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DRIVEN BY
PARTNERSHIP
F I S C A L 2 0 2 3 A N N U A L R E P O R T
D
FINANCIAL OVERVIEW
Q4 and Fiscal 2023 Selected Financial Information(1)(2)(5)
(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
Impairment of goodwill and other intangible assets
Fair value adjustment of non-controlling interests
derivative liability
Change in fair value of contingent consideration
Costs associated with redemption of convertible
debentures
Share of loss of an associate
Total expenses
Three months ended March 31
Year ended March 31
2023
2022
2021
Q4/23 vs.
Q4/22
2023
2022
Year-over-
year change
2021
$ 196,774 $
196,976 $
214,476
(0.1)%
$ 749,114 $
761,843 $
735,239
(1.7)%
50,962
104,649
26,921
45,949
5,134
108,801
122,353
305,939
(53.2)%
66,761
(14.5)%
41,960
87,830
(35.8)%
10,264
19,439
7,487
347.7%
24,033
(73.6)%
160,944
364,554
117,238
115,245
3,302
561,725
493,057
158,978
36,028
34,371
761,551
(71.3)%
197,092
(26.1)%
246,801
(26.3)%
26,288
40,717
219.9%
(90.4)%
430,389
499,793
706,526
(13.9)%
1,510,397
2,046,002
2,007,688
(26.2)%
276,066
151,535
294,695
108,024
395,638
117,784
(6.3)%
40.3%
936,872
1,248,184
1,227,895
(24.9)%
500,578
395,709
398,693
26.5%
—
—
11,629
(14,278)
—
10
515
—
—
—
—
11
418
(100.0)%
—
—
—
4,354
616
—
n.m.
n.m.
—
(9.1)%
5.4%
7,403
102,571
11,629
(14,278)
—
55
9,197
—
8,519
—
5,932
192
5,922
(19.5)%
—
—
—
n.m.
36.5%
n.m.
4,354
(100.0)%
922
(71.4)%
1,544,830
1,667,733
1,637,786
(7.4)%
424,962
403,245
518,810
(Loss) income before income taxes
5,427
96,548
187,716
(94.4)%
(34,433)
378,269
369,902
(109.1)%
Net (loss) income
Net (loss) income attributable to:
CGGI shareholders
Non-controlling interests
(Loss) earnings per common share – diluted
Dividends per common share
$
$
$
$
$
3,763 $
68,995 $
139,394
(94.5)%
$
(54,742) $
270,565 $
269,802
(120.2)%
(4,326) $
58,657 $
137,877
(107.4)%
8,089 $
10,338 $
1,517
(21.8)%
(0.08) $
0.53 $
0.93
(115.1)%
0.085 $
0.085 $
0.075
—
$
$
$
$
(90,104) $
246,314 $
263,786
(136.6)%
35,362 $
24,251 $
6,016
45.8%
(1.16) $
0.34 $
2.16 $
0.32 $
2.04
0.25
(153.7)%
6.3%
Total assets
Total liabilities
Non-controlling interests
Total shareholders’ equity
Number of employees
Excluding significant items(4)
Total revenue
Total expenses
Income before income taxes
Net income
Net income attributable to:
CGGI shareholders
Non-controlling interests
Net income attributable to common shareholders,
adjusted
Earnings per common share – diluted
$ 6,302,400 $ 7,250,245 $ 7,631,801
(13.1)%
$ 4,903,763 $ 5,833,476 $ 6,516,517
(15.9)%
$ 343,998 $
238,700 $
8,190
44.1%
$ 1,054,639 $ 1,178,069 $ 1,107,094
(10.5)%
2,829
2,587
2,356
9.4%
$ 430,389 $
490,793 $
692,326
(12.3)%
$ 1,523,348 $ 2,040,602 $ 1,993,488
(25.3)%
$ 414,055 $
396,268 $
509,087
4.5%
$ 1,397,476 $ 1,623,036 $ 1,607,398
(13.9)%
$
$
$
$
$
$
16,334 $
94,525 $
183,239
(82.7)%
$ 125,872 $
417,566 $
386,090
(69.9)%
17,428 $
66,822 $
137,128
(73.9)%
$ 100,986 $
305,827 $
285,887
(67.0)%
9,645 $
57,069 $
135,611
(83.1)%
7,783 $
9,753 $
1,517
(20.2)%
6,793 $
54,678 $
133,260
(87.6)%
0.07 $
0.52 $
1.20
(86.5)%
$
$
$
$
71,260 $
284,069 $
279,871
(74.9)%
29,726 $
21,758 $
6,016
36.6%
60,312 $
274,585 $
270,467
(78.0)%
0.59 $
2.51 $
2.48
(76.5)%
(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 32.7% non-controlling interest has been recognized for the three and 12 months ended March 31, 2023
[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]. The operating results of CGWM UK have been
fully consolidated, and a 5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the
three and 12 months ended March 31, 2023 [three and 12 months ended March 31, 2022 – 1.5%].
(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) Net income and earnings per common share excluding significant items reflect tax-effected adjustments related to such items. See Non-IFRS Measures on page 14 and the Q4 and
Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
(5) Data includes the operating results of Adam & Company since October 1, 2021; Sawaya, since December 31, 2021; PSW, since May 31, 2022; and Results, since August 17, 2022.
n.m.: not meaningful
Fiscal 2023 Annual Report Canaccord Genuity Group Inc.wz
1
While our financial performance for the fiscal year fell below our targets, our multi-
year strategy to diversify our business mix and reduce our reliance on underwriting
activities contributed to our resilience, protecting our capacity to deliver differentiated
services for our wealth management and capital markets clients in all our geographies.
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 Company’s international
capital markets division operates in North America, the UK
& Europe, Asia and Australia.
Canaccord Genuity Group Inc. is publicly traded under the
symbol CF on the TSX.
CONTENTS
Introduction
Global Performance
Letter from the President & CEO
Letter from the Chairman
Canaccord Genuity Wealth Management
Canaccord Genuity Capital Markets
Global Operating Committee
MD&A and Financials
Shareholder Information
1
2
4
7
8
10
12
13
Inside Back Cover
REVENUE
(C$ millions, fiscal years ended March 31)
2023(1)
2022(1)
2021(1)
2020
2019
INCOME BEFORE INCOME TAXES(1)
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
DILUTED EARNINGS PER SHARE(1)
(C$, fiscal years ended March 31)
2023
2022
2021
2020
2019
$1,523.3
$2,040.6
$1,993.5
$1,223.9
$1,190.6
$125.9
$417.6
$386.1
$123.1
$135.6
$0.59
$2.51
$2.48
$0.81
$0.80
(1) These figures exclude significant items. Figures excluding 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 24.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report 2
GLOBAL
PERFORMANCE
Throughout fiscal 2023, our business performed
in line with our expectations, with contributions
from wealth management and M&A advisory
helping to offset the dramatic reduction in
capital raising activity.
$1.5 billion
fiscal 2023 revenue
$0.59
fiscal 2023 diluted
earnings per share(1)
(1) These figures exclude significant items. Figures excluding significant items are non-
IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS
measures that exclude significant items to the applicable IFRS measures on page 24.
Fiscal 2023 Annual Report Canaccord Genuity Group Inc. 3
Strong partnerships between talented professionals in all CG businesses, and
the disciplines that support them, are vital to our collective success. Together
they leverage resources and capabilities from across verticals and geographies
to help our clients achieve their strategic and financial objectives.
FISCAL 2023 REVENUE BY OPERATING DIVISION
REVENUE BY GEOGRAPHY
(Fiscal years ended March 31)
47%
53%
31%
34%
2023
2022
40%
2021
36%
2020
41%
2019
32%
29%
8%
33%
21%
12%
29%
19%
12%
29%
31%
25%
31%
4%
3%
CG Capital Markets
CG Wealth
Management
Canada United States UK & Europe Australia
INCOME BEFORE INCOME TAXES(1) –
CONTRIBUTIONS BY BUSINESS SEGMENT
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
CG Capital Markets CG Wealth Management
$30.8 | $125.7
$324.6 | $148.5
$324.9 | $135.3
$59.8 | $80.2
$80.4 | $75.4
(1) These figures exclude significant items. Figures excluding 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 24.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report 4
LETTER FROM THE
PRESIDENT & CEO
Over the course of our 2023 fiscal year, an extraordinary confluence of events impacted the global capital
markets in ways not experienced in decades. Against a backdrop of significant geopolitical turmoil, high
inflation and rapid interest rate increases, the S&P 500, the S&P/TSX and the MSCI World indices posted
negative returns of -7.7%, -5.2% and -7.0% respectively over the 12-month period.
When confronted with persistent headwinds, the
business mix that helped us deliver record performances
in prior years performed in line with our expectations,
with contributions from wealth management and M&A
advisory helping to offset the dramatic reduction in
capital raising activity.
While our financial performance for the fiscal year fell
below our targets, our multi-year strategy to diversify
our business mix and reduce our reliance on underwriting
activities contributed to our resilience, protecting our
capacity to deliver differentiated services for our wealth
management and capital markets clients in all
our geographies.
Firm-wide revenue for the fiscal year amounted to
$1.5 billion, a decrease of 26% when compared to
the record achieved in the prior fiscal year. Excluding
significant items(1), pre-tax net income amounted to
$125.9 million, which translated to diluted earnings
per share(1) of $0.59.
Several factors impacted our profitability over the
fiscal year. Shortly after the onset of the global market
downturn, we experienced sharp declines in the value of
certain inventory and warrant positions earned in respect
of our investment banking activities, which primarily
impacted first quarter results in our Australian capital
markets business, and, to a lesser degree, our Canadian
business. Beginning in the third fiscal quarter, our
quarterly interest expense increased as we continued our
strategic activities, and our cost of financing increased.
We also recorded increased provisions and professional
fees in our fourth quarter.
In prolonged difficult markets, our wealth
management division is an important source
of earnings power and stability.
All CG wealth businesses contributed to our firm-wide
profitability, and together contributed adjusted pre-tax
net income(1) of $126 million in fiscal 2023. We ended
the fiscal year with client assets of $96 billion. Despite
the impact of reduced asset values, we continued to
experience positive inflows – bolstered by our acquisition
and recruiting efforts – and we are attracting a greater
share of wallet from our existing clients, reflecting
increased demand for advice in challenging markets.
We also continued to invest in the growth of all our
wealth businesses. Early in the fiscal year, we completed
our acquisition of Punter Southall Wealth, which
added scale to our financial planning and investment
management business in the UK & Crown Dependencies.
The impact of our integration efforts is reflected in the
record commissions and fees revenue and the substantial
increase in interest income in this business. Client assets
in our Australian business increased by 2% year over
year in connection with our recruiting activities in the
region, and subsequent to the end of the fiscal year, we
completed our acquisition of Mercer’s Canadian Private
Wealth business.
(1) These figures exclude significant items. Figures excluding 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 24.
Fiscal 2023 Annual Report Canaccord Genuity Group Inc.
5
Transaction volumes in our global capital
markets businesses continued to be impacted
by the challenging backdrop, consistent with
industry trends.
On a consolidated basis, our capital markets division
was modestly profitable in fiscal 2023. Historically,
underwriting revenue has represented more than one-
third of our total capital markets revenue, whereas it
accounted for just 16% of fiscal 2023 revenue in this
division. The metals and mining sector was most active
throughout the fiscal year, comprising 51% of our new
issue investment banking revenue.
Notwithstanding the substantially lower transaction
volume, we continue to defend our strong market position
among the league table leaders in each of our geographies.
Industry data shows that CG continues to hold the
distinction of being the most active mid-market dealer
globally. With an unwavering commitment to supporting
key growth sectors, we are differentiated by our ability
to get things done in difficult markets, and driven by our
commitment to helping entrepreneurs and innovators to
advance their strategic and financial objectives.
While M&A activity in our core focus sectors remained
comfortably above fiscal 2021 levels for the first half
of the fiscal year, advisory revenue for the 12-month
period declined by 26% when compared to the record
achieved in fiscal 2022. The technology and consumer
sectors were most active in this segment, reflecting
our investments in expanding our US and European
capabilities and the benefit of increasing collaboration
between these teams.
And finally, our sales, trading and specialty desks remained
steady, providing liquidity for our clients and supporting
increased volumes during bouts of market volatility.
Ongoing investments in our technology and infrastructure
position us well to scale when volumes return.
We remain steadfastly committed to
ensuring that Canaccord Genuity continues
to exceed our clients’ expectations while we
strive to achieve the best possible results
for our shareholders.
In February, a management-led group including myself
and our Chairman, David Kassie, along with officers and
employees – together holding approximately 21.3%
of the issued and outstanding shares of Canaccord
Genuity Group Inc. – formally launched a bid to acquire all
outstanding common shares of the Company at a price
of $11.25 per share, which represented a substantial
premium and certainty of value for our shareholders in
a volatile market. We entered this process with a clear
understanding of the opportunity, but also of
the risks. Unfortunately, certain conditions to the
offer, including regulatory approvals for change of
control, were not received in time to permit completion
of the offer prior to its expiry. With support from our
Board of Directors, we continue to explore a range of
opportunities to enhance value for our shareholders.
I assure you that we will not entertain or commit to any
option that would jeopardize the stability or competitive
positioning of our business or our workforce.
To ensure that our decisions and actions are always in
alignment with shareholders, we have long-standing
programs in place to increase equity participation at all
levels of our business. We estimate that almost 40%
of our common shares are held by CG employees.
I continue to have great confidence in our
future. We have come through an incredibly
challenging period with our core strategy intact,
and we are more committed to it than ever.
Although we are still navigating turbulent markets, our
wealth management businesses are performing well,
and we’re also seeing modest signs of improving activity
levels in several of our key capital markets verticals. Our
core business segments are well positioned to benefit
from an upturn in investor sentiment and increasing
risk tolerance. Capital raising activities remain low, but
demand for capital among small and growth-oriented
companies remains high, and we expect that our
investing clients will inevitably become more active in
supporting higher quality new issues in time. A solid
pipeline of M&A engagements should support stronger
performance in the coming year, provided markets are
supportive for completions.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report 6
“To ensure that our decisions and actions are always in
alignment with shareholders, we have long-standing
programs in place to increase equity participation at
all levels of our business.”
A strong culture of cost control has been integral to our
long-term strategy, but in a lower revenue environment
we incurred higher non-compensation expenses in
connection with our ongoing development efforts and
targeted investments in business development and
talent retention efforts following two years of pandemic-
related restrictions. Our fiscal 2023 compensation ratio
was 62%, reflecting the softer revenue environment
and the impact of a higher share price on our stock-
based compensation. Looking forward, and absent a
particularly poor performance in any of our businesses,
we expect to be able to manage within our overall
historical consolidated compensation ratios and
achieve our firm-wide expense targets.
We have proven that we can be incredibly agile
and productive in a broad range of challenging
environments, and this one is no exception.
Each of our businesses, and all the disciplines that
support them, have navigated persistently difficult
markets in a much more constructive and positive way
than in past downturns. Our strategy is supported by
more than 2,800 CG colleagues spanning four continents
who live up to our shared values in every interaction. I am
grateful to all of them for their relentless hard work and
commitment throughout this truly memorable year.
(signed)
Dan Daviau
President & CEO
Canaccord Genuity Group Inc.
Fiscal 2023 Annual Report Canaccord Genuity Group Inc. 7
LETTER FROM THE
CHAIRMAN
Despite the many headwinds that impacted our industry
throughout our 2023 fiscal year, we did not waver from
our commitment to supporting the best interests of our
employees, clients, and fellow shareholders.
Our business is focused on serving the unique needs of small
and mid-cap companies and investors throughout market
cycles. We are acutely aware that prolonged market downturns
can have a more profound impact on activity levels for many
of these smaller market participants, so we have carefully
structured our business for long-term stability. Our strategy
to grow our wealth management business has helped to raise
the floor of our returns in challenging markets, and, as we have
seen in recent years, our capital markets business can provide
significant upside when markets are accommodative. These
businesses work incredibly well together, leveraging resources
and expertise from across CG disciplines and geographies to
help our clients achieve their strategic and financial objectives.
Throughout the fiscal year, we continued to develop our
talent and leadership across the organization, while fostering
a strong culture of partnership and inclusion. We expanded
our Global Operating Committee to encompass a broader set
of focus areas, and more diverse representation from across
our global operations. We also took steps to evaluate and
improve employee engagement. Through employee feedback
surveys, we learned that our firm-wide engagement levels are
well above the average for our peer group. Many employees
highlighted that CG excels in offering tools for success and a
strong collective vision for our future.
We have also taken steps to ensure strong corporate governance
to represent the best interests of our Company and our fellow
shareholders. It has been a long-standing priority to identify
a pipeline of experienced and capable candidates who are
well-suited to serve as independent directors as our business
evolves. When several directors made the decision to step down
in connection with our privatization efforts, our preparedness
enabled us to reconstitute our Board in a timely manner while
ensuring majority independence, diverse representation, and a
strong complement to our existing skills matrix.
In March, we announced that Terry Lyons has rejoined our
Board of Directors and will serve as Lead Director and Chair
of the Audit and Risk Committee. Terry has an exemplary
governance track record and previously served on our Board
for 18 years. We also welcomed two additional independent
directors. Amy Freedman is a Partner at a Canadian boutique
investment firm and brings extensive experience in both capital
markets and shareholder advisory matters, and Rod Phillips
brings a wealth of knowledge in both the public and private
sector, having previously served as the Ontario Minister of
Finance and as Chairman of one of Canada’s largest news media
companies. I’d like to thank Charles Bralver, Gillian Denham,
Dipesh Shah, Francesca Shaw and Sally Tennant for their
contributions during their respective months and years
of service.
With support from our Board of Directors, a robust risk
management program has been at the core of our strategy
for many years. We have a diversified business with minimal
concentration risk and ample liquidity coverage. This ensures
that we maintain flexibility to operate effectively within a range
of market environments. Our business is in good financial
health and we undertake due diligence to ensure that the
clients and counterparties that we choose to work with meet
financial strength requirements. We prudently monitor and
manage all client activity to ensure compliance with best
practices and regulatory requirements.
Despite the challenges in our operating environment, we
continue to incorporate our Principles of Corporate Social
Responsibility and Sustainability into all aspects of our business
activities. The impacts of slowing economic growth, rapid
interest rate increases and higher inflation were felt across our
industry, but also had profound implications for households and
charities in the communities where we operate. Throughout
the fiscal year, our employees undertook initiatives to support
several important causes, including food banks across North
America, children’s cardiac and cancer care in Australia, and
mental health awareness efforts in the UK. As an organization,
we have also committed resources and expertise in all regions to
foster leadership development for women and diverse youth.
The market outlook for the year ahead remains uncertain, and
we know there will be challenges along the way. Having said
that, I have every confidence that Dan and our Global Operating
Committee will effectively guide our Company through any new
obstacles while continuing to deliver outstanding experiences
for our clients and employees in an increasingly complex world.
Thank you for your continued support.
(signed)
David Kassie
Chairman
Canaccord Genuity Group Inc.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report 8
CANACCORD GENUITY
WEALTH MANAGEMENT
During prolonged difficult markets, our wealth management businesses are an important
source of earnings power and stability. Throughout a challenging year, CG investment
professionals in all regions maintained an unwavering focus on helping our clients navigate
uncertainty, while supporting their long-term goals.
$96.2 billion
in total client assets
Although below their peak, assets in our global
wealth management businesses remained
resilient in light of the significant reversal in global
markets. We experienced positive inflows in all our
businesses, bolstered by our targeted recruiting
and acquisition activities.
ALL CG WEALTH MANAGEMENT BUSINESSES
CONTRIBUTED TO OUR FISCAL 2023 PROFITABILITY
GLOBAL WEALTH MANAGEMENT CLIENT ASSETS
(C$ billions, fiscal years ended March 31)
We have continued to invest in the development of all
our wealth businesses with a strong focus on supporting
long-term profitable growth in this important segment.
2023
2022
2021
2020
2019
GLOBAL WEALTH MANAGEMENT REVENUE(1)
(C$ millions, fiscal years ended March 31)
GLOBAL WEALTH MANAGEMENT INCOME BEFORE
INCOME TAXES(2)
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
$708.3
$720.4
$663.6
$511.4
$461.8
2023
2022
2021
2020
2019
$96.2
$96.1
$88.8
$60.7
$65.7
$125.7
$148.5
$135.3
$80.2
$75.4
(1) Beginning in Q3/20, amounts include Australia wealth management.
(2) These figures exclude significant items. Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that
exclude significant items to the applicable IFRS measures on page 24.
Fiscal 2023 Annual Report Canaccord Genuity Group Inc. 9
UK & CROWN DEPENDENCIES
With a higher concentration of fee-based revenue, this business was our strongest contributor of revenue and net income in this
segment for fiscal 2023. We have focused on integrating recent acquisitions and driving organic growth strategies across the UK & Crown
Dependencies, and we are beginning to see positive impacts from improved synergies and our expanded financial planning capability.
UK & CROWN DEPENDENCIES WEALTH MANAGEMENT
CLIENT ASSETS(1)
(C$ billions and £ billions, fiscal years ended March 31)
UK & CROWN DEPENDENCIES WEALTH MANAGEMENT
INCOME BEFORE INCOME TAXES(2)
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
CANADA
$55.1 | £33.0
$52.8 | £32.1
$52.3 | £30.2
$39.9 | £22.7
$44.2 | £25.4
2023
2022
2021
2020
2019
$86.1
$84.8
$65.3
$56.5
$48.5
Increased interest revenue of $46.2 million helped to offset the impact of reduced underwriting activity in this business during fiscal 2023.
Subsequent to the end of the year, we welcomed Mercer’s Canadian Private Wealth business, and we are looking forward to making a positive
impact for these advisors and their clients in the coming months and years.
CANADA WEALTH MANAGEMENT CLIENT ASSETS(1)
(C$ billions, fiscal years ended March 31)
CANADA WEALTH MANAGEMENT INCOME BEFORE
INCOME TAXES(2)
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
AUSTRALIA
$35.7
$37.9
$32.2
$18.4
$20.7
2023
2022
2021
2020
2019
$39.5
$56.3
$62.6
$22.7
$26.8
This business was also impacted by the abrupt decline in underwriting activity throughout the fiscal year, which led to a 40% year-over-year
reduction in investment banking revenue. Client assets increased modestly compared to last year, largely in connection with our recruiting
initiatives in the region.
AUSTRALIA WEALTH MANAGEMENT CLIENT ASSETS(1)
(C$ billions and A$ billions, fiscal years ended March 31)
AUSTRALIA WEALTH MANAGEMENT INCOME BEFORE
INCOME TAXES(2)(3)
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
$5.4 | A$6.0
$5.4 | A$5.7
$4.2 | A$4.4
$2.4 | A$2.7
$0.9 | A$0.9
2023
2022
2021
2020
$0.1
$7.3
$7.4
$1.0
(1) Assets under administration, management and management contract.
(2) These figures exclude significant items. Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14 and a reconciliation of non-IFRS measures that
exclude significant items to the applicable IFRS measures on page 24.
