash settled on the retirement of the employee, a “good leaver” departure after three years from the date of grant, or death. The DSUs are settled in cash one year after the participants’ departure from the Company under certain conditions of the plan. PERFORMANCE SHARE UNITS The Company adopted a performance share unit (PSU) plan for certain senior executives. The PSUs are a notional equity-based instrument linked to the value of the Company’s common shares. At the end of a three-year vesting period, the number of PSUs which vest is a multiple of the number of PSUs originally granted ranging from 0x to 2x based upon performance against certain metrics pre-determined for each annual grant. The PSUs cliff-vest on the third anniversary of the date of the grant. The number of PSUs that vest is also adjusted for dividends paid during the vesting period. The PSUs are settled in cash, based on the market price of the Company’s shares at the time of vesting. The PSUs were measured at fair value on the grant date. Changes in value of the PSUs at each reporting period are amortized over the remaining vesting period and recorded as a compensation expense in the statement of operations. During the year ended March 31, 2021, the PSU plan was amended to include certain employment-related conditions to the vesting of the awards resulting in a change in the periodic expense recorded during the vesting period. PERFORMANCE SHARE OPTIONS The Company created a performance share option (PSO) plan for certain senior executives. The PSOs have a term of five years and will time-vest rateably over four years (with one-third vesting on each of the second, third and fourth anniversaries of the date of the grant). The PSOs will also be subject to market (stock price) performance vesting conditions and have a four times exercise price cap on payout value (i.e., the gain on the exercise of the options is limited to three times the exercise price). OTHER RETENTION AND INCENTIVE PLANS There were other retention and incentive plans, including the employee stock purchase plan, with individual employees, for which the amount incurred was not significant in the aggregate. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 47 Related Party Transactions The Company’s related parties include the following persons and/or entities: (a) entities that are controlled or significantly influenced by the Company, and (b) key management personnel, who are comprised of the directors of the Company, as well as executives involved in strategic decision-making for the Company. The Company’s trading subsidiaries and intermediate holding companies are listed in the following table: % equity interest Canaccord Genuity Corp. CG Investments Inc. CG Investments Inc. III CG Investments Inc. IV CG Investments Inc. V CG Investments Inc. VI CG G Sponsors Inc. I Jitneytrade Inc. Finlogik Inc. Finlogik Tunisie SARL Canaccord Genuity SAS Canaccord Genuity Wealth (International) Limited* Canaccord Genuity Financial Planning Limited* Canaccord Genuity Wealth Limited* Canaccord Genuity Wealth Group Limited* Canaccord Genuity Wealth (International) Holdings Limited* Hargreave Hale Limited* CG Wealth Planning Limited* Adam & Company Investment Management Limited* Canaccord Genuity Limited Canaccord Genuity Wealth Group Holdings Ltd. Canaccord Genuity LLC Canaccord Genuity Wealth Management (USA) Inc. Canaccord Genuity Wealth & Estate Planning Services Ltd. Canaccord Genuity Petsky Prunier LLC Canaccord Adams Financial Group Inc. Collins Stewart Inc. Canaccord Genuity (2021) LLC Canaccord Genuity Finance Corp. Canaccord Adams (Delaware) Inc. Canaccord Genuity Securities LLC CG Sawaya, LLC Canaccord Genuity (2021) Holdings ULC Canaccord Genuity (2021) Limited Partnership Canaccord Genuity (2021) GP ULC Stockwave Equities Ltd. Canaccord Genuity Group Finance Company Ltd. Canaccord Genuity Emerging Markets Ltd. Canaccord Genuity (Hong Kong) Limited Canaccord Financial Group (Australia) Pty Ltd** Canaccord Genuity (Australia) Limited** Canaccord Genuity Financial Limited* Patersons Asset Management Limited** The Balloch Group Limited Canaccord Genuity Asia (Hong Kong) Limited Canaccord Genuity (Dubai) Ltd. Canaccord Genuity Wealth Group Holdings (Jersey) Limited* Canaccord Genuity Hawkpoint Limited Canaccord Genuity Management Company Limited Country of incorporation Canada Canada Canada Canada Canada Canada Canada Canada Canada Tunisia France Guernsey United Kingdom United Kingdom United Kingdom Guernsey United Kingdom United Kingdom United Kingdom United Kingdom Canada United States United States Canada United States United States United States United States Canada United States United States United States Canada Canada Canada Canada Canada Bahamas China (Hong Kong SAR) Australia Australia Australia Australia China British Virgin Islands China (Hong Kong SAR) United Arab Emirates Jersey United Kingdom Ireland March 31, 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% 75% 100% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 65% 65% 65% 65% 100% 100% 100% 100% 96.7% 100% 100% March 31, 2021 100% 100% 100% 100% 100% 100% 100% 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% n/a 100% 80% 80% 80% 65% 100% 100% 100% 100% 100% 100% 100% * During the year ended March 31, 2022, the Company issued Convertible Preferred Shares to certain institutional investors and certain equity instruments in CGWM UK within the context of the transaction value reflecting a 4.3% interest in the outstanding ordinary shares of CGWM UK. On an as converted basis, convertible preferred shares, preference shares and ordinary shares issued to management and employees of CGWM UK together represent an 26.5% equity equivalent interest. ** The Company owns 65% of the issued shares of Canaccord Financial Group (Australia) Pty Ltd., Canaccord Genuity (Australia) Limited, and Canaccord Genuity Financial Limited, but for accounting purposes, as of March 31, 2022 the Company is considered to have an 67.3% interest because of the shares held in a trust controlled by Canaccord Financial Group (Australia) Pty Ltd. [March 31, 2021 – 85%] Security trades executed for employees, officers and directors of Canaccord Genuity Group Inc. are transacted in accordance with terms and conditions applicable to all clients. Commission income on such transactions in the aggregate is not material in relation to the overall operations of Canaccord Genuity Group Inc. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 48 Management’s Discussion and Analysis The Company offers various share-based payment plans to its key management personnel, including common share purchase loans, a long-term incentive plan, a PSU plan, a PSO plan, and a DSU – senior executives plan. Independent directors have also been granted DSUs. Disclosed in the table below are the amounts recognized as expenses related to individuals who are key management personnel as at March 31, 2022 and March 31, 2021. (in thousands) Short term employee benefits Share-based payments Total compensation paid to key management personnel March 31, 2022 $ $ 33,585 $ 736 34,321 $ March 31, 2021 10,663 654 11,317 Accounts payable and accrued liabilities include the following balances with key management personnel: (in thousands) Accounts receivable Accounts payable and accrued liabilities Critical Accounting Policies and Estimates March 31, 2022 $ $ 12,009 $ 1,271 $ March 31, 2021 4,686 1,562 The following is a summary of Canaccord Genuity Group’s critical accounting estimates. The Company’s significant accounting policies are in accordance with IFRS and are described in Note 5 to the audited consolidated financial statements for the year ended March 31, 2022. The Company’s consolidated financial statements for the years ended March 31, 2022 and March 31, 2021 were also prepared in accordance with IFRS. The preparation of the March 31, 2022 audited consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Therefore, actual results may differ from those estimates and assumptions. The significant judgments, estimates and assumptions include consolidation, revenue recognition, share-based payments, income taxes and valuation of deferred tax assets, impairment of goodwill, intangible assets and other long-lived assets, allowance for credit losses, fair value of financial instruments, capitalization of intangible assets related to software costs, and provisions. Amendments may be made to estimates relating to net assets acquired in an acquisition as well as the allocation of identifiable intangible assets between indefinite life and finite lives. Judgments, estimates and assumptions were also utilized in connection with the valuation of goodwill and intangible assets acquired in connection with the acquisitions of Patersons Securities Limited and Thomas Miller Wealth Management and Thomas Miller Investment (Isle of Man) Limited. Significant accounting policies used and policies requiring management’s judgment and estimates are disclosed in Notes 2 and 5 of the audited consolidated financial statements for the year ended March 31, 2022. CONSOLIDATION The Company owns 65% of the voting shares of Canaccord Genuity (Australia) Limited (CGAL) and Canaccord Genuity Financial Limited (CGF) as at March 31, 2022. The Company completed an evaluation of its contractual arrangements with the other shareholders of CGAL and CGF and the control it has over the financial and operating policies of the two subsidiaries and determined it should consolidate under IFRS 10, “Consolidated Financial Statements” (IFRS 10), as at March 31, 2022 and 2021. Therefore, the financial position, financial performance and cash flows of CGAL and CGF have been consolidated. On January 3, 2022, the share structure for our Australian operations was reorganized through the sale of partly paid shares to selected employees of Canaccord Financial Group (Australia) Pty Ltd. (CFGA) and as a result the Company’s ownership in CFGA decreased from 80% to 65%. For accounting purposes, commencing in the fourth quarter of fiscal 2022 the Company’s ownership interest changed to 67.3% from 85% because of shares held in an employee trust controlled by CFGA. Accordingly, the Company has consolidated the entity and recognized a 32.7% non-controlling interest [March 31, 2021 – 15.0%], which represents the portion of net identifiable assets of CGAL and CGF not owned by the Company. Net income and each component of other comprehensive income are attributed to the non-controlling interest and to the owners of the parent. The Company has established employee benefit trusts, which are considered special purpose entities (SPEs), to fulfill obligations to employees arising from the Company’s share-based payment plans. The employee benefit trusts have been consolidated in accordance with IFRS 10 since their activities are conducted on behalf of the Company, and the Company retains the majority of the benefits and risks of the employee benefit trusts. INTANGIBLE ASSETS Identifiable intangible assets acquired separately are measured on initial recognition at cost. The cost of identifiable intangible assets acquired in a business combination is equal to their fair value as at the date of acquisition. Following initial recognition, identifiable intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 49 The useful lives of identifiable intangible assets are assessed to be either finite or indefinite. Identifiable intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the identifiable intangible asset may be impaired. The amortization period and the amortization method for an identifiable intangible asset are reviewed at least annually, at each financial year end. Identifiable intangible assets with indefinite useful lives are not amortized but are tested for impairment annually. Technology development expenditures on an individual project are recognized as an intangible asset when the Company can demonstrate that the technical feasibility of the asset for use has been established. The asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit. IMPAIRMENT OF NON-FINANCIAL ASSETS The Company assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value-in- use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount, and the impairment is recognized in the consolidated statements of operations. In assessing fair value less costs to sell, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Company bases its impairment calculation on annual budget calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These budget calculations generally cover a period of five years for longer periods, and a long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses are recognized in the consolidated statements of operations in expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of operations unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. The following assets have specific characteristics for impairment testing: Goodwill Goodwill is tested for impairment at least annually as at March 31 and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets Intangible assets with indefinite useful lives are tested for impairment annually as at March 31 at the CGU level and when circumstances indicate that the carrying value may be impaired. REVENUE RECOGNITION Revenue is recognized either at a point in time when a single performance obligation is satisfied at once or over the period of time when a performance obligation is received and utilized by the customer over that period. The Company assesses its revenue arrangements in order to determine if it is acting as principal or agent. The main types of revenue contracts are as follows: Commissions and fees revenue consists of revenue generated through commission-based brokerage services, recognized on a trade date basis, and the sale of fee-based products and services, recognized on an accrual basis. Realized and unrealized gains and losses on securities purchased for client-related transactions are reported as net facilitation losses and recorded net of commission revenue. Facilitation losses for the year ended March 31, 2022 were $9.1 million [2021 – $8.4 million]. Commissions are recognized at a point in time (trade date) as the performance obligation is satisfied. Investment banking revenue consists of underwriting fees and commissions earned on corporate finance activities. The act of underwriting the securities is the sole performance obligation and revenue is recognized at the point in time when the underwriting transaction is complete. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 50 Management’s Discussion and Analysis Advisory fees consist of ongoing management and advisory fees that are recognized over the period of time that this performance obligation is delivered. Also included in advisory fees is revenue from mergers and acquisitions activities, which is recognized at the point in time when the underlying transaction is substantially completed under the engagement terms, and it is probable that a significant revenue reversal will not occur. Principal trading revenue consists of income earned in connection with principal trading operations and is outside the scope of IFRS 15. Interest revenue consists of interest earned on client margin accounts, interest earned on the Company’s cash, interest earned on cash delivered in support of securities borrowing activity, and dividends earned on securities owned. Interest and dividend revenue is outside the scope of IFRS 15. Other revenue includes foreign exchange gains or losses, revenue earned from correspondent brokerage services and administrative fee revenue. INCOME TAXES Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statements of operations. Deferred tax Deferred taxes are accounted for using the liability method. This method requires that deferred taxes reflect the expected deferred tax effect of temporary differences at the reporting date between the carrying amounts of assets and liabilities for financial statement purposes and their tax bases. Deferred tax liabilities are recognized for all taxable temporary differences, except for taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits and carryforward of unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carryforward of unused tax credits and unused tax losses can be utilized. The carrying amounts of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is charged or credited in the statements of operations except where it relates to items that may be credited directly to equity, in which case the deferred tax is recognized directly against equity. Sales tax Revenues, expenses and assets are recognized net of the amount of sales tax, except where the amount of sales tax incurred is not recoverable from the tax authority. In these circumstances, sales tax is recognized as part of the cost of acquisition of the asset or as part of an item of the expense. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of accounts receivable or accounts payable in the consolidated statements of financial position. SHARE-BASED PAYMENTS Employees (including senior executives) of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The participating employees are eligible to receive shares that generally vest over three years (the RSUs). This program is referred to as the long-term incentive plan (the “LTIP” or the “Plan”). Independent directors also receive deferred share units (DSUs) as part of their remuneration, which can only be settled in cash (cash- settled transactions). Certain executives may also receive performance stock options (PSOs) as part of their remuneration, which are equity-settled. In addition, certain senior executives receive performance share units (PSUs) as well as DSUs under the senior executives DSU plan as part of their remuneration, which can only be settled in cash (cash-settled transactions). CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 51 The dilutive effect, if any, of outstanding options and share-based payments is reflected as additional share dilution in the computation of diluted earnings (loss) per common share. Equity-settled transactions For equity-settled transactions, the Company measures the fair value of share-based awards as of the grant date. RSUs issued by the Plan continue to vest after termination of employment so long as the employee does not violate certain post- termination restrictions and is not engaged in certain competitive or soliciting activities as provided in the Plan. The Company determined that the awards do not meet the criteria for an in-substance service condition, as defined by IFRS 2. Accordingly, RSUs granted as part of the normal course incentive compensation payment cycle are expensed in the period in which those awards are deemed to be earned with a corresponding increase in contributed surplus, which is generally the fiscal period in which the awards are either made or the immediately preceding fiscal year for those awards made after the end of such fiscal year but were determined and earned in respect of that fiscal year. For certain awards, typically new hire awards or retention awards, vesting is subject to continued employment and therefore these awards are subject to a continuing service requirement. Accordingly, the Company recognizes the cost as an expense on a graded basis over the applicable vesting period with a corresponding increase in contributed surplus. The Company estimates the number of equity instruments that will ultimately vest when calculating the expense attributable to equity-settled transactions. No expense is recognized for awards that do not ultimately vest. When share-based awards vest, contributed surplus is reduced by the applicable amount and share capital is increased by the same amount. Cash-settled transactions The cost of cash-settled transactions is measured initially at fair value at the grant date. The fair values of DSUs are expensed upon grant, as there are no vesting conditions. The liability is remeasured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognized through the statements of operations. The PSUs were measured at fair value on grant date. Changes in value of the PSUs at each reporting period are amortized over the remaining vesting period and recorded as a compensation expense in the statement of operations as a result of certain employment-related conditions. TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS AND FOREIGN SUBSIDIARIES The Company’s consolidated financial statements are presented in Canadian dollars, which is also the Company’s functional currency. Each subsidiary of the Company determines its own functional currency, and items included in the financial statements of each subsidiary are measured using that functional currency. Transactions and balances Transactions in foreign currencies are initially recorded by the Company and its subsidiaries at their respective functional currencies using exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated by the Company and its subsidiaries into their respective functional currencies at the exchange rate in effect at the reporting date. All differences upon translation are recognized in the consolidated statements of operations. Non-monetary assets and liabilities denominated in foreign currencies are translated by the Company and its subsidiaries into their respective functional currencies at historical rates. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates in effect at the date when the fair value is determined. Translation of foreign subsidiaries Assets and liabilities of foreign subsidiaries with a functional currency other than the Canadian dollar are translated into Canadian dollars at rates prevailing at the reporting date, and income and expenses are translated at average exchange rates prevailing during the period. Unrealized gains or losses arising as a result of the translation of the foreign subsidiaries are recorded in accumulated other comprehensive income (loss). On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in the consolidated statements of operations. The Company also has monetary assets and liabilities that are receivable or payable from a foreign operation. If settlement of the receivable or payable is neither planned nor likely to occur in the foreseeable future, the differences upon translation are recognized in accumulated other comprehensive income (loss) as these receivables and payables form part of the net investment in the foreign operation. PROVISIONS Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the statements of operations net of any reimbursement. If the effect of the time value of money is significant, provisions are discounted using a current pre-tax rate that 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 52 Management’s Discussion and Analysis reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Financial Instruments A significant portion of the Company’s assets and liabilities is composed of financial instruments. The Company uses financial instruments for both trading and non-trading activities. The Company engages in trading activities that include the purchase and sale of securities in the course of facilitating client trades and taking principal trading positions with the objective of earning a profit. The use of financial instruments may either introduce or mitigate exposures to market, credit and/or liquidity risks. See Risk Management in this MD&A for details on how these risks are managed. For significant assumptions made in determining the valuation of financial and other instruments, refer to Note 7 of the audited consolidated financial statements for the year ended March 31, 2022. FOREIGN EXCHANGE The Company manages its foreign exchange risk by periodically hedging pending settlements in foreign currencies. Realized and unrealized gains and losses related to these transactions are recognized in income during the period. On March 31, 2022, forward contracts outstanding to sell US dollars totalled US$1.8 million [March 31, 2021 – $nil]. Forward contracts outstanding to buy US dollars had a notional amount of US$2.3 million, a decrease of US$3.6 million from March 31, 2021. The fair value of these contracts was nominal. Some of the Company’s operations in the US, the UK & Europe, Australia, Hong Kong and China are conducted in the local currency; however, any foreign exchange risk in respect of these transactions is generally limited as pending settlements on both sides of the transaction are typically in the local currency. These contracts were entered into in an attempt to mitigate foreign exchange risk on pending security settlements in foreign currencies. The fair value of these contracts is nominal due to their short term to maturity. The Company’s Canaccord Genuity Wealth Management segment in the UK & Europe trades foreign exchange forward contracts on behalf of its clients and establishes matching contracts with the counterparties. The Company has no significant net exposure, assuming no counterparty default. FUTURES The Company’s Canadian operations are involved in trading various futures contracts, in an attempt to mitigate market risk, interest rate risk, yield curve risk and liquidity risk. Futures contracts are agreements to buy or sell a standardized amount of an underlying asset, at a predetermined future date and price, in accordance with terms specified by a regulated futures exchange, and are subject to daily cash margining. The Company’s Canadian operations have traditionally engaged in the trading of Canadian and US government bond futures contracts to mitigate their risk. At March 31, 2022, the notional amount of the bond futures contracts outstanding was long $9.7 million [March 31, 2021 – short $1.1 million]. The Company’s Canadian operations are also involved in trading US Treasury futures in an attempt to mitigate interest rate risk, yield curve risk and liquidity risk. There were no outstanding US Treasury futures contracts outstanding as at March 31, 2022 and March 31, 2021. The fair value of all of the above futures contracts is nominal due to their short term to maturity. Realized and unrealized gains and losses related to these contracts are recognized in net income (loss) during the reporting period. Adoption of New and Revised Standards There were no new accounting standards adopted for the period ended March 31, 2022. Future Changes in Accounting Policies and Estimates The Company monitors the potential changes proposed by the International Accounting Standards Board on an ongoing basis and analyzes the effect that changes in the standards may have on the Company’s operations. STANDARDS ISSUED BUT NOT YET EFFECTIVE There were no standards issued, which may reasonably be expected to materially impact the Company’s financial statements, but which were not yet effective as of March 31, 2022. Disclosure Controls and Procedures and Internal Control over Financial Reporting DISCLOSURE CONTROLS AND PROCEDURES As of March 31, 2022, an evaluation was carried out, under the supervision of and with the participation of management, including the President & CEO and the Executive Vice President & Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined under National Instrument 52-109. Based on that evaluation, the President & CEO and the CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 53 Executive Vice President & Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of and during the fiscal year ended March 31, 2022. INTERNAL CONTROL OVER FINANCIAL REPORTING Management, including the President & CEO and the Executive Vice President & Chief Financial Officer, has designed internal control over financial reporting as defined under National Instrument 52-109 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Based on that evaluation, the President & CEO and the Executive Vice President & Chief Financial Officer concluded that the Company’s internal control over financial reporting was designed and operating effectively as of and during the year ended March 31, 2022 and that there were no material weaknesses in our internal control over financial reporting. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes in internal control over financial reporting that occurred during the year ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Risk Management OVERVIEW Uncertainty and risk are inherent when conducting operations within financial markets. As an active participant in the Canadian and international capital markets, the Company is exposed to risks that could result in financial losses. The Company has identified its principal risks as: market risk, credit risk, operational risk and other risks. Accordingly, risk management and control of the balance between risk and return are critical elements in maintaining the Company’s financial stability and profitability. Therefore, an effective risk management framework is integral to the success of Canaccord Genuity Group Inc. RISK MANAGEMENT STRUCTURE AND GOVERNANCE The Company’s disciplined risk management process encompasses a number of functional areas and requires frequent communication, judgment and knowledge of the business, products and markets. The Company’s senior management is actively involved in the risk management process and has developed policies, procedures and reports that enable the Company to assess and control its risks. These policies and procedures are subject to ongoing review and modification as activities, markets and circumstances change. As part of the Company’s risk philosophy, the first line of responsibility for managing risk lies with branch managers, department heads and trading desk managers (within prescribed limits). The monitoring and control of the Company’s risk exposure is conducted through a variety of separate, but complementary, financial, credit, operational, compliance and legal reporting systems. The Company’s governance structure includes the following elements: Audit and Risk Committee Board of Directors Canaccord Genuity Group Inc. Corporate Governance & Compensation Committee Risk Management Committee Cyber Security Committee Canaccord Genuity Global Operating Committee The Board of Directors (the Board) has oversight of the company-wide risk management framework. These responsibilities are delegated to the Audit and Risk Management Committees. See the Company’s current Annual Information Form (AIF) for details of the Audit and Risk Committee’s mandate as it relates to risk management. The Audit and Risk Committee assists the Board in fulfilling its oversight responsibility by monitoring the effectiveness of internal controls and the control environment. It also receives and reviews various quarterly and annual updates, and reports on key risk metrics as well as the overall risk management program. The Risk Management Committee assists the Board in fulfilling its responsibilities for monitoring risk exposures against the defined risk appetite and for general oversight of the risk management process. The Risk Management Committee is led by the firm’s Chief Risk Officer and committee members include the CEO, the CFO and senior management representation from the key revenue- producing businesses and functional areas of the Company. The Risk Management Committee identifies, measures and monitors the principal risks facing the business through review and approval of the Company’s risk appetite, policies, procedures and limits/ thresholds. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 54 Management’s Discussion and Analysis The segregation of duties and management oversight are important aspects of the Company’s risk management framework. The Company has a number of functions that are independent of the revenue-producing businesses that perform risk management activities, including the monitoring, evaluating and analyzing of risk. These functions include Enterprise Risk Management, Compliance, Operations, Internal Audit, Treasury, Finance, Information Technology and Legal. The Company’s global Cybersecurity Committee exists to help identify, monitor and manage risks specific to the Company’s information networks, data and internal systems. This committee is chaired by the firm’s Chief Risk Officer and committee members include senior IT management from across the firm, as well as representation from Legal, Compliance, Internal Audit and Operations. The Cybersecurity Committee is focused on issues such as cybersecurity risk assessment, IT safeguards and controls, risks related to third-party service providers, employee training and awareness and incident response planning. MARKET RISK Market risk is the risk that a change in market prices and/or any of the underlying market factors will result in losses. Each business area is responsible for ensuring that their market risk exposure is prudent within a set of risk limits set by the Risk Management Committee and approved by the Audit and Risk Committee. In addition, the Company has established procedures to ensure that risks are measured, closely monitored, controlled and visible to senior levels of management. The Company is exposed to equity price risk, liquidity risk and volatility risk as a result of its principal trading activities in listed options and equity securities. The Company is also exposed to specific interest rate risk, credit spread risk and liquidity risk in respect of its principal trading in fixed income securities. In addition to active supervision and review of trading activities by senior management, Canaccord Genuity Group mitigates its risk exposure through a variety of limits to control concentration, capital allocation and usage, as well as through trading policies and guidelines. The Company manages and monitors its risks in this area using both qualitative and quantitative measures, on a company-wide basis, as well as by trading desk. Management regularly reviews and monitors inventory levels and positions, trading results, liquidity profile, position aging and concentration levels. Canaccord Genuity Group also utilizes scenario analysis and a Value-at-Risk (VaR) risk measurement system for its equity and fixed income and derivative inventories. Consequently, the Company can ensure that it is adequately diversified with respect to market risk factors and that trading activity is within the risk tolerance levels established by senior management. CREDIT RISK Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The primary source for credit risk to Canaccord Genuity Group is in connection with trading activity by clients in the Jitneytrade trade business acquired by the Company in fiscal 2019 (now rebranded as CG Direct) and Canaccord Genuity Wealth Management business segments, including client margin accounts. In order to minimize financial exposure in this area, the Company applies a set of credit standards and conducts financial reviews with respect to clients and new accounts. The Company provides financing to clients by way of margin lending. In margin-based lending, the Company extends credit for a portion of the market value of the securities in a client’s account, up to certain limits. The margin loans are collateralized by those securities in the client’s account. In connection with this lending activity, the Company faces a risk of financial loss in the event that a client fails to meet a margin call if market prices for securities held as collateral decline and if the Company is unable to recover sufficient value from the collateral held. For margin lending purposes, the Company has established risk-based limits that are generally more restrictive than those required by applicable regulatory policies. In addition, the Company has established limits to how much it will lend against an individual security or group of securities in a single sector so as to limit credit concentration risk. Trading strategies involving derivative products, such as exchange traded options and futures carry certain levels of risk to the Company. Due to the non-linear and intrinsically leveraged nature of derivative securities, the speed at which their value changes is exacerbated, thereby potentially triggering margin calls and client-related losses. Although the Company imposes strict limits on clients trading and monitors client exposure on a real-time basis there is no certainty that such procedures will be effective in eliminating or reducing the risk of losses to the Company. The extension of credit via margin lending is overseen by the firm’s Credit Committee. The Committee meets regularly to review and discuss the firm’s credit risks, including large individual loans, collateral quality, loan coverage ratios and concentration risk. The Committee will also meet, as required, to discuss any new loan arrangements proposed by senior management. The Company also faces a risk of financial loss with respect to trading activity by clients if such trading results in overdue or unpaid amounts in under-secured cash accounts. The Company has developed a number of controls within its automated trade order management system to ensure that trading by individual account and advisor is done in accordance with customized limits and risk parameters. The Company is engaged in various trading and brokerage activities whose counterparties primarily include broker dealers, banks, clearing agents, exchanges, financial intermediaries and other