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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 Report 2
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 Report 4
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 Report 6
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 Report 8
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
$1.0
(1) These figures exclude significant items. Figures that exclude significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS
measures that exclude significant items to the applicable IFRS measures on page 25.
(2) Acquisition of Punter Southall Wealth completed May 31, 2022.
(3) Assets under administration, management and management contract.
(4) Australia wealth management revenue was previously recorded as part of Canaccord Genuity Capital Markets Australia. Commencing in Q3/20, it is disclosed as a separate
operating segment. Fiscal 2020 income before income taxes reflects results only subsequent to the completion of the Patersons acquisition on October 19, 2019.
Canaccord Genuity Group Inc. Fiscal 2022 Annual Report 10
CANACCORD
GENUITY CAPITAL
MARKETS
We continued to experience a constructive
backdrop for capital raising activities in our
core sectors and geographies, despite the
broadly anticipated declines from the previous
year’s record levels. When market-wide new
issue activity began to decline, our M&A teams
rose to the occasion and delivered a record
performance, reflecting the confidence of the
executives, financial sponsors and boards of
the growing companies that we advise.
Global Capital Markets Revenue
(C$ 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 Report 12
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.
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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