(3) Australia wealth management contributions were previously recorded as part of Canaccord Genuity Capital Markets Australia. Commencing in Q3/20, they are disclosed as a separate
operating segment. Fiscal 2020 income before income taxes reflects results only subsequent to the completion of the Patersons acquisition on October 19, 2019.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report
10
CANACCORD GENUITY
CAPITAL MARKETS
CG Capital Markets is differentiated by our ability to get things done in difficult markets. We
are steadfastly committed to supporting key growth sectors of the global economy, and driven
to help entrepreneurs and innovators to advance their strategic and financial objectives.
GLOBAL CAPITAL MARKETS REVENUE
(C$ millions, fiscal years ended March 31)
2023
2022
2021
2020
2019
$792.9
$1,303.1
$1,312.2
$689.5
$704.4
The reduced revenue contribution from our global
capital markets division reflects the challenging
backdrop that persisted through the 12-month
period and led to reduced activity levels in our core
sectors and verticals, consistent with broader
industry trends.
Fiscal 2023 was a challenging year across our industry, and the small-cap and growth-oriented sectors
and investors that we serve were particularly impacted.
CAPITAL MARKETS REVENUE BY GEOGRAPHY
(Fiscal years ended March 31)
CAPITAL MARKETS REVENUE BY ACTIVITY
(Fiscal years ended March 31)
19%
61%
12%
8%
2023
2022
2021
2020
26%
34%
30%
37%
2019(1)
51%
45%
51%
9% 14%
7% 14%
14%
5%
43%
15%
5%
46%
38%
16%
15%
20%
3%
36%
12%
13% 1%
15%
49%
19%
16%
1%
2023
2022
2021
30%
2020
20%
2019
28%
16%
22%
35%
18%
25%
4%
2%
Canada United States UK & Europe Australia
Advisory Investment Banking Principal Trading
Commissions and Fees Interest and Other
(1) 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 2023 Annual Report Canaccord Genuity Group Inc. When confronted with one of the most challenging
market environments in decades, CG Capital
Markets teams demonstrated remarkable drive
and creativity supporting companies and investors
through persistent headwinds.
$17.5 billion
proceeds raised in fiscal 2023
Rising financing costs, heightened volatility in
financial markets and broader economic uncertainties
contributed to a decline in initial public and secondary
offerings during fiscal 2023.
359
transactions in fiscal 2023
Notwithstanding the dramatic reduction in transaction
activity that persisted throughout the fiscal year, we
continued to defend and build upon our strong market
position among the league table leaders in each of
our geographies.
11
The broad market decline in new issue activity that
had been widely anticipated following two years
of unprecedented highs was the primary driver of
the 73% year-over-year reduction in fiscal 2023
investment banking revenue.
The diversification away from higher-risk growth
assets negatively impacted demand for new issues in
several of our core sectors. Unsurprisingly, the metals
and mining sector was strongest for our underwriting
activities, accounting for 51% of our investment banking
revenues, primarily within our Australian, Canadian
and UK businesses.
M&A activities remained robust throughout most
of the fiscal year and helped offset the impact of
subdued new issue and agency trading activity.
While advisory activity in our core sectors remained
strong in the first half of the fiscal year, we experienced
a more difficult environment for completions in the
second half. Full-year advisory revenue declined by
26% when compared to the record set in the previous
year. The technology and consumer sectors were most
active in this segment, reflecting our investments in
expanding our US and European capabilities in these
sectors, and the benefit of increasing collaboration
between these teams.
Despite the dramatic reduction in industry-wide
activity levels, we did not retrench from our
commitment to fully supporting growth companies
and investors.
CG trading and specialty desks remained steady,
supporting liquidity and seamlessly supporting clients
in all our geographies through bouts of increased
volatility. Our sales and research teams mobilized to
create thousands of touchpoints for our clients through
conferences, corporate access roadshows, and timely
and informative market analysis and updates.
Although several transactions continue to be delayed
as companies await a more stable environment, our
clients remain highly engaged.
In an environment of rising interest rates, supply chain
pressures and inflation, the demand for capital among
small and growth-oriented companies remains high.
We are cautiously optimistic that our investing clients
will become more active in supporting higher quality
new issues in time. And finally, while we are not expecting
the IPO market to reopen quickly, history tells us that
there can be a strong bounce-back when it does, and
CG is very well positioned to recapture our historic
leadership in this segment.
Canaccord Genuity Group Inc. Fiscal 2023 Annual Report 12
GLOBAL OPERATING
COMMITTEE
Our Global Operating Committee is comprised of CG’s most seasoned leaders, with diverse representation
from each of our core operating businesses and geographies, and those responsible for global oversight of
our financial, legal, technology, and regulatory functions. This group collaborates closely on all issues and
opportunities facing our business, and ensures that everything we do is in alignment with the best interests
of our valued employees, clients and shareholders.
Dan Daviau
Jeffrey Barlow
David Esfandi
Marcus Freeman
Fera Jeraj
President & Chief Executive
Officer, Canaccord Genuity
Group Inc.
Chief Executive Officer,
Canaccord Genuity LLC (US)
Chief Executive Officer,
Canaccord Genuity Wealth
Management (UK & Europe)
Chief Executive Officer,
Canaccord Genuity Group
(Asia-Pacific)
Chief Technology Officer
Don MacFayden
Jason Melbourne
Jen Pardi
Adrian Pelosi
Stuart Raftus
Executive Vice President &
Chief Financial Officer
Head of CG Capital Markets –
Canada & Global Head of
Distribution
Global Head of Equity
Capital Markets
Executive Vice President,
Chief Risk Officer & Treasurer
Chief Executive Officer,
Canaccord Genuity Corp.
(Canada)
Nick Russell
Andrew F. Viles
Mark Whaling
Chief Executive Officer,
Capital Markets,
Canaccord Genuity Limited
(UK & Europe)
Executive Vice President &
Chief Legal Officer
Global Head of Securities
Fiscal 2023 Annual Report Canaccord Genuity Group Inc. Fiscal 2023 MD&A
13
Contents
14
18
20
23
26
Management’s Discussion and Analysis
Market Environment
Core Business Performance Highlights
Financial Overview
Fourth Quarter and Fiscal 2023 vs. Fourth Quarter and
Fiscal 2022
Business Segment Results – Q4 and Year Ended
March 31, 2023 Compared with Q4 and Year Ended
March 31, 2022
Canaccord Genuity Capital Markets
Canaccord Genuity Wealth Management
Corporate and Other Segment
Quarterly Financial Information – Seven Fiscal Quarters
Prior to Q4/23
Outstanding Preferred and Common Share Data
Share-Based Payment Plans
Related Party Transactions
48
52
52
52
53
53
57
57
57
58
61
107
113
116
118
Critical Accounting Policies and Estimates
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
29
29
34
38
39
44
46
47
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 titled “Fiscal 2024 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; inflationary pressures; credit, market, liquidity, strategic, insurance, operational,
reputation, conduct and legal, regulatory and environmental risk; currency value and interest rate fluctuations, including as a result of
market and oil price volatility; the effectiveness and adequacy of our risk management and valuation models and processes;
legislative or regulatory developments in the jurisdictions where we operate; climate change and other ESG related risks; 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 unaudited interim condensed and audited 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
titled “Risk Management” in this Management’s Discussion and Analysis (MD&A) and “Risk Factors” in the AIF, which include
market, liquidity, credit, operational, legal, cybersecurity 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 2024 Outlook section in this MD&A and those discussed from time to time in the Company’s unaudited interim condensed
and audited 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 be 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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
14
Management’s Discussion and Analysis
Fourth quarter fiscal year 2023 for the three months and fiscal year ended March 31, 2023 – this document is dated June 16,
2023
The following discussion of the financial condition and results of operations for Canaccord Genuity Group Inc. is provided to
enable the reader to assess material changes in our financial condition and to assess results for the three months and fiscal
year ended March 31, 2023 compared to the corresponding periods in the preceding fiscal year. The three-month period ended
March 31, 2023 is also referred to as fourth quarter fiscal 2023 and Q4/23. Unless otherwise indicated or the context otherwise
requires, the “Company” refers to Canaccord Genuity Group Inc. and “Canaccord Genuity Group or CG” refers to the Company
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, 2023 and March 31, 2022 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, 2023 and March 31, 2022 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 a 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
excluding any applicable fair value adjustments on certain illiquid or restricted marketable securities, warrants and options 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 is 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 the US and UK capital markets divisions, certain costs included
in Corporate & Other development costs related to the expired management-led takeover bid for the common shares of the
Company, impairment of goodwill and intangible assets in our Canadian capital markets operations, costs associated with the
redemption of convertible debentures, costs associated with the reorganization of CGWM UK, fair value adjustment of certain
contingent consideration in connection with prior acquisitions, 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 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 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 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, net income 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, restructuring
costs, 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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 15
A reconciliation of non-IFRS measures that exclude significant items to the applicable IFRS measures from the audited consolidated
financial statements for fiscal 2023 can be found in the table titled “Q4 and Fiscal 2023 Selected Financial Information Excluding
Significant Items”, on page 24.
Non-IFRS Ratios
Non-IFRS ratios are calculated using the non-IFRS measures defined above. For the periods presented herein, we use the following
non-IFRS ratios: (i) total expenses excluding significant items as a percentage of revenue, 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 are supplementary financial measures that do not have any definitions prescribed under IFRS and do 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 interest, 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 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, advisory 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 and Australia.
Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the Toronto Stock Exchange (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 advisory and 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, mergers and acquisitions (M&A), research, sales and trading
services with capabilities in North America, the UK & Europe, Asia and Australia. 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 and 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. Guernsey, Jersey and the Isle of Man are together
referred to as the “Crown Dependencies”. Our wealth management operations in the UK and in the Crown Dependencies are
together referred to as CGWM UK.
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
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
16 Management’s Discussion and Analysis
Canaccord Genuity Capital Markets or Canaccord Genuity Wealth Management divisions. Also included in this segment are the
Company’s operations and support services in Canada, which are responsible for front- and back-office information technology (IT)
systems, compliance and risk management, operations, legal, finance and other administrative functions of Canaccord Genuity
Group Inc.
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 of the recognition of such transactions in our capital markets business.
The Company is diversified across industry sectors and geographies. To add to its recurring revenue base and to offset the
inherent volatility of the capital markets business, the Company has increased the scale of its global wealth management
operations. Historically, the Company’s diversification across major financial centres has allowed it to benefit from strong equity
markets in certain regions and improve its capability for identifying and servicing opportunities in regional centres and across the
Company’s focus sectors.
The following charts depict firm-wide revenue contributions by geography for Q4 2023 and the year ended March 31, 2023:
Firmwide revenue by geography
Q4 fiscal 2023
Australia
7%
Firmwide revenue by geography
Year ended March 31, 2023
Australia
9%
UK, Europe &
Crown
Dependencies
31%
UK, Europe &
Crown
Dependencies
29%
Canada
35%
US
27%
Canada
30%
US
32%
IMPACT OF CHANGES IN CAPITAL MARKETS ACTIVITY
As a brokerage firm, the Company derives its revenue primarily from sales commissions, underwriting, 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 but also to some degree in 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.
The Company’s capital markets activities are primarily focused in the following sectors: Healthcare & Life Sciences (which includes
cannabis-related companies), Technology, Metals & Mining, Consumer & Retail, and Other. Coverage of these sectors includes
investment banking, M&A and advisory services, and institutional equity activities such as sales, trading and research. The value
of client assets in the Company’s wealth management businesses can be impacted by changes in market values during reporting
periods.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
BUSINESS SEGMENTS
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)
The principal operating entities included in the business units
described above are:
Canaccord Genuity Capital Markets (Canada)
Canaccord Genuity Corp. (capital markets division)
Jitneytrade Inc.
Canaccord Genuity Asia (Beijing) Limited
Canaccord Genuity (Hong Kong) Limited(1)
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 Petsky Prunier LLC
CG Sawaya, LLC
Canaccord Genuity Capital Markets (UK & Europe)
Canaccord Genuity Limited
Canaccord Genuity Dubai Ltd.(2)
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(3)
Canaccord Genuity Asset Management Limited (previously
“Hargreave Hale Limited”)
Canaccord Genuity Wealth (International) Limited
Canaccord Genuity Wealth Group Holdings (Jersey)
Limited
Punter Southall Wealth Limited(3)
Canaccord Genuity Capital Markets (Australia)
Canaccord Genuity (Australia) Limited
Canaccord Genuity (Hong Kong) Limited
(1)
Canaccord Genuity Wealth Management (Australia)
Canaccord Genuity Financial Limited
(1) Canaccord Genuity (Hong Kong) Limited is a shared resource for both Canaccord Genuity Capital Markets (Canada) and Canaccord Genuity Capital Markets (Australia).
(2) The Company sold its interest in Canaccord Genuity Dubai Ltd. subsequent to March 31, 2023.
(3) The Company was wound up into an affiliate(s) as part of an internal restructuring subsequent to March 31, 2023.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
18 Management’s Discussion and Analysis
In May 2022, HPS Investment Partners, LLC, on behalf of certain investment accounts and funds it manages (collectively, “HPS”),
completed the purchase of a new series of Convertible Preferred Shares issued by Canaccord Genuity Wealth Group Holdings
(Jersey) Limited, a subsidiary of the Company and the parent of all operating companies included in CGWM UK. This purchase was
in connection with the acquisition by CGWM UK of Punter Southall Wealth (“PSW”). The new series of Convertible Preferred
Shares bear the same terms as the Convertible Preferred Shares issued in fiscal 2022, except for the conversion ratio. Neither
series of Convertible Preferred Shares contains an obligation for the Company to deliver cash or other financial assets to the holders
of the Convertible Preferred Shares. 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 Canaccord Genuity Wealth Group Holdings (Jersey) Limited. On an as converted basis and subject to
the liquidation preference associated with the Convertible Preferred Shares and Preference Shares, the Company holds an
approximate 66.9% equity equivalent interest in Canaccord Genuity Wealth Group Holdings (Jersey) Limited.
The 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 and Corporate and Other, respectively. In addition,
the operating results of Petsky Prunier LLC (“Petsky Prunier”) since the closing date of February 13, 2019 and operating results
of CG Sawaya, LLC (“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 (“McCarthy Taylor”) (renamed as CG
McCarthy Taylor Limited), whose operations were subsequently transferred to CG Wealth Planning Limited since the closing date
of January 29, 2019; the operating results of Thomas Miller Wealth Management Limited (“Thomas Miller”) (renamed as CG Wealth
Planning Limited) since the closing date of May 1, 2019; 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; and Punter Southall Wealth Limited (“PSW”) as of May 31, 2022. Operating results for the business of
Results International Group LLP (“Results”) since the closing date of August 17, 2022 are included as part of Canaccord Genuity
Capital Markets (UK & Europe).
Market Environment
Economic backdrop
Throughout fiscal 2023, the world economy benefitted from the reopening of several economic regions with the gradual lifting of
pandemic lockdowns. The lagged impact of government spending, accumulated household savings, and the consumer spending
transition from goods to services also supported economic growth. The war in Ukraine and lingering supply chain bottlenecks caused
commodity prices to increase. In the US, the growing demand for labour and a shrinking labour pool caused the unemployment
rate to fall and inflation on wages and goods and services accelerated. Inflation peaked in the second quarter of fiscal 2023 but
remained well above target rates of 2% at the end of the fiscal year. Against this backdrop, equities and bonds sold off against the
rapid pace of rate hikes through the first half of the year.
Over the 12-month period the S&P 500, S&P/TSX and the MSCI world indices posted negative returns of -7.7%, -5.2% and -7.0%
respectively and US Treasury bond prices declined 6.9%.
Investment banking and advisory
Fiscal 2023 was a challenging year for capital-raising activities across our industry, and small cap and growth-oriented sectors
were particularly impacted. We attribute most of the decline in initial public and secondary offerings in our core sectors to rising
financing costs, heightened volatility in financial markets and broader economic uncertainties. M&A activities remained robust
throughout most of the fiscal year and helped offset the impact of subdued new issues and agency trading activity.
Index Value at End of
Fiscal Quarter
S&P IFCI Global Small Cap
S&P IFCI Global Large Cap
(Y/Y) 2022-06-30
2022-03-31
311.7
-2.8%
254.9 -14.1%
266.7 -24.9%
223.7 -27.3%
Q4/22
Q1/23
Q2/23
Q3/23
(Y/Y) 2022-09-30
(Y/Y) 2022-12-30
(Y/Y) 2023-03-31
242.7 -28.6%
196.9 -29.5%
264.2 -22.3%
213.7 -22.2%
Q4/23
(Y/Y)
274.4 -12.0%
221.0 -13.3%
(Q/Q)
3.9%
3.4%
Source: Refinitiv Datastream, Canaccord Genuity estimates
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. Government regulation can also have a profound 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 M&A and restructuring mandates.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 19
Trading
Higher interest rates, heightened recession fears and a rapid deceleration in corporate earnings year-over-year led to heightened
volatility in financial markets. As a result, trading volumes during the fourth quarter and fiscal 2023 have moderated from year-
ago levels.
Average Value During
Fiscal Quarter/Year
Russell 2000
S&P 400 Mid Cap
FTSE 100
MSCI EU Mid Cap
S&P/TSX
Q4/22
Q1/23
Q2/23
Q3/23
Q4/23
FY23
31-Mar-22
(Y/Y) 30-Jun-22
(Y/Y) 30-Sep-22
(Y/Y) 30-Dec-22
(Y/Y) 31-Mar-23 (Y/Y)
(Q/Q) 31-Mar-23
(Y/Y)
2056.8 -6.3% 1856.6 -18.0%
2670.8 6.9% 2474.5 -8.5%
7443.0 11.7% 7435.2
6.1%
1314.8 4.5% 1217.0 -9.4%
1833.3 -17.9%
2418.1 -10.3%
7297.3
3.0%
1136.3 -19.2%
1835.1 -16.9%
2468.3 -9.1%
7440.4
3.4%
1179.5 -13.6%
5.0% 19328.7 -5.2% 19512.7 -7.3% 20184.0 -5.3% 3.4% 19894.9 -3.3%
1856.9 -9.7% 3.5%
2555.4 -4.3% 5.3%
7755.5 4.2% 6.6%
1239.3 -5.7% 10.0%
1793.7 -21.2%
2426.1 -13.1%
7275.8
0.5%
1126.1 -19.5%
21308.0 16.7% 20563.0
Source: Refinitiv Datastream, Canaccord Genuity estimates
Global wealth management
Although equity prices generally improved in Q4/23, prices were lower on a year-over-year basis.
Q4/22
Change
(Q/Q)
-4.6%
3.8%
-6.1%
-5.3%
33.1%
-7.0%
1.1%
3.8%
Q1/23
Change
(Q/Q)
-16.1%
-13.2%
-8.0%
-15.5%
2.0%
-5.5%
-2.9%
2.5%
Q2/23
Change
(Q/Q)
-4.9%
-1.4%
-8.0%
-6.7%
-10.3%
-5.8%
-6.9%
-0.4%
Q3/23
Change
(Q/Q)
7.6%
6.0%
6.7%
9.9%
3.4%
0.3%
2.0%
-6.6%
Q4/23
Change
(Q/Q)
7.5%
4.6%
3.8%
7.4%
-4.9%
4.3%
0.3%
-1.0%
Fiscal 2023
Change
(Y/Y)
-7.7%
-5.2%
-6.2%
-7.0%
-10.0%
-6.9%
-7.5%
-5.6%
Total Return (excl. currencies)
S&P 500
S&P/TSX
MSCI EM ERGING MARKETS
MSCI WORLD
S&P GS COMMODITY INDEX
US 10-YEAR T-BONDS
CAD/USD
CAD/EUR
Source: Refinitiv Datastream, Canaccord Genuity estimates
Fiscal 2024 Outlook
It takes time for rate hikes by world central banks to filter through the economy. We expect that continued levels of elevated
inflation, notably for services, may prevent central banks from delivering rate cuts in the short-term. Additionally, the US banking
crisis that took place in our fourth quarter could prompt further deposit flight toward higher-yielding alternatives, which could cause
banks to keep lending standards tighter for a longer period.
Our overall economic outlook for fiscal 2024 calls for a mild economic recession with pressure on corporate earnings. We believe
financial markets will transition from inflation fears to growth concerns, which would lead to bouts of heightened market volatility,
particularly in core Canaccord Genuity growth sectors. We anticipate that most world central banks will complete their monetary
tightening cycle by the end of the first half of fiscal 2024, and some may cut rates.
Initial public offerings (IPOs), new issues and agency trading activities showed early signs of recovery at the start of fiscal 2024
but remain hindered by financial conditions, economic uncertainties and low risk appetite from investors. M&A advisory activities
have remained robust, although are showing signs of slowing down and several completions have been extended due to market
uncertainty. While we do not expect a rapid rebound in activity levels in fiscal 2024, our core business segments are well
positioned to benefit as market sentiment and the economic outlook turns more positive.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
20 Management’s Discussion and Analysis
Core Business Performance Highlights-Fourth Quarter and Fiscal Year Ended March 31,
2023
The following charts depict revenue, pre-tax net income(1)(2) and earnings per share(1)(2) contributions from our primary business
segments for the fiscal year ended March 31, 2023:
Revenue by business segment
Year ended March 31, 2023
Pre-tax net income contribution by
business segment
Year ended March 31, 2023
Diluted earnings per share contribution by
business segment
Year ended March 31, 2023
Wealth
Management
47%
Capital
Markets
20%
EPS $0.59
Capital
Markets
($0.01)
Capital
Markets
53%
Wealth
Management
80%
Wealth
Management
$0.60
(1) Figures exclude significant items. See Non-IFRS Measures on page 14.
(2) Figures reflect an allocation of net losses in Corporate and Other to the capital markets and wealth management divisions.
CANACCORD GENUITY WEALTH MANAGEMENT
Globally, Canaccord Genuity Wealth Management earned revenue of $197.1 million during the fourth fiscal quarter and
$708.3 million for fiscal 2023, a year-over-year increase of 13.1% and a decrease of 1.7%, respectively. The decrease in annual
revenue is primarily attributable to the impact of lower investment banking revenue resulting from a decline in new issue activity,
which was partially offset by higher interest revenue. Excluding significant items, this division contributed net income before
taxes of $36.9 million(1) for the fourth quarter and $125.7 million(1) for the full year, an increase of 26.1% and a decrease of
15.3%, respectively.
• Canaccord Genuity Wealth Management (North America) generated $78.4 million in revenue and, after intersegment
allocations, recorded net income before taxes of $10.9 million in Q4/23. Fiscal 2023 revenue in this business amounted to
$302.2 million, and net income before taxes and after intersegment allocations amounted to $39.5 million
• Wealth management operations in the UK & Crown Dependencies generated $103.7 million in revenue and, after intersegment
allocations and excluding significant items, recorded net income before taxes of $26.4 million(1) in the fourth quarter of
fiscal 2023. Fiscal 2023 revenue in this business amounted to $343.7 million and net income before taxes and after
intersegment allocations and excluding significant items amounted to $86.1 million(1).