financial institutions. These activities include agency and principal trading, securities borrowing and lending, and entering into repurchase agreements and reverse repurchase agreements. In the event that counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty and/or the issuer of the instrument. The Company manages this risk by imposing and monitoring individual and aggregate trading and position limits within each business segment, for each counterparty, conducting regular CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 55 credit reviews of financial counterparties, reviewing security and loan concentrations, holding and marking to market collateral on certain transactions, and conducting business through clearing organizations that guarantee performance. The Company records a provision for bad debts in general and administrative expense. Any actual losses arising from or associated with client trading activity as described above are charged to this provision. Historically, this provision has been sufficient to cover actual losses. OPERATIONAL RISK Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events such as the occurrence of disasters or security threats. Operational risk exists in all of the Company’s activities, including processes, systems and controls used to manage other risks. Failure to manage operational risk can result in financial loss, reputational damage, regulatory fines and failure to manage market, credit or other risks. The Company operates in different markets and relies on its employees and internal and third-party systems to process a high number of transactions and provide other technology and support functions. In order to mitigate this risk, the Company has developed a system of internal controls and checks and balances at appropriate levels, which includes overnight trade reconciliation, control procedures related to clearing and settlement, transaction and daily value limits within all trading applications, cash controls, physical security, independent review procedures, documentation standards, billing and collection procedures, and authorization and processing controls for transactions and accounts. In addition, the Company has implemented an operational risk program that helps Canaccord Genuity Group measure, manage, report and monitor operational risk issues (see RCSA below). The Company also has disaster recovery procedures, business continuity plans and built-in redundancies in place in the event of a systems or technological failure. In addition, the Company utilizes third party service agreements and security audits where appropriate. Risk and Control Self-Assessment (RCSA) The purpose of RCSAs is to: • Identify and assess key risks inherent to the business and categorize them based on severity and frequency of occurrence • Rate the effectiveness of the control environment associated with the key risks • Mitigate the risks through the identification of action plans to improve the control environment where appropriate • Provide management with a consistent approach to articulate and communicate the risk profiles of their areas of responsibility • Meet regulatory requirements and industry standards The Company has established a process to determine what the strategic objectives of each group/unit/department are and to identify, assess and quantify operational risks that hinder the Company’s ability to achieve those objectives. The RCSA results are specifically used to calculate the operational risk regulatory capital requirements for operations in the UK and operational risk exposure in all geographies. The RCSAs are periodically updated and results are reported to the Risk Management and Audit and Risk Committees. OTHER RISKS Other risks encompass those risks that can have an adverse material impact on the business but do not belong to market, credit or operational risk categories. Regulatory and legal risk Regulatory risk results from non-compliance with regulatory requirements, which could lead to fines and/or sanctions. The Company has established procedures to ensure compliance with all applicable statutory and regulatory requirements in each jurisdiction in which it operates. These procedures address issues such as regulatory capital requirements, disclosure requirements, internal controls over financial reporting, sales and trading practices, use of and safekeeping of client funds, use of and safekeeping of client data, credit granting, collection activity, anti-money laundering, insider trading, employee misconduct, conflicts of interest and recordkeeping. Legal risk results from potential criminal, civil or regulatory litigation against the Company that could materially affect the Company’s business, operations or financial condition. The Company has in-house legal counsel, as well as access to external legal counsel, to assist the Company in addressing legal matters related to operations and to defend the Company’s interests in various legal actions. Losses or costs associated with routine regulatory and legal matters are included in general and administrative expense in the Company’s audited consolidated financial statements. The Company and its affiliates provide financial advisory, underwriting and other services to, and trade the securities of issuers that are involved with, new and emerging industries, including the US cannabis industry. Activities within such industries, including the US cannabis industry, typically have not had the benefit of a history of successful operating results. In addition to the economic uncertainties associated with new industries, new activities and new issuers, the laws applicable to such industries or activities, particularly the US cannabis industry and the activities of issuers in that industry, and the effect or enforcement of such laws are undetermined, conflicting and uncertain. With respect to the US cannabis industry, cannabis continues to be a controlled substance 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 56 Management’s Discussion and Analysis under the United States Controlled Substances Act and as such, there is a risk that certain issuers, while in compliance with applicable state law, may be prosecuted under federal law. Accordingly, the Company has adopted policies and procedures reasonably designed to ensure compliance with the United States Currency and Foreign Transactions Reporting Act of 1970 (the Bank Secrecy Act) and the guidance issued by the United States Department of the Treasury Financial Crimes Enforcement Network, FIN-2014-G001 (the FinCEN Guidance) relating to providing financial services to marijuana related businesses in the United States (as that term is used in the FinCEN Guidance). While the Company takes steps to identify the risks associated with emerging industries, including the US cannabis industry, and only provides services to those issuers where it determines that there is no material risk to the Company or where any risk is unlikely to result in a material adverse consequence to the Company, there is a risk that the Company could be the subject of third party proceedings which may have a material adverse effect on the Company business, revenues, operating results and financial condition as well as the Company’s reputation, even if such proceedings were concluded successfully in favour of the Company. The Company has determined that any such proceedings are unlikely and, accordingly, has not recorded a provision in respect of such matters. Cybersecurity risk Cybersecurity risk is the risk that the Company’s information networks, data or internal systems will be damaged, disrupted, misappropriated, stolen, accessed without permission or otherwise attacked. This risk exists due to the interconnected nature of the Company’s business with its clients, suppliers, vendors, partners and the public via the internet and other networks. As a result of this interconnectivity, third parties with which the Company does business or that facilitate the Company’s business may also be a source of cybersecurity risk to the firm. The Company has implemented a third party risk management framework as part of onboarding new vendors and other third parties as well as vetting existing vendors. The purpose of this mitigant is to ensure all parties interacting with the Company are adhering to high standards in matters relating to cybersecurity. The Company devotes considerable effort and resources to defending against and mitigating cybersecurity risk, including increasing awareness throughout the organization by implementing a firm-wide cybersecurity training program for all employees. The Company’s management of cybersecurity risk, as well as any reported incidents, is regularly presented to both senior management via the Cybersecurity Committee and the Audit and Risk Committee of the Board of Directors. Reputational risk Reputational risk is the risk that an activity undertaken, or alleged to have been undertaken, by an organization or its representatives will impair its image in the community or lower public confidence in it, resulting in a loss of revenue, legal action or increased regulatory oversight. Possible sources of reputational risk could come from operational failures, non-compliance with laws and regulations, disparaging traditional or online media coverage, or leading an unsuccessful financing. The Company could face reputational risk through its association with past or present corporate finance clients who are the subject of regulatory and/or legal scrutiny. Reputational risk can also be reflected within customer satisfaction and external ratings, such as equity analyst reports. In addition to its various risk management policies, controls and procedures, the Company has a formal Code of Business Conduct and Ethics, a Business Integrity Line for reporting incidents, and an integrated program of marketing, branding, communications and investor relations to help manage and support the Company’s reputation. Pandemic risk Pandemic risk is the risk of large-scale outbreaks of infectious diseases that can greatly increase morbidity and mortality over a wide geographic area and cause significant social and economic disruption. Such disruptions could have a negative impact on the Company’s operations and could prevent the Company from operating as it would under normal conditions. The global outbreak of COVID-19 and the declaration of a pandemic by the World Health Organization in March 2020 caused a significant disruption in economic activity and resulted in a sharp downturn in global equity markets which impacted the normal operation of the Company’s business. In the early stages of the outbreak, the Company overhauled its Disaster Recovery Plan in preparation for an escalation of the outbreak. This overhaul included the setup of low-latency remote access trading systems for trading desks, updates of technology solutions and the network infrastructure, load testing of remote access systems, and policy and procedural enhancements to reduce the need for manual processes to ensure the smooth operations of the business in the event of a remote working environment. Because of these efforts, the Company was well prepared and experienced no visible disruptions to its operations as a result of having most employees working from remote locations. Trading desks operated smoothly and effectively to both service clients and to limit the Company’s exposure and risks in managing its own inventory and trading positions. Although the Company’s systems, processes and procedures were effective in limiting the risk associated with the outbreak of the COVID-19 pandemic there is a risk that such systems, processes and procedures may not be successful in the event of future pandemics or in the event that conditions under the COVID-19 pandemic deteriorate or persist for an extended period of time. The extent to which the Company’s business and financial condition will continue to be affected by the COVID-19 pandemic will depend on future developments including the spread of variants, the efficacy of vaccines against new variants, the vaccination progress and the impact of related controls and restrictions imposed by government authorities. Significant geopolitical, economic and market risk The Company’s wealth management and capital markets businesses are by nature, subject to numerous risks including changes in the economic, political and market conditions that are outside of the Company’s control. These conditions have the potential to cause reductions in investor confidence which could impact AUA growth, and activity levels in our investment banking, advisory and trading businesses. The effects of geopolitics on the global economy are difficult to predict and, in many cases, have not caused CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Management’s Discussion and Analysis 57 major disruptions to global economic growth. However, the war in Ukraine and the sanctions on Russia are having a substantial economic impact given their influence on global oil. commodity and agricultural markets. It is also expected that the geopolitical impacts of this crisis may have implications for decades to come. While the impacts of these factors on our business are inherently difficult to predict, such factors have the potential to adversely impact the Company’s revenues. operating margins, compensation ratios and expense levels due to their possible negative impacts on market volumes, asset prices, volatility, or liquidity. Control risk As of March 31, 2022, senior officers and directors of the Company collectively owned approximately 14.3% of the issued and outstanding (24.0% fully diluted) common shares of Canaccord Genuity Group Inc. If a sufficient number of these shareholders act or vote together, they will have the power to exercise significant influence over all matters requiring shareholder approval, including the election of the Company’s directors, amendments to its articles, amalgamations and plans of arrangement under Canadian law and mergers or sales of substantially all of its assets. This could prevent Canaccord Genuity Group from entering into transactions that could be beneficial to the Company or its other shareholders. Also, third parties could be discouraged from making a tender offer or takeover bid to acquire any or all of the outstanding common shares of the Company. Any significant change in these shareholdings through sale or other disposition, or significant acquisitions by others of the common shares in the public market or by way of private transactions, could result in a change of control and changes in business focus or practices that could affect the profitability of the Company’s business. Restrictions on ownership and transfer of common shares Restrictions on ownership and transfer of common shares in the articles of Canaccord Genuity Group Inc. to prevent unauthorized change in control without regulatory approval could, in certain cases, affect the marketability and liquidity of the common shares. Risk factors For a detailed list of the risk factors that are relevant to the Company’s business and the industry in which it operates, see the Risk Factors section in the Company’s current Annual Information Form (AIF). Risks include, but are not necessarily limited to, those listed in the AIF. Investors should carefully consider the information about risks, together with the other information in this document, before making investment decisions. It should be noted that this list is not exhaustive but contains risks that the Company considers to be of particular relevance. Other risk factors may apply. Further discussion regarding risks can be found in our AIF. Dividend Policy Although dividends are expected to be declared and paid quarterly, the Board of Directors, in its sole discretion, will determine the amount and timing of any dividends. All dividend payments will depend on general business conditions, the Company’s financial condition, results of operations, capital requirements and such other factors as the Board determines to be relevant. Dividend Declaration On June 2, 2022, the Board of Directors approved a dividend of $0.085 per common share, payable on June 30, 2022, with a record date of June 17, 2022. On June 2, 2022, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2022 to Series A Preferred shareholders of record as at June 17, 2022 On June 2, 2022, the Board approved a cash dividend of $0.31206 per Series C Preferred Share payable on June 30, 2022 to Series C Preferred shareholders of record as at June 17, 2022 Additional Information Additional information relating to Canaccord Genuity Group Inc., including our Annual Information Form, is available on our website at https://www.canaccordgenuity.com/investor-relations/investor-resources/financial-reports/ and on SEDAR at www.sedar.com. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 58 Independent Auditor’s Report To the Shareholders of Canaccord Genuity Group Inc. Opinion We have audited the consolidated financial statements of Canaccord Genuity Group Inc. and its subsidiaries [the “Group”], which comprise the consolidated statements of financial position as at March 31, 2022 and 2021, and the consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards [“IFRSs”]. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements. Key Audit Matter How our Audit Addressed the Key Audit Matter Revenue Recognition on Corporate Finance and Merger and Acquisition [“M&A”] Transactions As at March 31, 2022, the Group has $493.1 million of advisory revenue related to corporate finance and M&A transactions. The Group recognizes advisory fee revenue when the performance obligation for the underlying transaction is complete under the terms of the agreement. As individual advisory fee transactions are often substantial in size and the number and timing of transactions can vary significantly from period to period depending on market activity, this audit area is considered a key audit risk. Where significant transactions close near the reporting date, an evaluation must be completed to determine in which period the Group completed delivery of its performance obligations and recognize revenue accordingly. The details of the Group’s accounting policies for revenue recognition are disclosed in note 5, “Summary of Significant Accounting Policies”. To test the revenue recognized related to advisory fees, our audit procedures included, among others: • We selected a sample of advisory fee transactions and reviewed executed contracts to assess whether the performance obligation was satisfied over time or at a point in time. • We tested a sample of open advisory transactions at the reporting date and evaluated if performance obligations associated with advisory services provided over a period of time were recognized in accordance with IFRS 15 by obtaining evidence of delivery of services and comparing to the period of revenue being recognized. • We reviewed source documents, including the executed agreements and cash receipts to obtain evidence of completion of performance obligations for all advisory transactions that closed immediately before and after year-end and assessed whether revenue was recognized in the correct period. • We evaluated the Group’s critical accounting policies and related disclosures in the consolidated financial statements to determine if they appropriately describe these transactions and whether they are in accordance with IFRS 15. Impairment of Goodwill in Cash-Generating Units As at March 31, 2022, the Group has $510.3 million of goodwill recognized within cash generating units [“CGUs”]. Management To test the estimated FVLCS of the CGUs, our audit procedures included, among others: CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT 59 Key Audit Matter How our Audit Addressed the Key Audit Matter assesses at least annually, or when indicators of impairment exist, whether there has been an impairment loss in the carrying value of these assets. When testing goodwill for impairment, management compares the carrying amount of a CGU to its recoverable amount, which is determined using the higher of value in use or fair value less costs to sell [“FVLCS”]. The impairment testing of CGUs relies on estimates of recoverable amounts based on five-year forecasts and a terminal value for the period thereafter. Given the subjective nature of the significant inputs to the impairment model, including the volatility of revenue, incentive compensation costs, discount rate and terminal growth rate, the results of the model are sensitive to inputs where management applies judgment. Due to the subjectivity involved in forecasting and discounting future cash flows and the significance of the CGUs’ recognized goodwill as at March 31, 2022, this audit area is considered a key audit risk. The details of the Group’s accounting policies for goodwill are disclosed in note 5, “Summary of Significant Accounting Policies”. Fair value measurement of Level 3 securities owned and investments The Group has Level 3 securities owned and investments consisting of $89.6 million, recorded at fair value. These financial instruments are complex and illiquid and require valuation techniques that may include complex models and non-observable inputs, requiring management’s estimation and judgment. Auditing the valuation of these financial instruments required the application of significant auditor judgment and involvement of valuation specialists in assessing the complex models and non-observable inputs used, including any significant valuation adjustments. Given the subjectivity involved, this audit area is considered a key audit risk. The Group describes its significant accounting judgments, estimates, and assumptions in relation to the fair value measurement of financial instruments in note 5, “Summary of Significant Accounting Policies”, and in note 7, “Financial Instruments”. Other Information • With the assistance of our valuation specialists, we evaluated the appropriateness and mathematical accuracy of the impairment models for the CGUs. As part of this evaluation, we compared the carrying values used in models for each CGU to the financial records of the Group and compared the CGUs identified by the Group to the lowest level of operations monitored by management and others in the organization and assessed if the grouping of CGUs was appropriate for the purpose of the impairment test. • With the assistance of our valuation specialists, we evaluated the assumptions and inputs into the Group’s calculation of the recoverable amounts for the CGUs, including the revenue, incentive compensation costs, discount rate and terminal growth rate, by comparing those assumptions to historical results and third-party data. • We performed sensitivity analyses on significant assumptions, including revenue growth rates, and expense growth rates to evaluate changes in the recoverable amount of the CGUs that would result from changes in the assumptions. • We assessed the Group’s disclosures in relation to this matter. To test the fair value of Level 3 securities owned and investments, our audit procedures included, among others: • With the assistance of our valuation specialists, we assessed the appropriateness and mechanical accuracy of models used in the valuation of these financial instruments. • With the assistance of our valuation specialists, we verified management’s significant inputs to the valuation models by corroborating to internal and external sources and performed a sensitivity analysis on any significant non- observable inputs to evaluate the overall reasonability of the fair value of the portfolio. • We evaluated the Group’s disclosures of the securities owned and investments held by the Group and determined they were in accordance with IFRS 7 and IFRS 9. Management is responsible for the other information. The other information comprises: • Management’s Discussion and Analysis • The information, other than the consolidated financial statements and our auditor’s report thereon, in the Annual Report Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. We obtained Management’s Discussion & Analysis prior to the date of this auditor’s report. 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 in this auditor’s report. We have nothing to report in this regard. The Annual Report is expected to be made available to us after the date of the auditor’s report. If based on the work we will perform on this other information, we conclude there is a material misstatement of other information, we are required to report that fact to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 60 In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are 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 Canadian generally accepted 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 these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditor’s report is Sean Musselman. Chartered Professional Accountants Licensed Public Accountants Toronto, Canada June 2, 2022 CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT 61 Notes 6 9, 24 15 10 12 14 14 13 6, 7 9, 24 28 16 17 18 7,11 19 15 7, 11 17 18 March 31, 2022 $ March 31, 2021 $ $ $ 1,788,261 $ 1,051,229 3,438,655 1,967 6,280,112 98,224 22,928 34,643 186,993 510,279 117,066 7,250,245 $ 567,290 4,845,672 8,222 15,952 7,500 6,574 23,928 10,618 — 5,485,756 24,875 75,758 145,467 101,620 5,833,476 1,883,292 1,041,583 3,973,442 738 6,899,055 81,229 12,193 23,070 150,923 380,115 85,216 7,631,801 889,607 5,160,600 10,357 56,285 7,500 12,119 24,311 17,706 168,112 6,346,597 13,552 19,577 66,200 70,591 6,516,517 1,178,069 238,700 1,416,769 7,250,245 $ 1,107,094 8,190 1,115,284 7,631,801 $ Canaccord Genuity Group Inc. Consolidated Statements of Financial Position As at (in thousands of Canadian dollars) ASSETS Current Cash and cash equivalents Securities owned Accounts receivable Income taxes receivable Total current assets Deferred tax assets Investments Equipment and leasehold improvements Intangible assets Goodwill Right of use assets Total assets LIABILITIES AND EQUITY Current Securities sold short Accounts payable and accrued liabilities Provisions Income taxes payable Subordinated debt Current portion of bank loan Current portion of lease liabilities Current portion of contingent consideration Convertible debentures Total current liabilities Deferred tax liabilities Other liabilities Bank loan Lease liabilities Total liabilities Equity Attributable to equity holders of CGGI Attributable to non-controlling interests Total equity Total liabilities and shareholders’ equity See accompanying notes On behalf of the Board: “Daniel Daviau” “Terrence A. Lyons” DANIEL DAVIAU TERRENCE A. LYONS Director Director 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 62 Canaccord Genuity Group Inc. Consolidated Statements of Operations For the years ended (in thousands of Canadian dollars, except per share amounts) March 31, 2022 $ March 31, 2021 $ Notes 761,843 561,725 493,057 158,978 36,028 34,371 735,239 761,551 197,092 246,801 26,288 40,717 2,046,002 2,007,688 1,248,184 102,824 20,074 73,873 23,598 101,431 27,593 23,894 22,422 9,197 8,519 5,932 192 1,227,895 122,154 19,948 67,475 28,364 82,310 26,156 25,040 27,246 5,922 — 4,354 922 1,667,733 1,637,786 378,269 369,902 122,072 (14,368) 107,704 270,565 133,252 (33,152) 100,100 269,802 246,314 24,251 263,786 6,016 94,871 109,434 96,659 108,978 12, 14 13 8 19 15 8 21 21 21 $ 21 $ 22 $ 22 $ 22 $ 2.50 $ 2.16 $ 1.00 $ 1.25 $ 0.32 $ 2.30 2.04 0.97 1.25 0.25 REVENUE Commissions and fees Investment banking Advisory fees Principal trading Interest Other EXPENSES Compensation expense Trading costs Premises and equipment Communication and technology Interest General and administrative Amortization Amortization of right of use assets Development costs Acquisition-related costs Fair value adjustment of non-controlling interests derivative liability Loss and other costs in connection with extinguishment of convertible debentures Share of loss of an associate Income before income taxes Income tax expense (recovery) Current Deferred Net income for the year Net income attributable to: CGGI shareholders Non-controlling interests Weighted average number of common shares outstanding (thousands) Basic Diluted Income per common share Basic Diluted Dividend per Series A Preferred Share Dividend per Series C Preferred Share Dividend per common share See accompanying notes CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT 63 Canaccord Genuity Group Inc. Consolidated Statements of Comprehensive Income For the years ended (in thousands of Canadian dollars) Net income for the year Other comprehensive income Net change in unrealized losses on translation of foreign operations, net of tax Comprehensive income for the year Comprehensive income attributable to: CGGI shareholders Non-controlling interests See accompanying notes March 31, 2022 $ 270,565 (33,566) 236,999 March 31, 2021 $ 269,802 (31,439) 238,363 $ 8 $ 211,433 $ 25,566 $ 231,989 6,374 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 64 Canaccord Genuity Group Inc. Consolidated Statements of Changes in Equity As at and for the years ended (in thousands of Canadian dollars) Preferred shares, opening and closing Common shares, opening Shares issued in connection with share-based payments Acquisition of common shares for long-term incentive plan (LTIP) Release of vested common shares from employee benefit trusts Change in shares committed to purchase under the normal course issuer bid Conversion of convertible debentures Shares issued in connection with settlement of JItneytrade contingent consideration Shares issued in connection with acquisition of Petsky Prunier Shares issued in connection with exercise of performance stock options (PSOs) Shares purchased and cancelled under normal course issuer bid Shares purchased and cancelled under substantial issuer bid Net unvested share purchase loans Common shares, closing Convertible debentures – equity, opening Reclassification to retained earnings upon redemption of convertible debentures Convertible debentures – equity, closing Contributed surplus, opening Share-based payments, net Shares purchased and cancelled under normal course issuer bid Shares purchased and cancelled under substantial issuer bid Shares committed to purchase under the normal course issuer bid Equity portion of redemption of convertible debentures Unvested share purchase loans Change in deferred tax asset relating to share-based payments Contributed surplus, closing Retained earnings(deficit), opening Net income attributable to CGGI shareholders Reclassification of realized gains on disposal of financial instruments measure at fair value through other comprehensive income Common share dividends Preferred share dividends Shares purchased and cancelled under substantial issuer bid Reclassification of equity portion of convertible debentures Retained earnings, closing Deferred consideration, opening Settlement of deferred consideration in connection with the acquisition of Petsky Prunier Deferred consideration in connection with acquisition of Sawaya Partners Deferred consideration, closing Accumulated other comprehensive income, opening Reclassification of other comprehensive income to non-controlling interest Reclassification of realized gains on disposal of financial instruments measure at fair value through other comprehensive income Other comprehensive loss attributable to CGGI shareholders Accumulated other comprehensive income, closing Total shareholders’ equity Non-controlling interests, opening Non-controlling interests, closing Total equity See accompanying notes CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes 20 March 31, 2022 $ 205,641 662,366 (60,824) 34,188 4,770 — — — 4,099 (23,527) (44,801) (105) 576,166 — — — 62,402 45,983 (21,787) (27,486) (2,537) — 105 7,561 64,241 73,220 246,314 — (30,797) (9,484) (27,713) — 251,540 — — 11,378 11,378 103,465 519 21 19 22 22 19 11 March 31, 2021 $ 205,641 663,553 10 (37,822) 40,766 (8,181) 22 2,000 6,545 1,232 (5,585) — (174) 662,366 5,156 (5,156) — 101,501 15,882 (3,274) — — (58,747) 174 6,866 62,402 (193,131) 263,786 4,091 (23,924) (9,404) — 31,802 73,220 6,545 (6,545) — — 139,353 — — (34,881) 69,103 (4,091) (31,797) 103,465 1,178,069 1,107,094 156 8,190 1,416,769 1,115,284 8,190 238,700 Canaccord Genuity Group Inc. Consolidated Statements of Cash Flows For the years ended (in thousands of Canadian dollars) OPERATING ACTIVITIES Net income for the year Items not affecting cash Amortization Amortization of right-of-use assets Deferred income tax recovery Share-based compensation expense Fair value adjustment of non-controlling interests derivative liability Loss and other costs in connection with extinguishment of convertible debentures Non-cash portion of acquisition- related costs Share of loss of associate Impairment of investments Interest expense in connection with lease liabilities Changes in non-cash working capital Increase in securities owned Decrease/(increase) in accounts receivable (Decrease)/increase in income taxes payable, net (Decrease)/increase in securities sold short (Decrease)/increase in accounts payable, accrued liabilities and provisions Cash provided by operating activities FINANCING ACTIVITIES Purchase of shares for cancellation under normal course issuer bid Purchase of shares under substantial issuer bid Acquisition of common shares for long-term incentive plan Proceeds from issuance of convertible preferred shares and other equity instruments in UK & Crown 65 March 31, 2022 $ March 31, 2021 $ Notes $ 270,565 $ 269,802 12, 14 13 23 8 19 27,593 23,894 (14,368) 146,827 8,519 — — 192 — 6,518 (9,647) 539,655 (36,162) (322,316) (378,017) 263,253 (45,314) (100,000) (60,824) 26,156 25,040 (33,152) 146,408 — 4,354 2,000 922 2,370 6,765 (110,116) (699,172) 52,329 14,590 1,387,386 1,095,682 (8,859) — (37,822) Dependencies wealth management operations, net of acquisition related costs 224,963 — Payment of cash dividends on convertible preferred shares issued in UK & Crown Dependencies wealth management operations Redemption of convertible debentures Proceeds from bank loan Proceeds from exercise of performance share options Payment of bank loan Payment of long-term liability Cash dividends paid on common shares Cash dividends paid on preferred shares Lease payments Cash used in financing activities INVESTING ACTIVITIES Purchase of equipment and leasehold improvements Purchase of intangibles Acquisition of Adam & Company, net of cash acquired Acquisition of Sawaya Partners, net of cash acquired Investment in associate Purchase of investments Payment of deferred and contingent consideration Cash used in investing activities Effect of foreign exchange on cash balances (Decrease) increase in cash position Cash position, beginning of year Cash position, end of year Supplemental cash flow information Interest received Interest paid Income taxes paid See accompanying notes (7,141) (168,112) 88,465 4,099 (8,432) — (30,797) (9,484) (30,282) (142,859) (12,122) (2,541) (93,316) (45,513) (1,490) (14,161) (32,852) (201,995) (13,430) (95,031) 1,883,292 1,788,261 — — — 1,232 (6,925) (1,721) (23,924) (9,404) (30,212) (117,635) (4,857) (2,260) — — (2,414) (3,000) (73,596) (86,127) (5,739) 886,181 997,111 1,883,292 36,100 $ $ $ 22,232 $ $ 160,055 $ 25,423 27,418 83,886 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 66 Notes to Consolidated Financial Statements As at March 31, 2022 and March 31, 2021 and for the years ended March 31, 2022 and 2021 (in thousands of Canadian dollars, except per share amounts) NOTE 1. Corporate Information Through its principal subsidiaries, Canaccord Genuity Group Inc. (the Company or CGGI) is a leading independent, full-service financial services firm with capital markets operations in North America, the UK & Europe, Asia, Australia, the Bahamas and the Middle East. The Company also has wealth management operations in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. The Company has operations in each of the two principal segments of the securities industry: capital markets and wealth management. Together, these operations offer a wide range of complementary investment products, brokerage services and investment banking services to the Company’s private, institutional and corporate clients. Canaccord Genuity Group Inc. was incorporated on February 14, 1997 by the filing of a memorandum and articles with the Registrar of Companies for British Columbia under the Company Act (British Columbia) and continues in existence under the Business Corporations Act (British Columbia). The Company’s head office is located at Suite 2200 – 609 Granville Street, Vancouver, British Columbia, V7Y 1H2. The Company’s registered office is located at Suite 400 – 725 Granville Street, Vancouver, British Columbia, V7Y 1G5. The Company’s common shares are publicly traded under the symbol CF on the Toronto Stock Exchange (TSX). The Company’s Series A Preferred Shares are listed on the TSX under the symbol CF.PR.A. The Company’s Series C Preferred Shares are listed on the TSX under the symbol CF.PR.C. The Company’s business experiences considerable variations in revenue and income from quarter to quarter and year to year due to factors beyond the Company’s control. The Company’s business is affected by the overall condition of the worldwide equity and debt markets. NOTE 2. Basis of Preparation STATEMENT OF COMPLIANCE These audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These audited consolidated financial statements have been prepared on a historical cost basis except for investments, securities owned, securities sold short, non-controlling interests derivative liability deferred and contingent consideration. All of these have been measured at fair value as set out in the relevant accounting policies except for certain investments which have been accounted for under the equity method. These audited consolidated financial statements are presented in Canadian dollars and all values are in thousands of dollars, except when otherwise indicated. These audited consolidated financial statements were authorized for issuance by the Company’s Board of Directors on June 2, 2022. PRINCIPLES OF CONSOLIDATION These consolidated financial statements include the financial statements of the Company, its subsidiaries and controlled special purpose entities (SPEs). The financial results of a subsidiary or controlled SPE are consolidated if the Company acquires control. Control is achieved when an entity has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The results of subsidiaries acquired or disposed of during the year are included in the statements of operations from the effective date of the acquisition or up to the effective date of the disposal, as appropriate. All inter-company transactions and balances have been eliminated. In cases where an accounting policy of a subsidiary differs from the Company’s accounting policies, the Company has made the appropriate adjustments to ensure conformity for purposes of the preparation of these consolidated financial statements. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 67 USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS The preparation of these consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, accompanying note disclosures, and the disclosure of contingent liabilities at the reporting date. Therefore, actual results may differ from those estimates and assumptions. The global pandemic related to an outbreak of COVID-19 has cast additional uncertainty on the assumptions used by management in making its judgments and estimates. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods. Given that the full extent of the impact that COVID-19, including government and/or regulatory responses to the outbreak, will have on the global economy and the Company’s business is highly uncertain and difficult to predict at this time, there is a higher level of uncertainty with respect to management’s judgments and estimates. The extent to which the Company’s business and financial condition will continue to be affected by the COVID-19 pandemic will depend on future developments including the spread of variants, efficacy of vaccines against new variants, the achievement of mass vaccinations and the impact of related controls and restrictions imposed by government authorities. The significant judgments, estimates and assumptions include consolidation, revenue recognition, share-based payments, income taxes and valuation of deferred tax assets, impairment of goodwill, intangible assets and other long-lived assets, allowance for credit losses, fair values of level 2 and 3 financial instruments, capitalization of intangible assets related to software costs, provisions and the valuation of the non-controlling interests derivative liability. Amendments may be made to estimates relating to net assets acquired in an acquisition as well as the allocation of identifiable intangible assets between indefinite life and finite lives. Judgments, estimates and assumptions were also utilized in connection with the preliminary purchase price allocation, including the valuation of goodwill and intangible assets acquired in connection with the acquisitions of Adam & Company and Sawaya Partners. During the year ended March 31, 2022, certain institutional investors completed the purchase of Convertible Preferred Shares issued by Canaccord Genuity Wealth Group Holdings (Jersey) Limited (CGWM UK), a subsidiary of the Company. The Convertible Preferred Shares issued contain no obligation for the Company to deliver cash or other financials assets. Judgment was used to conclude that the Convertible Preferred Shares are a compound instrument comprised of an equity component, representing discretionary dividends and a liquidation preference, and a liability component that reflects a derivative to settle the instrument, if applicable, by delivering the economic equivalent of a variable number of common shares of CGWM UK. The fair value of the Convertible Preferred Shares at issuance was allocated to its respective equity and derivative components. The fair value of the derivative was established first and the residual amount was recorded as the equity component. The derivative component will be remeasured at the end of each reporting period using the Company’s best estimate of its value with any changes in fair value recorded through net income for the period. Significant judgment is required in respect of the estimates and assumptions to be used in the determination of the fair value of the derivative component at each reporting period. In the discussions below, unless otherwise noted, Hargreave Hale Limited is referred to as “Hargreave Hale”, Petsky Prunier LLC is referred to as “Petsky Prunier”, Sawya Partners LLC is referred as “Sawaya”, McCarthy Taylor Limited (renamed as CG McCarthy Taylor Limited) is referred to as “McCarthy Taylor”, Thomas Miller Wealth Management Limited (renamed as CG Wealth Planning Limited) and the private client business of Thomas Miller Investment (Isle of Man) Limited are referred to as “Thomas Miller”, Patersons Securities Limited (renamed as Canaccord Genuity Financial Limited) is referred to as “Patersons”, the private client investment management business acquired from Adam & Company (including the acquisition of the entire issued capital of Adam & Company Investment Management Limited) is referred to as “Adam & Company”, and Jitneytrade Inc., Finlogik Capital Inc. and Finlogik Inc. are collectively referred to as “Jitneytrade”. Consolidation The Company owns 65% of the voting shares of Canaccord Financial Group (Australia) Pty Ltd. (CFGA) which owns 100% of Canaccord Genuity (Australia) Limited (CGAL) and Canaccord Genuity Financial Limited (CGF) as at March 31, 2022. The Company completed an evaluation of its contractual arrangements with the other shareholders of CFGA and the control it has over the financial and operating policies of the two subsidiaries and determined it should consolidate under IFRS 10, “Consolidated Financial Statements” (IFRS 10), as at March 31, 2022 and 2021. Therefore, the financial position, financial performance and cash flows of CGAL and CGF have been consolidated. On January 3, 2022, the share structure for the Australian operations was reorganized through the sale of partly paid shares to selected employees of CGAL and CGF and as a result the Company’s ownership in CFGA decreased from 80% to 65%. For accounting purposes, commencing in the fourth quarter of fiscal 2022 the Company’s ownership interest changes to 67.3% from 85% because of shares held in an employee trust controlled by CFGA. Accordingly, the Company has consolidated the entity and recognized a 32.7% non-controlling interest [March 31, 2021 – 15.0%], which represents the portion of net identifiable assets of CGAL and CGF not owned by the Company. Net income and each component of other comprehensive income are attributed to the non-controlling interest and to the owners of the parent. The Company has employee benefit trusts, which are considered SPEs [Note 23], to fulfill obligations to employees arising from the Company’s share-based payment plans. The employee benefit trusts have been consolidated in accordance with IFRS 10 since their activities are conducted on behalf of the Company, and the Company retains the majority of the benefits and risks of the employee benefit trusts. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 68 Notes to Consolidated Financial Statements Revenue recognition Revenue is recognized to the extent that it is probable that the Company has an enforceable right to payment for performance completed to date and that a transaction price can be reliably measured. Estimation may be required to determine the amount of revenue that can be recognized and also the timing of the substantial completion of the performance obligations of the underlying investment banking or advisory transactions. Share-based payments The Company measures the cost of equity-settled and cash-settled transactions with employees and directors based on the fair value of the awards granted. The fair value is determined based on the observable share prices or by using an appropriate valuation model. The use of option pricing models to determine the fair value requires the input of highly subjective assumptions including the expected price volatility, expected forfeitures, expected life of the award and dividend yield. Changes in the subjective assumptions can materially affect the fair value estimates. The assumptions and models used for estimating the fair value of share-based payments, if and as applicable, are disclosed in Note 23. Income taxes and valuation of deferred taxes Accruals for income tax liabilities require management to make estimates and judgments with respect to the ultimate outcome of tax filings and assessments. Actual results could vary from these estimates. The Company operates within different tax jurisdictions and is subject to individual assessments by these jurisdictions. Tax filings can involve complex issues, which may require an extended period of time to resolve in the event of a dispute or re-assessment by tax authorities. Deferred taxes are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized based upon the likely timing and the level of future taxable profit. Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws and the amount and timing of future taxable income. The Company establishes tax provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as the Company’s experience of previous tax audits. Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment at least annually, or whenever an event or change in circumstance may indicate potential impairment, to ensure that the recoverable amount of the cash-generating unit (CGU) to which goodwill and indefinite life intangible assets are attributed is greater than or equal to their carrying values. In determining the recoverable amount, which is the higher of fair value less costs to sell (FVLCS) and value-in-use, management uses valuation models that consider such factors as projected earnings, price-to-earnings multiples, relief of royalties related to brand names and discount rates. Management must apply judgment in the selection of the approach to determining the recoverable amount and in making any necessary assumptions. These judgments may affect the recoverable amount and any resulting impairment write-down. The key assumptions used to determine recoverable amounts for the different cash- generating units are disclosed in Note 14. Impairment of other long-lived assets The Company assesses its amortizable long-lived assets at each reporting date to determine whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the recoverable amount of the asset or the CGU containing the asset using management’s best estimates and available information. Allowance for credit losses The Company records allowances for credit losses associated with clients’ receivables, loans, advances and other receivables based on a forward-looking, expected credit loss (ECL) approach. The Company establishes an allowance for credit losses in accordance with management’s valuation policy based on its historical credit loss experience adjusted for forward-looking factors or other considerations as appropriate. Judgment is required as to the timing of establishing an allowance for credit losses and the amount of the required specific allowance, taking into consideration counterparty creditworthiness, current economic trends and past experience. Clients’ receivable balances are generally collateralized by securities; therefore, any provision is generally measured after considering the market value of the collateral, if any. Fair value of financial instruments The Company measures a number of its financial instruments at fair value as discussed in Note 7. Fair value is determined based on market prices from independent sources, if available. If there is no available market price, then the fair value is determined by using valuation models. The inputs to these models, such as expected volatility and liquidity , are derived from observable market data where possible; but where observable data is not available, judgment is required to select or determine inputs to a fair value model. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 69 There is inherent uncertainty and imprecision in estimating the factors that can affect fair value, and in estimating fair values generally, when observable data is not available. Changes in assumptions and inputs used in valuing financial instruments could affect the reported fair values. Provisions The Company records provisions related to pending or outstanding legal matters and regulatory investigations. Provisions in connection with legal matters are determined on the basis of management’s judgment in consultation with legal counsel, considering such factors as the amount of the claim, the possibility of wrongdoing by an employee of the Company and precedents. Contingent litigation loss provisions are recorded by the Company when it is probable that the Company will incur a loss as a result of a past event and the amount of the loss can be reliably estimated. The Company also records provisions related to restructuring costs when the recognition criteria for provisions as they apply to restructuring costs are fulfilled. Comparatives Certain payments of deferred and contingent consideration associated with business combinations have been reclassified from financing activities to investing activities in the consolidated statements of cash flows to better align the presentation with the substance of the transactions. NOTE 3. Adoption of New and Revised Standards There were no new accounting standards adopted for the period ended March 31, 2022. NOTE 4. Future Changes in Accounting Policies Standards issued but not yet effective There were no standards issued, which may reasonably be expected to materially impact the Company’s financial statements, but which were not yet effective as of March 31, 2022. NOTE 5. Summary of Significant Accounting Policies TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS AND FOREIGN SUBSIDIARIES The Company’s consolidated financial statements are presented in Canadian dollars, which is also the Company’s functional currency. Each subsidiary of the Company determines its own functional currency, and items included in the financial statements of each subsidiary are measured using that functional currency. Transactions and balances Transactions in foreign currencies are initially recorded by the Company and its subsidiaries at their respective functional currencies using exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated by the Company and its subsidiaries into their respective functional currencies at the exchange rate in effect at the reporting date. All differences upon translation are recognized in the consolidated statements of operations. Non-monetary assets and liabilities denominated in foreign currencies are translated by the Company and its subsidiaries into their respective functional currencies at historical rates. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates in effect at the date when the fair value is determined. Translation of foreign subsidiaries Assets and liabilities of foreign subsidiaries with a functional currency other than the Canadian dollar are translated into Canadian dollars at rates prevailing at the reporting date, and income and expenses are translated at average exchange rates prevailing during the period. Unrealized gains or losses arising as a result of the translation of the foreign subsidiaries are recorded in accumulated other comprehensive income (loss). On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in the consolidated statements of operations. The Company also has monetary assets and liabilities that are receivable or payable from a foreign operation. If settlement of the receivable or payable is neither planned nor likely to occur in the foreseeable future, the differences upon translation are recognized in accumulated other comprehensive income (loss) as these receivables and payables form part of the net investment in the foreign operation. INTANGIBLE ASSETS Identifiable intangible assets acquired separately are measured on initial recognition at cost. The cost of identifiable intangible assets acquired in a business combination is equal to their fair value as at the date of acquisition. Following initial recognition, 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 70 Notes to Consolidated Financial Statements identifiable intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The amortization of intangible assets is recognized in the consolidated statements of operations as part of amortization expense. The useful lives of identifiable intangible assets are assessed to be either finite or indefinite. Identifiable intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the identifiable intangible asset may be impaired. The amortization period and the amortization method for an identifiable intangible asset are reviewed at least annually, at each financial year end. Identifiable intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually. Identifiable intangible assets purchased through the acquisitions of Genuity Capital Markets (Genuity), Patersons Securities Limited, Collins Stewart Hawkpoint plc (CSHP), Eden Financial Ltd., Hargreave Hale, McCarthy Taylor, Petsky Prunier, Adam & Company and Sawaya Partners are customer relationships, non-competition agreements, brand name, trading licences, contract book, fund management contracts and technology, which have finite lives and are amortized on a straight-line basis over their estimated useful lives. Branding acquired through the acquisition of Genuity is considered to have an indefinite life, as it will provide benefit to the Company over a continuous period. Software under development or acquired is amortized over its useful life once the asset is available for use. Brand names with definite lives are amortized over three years. Customer relationships are amortized over five to 24 years. Internally developed or acquired software is amortized over a maximum of 10 years. Internally developed or acquired software Expenditures towards the development or acquisition of projects are recognized as intangible assets when the Company can demonstrate that the technical feasibility of the assets for use has been established. The assets are carried at cost less any accumulated amortization and accumulated impairment losses in accordance with IAS 38, “Intangible Assets”. Capitalized costs are expenditures directly attributable to the software development, such as employment, consulting or professional fees. Amortization of the assets begins when development is complete, and the assets are available for use. The assets are amortized over the period of expected future benefit. IMPAIRMENT OF NON-FINANCIAL ASSETS The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of the FVLCS and the value-in-use of a particular asset or CGU. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount, and the impairment is recognized in the consolidated statements of operations. In assessing FVLCS, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Company bases its impairment calculation on annual budget calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These budget calculations generally cover a period of five years. A long-term growth rate is then calculated and applied to project future cash flows after the fifth year. Impairment losses are recognized in the consolidated statements of operations. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such an indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, or exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statements of operations. The following assets have specific characteristics for impairment testing: Goodwill Goodwill is tested for impairment annually as at March 31 or when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. Indefinite life intangible assets Intangible assets with indefinite useful lives are tested for impairment annually, as at March 31, at the CGU level and when circumstances indicate that the carrying value may be impaired. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 71 CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash on deposit, treasury bills, commercial paper and bankers’ acceptances with a term to maturity of less than three months from the date of purchase, which are subject to an insignificant risk of changes in value. FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. [i] Financial assets Initial recognition and measurement On initial recognition, financial assets are classified as instruments measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. The classification is based on two criteria: the Company’s business approach for managing the financial assets; and whether the instruments’ contractual cash flows result in cash flows that are solely payments of principal and interest on the principal amount outstanding (the SPPI criteria). The business approach considers whether the Company’s objective is to receive cash flows from holding the financial assets, from selling the assets or a combination of both. Classification and subsequent measurement Financial assets classified as fair value through profit or loss (FVTPL) Financial assets are classified as FVTPL when they either fail the contractual cash flow test or are held in a business model in which the aim is to realize the asset’s value through a short-term sale. Financial assets at FVTPL are stated at fair value, with any resulting gain or loss recognized in the statements of operations. The net gain or loss recognized in the statements of operations includes any unpaid dividend or interest earned on the financial asset. Financial assets measured at FVTPL consist of marketable securities owned and investments not subject to significant influence by the Company. The Company periodically evaluates the classification of its financial assets classified as FVTPL based on whether the intent to sell the financial assets in the near term is still appropriate. In rare circumstances, if the Company is unable to trade these financial assets due to inactive markets or if management’s intent to sell them in the foreseeable future significantly changes, the Company may elect to reclassify these financial assets. Financial assets classified as fair value through other comprehensive income (FVOCI) A financial asset is classified as FVOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset result in cash flows that meet the SPPI criteria. Included in the FVOCI category was our investment in Euroclear which was disposed during the year ended March 31, 2021. There are no other financial assets classified as FVOCI. Financial assets classified as amortized costs A financial asset is measured at amortized cost if it is held within a business model that has an objective to hold financial assets to collect contractual cash flows and the contractual terms of the financial asset result in cash flows that meet the SPPI criteria. Items included in this category include cash and cash equivalents and accounts receivable. The Company reclassifies financial assets only when its business approach for managing those assets changes. Impairment of financial assets The Company’s accounts receivables are classified as financial assets measured at amortized cost and are subject to the ECL model. Accounts receivable includes trade receivables from clients and brokers and dealers. All our corporate finance and client receivables have a maturity of less than 12 months from initial recognition; therefore, the allowance is limited to 12-month ECLs. The Company established a valuation policy that is based on its historical credit loss experience, adjusted for forward-looking factors or other considerations as appropriate. The impact of the allowance is not considered to have a significant impact on our audited consolidated financial statements for the year ended March 31, 2022. A financial asset or group of financial assets was deemed to be impaired if there was objective evidence of impairment as a result of one or more events that occurred since the initial recognition of the asset. Derecognition A financial asset is derecognized primarily when the rights to receive cash flows from the asset have expired or the Company has transferred its right to receive cash flows from the asset. [ii] Financial liabilities Initial recognition and measurement All financial liabilities are recognized initially at fair value and classified as either FVTPL or other financial liabilities. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 72 Notes to Consolidated Financial Statements Classification and subsequent measurement Financial liabilities classified as fair value through profit or loss Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held for trading are recognized in the statements of operations. The Company has not designated any financial liabilities as FVTPL that would not otherwise meet the definition of FVTPL upon initial recognition. Securities sold short, non-controlling interests derivative liability and contingent and deferred considerations are classified as held for trading and recognized at fair value. Financial liabilities classified as amortized cost After initial recognition, financial liabilities classified as other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the statements of operations. Financial liabilities classified as amortized cost include accounts payable and accrued liabilities, bank loans, and subordinated debt. The carrying value of other financial liabilities approximates their fair value. [iii] Offsetting of financial instruments Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. [iv] Derivative financial instruments Derivative financial instruments are financial contracts, the value of which is derived from the value of the underlying assets, interest rates, indices or currency exchange rates. The Company uses derivative financial instruments to manage foreign exchange risk on pending security settlements in foreign currencies. The fair value of these contracts is nominal due to their short term to maturity. Realized and unrealized gains and losses related to these contracts are recognized in the consolidated statements of operations during the reporting period. The Company trades in futures contracts, which are agreements to buy or sell standardized amounts of a financial instrument at a predetermined future date and price, in accordance with terms specified by a regulated futures exchange, and subject to daily cash margining. The Company trades in futures in an attempt to mitigate interest rate risk, yield curve risk and liquidity risk. The Company also trades in forward contracts, which are non-standardized contracts to buy or sell a financial instrument at a specified price on a future date. The Company trades in forward contracts in an attempt to mitigate foreign exchange risk on pending security settlements in foreign currencies. FAIR VALUE MEASUREMENT The Company measures financial instruments at fair value at each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. When available, quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs, are used to determine fair value. For financial instruments not traded in an active market, the fair value is determined using appropriate and reliable valuation techniques. Such techniques may include recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; discounted cash flow analysis or other valuation models. Valuation techniques may require the use of estimates or management assumptions if observable market data is not available. When the fair value cannot be reliably measured using a valuation technique, then the financial instrument is measured at cost. The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measured based on the lowest level input significant to the fair value measurement in its entirety [Note 7]. For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. SECURITIES OWNED AND SOLD SHORT Securities owned and sold short are recorded at fair value based on quoted market prices in an active market or a valuation model if no market prices are available. Unrealized gains and losses are reflected in income. Certain securities owned have been pledged as collateral for securities borrowing transactions. Securities owned and sold short are classified as held for trading financial instruments. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 73 SECURITIES LENDING AND BORROWING The Company employs securities lending and borrowing activities primarily to facilitate the securities settlement process. These arrangements are typically short term in nature, with interest being received when cash is delivered, and interest being paid when cash is received. The value of collateral for securities borrowed and securities loaned is carried at the amounts of cash collateral delivered and received in connection with the transactions. Securities borrowed transactions require the Company to deposit cash, letters of credit or other collateral with the lender. For securities loaned, the Company receives collateral in the form of cash or other collateral in an amount generally in excess of the market value of the securities loaned. The Company monitors the fair value of the securities loaned and borrowed against the cash collateral on a daily basis and, when appropriate, the Company may require counterparties to deposit additional collateral, or it may return collateral pledged to ensure such transactions are appropriately collateralized. Securities purchased under agreements to resell and securities sold under agreements to repurchase represent collateralized financing transactions. The Company receives securities purchased under agreements to resell, makes delivery of securities sold under agreements to repurchase, monitors the market value of these securities on a daily basis and delivers or obtains additional collateral as appropriate. The Company manages its credit exposure by establishing and monitoring aggregate limits by customer for these transactions. Interest earned on cash collateral is based on a floating rate. SECURITIES PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND OBLIGATIONS RELATED TO SECURITIES SOLD UNDER REPURCHASE AGREEMENTS The Company recognizes these transactions on the trade date at amortized cost using the effective interest rate method. Securities sold and purchased under repurchase agreements remain on the consolidated statement of financial position. Reverse repurchase agreements and repurchase agreements are treated as collateralized lending and borrowing transactions. REVENUE RECOGNITION Revenue is recognized either at a point in time when a single performance obligation is satisfied at once or over the period of time when a performance obligation is received and utilized by the customer over that period. The Company assesses its revenue arrangements in order to determine if it is acting as principal or agent. The main types of revenue contracts are as follows: Commissions and fees revenue consists of revenue generated through commission-based brokerage services, recognized on a trade date basis, and the sale of fee-based products and services, recognized on an accrual basis. Realized and unrealized gains and losses on securities purchased for client-related transactions are reported as net facilitation losses and recorded net of commission revenue. Facilitation losses for the year ended March 31, 2022 were $9.1 million [2021 – $8.4 million]. Commissions are recognized at a point in time (trade date) as the performance obligation is satisfied. Investment banking revenue consists of underwriting fees and commissions earned on corporate finance activities. The act of underwriting the securities is the sole performance obligation, and revenue is recognized at the point in time when the underwriting transaction is complete. Advisory fees consist of ongoing management and advisory fees that are recognized over the period of time that this performance obligation is delivered. Also included in advisory fees is revenue from mergers and acquisitions activities, which is recognized at the point in time when the underlying transaction is substantially completed under the engagement terms and it is probable that a significant revenue reversal will not occur. Principal trading revenue consists of income earned in connection with principal trading operations and is outside the scope of IFRS 15. Interest revenue consists of interest earned on client margin accounts, interest earned on the Company’s cash, interest earned on cash delivered in support of securities borrowing activity, and dividends earned on securities owned. Interest and dividend revenue is outside the scope of IFRS 15. Other revenue includes foreign exchange gains or losses, revenue earned from correspondent brokerage services and administrative fee revenue. EQUIPMENT AND LEASEHOLD IMPROVEMENTS Computer equipment, furniture and equipment, and leasehold improvements are recorded at cost less accumulated amortization. Amortization is being recorded as follows: Computer equipment Furniture and equipment Leasehold improvements Straight-line over useful life Straight-line over useful life Straight-line over the shorter of useful life and respective term of the leases An item of property, plant and equipment, and any specific part initially recognized, is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 74 Notes to Consolidated Financial Statements as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statements of operations when the asset is derecognized. The assets’ residual values, useful lives and methods of amortization are reviewed at each financial year end, and are adjusted prospectively where appropriate. INCOME TAXES Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in the Company’s tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statements of operations. Deferred tax Deferred taxes are accounted for using the liability method. This method requires that deferred taxes reflect the expected deferred tax effect of temporary differences at the reporting date between the carrying amounts of assets and liabilities for financial statement purposes and their tax bases. Deferred tax liabilities are recognized for all taxable temporary differences, except for taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits and carryforward of unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses, can be utilized. The carrying amounts of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. No deferred tax liability has been recognized for taxable temporary differences associated with investments in subsidiaries from undistributed profits and foreign exchange translation differences as the Company is able to control the timing of the reversal of these temporary differences. The Company has no plans or intention to perform any actions that will cause the temporary differences to reverse in the foreseeable future. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is charged or credited in the statements of operations except where it relates to items that may be credited directly to equity, in which case the deferred tax is recognized directly against equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. Sales tax Revenues, expenses and assets are recognized net of the amount of sales tax, except where the amount of sales tax incurred is not recoverable from the tax authority. In these circumstances, sales tax is recognized as part of the cost of acquisition of the asset or as part of an item of the expense. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of accounts receivable or accounts payable in the consolidated statements of financial position. TREASURY SHARES The Company’s own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. This includes shares held in the employee benefit trusts and unvested share purchase loans and preferred shares held in treasury. No gain or loss is recognized in the statements of operations on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognized in contributed surplus. Voting rights related to treasury shares are nullified for the Company and no dividends are allocated to them. EARNINGS PER COMMON SHARE Basic earnings per common share is computed by dividing the net income (loss) attributable to common shareholders for the period by the weighted average number of common shares outstanding. Diluted earnings per common share reflects the dilutive CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 75 effect in connection with the LTIP, other share-based payment plans, and the convertible debentures (up until the redemption date of April 9, 2021) based on the treasury stock method. The treasury stock method determines the number of incremental common shares by assuming that the number of shares the Company has granted to employees has been issued. The Convertible Preferred Shares issued by CGWM UK are factored into the diluted EPS by adjusting net income attributable to common shareholders of the Company to reflect our proportionate share of CGWM UK’s earnings on an as converted basis if the calculation is dilutive. SHARE-BASED PAYMENTS Employees (including senior executives) of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The participating employees are eligible to receive shares that generally vest over three years (the RSUs). This program is referred to as the long-term incentive plan (the LTIP or the Plan). Independent directors also receive deferred share units (DSUs) as part of their remuneration, which can only be settled in cash (cash- settled transactions). Certain executives may also receive performance stock options (PSOs) as part of their remuneration which are equity-settled.). In addition, certain senior executives receive performance share units (PSUs) as well as DSUs under the senior executives DSU plan as part of their remuneration, which can only be settled in cash (cash-settled transactions). The dilutive effect, if any, of outstanding options and share-based payments is reflected as additional share dilution in the computation of diluted earnings (loss) per common share. Equity-settled transactions For equity-settled transactions, the Company measures the fair value of share-based awards as of the grant date. RSUs issued by the Plan continue to vest after termination of employment so long as the employee does not violate certain post- termination restrictions and is not engaged in certain competitive or soliciting activities as provided in the Plan. The Company determined that the awards do not meet the criteria for an in-substance service condition, as defined by IFRS 2. Accordingly, RSUs granted as part of the normal course incentive compensation payment cycle are expensed in the period in which those awards are deemed to be earned, with a corresponding increase in contributed surplus, which is generally either the fiscal period in which the awards are made or the immediately preceding fiscal year for those awards made after the end of such fiscal year but determined and earned in respect of that fiscal year. For certain awards, typically new hire awards or retention awards, vesting is subject to continued employment, and therefore these awards are subject to a continuing service requirement. Accordingly, the Company recognizes the cost of such awards as an expense on a graded basis over the applicable vesting period, with a corresponding increase in contributed surplus. The Company estimates the number of equity instruments that will ultimately vest when calculating the expense attributable to equity- settled transactions. No expense is recognized for awards that do not ultimately vest. When share-based awards vest, contributed surplus is reduced by the applicable amount and share capital is increased by the same amount. Cash-settled transactions The cost of cash-settled transactions is measured initially at fair value at the grant date. The fair values of DSUs for independent directors are expensed upon grant, as there are no vesting conditions [Note 23]. The liability is remeasured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognized through the statements of operations. The PSUs and DSUs were measured at fair value on grant date. Changes in value of the PSUs and DSUs at each reporting period are amortized over the remaining vesting period and recorded as a compensation expense in the statement of operations as a result of certain employment-related conditions. PROVISIONS Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the statements of operations net of any reimbursement. If the effect of the time value of money is significant, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Legal provisions Legal provisions are recognized when it is probable that the Company will be liable for the future obligation as a result of a past event related to legal matters and when they can be reasonably estimated. Restructuring provisions Restructuring provisions are only recognized when the recognition criteria for provisions are fulfilled. In order for the recognition criteria to be met, the Company needs to have in place a detailed formal plan about the business or part of the business concerned, 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 76 Notes to Consolidated Financial Statements the location and number of employees affected, a detailed estimate of associated costs and an appropriate timeline. In addition, either the personnel affected must have a valid expectation that the restructuring is being carried out or the implementation must have been initiated. The restructuring provision recognized includes staff restructuring costs, reorganization expenses, onerous lease provisions and impairment of equipment and leasehold improvements. LEASES At the commencement of a lease, the liability to make lease payments and an asset representing the right to use the underlying asset during the lease term is recognized. The interest expense on the lease liability and the amortization expense on the right-of- use assets are charged to the statement of operations and separately recognized. CLIENT MONEY The Company’s UK & Europe operations hold money on behalf of their clients in accordance with the client money rules of the Financial Conduct Authority in the United Kingdom. Such money and the corresponding liabilities to clients are not included in the consolidated statements of financial position as the Company is not beneficially entitled thereto. The amounts held on behalf of clients at the reporting date are included in Note 27. SEGMENT REPORTING The Company’s segment reporting is based on the following operating segments: Canaccord Genuity Capital Markets, Canaccord Genuity Wealth Management and Corporate and Other. The Company’s business operations are grouped into the following geographic regions: Canada, the UK and Europe (including Dubai), Australia, and the US. The Company’s operations in Asia are allocated to the Canadian and Australian capital markets operations. NOTE 6. Securities Owned and Securities Sold Short Corporate and government debt Equities and convertible debentures March 31, 2022 March 31, 2021 Securities owned $ $ $ 548,639 $ 502,590 1,051,229 $ Securities sold short $ 456,206 111,084 567,290 $ $ Securities owned $ 770,455 271,128 1,041,583 $ $ Securities sold short $ 777,996 111,611 889,607 As at March 31, 2022, corporate and government debt maturities range from 2022 to 2080 [March 31, 2021 – 2021 to 2080] and bear interest ranging from 0.00% to 16.00% [March 31, 2021 – 0.00% to 31.50%]. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 77 NOTE 7. Financial Instruments CATEGORIES OF FINANCIAL INSTRUMENTS The categories of financial instruments, excluding cash and cash equivalents and bank indebtedness and investment accounted for under the equity method, held by the Company at March 31, 2022 and 2021 are as follows: Fair value through profit or loss Fair value through other comprehensive income Amortized cost Total March 31, 2022 $ March 31, 2021 $ March 31, 2022 $ March 31, 2021 $ March 31, 2022 $ March 31, 2021 $ March 31, 2022 $ March 31, 2021 $ $ 1,051,229 $ 1,041,583 $ — $ — $ — $ — $ 1,051,229 $ 1,041,583 — — — — — — — — 10,990 6,882 — — — — — — 1,693,579 2,434,162 1,693,579 2,434,162 — 1,020,112 848,549 1,020,112 — — — 512,147 212,817 — 494,476 196,255 — 512,147 212,817 10,990 848,549 494,476 196,255 6,882 $ 1,062,219 $ 1,048,465 — $ — 3,438,655 $ 3,973,442 $ 4,500,874 $ 5,021,907 $ 567,290 $ 889,607 $ — $ — $ — $ — $ 567,290 $ 889,607 — — — — — — 45,286 — — 41,090 — — — — — 8,087 29,196 — — — — — — — — — — — — — — 1,334,026 1,845,236 1,334,026 1,845,236 — 2,652,558 2,559,721 2,652,558 2,559,721 — — — — — — — — 859,088 755,643 859,088 755,643 7,500 — — — — 7,500 168,112 — — — 7,500 — — 45,286 — 7,500 168,112 8,087 29,196 — 152,041 78,319 152,041 78,319 — — 41,090 — Financial assets Securities owned Accounts receivable from brokers and investment dealers Accounts receivable from clients RRSP cash balances held in trust Other accounts receivable Investments Total financial assets Financial liabilities Securities sold short Accounts payable to brokers and investment dealers Accounts payable to clients Other accounts payable and accrued liabilities Subordinated debt Convertible debentures Deferred consideration Contingent consideration Other long-term liability Bank loan Non-controlling interest-derivative Total financial liabilities $ 653,666 $ 926,890 $ — $ — $ 5,005,213 $ 5,414,531 $ 5,658,879 $ 6,341,421 The Company has not designated any financial instruments as fair value through profit or loss upon initial recognition using the fair value option. FAIR VALUE HIERARCHY All financial instruments for which fair value is recognized or disclosed are categorized within a fair value hierarchy, described as follows, and based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 – Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities Level 2 – Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable) Level 3 – Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable) For financial instruments that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 78 Notes to Consolidated Financial Statements As at March 31, 2022 and 2021, the Company held the following classes of financial instruments measured at fair value: March 31, 2022 $ 37,820 510,819 548,639 499,221 3,369 502,590 1,051,229 10,990 1,062,219 (5,001) (451,205) (456,206) (111,084) (111,084) (567,290) (41,090) (45,286) (653,666) March 31, 2021 $ 20,419 750,036 770,455 267,148 3,980 271,128 1,041,583 6,882 1,048,465 (10,834) (767,162) (777,996) (111,611) — (111,611) (889,607) (8,087) (29,196) (926,890) Estimated fair value March 31, 2022 Level 2 $ 37,820 156,962 194,782 67,218 3,369 70,587 265,369 — 265,369 (5,001) (185,536) (190,537) (28,674) — (28,674) (219,211) — — (219,211) Estimated fair value March 31, 2021 Level 2 $ 20,419 413,542 433,961 69,861 3,980 73,841 507,802 — 507,802 (10,834) (421,938) (432,772) (13,470) — (13,470) (446,242) — — (446,242) Level 1 $ — 353,857 353,857 353,353 — 353,353 707,210 — 707,210 — (265,669) (265,669) (82,410) — (82,410) (348,079) — — (348,079) Level 1 $ — 336,494 336,494 157,535 — 157,535 494,029 — 494,029 — (345,224) (345,224) (98,141) — (98,141) (443,365) — — (443,365) Level 3 $ — — — 78,650 — 78,650 78,650 10,990 89,640 — — — — — — — (41,090) (45,286) (86,376) Level 3 $ — — — 39,752 — 39,752 39,752 6,882 46,634 — — — — — — — (8,087) (29,196) (37,283) Securities owned Corporate debt Government debt Corporate and government debt Equities Convertible debentures Equities and convertible debentures Investments Securities sold short Corporate debt Government debt Corporate and government debt Equities Convertible debentures Equities and convertible debentures Non-controlling interests – derivative liability Contingent consideration Securities owned Corporate debt Government debt Corporate and government debt Equities Convertible debentures Equities and convertible debentures Investments Securities sold short Corporate debt Government debt Corporate and government debt Equities Convertible debentures Equities and convertible debentures Deferred considerations Contingent consideration CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Movement in net Level 3 financial assets Balance, March 31, 2021 Payment of contingent consideration in connection with acquisition of Thomas Miller Payment of contingent consideration in connection with acquisition of Petsky Prunier Payment of contingent consideration in connection with acquisition of Hargreave Hale Addition of contingent consideration in connection with Sawaya Reclassification of contingent consideration in connection with acquisition of Thomas Miller Addition of investments Movement in fair value of level 3 securities owned during the year Non-controlling interests derivative liability in connection with Convertible Preferred Shares [Note 8] Reclassification of investments from FVTPL to equity investment Foreign exchange revaluation Balance, March 31, 2022 Fair value estimation i. Level 2 financial instruments Notes to Consolidated Financial Statements 79 $ 9,351 855 24,055 7,942 (42,856) 1,363 7,126 38,938 (41,090) (3,000) 580 3,264 Level 2 financial instruments include the Company’s investment in certain corporate and government debt, convertible debt and over- the-counter equities. The fair values of corporate and government debt and convertible debt classified as Level 2 are determined using the quoted market prices of identical assets or liabilities in markets that do not have transactions which take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company regularly reviews the transaction frequency and volume of trading in these instruments to determine the accuracy of pricing information. ii. Level 3 financial instruments Held for trading The fair value for Level 3 investments classified as held for trading is determined by the Company using a market-based approach with information that the Company has determined to be reliable, and represents best estimate of fair value readily available. Prices for held for trading investments are determined based on the last trade price or offer price, or, if these prices are considered stale, the Company obtains information based on certain inquiries, recent trades or pending new issues. The fair value of the Level 3 held for trading investments as at March 31, 2022 was $78.7 million [March 31, 2021 – $39.8 million]. As at March 31, 2022, the Company, either directly or through a wholly owned subsidiary, held investments in Capital Markets Gateway LLC, InvestX Capital Ltd. and Proactive Group Holdings Inc. which have been classified as Level 3 financial instruments given they do not have any observable inputs or market indicators [Note 10]. During the period ended March 31, 2022, the investment held in Katipult Technology Corp. was reclassified from FVTPL to an equity accounted investment. The Convertible Preferred Shares and Preference Shares issued to management and employees of CGWM UK [Note 8] were treated as a compound instrument comprised of an equity component, representing discretionary dividends and a liquidation preference, and a liability component that reflects a derivative to settle the instrument by delivering the economic equivalent of a variable number of common shares of CGWM UK. The derivative liability component of £25.0 million (C$41.1 million) is included in the statement of financial position as of March 31, 2022. During the year ended March 31, 2022, a fair value adjustment of $8.5 million was recorded in connection with the derivative liability. [Note 8] Level 3 financial liabilities also include the deferred and contingent consideration included as part of the total purchase consideration for the acquisitions of Hargreave Hale, Petsky Prunier, Thomas Miller and Sawaya. During the year ended March 31, 2022, the Company paid the remaining contingent consideration in connection with the purchase of Petsky Prunier [March 31, 2021 – $29.2 million] and the deferred consideration related to the acquisition of Hargreave Hale [March 31, 2021 – $8.1 million]. As part of the acquisition of Sawaya, there was contingent consideration of $35.4 million recorded as of March 31, 2022. [Note 11] The long-term portion of the contingent consideration and the non-controlling interests derivative liability are included as other liabilities in the statement of financial position as at March 31, 2022. The fair value measurements determined as described above may not be indicative of net realizable value or reflective of future values. Furthermore, the Company believes its valuation methods are appropriate and consistent with those which would be utilized by a market participant. RISK MANAGEMENT Credit risk Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Credit risk arises from cash and cash equivalents, net receivables from clients and brokers and investment dealers, and other accounts receivable. The 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 80 Notes to Consolidated Financial Statements maximum exposure of the Company to credit risk before taking into account any collateral held or other credit enhancements is the carrying amount of financial assets as disclosed in the Company’s audited consolidated financial statements as at March 31, 2022 and 2021. The primary source of credit risk to the Company is in connection with trading activity by private clients and in private client margin accounts. To minimize its exposure, the Company applies certain credit standards, applies limits to transactions and requires settlement of securities transactions on a cash basis or delivery against payment. Margin transactions are collateralized by securities in the clients’ accounts in accordance with limits established by the applicable regulatory authorities and are subject to the Company’s credit review and daily monitoring procedures. Management monitors the collectability of receivables and estimates an allowance for doubtful accounts. The accounts receivable outstanding are expected to be collectible within one year. The Company has recorded an allowance for doubtful accounts of $2.9 million as at March 31, 2022 [March 31, 2021 – $6.8 million] [Note 9]. The Company is also exposed to the risk that counterparties to transactions will not fulfill their obligations. Counterparties primarily include investment dealers, clearing agencies, banks and other financial institutions. The Company does not rely entirely on ratings assigned by credit rating agencies in evaluating counterparty risk. The Company mitigates credit risk by performing its own due diligence assessments on the counterparties, obtaining and analyzing information regarding the structure of the financial instruments, and keeping current with new innovations in the market. The Company also manages this risk by conducting regular credit reviews to assess creditworthiness, reviewing security and loan concentrations, holding and marking to market collateral on certain transactions and conducting business through clearing organizations with performance guarantees. As at March 31, 2022 and 2021, the Company’s most significant counterparty concentrations were with financial institutions and institutional clients. Management believes that they are in the normal course of business and does not anticipate loss for non- performance. Liquidity risk Liquidity risk is the risk that the Company cannot meet a demand for cash or fund its obligations as they become due. The Company’s management is responsible for reviewing liquidity resources to ensure funds are readily available to meet its financial obligations as they become due, as well as ensuring adequate funds exist to support business strategies and operational growth. The Company’s business requires capital for operating and regulatory purposes. The current assets reflected on the statements of financial position are highly liquid. The majority of the positions held as securities owned are readily marketable and all are recorded at their fair value. Client receivables are generally collateralized by readily marketable securities and are reviewed daily for impairment in value and collectability. Receivables and payables from brokers and dealers represent the following: current open transactions that generally settle within the normal two-day settlement cycle; collateralized securities borrowed and/or loaned in transactions that can be closed within a few days on demand; and balances on behalf of introducing brokers representing net balances in connection with their client accounts. Additional information regarding the Company’s capital structure and capital management objectives is discussed in Note 26. The following table presents the contractual terms to maturity of the financial liabilities owed by the Company as at March 31, 2022 and March 31, 2021, respectively: Financial liability Securities sold short Subordinated debt(1) Accounts payable and accrued liabilities Current portion of bank loan Current portion of contingent consideration Long term portion of bank loan Long term portion of contingent consideration Deferred consideration Convertible debentures(2) Non-controlling interests derivative liability Carrying amount $ Contractual term to maturity March 31, 2022 567,290 7,500 4,845,672 6,574 10,618 145,467 34,668 — 41,090 March 31, 2021 889,607 7,500 5,160,600 12,119 17,706 66,200 11,490 8,087 168,112 — Due on demand Due on demand(1) Due within one year Due within one year Due within one year Fiscal 2025 Fiscal 2023 n/a Due within one year Fiscal 2027 (1) Subject to Investment Industry Regulatory Organization of Canada’s approval. (2) Redemption of the convertible debentures completed on April 9, 2021 The fair values for cash, accounts receivable and accounts payable and accrued liabilities approximate their carrying values and will be paid within 12 months. Market risk Market risk is the risk that the fair value of financial instruments will fluctuate because of changes in market prices. The Company separates market risk into three categories: fair value risk, interest rate risk and foreign exchange risk. Fair value risk When participating in underwriting activities, the Company may incur losses if it is unable to resell the securities it is committed to purchase or if it is forced to liquidate its commitment at less than the agreed upon purchase price. The Company is also exposed CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 81 to fair value risk as a result of its principal trading activities in equity securities, fixed income securities, and derivative financial instruments. Securities at fair value are valued based on quoted market prices where available and, as such, changes in fair value affect earnings as they occur. Fair value risk also arises from the possibility that changes in market prices will affect the value of the securities the Company holds as collateral for client margin accounts. The Company mitigates its fair value risk exposure through controls to limit concentration levels and capital usage within its inventory trading accounts, as well as through monitoring procedures of the margin accounts. The following table summarizes the effect on earnings as a result of a fair value change in financial instruments as at March 31, 2022 and March 31, 2021, respectively. This analysis assumes all other variables remain constant. The methodology used to calculate the fair value sensitivity is consistent with the prior year. Financial instrument March 31, 2022 March 31, 2021 Carrying value Asset (Liability) Effect of a 10% increase in fair value on net income Effect of a 10% decrease in fair value on net income Carrying value Asset (Liability) Effect of a 10% increase in fair value on net income Effect of a 10% decrease in fair value on net income Equities and convertible debentures owned 502,590 18,000 (18,000) $ 271,128 $ 10,000 $ (10,000) Equities and convertible debentures sold short (111,084) (4,000) 4,000 (111,611) $ (4,000) $ 4,000 Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect the fair value or future cash flows of financial instruments held by the Company. The Company incurs interest rate risk on its cash and cash equivalent balances, bank indebtedness, fixed income portion of securities owned and securities sold short, net clients’ balances, RRSP cash balances held in trust and net brokers’ and investment dealers’ balances, as well as its subordinated debt and bank loan. The Company attempts to minimize and monitor its exposure to interest rate risk through quantitative analysis of its net positions of fixed income securities, clients’ balances, securities lending and borrowing activities, and short-term borrowings. The Company also trades in futures in an attempt to mitigate interest rate risk. Futures are included in marketable securities owned, net of marketable securities sold short, for the purpose of calculating interest rate sensitivity. All cash and cash equivalents mature within three months. Net clients’ receivable (payable) balances charge (incur) interest based on floating interest rates. Subordinated debt bears interest at a rate of prime plus 4.0% payable monthly. The following table provides the effect on net income for the years ended March 31, 2022 and 2021 if interest rates had increased or decreased by 100 basis points applied to balances as of March 31, 2022 and March 31, 2021, respectively. Fluctuations in interest rates do not have an effect on OCI. This sensitivity analysis assumes all other variables remain constant. The methodology used to calculate the interest rate sensitivity is consistent with the prior year. Net income effect of a 100 bps increase in interest rates $ March 31, 2022 Net income effect of a 100 bps decreases in interest rates(1) $ Carrying value Asset (Liability) $ Net income effect of a 100 bps increase in interest rates $ March 31, 2021 Net income effect of a 100 bps decreases in interest rates(1) $ Carrying value Asset (Liability) $ Cash and cash equivalents, net of bank indebtedness $ 1,788,261 $ 13,054 $ (13,054) $ 1,883,292 $ 13,842 $ (13,842) Marketable securities owned, net of marketable securities sold short Clients’ payable, net RRSP cash balances held in trust Brokers’ and investment dealers’ balance, net Subordinated debt Bank loan (1) Subject to a floor of zero. Foreign exchange risk 483,939 (1,632,446) 512,147 359,553 (7,500) (152,041) 3,533 (11,917) 3,739 2,625 (55) (1,110) (3,533) 11,917 (3,739) (2,625) 55 1,110 151,976 (1,711,172) 494,476 588,926 (7,500) (78,319) 1,117 (12,577) 3,634 4,329 (55) (576) (1,117) 12,577 (3,634) (4,329) 55 576 Foreign exchange risk arises from the possibility that changes in foreign currency exchange rates will result in losses. The Company’s primary foreign exchange risk results from its investment in its US, Australia and UK & Europe subsidiaries. These subsidiaries are translated using the foreign exchange rate at the reporting date. Any fluctuation in the Canadian dollar against the US dollar, the pound sterling or the Australian dollar will result in a change in the unrealized gains (losses) on translation of foreign operations recognized in accumulated other comprehensive income (loss). All of the subsidiaries may also hold financial instruments in currencies other than their functional currency; therefore, any fluctuations in foreign exchange rates will impact foreign exchange gains or losses in the statement of operations. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 82 Notes to Consolidated Financial Statements The following table summarizes the estimated effects on net income (loss) and OCI as a result of a 5% change in the value of the foreign currencies where there is significant exposure. The analysis assumes all other variables remain constant. The methodology used to calculate the foreign exchange rate sensitivity is consistent with the prior year. As at March 31, 2022: Currency US dollar Pound sterling Australian dollar As at March 31, 2021: Currency US dollar Pound sterling Australian dollar DERIVATIVE FINANCIAL INSTRUMENTS Effect of a 5% appreciation in foreign exchange rate on net income $ Effect of a 5% depreciation in foreign exchange rate on net income $ Effect of a 5% appreciation in foreign exchange rate on OCI $ (920) (360) (93) 920 360 93 22,670 30,365 5,509 Effect of a 5% depreciation in foreign exchange rate on OCI $ (22,670) (30,365) (5,509) Effect of a 5% appreciation in foreign exchange rate on net income $ Effect of a 5% depreciation in foreign exchange rate on net income $ Effect of a 5% appreciation in foreign exchange rate on OCI $ $ $ (1,067) (172) (263) $ 1,067 172 263 $ 12,701 25,041 4,638 Effect of a 5% depreciation in foreign exchange rate on OCI $ (12,701) (25,041) (4,638) Derivative financial instruments are financial contracts, the value of which is derived from the value of the underlying assets, interest rates, indices or currency exchange rates. All derivative financial instruments are expected to be settled within six months subsequent to fiscal year end. Foreign exchange forward contracts The Company uses derivative financial instruments to manage foreign exchange risk on pending security settlements in foreign currencies. The fair value of these contracts is nominal due to their short term to maturity. Realized and unrealized gains and losses related to these contracts are recognized in the consolidated statements of operations during the reporting period. Forward contracts outstanding at March 31, 2022: To sell US dollars To buy US dollars Forward contracts outstanding at March 31, 2021: Notional amount (millions) USD$ USD$ 1.8 2.3 Average price $1.25 (CAD/USD) $1.25 (CAD/USD) Maturity Fair value April 1, 2022 April 1, 2022 — — To sell US dollars To buy US dollars Notional amount (millions) USD$ USD$ nil 5.9 Average price — $1.26 (CAD/USD) Maturity Fair value — April, 1, 2021 $ — (0.01) The Company’s Canaccord Genuity Wealth Management segment in the UK & Europe trades foreign exchange forward contracts on behalf of its clients, and establishes matching contracts with the counterparties. The Company has no significant net exposure, assuming no counterparty default. The principal currencies of the forward contracts are the UK pound sterling, the US dollar or the euro. The weighted average term to maturity is 68 days as at March 31, 2022 [March 31, 2021 – 54 days]. The table below shows the fair value of the forward contract assets and liabilities, and the notional value of these forward contracts as at March 31, 2022 and March 31, 2021, respectively. The fair value of the forward contract assets and liabilities is included in the accounts receivable and payable balances. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 83 Foreign exchange forward contracts $ 82 $ 75 $ 11,760 $ 113 $ 100 $ Assets Liabilities Notional amount Assets Liabilities Notional amount 19,014 March 31, 2022 March 31, 2021 FUTURES The Company’s Canadian operations are involved in trading bond futures contracts, which are agreements to buy or sell a standardized amount of an underlying Government of Canada bond, at a predetermined future date and price, in accordance with terms specified by a regulated futures exchange, and are subject to daily cash margining. The Company’s Canadian operations trade in bond futures in an attempt to mitigate interest rate risk, yield curve risk and liquidity risk. At March 31, 2022, the notional amount of the bond futures contracts outstanding was long $9.7 million [March 31, 2021 – short $1.1 million]. The Company’s Canadian operations are also involved in trading US Treasury futures in an attempt to mitigate interest rate risk, yield curve risk and liquidity risk. There were no outstanding US Treasury futures contracts outstanding as at March 31, 2022 and March 31, 2021. The fair value of all of the above futures contracts is nominal due to their short term to maturity and is included in accounts receivable and accounts payable and accrued liabilities. Realized and unrealized gains and losses related to these contracts are recognized in the statement of operations during the reporting period. SECURITIES LENDING AND BORROWING The Company employs securities lending and borrowing primarily to facilitate the securities settlement process. These arrangements are typically short term in nature, with interest being received when cash is delivered, and interest being paid when cash is received. These transactions are fully collateralized and are subject to daily margin calls for any deficiency between the market value of the security given and the amount of collateral received. These transactions are collateralized by either cash or securities, including government treasury bills and government bonds, and are reflected within accounts receivable and accounts payable. Interest earned on cash collateral is based on a floating rate. At March 31, 2022 and 2021, the floating rates were nil. March 31, 2022 March 31, 2021 BANK INDEBTEDNESS Cash Securities Loaned or delivered as collateral $ Borrowed or received as collateral $ Loaned or delivered as collateral $ $ $ 282,142 $ $ 232,558 186,174 $ $ 39,404 203,465 $ $ 63,536 Borrowed or received as collateral $ 309,123 232,126 The Company enters into call loans or overdraft positions primarily to facilitate the securities settlement process for both client and Company securities transactions. The bank indebtedness is collateralized by unpaid client securities and/or securities owned by the Company. As at March 31, 2022, the Company had nil balance outstanding [March 31, 2021 – $nil (£ nil)]. BANK LOAN A subsidiary of the Company entered into a senior credit facility to finance a portion of the cash consideration for its acquisitions of Hargreave Hale, Thomas Miller and Adam & Company. The balance outstanding at March 31, 2022, net of unamortized financing fees, was $152.0 million [March 31, 2021 – $78.3 million]. [Note 17] SHORT-TERM LOAN FACILITY On April 9, 2021, the Company redeemed the entire $132.7 million principal amount of its outstanding Debentures due December 31, 2023. The total redemption price including accrued interest was $168.1 million which was fully accrued at March 31, 2021. In order to fund the redemption in part, and pursuant to the terms of a commitment letter entered into with certain institutional investors on March 18, 2021, the Company entered into a credit agreement on April 6, 2021 with certain lenders for a senior secured first lien term loan facility in an aggregate principal amount of £69.0 million. This loan was repaid from the proceeds of the issuance of the Convertible Preferred Shares by CGWM UK to certain institutional investors on July 29, 2021. OTHER CREDIT FACILITIES Excluding the bank loan in connection with the acquisitions of Hargreave Hale, Thomas Miller and Adam & Company as described above, subsidiaries of the Company have other credit facilities with banks in Canada and the UK for an aggregate amount of $657.0 million [March 31, 2021 – $637.1 million]. These credit facilities, consisting of call loans, letters of credit and daylight overdraft facilities, are collateralized by unpaid client securities and/or securities owned by the Company. As of March 31, 2022, there was no bank indebtedness outstanding [March 31, 2021 – $nil]. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 84 Notes to Consolidated Financial Statements A subsidiary of the Company has also entered into secured irrevocable standby letters of credit from a financial institution totaling $3.7 million (US$2.9 million) [March 31, 2021 – $2.9 million (US$2.3 million)] as rent guarantees for its leased premises in New York. As of March 31, 2022, and March 31, 2021, there were no outstanding balances under these standby letters of credit. NOTE 8. NON-CONTROLLING INTERESTS UK & Crown Dependencies Wealth Management On July 29, 2021, certain institutional investors acquired convertible preferred shares (“Convertible Preferred Shares”) in the amount of £125.0 million (C$218.0 million) issued by CGWM UK. A portion of the proceeds was used to repay the senior secured first lien term loan facility of £69.0 million which was used to partially fund the redemption of the Company’s 6.25% convertible unsecured senior subordinated debentures on April 9, 2021 [Note 7]. On an as converted basis the Convertible Preferred Shares represent 21.93% of the outstanding equity interest in CGWM UK as at March 31, 2022. Cumulative dividends, when, as and if declared by the board of directors of CGWM UK, are payable by CGWM UK on the Convertible Preferred Shares at the greater of an annual 7.5% coupon and the proportionate share that such shares would receive, on an as converted basis, in respect of any dividends declared and paid in respect of ordinary shares of CGWM UK. No dividends may be paid on any other class of shares of CGWM UK unless and until the cumulative dividends on the Convertible Preferred Shares are declared and paid. If a liquidity event occurs before the end of five years the Convertible Preferred Shares will carry a liquidation preference equal to the greatest of (i) the amount of principal plus accrued but unpaid dividends attributable to the Convertible Preferred Shares had they been issued five years prior, (ii) an amount equal to 1.5 multiplied by the issue price of the Convertible Preferred Shares (less any previously paid dividends), or (iii) the amount which the holders of the Convertible Preferred Shares would receive on an as converted basis. If a liquidity event occurs on or after the fifth anniversary then the Convertible Preferred Shares will carry a liquidation preference equal to the greater of (i) the amount of principal plus accrued but unpaid dividends attributable to the Convertible Preferred Shares or (ii) the amount which the holders of the Convertible Preferred Shares would receive on an as converted basis. If a liquidity event has not occurred after five years, then CGWM UK has an option to acquire the Convertible Preferred Shares at the greater of the applicable liquidation preference amount and the amount which would provide the holders of the Convertible Preferred Shares with an internal rate of return of 11.5% (including all previously paid dividends). After the fifth anniversary the holders of the Convertible Preferred Shares have certain rights in respect of initiating a liquidity event. The Convertible Preferred Shares carry customary minority rights in respect of CGWM UK governance and financial matters, including representation on the CGWM UK board of directors. In connection with the issuance of the Convertible Preferred Shares, CGWM UK provided for the purchase of certain equity instruments in CGWM UK by management and employees of CGWM UK which will reflect an approximate 4.6% equity-equivalent interest in CGWM UK. As of March 31, 2022, £24.6 million (CAD$42.7 million) of such equity instruments in CGWM UK were purchased in connection with this equity program. Included in these equity instruments of CGWM UK were preferred shares with the same economic attributes as the Convertible Preferred Shares (the “Preference Shares”). Preference Shares in the amounts of £7.5 million (CAD$13.0 million) were issued to management as of March 31, 2022. The other equity interests purchased by management and employees of CGWM UK are ordinary shares of CGWM UK with certain restrictions on transfer and limited governance rights. In connection with the purchase of the ordinary shares, a limited recourse loan of £4.0 million (CAD$6.9 million) as well as certain full recourse employee loans were made. A management incentive plan arrangement has been implemented which, subject to certain minimum threshold levels, will provide for certain payments if a liquidity event occurs within six years or after six years if a liquidity event has not occurred and the Convertible Preferred Shares are no longer outstanding. The Convertible Preferred Shares and Preference Shares do not give rise to any obligation for the Company to deliver cash or other financial assets to the holders thereof. The Convertible Preferred Shares and Preference Shares were treated as a compound instrument comprised of an equity component, representing discretionary dividends and a liquidation preference, and a liability component that reflects a derivative to settle the instrument, if applicable, by delivering the economic equivalent of a variable number of common shares of CGWM UK. The equity component of the Convertible Preferred Shares and Preference Shares are included in equity and the derivative liability component is included in other liabilities in the statement of financial position as of March 31, 2022. The fair value of the Convertible Preferred Shares and Preference Shares at issuance was allocated to the respective equity and derivative liability components. The fair value of the non-controlling interests derivative liability was established first and the residual amount was recorded to the equity component. The derivative component will be remeasured at the end of each reporting period using the Company’s best estimate of its value. During the year ended March 31, 2022, a fair value adjustment of $8.5 million was recorded in the consolidated statement of operations. The carrying value of the derivative liability at March 31, 2022 was $41.1 million and included in other liabilities in the audited consolidated statements of financial position. The Company uses a Black Scholes model to estimate the fair value of the derivative liability embedded in the Convertible Preferred Shares and Preferred Shares. The fair value is calculated using the estimated fair value as determined on as converted equity equivalent basis and the amount of the liquidation preference of the Convertible Preferred Shares and Preference Shares. Other assumptions include estimates in respect of volatility, the risk-free interest and dividend rates. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 85 Significant judgment is involved in the assumptions and estimates used to determine the fair value of the derivative liability component at each reporting period. Australia The Company owns 65% of the issued shares of Canaccord Financial Group (Australia) Pty Ltd., and through that ownership an 65% indirect interest in Canaccord Genuity (Australia) Limited and Canaccord Genuity Financial Limited as of March 31, 2022 [March 31, 2021 – 80%]. During the year ended March 31, 2022, the share structure for the Australian operations was reorganized through the sale of partly paid shares to selected employees of Canaccord Financial Group (Australia) Pty Ltd. (CFGA) and as a result the Company’s ownership in CFGA decreased from 80% to 65%. However, for accounting purposes, because of shares held in an employee trust controlled by CFGA, commencing the fourth quarter of fiscal 2022 the Company’s ownership interest changes to 67% from 85%. The purpose of the change in the ownership structure was to provide further alignment with our employee base in the Australian region and to provide the business with capital and access to capital for continued growth. Canaccord Genuity (Australia) Limited (CGAL) operates in the capital markets segment, while the wealth management business is carried out by Canaccord Genuity Financial Limited (CGFL). As discussed in Note 26, CGAL and CGFL are both regulated by the Australian Securities and Investments Commission. Summarized statement of profit or loss for the years ended March 31, 2022 and 2021: Revenue Expenses Net income before taxes Income tax expense Net income Attributable to: CGGI shareholders Non-controlling interests Australia UK & Crown Dependencies Total 2022 $ 2021 $ 248,721 244,964 190,744 188,090 57,977 20,935 37,042 56,874 17,104 39,770 2022 $ 310,495 252,681 57,814 9,528 48,286 2021 $ 2022 $ 2021 $ 277,329 559,216 522,293 230,004 443,425 418,094 47,325 115,791 104,199 22,931 30,463 5,827 41,498 85,328 81,268 Australia UK & Crown Dependencies Total 2022 $ 2021 $ 29,670 33,754 6,016 7,372 37,042 39,770 2022 $ 31,407 16,879 48,286 2021 $ 2022 $ 2021 $ 41,498 61,077 75,252 6,016 — 24,251 41,498 85,328 81,268 Summarized statement of financial position as at March 31, 2022 and 2021: Australia UK & Crown Dependencies Total Current assets Non-current assets Current liabilities Non-current liabilities 2022 $ 2021 $ 33,473 235,141 178,147 27,006 133,434 113,879 7,493 18,238 2022 $ 162,826 367,770 94,256 182,515 2021 $ 2022 $ 2021 $ 92,390 397,967 270,537 297,012 401,243 324,018 93,871 227,690 207,750 101,689 200,753 109,182 Summarized cash flow information for the years ended March 31, 2022 and 2021: Cash provided by operating activities Cash used by financing activities Cash used by investing activities Foreign exchange impact on cash balance Net (decrease) increase in cash and cash equivalents Australia UK & Crown Dependencies Total 2022 $ 33,150 (31,125) (1,530) (2,291) 2021 $ 83,324 (3,546) (426) 2,739 (1,796) 82,091 2022 $ 86,100 70,034 (98,755) (8,274) 49,105 2021 $ 23,436 (39,071) (787) (2,974) (19,396) 2022 $ 119,250 38,909 (100,285) (10,565) 2021 $ 106,760 (42,617) (1,213) (235) 47,309 62,695 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 86 Notes to Consolidated Financial Statements The non-controlling interests as of March 31, 2022 comprised of the following: As at and for the period ended March 31 Australia UK & Crown Dependencies Total Balance, opening Comprehensive income attributable to non-controlling interests Foreign exchange on non-controlling interests Dividends paid to non-controlling interest Issuance of convertible preferred shares, net of discount Issuance of equity instruments to management and employees Reclassification to derivative liability on issuance date Acquisition-related costs, net of deferred tax recovery Share-based payment Increase in non-controlling interests due to issuance of partly paid shares Payment of dividends on convertible preferred shares Reclassification of other comprehensive income on issuance date Balance, ending 2022 $ 2021 $ 8,190 156 8,687 6,374 329 1,660 — — — — — — — — — (5,853) — — — — — 10,843 — 1,105 23,301 8,190 2022 $ — 16,879 (5,112) — 212,449 35,722 (34,682) (2,834) 1,740 — (7,139) (1,624) 215,399 Comprehensive income attributable to non-controlling interests Australia UK & Crown Dependencies Total NOTE 9. Accounts Receivable and Accounts Payable and Accrued Liabilities 2021 $ 2022 $ 2021 $ — 156 8,190 — 25,566 6,374 — (4,783) 1,660 — — (5,853) — — 212,449 — — 35,722 — — (34,682) — — (2,834) — 1,740 — — — 10,843 — — (7,139) — (519) — — 238,700 8,190 March 31 2022 $ March 31 2021 $ 8,687 16,879 25,566 6,374 — 6,374 ACCOUNTS RECEIVABLE Brokers and investment dealers Clients RRSP cash balances held in trust Other ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Brokers and investment dealers Clients Other March 31, 2022 $ March 31, 2021 $ $ 1,693,579 $ 1,020,112 512,147 212,817 2,434,162 848,549 494,476 196,255 $ 3,438,655 $ 3,973,442 March 31, 2022 $ March 31, 2021 $ $ 1,334,026 $ 2,652,558 859,088 1,845,236 2,559,721 755,643 $ 4,845,672 $ 5,160,600 Amounts due from and to brokers and investment dealers include balances from resale and repurchase agreements, securities loaned and borrowed, as well as brokers’ and dealers’ counterparty balances. Client security purchases are entered into on either a cash or a margin basis. In the case of a margin account, the Company extends a loan to a client for the purchase of securities, using securities purchased and/or other securities in the client’s account as collateral. Amounts loaned to any client are limited by the margin regulations of the Investment Industry Regulatory Organization of Canada (IIROC) and other regulatory authorities and are subject to the Company’s credit review and daily monitoring procedures. Amounts due from and to clients are due by the settlement date of the trade transaction. Margin loans are due on demand and are collateralized by the assets in the clients’ accounts. Interest on margin loans and on amounts due to clients is based on a floating rate [March 31, 2022 – 5.7% to 6.5% and 0.00% to 0.05%, respectively; March 31, 2021 – 5.45% to 6.25% and 0.00% to 0.05%, respectively]. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 87 As at March 31, 2022, the allowance for doubtful accounts was $2.9 million [March 31, 2021 – $6.8 million]. See below for the movements in the allowance for doubtful accounts: Balance, March 31, 2020 Charge for the year Recoveries Foreign exchange Balance, March 31, 2021 Charge for the year Recoveries Foreign exchange Balance, March 31, 2022 NOTE 10. Investments Investment accounted for under the equity method Investments held as fair value through profit or loss Breakdown of investments as follow: INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD Canaccord Genuity G Ventures Corp. Canaccord Genuity Growth II Corp. InterCure Ltd. Katipult Technology Corp. Link Investment Management Inc. International Deal Gateway Blockchain Inc. Other INVESTMENTS HELD AS FAIR VALUE THROUGH PROFIT AND LOSS (FVTPL) Capital Markets Gateway LLC InvestX Capital Ltd Proactive Group Holdings Inc. Katipult Technology Corp. $ $ $ 8,861 6,947 (8,985) 18 6,841 4,835 (8,625) (106) 2,945 March 31, 2022 $ March 31, 2021 $ $ $ $ 11,938 $ 10,990 $ 22,928 $ 5,311 6,882 12,193 March 31, 2022 March 31, 2021 1,298 — — 3,000 2,500 4,500 640 $ 11,938 $ — 2,897 1,785 — — — 629 5,311 March 31, 2022 March 31, 2021 3,864 $ 3,126 4,000 — $ 10,990 $ 3,882 — — 3,000 6,882 During the period ended March 31, 2022, the Company, through a wholly owned subsidiary, made an investment of $1.4 million for Class B preferred share and warrants of Canaccord Genuity G Ventures Corp. (CGGV). CGGV is a special purpose acquisition corporation formed to effect an acquisition of one or more businesses. The Company holds a 20.0% interest in CGGV and is considered to exert significant influence over the operations of CGGV. Accordingly, the investment in CGGV is accounted for using the equity method. The Company’s equity portion of the net loss of CGGV for the period ended March 31, 2022 was $0.2 million. The Company, through a wholly owned subsidiary, held an investment in Capital Markets Gateway LLC (CMG) for US$3.1 million ($3.9 million) [March 31, 2021 – US$3.1 million ($3.9 million)]. The Company is not considered to exert significant influence over the operations of CMG. Accordingly, the investment in CMG are accounted for as financial assets measured at FVTPL and included as investments on the consolidated statement of financial position as at March 31, 2022. The Company also held an investment in convertible unsecured subordinated debentures of Katipult Technology Corp (Katipult). During the year ended March 31, 2022, the investment held in Katipult Technology Corp. was reclassified from FVTPL to an equity accounted investment. The Company also made investments of $2.5 million in Series A units in Link Investment Management Inc. (“Link”) and $4.5 million in Series A units of International Deal Gateway Blockchain Inc. (“IDG”) during the period ended March 31, 2022. The Company is considered to exert significant influence over the operations of Link and IDG factoring in potential voting rights, even though the 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 88 Notes to Consolidated Financial Statements Company does not currently have any entitlement to a share of the net assets of these companies. Accordingly, these investments are treated as equity investments and included as investments in the consolidated statement of financial position as at March 31, 2022. In addition, during the period ended March 31, 2022, the Company also invested US $2.5 million ($3.1 million) in Series A preferred shares of InvestX Capital Ltd (“InvestX”), as well as an investment of $4.0 million in the preferred shares of Proactive Group Holdings Inc. (“Proactive”). The Company does not exert significant influence over the operations of InvestX or Proactive. Accordingly, the investments in InvestX and Proactive are accounted for as financial assets measured at FVTPL and included as investments on the consolidated statement of financial position as at March 31, 2022. NOTE 11. Business Combinations i) Adam & Company On October 1, 2021, the Company, through CGWM UK completed its acquisition of the private client investment management business of Adam & Company (including the acquisition of the entire issued capital of Adam & Company Investment Management Limited) for £54.5 million (C$93.3 million). In connection with the completion of the acquisition, a subsidiary of the Company modified its existing banking arrangements and increased its bank loan by an additional £53.3 million (C$87.6 million as of March 31, 2022 ) [Notes 7 and 17]. The preliminary purchase price, determined by the fair value of the consideration given at the date of the acquisition and the fair value of the net assets acquired on the date of the acquisition, was as follows: CONSIDERATION PAID Cash NET ASSETS ACQUIRED Accounts receivable Deferred tax assets Accounts payable and accrued liabilities Identifiable intangible assets Deferred tax liability related to identifiable intangible assets Goodwill $ 93,316 93,316 5,875 673 (2,334) 52,930 (12,901) 49,073 93,316 $ Identifiable intangible assets of $52.9 million were recognized and relate to customer relationships and brand name. The goodwill of $49.1 million represents the value of expected synergies arising from the acquisition. Goodwill is not deductible for tax purposes. The above amounts included in the purchase price allocation are preliminary. The purchase price and the fair value of the net assets acquired from Adam & Company are estimates, which were made by management at the time of the preparation of these audited consolidated financial statements based on available information. Amendments may be made to these amounts as well as the identification of intangible assets and the allocation of identifiable intangible assets between indefinite life and finite lives. Values based on estimates are subject to changes during the period ending 12 months after the acquisition date. The aggregate acquisition-related expenses incurred by the Company during the year ended March 31, 2022 in connection with the acquisition of Adam & Company were $2.1 million which comprised mainly of professional fees. Revenue and net income generated by Adam & Company including acquisition-related costs, were $9.7 million and $1.8 million, respectively, since the acquisition date. Had Adam & Company been consolidated from April 1, 2021, as part of the consolidated statement of operations, the consolidated revenue and net income would have been approximately $2.1 billion and $274.5 million, respectively, for the year ended March 31, 2022. These figures represent historical results and are not necessarily indicative of future performance. ii) Sawaya Partners On December 31, 2021, the Company completed its acquisition of Sawaya Partners (Sawaya), a leading independent M&A advisory firm to the consumer sector based in the US. The initial cash consideration was US$ 36.0 million (C$45.5 million), with additional contingent consideration of up to US$ 40.0 million (C$50.6 million) payable over a period of four years following completion, subject to achievement of performance targets related to revenue. The contingent consideration was recorded at its fair value of US$33.9 million (C$42.9 million) as of the acquisition date.There was also deferred consideration of US$ 9.0 million (C$ 11.4 million), payable over a period of four years following completion, in cash or shares based on the Company’s option subject to a 12-month election period after the date of acquisition. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 89 The fair value of the contingent consideration is classified as Level 3 in the fair value hierarchy and was determined using on a Monte Carlo simulation using various assumptions including EBITDA forecast, risk-free rate ranging from 0.39% to 1.12%, and a volatility factor of 8.0%. Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s contingent consideration. The preliminary purchase price, determined by the fair value of the consideration given at the date of the acquisition and the fair value of the net assets acquired on the date of the acquisition, was as follows: CONSIDERATION PAID Cash Deferred consideration Contingent consideration NET ASSETS ACQUIRED Accounts receivable Equipment and leasehold improvements Right of use assets Accounts payable and accrued liabilities Lease liabilities Identifiable intangible assets Goodwill $ $ $ 45,513 11,378 42,856 99,747 78 1,122 4,070 (77) (4,070) 4,876 93,748 99,747 Identifiable intangible assets of $4.9 million were recognized and relate to the contract book and brand name. The goodwill of $93.7 million represents the value of expected synergies arising from the acquisition. The above amounts included in the purchase price allocation are preliminary. The purchase price and the fair value of the net assets acquired from Sawaya are estimates, which were made by management at the time of the preparation of these audited consolidated financial statements based on available information. Amendments may be made to these amounts as well as the identification of intangible assets and the allocation of identifiable intangible assets between indefinite life and finite lives. Values based on estimates are subject to changes during the period ending 12 months after the acquisition date. The aggregate acquisition-related expenses incurred by the Company during the year ended March 31, 2022 in connection with the acquisition of Sawaya were $0.5 million which comprised mainly of professional fees. Revenue and net loss generated by Sawaya including acquisition-related costs, were $4.6 million and $3.6 million, respectively, since the acquisition date. NOTE 12. Equipment and Leasehold Improvements March 31, 2022 Computer equipment Furniture and equipment Leasehold improvements March 31, 2021 Computer equipment Furniture and equipment Leasehold improvements Accumulated amortization $ Net book value $ Cost $ 21,197 28,965 91,779 17,522 25,564 64,212 141,941 107,298 24,024 29,751 90,871 21,906 26,810 72,860 144,646 121,576 3,675 3,401 27,567 34,643 2,118 2,941 18,011 23,070 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 90 Notes to Consolidated Financial Statements Cost Balance, March 31, 2020 Additions Disposals Foreign exchange Balance, March 31, 2021 Reclassification Additions Disposals Foreign exchange Balance, March 31, 2022 Accumulated amortization and impairment Balance, March 31, 2020 Amortization Disposals Foreign exchange Balance, March 31, 2021 Reclassification Amortization Disposals Foreign exchange Balance, March 31, 2022 $ $ $ $ Computer equipment $ Furniture and equipment $ Leasehold improvements $ $ 24,072 438 (4) (482) 24,024 1,879 3,348 (7,052) (1,002) 21,197 $ 29,672 198 (2) (117) 29,751 — 2,346 (2,796) (336) 28,965 89,897 4,221 (2,540) (707) 90,871 (2,038) 15,050 (11,035) (1,069) 91,779 Computer equipment $ Furniture and equipment $ Leasehold improvements $ $ 21,730 620 (4) (440) 21,906 1,478 2,048 (7,041) (869) 17,522 $ 26,256 567 (1) (12) 26,810 — 1,828 (2,792) (282) 25,564 70,795 4,761 (2,540) (156) 72,860 (1,637) 4,454 (10,817) (648) 64,212 Total $ 143,641 4,857 (2,546) (1,306) 144,646 (159) 20,744 (20,883) (2,407) 141,941 Total $ 118,781 5,948 (2,545) (608) 121,576 (159) 8,330 (20,650) (1,799) 107,298 The carrying value of any temporarily idle property, plant and equipment is not considered material as at March 31, 2022 and March 31, 2021. NOTE 13. Right-of-Use Assets Cost Balance, March 31, 2020 Additions Reclassification Foreign exchange As at March 31, 2021 Additions Extinguishment Foreign exchange As at March 31, 2022 Amortization Balance, March 31, 2020 Charge for the year As at March 31, 2021 Charge for the year As at March 31, 2022 Net book value as at March 31, 2021 CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT $ $ 129,000 9,101 (1,601) (3,378) 133,122 61,424 (4,020) (1,660) 188,866 22,866 25,040 47,906 23,894 71,800 85,216 Notes to Consolidated Financial Statements 91 Net book value as at March 31, 2022 $ 117,066 NOTE 14. Goodwill and Other Intangible Assets Brand names (indefinite life) $ Goodwill $ Brand names $ Customer relationships $ Technology $ Trading licences $ Fund management $ Contract book Favourable lease Client books Total $ Gross amount Balance, March 31, 2020 718,049 44,930 Additions — — 614 — Foreign exchange (15,302) — (70) (1,394) 164,940 37,893 584 39,427 6,884 — 2,260 (521) — 41 — — (646) (734) Balance, March 31, 2021 702,747 44,930 544 163,546 39,632 625 38,781 6,150 594 — (68) 526 — 295,866 — 2,260 — (3,392) 294,734 Additions Foreign exchange Reclassification 142,821 (12,657) — — 1,382 — (42) — — 52,116 (8,345) 184 2,541 (1,704) (184) — (8) — — 4,308 — 1,931 62,278 (1,947) — (80) — (3) — — (12,129) — — Balance, March 31, 2022 832,911 44,930 1,884 207,501 40,285 617 36,834 10,378 523 1,931 344,883 Accumulated amortization and impairment Balance, March 31, 2020 (322,632) — (238) (88,010) (23,787) Amortization Foreign exchange Reclassification — — — — (190) (11,980) (3,739) — — 32 32 814 2,931 332 — (196) (427) (2) — (6,375) (6,852) (3,650) 145 (2,931) — 734 (32) (238) (222) 38 — — (125,696) — (20,208) — — 2,093 — Balance, March 31, 2021 (322,632) — (364) (96,245) (27,194) (625) (12,811) (6,150) (422) — (143,811) Amortization Foreign exchange — — — (335) (11,297) (3,002) — 6 3,461 1,290 — 8 (3,620) (1,112) (103) (206) (19,675) 795 36 2 (2) 5,596 Balance, March 31, 2022 (322,632) — (693) (104,081) (28,906) (617) (15,636) (7,226) (523) (208) (157,890) Net book value March 31, 2021 March 31, 2022 380,115 44,930 180 67,301 510,279 44,930 1,191 103,420 12,438 11,379 — — 25,970 — 104 — 150,923 21,198 3,152 — 1,723 186,993 Identifiable intangible assets purchased through the acquisitions of Genuity Capital Markets (Genuity), the 80% interest in Canaccord Genuity (Australia) Limited (Canaccord Genuity Australia), Collins Stewart Hawkpoint plc (CSHP), Eden Financial Ltd., Hargreave Hale, Jitneytrade, Petsky Prunier, McCarthy Taylor, Thomas Miller, Patersons Adam & Company and Sawaya Partners are customer relationships, non-competition agreements, trading licences, fund management contracts, technology and brand names acquired through the acquisitions of Petsky Prunier and Sawaya Partners, which have finite lives and are amortized on a straight- line basis over their estimated useful lives. Branding acquired through the acquisition of Genuity is considered to have an indefinite life as the Company has no plans to cease its use in the future. IMPAIRMENT TESTING OF GOODWILL AND OTHER ASSETS The carrying amounts of goodwill and indefinite life intangible assets acquired through business combinations are as follows: Canaccord Genuity Capital Markets CGUs Canada US Canaccord Genuity Wealth Management CGUs UK & Crown Dependencies (Channel Islands) UK & Crown Dependencies (UK wealth) Australia Intangible assets with indefinite lives Goodwill Total March 31, 2022 $ March 31, 2021 $ March 31, 2022 $ March 31, 2021 $ March 31, 2022 $ March 31, 2021 $ $ 44,930 $ — 44,930 $ — 101,732 $ 189,608 101,732 $ 97,441 146,662 $ 189,608 146,662 97,441 — — — — — — 88,644 127,434 2,861 93,374 84,651 2,917 88,644 127,434 2,861 93,374 84,651 2,917 $ 44,930 $ 44,930 $ 510,279 $ 380,115 $ 555,209 $ 425,045 Goodwill acquired in connection with the acquisition of Sawaya [Note 11] is included in the Canaccord Genuity Capital Markets (US) CGU for the purpose of goodwill impairment testing. The Canaccord Genuity Wealth Management (UK Wealth) CGU for the purpose of goodwill impairment testing includes the goodwill acquired in connection with the acquisitions Adam & Company [Note 11]. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 92 Notes to Consolidated Financial Statements The Genuity brand name is considered to have an indefinite life as the Company has no plans to cease its use in the future. Goodwill and intangible assets with indefinite lives are tested for impairment annually at March 31, or when circumstances indicate the carrying value may potentially be impaired. If any indication of impairment exists, the Company estimates the recoverable amount of the CGU to which goodwill and indefinite life intangible assets are allocated. Where the carrying amount of a CGU exceeds its recoverable amount, an impairment loss is recognized. Any impairment loss first reduces the carrying amount of any goodwill allocated to the CGUs and then if any impairment loss remains, the other assets of the unit are reduced on a pro rata basis. Impairment losses relating to goodwill cannot be reversed in future periods. In accordance with IAS 36, “Impairment of Assets” (IAS 36), the recoverable amounts of the CGUs’ net assets have been determined using fair value less costs to sell (FVLCS) calculations, which are based on future cash flow assumptions considered to be appropriate for the purposes of such calculations. In accordance with IFRS 13, fair value represents an estimate of the price at which an orderly transaction to sell an asset or transfer a liability would take place between market participants as at the end of the reporting period under market conditions as at that date (an exit price as at the measurement date). There is a material degree of uncertainty with respect to the estimates of the recoverable amounts of the CGUs’ net assets given that these estimates involve making key assumptions about the future. In making such assumptions, management has used its best estimate of future economic and market conditions within the context of the Company’s capital markets and wealth management activities. These valuations are categorized as Level 3 in the fair value hierarchy. The FVLCS calculations are based on assumptions, as described above, made in connection with future cash flows, relief of royalties with respect to the brand name indefinite life intangible asset, terminal growth rates and discount rates. In order to estimate the FVLCS for each CGU, cash flows are forecast over a five-year period, a terminal growth rate is applied and then such cash flows are discounted to their present value. The discount rate is based on the specific circumstances of each CGU and is derived from the estimated weighted average cost of capital of the Company. The CGUs which recorded goodwill in their carrying value as of March 31, 2022 were Canaccord Genuity Capital Markets Canada, Canaccord Genuity Capital Markets US, Canaccord Genuity Wealth Management UK & Europe (Channel Islands), Canaccord Genuity Wealth Management UK & Europe (UK) and Canaccord Genuity Wealth Management (Australia). The discount rate is based on the specific circumstances of each CGU and is derived from the estimated weighted average cost of capital of the Company. The discount rate utilized for each of these CGUs for the purposes of these calculations was 12.5% [March 31, 2021 – 12.5%]. Cash flow estimates for each of these CGUs were based on management assumptions as described above and utilized a compound annual revenue growth rate of 5.0% over the forecast period except for Canaccord Genuity Capital Markets Canada and Canaccord Genuity Capital Markets US which utilized a compound annual growth rate of 5.0% [March 31, 2021 – 0.0%] for Canaccord Genuity Capital Markets Canada and 0.0% for Canaccord Genuity Capital Markets US [March 31, 2021 – 2.5%] as well as estimates in respect of operating margins. The terminal growth rate used for each of Canaccord Genuity Capital Markets Canada, Canaccord Genuity Capital Markets US , Canaccord Genuity Wealth Management UK & Europe (Channel Islands), Canaccord Genuity Wealth Management UK & Europe (UK), and Canaccord Genuity Wealth Management (Australia) was 2.5% [March 31, 2021 – 2.5%]. NOTE 15. Income Taxes The major components of income tax expense are: Consolidated statements of operations Current income tax expense Current income tax expense Adjustments in respect of prior years Deferred income tax recovery Origination and reversal of temporary differences Impact of change in tax rates Benefit arising from a previously unrecognized tax loss Income tax expense reported in the statements of operations CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT March 31, 2022 $ March 31, 2021 $ $ 122,348 $ 133,283 (31) (276) 122,072 133,252 (14,301) (67) — (14,368) (30,284) 12 (2,880) (33,152) $ 107,704 $ 100,100 Notes to Consolidated Financial Statements 93 The Company’s income tax expense differs from the amount that would be computed by applying the combined federal and provincial income tax rates as a result of the following: Net income before income taxes Income tax expense at the statutory rate of 27.0% (2021 – 27.0%) Difference in tax rates in foreign jurisdictions Permanent differences Change in accounting and tax base estimate Impact of change in tax rate on deferred tax liabilities in connection with intangible assets acquired in respect of previous acquisitions Utilization of tax losses and other temporary differences not recognized Share-based payments Other Income tax expense reported in the statements of operations March 31, 2022 $ 378,269 102,129 (1,978) 4,694 2,074 1,957 (749) (1,470) 1,047 March 31, 2021 $ 369,902 99,874 (1,810) 5,266 2,193 — (2,615) (4,456) 1,648 $107,704 $100,100 The following were the deferred tax assets and liabilities recognized by the Company and movements thereon during the year: Unrealized gain on securities owned Legal provisions Unpaid remunerations Unamortized capital cost of equipment and leasehold improvements over their net book value Unamortized common share purchase loans Loss carryforwards Long-term incentive plan Other intangible assets Other Consolidated statements of financial position Consolidated statements of operations March 31, 2022 $ $(33,770) $ 1,273 36,250 3,085 39,368 10,195 54,139 (42,087) 4,896 $ 73,349 $ March 31, 2021 $ (18,024) 1,771 24,634 3,637 29,179 10,445 41,837 (29,243) 3,441 67,677 March 31, 2022 $ $ 17,398 $ 498 (11,337) 553 (10,189) 250 (12,302) 12,845 (12,084) $(14,368) $ March 31, 2021 $ 17,240 (522) (17,004) 2,134 (21,131) 2,028 (19,910) 400 3,613 (33,152) Deferred tax assets and liabilities as reflected in the consolidated statements of financial position are as follows: Deferred tax assets Deferred tax liabilities The movement for the year in the net deferred tax position was as follows: Opening balance Tax recovery recognized in the consolidated statements of operations Deferred taxes acquired in business combination Tax benefit recognized in equity Foreign exchange and other Ending balance as of March 31 March 31, 2022 $ $ 98,224 $ (24,875) $ 73,349 $ March 31, 2021 $ 81,229 (13,552) 67,677 $ March 31, 2022 $ 67,677 14,368 (12,255) 742 2,817 $ 73,349 $ March 31, 2021 $ 29,584 33,152 — 6,866 (1,925) 67,677 Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and if the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. Tax loss carryforwards of $2.8 million [2021 – $4.8 million] in the UK and Europe, $6.5 million [2021 – $7.3 million] in the US and $0 million [2021 – $0.3 million] in Australia have been recognized as deferred tax assets. The losses in these jurisdictions can be carried forward indefinitely. Tax loss carryforwards of $30.8 million [2021 – $29.4 million] in Canada have been recognized as a deferred tax asset and can be carried forward 20 years. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 94 Notes to Consolidated Financial Statements At the balance sheet date, the Company has tax loss carryforwards of approximately $22.4 million [2021 – $22.8 million] and other temporary differences of $nil [2021 – $nil] for which a deferred tax asset has not been recognized. These relate to subsidiaries outside of Canada that have a history of losses and may also be subject to legislative limitations on use and may not be used to offset taxable income elsewhere in the consolidated group of companies. The subsidiaries have no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these deferred tax assets, as the likelihood of future economic benefit is not sufficiently assured. These losses are to carry forward indefinitely. NOTE 16. Subordinated Debt Loan payable, interest payable monthly at prime + 4% per annum, due on demand March 31, 2022 $ 7,500 March 31, 2021 $ 7,500 The loan payable is subject to a subordination agreement and may only be repaid with the prior approval of the Investment Industry Regulatory Organization of Canada (IIROC). As at March 31, 2022 and 2021, the interest rates for the subordinated debt were 6.7% and 6.45%, respectively. The carrying value of subordinated debt approximates its fair value due to the short-term nature of this liability. NOTE 17. Bank Loan Loan Less: Unamortized financing fees Current portion Long-term portion March 31, 2022 $ $154,498 (2,457) 152,041 6,574 145,467 March 31, 2021 $ $79,051 (732) 78,319 12,119 66,200 A subsidiary of the Company entered into a senior credit facility to finance a portion of the cash consideration for its acquisitions of Hargreave Hale, Thomas Miller and Adam & Company. The loan is repayable in instalments of principal and interest and matures in September 2024. The interest rate on this loan is 3.375% per annum as at March 31, 2022 [March 31, 2021 – 2.1288% per annum]. NOTE 18. Lease Liabilities Year one Year two Year three Year four Year five and thereafter Effect of discounting Present value of minimum lease payments Less: current portion Non-current portion of lease liabilities NOTE 19. Convertible Debentures March 31, 2022 $ 30,351 29,919 24,732 16,340 55,635 156,977 (31,429) 125,548 (23,928) 101,620 March 31, 2021 $ 29,642 24,587 21,550 16,456 19,751 111,986 (17,084) 94,902 (24,311) 70,591 Convertible debentures March 31, 2022 March 31, 2021 Liability — $ Equity Liability — $ 168,112 Equity — On April 9, 2021, the Company redeemed the entire $132,690,000 principal amount of its 6.25% convertible unsecured senior subordinated debentures due on December 31, 2023 (the “Debentures”). The redemption price of the Debentures was $1,266.95 CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 95 for each $1,000 principal amount of Debentures, being equal to the aggregate of (i) $1,250 per $1,000 principal amount of Debentures, and (ii) $16.95 of accrued and unpaid interest per $1,000 principal amount up to but excluding April 9, 2021. NOTE 20. Preferred Shares Series A Preferred Shares issued and outstanding Series C Preferred Shares issued and outstanding Series C Preferred Shares held in treasury [i] SERIES A PREFERRED SHARES March 31, 2022 March 31, 2021 Amount $ 110,818 97,450 (2,627) 94,823 205,641 Number of shares 4,540,000 4,000,000 (106,794) 3,893,206 8,433,206 Amount $ 110,818 97,450 (2,627) 94,823 205,641 Number of shares 4,540,000 4,000,000 (106,794) 3,893,206 8,433,206 The Company issued 4,540,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series A (Series A Preferred Shares) at a purchase price of $25.00 per share for gross proceeds of $113.5 million. The aggregate net amount recognized after deducting issue costs, net of deferred taxes of $1.0 million, was $110.8 million. On September 1, 2021, the Company announced the reset of the dividend rate on its Cumulative 5-year Rate Reset First Preferred Shares, Series A (the “Series A Preferred Shares”). Quarterly cumulative cash dividends, as declared, were paid at an annual rate of 3.885% for the five years ended September 30, 2021. Commencing October 1, 2021 and ending on and including September 30, 2026, quarterly cumulative dividends, if declared, will be paid at an annual rate of 4.028%. The dividend rate will be reset every five years at a rate equal to the five-year Government of Canada yield plus 3.21%. Holders of Series A Preferred Shares had the option to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Shares, Series B (Series B Preferred Series), subject to certain conditions, on September 30, 2021 and have the option on September 30 every five years thereafter. The number of shares tendered for conversion by the conversion deadline of September 30, 2021 was below the minimum required to proceed with the conversion and, accordingly, no Series B Preferred Shares were issued. Series B Preferred Shares would entitle any holders thereof to receive floating rate, cumulative, preferential dividends payable quarterly, if declared, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 3.21%. The Company had the option to redeem the Series A Preferred Shares on September 30, 2021 and has the option to redeem on September 30 every five years thereafter, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. [ii] SERIES C PREFERRED SHARES The Company issued 4,000,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series C (Series C Preferred Shares) at a purchase price of $25.00 per share for gross proceeds of $100.0 million. The aggregate net amount recognized after deducting issue costs, net of deferred taxes of $1.0 million, was $97.5 million. Quarterly cumulative cash dividends, if declared, are paid at an annual rate of 4.993% for the five years ending on and including June 30, 2022. Thereafter, the dividend rate will be reset every five years at a rate equal to the five-year Government of Canada bond yield plus 4.03%. Holders of Series C Preferred Shares had the option to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Shares, Series D (Series D Preferred Shares), subject to certain conditions, on June 30, 2017 and have the option on June 30 every five years thereafter. The number of shares tendered for conversion by the conversion deadline of June 30, 2017 was below the minimum required to proceed with the conversion and, accordingly, no Series D Preferred Shares were issued. Series D Preferred Shares would entitle any holders thereof to receive floating rate, cumulative, preferential dividends payable quarterly, if declared, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.03%. The Company had the option to redeem the Series C Preferred Shares on June 30, 2017, and has the option to redeem on June 30 every five years thereafter, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. On May 24, 2022, the Company announced that it does not intend to exercise its option to redeem the Series C Preferred Shares on June 30, 2022. [Note 29] 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 96 Notes to Consolidated Financial Statements NOTE 21. Common Shares Issued and fully paid Shares committed to repurchase under the normal course issuer bid Held for share-based payment plans Held for the LTIP [i] AUTHORIZED Unlimited common shares without par value. [ii] ISSUED AND FULLY PAID March 31, 2022 March 31, 2021 Amount $ 685,270 (3,411) (1,505) (104,188) Number of shares 99,697,799 (495,100) (122,355) (11,023,169) 576,166 88,057,175 Amount $ 749,500 (8,181) (1,401) (77,552) 662,366 Number of shares 108,191,331 (689,500) (122,355) (11,588,393) 95,791,083 Balance, March 31, 2020 Shares issued in connection with share-based payment plans [Note 23] Shares issued in connection with settlement of Petsky Prunier deferred consideration Shares issued in connection with settlement of Jitneytrade contingent consideration Shares issued in connection with exercise of PSO Shares issued in connection with conversion of convertible debentures Shares purchased and cancelled under the normal course issuer bid Balance, March 31, 2021 Shares issued in connection with settlement of Petsky Prunier deferred consideration Shares issued in connection with exercise of PSO Shares purchased and cancelled under the substantial course issuer bid Shares purchased and cancelled under the normal course issuer bid Balance, March 31, 2022 Number of shares 107,812,361 $ 1,121 736,850 300,000 182,999 3,500 (845,500) 108,191,331 736,850 609,046 (6,451,612) (3,387,816) 99,697,799 Amount $ 745,275 10 6,545 2,000 1,232 23 (5,585) 749,500 — 4,098 (44,801) (23,527) 685,270 In a substantial issuer bid which commenced on December 22, 2021 and expired on January 27, 2022, the Company made an offer (the “Offer”) to purchase for cancellation up to $100.0 million of its common shares. The Offer was made by way of a “modified Dutch auction”, which allowed shareholders who chose to participate in the offer to individually select the price, within a price range of not less than $15.50 per Common Share and not more than $16.50 per common share (in increments of $0.10 per Common Share), at which they were willing to sell their common shares. Upon expiry of the offer, the Company determined that $15.50 was the lowest purchase price that allowed it to purchase the maximum number of common shares properly tendered to the offer, and not properly withdrawn, having an aggregate purchase price of approximately $100.0 million. The Company therefore purchased for cancellation 6,451,612 of its common shares at a purchase price of $15.50 per share. Common shares are reduced by the number of shares estimated to be repurchased at the weighted average share value, with the excess recorded as a reduction to contributed surplus and retained earnings. On August 18, 2021, the Company filed a notice to renew the normal course issuer bid (NCIB) to provide the Company with the choice to purchase up to a maximum of 5,342,990 of its common shares during the period from August 21, 2021 to August 20, 2022 through the facilities of the TSX and on alternative trading systems in accordance with the requirements of the TSX. The purpose of the purchase of common shares under the NCIB is to enable the Company to acquire shares for cancellation. The maximum number of shares that may be purchased under the current NCIB represents 5.0% of the Company’s outstanding common shares at the time of the notice. During the year ended March 31, 2022, there were 3,401,116 shares purchased under the NCIB, of which 83,300 shares have not been cancelled as of March 31, 2022. There were also 70,000 shares purchased under the NCIB during the year ended March 31, 2021 and cancelled during the year ended March 31, 2022. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT [iii] EARNINGS PER COMMON SHARE Earnings per common share Net income attributable to CGGI shareholders Preferred share dividends Equity portion of loss on extinguishment of convertible debentures Net income attributable to common shareholders Weighted average number of common shares (number) Basic earnings per share Diluted earnings per common share Net income attributable to common shareholders Weighted average number of common shares (number) Dilutive effect in connection with LTIP (number) Dilutive effect in connection with acquisition of Sawaya (number) Dilutive effect in connection with PSOs(number) Adjusted weighted average number of common shares (number) Diluted earnings per common share NOTE 22. Dividends COMMON SHARE DIVIDENDS Notes to Consolidated Financial Statements 97 For the years ended March 31, 2022 $ $ 246,314 $ (9,484) — 236,830 March 31, 2021 $ 263,786 (9,404) (32,100) 222,282 94,871,398 $ 2.50 $ 96,658,863 2.30 236,830 94,871,398 10,922,398 783,972 2,856,706 222,282 96,658,863 11,212,531 — 1,106,578 109,434,474 108,977,972 $ 2.16 $ 2.04 The Company declared the following common share dividends during the year ended March 31, 2022: Record date June 18, 2021 August 27, 2021 November 26, 2021 February 25, 2022 Payment date Cash dividend per common share Total common dividend amount June 30, 2021 $ September 10, 2021 $ December 10, 2021 $ March 10, 2022 $ 0.075 0.075 0.075 0.085 $ $ $ $ 8,059 8,015 7,936 8,507 On June 2, 2022, the Board of Directors approved a dividend of $0.085 per common share, payable on June 30, 2022, with a record date of June 17, 2022. [Note 29] PREFERRED SHARE DIVIDENDS Record date June 18, 2021 September 17, 2021 December 17, 2021 March 18, 2022 Payment date Cash dividend per Series A Preferred Share Cash dividend per Series C Preferred Share Total preferred dividend amount June 30, 2021 $ September 30, 2021 $ December 31, 2021 $ March 31, 2022 $ 0.24281 0.24281 0.25175 0.25175 $ $ $ $ 0.31206 0.31206 0.31206 0.31206 $ $ $ $ 2,351 2,351 2,391 2,391 On June 2, 2022, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2022 to Series A Preferred shareholders of record as at June 17, 2022 [Note 29]. On June 2, 2022, the Board approved a cash dividend of $0.31206 per Series C Preferred Share payable on June 30, 2022 to Series C Preferred shareholders of record as at June 17, 2022 [Note 29]. NOTE 23. Share-Based Payment Plans [i] LONG-TERM INCENTIVE PLAN Under the long-term incentive plan (LTIP or the Plan), eligible participants are awarded restricted share units (RSUs), which generally vest over three years. All awards under the LTIP are settled by transfer of shares from employee benefit trusts (Trusts) which are funded by the Company, or certain of its subsidiaries, as the case may be, with cash which is used by the trustees to purchase common shares on the open market that will be held in the Trusts until the RSUs vest. No further shares may be issued from treasury under the LTIP. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 98 Notes to Consolidated Financial Statements For RSUs granted as part of the normal course incentive compensation payment cycle, vesting will continue after termination of employment so long as the employee does not violate certain post-termination restrictions and is not engaged in certain competitive or soliciting activities as provided in the Plan. These RSUs are expensed in the period in which those awards are deemed to be earned with, a corresponding increase in contributed surplus, which is generally either the fiscal period in which the awards are made or the immediately preceding fiscal year for those awards made after the end of such fiscal year but determined and earned in respect of that fiscal year. For certain awards, typically new hire awards or retention awards, vesting is subject to continued employment, and therefore these awards are subject to a continuing service requirement. Accordingly, the Company recognizes the cost of such awards as an expense on a graded basis over the applicable vesting period, with a corresponding increase in contributed surplus. There were 4,825,572 RSUs [year ended March 31, 2021 – 5,872,783 RSUs] granted in lieu of cash compensation to employees during the year ended March 31, 2022. The Trusts purchased 4,531,020 common shares [year ended March 31, 2021 – 4,694,369 common shares] during the year ended March 31, 2022. The fair value of the RSUs at the measurement date is based on the fair value on the grant date. The weighted average fair value of RSUs granted during the year ended March 31, 2022 was $13.45 [March 31, 2021 – $5.92]. Awards outstanding, March 31, 2020 Grants Vested Forfeited Awards outstanding, March 31, 2021 Grants Vested Forfeited Awards outstanding, March 31, 2022 Common shares held by the Trusts, March 31, 2020 Acquired Released on vesting Common shares held by the Trusts, March 31, 2021 Acquired Released on vesting Common shares held by the Trusts, March 31, 2022 [ii] INDEPENDENT DIRECTOR DEFERRED SHARE UNITS Number 13,104,975 5,872,783 (7,156,597) (157,352) 11,663,809 4,825,572 (5,096,244) (212,602) 11,180,535 Number 14,063,465 4,694,369 (7,169,441) 11,588,393 4,531,020 (5,096,244) 11,023,169 Beginning April 1, 2011, the Company adopted a deferred share unit (DSU) plan for its independent directors. From August 7, 2020, half of the independent directors’ annual fee was paid in the form of DSUs. Directors may elect annually to use more of their directors’ fees for DSUs. When a director leaves the Board of Directors, outstanding DSUs are paid out in cash with the amount equal to the number of DSUs held multiplied by the volume weighted average price of the Company’s common shares for the ten trading days immediately preceding a date elected in advance by the outgoing director as the valuation date at any time between their ceasing to be a director and December 1 of the following calendar year. During the year ended March 31, 2022, the Company granted 53,629 DSUs [2021 – 91,603 DSUs]. The carrying amount of the liability relating to DSUs at March 31, 2022 was $7.7 million [2021 – $6.4 million]. [iii] EXECUTIVE EMPLOYEE DEFERRED SHARES UNITS On June 1, 2021, the Company adopted a deferred share unit (DSUs) plan for certain key senior executives. All DSU awards will be cash settled on the retirement of the employee, a “good leaver” departure after three years from the date of grant, or death. The DSUs are settled in cash one year after the participants’ departure from the Company under certain conditions of the plan. The carrying amount of the liability recognized in accounts payable and accrued liabilities relating to DSUs at March 31, 2022 was $5.4 million [March 31, 2021 – $ nil]. [iv] PERFORMANCE SHARE UNITS The Company adopted a performance share unit (PSU) plan for certain senior executives. The PSUs are a notional equity-based instrument linked to the value of the Company’s common shares. At the end of a three-year vesting period, the number of PSUs which vest is a multiple of the number of PSUs originally granted ranging from 0x to 2x based upon performance against certain metrics pre-determined for each annual grant. The PSUs cliff-vest on the third anniversary of the date of the grant. The number of PSUs that vest is also adjusted for dividends paid during the vesting period. The PSUs are settled in cash, based on the market price of the Company’s shares at the time of vesting. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 99 The PSUs were measured at fair value on the grant date. Changes in value of the PSUs at each reporting period are amortized over the remaining vesting period and recorded as a compensation expense in the statement of operations. During the year ended March 31, 2021, the PSU plan was amended to include certain employment-related conditions to the vesting of the awards resulting in a change in the periodic expense recorded during the vesting period. The carrying amount of the liability recognized in accounts payable and accrued liabilities relating to PSUs at March 31, 2022 was $140.2 million [March 31, 2021 – $85.9 million]. [v] PERFORMANCE STOCK OPTIONS The Company adopted a performance share option (PSO) plan for certain senior executives. The PSOs have a term of five years and will time-vest ratably over four years (with one-third vesting on each of the second, third and fourth anniversaries of the date of the grant). The PSOs will also be subject to market (stock price) performance vesting conditions, and have a four times exercise price cap on payout value (i.e., the gain on the exercise of the options is limited to three times the exercise price). During the year ended March 31, 2022, the stock price performance vesting conditions had been met on all the outstanding options. A total of 3,421,289 options outstanding (net of options already exercised) had met both stock price performance and time-based vesting conditions and are therefore fully vested and outstanding. The following is a summary of the Company’s PSOs as at March 31, 2022: Balance, March 31, 2021 Exercised Balance, March 31, 2022 [vi] SHARE-BASED COMPENSATION EXPENSE Long-term incentive plan Deferred share units (cash-settled) Deferred share units (cash-settled) – senior executives PSO PSU (cash-settled) Other share-based payment plan Total share-based compensation expense Number of PSOs Weighted average exercise price ($) 6,237,001 (609,046) $ $ 5,627,955 $ 6.78 6.73 6.79 $ For the years ended March 31, 2022 $ 82,452 $ 342 5,435 1,393 55,465 1,740 March 31, 2021 $ 72,654 3,327 — 2,766 64,287 3,374 $ 146,827 $ 146,408 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 100 Notes to Consolidated Financial Statements NOTE 24. Related Party Transactions [i] CONSOLIDATED SUBSIDIARIES The consolidated financial statements include the financial statements of the Company and the Company’s operating subsidiaries and intermediate holding companies listed in the following table: Canaccord Genuity Corp. CG Investments Inc. CG Investments Inc. III CG Investments Inc. IV CG Investments Inc. V CG Investments Inc. VI CG G Sponsors Inc. I Jitneytrade Inc. Finlogik Inc. Finlogik Tunisie, SARL Canaccord Genuity SAS Canaccord Genuity Wealth (International) Limited* Canaccord Genuity Financial Planning Limited* Canaccord Genuity Wealth Limited* Canaccord Genuity Wealth Group Limited* Canaccord Genuity Wealth (International) Holdings Limited* Hargreave Hale Limited* CG Wealth Planning Limited* Adam & Company Investment Management Limited* Canaccord Genuity Limited Canaccord Genuity Wealth Group Holdings Ltd. Canaccord Genuity LLC Canaccord Genuity Wealth Management (USA) Inc. Canaccord Genuity Wealth & Estate Planning Services Ltd. Canaccord Genuity Petsky Prunier LLC Canaccord Asset Management Inc. Canaccord Adams Financial Group Inc. Collins Stewart Inc. Canaccord Genuity (2021) LLC Canaccord Genuity Finance Corp. Canaccord Adams (Delaware) Inc. Canaccord Genuity Securities LLC CG Sawaya, LLC Canaccord Genuity (2021) Holdings ULC Canaccord Genuity (2021) Limited Partnership Canaccord Genuity (2021) GP ULC Stockwave Equities Ltd. Canaccord Genuity Group Finance Company Ltd. Canaccord Genuity (Hong Kong) Limited Canaccord Genuity Emerging Markets Ltd. Canaccord Financial Group (Australia) Pty Ltd** Canaccord Genuity (Australia) Limited** Canaccord Genuity Financial Limited** Patersons Asset Management Limited** Canaccord Genuity Asia (Beijing) Limited The Balloch Group Limited Canaccord Genuity Asia (Hong Kong) Limited Canaccord Genuity (Dubai) Ltd. Canaccord Genuity Wealth Group Holdings (Jersey) Limited* Canaccord Genuity Hawkpoint Limited Canaccord Genuity Management Company Limited % equity interest Country of incorporation Canada Canada Canada Canada Canada Canada Canada Canada Canada Tunisia France Guernsey United Kingdom United Kingdom United Kingdom Guernsey United Kingdom United Kingdom United Kingdom United Kingdom Canada United States United States Canada United States Canada United States United States United States Canada United States United States United States Canada Canada Canada Canada Canada China (Hong Kong SAR) Bahamas Australia Australia Australia Australia China British Virgin Islands China (Hong Kong SAR) United Arab Emirates Jersey United Kingdom Ireland March 31, 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% 75% 100% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 65% 65% 65% 65% 100% 100% 100% 100% 96.7% 100% 100% March 31, 2021 100% 100% 100% 100% 100% 100% 100% 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% n/a 80% 80% 80% 80% 100% 100% 100% 100% 100% 100% 100% * During the year ended March 31, 2022, the Company issued Convertible Preferred Shares to certain institutional investors and certain equity instruments in CGWM UK within the context of the transaction value reflecting a 4.3% interest in the outstanding ordinary shares of CGWM UK. On an as converted basis, convertible preferred shares, preference shares and ordinary shares issued to management and employees of CGWM UK together represent an 26.5% equity equivalent interest. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 101 ** The Company owns 65% of the issued shares of Canaccord Financial Group (Australia) Pty Ltd., Canaccord Genuity (Australia) Limited, and Canaccord Genuity Financial Limited, but for accounting purposes, as of March 31, 2022 the Company is considered to have an 67.3% interest because of the shares held in a trust controlled by Canaccord Financial Group (Australia) Pty Ltd. [March 31, 2021 – 85%] [Note 8]. [ii] COMPENSATION OF KEY MANAGEMENT PERSONNEL OF THE COMPANY Disclosed in the table below are the amounts recognized as expenses related to individuals who are key management personnel as at March 31, 2022 and 2021: Short-term employee benefits Share-based payments Total compensation paid to key management personnel [iii] OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Accounts payable and accrued liabilities include the following balances with key management personnel: Accounts receivable Accounts payable and accrued liabilities March 31, 2022 $ 33,585 736 34,321 March 31, 2021 $ 10,663 654 11,317 March 31, 2022 $ 12,009 1,271 March 31, 2021 $ 4,686 1,562 [iv] TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES Security trades executed by the Company for officers and directors are transacted in accordance with the terms and conditions applicable to all clients. Commission income on such transactions in the aggregate is not material in relation to the overall operations of the Company. NOTE 25. Segmented Information The Company operates in two industry segments as follows: Canaccord Genuity Capital Markets – includes investment banking, advisory, research and trading activities on behalf of corporate, institutional and government clients as well as principal trading activities in Canada, the UK & Europe (including Dubai), Australia and the US. Commencing in the fiscal year starting April 1, 2019, the Other Foreign Locations (OFL), comprised of our operations in China and Hong Kong, have been combined with our Canadian and Australian capital markets operations. Canaccord Genuity Wealth Management – provides brokerage services and investment advice to retail or institutional clients in Canada, the US, Australia and the UK & Crown Dependencies. Corporate and Other includes correspondent brokerage services, interest and foreign exchange revenue and expenses not specifically allocable to Canaccord Genuity Capital Markets or Canaccord Genuity Wealth Management. The Company’s industry segments are managed separately because each business offers different services and requires different personnel and marketing strategies. The Company evaluates the performance of each business based on operating results, without regard to non-controlling interests. The Company does not allocate total assets, liabilities or equipment and leasehold improvements to the segments. Amortization of tangible assets is allocated to the segments based on the square footage occupied. Amortization of identifiable intangible assets is allocated to the Canaccord Genuity Capital Markets Canada segment, as it relates to the acquisitions of Genuity and Jitneytrade. Amortization of the identifiable intangible assets acquired through the purchase of Collins Stewart Hawkpoint plc (CSHP) is allocated to the Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management segments in the UK & Crown Dependencies (Channel Islands). Amortization of identifiable intangible assets acquired through the acquisitions of Eden Financial Ltd., Hargreave Hale, McCarthy Taylor, Thomas Miller and Adam & Company is allocated to the Canaccord Genuity Wealth Management UK & Europe (UK Wealth) segment. Amortization of identifiable intangible assets acquired through the acquisitions of Petsky Prunier and CG Sawaya is allocated to the Canaccord Genuity Capital Markets US segment. Amortization of identifiable intangible assets acquired through the acquisition of Patersons is allocated to Canaccord Genuity Wealth Management Australia. There are no significant intersegment revenues. Income taxes are managed on a Company basis and are not allocated to operating segments. All revenue and operating profit is derived from external customers. The Company also does not allocate cash flows by reportable segments. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 102 Notes to Consolidated Financial Statements For the years ended March 31, 2022 Canaccord Genuity Capital Markets $ Canaccord Genuity Wealth Management $ 174,826 463,118 488,579 158,232 8,985 9,334 587,001 98,607 4,478 744 21,580 7,997 Corporate and Other $ 16 — — 2 5,463 17,040 Canaccord Genuity Capital Markets $ Total $ 761,843 $ 212,431 644,089 561,725 193,464 493,057 245,662 158,978 6,605 36,028 9,977 34,371 Canaccord Genuity Wealth Management $ $ 522,638 117,462 3,572 1,139 13,808 5,000 March 31, 2021 Corporate and Other $ Total $ $ 170 $ 735,239 761,551 197,092 246,801 26,288 40,717 — 56 — 5,875 25,740 924,199 6,784 512,719 20,192 109,468 617 1,546,386 27,593 933,076 6,796 478,995 18,890 107,711 470 1,519,782 26,156 15,278 1,366 13,072 537 5,444 20,861 8,852 8,660 3,172 195 1,674 — 23,894 22,422 23,598 9,197 14,536 5,855 11,739 4,644 7,626 17,465 5,222 1,278 2,878 3,926 11,403 — 25,040 27,246 28,364 5,922 — — — — — — 8,519 8,519 5,932 5,932 192 192 — — — — — — — — 4,354 4,354 922 922 341,838 20,007 143,679 22,670 (107,248) (42,677) 378,269 — 335,582 18,263 134,143 17,288 (99,823) (35,551) 369,902 — Commissions and fees Investment banking Advisory fees Principal trading Interest Other Expenses, excluding undernoted Amortization Amortization of right of use assets Development costs Interest expense Acquisition related costs Non-controlling interest derivative liability fair value adjustment Costs associated with redemption of convertible debentures Share of loss of an associate Income (loss) before intersegment allocations and income taxes Intersegment allocations Income (loss) before income taxes 321,831 121,009 (64,571) 378,269 317,319 116,855 (64,272) 369,902 For geographic reporting purposes, the Company’s business operations are grouped into Canada, the US, the UK & Europe (including Dubai) and Australia. The Asian operations are allocated to our Canadian and Australian capital markets operations. The comparatives have not been restated. The following table presents the revenue of the Company by geographic location (revenue is attributed to geographic areas on the basis of location of the underlying corporate operating results): $ For the years ended March 31, 2022 $ 692,432 $ 430,850 673,997 248,723 March 31, 2021 $ 789,814 372,864 600,046 244,964 $ 2,046,002 $ 2,007,688 Canada UK, Europe & Crown Dependencies United States Australia CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 103 The following table presents selected figures pertaining to the financial position of each geographic location: UK & Crown Dependencies $ Canada $ United States $ Australia $ $ $ $ $ 15,847 $ 9,796 $ 5,506 $ 101,732 48,932 216,078 127,117 189,608 3,746 3,494 $ 2,861 7,198 166,511 $ 352,991 $ 198,860 $ 13,553 $ $ 6,197 101,732 48,184 $ 6,873 178,025 96,357 $ 6,165 97,441 376 $ 3,835 2,917 6,006 156,113 $ 281,255 $ 103,982 $ 12,758 $ Total $ 34,643 510,279 186,993 731,915 23,070 380,115 150,923 554,108 As at March 31, 2022 Equipment and leasehold improvements Goodwill Intangible assets Non-current assets As at March 31, 2021 Equipment and leasehold improvements Goodwill Intangible assets Non-current assets NOTE 26. Capital Management The Company’s business requires capital for operating and regulatory purposes, including funding current and future operations. The Company’s capital structure is underpinned by shareholders’ equity, which is comprised of preferred shares, common shares, contributed surplus, retained earnings and accumulated other comprehensive income , and is further complemented by the subordinated debt, non-controlling interests, bank loans and convertible debentures. The following table summarizes our capital as at March 31, 2022 and 2021: Type of capital Preferred shares Common shares Deferred consideration Contributed surplus Retained earnings Accumulated other comprehensive income Shareholders’ equity Non-controlling interests Convertible debentures Subordinated debt Bank loan $ March 31, 2022 $ 205,641 $ 576,166 11,378 64,241 251,540 69,103 1,178,069 238,700 — 7,500 152,041 March 31, 2021 $ 205,641 662,366 — 62,402 73,220 103,465 1,107,094 8,190 168,112 7,500 78,319 $ 1,576,310 $ 1,369,215 The Company’s capital management framework is designed to maintain the level of capital that will: • Meet the Company’s regulated subsidiaries’ target ratios as set out by the respective regulators • Fund current and future operations • Ensure that the Company is able to meet its financial obligations as they become due • Support the creation of shareholder value The following subsidiaries are subject to regulatory capital requirements in the respective jurisdictions by the listed regulators: • Canaccord Genuity Corp. and Jitneytrade Inc. are subject to regulation in Canada primarily by the Investment Industry Regulatory Organization of Canada (IIROC) • Canaccord Genuity Limited, Canaccord Genuity Wealth Limited, Canaccord Genuity Financial Planning Limited, CG McCarthy Taylor Limited, CG Wealth Planning Limited, Adam & Company Investment Management Limited and Hargreave Hale Limited are regulated in the UK by the Financial Conduct Authority (FCA) • Canaccord Genuity Wealth (International) Limited is licensed and regulated by the Guernsey Financial Services Commission, the Isle of Man Financial Supervision Commission and the Jersey Financial Services Commission • Canaccord Genuity (Australia) Limited and Canaccord Genuity Financial Limited are regulated by the Australian Securities and Investments Commission • Canaccord Genuity (Hong Kong) Limited is regulated in Hong Kong by the Securities and Futures Commission • Canaccord Genuity LLC is registered as a broker dealer in the US and is subject to regulation primarily by the Financial Industry Regulatory Authority, Inc. (FINRA) 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 104 Notes to Consolidated Financial Statements • Canaccord Genuity Wealth Management (USA) Inc. is registered as a broker dealer in the US and is subject to regulation primarily by FINRA • Canaccord Genuity (Dubai) Ltd. is subject to regulation in the United Arab Emirates by the Dubai Financial Services Authority (DFSA) • Canaccord Genuity Emerging Markets Ltd. is subject to regulation in the Bahamas by the Securities Commission of the Bahamas • Canaccord Genuity Insurance Company Ltd is subject to regulation by the Financial Services Commission (Barbados) Margin requirements in respect of outstanding trades, underwriting deal requirements and/or working capital requirements cause regulatory capital requirements to fluctuate on a daily basis. Compliance with these requirements may require the Company to keep sufficient cash and other liquid assets on hand to maintain regulatory capital requirements rather than using these liquid assets in connection with its business or paying them out in the form of cash disbursements. Some of the subsidiaries are also subject to regulations relating to withdrawal of capital, including payment of dividends to the Company. There were no significant changes in the Company’s capital management policy during the current year. The Company’s subsidiaries were in compliance with all of the minimum regulatory capital requirements as at and during the year ended March 31, 2022. NOTE 27. Client Money At March 31, 2022, the UK & Europe operations held client money in segregated accounts of $2.859 billion (£1.740 billion) [2021 – $2.770 billion (£1.600 billion)]. This client money includes $7.345 million (£4.469 million) [2021 – $7.278 million (£4.204 million)] of cash to settle outstanding trades and $2.852 billion (£1.735 billion) [2021 – $2.756 billion (£1.592 billion)] of segregated deposits, which are held on behalf of clients and which are not reflected on the consolidated statements of financial position. Movement in settlement balances is reflected in operating cash flows. NOTE 28. Provisions and Contingencies PROVISIONS Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made. At each reporting date, the Company assesses the adequacy of its pre-existing provisions and adjusts the amounts as necessary. The following is a summary of the changes during the years ended March 31, 2022 and 2021: Balance, March 31, 2020 Additions Utilized Balance, March 31, 2021 Additions Utilized Balance, March 31, 2022 Legal provisions $ Restructuring provisions $ $ $ 4,545 6,711 (2,705) 8,551 2,515 (4,419) 6,647 $ 2,190 — (384) 1,806 — (231) 1,575 Total provisions $ 6,735 6,711 (3,089) 10,357 2,515 (4,650) 8,222 Commitments, litigation proceedings and contingent liabilities In the normal course of business, the Company is involved in litigation, and as of March 31, 2022, it was a defendant in various legal actions. The Company has established provisions for matters where payments are probable and can be reasonably estimated. While the outcome of these actions is subject to future resolution, management’s evaluation and analysis of these actions indicate that, individually and in the aggregate, the probable ultimate resolution of these actions will not have a material effect on the financial position of the Company. The Company is also subject to asserted and unasserted claims arising in the normal course of business which, as of March 31, 2022, have not resulted in the commencement of legal actions. The Company cannot determine the effect of all asserted and unasserted claims on its financial position; however, where losses arising from asserted and unasserted claims are considered probable and where such losses can be reasonably estimated, the Company has recorded a provision. Litigation matters and asserted and unasserted claims against the Company may be in respect of certain subsidiaries of CGGI, CGGI directly or both CGGI and certain of its subsidiaries. The Company provides financial advisory, underwriting and other services to, and trades the securities of issuers that are involved with new and emerging industries, including the US cannabis industry. Activities within such industries, including the US cannabis industry, typically have not had the benefit of a history of successful operating results. In addition to the economic uncertainties associated with new industries, new activities and new issuers, the laws applicable to such industries or activities, particularly CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Notes to Consolidated Financial Statements 105 the US cannabis industry and the activities of issuers in that industry, and the effect or enforcement of such laws are undetermined, conflicting and uncertain. With respect to the US cannabis industry, cannabis continues to be a controlled substance under the United States Controlled Substances Act and as such, there is a risk that certain issuers, while in compliance with applicable state law, may be prosecuted under federal law. Accordingly, the Company has adopted policies and procedures reasonably designed to ensure compliance with the United States Currency and Foreign Transactions Reporting Act of 1970 (the Bank Secrecy Act) and the guidance issued by the United States Department of the Treasury Financial Crimes Enforcement Network, FIN-2014-G001 (the FinCEN Guidance) relating to providing financial services to marijuana related businesses in the United States (as that term is used in the FinCEN Guidance). While the Company takes steps to identify the risks associated with emerging industries, including the US cannabis industry, and only provides services to those issuers where it determines that there is no material risk to the Company or where any risk is unlikely to result in a material adverse consequence to the Company, there is a risk that the Company could be the subject of third party proceedings which may have a material adverse effect on the Company’s business, revenues, operating results and financial condition as well as the Company’s reputation, even if such proceedings were concluded successfully in favour of the Company. Notwithstanding these procedures, the Company is currently a party to securities class action proceedings in Canada and the US relating to underwriting services provided to certain issuers in the cannabis and e-cigarette and vaping industries. Although the Company believes that these claims are without merit and intends to vigorously defend itself, the probable outcome of these class action proceedings cannot be predicted with certainty and a reliable estimate of the amount of losses, if any, in the event of adverse outcomes is not determinable as at the date of these financial statements and, accordingly, the Company has not recorded a provision in respect of these claims. The risk of any further actions against the Company is not known. As at the date of these audited consolidated financial statements, the Company has not recorded a provision in respect of any other such matters. Risks associated with emerging industries such as the cannabis and e-cigarette and vaping industries also include the risk of the insolvency of issuers and the consequent inability of such issuers to satisfy their indemnification obligations to the Company. Accordingly, in the event of a loss to the Company, the ability of the Company to recover amounts in respect of any indemnity claims also cannot be predicted with certainty. NOTE 29. Subsequent Events Business combination On May 31, 2022, the Company announced that through its wealth management business in the UK (“CGWM UK”), it has completed its previously announced acquisition of Punter Southall Wealth (“PSW”), including the intermediary-facing brand Psigma. In connection with completion of the acquisition, CGWM UK added £100 million (C$169.2 million) to its existing bank facility. In addition, HPS Investment Partners, LLC on behalf of investment accounts and funds it manages made an additional investment in CGWM UK on closing of the acquisition through the purchase of a new series of convertible preferred shares of CGWM UK in the amount of £65.3 million (C$110.5 million). Cumulative dividends will be payable by CGWM UK on the convertible preferred shares at the greater of an annual 7.5% coupon and the proportionate share that such shares would receive on an as converted basis. The convertible preferred shares will also carry customary minority rights in respect of CGWM UK governance and financial matters, a liquidation preference, and call protections. Series C Preferred Shares dividend reset On May 24, 2022, the Company announced that it does not intend to exercise its option to redeem the Series C Preferred Shares on June 30, 2022. The Company has the option to redeem on June 30 every five years thereafter, in whole or in part, at $25.00 per share together with all declared and unpaid dividends. On June 1, 2022, the Company announced the reset of the dividend rate on its Series C Preferred Shares. Quarterly cumulative cash dividends, as declared, are paid at an annual rate of 4.993% for the five years ending on and including June 30, 2022. Commencing July 1, 2022 and ending on and including June 30, 2027, quarterly cumulative dividends, if declared, will be paid at an annual rate of 6.837%. The dividend rate will be reset every five years at a rate equal to the five-year Government of Canada yield plus 4.03%. Up until June 15, 2022 holders of the Series C Preferred Shares have the option to convert those shares into Series D Preferred Shares which will carry a quarterly floating rate equal to the three-month Government of Canada Treasury Bill rate plus 4.03%. The issuance of Series D Preferred Shares is subject to a certain minimum level. DIVIDENDS On June 2, 2022, the Board of Directors approved a dividend of $0.085 per common share, payable on June 30, 2022, with a record date of June 17, 2022. [Note 22]. On June 2, 2022, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2022 to Series A Preferred shareholders of record as at June 17, 2022 [Note 22]. On June 2, 2022, the Board approved a cash dividend of $0.31206 per Series C Preferred Share payable on June 30, 2022 to Series C Preferred shareholders of record as at June 17, 2022 [Note 22]. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 106 SUPPLEMENTAL INFORMATION Advisory note: This supplemental information is not audited and should be read in conjunction with the audited financial statements contained herein. FINANCIAL HIGHLIGHTS(1)(2)(3) (C$ thousands, except for AUM, AUA, common and preferred share information, financial measures and percentages) Financial results Revenue Expenses Income taxes expense Net income Net income attributable to CGGI shareholders Net income attributable to common shareholders For the years ended and as at March 31 2022 2021 2020 2019 2018 2,046,002 1,667,733 107,704 270,565 246,314 236,830 2,007,688 1,637,786 100,100 269,802 263,786 254,382 1,223,867 1,123,844 13,469 86,554 86,490 77,086 1,190,567 1,097,911 21,074 71,582 70,530 61,126 1,022,877 987,131 18,669 17,077 13,024 3,431 Business segment Income before income taxes Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate and Other Client assets information ($ millions) AUM – Canada (discretionary) AUA – Canada AUM – UK & Crown Dependencies AUM – Australia Total Common share information Per common share ($) Basic earnings Diluted earnings Common share price ($) High Low Close Common shares outstanding (thousands) Issued shares excluding unvested shares Issued and outstanding Diluted shares Average basic Average diluted Market capitalization (thousands) Preferred share information (thousands) Shares issued and outstanding Financial measures 321,831 121,009 (64,571) 8,482 37,881 52,830 5,352 96,063 2.50 2.16 16.52 11.42 12.35 317,319 116,855 (64,272) 6,307 32,240 52,298 4,228 88,766 2.30 2.04 13.25 3.93 11.50 88,057 99,698 104,500 94,871 109,434 1,290,575 95,791 108,191 112,568 96,659 108,978 1,294,532 48,801 68,174 (16,952) 4,009 18,440 39,879 2,400 60,719 0.78 0.65 6.00 3.29 4.33 93,464 107,812 130,723 98,449 128,303 566,031 62,877 58,603 (28,824) 4,221 20,674 44,195 854 65,723 0.58 0.48 7.47 5.54 5.84 97,580 115,617 140,241 96,260 130,944 819,007 13,126 33,999 (11,379) 2,815 15,567 44,877 830 61,274 0.04 0.03 7.49 4.08 6.93 93,054 113,523 124,294 92,587 110,862 861,357 8,540 8,540 8,540 8,540 8,540 Dividends per common share Common dividend yield (closing common share price) 0.32 2.6% 0.25 2.2% 0.20 4.6% 0.20 3.4% 0.15 2.2% (1) (2) (3) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. The operating results of the Australian operations have been fully consolidated, and a 15% non-controlling interest has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 – 15%]. The operating results of CGWM UK have been fully consolidated, and a 1.6% non-controlling has been recognized for the period from August 1, 2021 to December 31, 2021 and 4.3% for the fourth quarter of fiscal 2022 [March 31, 2021 – $nil]. Data includes the operating results of Hargreave Hale since September 18, 2017, Jitneytrade since June 6, 2018, McCarthy Taylor since January 29, 2019, Petsky Prunier since February 13, 2019, Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya since December 31, 2021. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Supplemental Information 107 Condensed Consolidated Statements of Operations and Retained Earnings (Deficit)(1)(2)(3)(4) (C$ thousands, except per share amounts and percentages) Revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Expenses Compensation expense Trading costs Premises and equipment Communication and technology Interest General and administrative Amortization Development costs Amortization of right of use assets Restructuring costs Acceleration of long-term incentive plan expense Change in derivative liability fair value Share of loss of an associate Loss on extinguishment of convertible debentures Acquisition-related costs Income before income taxes Income taxes expense Net income for the year Non-controlling interests Net income attributable to CGGI shareholders Retained earnings (deficit), beginning of year Common shares dividends Preferred shares dividends Reclassification of realized gains on disposal of financial instruments measure at fair value through other comprehensive income Reclassification of equity portion of convertible debentures Shares purchased and cancelled under substantial issuer bid Equity portion of loss on extinguishment of convertible debentures Retained earnings (deficit), end of year Total compensation expenses as a % of revenue Non-compensation expenses as a % of revenue Total expenses as a % of revenue Pre-tax profit margin Effective tax rate Net profit margin Basic earnings per share Diluted earnings per share Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate and Other For the years ended and as at March 31 2022 2021 2020 2019 2018 761,843 561,725 493,057 158,978 36,028 34,371 2,046,002 1,248,184 102,824 20,074 73,873 23,598 101,431 27,593 22,422 23,894 — — 8,519 192 5,932 9,197 1,667,733 378,269 107,704 270,565 24,251 246,314 73,220 (30,797) (9,484) — — (27,713) — 251,540 61.0% 20.5% 81.5% 18.5% 28.5% 13.2% 2.50 2.16 1,303,074 720,407 22,521 2,046,002 735,239 761,551 197,092 246,801 26,288 40,717 2,007,688 1,227,895 122,154 19,948 67,475 28,364 82,310 26,156 27,246 25,040 — — — 922 4,354 5,922 1,637,786 369,902 100,100 269,802 6,016 263,786 (193,131) (23,924) (9,404) 4,091 31,802 — — 73,220 61.2% 20.4% 81.6% 18.4% 27.1% 13.4% 2.30 2.04 1,312,228 663,619 31,841 2,007,688 586,884 236,962 206,507 108,834 63,690 20,990 1,223,867 738,313 83,964 18,094 66,666 33,678 113,612 32,594 12,053 22,866 1,921 — — 207 — (124) 1,123,844 100,023 13,469 86,554 64 86,490 (237,770) (32,447) (9,404) — — — — (193,131) 60.3% 31.5% 91.8% 8.2% 13.5% 7.1% 0.78 0.65 689,469 511,435 22,963 1,223,867 556,475 294,241 142,228 125,830 51,008 20,785 1,190,567 716,625 83,577 41,719 64,930 25,453 100,768 24,280 15,513 — 13,070 — — 304 8,608 3,064 1,097,911 92,656 21,074 71,582 1,052 70,530 (277,472) (16,534) (9,402) — — — (4,892) (237,770) 60.2% 32.0% 92.2% 7.8% 22.7% 6.0% 0.58 0.48 704,326 461,811 24,430 1,190,567 461,937 282,195 122,372 113,921 27,875 14,577 1,022,877 625,853 68,209 39,605 56,346 18,437 83,982 24,007 7,664 — 7,643 48,355 — 298 — 6,732 987,131 35,746 18,669 17,077 4,053 13,024 (267,559) (13,344) (9,593) — — — — (277,472) 61.2% 35.3% 96.5% 3.5% 52.2% 1.7% 0.04 0.03 637,556 370,265 15,056 1,022,877 (1) (2) (3) (4) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. The operating results of the Australian operations have been fully consolidated, and a 15% non-controlling interest has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 — 15%]. The operating results of CGWM UK have been fully consolidated, and a 1.6% non-controlling has been recognized for the period from August 1, 2021 to December 31, 2021 and 4.3% for the fourth quarter of fiscal 2022 [March 31, 2021 — $nil]. Data includes the operating results of Hargreave Hale since September 18, 2017, Jitneytrade since June 6, 2018, McCarthy Taylor since January 29, 2019, Petsky Prunier since February 13, 2019, Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya since December 31, 2021. Q1/20, our Asian based operations, including Singapore, China and Hong Kong, have been combined with our Canadian and Australian capital markets operations to reflect management of these operating units. Also, commencing in Q3/20, our Australian wealth management business, comprised of the operating results of Patersons since October 21, 2019 and the wealth management business of Australia previously included as part of Canaccord Genuity Capital Markets Australia, is disclosed as a separate operating segment in the discussions below. Comparatives have not been restated. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 108 Supplemental Information Condensed Consolidated Statements of Financial Position As at March 31 (C$ thousands) Assets Cash and cash equivalents Securities owned Accounts receivable Income taxes recoverable Deferred tax assets Investments Equipment and leasehold improvements Goodwill and other intangibles Right of use asset Liabilities and shareholders’ equity Bank indebtedness Securities sold short Accounts payable, accrued liabilities and other Income taxes payable Current portion of bank loan Current portion of lease liability Current portion of contingent consideration Promissory note Lease liability Other long-term liabilities Bank loan Deferred tax liabilities Subordinated debt Convertible debentures Non-controlling interests Shareholders’ equity Miscellaneous Operational Statistics(1) As at March 31 Number of employees in Canada Number in Canaccord Genuity Capital Markets Number in Canaccord Genuity Wealth Management Number in Corporate and Other Total Canada Number of employees in the UK & Europe Number in Canaccord Genuity Capital Markets Number in Canaccord Genuity Wealth Management Number of employees in the US Number in Canaccord Genuity Capital Markets Number of employees in Australia Number in Canaccord Genuity Capital Markets Number in Canaccord Genuity Wealth Management Number of employees in Other Foreign Locations Number in Canaccord Genuity Capital Markets Number of employees company-wide Number of Advisory Teams in Canada(2) Number of licensed professionals in Canada Number of investment professionals and fund managers in the UK & Europe(3) Number of Advisors – Australia AUM – Canada (discretionary) (C$ millions) AUA – Canada (C$ millions) AUM – UK & Europe (C$ millions) AUM – Australia (C$ millions) Total (C$ millions) 2022 2021 2020 2019 2018 1,788,261 1,051,229 3,438,655 1,967 98,224 22,928 34,643 697,272 117,066 7,250,245 — 567,290 4,853,894 15,952 6,574 23,928 10,618 — 101,620 75,758 145,467 24,875 7,500 — 238,700 1,178,069 7,250,245 2022 278 489 405 1,172 143 581 378 91 222 — 2,587 146 464 220 115 8,482 37,881 52,830 5,352 96,063 1,883,292 1,041,583 3,973,442 738 81,229 12,193 23,070 531,038 85,216 7,631,801 — 889,607 5,170,957 56,285 12,119 24,311 17,706 — 70,591 19,577 66,200 13,552 7,500 168,112 8,190 1,107,094 7,631,801 2021 274 454 362 1,090 131 528 319 84 204 — 2,356 145 451 202 110 6,307 32,240 52,298 4,228 88,766 997,111 931,467 3,275,841 5,603 39,487 10,105 24,860 565,587 106,134 5,956,195 — 875,017 3,680,186 11,721 7,042 23,417 57,859 — 88,922 58,340 79,192 9,903 7,500 128,322 156 928,618 5,956,195 2020 257 432 339 1,028 136 548 313 83 200 — 2,308 146 435 210 119 4,009 18,440 39,879 2,400 60,719 820,739 690,499 2,656,664 2,502 22,117 6,224 25,792 524,757 — 4,749,294 9,639 373,419 3,141,977 5,415 9,294 — — 5,832 — 132,285 50,370 7,978 7,500 127,225 1,997 876,363 4,749,294 862,838 469,217 2,215,837 1,170 19,941 2,035 30,967 418,731 — 4,020,736 — 301,006 2,647,382 7,851 9,679 — — — — 59,841 61,758 13,715 7,500 57,081 13,571 841,352 4,020,736 2019 2018 255 430 308 993 197 542 308 58 10 4 2,112 155 420 190 6 4,221 20,674 44,195 854 65,723 189 379 288 856 214 559 256 57 11 3 1,956 142 374 188 7 2,815 15,567 44,877 830 61,274 (1) (2) (3) These miscellaneous operational statistics are non-IFRS measures. See Non-IFRS Measures on page 14. Advisory Teams in Canada are normally comprised of one or more Investment Advisors (IAs) and their assistants and associates, who together manage a shared set of client accounts. Advisory Teams that are led by, or only include, an IA who has been licensed for less than three years are not included in our Advisory Team count, as it typically takes a new IA approximately three years to build an average-sized book. Investment professionals include all staff with direct sales responsibilities, which includes brokers and assistants with direct client contacts. Fund managers include all staff who manage client assets. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Quarterly Financial Highlights(1)(2)(3)(4) (C$ thousands, except for AUM, AUA, common and preferred share information, financial measures and percentages) Financial results Revenue Expenses Income taxes expense Net income Net income attributable to CGGI shareholders Net income attributable to common shareholders Business segment Income (loss) before income taxes Canaccord Genuity Canaccord Genuity Wealth Management Corporate and Other Client assets ($ millions) AUM – Canada (discretionary) AUA – Canada AUM – UK & Europe AUM – Australia Total Common share information Per common share ($) Basic earnings Diluted earnings Common share price ($) High Low Close Common shares outstanding (thousands) Issued shares excluding unvested shares Issued and outstanding Diluted shares Average basic Average diluted Preferred shares outstanding (thousands) Shares issued and outstanding Financial measures Dividends per common share Supplemental Information 109 Fiscal 2022 Fiscal 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 499,793 552,217 475,161 518,831 403,245 457,234 388,124 419,130 26,648 73,053 72,001 69,650 27,553 68,995 58,657 56,266 28,251 66,732 58,645 56,254 25,252 61,785 56,583 54,232 706,526 533,077 390,357 377,728 518,810 433,803 344,499 340,674 8,090 28,964 27,483 25,132 48,322 139,394 137,877 135,526 30,823 68,451 66,991 64,640 12,865 32,993 31,435 29,084 71,743 23,919 93,126 28,677 886 (26,820) 72,845 23,696 (9,504) 84,117 44,717 (29,133) 154,382 40,298 (6,964) 87,102 33,243 (21,071) 42,189 22,964 (19,295) 33,646 20,350 (16,942) 8,482 37,881 52,830 5,352 8,385 37,472 59,407 5,065 96,063 101,944 7,637 35,768 57,508 4,814 98,090 6,989 34,588 55,605 4,691 94,884 6,307 32,240 52,298 4,228 88,766 5,728 29,270 51,762 4,174 85,206 4,941 24,648 45,380 3,366 73,394 4,551 22,243 43,566 3,064 68,873 0.62 0.53 15.85 11.48 12.35 0.59 0.52 16.52 12.95 15.08 0.56 0.49 15.55 12.63 13.93 0.72 0.63 14.27 11.42 13.58 1.07 0.93 13.25 11.01 11.50 0.67 0.54 11.44 6.46 11.21 0.30 0.25 8.15 6.37 6.79 0.26 0.22 6.94 3.93 6.91 94,689 88,221 88,057 96,836 99,698 105,811 106,444 107,407 104,500 104,038 110,765 111,834 97,065 105,790 108,976 110,084 110,810 91,235 94,997 96,138 95,791 96,382 96,873 98,479 108,191 107,996 107,784 107,813 112,568 127,801 129,632 129,988 95,370 110,899 123,760 125,254 122,715 96,867 96,719 97,669 8,540 8,540 8,540 8,540 8,540 8,540 8,540 8,540 0.085 0.085 0.075 0.075 0.075 0.065 0.055 0.055 (1) (2) (3) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 15% has been recognized for the year ended March 31, 2021 [ March 31, 2020 — 15%]. Data includes the operating results of Hargreave Hale since September 18, 2017, Jitneytrade since June 6, 2018, McCarthy Taylor since January 29, 2019, Petsky Prunier since February 13, 2019, Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya since December 31, 2021. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 110 Supplemental Information Condensed Consolidated Statements of Operations(1)(2)(3)(4) (C$ thousands, except per share amounts and percentages) Revenue Commissions and fees Investment banking Advisory fees Principal trading Interest Other Expenses Compensation expense Trading costs Premises and equipment Communication and technology Interest General and administrative Amortization Amortization of right of use assets Development costs Acquisition-related costs Share of loss of an associate Loss on extinguishment of convertible debentures Change in derivative liability fair value Income before income taxes Income tax expense Net income for the period Non-controlling interests Net income attributable to CGGI shareholders Total compensation expenses as a % of revenue Non-compensation expenses as a % of revenue Total expenses as a % of revenue Pre-tax profit margin Effective tax rate Net profit margin Basic earnings per share Diluted earnings per share Canaccord Genuity Capital Markets Canaccord Genuity Wealth Management Corporate and Other Fiscal 2022 Fiscal 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 196,976 108,801 122,353 41,960 10,264 19,439 499,793 294,695 23,588 5,327 20,336 7,483 29,434 8,945 6,697 6,214 515 11 — — 403,245 96,548 27,553 68,995 10,338 58,657 59.0% 21.7% 80.7% 19.3% 28.5% 13.8% 0.62 0.53 312,046 174,274 13,473 499,793 197,009 151,025 153,297 33,980 9,639 7,267 552,217 340,929 25,401 5,389 18,048 6,014 28,658 6,792 5,464 5,195 6,762 63 — 8,519 457,234 94,983 28,251 66,732 8,087 58,645 61.7% 21.1% 82.8% 17.2% 29.7% 12.1% 0.59 0.52 361,893 184,901 5,423 552,217 185,105 106,261 139,413 30,390 8,458 5,534 475,161 290,234 25,451 5,195 18,958 5,353 21,782 5,987 5,715 6,943 1,920 118 468 — 388,124 87,037 25,252 61,785 5,202 56,583 61.1% 20.6% 81.7% 18.3% 29.0% 13.0% 0.56 0.49 304,919 166,228 4,014 475,161 182,753 195,638 77,994 52,648 7,667 2,131 518,831 322,326 28,384 4,163 16,531 4,748 21,557 5,869 6,018 4,070 — — 5,464 — 419,130 99,701 26,648 73,053 1,052 72,001 62.1% 18.7% 80.8% 19.2% 26.7% 14.1% 0.72 0.63 324,216 195,004 (389) 518,831 214,476 305,939 66,761 87,830 7,487 24,033 706,526 395,638 39,420 5,638 17,423 8,239 23,521 6,518 6,176 10,849 418 616 4,354 — 518,810 187,716 48,322 139,394 1,517 137,877 56.0% 17.4% 73.4% 26.6% 25.7% 19.7% 1.07 0.93 486,951 199,207 20,368 706,526 184,186 213,419 72,004 51,113 5,791 6,564 533,077 328,647 27,982 4,948 16,020 6,724 22,690 6,145 6,053 8,815 5,504 275 — — 433,803 99,274 30,823 68,451 1,460 66,991 61.7% 19.7% 81.4% 18.6% 31.0% 12.8% 0.67 0.54 348,875 180,497 3,705 533,077 167,575 131,625 37,281 42,746 6,005 5,125 390,357 250,796 27,783 4,984 17,284 6,671 20,181 6,941 6,078 3,767 — 14 — — 344,499 45,858 12,865 32,993 1,558 31,435 64.2% 24.0% 88.3% 11.7% 28.1% 8.5% 0.30 0.25 241,549 145,977 2,831 390,357 169,002 110,568 21,046 65,112 7,005 4,995 377,728 252,814 26,969 4,378 16,748 6,730 15,918 6,552 6,733 3,815 — 17 — — 340,674 37,054 8,090 28,964 1,481 27,483 66.9% 23.3% 90.2% 9.8% 21.8% 7.7% 0.26 0.22 234,853 137,938 4,937 377,728 (1) (2) (3) (4) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14. The operating results of the Australian operations have been fully consolidated, and a 15% non-controlling interest has been recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022 due to the share reorganization in Australia on January 3, 2022 [March 31, 2021 — 15%]. The operating results of CGWM UK have been fully consolidated, and a 1.6% non-controlling has been recognized for the period from August 1, 2021 to December 31, 2021 and 4.3% for the fourth quarter of fiscal 2022 [March 31, 2021 — $nil]. Data includes the operating results of Hargreave Hale since September 18, 2017, Jitneytrade since June 6, 2018, McCarthy Taylor since January 29, 2019, Petsky Prunier since February 13, 2019, Thomas Miller since May 1, 2019, Patersons since October 21, 2019, Adam & Company since October 1, 2021 and Sawaya since December 31, 2021. Q1/20, our Asian based operations, including Singapore, China and Hong Kong, have been combined with our Canadian and Australian capital markets operations to reflect management of these operating units. Also, commencing in Q3/20, our Australian wealth management business, comprised of the operating results of Patersons since October 21, 2019 and the wealth management business of Australia previously included as part of Canaccord Genuity Capital Markets Australia, is disclosed as a separate operating segment in the discussions below. Comparatives have not been restated. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Condensed Consolidated Statements of Financial Position Supplemental Information 111 (C$ thousands) Assets Cash and cash equivalents Securities owned Accounts receivable Income taxes recoverable Deferred tax assets Investments Equipment and leasehold improvements Goodwill and other intangibles Right of use asset Liabilities and shareholders’ equity Fiscal 2022 Fiscal 2021 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 782,300 1,788,261 1,790,177 1,725,252 1,364,952 1,883,292 1,253,263 1,051,229 1,159,854 1,136,754 1,141,213 1,041,583 1,062,946 830,932 3,438,655 3,137,364 4,291,580 3,862,988 3,973,442 3,069,771 3,130,499 2,647,206 10,859 36,325 9,837 23,389 543,389 97,238 7,250,245 7,039,426 7,886,293 7,098,990 7,631,801 6,085,307 5,651,721 4,981,475 738 81,229 12,193 23,070 531,038 85,216 3,710 40,599 10,396 23,569 543,576 91,358 282 44,923 7,348 22,843 537,648 86,283 1,967 98,224 22,928 34,643 697,272 117,066 17,342 77,264 8,879 21,686 524,875 79,791 8,012 83,674 20,430 21,271 522,449 76,871 9,568 89,186 24,815 23,724 725,569 79,169 904,598 903,416 — — 814,493 — 567,290 — 753,312 — 889,607 — — Bank indebtedness Securities sold short 631,662 876,313 1,219,252 Accounts payable, accrued liabilities and other 4,853,894 4,436,267 4,988,873 4,780,498 5,170,957 3,968,036 3,619,631 2,997,985 8,287 Income taxes payable 56,285 8,416 Current portion of bank loan 12,119 22,936 Current portion of lease liability 24,311 51,373 Current portion of contingent consideration 17,706 — Short-term loan facility — 83,201 Lease liability 70,591 59,284 40,624 Other long-term liabilities 19,577 42,166 70,775 Bank loan 66,200 154,016 8,647 Deferred tax liabilities 13,552 15,010 7,500 Subordinated debt 7,500 7,500 128,609 Convertible debentures 168,112 — 3,469 Non-controlling interests 8,190 208,208 1,178,069 1,107,972 1,151,429 1,123,244 1,107,094 917,991 Shareholders’ equity 7,250,245 7,039,426 7,886,293 7,098,990 7,631,801 6,085,307 5,651,721 4,981,475 37,013 15,432 23,898 — 12,399 — 118,321 64,096 19,482 57,097 19,180 7,500 — 6,337 6,192 8,605 22,465 17,286 — 77,871 40,275 72,475 8,489 7,500 128,902 5,439 935,682 19,664 12,195 22,490 18,769 — 72,503 32,399 66,513 8,083 7,500 129,200 6,844 967,799 15,952 6,574 23,928 10,618 — 101,620 75,758 145,467 24,875 7,500 — 238,700 6,266 6,843 24,446 11,034 — 63,281 80,875 154,501 25,629 7,500 — 238,499 8,183 6,836 25,536 — 700,909 Miscellaneous Operational Statistics(1) Number of employees in Canada Number in Canaccord Genuity Number in Canaccord Genuity Wealth Management Number in Corporate and Other Total Canada Number of employees in the UK & Europe Number in Canaccord Genuity Number in Canaccord Genuity Wealth Management Number of employees in the US Number in Canaccord Genuity Number of employees in Australia Number in Canaccord Genuity Number in Canaccord Genuity Wealth Management Number of employees company-wide Number of Advisory Teams in Canada(2) Number of licensed professionals in Canada Number of investment professionals and fund managers in the UK & Europe(3) Number of Advisors – Australia AUM – Canada (discretionary) (C$ millions) AUA – Canada (C$ millions) AUM – UK & Europe (C$ millions) AUM – Australia (C$ millions) Total (C$ millions) Q4 278 489 405 1,172 143 581 378 91 222 2,587 146 464 220 115 8,482 37,881 52,830 5,352 96,063 Fiscal 2022 Q3 270 474 382 1,126 136 576 366 86 220 2,510 146 464 226 112 8,385 37,472 59,407 5,065 101,944 Q2 268 463 380 1,111 133 545 337 89 215 2,430 146 460 204 108 7,637 35,768 57,508 4,814 98,090 Q1 266 470 379 1,115 131 533 315 82 207 2,383 145 460 202 109 6,989 34,588 55,605 4,691 94,884 Q4 274 454 362 1,090 131 528 319 84 204 2,356 145 451 202 110 6,307 32,240 52,298 4,228 88,766 Fiscal 2021 Q3 Q2 261 259 433 359 1,053 438 345 1,042 133 525 311 80 194 2,296 144 438 205 106 5,728 29,270 51,762 4,174 85,206 133 530 308 74 198 2,285 145 433 208 115 4,941 24,648 45,380 3,366 73,394 Q1 251 426 342 1,019 133 537 304 82 197 2,272 144 431 209 117 4,551 22,243 43,566 3,064 68,873 (1) (2) (3) These miscellaneous operational statistics are non-IFRS measures. See Non-IFRS Measures on page 14. Advisory Teams are normally comprised of one or more Investment Advisors (IAs) and their assistants and associates, who together manage a shared set of client accounts. Advisory Teams that are led by, or only include, an IA who has been licensed for less than three years are not included in our Advisory Team count, as it typically takes a new IA approximately three years to build an average- sized book. Investment professionals include all staff with direct sales responsibilities, which includes brokers and assistants with direct client contacts. Fund managers include all staff who manage client assets. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 112 Glossary Acquisition-related expense items These expenses are mainly comprised of professional and employment costs in connection with acquisitions. Acquisition- related expense items also include costs incurred for prospective acquisitions not pursued. Figures that exclude acquisition-related items are considered non-IFRS measures. Advisory fees Revenue related to the fees the Company charges for corporate advisory, mergers and acquisitions or corporate restructuring services is recorded as Advisory fees. Advisory Teams (IA Teams) Advisory Teams are normally comprised of one or more Investment Advisors (IAs) and their assistants and associates, who together manage a shared set of client accounts. Advisory Teams that are led by, or only include, an IA who has been licensed for less than three years are not included in our Advisory Team count, as it typically takes a new IA approximately three years to build an average-sized book of business. Assets under administration (AUA) Canada AUA is the market value of client assets administered by the Company, for which the Company earns commissions or fees. This measure includes funds held in client accounts, as well as the aggregate market value of long and short security positions. Management uses this measure to assess operational performance of the Canaccord Genuity Wealth Management business segment. This measure is non-IFRS. Assets under management (AUM) Canada AUM consists of assets that are beneficially owned by clients and discretionarily managed by the Company as part of the Complete Canaccord Investment Counselling Program and Complete Canaccord Private Investment Management. Services provided include the selection of investments and the provision of investment advice. AUM is also administered by the Company and is therefore included in AUA. This measure is non-IFRS. Assets under management (AUM) UK and Crown Dependencies AUM is the market value of client assets managed and administered by the Company, for which the Company earns commissions or fees. This measure includes both discretionary and non-discretionary accounts. This measure is non-IFRS. Canaccord Genuity Capital Markets Canaccord Genuity Capital Markets is the global capital markets division of Canaccord Genuity Group Inc., offering institutional and corporate clients idea-driven investment banking, merger and acquisition, research, sales and trading services with capabilities in North America, the UK & Europe, Asia, Australia and the Middle East. We are committed to providing valued services to our clients throughout the entire lifecycle of their business and operating as a gold standard independent investment bank — expansive in resources and reach, but targeted in industry expertise, market focus and individual client attention. Canaccord Genuity Wealth Management (CGWM) Canaccord Genuity Wealth Management operations provide comprehensive wealth management solutions and brokerage services to individual investors, private clients, charities and intermediaries through a full suite of services tailored to the CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT needs of clients in each of its markets. The Company’s wealth management division now has Investment Advisors (IAs) and professionals in Canada, the UK, Jersey, Guernsey, the Isle of Man and Australia. Corporate and Other Canaccord Genuity Group’s administrative segment, described as Corporate and Other, includes revenues and expenses associated with providing correspondent brokerage services, bank and other interest, foreign exchange gains and losses, and activities not specifically allocable to either the Canaccord Genuity Capital Markets or Canaccord Genuity Wealth Management divisions. Also included in this segment are the Company’s operations and support services, which are responsible for front- and back-office information technology systems, compliance and risk management, operations, legal, finance, and all administrative functions of Canaccord Genuity Group Inc. Commissions and fees Commission and fees revenue consist of revenue generated through commission-based brokerage services and the sale of fee-based products and services. Correspondent brokerage services The provision of secure administrative, trade execution and research services to other brokerage firms through the Company’s existing technology and operations infrastructure (Pinnacle Correspondent Services). Earnings per share (EPS) Basic earnings per common share is computed by dividing the net income (loss) attributable to common shareholders for the period by the weighted average number of common shares outstanding. Diluted earnings per common share reflects the dilutive effect in connection with the LTIP, warrants, other share-based payment plans as well as the convertible debentures based on the treasury stock method. The treasury stock method determines the number of incremental common shares by assuming that the number of shares the Company has granted to employees has been issued. Fair value adjustment An estimate of the fair value of an asset (or liability) for which a market price cannot be determined, usually because there is no established market for the asset. Fixed income trading Trading in new issues, government and corporate bonds, treasury bills, commercial paper, strip bonds, high-yield debt and convertible debentures. Incentive-based revenue A percentage of incentive-based revenue earned is directly paid out as incentive compensation expense, including commission, investment banking, advisory fees, and principal trading revenue. Institutional sales and trading A capital markets business segment providing market information and research, advice and trade execution to institutional clients. International Equities Group (IEG) The International Equities Group is a premium, low cost, order routing destination for both US listed securities and foreign listed ordinary shares for local market execution in the US operations. Glossary 113 Investment banking Assisting public and private businesses and governments to obtain financing in the capital markets through the issuance of debt, equity and derivative securities on either an underwritten or an agency basis. PSUs cliff-vest on the third anniversary of the date of the grant. The number of PSUs that vest is also adjusted for dividends paid during the vesting period. The PSUs are settled in cash, based on the market price of the Company’s shares at the time of vesting. Investment professionals and fund managers Investment professionals include all staff with direct sales responsibilities, which include brokers and assistants with direct contacts. Fund managers include all staff who manage client assets. Liquidity The total of cash and cash equivalents available to the Company as capital for operating and regulatory purposes. Long-term incentive plan (LTIP) Employees (including senior executives) of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The participating employees are eligible to receive shares that generally vest over three years (the “RSUs”). This program is referred to as the Long-Term Incentive Plan (the “LTIP” or the “Plan”). National Insurance (NI) tax Payroll tax applicable to UK employees based on a percentage of incentive compensation payout. Non-cash charges Charges booked by a company that do not impact its cash balance or working capital. Non-IFRS Measures Non-IFRS Measures do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) and are therefore unlikely to be comparable to similar measured presented by other companies. Performance stock options The PSOs have a term of five years and will time-vest ratably over four years (with one third vesting on each of the second, third and fourth anniversaries of the date of the grant). The PSOs will also be subject to market (stock price) performance vesting conditions, as well as have a four times exercise price cap on payout value (i.e., the gain on the exercise of the options is limited to three times the exercise price). The PSOs will expire on June 14, 2023. Performance share units The Company adopted a performance share unit (PSU) plan for certain senior executives. The PSUs are a notional equity-based instrument linked to the value of the Company’s common shares. At the end of a three-year vesting period, the number of PSUs which vest is a multiple of the number of PSUs originally granted ranging from 0x to 2x based upon performance against certain metrics pre-determined for each annual grant. The The PSUs were measured at fair value on the grant date. Changes in value of the PSUs at each reporting period are amortized over the remaining vesting period and recorded as a compensation expense in the statement of operations. Preferred shares A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred shares generally do not have voting rights; however, preferred shareholders receive a dividend that must be paid out before dividends are paid to common stockholders. Principal trading Trading in equity securities in principal and inventory accounts. Revenue is generated through inventory trading gains and losses. Risk Financial institutions face a number of risks that may expose them to losses, including market, credit, operational, regulatory and legal risk. Separately managed accounts (SMAs) Investment portfolios available to clients that are managed by a senior portfolio manager. In SMAs, clients own the individual securities within the portfolio, rather than a portion of a pooled fund. Significant items Significant items include restructuring costs, amortization of intangible assets acquired in connection with a business combination, impairment of goodwill and other assets and acquisition-related expense items, which include costs recognized in relation to both prospective and completed acquisitions, gains or losses related to business disposals including recognition of realized translation gains on the disposal of foreign operations, certain accounting charges related to the change in the Company’s long-term incentive plan (LTIP) as recorded with effect on March 31, 2018, certain incentive-based costs related to the acquisitions and growth initiatives in the UK & Crown Dependencies wealth management business, loss and other costs related to the extinguishment of convertible debentures as recorded for accounting purposes, certain expense items, typically included in development costs, which are considered by management to reflect a singular charge of a non- operating nature, as well as certain fair value adjustments on certain illiquid or restricted marketable securities as recorded for IFRS reporting purposes, but which are excluded for management reporting purposes and are not used by management to assess operating performance. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 114 CORPORATE GOVERNANCE The Board of Directors (Board) assumes responsibility for the stewardship of the Company, acting as a whole and through its committees, and has approved a formal Board Governance Manual (Mandate) including terms of reference for the Board and setting forth the Board’s stewardship responsibilities and other specific duties and responsibilities. The Board’s responsibilities are also governed by: • The Business Corporations Act (British Columbia) • The Company’s articles • The charters of its committees • Other corporate policies and applicable laws Communication with Independent Members of the board Gillian H. Denham has been appointed by the Board of Directors of Canaccord Genuity Group Inc. as its Lead Director. One of her responsibilities is to receive and determine appropriate action on any communications from interested parties that are addressed to the independent directors of the Board. Such communications may be sent to Ms. Denham in writing by mail care of the Corporate Secretary of Canaccord Genuity Group Inc. It is recommended that such communications be addressed as “Jill Denham, Lead Director, Canaccord Genuity Group Inc., c/o Corporate Secretary, 3000-161 Bay Street, Toronto, M5J 2S1, TO BE OPENED BY ADDRESSEE ONLY.” Such communications will be forwarded, unopened, to Ms. Denham. Strategic Planning Process The Board’s Mandate provides that the Board is responsible for ensuring that the Company has an effective strategic planning process. As such, the Board reviews, approves, monitors and provides guidance on the Company’s strategic plan. Identification and Management of Risks The Board’s Mandate includes: • Assisting management to identify the principal business risks of the Company • Taking reasonable steps to ensure the implementation of appropriate systems to manage and monitor those risks • Reviewing plans for evaluating and testing the Company’s internal financial controls • Overseeing the external auditor, including the approval of the external auditor’s terms of reference Succession Planning and Evaluation The Board’s Mandate includes keeping in place adequate and effective succession plans for the Chief Executive Officer (CEO) and senior management. • The Corporate Governance and Compensation Committee (CGCC) receives periodic updates on the Company’s succession plan at the senior officer level and monitors the succession planning process • The succession plan is reviewed, at least annually, by the CGCC • On the recommendation of the Chairman & CEO, the Board appoints the senior officers of the Company Communications and Public Disclosure The Company’s Disclosure Controls Policy (DCP) addresses the accurate and timely communication of all important information relating to the Company and its interaction with shareholders, investment analysts, other stakeholders and the public generally. • The DCP is reviewed annually by the Board • The DCP, public securities regulatory filings, press releases and investor presentations are posted on the Company’s website • The Board reviews all quarterly and annual consolidated financial statements and related management discussion and analysis, the Company’s earnings releases, management information circulars, annual information forms (AIFs) and financing documents Internal Controls The Board requires management to maintain effective internal controls and information systems. The Board, with the assistance of the Audit and Risk Committee, oversees the integrity of the Company’s internal control and information systems. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT CORPORATE GOVERNANCE 115 • The Audit and Risk Committee meets no less than four times a year with the Company’s Chief Financial Officer (CFO) and senior finance staff to review internal controls over financial reporting and related information systems • External auditor provides recommendations to the Audit and Risk Committee on an annual basis in relation to the Company’s internal controls and information systems As of March 31, 2022 an evaluation was carried out, under the supervision of and with the participation of management, including the President & CEO and the Executive Vice President & CFO, of the effectiveness of our disclosure controls and procedures as defined under National Instrument 52-109. Based on that evaluation, the President & CEO and the Executive Vice President & CFO concluded that the design and operation of these disclosure controls and procedures were effective as of March 31, 2022. Governance The Board is currently composed of eleven directors, nine of whom are independent of management as determined under applicable securities legislation. In order to facilitate the exercise of independent judgment by the Board of Directors, the Board has appointed a lead director and holds regular meetings without management directors present. • The CGCC is responsible for periodically reviewing the composition of the Board and its committees • A formal annual assessment process has been established to include feedback by all the directors to the full Board, including the completion of a confidential survey • New directors are provided with substantial reference material on the Company’s strategic focus, financial and operating history, corporate governance practices and corporate vision Summary of charters and committees The Board has delegated certain of its responsibilities to two committees, each of which has specific roles and responsibilities as defined by the Board. Both of these Board committees are made up of independent directors. AUDIT AND RISK COMMITTEE The Audit and Risk Committee assists the Board of Directors in fulfilling its oversight responsibilities by monitoring the Company’s financial reporting practices and financial disclosure. It comprises seven independent directors. All members of the Audit and Risk Committee are financially literate; that is, they are able to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. The current members of the Audit and Risk Committee are Terry Lyons (Chair), Charles Bralver, Gillian Denham, Merri Jones, Jo-Anne O’Connor, Francesca Shaw and Dipesh Shah. The Audit and Risk Committee has adopted a charter which specifically defines the roles and responsibilities of the Audit and Risk Committee. The Audit and Risk Committee Charter can be found in the Company’s AIF filed on SEDAR. The Audit and Risk Committee has direct communication channels with the external auditor and CFO and senior finance staff and discusses and reviews issues with each of them on a regular basis. The Audit and Risk Committee is responsible for ensuring management has designed and implemented an effective system of internal control. The external auditor is hired by and reports directly to the Audit and Risk Committee. After consultation with management, the Audit and Risk Committee is responsible for setting the external auditor’s compensation. The external auditor attends each meeting of the Audit and Risk Committee, and a portion of each meeting is held without the presence of management. The Audit and Risk Committee annually reviews and approves the external auditor’s audit plan and must approve any audit and non-audit work performed by the external auditor. The CFO and senior finance staff attend each meeting of the Audit and Risk Committee other than the portion of the meeting which is held without management present to allow more open discussion. The Audit and Risk Committee annually reviews and approves the internal audit plan. CORPORATE GOVERNANCE AND COMPENSATION COMMITTEE The Corporate Governance and Compensation Committee is responsible for developing the Company’s approach to governance issues, reviewing the Company’s overall governance principles and recommending changes to those principles from time to time. It comprises four independent directors: Michael Harris (Chair), Charles Bralver, Terrence Lyons and Sally Tennant. The committee has full access to staff and resources. At all regular committee meetings during the year, a portion of each meeting is held without management present to allow more open discussion. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 116 Board of Directors Charles N. Bralver Audit and Risk Committee Corporate Governance and Compensation Committee Charles N. Bralver, age 70, is a financial services executive with over 30 years of capital markets experience. For more than 23 years — from 1984 to 2007 — Mr. Bralver was a founder and Vice Chairman of management consultancy Oliver, Wyman & Co. where he specialized in strategy, risk and operational work for leading investment banks, asset managers, exchanges and other market utilities. He also served as Senior Associate Dean for International Business and Finance at the Fletcher School of Law and Diplomacy from 2007 to 2010, and from 2007 to 2009 as a strategic advisor to Warburg Pincus LLC. Mr. Bralver is Chairman of Sigma7 and also serves as a director of the Company and insurance risk exchange AkinovA Ltd., and on the Leadership Council of AI solution developer r4. Mr. Bralver is also a member of the Royal Institute of International Affairs, the Canadian Institute of Corporate Directors, and Business Executives for National Security in the US. Mr. Bralver started his career at Booz Allen Hamilton. He is a U.S. citizen and a graduate of the Fletcher School and Dartmouth College. Mr. Bralver is not currently a director of any other public companies. Daniel Daviau Dan Daviau, age 57, was appointed President and Chief Executive Officer and a director of the Company and Chief Executive Officer of Canaccord Genuity Corp. effective on October 1, 2015. Mr. Daviau served as President of Canaccord Genuity’s North American capital markets business from February 2015. From 2012 to 2015, he was President of the firm’s US capital markets business, where he helped to structure the firm’s investment banking, research, sales and trading operations in the region and improve cross- border capabilities. From 2010 to 2012, Mr. Daviau was Head of Investment Banking for Canaccord Genuity. Before the Canaccord/ Genuity merger that was announced in 2010, Mr. Daviau was a Principal and Founder of Genuity Capital Markets, where he held a variety of senior roles since 2005. Before 2005, Mr. Daviau was Co-Head of Investment Banking at CIBC World Markets, a firm he joined in 1991. While at CIBC World Markets, Mr. Daviau also served as the Head of the Media and Telecommunications Group since 2000 and Head of the Technology Investment Banking Group in Canada since 1997. Having started his career as a securities lawyer with Goodman & Co., Mr. Daviau has extensive experience in a broad range of financing transactions and M&A assignments. Mr. Daviau is based in Toronto, Canada. He holds an MBA from York University, an LL.B. from Osgoode Hall/York University and a B.A. (Math and Statistics) from the University of Western Ontario. Mr. Daviau is not currently a director of any other public companies. Gillian (Jill) Denham Audit and Risk Committee Gillian (Jill) Denham, age 61, is President of Authentum Partners Ltd. that invests in technology and related businesses and provides advisory services. Ms. Denham currently serves on the board of directors of Canadian Pacific Railway Limited and Kinaxis Inc. and is on the board of directors of LifeWorks Inc. (formerly Morneau Shepell Inc.). Ms. Denham spent her career at Wood Gundy and CIBC. She has held senior positions in investment banking, was President of Merchant Banking/Private Equity and had regional responsibility for CIBC in Europe. She was also head of the Retail Bank for CIBC. She holds an Honours Business Administration (HBA) degree from the Ivey Business School, University of Western Ontario and an MBA from Harvard Business School. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Michael D. Harris, O.Ont., D.Litt. (Hon.), ICD.D Corporate Governance and Compensation Committee Michael Harris, ICD.D, age 77, is a Senior Business Advisor in the Corporate/Commercial and Government Relations & Ethics Groups at Fasken Martineau DuMoulin LLP. From 1981 — 2002, Mr. Harris served as Member of Provincial Parliament for the riding of Nipissing. From 1995 — 2002 he served as Ontario’s twenty-second Premier, following a landslide election victory in 1995. He was re-elected again for a second term in 1999, making him the first Ontario Premier in more than 30 years to form a second consecutive majority government. He is known for his advice on governance issues and government relations matters and brings extensive experience in public policy and government decision-making. After leaving public office in 2002, Mr. Harris formed his own consulting firm. As President of Steane Consulting Ltd., he is an advisor to numerous Canadian companies. He serves as director on several private and public boards, including Chartwell Retirement Residences, Route1 Inc. and Voxtur Analytics Corp. His past board responsibilities included Chair of Magna International, where he led the restructuring to a one share-one vote corporation; Element Financial; and Enmax Corp. in Calgary. Mr. Harris also sits on the advisory boards of several private equity funds including EnerTech and Beringer Capital. He received his ICD.D certification from the Institute of Corporate Directors in 2005. Mr. Harris’ passion for the community is shown through his involvement with various organisations and institutions. He serves on the board of the New Haven Learning Centre, a charitable, non- profit organization committed to being a Centre of Excellence in the treatment and education of children with autism. He has served on the board of the Tim Horton Children’s Foundation. He has also served as Honorary Chairman of fundraising initiatives for Nipissing University, Canadore College and the North Bay Regional Health Centre. Mr. Harris is also a Senior Fellow with The Fraser Institute, a leading Canadian economic, social research and education organization. In addition to Canaccord Genuity Group Inc., Mr. Harris is a director of the following public companies: Route1 Inc. (Chair) and Voxtur Analytics Corp. Merri Jones Audit and Risk Committee Merri Jones, ICD.D, age 71, is a corporate director and advisor. She has over 40 years’ experience within financial services with expertise across sales and marketing, finance, strategy and human resources. She was the first female to lead a Schedule II Bank in Canada. She was the Executive Vice President, Private Wealth, at Fiera Capital from 2010 to 2015; President of GBC Asset Management in 2008 and 2009; President and Chief Executive Officer of AGF Private Wealth Management from 2003 to 2007; President, Chief Operating Officer and Director of TAL Private Management from 1996 to 2003; and President and Chief Executive Officer of CIBC Trust in 1995 and 1996. Before joining CIBC in 1995, Ms. Jones had been President and Chief Executive Officer of First Interstate Bancorp from 1986 to 1990 and had worked at Chemical Bank and the Royal Bank of Canada, where she began her career. Ms. Jones was educated at the University of Western Ontario, the Wharton School of Business and the University of Toronto. She has received her ICD.D certification from the Institute of Corporate Directors. Ms. Jones is a director of the following public company: Data Communications Management Corp. She is also the chair of the Investment Review Committee of the Starlight Group of Funds. David Kassie David Kassie, age 66, became Group Chairman and a director of the Company on the closing of the acquisition of Genuity Capital Markets, a Canadian investment bank, on April 23, 2010, and became Chairman on April 1, 2012. He was the Principal, Chairman and Chief Executive Officer of Genuity Capital Markets from 2004 until May 9, 2010, when the integration of the businesses of Genuity Capital Markets and Canaccord Financial Ltd. was completed under the name Canaccord Genuity. Before 2004, he was Chairman and Chief Executive Officer of CIBC World Markets and the Vice Chairman of CIBC. On the death of Paul Reynolds on April 1, 2015, Mr. Kassie was appointed as the Chief Executive Officer of the Company and on October 1, 2015, upon succession, Mr. Kassie became the Executive Chairman. Mr. Kassie is now the Chairman of the Board. Mr. Kassie has extensive experience as an advisor, underwriter and principal. He sits on a number of corporate boards. Mr. Kassie is actively involved in community and charitable organizations and is a director and former Chairman of the Board of Baycrest Health Sciences and was formerly on the boards of the Richard Ivey School of Business, the Toronto International Film Festival Group and the Hospital for Sick Children. Mr. Kassie holds a B.Comm. (Honours) in Economics from McGill University (1977) and an MBA from the University of Western Ontario (1979). In addition to Canaccord Genuity Group Inc., Mr. Kassie is a director of the following public company: Reitmans (Canada) Limited. Terrence A. Lyons, ICD.D. Audit and Risk Committee Corporate Governance and Compensation Committee Terrence (Terry) Lyons, ICD.D, age 72, is a corporate director. He is a director of several public and private corporations including Sprott Resource Holdings Inc. (Chairman) and Martinrea International Inc. Mr. Lyons is a retired Managing Partner of Brookfield Asset Management, past Chairman of Northgate Minerals Corporation which was acquired by AuRico Gold Inc. (now Alamos Gold Inc.), past Chairman of Eacom Timber Corporation which was sold to a private equity firm, past Chairman of Westmin Mining, past Vice-Chairman of Battle Mountain Gold and past Chairman of Polaris Materials Corporation. Mr. Lyons is a Civil Engineer (UBC) with an MBA from the University of Western Ontario (1974). He sits on the Advisory Board of the Richard Ivey School of Business and is active in sports and charitable activities, is a past Governor of the Olympic Foundation of Canada, past Chairman of the Mining Association of B.C., past Governor and member of the Executive Committee of the B.C. Business Council and a past director of the Institute of Corporate Directors (B.C.). In 2007, Mr. Lyons was awarded the INCO Medal by the Canadian Institute of Mining and Metallurgy for distinguished service to the mining industry. In addition to Canaccord Genuity Group Inc., Mr. Lyons is a director of the following public companies: Martinrea International Inc., Mineral Mountain Resources Ltd. and Sprott Resource Holdings Inc. Jo-Anne O’Connor Corporate Governance and Compensation Committee Audit and Risk Committee Jo-Anne O’Connor, age 62, has over 35 years experience within financial services, with expertise in capital markets. Ms. O’Connor spent close to 30 years (1985 to 2014) at Wood Gundy and CIBC, with senior positions in Institutional Equity Trading. From 2017 to 2020, Ms. O’Connor was Managing Director and Chief Operating Officer for a family office, Crescentwood Capital. She is currently the President and Chief Executive Officer of Strategem Capital 117 Corporation, a publicly-traded company (SGE-TSXV) providing growth through diverse investment assets. Ms. O’Connor is not currently a director of any other public companies. Dipesh Shah Audit and Risk Committee Dipesh Shah, OBE, FRSA, age 69, is the Chairman of Highways England and a Director and Chairman of the Investment Committee of the 2020 European Fund for Energy, Climate Change and Infrastructure and also of the EU Marguerite Fund. Mr. Shah was formerly the Chief Executive of the UK Atomic Energy Authority and of various large businesses in BP Plc, where he was a member of the Group Leadership for more than a decade and latterly also the Global Head of Acquisitions and Divestitures. Mr. Shah was Chairman, inter alia, of Notting Hill Genesis and Genesis Housing Association, Viridian Group plc, HgCapital Renewable Power Partners LLP and the European Photovoltaic Industry Association. He was the Senior Independent Director and Chair of the Remuneration Committee of JKX Oil & Gas Plc from 2008 to 2015, the Senior Independent Director and Chair of the Nominations Committee of Equus Petroleum Plc from 2013 to 2016 and a Director of The Crown Estate from 2011 to 2018, Thames Water from 2007 to 2017 and of Cavendish Fluor Partnership from 2014 to 2017. In addition, he has been a Director of several major organizations, including Babcock International Group Plc and Lloyd’s of London, the insurance market. He was a Trustee of the British Youth Opera and a Governor of Merchant Taylors’ School. He was also a member of the UK Government’s Renewable Energy Advisory Committee from 1994 to 2002. Earlier, Mr. Shah was the Chief Economist for BP Oil UK. Born in India, and brought up in Uganda, Mr. Shah is a graduate of the University of London, the University of Warwick and the Harvard Business School management program. He was appointed an Officer of the Order of the British Empire (OBE) in the 2007 New Year Honours and is a Life Fellow of the Royal Society of Arts (FRSA). Mr. Shah is not currently a director of any other public companies. Francesca Shaw Audit and Risk Committee Francesca Shaw, FCPA, FCA, age 62, has nearly 40 years of experience across a wide range of senior governance and commercial roles within UK and international banks. Having begun her career in 1982 at Ernst & Young, where she worked in progressive positions in public accounting covering diverse industries and Schedule A and B banks, she went on to spend 20 years at CIBC, taking on increasingly strategic roles in financial leadership, including Senior Vice President & Chief Accountant, where she played a leadership role in successfully navigating the organization through the structured credit crisis and Enron challenges, as well as implementing three significant Basel systems and an enterprise management cost and allocations system, and Chief Financial Officer (CFO), FirstCaribbean, where she provided critical leadership in finance and risk and managed relationships with 14 international regulators. She joined TD Bank in 2011, initially as Senior Vice President, CFO & Chief Risk Officer Wealth Management and Insurance, before advancing to become Senior Vice President and CFO Insurance and Cards, and later became Head of US Productivity, where she led the design and execution of a US wide productivity programme. More recently, she served as CFO at C Hoare & Co. from 2015 to 2020. Outside of financial services, Ms. Shaw has demonstrated a lifetime commitment to volunteering and community building. She has held many senior board positions over thirty years of volunteering with United Way of Greater Toronto, including chairing the Community Impact Committee and the Innovation Committee, in addition to serving as a Trustee on joint governmental taskforces and leading governance efforts on assisting troubled entities. 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. 118 Ms. Shaw also serves as Independent Non-Executive Director of Cashplus Bank in the United Kingdom. Ms. Shaw is not currently a director of any other public companies. Sally Tennant Corporate Governance and Compensation Committee Sally Tennant, OBE, age 66, , is the founding partner of Acorn Capital Advisers, an independent wealth adviser, and has been CEO of three banks: Kleinwort Benson (2011-2014), Schroders Private Banking (2002-2006) and Lombard Odier (UK) Ltd. (2007- 2010) and the Chair of a fourth, Duncan Lawrie Ltd. She additionally has extensive experience of asset and wealth management as a former main board director of Gartmore plc, where she successfully built the global institutional division. She has a total of 20 years running money at Gartmore, Morgan Grenfell and SG Warburg / Mercury Asset Management. Ms. Tennant also co-launched a hedge fund, Beaumont Capital, and has deep experience of dealing with multigenerational families and family businesses in a wide range of ways, from sitting on the board of a large family holding company, B-FLEXION, to working for a multigenerational family owned bank, Lombard Odier; and advising numerous ultra high net worth families. She has extensive chair, non-executive and remuneration chair experience in the unquoted and private equity space. Ms. Tennant was born and grew up in Switzerland. She has international experience in the Channel Islands, U.S., the Middle East and Continental and Eastern Europe. She holds a degree in politics from Durham University. She is a patron of Tommy’s the Baby Charity and a trustee of Guy’s & St. Thomas’ Foundation. She was appointed an Officer of the Order of the British Empire (OBE) in the Queen’s 2018 Birthday Honours. Ms. Tennant is not currently a director of any other public companies. CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Locations Capital Markets CANACCORD GENUITY CAPITAL MARKETS Canada Toronto Brookfield Place 161 Bay Street, Suite 3000 P.O. Box 516 Toronto, ON Canada M5J 2S1 Telephone: 416.869.7368 Toll free (Canada): 1.800.382.9280 Vancouver Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC Canada V7Y 1H2 Telephone: 604.643.7300 Toll free (Canada): 1.800.663.1899 Calgary Centennial Place – East Tower Suite 2400, 520 3rd Ave. SW Calgary, AB Canada T2P 0R3 Telephone: 403.508.3800 Montréal 360, Saint-Jacques Street West, Suite G-102. Montréal, QC Canada H2Y 1P5 Telephone: 514.985.8080 United States New York 535 Madison Avenue New York, NY USA 10022 Telephone: 212.389.8000 Boston 99 High Street, Suite 1200 Boston, MA USA 02110 Telephone: 617.371.3900 Toll free: 1.800.225.6201 San Francisco 44 Montgomery Street, Suite 1600 San Francisco, CA USA 94104 Telephone: 415.392.8844 Toll free: 1.800.229.7171 Nashville 1033 Demonbreun Street, Suite 620 Nashville, TN USA 37203 Telephone: 615.490.8500 Minneapolis 45 South 7th Street, Suite 2640 Minneapolis, MN USA 55402 Telephone: 612.332.2208 Washington 1200 G Street, NW Suite 725 Washington, DC 20036 USA Telephone: 301.657.4600 New York 33 Whitehall Street, 27th Floor New York, NY USA 10004 Telephone: 212.842.6020 New York 227 W. Trade Street Suite 1820 Charlotte, NC 28202 UK & Europe London 88 Wood Street London, UK EC2V 7QR Telephone: 44.20.7523.8000 Dublin 38 Fitzwilliam Street Upper Grand Canal Dock Dublin 2 D02 KV05 Ireland Telephone: 353.1.635.0210 Paris Washington Plaza 119 29 rue de Berri 75008 Paris France Telephone: 33.1.56.69.66.66 Dubai Gate Village Building 4 Suite 402, DIFC PO Box 507023 Dubai United Arab Emirates Telephone: 971.4.454.1204 Bahamas 119 Harbour Way, Ocean Club Estate Paradise Island Nassau Asia-Pacific Beijing Unit 1421-22, South Tower, Beijing Kerry Centre, 1 Guanghua Road, Chaoyang District Beijing 100020 China Telephone: 8610.8622.9070 Hong Kong 1505, 15/F, ICBC Tower, Three Garden Road, Central, Hong Kong Telephone: 852.3919.2500 Melbourne Level 15, 333 Collins Street Melbourne, VIC, 3000, Australia Telephone: 61.3.8688.9100 Perth Level 23, Exchange Tower 2 The Esplanade Perth, WA, 6000 Australia Telephone: 61.8.9263.1111 Sydney Level 62, MLC Centre 19 Martin Place Sydney NSW 2000, Australia Telephone: 61.2.9263.2700 Portsea 3741 Point Nepean Place Portsea, Victoria 3944, Australia 120 Locations Wealth Management CANACCORD GENUITY WEALTH MANAGEMENT Canada British Columbia Vancouver Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC Canada V7Y 1H2 Telephone: 604.643.7300 Toll free (Canada):1.800.663.1899 Kelowna Landmark 5, 320 – 1620 Dickson Avenue Kelowna, BC Canada V1Y 9Y2 Telephone: 250.712.1100 Toll free: 1.888.389.3331 Ontario Toronto Brookfield Place, Suite 3100 P.O. Box 516 161 Bay Street Toronto, ON Canada M5J 2S1 Telephone: 416.869.7368 Toll free (Canada): 1.800.382.9280 Waterloo 80 King Street South, Suite 101 Waterloo, ON Canada N2J 1P5 Telephone: 519.886.1060 Toll free: 1.800.495.8071 Alberta Calgary Centennial Place – East Tower 520 3rd Avenue SW, Suite 2400 Calgary, AB Canada T2P 0R3 Telephone: 403.508.3800 Toll free: 1.800.818.4119 Edmonton Manulife Place 10180 – 101st Street, Suite 570 Edmonton, AB Canada T5J 3S4 Telephone: 780.408.1500 Toll free: 1.877.313.3035 Manitoba Winnipeg 1010-201 Portage Avenue Winnipeg, MB Canada R3B 3K6 Telephone: 204.259.2850 Toll free: 1.877.259.2888 CANACCORD GENUITY GROUP INC. / 2022 ANNUAL REPORT Québec Montréal 1250 René-Lévesque Boulevard West, Suite 2930 Montreal, QC Canada H3B 4W8 Telephone: 514.844.5443 Toll free: 1.800.361.4805 Nova Scotia Halifax Purdy’s Wharf Tower II 1969 Upper Water Street Suite 2004 Halifax, NS Canada B3J 3R7 Telephone: 902.442.3162 Toll free: 1.866.371.2262 Canaccord Genuity Wealth Management (USA), Inc. Vancouver Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC Canada V7Y 1H2 Telephone: 604.684.5992 UK & Crown Dependencies London 88 Wood Street London, UK EC2V 7QR Telephone: 44.20.7523.4500 London 11 Strand Street London, UK WC2N 5HR Telephone: 44.20.3327.5656 Edinburgh 4th Floor, 40 Princes Street Edinburgh EH2 2BY Telephone: 44.13.1225.8484 Edinburgh 3rd Floor, The Capital Building 12-13 St Andrew Square Edinburgh EH2 2AF Telephone: 44.13.1230.0333 Jersey 37 Esplanade St Helier Jersey JE4 0XQ Telephone: 44.1534.708090 Guernsey Trafalgar Court, Admiral Park, St. Peter Port Guernsey GY1 2JA Telephone : 44.1481.733900 Isle of Man 55 Athol Street Douglas Isle of Man IM1 1LA Telephone: 44.1624.690100 Blackpool Talisman House Boardmans Way Blackpool FY4 5FY Telephone: 44.1253.621575 Lancaster 2 Waterview Lancaster LA1 4XQ Telephone: 44.1524.541560 Norwich 13-15 St Georges Street Norwich Norfolk NR3 1AB Telephone: 44.1603.567120 Llandudno Anson House 1 Cae’r Llynen Llandudno Junction Conwy LL31 9LS Telephone: 44.1492.558359 Nottingham The Point Loughborough Road West Bridgford, Nottingham NG2 7QW Telephone: 44.1158.965840 Worcester Slip House Princes Drive Worcester WR1 2AB Telephone: 44.1905.953600 York 29 High Petergate York Yorkshire YO1 7HP Telephone: 44.1904.232780 Southampton Ocean Village Innovation Centre Ocean Way Southampton SO14 3JZ Telephone: 44.2380.381670 Birmingham 7th Floor, 4 Temple Row Birmingham B2 5HG Telephone: 44.1212.301910 Locations 121 OTHER LOCATIONS Pinnacle Correspondent Services Vancouver Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC Canada V7Y 1H2 Telephone: 604.643.7300 Toronto Brookfield Place 161 Bay Street, Suite 3000 P.O. Box 516 Toronto, ON Canada M5J 2S1 Telephone: 416.869.7368 Guilford 4th Floor, Tempus Court Onslow Street Guilford GU1 4SS Telephone: 44.1483.330500 Newcastle City Quadrant 11 Waterloo Street Newcastle NE1 4DP Telephone: 44.1919.178520 Australia Melbourne Level 42, 101 Collins Street Melbourne, VIC, 3000, Australia Telephone: 61.3.8688.9100 Sydney Level 62, MLC Centre 19 Martin Place Sydney NSW 2000 Telephone: 61.2.8238.6200 Perth Level 23, Exchange Tower 2 The Esplanade Perth, Western Australia, 6000 Telephone: 61.8.9263.1111 Albany Level 2, Middleton Centre 184 Aberdeen Street Albany, Western Australia, 6330 Telephone: 61.8.9842.4700 Busselton Suite 3 72 Duchess Street Busselton, Western Australia, 6280 Telephone: 61.8.9754.0700 Gold Coast Level 9, 21 Upton Street Gold Coast, Queensland, 4215 Telephone: 61.7.5631.2300 Adelaide Level 6, 26 Flinders Street Adelaide, South Australia, 5000 Telephone: 61.8.8407.5700 2022 ANNUAL REPORT / CANACCORD GENUITY GROUP INC. Shareholder Information Corporate Headquarters Corporate Website STREET ADDRESS Canaccord Genuity Group Inc. 609 Granville Street, Suite 2200 Vancouver, BC, Canada MAILING ADDRESS Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC V7Y 1H2, Canada Stock Exchange Listing Common shares: TSX: CF www.canaccordgenuity.com General Shareholder Inquiries and Information INVESTOR RELATIONS 161 Bay Street, Suite 3000 Toronto, ON, Canada Telephone: 416.869.7293 Fax: 416.947.8343 Email: investor.relations@cgf.com Media Relations and Inquiries from Institutional Investors and Analysts Christina Marinoff Vice President, Investor Relations and Com- munications Phone: 416-687-5507 Email: cmarinoff@cgf.com The Canaccord Genuity Group Inc. 2022 Annual Report is available on our website at www.cgf.com. For a printed copy, please contact the Investor Relations department. Preferred shares: Series A (TSX): CF.PR.A. Series C (TSX): CF.PR.C. Expected Dividend(1) and Earnings Release Dates for the next four quarters Expected earnings release date Preferred dividend record date Preferred dividend payment date Common dividend record date Common dividend payment date Q1/23 Q2/23 Q3/23 Q4/23 August 4, 2022 November 2, 2022 February 8, 2023 June 7, 2023 September 16, 2022 December 23, 2022 March 17, 2023 June 23, 2023 September 30, 2022 January 3, 2023 March 31, 2023 July 4, 2023 September 2, 2022 December 2, 2022 February 24, 2023 June 23, 2023 September 15, 2022 December 15, 2022 March 10, 2023 July 4, 2023 (1) Dividends are subject to Board of Directors approval. All dividend payments will depend on general business conditions and the Company’s financial conditions, results of operations, capital requirements and such other factors as the Board determines to be relevant. Shareholder Administration For information about stock transfers, ad- dress changes, dividends, lost stock certifi- cates, tax forms and estate transfers, con- tact: COMPUTERSHARE INVESTOR SERVICES INC. 100 University Avenue, 9th Floor Toronto, ON M5J 2Y1 Telephone toll free (North America): 1.800.564.6253 International: 514.982.7555 Fax: 1.866.249.7775 Toll free fax (North America) or International fax: 416.263.9524 Email: service@computershare.com Website: www.computershare.com Offers enrolment for self-service account management for registered shareholders through the Investor Centre. Financial Information For present and archived financial informa- tion, please visit www.canaccordgenuity.com Auditor Ernst & Young LLP Chartered Professional Accountants Vancouver, BC SHAREHOLDER INFORMATION STOCK EXCHANGE LISTINGS TSX: CF, CF.PR.A, CF.PR.C WEBSITE AND FINANCIAL INFORMATION For TSX required corporate governance disclosures and current financial information, please visit www.cgf.com/investor-relations. FISCAL YEAR END March 31 REGULATORY FILINGS To view Canaccord Genuity Group Inc.’s regulatory filings on SEDAR, please visit www.sedar.com. INSTITUTIONAL INVESTORS, ANALYSTS AND MEDIA CONTACT Christina Marinoff Vice President, Investor Relations & Communications Telephone: 416.687.5507 Email: cmarinoff@cgf.com GENERAL SHAREHOLDER INQUIRIES For all general shareholder info, or to request a copy of this report. Investor Relations 161 Bay Street, Suite 3000 Toronto, ON, Canada Telephone: 416.869.7293 Email: investor.relations@cgf.com TRANSFER AGENT AND REGISTRAR For information about stock transfers, address changes, dividends, lost stock certificates, tax forms and estate transfers, contact: CORPORATE HEADQUARTERS Canaccord Genuity Group Inc. Pacific Centre 609 Granville Street, Suite 2200 P.O. Box 10337 Vancouver, BC V7Y 1H2 Canada Computershare Investor Services Inc. 100 University Avenue, 8th Floor Toronto, ON M5J 2Y1 Telephone toll free (North America): 1.800.564.6253 International: 514.982.7555 Fax: 1.866.249.7775 Toll free fax (North America) or International fax: 416.263.9524 Email: service@computershare.com Website: www.computershare.com ELIGIBLE DIVIDEND DESIGNATION Income Tax Act (Canada) In Canada, the Federal Income Tax Act and most provincial income tax legislation provide lower levels of taxation for Canadian individuals who receive eligible dividends. All of the common share dividends paid by Canaccord Genuity Group Inc. since 2006 are eligible, as are common share dividends paid hereafter, unless otherwise indicated. INDEPENDENT AUDITOR Ernst & Young LLP Chartered Professional Accountants Vancouver, BC For information about fees paid to shareholders’ auditors, refer to our Fiscal 2022 Annual Information Form. QUALIFIED FOREIGN CORPORATION Canaccord Genuity Group Inc. is a “qualified foreign corporation” for US tax purposes under the Jobs & Growth Tax Reconciliation Act of 2003. ANNUAL GENERAL MEETING Friday, August 5, 2022 10:00 a.m. (Eastern time) Shareholders and duly appointed proxyholders can attend the virtual meeting online by going to https://web.lumiagm.com/#/434429753 EDITORIAL AND DESIGN SERVICES The Works Design Communications Ltd. C a n a c c o r d G e n u i t y G r o u p I n c . F i s c a l 2 0 2 2 A n n u a l R e p o r t NORTH AMERICA Bahamas Boston Charlotte Calgary Edmonton Halifax Kelowna Miami Minneapolis Montréal Nashville New York San Francisco Toronto Vancouver Waterloo Winnipeg UK & EUROPE Birmingham Blackpool Dublin Edinburgh Guernsey Guildford Isle of Man Jersey Lancaster AUSTRALIA ASIA MIDDLE EAST Llandudno London Newcastle Norwich Nottingham Paris Southampton Worcester York Beijing Hong Kong Dubai Tel Aviv WEALTH MANAGEMENT OFFICES CAPITAL MARKETS OFFICES Adelaide Albany Busselton Melbourne Perth Sydney www.cgf.com Des exemplaires en français du présent rapport et des documents d’information connexes pour l’exercice 2022 peuvent être obtenus à l’adresse : www.canaccordgenuity.com/fr/relations-investisseurs/relations-investisseurs/rapports-financiers

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