• Wealth management operations in Australia generated revenue of $15.0 million and, after intersegment allocations and
excluding significant items, recorded a loss before taxes of $0.4 million in the fourth quarter of fiscal 2023(1). Fiscal 2023
revenue in this business amounted to $62.4 million and income before taxes and after intersegment allocations amounted to
$0.1 million.
Firm-wide client assets were $96.2 billion at March 31, 2023, representing an increase of $0.2 billion or 0.2% from $96.1 billion
at March 31, 2022(2). Client assets across the individual businesses as at March 31, 2023 were as follows.
• $35.7 billion in North America, a decrease of $2.2 billion or 5.8% from March 31, 2022(2)
• $55.1 billion (£33.0 billion) in the UK & Crown Dependencies, an increase of $2.3 billion or 4.3% from $52.8 billion
(£32.1 billion) at the end of the fourth quarter of the previous fiscal year(2)
• $5.4 billion (AUD$ 6.0 billion) in Australia held through our investment management platform, an increase of $0.1 billion or
1.5% from March 31, 2022(2)
CANACCORD GENUITY CAPITAL MARKETS
Globally, Canaccord Genuity Capital Markets earned revenue of $226.1 million for the fourth fiscal quarter and $792.9 million in
fiscal 2023, representing year-over-year decreases of 27.5% and 39.2%, respectively. The decreases primarily reflected substantially
lower investment banking revenues in all geographies in connection with the significant decline in industry-wide new issue
volumes. Excluding significant items, this division recorded a loss before income taxes of $5.5 million(1) for the fourth quarter and
income before income taxes of $30.8 million(1) for the full fiscal year.
In addition to the challenging backdrop which led to reduced activity levels in our core sectors and verticals, fiscal 2023 results in
this division were impacted by declines in the market value of certain inventory and warrant positions earned in respect of our
investment banking activities subsequent to March 31, 2022 and mostly recorded during Q1/23. These valuation changes primarily
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14.
(2) See Non-IFRS Measures on page 14.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 21
impacted our Australian capital markets business and, to a lesser degree, our Canadian business. Market value adjustments also
had a negative impact on our facilitation trading activity in Canada during Q1/23.
• Canaccord Genuity Capital Markets participated in a total of 83 investment banking transactions globally, raising total
proceeds of $3.1 billion in Q4/23
• Canaccord Genuity Capital Markets participated in a total of 359 investment banking transactions globally, raising total
proceeds of $17.5 billion in fiscal 2023
Revenue by activity as a percentage of Canaccord Genuity Capital Markets revenue:
Commissions and fees
Investment banking
Advisory fees
Principal trading
Interest
Other
For three months
ended March 31
2023
19.4%
18.1%
45.9%
11.8%
4.5%
0.3%
2023
15.6%
30.5%
39.0%
13.4%
0.8%
0.7%
Quarter-over-
quarter change
3.8 p.p.
(12.4) p.p.
6.9 p.p.
(1.6) p.p.
3.7 p.p.
(0.4) p.p.
Year ended March 31
2023
19.7%
16.0%
45.7%
14.7%
3.2%
0.7%
2022
13.4%
35.5%
37.5%
12.1%
0.8%
0.7%
Year-over-
year change
6.3 p.p.
(19.5) p.p.
8.2 p.p.
2.6 p.p.
2.4 p.p.
(0.0) p.p.
Canaccord Genuity Capital Markets (total)
100.0% 100.0%
100.0%
100.0%
p.p.: percentage points
Further detail is provided in the Business Segment Results beginning on page 29.
SUMMARY OF CORPORATE DEVELOPMENTS
On May 31, 2022 the Company, through CGWM UK, completed its acquisition of the private client investment management
business of PSW for a total purchase price on closing of £168.0 million ($267.8 million). In connection with the completion of the
acquisition, CGWM UK modified its existing banking arrangements and increased its bank loan by an additional £100 million
($159.4 million as of the acquisition date of May 31, 2022). In addition, certain institutional investors made an additional
investment in CGWM UK through the purchase of a new series of Convertible Preferred Shares in the amount of £65.3 million
($104.1 million as of the acquisition date of May 31, 2022). With the issuance of the additional Convertible Preferred Shares and
ordinary shares by CGWM UK in connection with the transaction, the Company’s equity equivalent interest in CGWM UK on an as-
converted basis now stands at 66.9%.
On June 1, 2022, the Company announced the reset of the dividend rate on its Cumulative 5-Year Rate Reset First Preferred
Shares, Series C (the “Series C Preferred Shares”). Quarterly cumulative cash dividends, as declared, were paid at an annual rate
of 4.993% for the five years ended 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%. The Company did not exercise its right to redeem all or
any part of the outstanding Series C Preferred Shares on June 30, 2022.
On August 5, 2022, at the Fiscal 2022 Annual General Meeting of Shareholders, Michael Auerbach was elected to the Company’s
Board of Directors. Mr. Auerbach is an entrepreneur, investor, business consultant and private diplomat with deep experience in
financial services, strategic intelligence, advisory and risk management.
On August 17, 2022, the Company completed its previously announced asset purchase agreement to acquire the business of
Results International Group LLP (“Results”). Results is an independent advisory firm headquartered in London, UK that is focused
in the Technology and Healthcare sectors. This transaction complements recent investments by the Company to expand its
global Advisory business with the acquisitions of Petsky Prunier (2019) and Sawaya Partners (2021) and expands its European
domain expertise in the Healthcare and Technology sectors.
On August 18, 2022, 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 4,959,281 of its common shares during the period from August 21, 2022 to August 20,
2023, 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.
On January 9, 2023, 1373313 B.C. Ltd (the “Offeror”), on behalf of itself and a management-led group consisting of officers and
employees of the Company and its subsidiaries (collectively, the “CG Employee Group” or the “Management Group”), announced an
intention to commence a take-over bid (the “Management Offer”) to acquire all of the issued and outstanding common shares of
the Company (other than certain common shares beneficially owned by the CG Employee Group) at a price of $11.25 per common
share. A take-over bid circular was issued on January 29, 2023. Subsequently, a Special Committee of independent directors of
the Company issued a circular in response to the take-over bid circular (the “Special Committee”).
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
22 Management’s Discussion and Analysis
On March 13, 2023, the Company announced that Gillian Denham, Dipesh Shah, Charles Bralver and Sally Tennant (the “Former
Special Committee Directors”) and Francesca Shaw provided the Company with notice of their resignations from the Board of
Directors (the “Board”) of the Company. As a result of the resignations, the Board appointed Terrence Lyons as a new director
and appointed Michael Auerbach as Chair of the Special Committee and Terrence Lyons as a member. The Board also appointed
Mr. Lyons as its new Lead Director. Mr. Lyons is the former Lead Independent Director and Chair of the Audit and Risk Committee of
the Company, having served as a director of the Company from 2004 to 2022.
On March 20, 2023, the Company announced that the Board of Directors had appointed Amy Freedman and Rod Phillips as
independent directors. With these changes the Board is now comprised of seven (7) directors, of which five (5) are independent.
The independent members of the Board also appointed Amy Freedman and Rod Phillips as additional members of the Special
Committee.
On March 22, 2023, the Special Committee provided an update to shareholders with respect to its evaluation and consideration
of the Management Offer, and announced that Greenhill & Co. Canada had been appointed as financial advisor.
On April 6, 2023, the Company announced that it had filed and mailed a Directors’ Circular in response to the Management Offer
and the take-over bid circular dated February 27, 2023. At this time, the Board did not make a recommendation to shareholders
and stated that the newly formed Special Committee required additional time to make an informed recommendation to the Board.
On April 11, 2023 the Company announced that it had received exemptive relief sought from the British Columbia Securities
Commission and the Ontario Securities Commission to extend the period within which the Company was required to prepare and
send a Directors’ Circular responding to the Management Offer. The Directors’ Circular was mailed and filed on April 6, 2023, in
accordance with the exemptive relief.
On May 8, 2023, the Company announced that it had been advised by certain of its applicable regulatory authorities that, due to
an ongoing regulatory matter involving one of the Company’s foreign subsidiaries, regulatory approval for the change in control
contemplated by the Management Offer would not be granted on an expedited basis, and that based on continuing discussions
with the regulatory authorities, the Company has determined that regulatory approvals will likely not be received in a timely enough
manner to permit completion of the Management Offer prior to the expiry date of June 13, 2023, and may not be received prior
to expiration of the financing commitments for the Management Offer on August 9, 2023. The receipt of regulatory approvals is a
condition of the Management Offer.
On May 29, 2023, the Company announced that, through its Canadian wealth management business, it had completed its
acquisition of Mercer’s Canadian private wealth business.
On June 5, 2023, the Board recommended that shareholders of the Company reject the Management Offer and issued a supplement
to the directors’ circular dated April 6,2023. As described in the supplement, the reason for rejecting the Management Offer was
that there exists a regulatory condition which was expected to remain unsatisfied at the expiry of the bid on June 13, 2023 and the
waiver of which would directly contravene the express requirements of a regulatory authority.
On June 14, 2023, the Company announced the expiration of the Management Offer as certain substantive conditions to the
Offer, including conditions related to the receipts of required regulatory approvals, were not satisfied as of the expiry time and the
Management Group determined not to extend the Management Offer. The Company entered into an agreement with the
Management Group with respect to certain matters relating to the Offer, including a two-year standstill with voting support
commitments from certain members of the Management Group in favour of Board-supported director nominees, reimbursement of
certain reasonable expenses of the Management Group (subject to clawback in certain circumstances), and continuation of an
ad hoc independent committee, if required, although the Board is not actively considering the sale of any division and considers
that all business units are important to the development of the long term value of the Company.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 23
FINANCIAL OVERVIEW
Q4 AND FISCAL 2023 SELECTED FINANCIAL INFORMATION(1)(2)(5)
(C$ thousands, except per share and % amounts, and
number of employees)
2023
2022
2021
Q4/23 vs
Q4/22
2023
2022
2021
Year over
year change
Three months ended March 31
Year 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
Impairment of goodwill and
other intangible assets
Fair value adjustment of non-controlling interests
derivative liability
Change in fair value of contingent consideration
Costs associated with redemption of
convertible debentures
Share of loss of an associate
$ 196,774 $ 196,976 $ 214,476
(0.1)% $ 749,114 $ 761,843 $ 735,239
50,962
108,801
305,939
104,649
122,353
26,921
45,949
5,134
41,960
10,264
19,439
66,761
87,830
7,487
24,033
(53.2)%
(14.5)%
(35.8)%
347.7%
(73.6)%
160,944
561,725
761,551
364,554
493,057
197,092
117,238
158,978
246,801
115,245
3,302
36,028
34,371
26,288
40,717
430,389
499,793
706,526
(13.9)% 1,510,397
2,046,002
2,007,688
(1.7)%
(71.3)%
(26.1)%
(26.3)%
219.9%
(90.4)%
(26.2)%
276,066
294,695
395,638
151,535
108,024
117,784
(6.3)%
40.3%
936,872
1,248,184
1,227,895
(24.9)%
500,578
395,709
398,693
26.5%
515
418
(100.0)%
7,403
9,197
5,922
(19.5)%
—
—
11,629
(14,278)
—
10
—
—
—
—
11
—
—
—
—
102,571
—
n.m.
n.m.
11,629
(14,278)
—
—
—
n.m.
36.5%
n.m.
4,354
(100.0)%
922
(71.4)%
8,519
—
5,932
192
4,354
616
—
(9.1)%
—
55
Total expenses
424,962
403,245
518,810
5.4% 1,544,830
1,667,733
1,637,786
(7.4)%
(Loss) income before income taxes
5,427
96,548
187,716
(94.4)%
(34,433)
378,269
369,902
(109.1)%
Net (loss) income
Net (loss) income attributable to:
CGGI shareholders
Non-controlling interests
(Loss) earnings per common share – diluted
Dividends per common share
$
$
$
$
$
3,763 $
68,995 $ 139,394
(94.5)% $ (54,742) $ 270,565 $ 269,802
(120.2)%
(4,326) $
58,657 $ 137,877
(107.4)% $ (90,104) $ 246,314 $ 263,786
(136.6)%
8,089 $
10,338 $
1,517
(21.8)% $
35,362 $
24,251 $
6,016
45.8%
(0.08) $
0.085 $
0.53 $
0.93
(115.1)% $
(1.16) $
0.085 $
0.075
— $
0.34 $
2.16 $
0.32 $
2.04
0.25
(153.7)%
6.3%
Total assets
Total liabilities
Non-controlling interests
Total shareholders’ equity
Number of employees
Excluding significant items(4)
Total revenue
Total expenses
Income before income taxes
Net income
Net income attributable to:
CGGI shareholders
Non-controlling interests
$ 6,302,400 $ 7,250,245 $ 7,631,801
$ 4,903,763 $ 5,833,476 $ 6,516,517
$ 343,998 $ 238,700 $
8,190
(13.1)%
(15.9)%
44.1%
$ 1,054,639 $ 1,178,069 $ 1,107,094
(10.5)%
2,829
2,587
2,356
9.4%
$ 430,389 $ 490,793 $ 692,326
(12.3)% $ 1,523,348 $ 2,040,602 $ 1,993,488
$ 414,055 $ 396,268 $ 509,087
4.5% $ 1,397,476 $ 1,623,036 $ 1,607,398
16,334 $
94,525 $ 183,239
(82.7)% $ 125,872 $ 417,566 $ 386,090
17,428 $
66,822 $ 137,128
(73.9)% $ 100,986 $ 305,827 $ 285,887
$
$
$
$
(25.3)%
(13.9)%
(69.9)%
(67.0)%
36.6%
(78.0)%
(76.5)%
Net income attributable to common shareholders, adjusted $
6,793 $
54,678 $ 133,260
(87.6)% $
60,312 $ 274,585 $ 270,467
Earnings per common share – diluted
$
0.07 $
0.52 $
1.20
(86.5)% $
0.59 $
2.51 $
2.48
9,645 $
57,069 $ 135,611
(83.1)% $
71,260 $ 284,069 $ 279,871
(74.9)%
7,783 $
9,753 $
1,517
(20.2)% $
29,726 $
21,758 $
6,016
(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 32.7% non-controlling interest has been recognized for the three months and fiscal 2023 [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]. The operating results of CGWM UK have been fully consolidated, and a
5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the three and 12 months ended
March 31, 2023 [three and 12 months ended March 31, 2022 – 1.5%].
(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) Net income and earnings per common share excluding significant items reflect tax-effected adjustments related to such items. See Non-IFRS Measures on page 14 and the Q4 and Fiscal 2023
Selected Financial Information Excluding Significant Items table on page 24.
(5) Data includes the operating results of Adam & Company since October 1, 2021; Sawaya, since December 31, 2021; PSW, since May 31, 2022; and Results, since August 17, 2022.
n.m.: not meaningful
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
24 Management’s Discussion and Analysis
Q4 AND FISCAL 2023 SELECTED FINANCIAL INFORMATION EXCLUDING SIGNIFICANT ITEMS(1)
(C$ thousands, except per share and % amounts)
2023
2022
Three months ended March 31
Quarter-
over-
quarter
change
Year ended March 31
2023
2022
Year-
over-
year
change
Revenue
Revenue per IFRS
Significant items recorded in Corporate and Other
Fair value adjustments on certain illiquid and
$
430,389 $
499,793
(13.9)% $ 1,510,397 $ 2,046,002
(26.2)%
restricted marketable securities
— $
9,000
(100.0)% $
(12,951) $
5,400
430,389 $
490,793
(12.3)% $ 1,523,348 $ 2,040,602
n.m.
(25.3)%
Total revenue excluding significant items
Expenses
Expenses per IFRS
Significant items recorded in Canaccord Genuity
Capital Markets
Amortization of intangible assets
Incentive based costs related to
acquisitions(2)
$
$
$
$
424,962 $
403,245
5.4% $ 1,544,830 $ 1,667,733
(7.4)%
214 $
1,283
(83.3)% $
4,656 $
1,843
152.6%
Impairment of goodwill and
other intangible assets
Acquisition-related costs
Change in fair value of contingent consideration $
—
—
(14,278)
Significant items recorded in Canaccord Genuity
—
—
—
— $
— $
n.m. $
102,571
1,477
(14,278)
648 $
364
78.0% $
1,975 $
364
—
537
—
n.m.
n.m.
175.0%
n.m.
Wealth Management
Amortization of intangible assets
Acquisition-related costs
Incentive based costs related to
acquisitions(2)
Costs associated with reorganization of
UK & Crown Dependencies
Significant items recorded in Corporate and Other
Fair value adjustment of non-controlling interests
derivative liability
Costs associated with redemption of
convertible debentures
Development costs
Total significant items
Total expenses excluding significant items
Net income before taxes – adjusted
Income taxes (recovery) – 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)(1)
Net income attributable to common shareholders
excluding significant items(1)
Earnings per common share excluding significant
items(1) – basic
Diluted earnings per common share excluding
significant items(1) – diluted
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
6,314 $
— $
4,190
515
50.7% $
(100.0)% $
22,400 $
5,926 $
14,629
8,660
53.1%
(31.6)%
1,477 $
625
136.3% $
3,977 $
3,419
16.3%
—
11,629
—
4,903
10,907 $
414,055 $
16,334 $
(1,094) $
17,428 $
—
—
—
—
6,977
396,268
94,525
27,703
66,822
—
— $
794
(100.0)%
n.m. $
11,629 $
8,519
36.5%
—
n.m. $
— $
7,021
5,932
—
56.3% $
44,697
147,354 $
4.5% $ 1,397,476 $ 1,623,036
(82.7)% $
(103.9)% $
(73.9)% $
125,872 $
24,886 $
100,986 $
417,566
111,739
305,827
(100.0)%
n.m.
229.7%
(13.9)%
(69.9)%
(77.7)%
(67.0)%
8,089 $
10,338
(21.8)% $
35,362 $
24,251
45.8%
306 $
7,783 $
585
9,753
(47.7)% $
(20.2)% $
5,636 $
29,726 $
2,493
21,758
126.1%
36.6%
6,793 $
54,678
(87.6)% $
60,312 $
274,585
(78.0)%
0.10 $
0.62
(83.9)% $
0.72 $
2.92
(75.3)%
0.07 $
0.52
(86.5)% $
0.59 $
2.51
(76.5)%
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14.
(2)
n.m.: not meaningful
Incentive-based costs related to the acquisitions and growth initiatives in the UK & Europe wealth management business and in the US and UK capital markets.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 25
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 Canaccord Genuity Wealth Management Holdings (Jersey) Limited
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 and fiscal year
ended March 31, 2023, the effect of reflecting our proportionate share of CGWM UK’s earnings is anti-dilutive for diluted EPS
purposes under IFRS, 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.
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. Subsequent to year-end, the Company
ceased its operations in Dubai. 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”. Our Asian-based operations, comprising China and Hong Kong,
have been combined with our Canadian and Australian capital markets operations to reflect the management of these operating units.
Goodwill
Due to the effect of weak equity market conditions globally and particularly in Canada, our Canadian capital markets operation
experienced substantial declines in business activity and revenue, and incurred material losses over the fiscal year. With these
adverse changes in the business environment, continued weakness in commodity prices and a challenging outlook as negative
economic conditions persist, it was determined that the carrying value of our Canadian capital markets cash generating unit (CGU)
exceeded its fair value as of December 31, 2022. As a result, the Company recorded an impairment charge in respect of goodwill
of $101.8 million in Q3/23. In addition, the Company recorded an impairment charge related to the unamortized intangible
assets of $0.8 million allocated to the Canadian capital markets CGU.
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 indefinite life intangible
assets recorded in Canaccord Genuity Capital Markets Canada, or goodwill in Canaccord Genuity Capital Markets US and Canaccord
Genuity Capital Markets UK & Europe.
Notwithstanding this determination as of March 31, 2023, 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 the
future. 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.
(1) See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
26 Management’s Discussion and Analysis
FOURTH QUARTER AND FISCAL 2023 VS. FOURTH QUARTER AND FISCAL 2022
REVENUE
On a consolidated basis, revenue is generated through six primary activities: commissions and fees associated with agency
trading and private client wealth management activity, investment banking, advisory fees, principal trading, interest and other.
REVENUE BY ACTIVITY AS A PERCENTAGE OF FIRMWIDE REVENUE
Commissions and fees
Investment banking
Advisory fees
Principal trading
Interest
Other
For three months ended March 31
2023
45.7%
11.8%
24.3%
6.3%
10.7%
1.2%
2022
39.4%
21.8%
24.5%
8.4%
2.1%
3.8%
Quarter-over-
quarter change
6.3 p.p.
(10.0) p.p.
(0.2) p.p.
(2.1) p.p.
8.6 p.p.
(2.6) p.p.
Year ended March 31
2023
49.6%
10.7%
24.1%
7.8%
7.6%
0.2%
2022
37.2%
27.5%
24.1%
7.8%
1.8%
1.6%
Year-over-
year change
12.4 p.p.
(16.8) p.p.
0.0 p.p.
(0.0) p.p.
5.8 p.p.
(1.4) p.p.
Canaccord Genuity Group Inc. (total)
100.0%
100.0%
100.0%
100.0%
p.p.: percentage points
Firm-wide revenue for the three months ended March 31, 2023 was $430.4 million, a decrease of 13.9% or $69.4 million
compared to the same period a year ago. The decrease was primarily driven by the broad market downturn beginning at the start
of our current fiscal year, which has resulted in a significant decline in new issue activity compared to the same period a year ago.
This decline was partially offset by higher firm-wide interest revenue during the three-month period, which increased by 347.7% year-
over-year to $45.9 million. Firm-wide revenue for fiscal 2023 was $1.5 billion, a decrease of 26.2% year-over-year. The most
notable decrease was in investment banking, which decreased by $400.8 million or 71.3% year-over-year.
Commissions and fees revenue is primarily generated from private client investment management trading activity and institutional
sales and trading. Firm-wide revenue generated from commissions and fees decreased slightly, by $0.2 million or 0.1% to
$196.8 million in Q4/23 compared to Q4/22. Fiscal 2023 commissions and fees revenue were $749.1 million, a decrease of
1.7% or $12.7 million compared to the prior year. The decrease in the 12-month period primarily reflected lower contributions from
our Canadian capital markets business, which was impacted by facilitation losses and market value adjustments in the first
quarter of fiscal 2023.
Firm-wide investment banking revenue for the fourth fiscal quarter decreased by $57.8 million or 53.2% year-over-year, to
$51.0 million, reflecting the continued broad-market reduction in new issue activity which impacted revenue across all business
units. When compared to the previous quarter, investment banking revenue increased by 7.3%. Further contributing to the overall
decrease in consolidated investment banking revenue was a decrease of $3.7 million or 27.0% in our Canaccord Genuity Wealth
Management segment compared to Q4/22, reflecting the impact of reduced new issue activity in our Canadian and Australian
wealth management businesses during the three-month period. Investment banking revenue for the year ended March 31,
2023 amounted to $160.9 million, a year-over-year decrease of $400.8 million or 71.3%, due to the significant reduction in new
issue activity across all our core operations as discussed above.
Firm-wide advisory fee revenue in Q4/23 decreased by $17.7 million or 14.5% from the same quarter a year ago, to $104.6 million.
Our US operations contributed $59.7 million of advisory revenue, representing a decrease of $5.2 million or 8.0% compared to
the same period in the prior year. This reduction reflects the more challenging environment for completions and lower valuations,
consistent with industry trends. Firm-wide advisory revenue for fiscal 2023 amounted to $364.6 million, a year-over-year decrease of
26.1% or $128.5 million, largely driven by a reduction in activity in our US and Canadian capital markets operations.
Firm-wide principal trading revenue was $26.9 million in Q4/23, representing a decrease of $15.0 million or 35.8% decrease
compared to Q4/22. For the year ended March 31, 2023, firm-wide trading revenue was $117.2 million, a decrease of $41.7 million
or 26.3% as a result of reduced market-wide trading activity when compared to the prior year.
Firm-wide interest revenue was $45.9 million for the three months ended March 31, 2023, representing an increase of $35.7 million
or 347.7% from Q4/22; this is largely attributable to our Canadian wealth management and capital markets operations, which
contributed interest revenue of $13.8 million and $8.6 million, respectively, for the three-month period. Interest revenue for fiscal
2023 was $115.2 million, an increase of $79.2 million or 219.9%, also mainly attributable to our Canadian wealth management
and capital markets operations. The increase in interest revenue in both the three and 12-month periods is attributable to the
increase in market rates compared to the same periods in fiscal 2022.
Other revenue was $5.1 million for Q4/23, a decrease of $14.3 million or 73.6% from the same period a year ago. In fiscal
2023, a fair value adjustment on certain warrants, illiquid or restricted marketable securities resulted in a reduction in revenue of
$13.0 million, $11.4 million of which was incurred in the first fiscal quarter, reflecting the sharp declines in the market value of
certain inventory and warrant positions related to our investment banking activities in Australia and Canada. The fair value adjustment
is excluded for management reporting purposes as it is not used by management to assess operating performance and is
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 27
excluded for purposes of determining net income excluding significant items(1). Future changes in the fair value of certain marketable
securities as determined under applicable accounting standards may be significant and will be recorded through the consolidated
statements of operations. Partially offsetting the fair value adjustment was an increase in interest income resulting from higher
interest rates during the current fiscal year.
EXPENSES
Firm-wide expenses for the three months ended March 31, 2023 were $425.0 million, an increase of 5.4% or $21.7 million from
Q4/22. Total expenses excluding significant items(1) as a percentage of revenue amounted to 96.2%, an increase 15.5 percentage
points compared to the three months ended March 31, 2022.
For the year ended March 31, 2023, expenses were $1.5 billion compared to $1.7 billion for the same period in the prior year, a
decrease of 7.4%. Total expenses excluding significant items(1) as a percentage of revenue increased by 12.2 percentage points
compared to fiscal 2022.
EXPENSES AS A PERCENTAGE OF REVENUE
Compensation expense
Other overhead expenses(1)
Acquisition-related costs
Fair value adjustment of non-controlling
interests derivative liability
Change in fair value of contingent
consideration
Costs associated with redemption of
convertible debentures
Impairment of goodwill and other intangible
assets
Total
Three months ended March 31
2023
64.1%
35.2%
0.0%
2022
59.0%
21.6%
0.1%
Quarter-over-
quarter change
5.1 p.p.
13.6 p.p.
(0.1) p.p.
Year ended March 31
2023
62.0%
33.1%
0.5%
2022
61.0%
19.4%
0.4%
Year-over-
year change
1.0 p.p.
13.7 p.p.
0.1 p.p.
2.7%
0.0%
(2.7) p.p.
0.8%
0.4%
0.4 p.p.
(3.3)%
0.0%
(3.3) p.p.
(0.9)%
0.0%
(0.9) p.p.
0.0%
0.0%
0.0 p.p.
0.0%
0.3%
(0.3) p.p.
0.0%
98.7%
0.0%
80.7%
0.0 p.p.
18.0 p.p.
6.8%
102.3%
0.0%
81.5%
6.8 p.p.
20.8 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
COMPENSATION EXPENSE
Firm-wide compensation expense in Q4/23 was $276.1 million, a decrease of $18.6 million or 6.3% compared to Q4/22. Total
compensation expense as a percentage of revenue increased from 59.0% in Q4/22 to 64.1% in Q4/23, an increase of 5.2 percentage
points. The increase in compensation ratio was partially due to changes in the value of stock-based compensation awards as
well as shortfall coverage in certain discretionary compensation pools arising from lower revenue levels.
Compensation expense for fiscal 2023 was $936.9 million, a decrease of $311.3 million or 24.9% compared to the same period
in the prior year. Compensation expense as a percentage of revenue increased by 1.0 percentage point to 62.0% for fiscal
2023, reflecting the softer revenue environment.
OTHER OVERHEAD EXPENSES
(C$ 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
$
Three months ended March 31
2023
23,417 $
6,904
23,239
23,915
43,344
10,838
6,552
13,326
2022
23,588
5,327
20,336
7,483
29,434
8,945
6,697
6,214
Quarter-over-
quarter change
(0.7)% $
29.6%
14.3%
219.6%
47.3%
21.2%
(2.2)%
114.5%
Year ended March 31
2023
96,083 $
21,986
85,482
54,539
138,461
41,634
26,335
36,058
2022
102,824
20,074
73,873
23,598
101,431
27,593
23,894
22,422
395,709
Year-over-
year change
(6.6)%
9.5%
15.7%
131.1%
36.5%
50.9%
10.2%
60.8%
26.5%
Total other overhead expenses
$
151,535 $
108,024
40.3% $
500,578 $
(1)
Includes amortization of intangible assets. See the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
Other overhead expenses were $151.5 million, an increase of 40.3% in Q4/23 compared to Q4/22. As a percentage of revenue,
other overhead expenses were 35.2% in Q4/23 compared to 21.6% in Q4/22, an increase of 13.6 percentage points.
General and administrative expense increased by $13.9 million or 47.3% for the quarter ended March 31, 2023, compared to the
same period in the prior year; this was due to higher promotion and travel expenses, as activity levels in connection with
conferences, client meetings and events increased following the end of COVID-19 restrictions.
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
28 Management’s Discussion and Analysis
Interest expense also increased by $16.4 million or 219.6% compared to Q4/22, primarily as a result of higher interest expense
in our CGWM UK operations associated with additional bank loans obtained in connection with the acquisition of PSW completed on
May 31, 2022 and increases in market rates. Interest expense in our Canadian capital markets operations increased by
$4.0 million due to increased stock borrowing activity and higher interest rates.
Amortization expense increased by $1.9 million or 21.2% compared to Q4 fiscal 2022 largely as a result of the amortization of
intangible assets acquired in connection with PSW and Results.
Other overhead expenses for fiscal 2023 increased by $104.9 million to $500.6 million, an increase of 26.5% from the prior
year. As a percentage of revenue, other overhead expenses increased by 13.8 percentage points compared to fiscal 2022. The
most significant increases in overhead expenses included general and administrative, interest, and amortization expenses for the
reasons discussed above. For fiscal 2023, development costs were $36.1 million, compared to $22.4 million for the same
period in the prior year; this change was due to an increase in incentive-based costs related to the acquisition of Sawaya and
other growth initiatives in our US capital markets operations, recruiting and incentive-based costs in our Canadian and Australian
wealth management operations, as well as costs in our Corporate & Other segment related to the expired management take-over
bid.
Acquisition-related costs of $7.4 million recorded in fiscal 2023 related to the acquisitions of PSW and Results.
Due to the effect of weak equity market conditions globally and particularly in Canada, our Canadian capital markets operation
experienced substantial declines in business activity and revenue and incurred material losses over the fiscal year. With these
adverse changes in the business environment, continued weakness in commodity prices, and a challenging outlook as negative
economic conditions persist, it was determined that the carrying value of our Canadian capital markets CGU exceeded its fair value
as of December 31, 2022. As a result, the Company recorded an impairment charge in respect of goodwill of $101.8 million
during Q3/23. In addition, the Company recorded an impairment charge related to the unamortized intangible assets of $0.8 million
allocated to the Canadian capital markets. CGU.
During the years ended March 31, 2023 and March 31, 2022, the Company recorded fair value adjustments of $11.6 million and
$8.5 million, respectively, related to the derivative liability component of the non-controlling interests related to the Convertible
Preferred Shares issued by CGWM UK.
In addition, the Company recorded a fair value adjustment of $14.3 million related to the reduction in the contingent consideration
liability in connection with the acquisition of Sawaya.
INCOME TAX
Income tax expense for the three months ended March 31, 2023 was $1.7 million on income before income taxes of $5.4 million
compared to tax expense of $27.6 million on income before income taxes of $96.5 million in Q4/22. The change in effective tax
rate was largely due to tax recoveries recorded in higher tax jurisdictions and the remeasurement of deferred tax assets related to
unvested awards in connection with share-based payment plans, and changes in the value of stock-based awards compared to
the previous quarter.
For the year ended March 31, 2023, income tax expense was $20.3 million on a loss before income taxes of $34.4 million,
compared to income tax expense of $107.7 million on income before income taxes of $378.3 million for the same period in the
prior year. The change in the effective tax rate was mainly due to the non-deductibility of the impairment of goodwill and intangible
assets for tax purposes. In addition, the remeasurement of deferred tax assets related to unvested awards in connection with share-
based payment plans also impacted the effective tax rate as the value of stock-based awards decreased compared to March 31,
2022.
NET INCOME (LOSS)
Net income for Q4/23 was $3.8 million compared to net income of $69.0 million in the same period a year ago. Net loss
attributable to common shareholders was $7.2 million compared to net income attributable to common shareholders of
$56.3 million for the three months ended March 31, 2022. Diluted loss per common share was $0.08 in Q4/23 compared to
diluted earnings per common share of $0.53 in Q4/22.
Net loss for fiscal 2023 was $54.7 million compared to net income of $270.6 million in the prior year. Net loss attributable to
common shareholders was $101.1 million compared to net income attributable to common shareholders of $236.8 million for fiscal
2022. Diluted loss per common share was $1.16 in the current year compared to diluted earnings per common share of $2.16
in fiscal 2022.
Excluding significant items(1), net income for Q4/23 was $17.4 million compared to net income of $66.8 million in Q4/22. Net
income attributable to common shareholders excluding significant items(1) was $6.8 million compared to $54.7 million for the same
period in the prior year. Diluted earnings per common share excluding significant items(1) was $0.07 in Q4/23 compared to
diluted earnings per common share excluding significant items(1) of $0.52 in Q4/22.
Excluding significant items(1) and before non-controlling interests and preferred share dividends, net income for fiscal 2023 was
$101.0 million compared to net income of $305.8 million for fiscal 2022. Diluted earnings per common share, excluding significant
items(1), were $0.59 for the 12-month period compared to diluted earnings per common share excluding significant items(1) of
$2.51 for the prior year.
(1) See Non-IFRS Measures on page 14
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 29
Business Segment Results – Q4 and Year Ended March 31, 2023 Compared with Q4 and
Year Ended March 31, 2022(1)(2)
(C$ thousands,
except number of employees)
Revenue
Canada
UK & Europe
US
Australia
Total revenue
Expenses
Intersegment allocations
(Loss) income 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
2023
Total
Canaccord
Genuity
Capital
Markets
Canaccord
Genuity
Wealth
Management
Corporate
and Other
2022
Total
$
148,356 $
96,275
482,750
65,472
792,853
836,819
21,651
297,145 $
343,728
5,019
62,412
708,304
591,589
23,293
9,240 $
—
—
—
9,240
116,422
(44,944)
454,741 $
440,003
487,769
127,884
1,510,397
1,544,830
—
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
—
$
(65,617) $
93,422 $
(62,238) $
(34,433) $
321,831 $
121,009 $
(64,571) $
378,269
792,853
740,418
21,651
708,304
559,286
23,293
22,191
97,772
(44,944)
1,523,348
1,397,476
—
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
—
30,784
935
125,725
1,467
(30,637)
427
125,872
2,829
324,575
890
148,511
1,292
(55,520)
405
417,566
2,587
(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.
(2) The operating results of the Australian operations have been fully consolidated and a non-controlling interest of 32.7% has been recognized for fiscal 2023. 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.
(3) See the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
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 it also conducts principal trading activities. The Company has offices
and employees in more than 20 locations in Canada, the US, the UK & Europe, Australia and Asia.
Our capital markets division has over 900 employees who are organized into product, industry, geographic and support groups.
Our industry coverage groups are focused in key growth sectors of the global economy and are primarily focused in the Technology,
Healthcare & Life Sciences (which includes cannabis), Metals & Mining, and Consumer & Retail sectors, with additional exposure
to the Diversified, Transportation & Industrials, Energy, and Structured Products & Sustainability sectors. Our capabilities include
private placements, equity and debt underwriting, IPOs, follow-on offerings, at-the-market offerings, debt finance and restructuring,
advisory (which includes M&A and private capital/financial sponsor advisory services), principal trading, block trades and market
making.
A disciplined mid-market focus with global alignment efforts has firmly entrenched Canaccord Genuity Capital Markets as a
leading global independent investment bank that specializes in its core focus sectors and geographies. Canaccord Genuity Capital
Markets’ integrated global platform and disciplined focus in key growth sectors of the global economy provides a competitive
advantage. Canaccord Genuity Capital Markets is focused on providing execution capabilities and specialized knowledge across
geographies, thereby providing a differentiated service when compared to other global investment banks.
Outlook
Canaccord Genuity Capital Markets continues to take steps 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 the global platform
through further integration of our global capabilities 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. During
fiscal 2023, the Company, through its UK & Europe capital markets business, completed the acquisition of the business of
Results, a UK-based advisory business focused in the Technology and Healthcare sectors. This transaction complements recent
investments by the Company to expand its global advisory business with the acquisitions of Petsky Prunier (2019) and Sawaya
(2021) in the US, as it adds expertise in the Healthcare and Technology sectors to its platform in the UK.
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
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
30 Management’s Discussion and Analysis
Company will continue to make disciplined investments, as appropriate, to further strengthen our operations in areas where we
believe we can capture additional market share.
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 throughout all market cycles. A culture of cost containment
continues to be reinforced throughout the Company, and strategies by which to lower operating costs in this division over the long
term continue to be explored.
FINANCIAL PERFORMANCE(1)(2)
(C$ thousands, except number
of employees)
Revenue
Expenses
Canada
70,141
Three months ended March 31, 2023
Three months ended March 31, 2022
UK(5)
US
Australia
Total
Canada
UK(5)
US
Australia
Total
28,168
114,292
13,539
226,140
74,481
29,237
146,532
61,796
312,046
Compensation expense
Other overhead expenses
44,732
17,829
16,338
9,691
80,237
42,607
12,074
153,381
3,712
73,839
36,921
13,921
19,330
7,679
77,981
33,648
39,276
173,508
3,830
59,078
Change in fair value of
contingent consideration
Total expenses
Intersegment allocations(3)
Income (loss) before income
taxes(3)
Non-controlling interests(2)
Excluding significant items(4)
Total revenue
Total expenses
Intersegment allocations(3)
Income (loss) before income
taxes(3)
—
— (14,278)
— (14,278)
—
—
—
—
—
62,561
26,029
108,566
15,786
212,942
50,842
27,009
111,629
43,106
232,586
3,787
372
914
200
5,273
5,469
770
998
480
7,717
$
3,793 $
1,767 $
4,812 $
(2,447) $
7,925 $
18,170 $
1,458 $
33,905 $
18,210 $
71,743
—
—
—
(576)
(576)
—
—
—
3,185
3,185
70,141
62,561
3,787
28,168
114,292
13,539
226,140
25,615
122,396
15,786
226,358
372
914
200
5,273
74,481
50,782
5,469
29,237
146,532
61,796
312,046
27,009
110,042
43,106
230,939
770
998
480
7,717
$
3,793 $
2,181 $
(9,018) $
(2,447) $
(5,491) $
18,230 $
1,458 $
35,492 $
18,210 $
73,390
Number of employees
275
180
394
86
935
278
143
378
91
890
(C$ thousands, except number
of employees)
Revenue
Expenses
Year ended March 31, 2023
Year ended March 31, 2022
Canada
UK(5)
US
Australia
Total
Canada
UK(5)
US
Australia
Total
148,356
96,275
482,750
65,472
792,853
341,453
120,355
667,176
174,090 1,303,074
Compensation expense
Other overhead expenses
96,256
64,583
57,917
296,074
38,576
488,823
168,942
78,963
385,975
107,906
741,786
30,142
145,431
18,070
258,226
53,735
28,205
122,094
14,879
218,913
Impairment of goodwill and
other assets
Change in fair value of
contingent consideration
Acquisition-related costs
Total expenses
Intersegment allocations(3)
Income (loss) before income
taxes(3)
Non-controlling interests(2)
Excluding significant items(4)
Total revenue
Total expenses
Intersegment allocations(3)
Income (loss) before income
taxes(3)
102,571
—
—
— 102,571
—
—
— (14,278)
1,477
—
— (14,278)
—
1,477
—
—
—
—
—
—
—
—
537
—
—
—
—
—
537
263,410
89,536
427,227
56,646
836,819
222,677
107,168
508,606
122,785
961,236
15,717
1,495
3,467
972
21,651
14,526
1,484
3,248
749
20,007
$ (130,771) $
5,244 $
52,056 $
7,854 $ (65,617) $ 104,250 $
11,703 $ 155,322 $
50,556 $ 321,831
—
—
—
2,688
2,688
—
—
—
6,581
6,581
148,356
160,659
15,717
96,275
482,750
65,472
792,853
341,453
120,355
667,176
174,090 1,303,074
86,887
436,226
56,646
740,418
222,301
107,168
506,238
122,785
958,492
1,495
3,467
972
21,651
14,526
1,484
3,248
749
20,007
$ (28,020) $
7,893 $
43,057 $
7,854 $
30,784 $ 104,626 $
11,703 $ 157,690 $
50,556 $ 324,575
Number of employees
275
180
394
86
935
278
143
378
91
890
(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 non-controlling interest of 32.7% has been recognized for fiscal 2023. A 15% non-controlling interest had been
recognized for the first nine months of fiscal 2022 and 32.7% for the fourth quarter of fiscal 2022.
Income before income taxes includes intersegment allocations and excludes non-controlling interests. See the Intersegment Allocated Costs section on page 39.
(3)
(4) Refer to the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
(5)
Includes our Dubai-based operations.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 31
REVENUE – CANACCORD GENUITY CAPITAL MARKETS
Revenue from Canaccord Genuity Capital Markets is generated from commissions and fees earned in connection with investment
banking and advisory transactions and institutional sales and trading activity, as well as trading gains and losses from Canaccord
Genuity Capital Markets’ principal trading activity, including its international trading operations. In Australia and Canada, revenue is
also earned through inventory positions, which are included as part of investment banking revenue. The value of these positions
can fluctuate with changes in the market environment.
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
Three months ended
March 31
2023
2022
Quarter-over-
quarter change
Year ended
March 31
2023
2022
Year-over-year
change
31.0%
12.5%
50.5%
6.0%
100%
23.8%
9.4%
47.0%
19.8%
100%
7.2 p.p
3.1 p.p
3.5 p.p
(13.8) p.p
18.7%
12.1%
60.9%
8.3%
100%
26.2%
9.2%
51.2%
13.4%
100%
(7.5) p.p
2.9 p.p
9.7 p.p
(5.1) p.p
Canaccord Genuity Capital Markets generated $226.1 million in revenue for the three months ended March 31, 2023, a decrease
of 27.5% or $85.9 million from the same quarter a year ago. Our US capital markets business was the largest contributor of
revenue for the three-month period, which amounted to $114.3 million, or 50.5% of total capital markets revenue. The largest
decrease was recorded in our Australian capital markets business, where Q4/23 revenue decreased by $48.3 million or 78.1% year-
over-year to $13.5 million.
For the 12 months ended March 31, 2023, revenue for our global capital markets operations was $792.9 million, a decrease of
$510.2 million or 39.2% compared to the prior year.
Declines in the three- and 12-month periods were attributable to a market-wide reduction in activity levels, primarily in investment
banking. In addition to the more challenging environment, sharp declines in the market value of certain inventory and warrant
positions earned in respect of our investment banking activities had a negative impact on year-to-date revenues earned by our
Australian capital markets business and, to a lesser degree, our Canadian capital markets business.
Investment banking
The substantial reduction in market-wide underwriting activities persisted through fiscal 2023, and this especially impacted
smaller issuers in several of our key growth sectors. Revenue from the Metals & Mining sector, a historic area of strength for the
Company, reflects contributions from Australia, Canada and the UK. Revenue from the Healthcare sector was led by our US and
Canadian capital markets businesses and includes transactions with companies in the Cannabis sector. Revenue in the Other
segment was led by our UK and Canadian businesses and included transactions with companies in the Energy sector.
Investment banking revenue for the three months ended March 31, 2023 was $40.9 million, a decrease of $54.1 million or
56.9% compared to Q4/22. When compared to Q3/23, investment banking revenue increased modestly, by 8.6%. Investment
banking revenue for fiscal 2023 was $126.6 million, a significant decrease of $336.5 million or 72.7% compared to fiscal 2022,
reflecting the challenging backdrop for capital raising activities across our industry that impacted several of our core focus
sectors. As discussed above, investment banking revenue was impacted by the sharp decline in the market value of certain
inventory and warrant positions related to our investment banking activities in Canada and Australia as well as certain market
value adjustments related to our facilitation activity in Canada, which primarily impacted our first fiscal quarter results.
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
Healthcare
Technology
Metals & Mining
Consumer & Retail
Other
Total
Fiscal 2023
Global
Canada
US
UK & Dubai
Australia
16%
6%
51%
4%
23%
15%
5%
42%
1%
37%
67%
16%
2%
14%
1%
0%
8%
12%
0%
80%
3%
3%
78%
4%
12%
100.0%
100.0%
100.0%
100.0%
100.0%
Note in reference to the tables above: Transactions with companies in the Cannabis sector in Canada are included under the Healthcare sector.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
32 Management’s Discussion and Analysis
Advisory
Increasing contributions from higher-margin advisory activities helps to offset the inherent volatility of our capital raising activities
and continues to be an important strategic priority for the Company. Our specialized expertise in key sectors of the economy and our
track record of success in equity capital markets activities position 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. Meanwhile, our advisory activities outpaced the broader market in the first
half of fiscal 2023, M&A completions in the second half were down from the yearly and quarterly comparison periods. Advisory
revenue earned in Q4/23 was $103.8 million, a decrease of $17.8 million or 14.6% when compared to the same period last year,
and an increase of 38.0% when compared to Q3/23. Revenue in fiscal 2023 earned through capital markets advisory decreased
by 25.8% year-over-year to $362.5 million, which reflects the more challenging environment for completions and lower valuations.
Our US business was the largest contributor in this segment, with fiscal 2023 advisory revenue of $250.9 million, or 69.2% of
global capital markets advisory revenue, which was primarily earned in the Technology, Consumer & Retail and Healthcare sectors;
this reflects our investments in the growth of our capabilities.
ADVISORY FEES REVENUE BY SECTOR (AS A % OF ADVISORY FEES REVENUE FOR EACH GEOGRAPHIC REGION)
Sectors
Healthcare
Technology
Metals & Mining
Consumer & Retail
Other
Total
Principal trading
Fiscal 2023
Global
Canada
10%
54%
9%
16%
11%
10%
3%
67%
9%
11%
US
12%
73%
0%
13%
2%
UK & Dubai
3%
12%
3%
34%
48%
100.0%
100.0%
100.0%
100.0%
Principal trading revenue for the three months ended March 31, 2023 was $26.6 million, a decrease of $15.1 million or 36.2%
compared to Q4/22. For the year ended March 31, 2023, revenue earned from principal trading activity amounted to $116.9 million,
a decrease of $41.3 million or 26.1% compared to the prior fiscal year, primarily a reflection of lower market volatility that
reduced market activity and revenue opportunities when compared to the record levels set in the prior year. Our US business
contributed $104.2 million of trading revenues for the 12-month period, largely attributable to the International Equities Group.
Commissions and fees
Commissions and fees revenue was $43.8 million and $156.2 million for the three and 12-month periods ended March 31,
2023, with year-over-year decreases of 10.2% and 10.7%, respectively; these numbers reflect lower client trading activity and
reduced new issue activity. Commissions and fees revenue in our US operations for fiscal 2023 increased by $4.9 million or 5.2%
year-over-year, offset by a decrease of $20.6 million or 44.9% in our Canadian operations due to facilitation losses largely
recorded in Q1/23.
EXPENSES – CANACCORD GENUITY CAPITAL MARKETS
Expenses in our Canaccord Genuity Capital Markets division for the three months ended March 31, 2023 were $212.9 million, a
decrease of 8.4% or $19.6 million compared to the same period a year ago. For fiscal 2023, expenses decreased by $124.4 million
or 12.9% to $836.8 million. As a percentage of revenue, total expenses excluding significant items(1) in this division increased
by 26.1 percentage points and 19.8 percentage points for the three and 12-month period ended March 31, 2023, respectively,
compared to the same period in the prior year, due to the fixed nature of certain overhead expenses.
Compensation expense
Partly reflecting the reduction in incentive-based revenue, compensation expense in our capital markets division for the three months
and year ended March 31, 2023 decreased by $20.1 million or 11.6% and $253.0 million or 34.1%, respectively, compared to
the same period in the prior year. Total compensation expense as a percentage of revenue for the three months ended March 31,
2023 was 67.8%, an increase of 12.2 percentage points compared to Q4/22. The compensation ratio for Q4/23 for all regions
was negatively impacted by changes in the value of certain share-based compensation payments granted in prior periods and
shortfall coverage in certain discretionary compensation pools. The total compensation ratio was 61.7% for the year ended March 31,
2023, an increase of 4.8 percentage points from the prior year.
In Canada, total compensation expense as a percentage revenue increased by 14.2 percentage points and 15.4 percentage
points compared to the three and 12 months ended March 31, 2022, respectively, as a result of fixed staff costs relative to the
decrease in revenue during the current period and the related pressure on discretionary compensation pools. In the US, the
increases in compensation ratio for Q4/23 and fiscal 2023 were impacted by changes in the composition of revenue and the
associated variable compensation associated with the different revenue streams, as well as an increase in share-based payment
expense as discussed above. In Australia, a change in the relative levels of fixed and variable compensation and a significant
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 33
decline in revenue during the fourth quarter of fiscal 2023 contributed to a 25.6 percentage point increase in total compensation
ratio. Total compensation expense as a percentage of revenue decreased by 8.1 and 5.5 percentage points for the quarter and
year ended March 31, 2023, respectively, for our UK & Europe operations.
CANACCORD GENUITY CAPITAL MARKETS TOTAL 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
Three months ended
March 31
2023
63.8%
58.0%
70.2%
89.2%
67.8%
2022
49.6%
66.1%
53.2%
63.6%
55.6%
Quarter-over-
quarter change
14.2 p.p
(8.1) p.p
17.0 p.p
25.6 p.p
12.2 p.p
Year ended
March 31
2023
64.9%
60.2%
61.3%
58.9%
61.7%
2022
49.5%
65.6%
57.9%
62.0%
56.9%
Year-over-year
change
15.4 p.p
(5.4) p.p
3.4 p.p
(3.1) p.p
4.8 p.p
Other overhead expenses in our global capital markets increased by 25.0% and 18.0% compared to the three and 12-month
period of fiscal 2022, respectively.
On a quarterly and year-over-year basis, interest expense increased by $2.1 million or 52.0% and $5.8 million or 44.2%, respectively,
largely driven by stock borrowing activity in our Canadian capital markets operations. Increased spending in promotion and travel
as well as conference costs in our Canadian and US capital markets operations were the primary drivers of higher general and
administrative expenses, which increased by 84.6% and 55.6% compared to the three and 12-month period of fiscal 2022,
respectively. These activities were targeted investments in our business development and talent retention efforts, which were
concentrated in a short period following two years of COVID-19 restrictions. More normalized levels are expected going forward.
Partially offsetting the overall increase in overhead expenses for the three months and fiscal year ended March 31, 2023 was a
decrease in trading costs of $0.8 million or 4.1% and $6.7 million or 8.1%, respectively, compared to the same period in the prior
year; this was mainly due to lower trading costs in our US operations in connection with reduced trading activity during the
periods.
Amortization expense decreased by 37.2% or $1.2 million in Q4/23 but increased by 51.9% or $3.5 million for fiscal 2023 when
compared to the same periods of the prior year, largely due to the amortization of intangibles acquired in connection with the
acquisitions of Sawaya, which closed on December 31, 2021, and Results, which was completed on August 17, 2022.
Acquisition-related costs of $1.5 million recorded during fiscal 2023 related to the acquisition of Results, which was completed
on August 17, 2022.
In addition, the Company recorded a fair value adjustment of $14.3 million related to fair value changes in the contingent
consideration liability in connection with the acquisition of Sawaya.
Due to the effect of weak equity market conditions globally, our Canadian capital markets operation experienced declines in
business activity and revenue and incurred material losses over the fiscal year. With these adverse changes in the business
environment, continued weakness in commodity prices, and a challenging outlook as negative economic conditions persist, it was
determined that the carrying value of our Canadian capital markets CGU exceeded its fair value as of December 31, 2022. As a
result, the Company recorded an impairment charge in respect of goodwill of $101.8 million in Q3/23. In addition, the Company
recorded an impairment charge related to the unamortized intangible assets of $0.8 million allocated to the Canadian capital
markets CGU.
Income before income taxes
Income before income taxes including allocated overhead expenses for the three months ended March 31, 2023 was $7.9 million
for our combined capital markets business, compared to net income of $71.7 million in the same period a year ago. Excluding
significant items(1) loss before taxes was $5.5 million in Q4/23 compared to income before income taxes of $73.4 million in the
same period of fiscal 2022.
For fiscal 2023, loss before income taxes including allocated overhead expenses was $65.6 million compared to net income
before income taxes of $321.8 million for fiscal 2022. Excluding significant items(1) net income before taxes declined by
$293.8 million or 90.5% to $30.8 million.
The decline in our quarterly and fiscal year income before taxes in our global capital markets business was largely attributable to
the significant decline in revenue across our core operations as a result of the global market downturn, in addition to the impact of
markdowns certain inventory and warrant positions earned in respect of our investment banking activities and mostly recorded
during Q1/23.
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
34 Management’s Discussion and Analysis
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, 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, 2023. Revenue earned by this business is largely generated through fee-based accounts, portfolio
management, interest and financial planning activities. Fee-related revenue as a percentage of total revenue in this business was
80.2% for the year ended March 31, 2023. The business offers services to domestic (UK) and international 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 252 Investment Professionals on March 31, 2023.
On March 31, 2023, Canaccord Genuity Wealth Management had nine offices located across Canada, including IAs who are
registered in the US. Fee-related revenue as a percentage of total revenue in this business was 46.2% for fiscal 2023 ended
March 31, 2023. This business had 145 Advisor teams on March 31, 2023.
In Australia, Canaccord Genuity Wealth Management had nine offices on March 31, 2023. This business had 119 Advisor teams
on March 31, 2023.
Outlook
Our strategic shift to strengthening contributions from our global wealth management segment continues to be a major focus for
the Company. Management’s priorities for Canaccord Genuity Wealth Management will be focused on growing AUA and AUM 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 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. We are increasingly improving synergies as we integrate the businesses that we have acquired in the last
12 months.
In connection with the acquisition of PSW which was completed on May 31, 2022, CGWM UK added £100 million ($159.4 million
as of May 31, 2022) 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 Canaccord Genuity Wealth Management Holdings (Jersey) Limited in the amount of £65.3 million ($104.1 million as
of May 31, 2022). With this investment, and with the small equity component issued in connection with the acquisition, the
Company’s effective as-converted interest in CGWM UK is approximately 66.9%, subject to the liquidation preference associated
with the Convertible Preferred Shares and the Preference Shares.
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 IAs. 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 growth and
profitability. We maintain a strong focus on investing in technology and training programs and building a comprehensive suite of
products targeted at attracting high net worth investors and providing resources to advisors to help them grow their businesses.
Subsequent to the end of the third fiscal quarter, on February 1, 2023, the Company announced that it has entered into a definitive
agreement with Mercer Global Investments Canada Limited to acquire Mercer’s Canadian Private Wealth Business. The transaction
closed on May 29, 2023.
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
addition to the leveraging of the benefits provided by its connection to Canaccord Genuity’s capital markets business in the region.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT NORTH AMERICA(1)(2)
Management’s Discussion and Analysis 35
(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(2)
Income before income taxes(2)
AUM (discretionary)(3)
AUA(4)
Number of Advisory Teams
Number of employees
Excluding significant items(5)
Total expenses
Intersegment allocations(2)
Income before income taxes(2)
Three months ended
March 31
2023
2022
Quarter-over-
quarter
change
Year ended
March 31
2023
2022
$
78,410 $
76,165
2.9% $ 302,164 $ 335,279
43,453
19,256
62,709 $
4,837
10,864 $
8,834
35,694
145
499
47,426
17,083
64,509
6,555
5,101
8,482
37,881
146
489
(8.4)%
12.7%
168,001
73,763
198,197
60,079
(2.8)% $ 241,764 $ 258,276
20,659
20,926
56,344
39,474 $
(26.2)%
113.0% $
4.1%
(5.8)%
(0.7)%
2.0%
Year-over-
year
change
(9.9)%
(15.2)%
22.8%
(6.4)%
1.3%
(29.9)%
62,709 $
4,837
64,509
6,555
(2.8)% $ 241,764 $ 258,276
20,659
20,926
(26.2)%
10,864 $
5,101
113.0% $
39,474 $
56,344
(6.4)%
1.3%
(29.9)%
$
$
$
$
(1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14.
(2)
Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 39.
(3) AUM in Canada 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.
(4) AUA in Canada is the market value of client assets administered by the Company, from which the Company earns commissions and fees and includes AUM. See Non-IFRS Measures on page 14.
(5) Refer to Non-IFRS Measures on page 14 and the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
Revenue from Canaccord Genuity Wealth Management North America was $78.4 million, an increase of $2.2 million or 2.9%
compared to the three months ended March 31, 2022. For the year ended March 31, 2023, revenue was $302.2 million, a reduction
of $33.1 million or 9.9%. Investment banking revenue in this business segment decreased by 30.3% and 70.6% year-over-year
for the three- and 12-month periods ended March 31, 2023, due to lower new issue activity, which was partially offset by higher
interest revenue. The higher interest rate environment has benefited interest income associated with our deposit and lending
activities in this business. Interest income was up 162.8% to $13.8 million for the three-month period and 144.0% to $46.2 million
for the fiscal year.
AUA(1) in Canada decreased by 5.8% to $35.7 billion at March 31, 2023, compared to $37.9 billion at March 31, 2022, reflecting
the reduction in market values which were partially offset by a net inflow of new client assets. As of March 31, 2023 there were
145 Advisory Teams in Canada, a decrease of one from a year ago. Fee-related revenue in our North American operations as
a percentage of total revenue increased by 6.8 percentage points compared to fiscal 2022 and accounted for 46.2% of the wealth
management revenue in Canada during fiscal 2023.
Total expenses in this business for the three months ended March 31, 2023 were $62.7 million, a decrease of $1.8 million or
2.8% compared to the same period a year ago. For the year ended March 31, 2023, total expenses were $241.8 million, a reduction
of $16.5 million or 6.4% compared to the previous year.
Compensation costs were down by $4.0 million or 8.4% for Q4/23 and by $30.2 million or 15.2% for fiscal 2023. Compensation
expense as a percentage of revenue was 55.4% for Q4 fiscal 2023 and 55.6% for the fiscal year, representing decreases of
6.8 percentage points and 3.5 percentage points, respectively.
Other overhead costs increased by $2.2 million or 12.7% and $13.7 million or 22.8% compared to the three and 12 months
ended March 31, 2022. The increase in expenses for the three- and 12 months ended March 31, 2023 was driven by higher
premises and equipment, communication and technology, and general and administrative expenses. General and administrative
expenses increased by $0.7 million or 18.7% compared to Q4/22 and by $5.5 million or 45.7% for the fiscal year due to higher
conference costs. Premises and equipment expense was up $0.7 million or 102.6% on a three-month basis and $1.7 million or
67.9% for the full year due to additional allocations from the Corporate and Other segment. Development costs also increased
by $2.2 million or 16.7% for the year ended March 31, 2023 as a result of the amortization of incentive-based payments to new
recruits.
Income before taxes for the three months ended March 31, 2023 was $10.9 million, an increase of $5.8 million or 113.0%
compared to Q4/22. On a fiscal year basis, income before income taxes was $39.5 million, a reduction of $16.9 million or 29.9%
compared to the prior year.
(1) See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
36 Management’s Discussion and Analysis
FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT UK & CROWN DEPENDENCIES(1)(5)
Three months ended March 31
Year ended March 31
2023
2022
Quarter-
over-
quarter
change
2023
2022
$
103,730 $
80,316
29.2% $
343,728 $
310,495
(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 cost
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)
42,527
41,922
—
84,449
558
18,723
8,798
55,101
252
737
$
76,776 $
558
26,396
8,492
38,202
22,345
515
61,062
927
18,327
7,064
52,830
220
581
55,849
927
23,540
6,479
Year-
over-
year
change
10.7%
0.6%
47.7%
(31.6)%
14.5%
27.2%
(6.1)%
93.4%
163,634
117,628
5,926
287,188
2,236
54,304
32,651
162,618
79,645
8,660
250,923
1,758
57,814
16,879
11.3%
87.6%
(100.0)%
38.3%
(39.8)%
2.2%
24.5%
4.3%
14.5%
26.9%
37.5% $
(39.8)%
12.1%
31.1%
255,348 $
2,236
86,144
27,015
223,895
1,758
84,842
14,386
14.0%
27.2%
1.5%
87.8%
(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 & Crown Dependencies is the market value of client assets managed and administered by the Company, from which the Company earns commissions and fees. This measure
Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 39.
includes both discretionary and non-discretionary accounts. See Non-IFRS Measures on page 14.
(4) Refer to Non-IFRS Measures on page 14 and the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
(5)
(6) The non-controlling interest is the portion of the net income after income taxes of CGWM UK not attributable to the Company.
Includes the operating results of Adam & Company since the acquisition date of October 1, 2021 and PSW as of May 31, 2022.
Revenue from our UK & Crown Dependencies wealth management business is largely generated through fee-related accounts and
portfolio management activities and, as such, is less sensitive to changes in levels of trading activity, although more sensitive
to changes in market values. Revenue for Q4/23 was $103.7 million, an increase of $23.4 million or 29.2% from Q4/22, and the
highest quarterly revenue on record for this operation. Revenue for fiscal 2023 also reached a new record of $343.7 million, an
increase of $33.2 million or 10.7% from the prior year. The higher interest rate environment has also positively impacted interest
income in this business, which has increased by $27.7 million to $30.3 million for fiscal 2023. Measured in local currency
(GBP), revenue was £63.1 million in the three months ended March 31, 2023 compared to £47.3 million for the three months
ended March 31, 2022, an increase of 33.3%. For the year ended March 31, 2023, revenue was £215.2 million compared to
£181.4 million for the year ended March 31, 2022, an increase of 18.6%.
AUM(1) in the UK & Crown Dependencies as of March 31, 2023 reached a new record of $55.1 billion, an increase of 4.3%
compared to $52.8 billion as of March 31, 2022, driven by increases in client assets as well as new assets added to our platform
following the completion of the acquisition of PSW on May 31, 2022. Measured in local currency (GBP), AUM(1) increased by
2.8% from £32.1 billion at March 31, 2022 to £33.0 billion at March 31, 2023. Fee-related revenue in our UK & Crown
Dependencies wealth management operations accounted for 80.2% of total revenue in the year ended March 31, 2023, an increase
of 1.6 percentage points from the prior year.
Total compensation expense increased by $4.3 million or 11.3% in Q4/23 and $1.0 million or 0.6% for fiscal 2023 compared to
the prior year. Total compensation expense as a percentage of revenue decreased by 6.6 percentage points from 47.6% to 41.0%
and by 4.8 percentage points from 52.4% to 47.6% for fiscal 2023, respectively.
Other overhead expenses in this business were $41.9 million for the three months ended March 31, 2023 compared to
$22.3 million in the same period in the prior year, an increase of $19.6 million or 87.6% year-over-year. The most significant
increase related to interest expense, which increased by $14.0 million compared to Q4/22 due to additional bank loans obtained
in connection with the acquisitions of Adam & Co and PSW. Amortization expense increased by $2.2 million or 43.4% compared
to the three months ended March 31, 2022, mainly as a result of the amortization of intangibles acquired in connection with the
acquisition of PSW completed on May 31, 2022. Communication and technology expense increased by $1.3 million or 41.9% to
support the increased headcount in this operation.
Other overhead expenses of $117.6 million for fiscal 2023 were up by $38.0 million or 47.7% from the prior year, with the most
significant increases in communication and technology, interest expense and amortization expense for the same reasons as discussed
(1) See Non-IFRS Measures on page 14
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 37
above. In addition, general and administrative expense increased by $2.1 million or 10.9% year-over-year, due to higher promotion
and travel costs as well as higher costs to support the expanded operations.
Acquisition-related costs of $5.9 million for the year ended March 31, 2023 related to the acquisition of PSW.
Fourth quarter fiscal 2023 income before income taxes was $18.7 million compared to $18.3 million for Q4/22, and net income
before taxes excluding significant items(1) was $26.4 million compared to $23.5 million for Q4/22. For the year ended March 31,
2023 net income before income taxes was $54.3 million compared to $57.8 million in fiscal 2022, and net income before taxes
excluding significant items(1) was $86.1 million compared to $84.8 million for the prior fiscal year.
FINANCIAL PERFORMANCE – CANACCORD GENUITY WEALTH MANAGEMENT AUSTRALIA(1)
(C$ 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(6)
AUM(4)
Number of investment professionals and
fund managers
Number of employees
Excluding significant items(5)
Total expenses
Intersegment allocations(3)
Income before income taxes(3)
Non-controlling interest(6)
Three months ended March 31
Year ended March 31
2023
2022
Quarter-
over-
quarter
change
2023
2022
$
14,969 $
17,793
(15.9)% $
62,412 $
74,633
11,105
4,314
15,419
54
(504)
(133)
5,432
119
231
$
15,301 $
54
(386)
(133)
13,245
3,804
17,049
253
491
89
5,352
115
222
16,932
253
608
89
44,492
18,145
62,637
131
(356)
23
51,505
16,024
67,529
253
6,851
791
(16.2)%
13.4%
(9.6)%
(78.7)%
(202.6)%
(249.4)%
1.5%
3.5%
4.1%
(9.6)% $
(78.7)%
(163.5)%
(249.4)%
62,174 $
131
107
23
67,055
253
7,325
791
(7.3)%
(48.2)%
(98.5)%
(97.1)%
Year-
over-
year
change
(16.4)%
(13.6)%
13.2%
(7.2)%
(48.2)%
(105.2)%
(97.1)%
(1) Financial measures are in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14.
(2)
Income before income taxes includes intersegment allocations. See the Intersegment Allocated Costs section on page 39.
(3) AUM is the market value of client assets managed and administered by the Company. See Non-IFRS Measures on page 14.
(4) Refer to Non-IFRS Measures on page 14 and the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
(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
During the three months ended March 31, 2023, Canaccord Genuity Wealth Management Australia generated revenue of
$15.0 million, a decrease of $2.8 million or 15.9% compared to the same period a year ago. For the year ended March 31, 2023,
revenue was $62.4 million, a reduction of $12.2 million or 16.4% compared to fiscal 2022. Investment banking revenue for the
fiscal year declined by 39.1% or $6.6 million due to lower new issue activity. AUM(1) in our Australian wealth management operations
was $5.4 billion as of March 31, 2023, an increase of 1.5% from Q4/22 largely due to an increase in net new assets in connection
with our recruiting initiatives. In addition, client assets(1) totalling $14.6 billion are also held on record in other less active
accounts on our Australian wealth management platforms compared to $17.5 billion as of March 31, 2022. Fee-related revenue
in our Australian operations as a percentage of total revenue accounted for 34.7% of the wealth management revenue during the
year ended March 31, 2023, an increase of 7.6 percentage points from fiscal 2022.
Total compensation expense decreased by $2.1 million or 16.2% and by $7.0 million and 13.6% for the three months and fiscal
year ended March 31, 2023, respectively, compared to the same periods in the prior year. As a percentage of revenue, total
compensation expense for Q4/23 and fiscal 2023 was 74.2% and 71.3%, respectively, reflecting a decrease of 0.3 percentage
points and an increase of 2.3 percentage points from the prior period comparatives, respectively.
Other overhead expenses of $4.3 million were $0.5 million or 13.4% higher compared to Q4/22 mainly due to an increase in the
amortization of right-of-use assets as a result of a reallocation of expenses between the Australian wealth and capital markets
operations. For the year ended March 31, 2023, other overhead expenses increased by $2.1 million or 13.2% compared to the
prior year, principally driven by an increase in development and communication and technology costs of $1.6 million and $0.5 million,
respectively, as a result of the operation’s active recruitment efforts in fiscal 2023.
Fourth quarter fiscal 2023 loss before income taxes was $0.5 million compared to net income before taxes of $0.5 million for
Q4/22. For the three months ended March 31, 2023, loss before taxes excluding significant items(1) was $0.4 million compared
to net income before income taxes of $0.6 million for Q4/22. Loss before income taxes for fiscal 2023 was $0.4 million compared
(1) See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
38 Management’s Discussion and Analysis
to income before income taxes of $6.9 million for the prior period. For the year ended March 31, 2023, net income before taxes
excluding significant items(1) was $0.1 million compared to $7.3 million for fiscal 2022.
CORPORATE AND OTHER SEGMENT(1)
FINANCIAL PERFORMANCE – CORPORATE AND OTHER SEGMENT
(C$ thousands, except number of employees
and % amounts)
2023
2022
Quarter-
over-
quarter
change
2023
2022
Three months ended March 31
Year ended March 31
Revenue
Expenses
Compensation expense
Other overhead expenses
Fair value adjustment of non-controlling
interests derivative
liability
Costs associated with redemption of
convertible debentures
Share of loss of an associate
Total expenses
Intersegment allocations(2)
(Loss) income before income taxes(2)
Number of employees
Excluding significant items(3)
Revenue
Total expenses
Intersegment allocations(2)
Loss before income taxes(2)
$
7,140 $
13,473
(47.0)% $
9,240 $
22,521
25,600
12,204
22,314
5,714
14.7%
113.6%
71,922
32,816
94,078
21,048
11,629
—
10
49,443
(10,722)
(31,581)
427
$
7,140 $
32,911
(10,722)
(15,049)
—
—
11
28,039
(15,452)
886
405
4,473
28,039
(15,452)
(8,114)
n.m.
11,629
—
(9.1)%
76.3%
30.6%
n.m.
5.4%
—
55
116,422
(44,944)
(62,238)
8,519
5,932
192
129,769
(42,677)
(64,571)
59.6% $
17.4%
30.6%
22,191 $
97,772
(44,944)
(85.5)%
(30,637)
17,121
115,318
(42,677)
(55,520)
Year-
over-
year
change
(59.0)%
(23.6)%
55.9%
36.5%
(100.0)%
(71.4)%
(10.3)%
(5.3)%
3.6%
29.6%
(15.2)%
(5.3)%
44.8%
(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 39.
(3) Refer to Non-IFRS Measures on page 14 and the Q4 and Fiscal 2023 Selected Financial Information Excluding Significant Items table on page 24.
n.m.: not meaningful
This 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 expenses 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 Canadian-based operations and support services, which are responsible for front- and back-office IT systems,
compliance and risk management, operations, finance, and all administrative functions. Allocations and charges to the Capital
Markets and Wealth Management segments in Canada and other regions are recorded as intersegment allocations.
Revenue in the Corporate and Other segment for the three months ended March 31, 2023 was $7.1 million compared to
$13.5 million in the same quarter a year ago. For the year ended March 31, 2023, revenue was $9.2 million compared to
$22.5 million a year ago. During the 12 months ended March 31, 2023, there was a change to the fair value adjustment recorded
on certain warrants and illiquid and restricted marketable securities, resulting in a decrease in revenue of $13.0 million, largely
recorded in Q1/23. 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 marketable securities as determined under applicable accounting standards may be significant and will
be recorded through the consolidated statements of operations. Interest revenue increased by $3.1 million or 248.8% and
$8.1 million or 148.7% for the three and 12-month period of fiscal 2023, respectively, compared to the same periods in the prior
year due to the increase in interest rates.
Expenses in this segment for the three months ended March 31, 2023 increased by $21.4 million or 76.3% to $49.4 million
compared to the three months ended March 31, 2022. On a fiscal year basis, total expenses decreased by $13.3 million or 10.3%.
Compensation expense increased by $3.3 million or 14.7% compared to the three months ended March 31, 2022 mainly due to
higher share-based payment expense compared to Q4/22. Compensation expense decreased by $22.2 million and 23.6% for fiscal
2023, reflecting both the reduced profitability of the Company as a whole and also a decline in the fair value of certain share-
based payment awards granted in prior periods compared to fiscal 2022.
The increase in other overhead expenses of $6.5 million in Q4 fiscal 2023 was principally due to $5.4 million of professional
fees related to the expired management take-over bid, as well as the net result of higher general and administrative expenses which
increased by $1.2 million to support higher headcount, partially offset by lower communication costs which decreased by
$0.8 million, as well as lower premises and equipment expense which decreased by $1.2 million due to a reallocation of expense
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 39
to the Canadian capital markets and wealth management operations. For the year ended March 31, 2023, other overhead
expenses amounted to $32.8 million, $11.8 million higher than fiscal 2022. The increase in other overhead expenses for fiscal
2023 was principally driven by professional fees and other costs incurred by the Company related to the expired management take-
over bid as well as higher general and administrative expense as discussed above.
During the years ended March 31, 2023 and March 31, 2022, the Company recorded a fair value adjustment of $11.6 million
and $8.5 million, respectively, related to the derivative liability component of the non-controlling interests related to the Convertible
Preferred Shares issued by CGWM UK.
Overall, the loss before income taxes was $31.6 million compared to income before income taxes of $0.9 million for the
three months ended March 31, 2022. The net loss before taxes excluding significant items(1) was $15.0 million for the three months
ended March 31, 2023, compared to a net loss before taxes of $8.1 million for the same period in the prior year. For fiscal
2023, loss before income taxes was $62.2 million compared to a loss of $64.6 million for fiscal 2022. Excluding significant items(1),
loss before income taxes was $30.6 million compared to a loss before income taxes of $55.5 million on a fiscal year basis.
INTERSEGMENT ALLOCATED COSTS
Included in the Corporate and Other segment are certain support services and other expenses that have been incurred to support
the activities within the Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management segments in Canada as
well as in all other regions. Certain trading, clearing and settlement charges are included as a trading cost in the applicable business
units and as a trading cost recovery in Corporate and Other. In addition, certain overhead costs are charged by Canaccord
Genuity Capital Markets UK & Europe to Canaccord Genuity Wealth Management UK & Crown Dependencies and are included in
intersegment allocated costs for these business units.
Quarterly Financial Information – Seven Fiscal Quarters Prior to Q4/23(1)
The following table provides selected quarterly financial information for the eight most recently completed financial quarters
ended on or before March 31, 2023. This information is unaudited but reflects all adjustments of a recurring nature, which are, in
the opinion of management, necessary to present a fair statement of the results of operations for the periods presented. Quarter-
to-quarter comparisons of financial results are not necessarily meaningful and should not be relied upon as indications of future
performance.
(C$ thousands, except number
of employees and % amounts)
Revenue
Canaccord Genuity Capital
Q4
Q3
Fiscal 2023
Q1
Q2
Q4
Q3
Fiscal 2022
Q1
Q2
Markets
$ 226,140 $ 196,879 $ 205,697 $ 164,137
$ 312,046
$ 361,893
$ 304,919
$ 324,216
Canaccord Genuity Wealth
Management:
North America
UK & Crown Dependencies
Australia
Corporate and Other
Total revenue
Net income (loss)
(Loss) earnings per common
share – basic
Diluted (loss) earnings per
common share
Net Income excluding
significant items(1)
Earnings per common share,
excluding significant
items(1) – basic
Diluted earnings per common
share, excluding significant
items(1)
$
$
$
$
$
78,410
103,730
14,969
7,140
430,389
3,763
77,364
85,691
16,633
5,549
382,116
(82,065)
73,429
80,970
14,889
5,537
380,522
26,564
72,961
73,337
15,921
(8,986)
317,370
(3,004)
76,165
80,316
17,793
13,473
499,793
68,995
82,589
81,741
20,571
5,423
552,217
66,732
72,367
75,109
18,752
4,014
475,161
61,785
104,158
73,329
17,517
(389)
518,831
73,053
(0.08) $
(1.10) $
0.17 $
(0.14)
(0.08) $
(1.10) $
0.14 $
(0.14)
17,428 $
28,197 $
35,426 $
19,935
$
$
$
0.62
0.53
66,822
$
$
$
0.59
0.52
84,632
$
$
$
0.56
0.49
69,719
$
$
$
0.72
0.63
84,654
0.10 $
0.20 $
0.30 $
0.13
$
0.62
$
0.80
$
0.66
$
0.84
0.07 $
0.16 $
0.25 $
0.11
$
0.52
$
0.69
$
0.58
$
0.73
(1) Data is in accordance with IFRS except for figures excluding significant items. See Non-IFRS Measures on page 14
(1) See Non-IFRS Measures on page 14
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
40 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
Change in fair value of
contingent consideration
Acquisition-related costs
Impairment of goodwill and
other intangible assets
Incentive based costs
related to
acquisitions
Significant items recorded in
Canaccord Genuity Wealth
Management
Amortization of intangible
assets
Acquisition-related costs
Incentive based costs
related to
acquisitions
Costs associated with
reorganization of
CGWM UK
Significant items recorded in
Corporate and Other
Costs associated with
redemption of
convertible debentures
Development costs
Fair value adjustment of
non-controlling interests
derivative liability
Total significant items –
expenses
Total expenses excluding
significant items
Net income before income
taxes – adjusted
Income tax expense
(recovery) – adjusted
Net income – adjusted
Net income attributable to
common shareholders
Earnings per common share
adjusted – basic
Diluted earnings per common
share adjusted – diluted
Q4
Q3
Q2
$
430,389 $
424,962
382,116 $
462,902
380,522 $
341,490
Fiscal 2023
Q1
317,370 $
315,476
Q4
Q3
Q2
499,793 $
403,245
552,217 $
457,234
475,161 $
388,124
Fiscal 2022
Q1
518,831
419,130
—
233
1,271
11,447
(9,000)
(1,400)
—
5,000
$
430,389 $
382,349 $
381,793 $
328,817 $
490,793 $
550,817 $
475,161 $
523,831
214
1,643
1,535
1,264
1,283
(14,278)
—
—
—
—
1,477
—
102,571
—
—
—
—
—
—
—
648
523
437
367
364
107
—
537
—
—
160
293
—
—
—
—
—
—
—
—
6,314
—
5,830
—
5,944
(1,656)
4,312
7,582
4,190
515
4,113
6,225
3,178
1,920
3,148
—
1,477
649
1,265
586
625
348
2,095
351
—
—
—
—
4,903
—
808
—
1,310
11,629
—
—
—
—
—
—
—
—
—
—
—
794
—
—
—
468
—
5,464
—
8,519
—
—
10,907
112,024
10,312
14,111
6,977
19,849
8,615
9,256
414,055
350,878
331,178
301,365
396,268
437,385
379,509
409,874
$
$
$
$
$
16,334 $
31,471 $
50,615 $
27,452 $
94,525 $
113,432 $
95,652 $
113,957
(1,094)
17,428 $
3,274
28,197 $
15,189
35,426 $
7,517
19,935 $
27,703
66,822 $
28,800
84,632 $
25,933
69,719 $
29,303
84,654
6,793 $
16,561 $
25,793 $
11,879 $
54,678 $
75,098 $
63,326 $
81,251
0.10 $
0.20 $
0.30 $
0.13 $
0.62 $
0.80 $
0.66 $
0.07 $
0.16 $
0.25 $
0.11 $
0.52 $
0.69 $
0.58 $
0.84
0.73
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14.
(2) 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
the fourth quarter of fiscal 2022 and first quarter of fiscal 2023, 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. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 41
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.
The Company recorded revenue of $430.4 million in Q4/23, which was approximately 4.0% lower than the average for the
previous seven quarters. On a consolidated basis, investment banking revenue declined from record level of $305.9 million in
Q4/21 to $51.0 million in Q4/23, due to lower market-wide activity in all our geographies. Advisory fees revenue of $104.6 million
was approximately 3.0% lower than the average of the last seven fiscal quarters, which included a strong first-half of fiscal 2023
and the record revenue which was achieved in fiscal 2022. Firm-wide commissions and fees revenue declined slightly by 0.1% year-
over-year to $196.8 million. Revenue from principal trading activities decreased by 35.8% year-over-year to $26.9 million.
The higher interest rate environment supported a 347.7% year-over-year increase in interest revenue to $45.9 million, which was
approximately 205% higher than the average of the last seven fiscal quarters. When compared to Q3/23, commissions and fees,
investment banking, advisory fees and interest revenues increased by 4.3%, 7.3%, 38.3% and 43.2%, respectively.
Global Capital Markets
Our global capital markets operations generated revenue of $226.1 million, a decrease of approximately 15% from the average
quarterly revenue for the past seven quarters due to the prolonged global market downturn, which has impacted activity levels in
all segments, but most notably investment banking. Compared to the previous quarter, revenue was 14.9% higher in Q4/23.
Our US capital markets operation was the biggest contributor to capital markets revenue with $114.3 million for the quarter, a
decrease of 1.2% from the previous quarter and 22.0% from Q4/22. Fourth quarter revenue in this region was approximately 23%
lower than the average of the last seven fiscal quarters. While advisory activity in this business has remained healthy, fourth
quarter advisory revenue in this segment was approximately 18% lower than the average of the last seven fiscal quarters, a
comparison period that included record quarterly revenues earned in fiscal 2022.
Revenue in our Canadian capital markets operations was $70.1 million in Q4/23, a decrease of 5.8% over Q4 fiscal 2022 and an
increase of 122.5% on a sequential basis. Fourth quarter revenue in this business was approximately 17% higher than the
average of the last seven fiscal quarters; this is primarily attributable to higher advisory and interest revenues, which were
approximately 51% and 172% higher than the average of the last seven fiscal quarters.
Revenue in our Australian capital markets operations decreased by 55.6% sequentially, principally as a result of a 59.9% decrease
in investment banking revenue which reflects lower activity levels in our core focus sectors. Fourth quarter revenue in this region
was approximately 58% lower than the average of the last seven fiscal quarters, a comparison period that included record quarterly
investment banking revenues earned in the second half of fiscal 2022.
Our UK & Europe capital markets operations recorded revenue of $28.2 million for Q4/23, an increase of 46.3% compared to the
previous quarter. Fourth quarter revenue in this business was approximately 5.0% higher than the average of the last seven
fiscal quarters. Advisory fees revenue was sequentially up 40.7% and approximately 4.0% higher than the average of the previous
seven quarters.
Global Wealth Management
Fourth quarter revenue in our global wealth management businesses amounted to $197.1 million, an increase of 9.7% compared
to Q3/23. Fourth quarter revenue in this division was approximately 12% higher than the average of the last seven fiscal quarters.
Revenue in our Canaccord Genuity North America wealth management operations increased by 2.9% compared to Q4/22 and by
1.4% sequentially. Fourth quarter revenue in this business was approximately 2% lower than the average of the last seven
fiscal quarters. When compared to the average of the past seven fiscal quarters, investment banking revenue in this business
was approximately 47% lower while interest revenue increased by approximately 88.0%. AUA(1) were $35.7 billion, an increase of
2.8% when measured against Q3/23, and were 5.8% below their peak of $37.9 billion achieved in Q4/22, reflecting reduced market
values in connection with the broad market downturn.
The CGWM UK operations have contributed consistently to our revenue and profitability levels. Revenue for Q4/23 was
$103.7 million, approximately 32% higher than the average for the past seven quarters, supported by stronger commissions and
fees and interest revenue. AUM(1) for this group increased by 4.3% as of the end of Q4/23 to $55.1 billion compared to Q4/22 due
to increases in client asset values as well as new assets added to our platform following the completion of the acquisition of
PSW.
(1) Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 14.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
42 Management’s Discussion and Analysis
Revenue in our Australia wealth management operations reached $15.0 million in Q4/23, a decrease of 10.0% over the previous
quarter and a decline of 15.9% compared to the corresponding quarter in fiscal 2022. Fourth quarter revenue in this business
was approximately 14% lower than the average of the last seven fiscal quarters, a comparison period that included record quarterly
investment banking revenue earned in fiscal 2022. AUM(1) as of March 31, 2023 were $5.4 billion, an increase of 1.5% compared
to the corresponding period in fiscal 2022, reflecting our active recruitment efforts in fiscal 2023.
Corporate and Other
The movement in revenue in the Corporate and Other division was mainly due to fair value adjustment recorded on certain illiquid
or restricted marketable securities, as well as changes in interest revenue and foreign exchange gains or losses resulting from
fluctuations in the Canadian dollars.
Financial Condition
Below are selected balance sheet items for the past five fiscal years:
(C$ 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 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
Non-controlling interests
Shareholders’ equity
Balance sheet summary as at March 31
2023
2022
2021
2020
2019
$ 1,008,432 $ 1,788,261
1,051,229
3,438,655
1,967
98,224
22,928
34,643
697,272
117,066
715,078
3,355,203
34,209
90,733
18,101
48,180
928,735
103,729
$ 1,883,292
1,041,583
3,973,442
738
81,229
12,193
23,070
531,038
85,216
$
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
—
$ 6,302,400 $ 7,250,245
$ 7,631,801
$ 5,956,195
$ 4,749,294
$
— $
— $
— $
— $
556,303
3,739,992
2,177
13,342
26,712
17,325
—
92,526
98,378
293,780
55,728
7,500
—
343,998
1,054,639
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
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
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
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
Total liabilities and equity
$ 6,302,400 $ 7,250,245
$ 7,631,801
$ 5,956,195
$ 4,749,294
ASSETS
Cash and cash equivalents were $1.0 billion on March 31, 2023 compared to $1.8 billion on March 31, 2022. Refer to the
Liquidity and Capital Resources section on page 44 for more details.
Securities owned were $0.7 billion on March 31, 2023 compared to $1.1 billion on March 31, 2022, mainly due to a decrease in
equities and convertible debentures owned as of March 31, 2023.
Accounts receivable were $3.4 billion at March 31, 2023 compared to $3.4 billion at March 31, 2022, in line with the prior year.
Goodwill was $622.8 million and intangible assets were $305.9 million on March 31, 2023. On March 31, 2022, goodwill was
$510.3 million and intangible assets were $187.0 million. These amounts represent the goodwill and intangible assets acquired
through the purchases of Genuity Capital Markets, Collins Stewart Hawkpoint plc, Eden Financial Ltd., Hargreave Hale, Jitneytrade,
McCarthy Taylor, Petsky Prunier, Thomas Miller, Patersons, Adam & Company and Sawaya, and as of March 31, 2023, also
included PSW and Results.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 43
During fiscal 2023, the Company recorded an impairment charge of $102.6 million on the goodwill and intangible assets related
to the Canadian capital markets CGU.
Right-of-use assets at March 31, 2023 were $103.7 million compared to $117.1 million at March 31, 2022, mainly due to
amortization recorded during the period.
Other assets, consisting of income taxes receivable, deferred tax assets, equipment and leasehold improvements, and investments,
were $191.2 million at March 31, 2023 compared to $157.8 million at March 31, 2022. The increase in other assets was
mainly due to higher income taxes receivable at March 31, 2023.
LIABILITIES AND EQUITY
Securities sold short were $556.3 million at March 31, 2023 compared to $567.3 million at March 31, 2022, mostly due to an
increase in short positions in corporate and government debt.
Accounts payable and accrued liabilities, including provisions, were $3.7 billion at March 31, 2023, a decrease from $4.9 billion
at March 31, 2022, mainly due to a decrease in payables to clients.
Subordinated debt, income taxes payable and deferred tax liabilities were $65.4 million at March 31, 2023, an increase from
$48.3 million at March 31, 2022. The increase was mostly due to the increase in deferred tax liabilities, partially offset by a
reduction in income taxes payable.
There were also lease liabilities of $119.2 million recorded as of March 31, 2023 [March 31, 2022 – $125.5 million].
At the end of March 31, 2023, deferred and contingent consideration was $54.0 million [March 31, 2022 – $45.3 million].
During the year ended March 31, 2023, there was an adjustment to the contingent consideration related to Sawaya of $1.5 million
with a corresponding increase in goodwill. In addition, there was $16.9 million and $3.3 million of contingent and deferred
consideration, respectively, arising from the Results acquisition as of March 31, 2023. In addition, the Company recorded a fair
value adjustment of $14.3 million related to a change in the fair value of the contingent consideration liability in connection with the
acquisition of Sawaya.
On May 31, 2022, institutional investors acquired a new series of Convertible Preferred Shares in the amount of £65.3 million
($104.1 million) issued by the Company’s subsidiary, CGWM UK. Both series of the Convertible Preferred Shares and Preference
Shares issued to management and employees of CGWM UK 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. During the years
ended March 31, 2023 and March 31, 2022, the Company recorded a fair value adjustment of $11.6 million and $8.5 million,
respectively, related to the derivative liability component of the non-controlling interests related to the Convertible Preferred Shares
issued by CGWM UK. The carrying value of the derivative liability component of £37.0 million (C$61.7 million) [March 31,
2022 – £25.0 million (C$41.1 million)] is included in other liabilities in the statement of financial position as of March 31, 2023.
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, Adam & Company and PSW. The loan is repayable in instalments of principal and interest and
matures in September 2024. The interest rate on this loan is 7.177% per annum as at March 31, 2023 [March 31,
2022 – 3.375% per annum]. The total bank loans outstanding as of March 31, 2023, net of financing charges, was $307.1 million
[March 31, 2022 – $152.0 million].
Excluding the bank loan in connection with the acquisitions of Hargreave Hale, Thomas Miller, Adam & Company and PSW as
described above, subsidiaries of the Company have other credit facilities with banks in Canada and the UK for an aggregate amount
of $667.4 million [March 31, 2022 – $657.0 million]. These limited 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,
2023, there were no balances outstanding under these other credit facilities [March 31, 2022 – $nil].
Non-controlling interests were $344.0 million at March 31, 2023 compared to $238.7 million as at March 31, 2022, an increase
of $105.3 million, mainly related to the equity component of the new Series of Convertible Preferred Shares issued by CGWM
UK, net of dividends received and foreign exchange movement. Non-controlling interests also represent 32.7% [March 31,
2022 – 32.7%] 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
$3.9 million (US$2.9 million) [March 31, 2022 – $3.7 million (US$2.9 million)] as rent guarantees for its leased premises in New
York. As of March 31, 2023 and March 31, 2022, there were no outstanding balances under these standby letters of credit.
Bank indebtedness and other credit facilities
The Company enters into call loans or overdraft positions primarily to facilitate the securities settlement process for both client
and Company securities transactions. The bank indebtedness is collateralized by unpaid client securities and/or securities owned
by the Company. As of March 31, 2023, and March 31, 2022, the Company had no bank indebtedness outstanding under these
facilities.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
44 Management’s Discussion and Analysis
In the normal course of business, the Company enters into contracts that give rise to commitments of future minimum payments
that affect its liquidity.
The following table summarizes the Company’s long-term contractual obligations on March 31, 2023:
(C$ thousands)
Premises and equipment operating leases
Bank loan(1)
Total contractual obligations
Total
Fiscal 2024
Fiscal 2025 –
Fiscal 2026
Fiscal 2027 –
Fiscal 2028
142,547
342,897
485,444
34,148
35,365
69,513
47,809
307,532
355,341
22,188
—
22,188
Thereafter
38,402
—
38,402
(1) Bank loan obtained to finance a portion of the cash consideration for the acquisitions in CGWM UK. The bank loan bears interest at 7.177% [March 31, 2022 – 3.375%] 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 preferred shares, common shares, retained earnings and accumulated other
comprehensive income (OCI). On March 31, 2023, cash and cash equivalents were $1.0 billion, a decrease of $779.8 million from
$1.8 billion as of March 31, 2022. During fiscal 2023 ended March 31, 2023, financing activities provided cash in the amount
of $71.2 million, mainly due to proceeds from a bank loan obtained in connection with the acquisition of PSW, issuance of
Convertible Preferred Shares in CGWM UK, partially offset by purchases of common shares for the LTIP, dividends paid on Convertible
Preferred Shares issued in the UK & Crown Dependencies, payment of dividends to non-controlling interests in Australia, and
cash dividends paid on common and preferred shares. Investing activities used cash in the amount of $288.1 million for the
acquisitions of PSW and Results, the purchase of equipment and leasehold improvements and intangible assets. Operating
activities used cash in the amount of $584.4 million, which was largely due to changes in non-cash working capital. An increase in
cash of $21.5 million was attributable to the effect of foreign exchange translation on cash balances.
Compared to the year ended March 31, 2022, cash provided by financing activities increased by $214.1 million due to additional
proceeds from a bank loan in the current year, the redemption of convertible debentures in April 2021 and additional purchases
of common shares under the substantial issuer bid and NCIB in fiscal 2022 compared to the current year. Cash used in investing
activities increased by $86.1 million during fiscal 2023 ended March 31, 2023 compared to the same period last year, mainly
due to the acquisitions of PSW and Results during the current fiscal year. Changes in non-cash working capital balances as well
as reduced profitability led to a decrease in cash provided by operating activities of $847.7 million. In addition, cash balances
increased by $32.5 million from the effects of foreign exchange translation on cash balances. Overall, cash and cash equivalents
decreased by $779.8 million from $1.8 billion at March 31, 2022 to $1.0 billion at March 31, 2023.
The Company’s business requires capital for operating and regulatory purposes. The Company’s working capital, including cash
and cash equivalents, is fully deployed by the Company in its operations to support regulatory capital levels as required and counter-
party requirements, including cash deposit requirements needed to maintain current levels of activity. The majority of current
assets reflected on the Company’s audited consolidated statement 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.
The Company has certain commitments as discussed in the Off-Balance Sheet Arrangements and Bank Indebtedness and Other
Credit Facilities sections above. Other than contracts entered into in the ordinary course of business, the Company has not entered
into any contract which can reasonably be regarded as material.
Outstanding Preferred and Common 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
2023
2022
4,540,000
4,000,000
4,540,000
4,000,000
87,477,151
99,594,391
104,497,584
87,381,995
n/a
88,057,175
99,697,799
104,500,074
94,871,398
109,434,474
(1) Excludes 11,994,885 unvested shares purchased by employee benefit trusts for the LTIP, and 122,355 outstanding shares related to share purchase loans.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 45
Includes 11,994,885 unvested shares purchased by employee benefit trusts for the LTIP, and 122,355 outstanding shares related to share purchase loans.
Includes 4,903,193 share issuance commitments net of forfeitures.
(2)
(3)
(4) This is the diluted share number used to calculate diluted EPS. For the year ended March 31, 2023, the instruments involving potential common shares were excluded from the calculation of
diluted loss per share as they were anti-dilutive.
Preferred shares
SERIES A PREFERRED SHARES
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%.
SERIES B PREFERRED SHARES
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 (the “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
The Company issued 4,000,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series C (the “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, were paid at an annual rate of 4.993% for the five years ended 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%.
SERIES D PREFERRED SHARES
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 (the “Series D Preferred Series”), subject to certain conditions, on June 30, 2022
and have the option on June 30 every five years thereafter. The number of shares tendered for conversion by the conversion deadline
of June 15, 2022 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, 2022 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. The Company
did not redeem any Series C Preferred Shares on June 30, 2022.
Terms of the Series A and C Preferred Shares are disclosed in Note 19 of the March 31, 2023 consolidated financial statements.
COMMON SHARES
On August 18, 2022, the Company filed a notice to renew the NCIB to provide the Company with the choice to purchase up to a
maximum of 4,959,281 of its common shares during the period from August 21, 2022 to August 20, 2023 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 12-month period ended March 31, 2023, there were 502,000 shares purchased under the NCIB. There were
also 83,300 shares purchased under the NCIB during the year ended March 31, 2022 and cancelled during fiscal 2023, which
ended March 31, 2023.
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,
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
46 Management’s Discussion and Analysis
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, 2022 and will continue for one year (to August 20,
2023) 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 76,881 common shares of the
Company (which is 25% of the average daily trading volume (ADTV) of common shares of the Company on the TSX in the six
calendar months from February 2021 to July 2022 (25% of the ADTV of 307,527)).
As of May 31, 2023, the Company has 99,594,391 common shares issued and outstanding.
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 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
Shares issued in connection with settlement of Sawaya deferred consideration
Shares issued in connection with exercise of PSO
Shares purchased and cancelled under the normal course issuer bid
Balance, March 31, 2023
Share-Based Payment Plans
LONG-TERM INCENTIVE PLAN
Number of shares
108,191,331
736,850
609,046
(6,451,612)
(3,387,816)
99,697,799
195,993
285,899
(585,300)
99,594,391
Under the LTIP, eligible participants are awarded restricted share units (RSUs), which generally vest over three years. For employees
in Canada, the US, the Channel Islands, Australia and the UK, employee benefit trusts (the Trusts) have been established. The
Company or certain of its subsidiaries, as the case may be, funds 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
10 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 DSU 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 and based on 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.
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
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 47
of the grant). The PSOs will also be subject to market (stock price) performance vesting conditions and have a 4x exercise price
cap on payout value (i.e., the gain on the exercise of the options is limited to 3x the exercise price).
PSW CONDITIONAL SHARE PLAN
In connection with the acquisition of PSW, the Company adopted a share-based payment plan in respect of CGWM UK ordinary
shares for certain key employees of PSW. The plan is subject to various vesting conditions and, accordingly, the Company recognizes
the cost of such awards as an expense over the applicable vesting period.
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.
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 and 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(1)
Canaccord Genuity Financial Planning Limited(1)(4)
Canaccord Genuity Wealth Limited(1)
Canaccord Genuity Wealth Group Limited(1)
Canaccord Genuity Wealth (International) Holdings Limited(1)
Hargreave Hale Limited(1)
CG Wealth Planning Limited(1)
Adam & Company Investment Management Limited(1)(4)
Punter Southall Wealth Limited(1)(4)
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(2)
Canaccord Genuity (Australia) Limited(2)
Canaccord Genuity Financial Limited(2)
Patersons Asset Management Limited(2)
Canaccord Genuity Asia (Beijing) 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
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
March 31,
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
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%
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%
n/a
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%
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
48 Management’s Discussion and Analysis
The Balloch Group Limited
Canaccord Genuity Asia (Hong Kong) Limited
Canaccord Genuity (Dubai) Ltd.(3)
Canaccord Genuity Wealth Group Holdings (Jersey) Limited(1)
Canaccord Genuity Hawkpoint Limited
Canaccord Genuity Management Company Limited(1)(4)
% equity interest
Country of
incorporation
British Virgin Islands
China (Hong Kong SAR)
United Arab Emirates
Jersey
United Kingdom
Ireland
March 31,
2023
100%
100%
100%
94.5%
100%
100%
March 31,
2022
100%
100%
100%
96.7%
100%
100%
(1) The Company issued Convertible Preferred Shares to certain institutional investors and certain equity instruments in CGWM UK within the context of the transaction value and reflecting a 5.5%
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 a 33.1% equity equivalent interest.
(2) 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, 2023 the Company is considered to have a 67.3% interest because of the shares held in a trust controlled by Canaccord Financial Group (Australia) Pty Ltd. [March 31,
2022 – 67.3%].
(3) The Company sold its interest in Canaccord Genuity (Dubai) Ltd. subsequent to March 31, 2023.
(4) This company was wound-up as part of an internal restructuring subsequent to March 31, 2023.
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.
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 senior executives DSU 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, 2023 and March 31, 2022.
(in thousands)
Short-term employee benefits
Share-based payments
Total compensation paid to key management personnel
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
March31,
2023
$
48,804
892
49,696
March31,
2023
$
18,115
600
March 31,
2022
$
33,585
736
34,321
March 31,
2022
$
12,009
1,271
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, 2023. The Company’s consolidated financial statements for the years ended March 31, 2023 and March 31, 2022
were also prepared in accordance with IFRS.
The preparation of the March 31, 2023 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 the 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 preliminary purchase price allocation, including the valuation of goodwill and intangible assets acquired in
connection with the acquisitions of PSW and Results, as well as the valuation of the contingent consideration related to Results
and Sawaya.
The Company operates in various tax jurisdictions and is subject to tax policies and legislations that pertain to the Company’s
activities in Canada and in foreign countries. As the tax laws and policies of various countries are subject to continual change and
interpretations, the final outcome of certain tax transactions may be uncertain. The Company is affected by changes in tax laws
and regulations, including the introduction of Pillar Two (15% global minimum tax) as proposed by the Organization for Economics
Co-operation and Development.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 49
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, 2023.
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, 2023. 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, 2023 and 2022. Therefore, the financial position, financial performance and cash flows
of CGAL and CGF have been consolidated.
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.
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 CGU’s 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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
50 Management’s Discussion and Analysis
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, 2023 were $13.0 million [2022 – $9.1 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 M&A 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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 51
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 LTIP (or the “Plan”).
Independent directors also receive DSUs as part of their remuneration, which can only be settled in cash (cash-settled
transactions). Certain executives may also receive PSOs as part of their remuneration, which are equity-settled. In addition,
certain senior executives receive 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 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 the 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 in 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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
52 Management’s Discussion and Analysis
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 OCI 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
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
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. Forward contracts to buy US
dollars at March 31, 2023 had a notional amount of US$1.8 million compared to $2.3 million on March 31, 2022. Forward
contracts outstanding to sell US dollars had a notional amount of US $3.9 million, an increase of US $2.1 million from March 31,
2022. 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 a 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 & Crown Dependencies 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 &
US Government bond futures contracts to mitigate its risk. The Company’s Canadian operations also began trading other types of
futures contracts, including but not limited to index futures and commodity futures.
At March 31, 2023, the notional amount of the Canadian bond futures contracts outstanding was short $1.4 million [March 31,
2022 – long $9.7 million].
The fair value of all 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 year ended March 31, 2023.
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 53
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, 2023.
Disclosure Controls and Procedures and Internal Control over Financial Reporting
DISCLOSURE CONTROLS AND PROCEDURES
As of March 31, 2023, an evaluation was carried out, under the supervision of and with the participation of management,
including the President & Chief Executive Officer (CEO) and the Executive Vice President & Chief Financial Officer (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 our disclosure controls and procedures were effective
as of March 31, 2023.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management, including the President & CEO and the Executive Vice President & CFO, 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 & CFO concluded that the Company’s internal control over financial reporting
was designed and operating effectively as of and during the year ended March 31, 2023 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, 2023 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:
The Board of Directors (the Board) has oversight of the company-wide risk management framework. These responsibilities are
delegated to the Audit and Risk and Risk Management Committees. See the Company’s current AIF for details of the Audit and
Risk Committee’s mandate as it relates to risk management.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
54 Management’s Discussion and Analysis
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 (CRO) 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.
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 CRO 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 its 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 the 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 of
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 55
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 an 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
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
The purposes of a risk and control self-assessment (RCSA) are 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 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 and safekeeping of client funds, use and safekeeping
of client data, credit granting, collection activity, anti-money laundering, anti-insider trading, anti-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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
56 Management’s Discussion and Analysis
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
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 provides services only 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 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 for 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 set-up 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 both to
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Management’s Discussion and Analysis 57
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 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
major disruptions to global economic growth. However, the war in Ukraine and 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, 2023, senior officers and directors of the Company collectively owned approximately 14.7% of the issued and
outstanding (25.1% fully diluted) common shares of Canaccord Genuity Group Inc. If a sufficient number of these shareholders were
to act or vote together, they would 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 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 and capital requirements; and such other factors as the Board determines to be relevant.
Dividend Declaration
On June 16, 2023, the Board of Directors approved a dividend of $0.085 per common share, payable on July 4, 2023, with a
record date of June 23, 2023.
On June 16, 2023, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2023 to
Series A Preferred shareholders of record as at June 23, 2023.
On June 16, 2023, the Board approved a cash dividend of $0.42731 per Series C Preferred Share payable on June 30, 2023 to
Series C Preferred shareholders of record as at June 23, 2023.
Additional Information
Additional information relating to Canaccord Genuity Group Inc., including its Annual Information Form, is available on the
Company’s website at www.cgf.com/investor-relations/investor-resources/financial-reports/ and on SEDAR at www.sedar.com.
2023 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, 2023 and 2022, and the consolidated statements
of operations, consolidated statements of comprehensive (loss) 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, 2023 and 2022, 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 consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated 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, 2023, the Group has $364.6 million of advisory fee
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
59
Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill in cash-generating units [“CGUs”]
As at March 31, 2023, the Group has $622.8 million of goodwill
recognized within CGUs. Management 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.
The Group recognized a $101.7 million impairment charge in relation
to the goodwill of the Canada Capital Markets CGU in the year ended
March 31, 2023.
Due to the subjectivity involved in forecasting and discounting future
cash flows and the significance of the CGUs’ recognized goodwill as
at March 31, 2023, 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”.
Other information
To test the estimated FVLCS of the CGUs, our audit procedures included, among
others:
• 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.
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 and 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.
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
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
60
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 16, 2023
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
61
March 31,
2023
$
March 31,
2022
$
Notes
$
6
9, 23
1,008,432 $
715,078
3,355,203
34,209
15
10
12
14
14
13
6, 7
9, 23
27
16
17
18
7,11
15
7, 11
17
18
5,112,922
90,733
18,101
48,180
305,915
622,820
103,729
6,302,400
556,303
3,720,332
19,660
2,177
7,500
13,342
26,712
17,325
4,363,351
55,728
98,378
293,780
92,526
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
4,903,763
5,833,476
1,054,639
343,998
1,398,637
6,302,400
1,178,069
238,700
1,416,769
7,250,245
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 deferred and contingent consideration
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
2023 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,
2023
$
March 31,
2022
$
Notes
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
Impairment of goodwill and intangible assets
Fair value adjustment of non-controlling interest derivative liability
Change in fair value of contingent consideration
Loss and other costs in connection with extinguishment of convertible debentures
Share of loss of an associate
Net (loss) income before income taxes
Income tax expense (recovery)
Current
Deferred
Net (loss) income for the year
Net (loss) income attributable to:
CGGI shareholders
Non-controlling interests
Weighted average number of common shares outstanding (thousands)
Basic
Diluted
(Loss) earnings 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. / 2023 ANNUAL REPORT
749,114
160,944
364,554
117,238
115,245
3,302
761,843
561,725
493,057
158,978
36,028
34,371
1,510,397
2,046,002
936,872
96,083
21,986
85,482
54,539
138,461
41,634
26,335
36,058
7,403
102,571
11,629
(14,278)
—
55
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
1,544,830
1,667,733
(34,433)
378,269
20,173
136
20,309
(54,742)
122,072
(14,368)
107,704
270,565
(90,104)
35,362
246,314
24,251
87,382
n/a
94,871
109,434
12, 14
13
11
14
8
7
15
8
20
20
20 $
20 $
21 $
21 $
21 $
(1.16) $
(1.16) $
1.00 $
1.71 $
0.34 $
2.50
2.16
1.00
1.25
0.32
63
Canaccord Genuity Group Inc.
Consolidated Statements of Comprehensive (Loss) Income
For the years ended (in thousands of Canadian dollars)
Net (loss) income for the year
Other comprehensive income (loss)
Net change in unrealized gains (losses) on translation of foreign operations, net of tax
Comprehensive (loss) income for the year
Comprehensive (loss) income attributable to:
CGGI shareholders
Non-controlling interests
See accompanying notes
March 31,
2023
$
(54,742)
38,832
(15,910)
March 31,
2022
$
270,565
(33,566)
236,999
(54,001) $
38,091 $
211,433
25,566
8
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
Common shares, closing
20
566,345
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
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
Shares issued in connection with acquisition of Sawaya Partners
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
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
Unvested share purchase loans
Change in current net income tax receivable and deferred tax asset relating to share-based payments
Contributed surplus, closing
Retained earnings, opening
Net (loss) income attributable to CGGI shareholders
Common share dividends
Preferred share dividends
Shares purchased and cancelled under substantial issuer bid
Retained earnings, closing
Deferred consideration, opening
Payment during the year
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
Other comprehensive income (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. / 2023 ANNUAL REPORT
March 31,
2023
$
March 31,
2022
$
Notes
19
205,641
576,166
(69,416)
55,240
3,411
2,883
1,924
(4,034)
—
171
64,241
(12,444)
(2,597)
—
2,537
(171)
(2,166)
49,400
251,540
(90,104)
(30,936)
(10,948)
—
119,552
11,378
(2,883)
—
8,495
69,103
—
36,103
105,206
21
21
11
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
(34,881)
69,103
1,054,639 1,178,069
238,700
8,190
8
343,998
238,700
1,398,637 1,416,769
Canaccord Genuity Group Inc.
Consolidated Statements of Cash Flows
For the years ended (in thousands of Canadian dollars)
OPERATING ACTIVITIES
Net (loss) income for the year
Items not affecting cash
Amortization
Amortization of right-of-use assets
Deferred income tax expense (recovery)
Share-based compensation expense
Fair value adjustment of non-controlling interests derivative liability
Impairment of goodwill and intangible assets
Share of loss of associate
Change in fair value of contingent consideration
Impairment of investments
Interest expense in connection with lease liabilities
Changes in non-cash working capital
Decrease/(increase) in securities owned
Decrease in accounts receivable
Increase in income taxes receivable, net
Decrease in securities sold short
Decrease in accounts payable, accrued liabilities and provisions
Cash (used in) 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
Dependencies wealth management operations, net of acquisition related costs
Payment of cash dividends on convertible preferred shares issued in UK & Crown Dependencies wealth
management operations
Payment of dividends to Australian non-controlling interests
Redemption of convertible debentures
Proceeds from bank loan
Proceeds from exercise of performance share options
Payment of bank loan
Cash dividends paid on common shares
Cash dividends paid on preferred shares
Lease payments
Cash provided by (used in) financing activities
INVESTING ACTIVITIES
Purchase of equipment and leasehold improvements, net of disposals
Purchase of intangibles
Acquisition of Punter Southall Wealth, net of cash acquired
Acquisition of Results International Group LLP
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 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
Notes
12, 14
13
22
8
14
7
10
65
March 31,
2023
$
March 31,
2022
$
(54,742)
270,565
41,634
26,335
136
59,495
11,629
102,571
55
(14,728)
4,750
7,603
336,152
83,452
(42,351)
(10,987)
(1,135,420)
(584,416)
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
(6,631)
—
(69,416)
(45,314)
(100,000)
(60,824)
102,223
224,963
(20,368)
(7,683)
—
159,400
1,924
(13,041)
(30,936)
(10,948)
(33,301)
71,223
(24,348)
(4,006)
(238,591)
(8,211)
—
—
—
—
(12,955)
(288,111)
21,475
(779,829)
1,788,261
1,008,432
(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
$
$
$
36,100
115,231 $
52,570 $
22,232
64,532 $ 160,055
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
66
Canaccord Genuity Group Inc.
Notes to consolidated financial statements
As at March 31, 2023 and March 31, 2022
and for the years ended March 31, 2023 and 2022
(in thousands of Canadian dollars, except per share amounts)
1.
Corporate information
Through its principal subsidiaries, Canaccord Genuity Group Inc. (the Company or CGGI) is an independent, full-service investment
dealer with capital markets operations in North America, the UK & Europe, Asia, and Australia. The Company also has wealth
management operations in Canada, the UK, the Crown Dependencies 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 2200, 700 West Georgia Street, Vancouver,
British Columbia, V7Y 1K8 (as of May 15, 2022).
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.
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 certain investments at
fair value through profit or loss, 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 16,
2023.
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. / 2023 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.
Certain factors impact and cast additional uncertainty on the assumptions used by management in making its judgments and
estimates. These factors include, but are not limited to, inflation, significant monetary and fiscal interventions by the government
and central banks to stabilize economic conditions, including slowing economic growth, inflation and rising interest rates, as
well as the impact of the war in Ukraine and the resulting humanitarian crisis on the global economy.
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 levels 2 and 3 financial instruments, 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 Punter Southall Wealth and Results International Group LLP, as well as the valuation of the
contingent consideration related to Results International Group LLP. For year ended March 31, 2022, estimates and assumptions
were utilized in connection with the valuation of goodwill and intangible assets acquired in connection with the acquisitions of
Adam & Company and Sawaya Partners.
The Company operates in various tax jurisdictions and is subject to tax policies and legislations that pertain to the Company’s
activities in Canada and in other foreign countries. As the tax laws and policies of various countries are subject to continual change
and interpretations, the final outcome of certain tax transactions may be uncertain. The Company is affected by changes in tax
laws and regulations, including the introduction of Pillar Two (15% global minimum tax) as proposed by the Organization for
Economics Co-operation and Development.
During the year ended March 31, 2022, certain institutional investors acquired convertible preferred shares (“A Convertible
Preferred Shares”) in the amount of £125.0 million (C$218.0 million) issued by CGWM UK. On May 31, 2022, certain institutional
investors purchased a new series of Convertible Preferred Shares (B Convertible Preferred Shares) issued by CGWM UK for
£65.3 million ($104.1 million as of the issuance date). The two series of the Convertible Preferred Shares are collectively described
as Convertible Preferred Shares in discussions below.
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
components 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” (renamed as
Canaccord Genuity Asset Management), Petsky Prunier LLC is referred to as “Petsky Prunier”, Sawaya Partners LLC is referred to
as “Sawaya”, McCarthy Taylor Limited (renamed as CG McCarthy Taylor Limited) and whose operations were subsequently transferred
to CG Wealth Planning 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”, Punter Southall Wealth Limited as “PSW” and Results
International Group LLP as “Results”.
Consolidation
The Company owns 65% [March 31, 2022 – 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,
2023. 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, 2023 and 2022. Therefore, the financial position, financial
performance and cash flows of CGAL and CGF have been consolidated.
The Company has employee benefit trusts, which are considered SPEs [Note 22], 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.
2023 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 and at each reporting date after the grant date in the case of cash-settled awards. 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 22.
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 CGUs 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. / 2023 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.
3.
Adoption of new and revised standards
There were no new accounting standards adopted for the year ended March 31, 2023.
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, 2023.
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,
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
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
70 Notes to Consolidated Financial Statements
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, Collins Stewart
Hawkpoint plc (CSHP), Eden Financial Ltd., Hargreave Hale, McCarthy Taylor, Petsky Prunier, Adam & Company, Sawaya , PSW
and Results are customer relationships, non-competition agreements, brand name, trading licenses, fund management contracts,
contract book, favorable lease, client books 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. Amortization is being recorded as follows:
• Brand name with definitive lives – up to a maximum of three years
• Customer relationships – up to a maximum of 14 years
• Technology – internally developed or acquired software up to a maximum of 10 years
• Fund management contracts – up to a maximum of 10 years
• Contract book – over the contract book period, usually up to a maximum of 2 years
• Client books – up to 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. / 2023 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
Financial assets are classified as fair value through profit or loss (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 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
A financial asset is classified as fair value through other comprehensive income (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. There are no financial assets classified as FVOCI.
Financial assets classified as amortized cost
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 twelve months from initial recognition; therefore, the allowance is limited to twelve 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, 2023. A financial asset or group of financial
assets is deemed to be impaired if there is 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.
2023 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. / 2023 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 a 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, 2023 were $13.0 million [2022 – $9.1 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 (M&As) 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
2023 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 (LOSS) 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. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 75
effect in connection with the long-term incentive plan (LTIP) and other share-based payment plans 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 (loss) 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 restricted share units, or “RSUs”). This program is referred
to as the long-term incentive plan (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 22]. 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 the 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,
2023 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 (FCA) 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 26.
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 & Europe (including Dubai), Australia, and the US. The Company’s operations in Asia are allocated to
the Canadian and Australian capital markets operations.
6.
Securities Owned and Securities Sold Short
Corporate and government debt
Equities and convertible debentures
March 31, 2023
March 31, 2022
Securities
owned
$
428,119 $
286,959
715,078 $
Securities
sold short
$
394,284
162,019
556,303
$
$
Securities
owned
$
548,639
502,590
$
1,051,229
$
Securities
sold short
$
456,206
111,084
567,290
$
$
As at March 31, 2023, corporate and government debt maturities range from 2023 to 2080 [March 31, 2022 – 2022 to 2080]
and bear interest ranging from 0.00% to 20.00% [March 31, 2022 – 0.00% to 16.00%].
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, 2023 and 2022 are as follows:
Fair value through
profit or loss
Amortized
cost
Total
March 31,
2023
$
March 31,
2022
$
March 31,
2023
$
March 31,
2022
$
March 31,
2023
$
March 31,
2022
$
$ 715,078
$ 1,051,229
$
—
$
—
$ 715,078
$ 1,051,229
—
—
—
—
11,569
—
—
—
—
10,990
1,939,685
869,883
332,055
213,580
—
1,693,579
1,020,112
512,147
212,817
1,939,685
869,883
332,055
213,580
11,569
1,693,579
1,020,112
512,147
212,817
10,990
$
$ 726,647
$ 1,062,219
$ 3,355,203
3,438,655
$ 4,081,850
$ 4,500,874
$ 556,303
$ 567,290
$
—
$
—
$ 556,303
$ 567,290
—
—
—
—
—
—
1,361,601
1,738,806
619,925
1,334,026
2,652,558
859,088
1,361,601
1,738,806
619,925
1,334,026
2,652,558
859,088
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 at FVTPL
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
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 77
Subordinated debt
Deferred and Contingent consideration
Bank loan
Non-controlling interest-derivative
Fair value through
profit or loss
Amortized
cost
Total
March 31,
2023
$
—
53,998
—
61,705
March 31,
2022
$
—
45,286
—
41,090
March 31,
2023
$
7,500
—
307,122
—
March 31,
2022
$
7,500
—
152,041
—
March 31,
2023
$
7,500
53,998
307,122
61,705
March 31,
2022
$
7,500
45,286
152,041
41,090
Total financial liabilities
$ 672,006
$ 653,666
$ 4,034,954
$ 5,005,213
$ 4,706,960
$ 5,658,879
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.
As at March 31, 2023 and 2022, the Company held the following classes of financial instruments measured at fair value:
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
Equities
Deferred and contingent consideration
Non-controlling interest – derivative liability
Securities owned
Corporate debt
Government debt
Corporate and government debt
Equities
Convertible debentures
Equities and convertible debentures
Investments
March 31, 2023
$
13,462
414,657
428,119
285,474
1,485
286,959
715,078
11,569
726,647
(3,109)
(391,175)
(394,284)
(162,019)
(162,019)
(556,303)
(53,998)
(61,705)
(672,006)
March 31, 2022
$
37,820
510,819
548,639
499,221
3,369
502,590
1,051,229
10,990
1,062,219
Estimated fair value
March 31, 2023
Level 2
$
13,462
233,778
247,240
60,568
1,485
62,053
309,293
—
309,293
(3,109)
(208,962)
(212,071)
(10,604)
(10,604)
(222,675)
—
—
(222,675)
Estimated fair value
March 31, 2022
Level 2
$
37,820
156,962
194,782
67,218
3,369
70,587
265,369
—
265,369
Level 1
$
—
180,879
180,879
208,253
—
208,253
389,132
—
389,132
—
(182,213)
(182,213)
(151,415)
(151,415)
(333,628)
—
—
(333,628)
Level 1
$
—
353,857
353,857
353,353
—
353,353
707,210
—
707,210
Level 3
$
—
—
—
16,653
—
16,653
16,653
11,569
28,222
—
—
—
—
—
—
(53,998)
(61,705)
(115,703)
Level 3
$
—
—
—
78,650
—
78,650
78,650
10,990
89,640
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
78 Notes to Consolidated Financial Statements
Securities sold short
Corporate debt
Government debt
Corporate and government debt
Equities
Non-controlling interest – derivative liability
Deferred and contingent consideration
Movement in net Level 3 financial assets (liability)
March 31, 2022
$
(5,001)
(451,205)
(456,206)
(111,084)
(567,290)
(41,090)
(45,286)
(653,666)
Estimated fair value
March 31, 2022
Level 2
$
(5,001)
(185,536)
(190,537)
(28,674)
(219,211)
—
—
(219,211)
Level 1
$
—
(265,669)
(265,669)
(82,410)
(348,079)
—
—
(348,079)
Balance, March 31, 2022
Payment of contingent and deferred consideration in connection with acquisition of Thomas Miller and PSW
Adjustment to contingent consideration in connection with Sawaya [Note 11]
Addition of deferred and contingent consideration in connection with Results [Note 11]
Addition of deferred consideration in connection with PSW
Change in fair value of contingent consideration in connection with Sawaya [Note 11]
Movement in fair value of level 3 securities owned during the period
Non-controlling interest derivative liability component in connection with issuance of B Convertible Preferred Shares [Note 8]
Fair value adjustment of non-controlling interest derivative liability
Foreign exchange revaluation
$
Balance, March 31, 2023
Fair value estimation
i.
Level 2 financial instruments
Level 3
$
—
—
—
—
—
(41,090)
(45,286)
(86,376)
3,264
12,955
(1,519)
(18,847)
(10,140)
14,278
(61,997)
(7,970)
(11,629)
(5,876)
(87,481)
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 a 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, 2023 was $14.9 million [March 31, 2022 – $78.7 million].
As at March 31, 2023, 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].
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. During the year ended March 31, 2023, a fair value adjustment of $11.6 million
[March 31, 2022 – $8.5 million] was recorded in the statement of operations. The derivative liability component of £37.0 million
(C$61.7 million) [March 31, 2022 – £25.0 million (C$41.1 million)] is included in the statement of financial position as of March 31,
2023.
In connection with the acquisitions of Sawaya and Results, there are current and long-term portion of deferred and contingent
considerations recorded of $54.0 million as of March 31, 2023. During the year ended March 31, 2023, the Company recorded a
reduction in the fair value of the contingent consideration in connection with the acquisition of Sawaya of $14.3 million through
the consolidated statements of operations.
The long-term portion of the deferred and contingent consideration and the non-controlling interests derivative liability are included
as other liabilities in the statement of financial position as at March 31, 2023.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 79
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, brokers and investment dealers, and other accounts receivable. The
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,
2023 and 2022.
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 $3.1 million as at March 31, 2023 [March 31, 2022 – $2.9 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, 2023 and 2022, 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 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 25.
The following table presents the contractual terms to maturity of the financial liabilities owed by the Company as at March 31,
2023 and March 31, 2022, respectively:
Financial liability
Securities sold short
Subordinated debt(1)
Accounts payable and accrued liabilities
Current portion of bank loan
Current portion of deferred and contingent consideration
Long term portion of bank loan
Long term portion of deferred and contingent consideration
Non-controlling interests derivative liability
Carrying amount
$
Contractual term to maturity
March 31, 2023
556,303
7,500
3,720,332
13,342
17,325
293,780
36,673
61,705
March 31, 2022
567,290
7,500
4,845,672
6,574
10,618
145,467
34,668
41,090
Due on demand
Due on demand(1)
Due within one year
Due within one year
Due within one year
Fiscal 2025
Fiscal 2025 to 2027
Fiscal 2027
(1) Subject to approval from Canadian Investment Regulatory Organization (formerly Investment Industry Regulatory Organization of Canada)
The fair values for cash, accounts receivable and accounts payable and accrued liabilities approximate their carrying values and
will be paid within twelve months.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
80 Notes to Consolidated Financial Statements
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
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,
2023 and March 31, 2022, 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, 2023
March 31, 2022
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
286,959
10,000
(10,000)
502,590
18,000
(18,000)
Equities and convertible debentures sold
short
Interest rate risk
(162,019)
(6,000)
6,000
(111,084)
(4,000)
4,000
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 securities owned, net of 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, 2023 and 2022 if interest rates had increased
or decreased by 100 basis points applied to balances as of March 31, 2023 and March 31, 2022, 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, 2023
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, 2022
Net income
effect of a
100 bps
decreases in
interest rates(1)
$
Carrying value
Asset (Liability)
$
Cash and cash equivalents, net of bank
indebtedness
$
1,008,432 $
7,362 $
(7,362) $ 1,788,261
$
13,054
$
(13,054)
Securities owned, net of 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
158,775
(868,923)
332,055
578,084
(7,500)
(307,122)
1,159
(6,343)
2,424
4,220
(55)
(2,242)
(1,159)
6,343
(2,424)
(4,220)
55
2,242
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
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
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 81
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.
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, 2023:
Currency
US dollar
Pound sterling
Australian dollar
As at March 31, 2022:
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
$
Effect of a
5% depreciation
in foreign
exchange rate
on OCI
$
(1,407) $
(393)
70
1,407 $
393 $
(70) $
23,072 $
48,975 $
4,074 $
(23,072)
(48,975)
(4,074)
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)
$
$
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, 2023:
To sell US dollars
To buy US dollars
Forward contracts outstanding at March 31, 2022:
Notional amount
(millions)
USD$
USD$
3.9
1.8
Average price
$1.35 (CAD/USD)
$1.35 (CAD/USD)
Maturity
Fair value
April 3, 2023
April 3, 2023
—
—
To sell US dollars
To buy US dollars
Notional amount
(millions)
USD$
USD$
1.8
2.3
Average price
$1.25 (CAD/USD)
$1.25 (CAD/USD)
Maturity
Fair value
April 1, 2022
April 1, 2022
—
—
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
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
82 Notes to Consolidated Financial Statements
the euro. The weighted average term to maturity is 63 days as at March 31, 2023 [March 31, 2022 – 68 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,
2023 and March 31, 2022, respectively. The fair value of the forward contract assets and liabilities is included in the accounts
receivable and payable balances.
Foreign exchange forward contracts
$
108 $
98 $
13,812 $
82
$
75
$
Assets
Liabilities
Notional
amount
Assets
Liabilities
Notional
amount
11,760
March 31, 2023
March 31, 2022
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, and in accordance
with terms specified by a regulated futures exchange; they 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, 2023, the
notional amount of the bond futures contracts outstanding was short $1.4 million [March 31, 2022 – long $9.7 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, 2023 and
March 31, 2022.
The fair value of all 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, 2023 and 2022, the floating rate was nil.
March 31, 2023
March 31, 2022
BANK INDEBTEDNESS
Cash
Securities
Loaned or
delivered as
collateral
$
Borrowed or
received as
collateral
$
Loaned or
delivered as
collateral
$
$
$
205,794 $
$
282,142
130,651 $
$
186,174
157,222 $
$
203,465
Borrowed or
received as
collateral
$
206,328
309,123
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, 2023, the Company had a nil balance outstanding [March 31, 2022 – $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, Adam & Company and Punter Southall. The balance outstanding at March 31, 2023, net of
unamortized financing fees, was $307.1 million [March 31, 2022 – $152.0 million] [Note 17]. The facility ends on September 30,
2024 and the then outstanding payments are immediately due for repayment.
OTHER CREDIT FACILITIES
Excluding the bank loan in connection with the acquisitions of Hargreave Hale, Thomas Miller, Adam & Company and Punter
Southall as described above, subsidiaries of the Company have other credit facilities with banks in Canada and the UK for an
aggregate amount of $667.4 million [March 31, 2022 – $657.0 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, 2023, there was no bank indebtedness outstanding [March 31, 2022 – $nil].
A subsidiary of the Company has also entered into secured irrevocable standby letters of credit from a financial institution totaling
$3.9 million (US$2.9 million) [March 31, 2022 – $3.7 million (US$2.9 million)] as rent guarantees for its leased premises in
New York. As of March 31, 2023, and March 31, 2022, there were no outstanding balances under these standby letters of credit.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 83
8.
NON-CONTROLLING INTERESTS
UK & Crown Dependencies Wealth Management
On July 29, 2021, certain institutional investors acquired convertible preferred shares (“A Convertible Preferred Shares”) in the
amount of £125.0 million (C$218.0 million) issued by CGWM UK.
On May 31, 2022, certain institutional investors purchased a new series of Convertible Preferred Shares (“B Convertible Preferred
Shares”) issued by CGWM UK for £65.3 million ($104.1 million as of the issuance date of May 31, 2022). The proceeds, net of
discount of $2.1 million, were used in connection with the acquisition of PSW [note 11]. The B Convertible Preferred Shares bear the
same terms as the A Convertible Preferred Shares issued during the year ended March 31, 2022 except for differences in
conversion ratios. The two series of the Convertible Preferred Shares are collectively described as Convertible Preferred Shares in
discussions below.
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 from the date of issuance of the A Convertible Preferred
Shares 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 of the issuance of the A Convertible Preferred
Shares 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 A Convertible Preferred Shares, CGWM UK provided for the purchase of certain equity
instruments in CGWM UK by management and employees of CGWM UK. £24.6 million (CAD$42.7 million at the time of issuance)
of such equity instruments in CGWM UK have been 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 A Convertible Preferred Shares (the
“Preference Shares”). Preference Shares in the amounts of £7.5 million (CAD$13.0 million) were outstanding as of March 31, 2023.
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$6.7 million as of March 31, 2023) as well as certain full recourse employee loans were made. A management
incentive plan 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 A Convertible Preferred Shares
are no longer outstanding.
In connection with the acquisition of PSW [Note 11], the Company also issued £4.0 million ($6.4 million as of the acquisition
date of May 31, 2022) of ordinary shares of CGWM UK as part of the purchase consideration. In addition, a management incentive
plan has been implemented. A total of £2.5 million of CGWM UK ordinary shares are expected to be issued in connection with
this plan.
On an as-converted basis, the Company holds an approximate 66.9% equity equivalent interest in CGWM UK. Together, the equity
instruments purchased by management and employees of CGWM UK in connection with the issuance of the A Convertible
Preferred Shares and with the equity instruments issued and to be issued in connection with the acquisitions of PSW represent
an approximate 5.1% equity equivalent interest in CGWM UK on an as-converted basis.
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, 2023.
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 components will be remeasured at the end of each reporting
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
84 Notes to Consolidated Financial Statements
period using the Company’s best estimate of its value. During the twelve months ended March 31, 2023, the Company recorded
a derivative liability in connection with the issuance of the B Convertible Preferred Shares of £5.0 million ($8.0 million as of
May 31, 2022). During the year ended March 31, 2023, a fair value adjustment of $11.6 million [March 31, 2022 – $8.5
million] was recorded in the statement of operations. The carrying value of the derivative liability component of £37.0 million
(C$61.7 million) [March 31, 2022 – £25.0 million (C$41.1 million)] is included in other liabilities in the statement of financial
position as of March 31, 2023.
The Company uses a Black Scholes model to estimate the fair value of the derivative liability embedded in the Convertible
Preferred Shares and Preference Shares. The fair value is calculated using the estimated fair value as determined on an 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.
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 a 65%
indirect interest in Canaccord Genuity (Australia) Limited and Canaccord Genuity Financial Limited as of March 31, 2023 [March 31,
2022 – 65%]. Because of shares held in an employee trust controlled by CFGA, the Company holds a 67% ownership for accounting
purposes.
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 25, both CGAL and CGFL are regulated by the
Australian Securities and Investments Commission.
Summarized statement of profit or loss for the years ended March 31, 2023 and 2022:
Revenue
Expenses
Net income before taxes
Income tax (recovery) expense
Net income
Attributable to:
CGGI shareholders
Non-controlling interests
Australia
UK & Crown Dependencies
Total
2023
$
2022
$
127,838 248,721
119,690 190,744
8,148
(462)
8,610
57,977
20,935
37,042
2023
$
343,728
289,424
54,304
6,403
47,901
2022
$
2023
$
2022
$
310,495 471,566 559,216
252,681 409,114 443,425
57,814
9,528
48,286
62,452 115,791
30,463
5,941
56,511
85,328
Australia
UK & Crown Dependencies
Total
2023
$
2022
$
5,899 29,670
7,372
2,711
8,610 37,042
2023
$
15,250
32,651
47,901
2022
$
2023
$
2022
$
31,407 21,149 61,077
16,879 35,362 24,251
48,286 56,511 85,328
Summarized statement of financial position as at March 31, 2023 and 2022:
Australia
UK & Crown Dependencies
Total
2023
$
2022
$
2023
$
2022
$
2023
$
2022
$
Current assets
Non-current assets
Current liabilities
Non-current liabilities
172,683 235,141
38,523
33,473
86,439 133,434
18,238
16,313
225,682
1,622,049
143,925
364,915
Summarized cash flow information for the years ended March 31, 2023 and 2022:
162,826
397,967
398,365
1,041,733 1,660,572 1,075,206
227,690
230,364
200,753
381,228
94,256
182,515
Cash provided by operating activities
Cash (used in) provided by financing activities
Cash used by investing activities
Foreign exchange impact on cash balance
Net (decrease) increase in cash and cash equivalents
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Australia
UK & Crown Dependencies
Total
2023
$
6,655
(7,683)
(2,468)
(4,134)
(7,630)
2022
$
33,150
(31,125)
(1,530)
(2,291)
(1,796)
2023
$
32,329
231,549
(256,245)
2,928
2022
$
86,100
70,034
(98,755)
(8,274)
2023
$
2022
$
38,984
223,866
(258,713)
(1,206)
119,250
38,909
(100,285)
(10,565)
10,561
49,105
2,931
47,309
Notes to Consolidated Financial Statements 85
The non-controlling interests as of March 31, 2023 and 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
Issuance of equity instruments in connection with acquisition of PSW
[Note 11]
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
2023
$
23,301
5,440
(582)
(7,683)
—
—
—
2022
$
8,190
8,687
329
(5,853)
—
—
—
—
—
—
—
—
—
— 10,843
—
—
— 1,105
20,476 23,301
2023
$
215,400
32,651
(4,790)
—
102,017
206
(7,970)
6,376
—
—
—
(20,368)
—
323,522
Comprehensive income attributable to non-controlling interests
Australia
UK & Crown Dependencies
Total
9.
Accounts Receivable and Accounts Payable and Accrued Liabilities
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
2022
$
2023
$
2022
$
— 238,701
38,091
(5,372)
— (7,683)
8,190
25,566
(4,783)
(5,853)
102,017 212,449
35,722
(34,682)
206
(7,970)
6,376
—
— (2,834)
—
1,740
— 10,843
(7,139)
(519)
(20,368)
—
16,879
(5,112)
212,449
35,722
(34,682)
—
(2,834)
1,740
—
(7,139)
(1,624)
215,399
343,998 238,700
March 31
2023
$
March 31
2022
$
5,440
32,651
38,091
8,687
16,879
25,566
March 31, 2023
$
March 31, 2022
$
$
1,939,685 $
869,883
332,055
213,580
1,693,579
1,020,112
512,147
212,817
$
3,355,203 $
3,438,655
March 31, 2023
$
March 31, 2022
$
$
1,361,601 $
1,738,806
619,925
1,334,026
2,652,558
859,088
$
3,720,332 $
4,845,672
Amounts due from and to brokers and investment dealers include balances from resale and repurchase agreements, securities
loaned and borrowed, and 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 Canadian Investment Regulatory
Organization (“CIRO”) (formerly Investment Industry Regulatory Organization of Canada) 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, 2023 – 9.70% to 11.00% and 0.00% to 0.05%, respectively; March 31, 2022 – 5.7% to 6.5% and 0.00% to
0.05%, respectively].
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
86 Notes to Consolidated Financial Statements
As at March 31, 2023, the allowance for doubtful accounts was $3.1 million [March 31, 2022 – $2.9 million]. See below for the
movements in the allowance for doubtful accounts:
Balance, March 31, 2021
Charge for the year
Recoveries
Foreign exchange
Balance, March 31, 2022
Charge for the year
Recoveries
Foreign exchange
Balance, March 31, 2023
10.
Investments
Investment accounted for under the equity method
Investments held as fair value through profit or loss
Breakdown of investments is as follows:
INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD
Canaccord Genuity G Ventures Corp.
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.
Investments accounted for under equity method
$
$
6,841
4,835
(8,625)
(106)
2,945
3,888
(3,751)
—
3,082
March 31, 2023
$
March 31, 2022
$
6,532
11,569
18,101
11,938
10,990
22,928
March 31, 2023 March 31, 2022
1,243
500
250
4,500
39
1,298
3,000
2,500
4,500
640
6,532 $
11,938
March 31, 2023 March 31, 2022
4,177
3,392
4,000
3,864
3,126
4,000
11,569 $
10,990
The Company recorded a net share of loss on associates of $0.06 million during the year ended March 31, 2023 [March 31,
2022 – net loss of $0.2 million]. Additionally, the Company recorded aggregate impairments during the year of $4.75 million on
certain of these investments, including $2.5 million on Katipult Technology Corp (“Katipult) and $2.25 million on Link Investment
Management Inc (“Link”).
The Company is considered to exert significant influence over the operations of Katipult, Link and International Deal Gateway
Blockchain Inc. factoring in potential voting rights, even though the 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, 2023.
Investments held as FVTPL
The Company holds certain investments classified as FVTPL as the Company does not exert significant influence over the operations
of these investments.
11.
Business Combinations
RESULTS INTERNATIONAL GROUP LLP
On August 17, 2022, the Company, through its UK & Europe capital markets business, completed its acquisition of Results
International Group LLP (Results). The initial cash consideration net of liabilities assumed was £5.3 million ($8.2 million), with
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 87
additional contingent consideration of up to £14.45 million ($22.5 million) payable over a period of four years following completion,
subject to the achievement of performance targets related to revenue. The contingent consideration was recorded at its fair
value of £10.1 million ($15.7 million) as of the acquisition date. There was also deferred consideration of £2.0 million ($3.1 million),
payable over a period of three years following completion, in cash or the Company’s shares based on the Company’s option.
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 an earnings before interest, taxation, depreciation and amortization
(EBITDA) forecast, a risk-free rate of 2.0% and a volatility factor of 8.0%. Option pricing models require the input of highly subjective
assumptions including 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
Cash net of liabilities assumed
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
Deferred tax liability related to identifiable intangible assets
Goodwill
$
$
$
8,211
3,112
15,735
27,058
1,307
38
3,667
(5,079)
(4,171)
2,728
(641)
29,209
27,058
Identifiable intangible assets of $2.7 million were recognized and relate to the contract book, brand name and customer
relationships. The goodwill of $29.2 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 Results 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
twelve months after the acquisition date.
The aggregate acquisition-related expenses incurred by the Company during the year ended March 31, 2023 in connection with
the acquisition of Results were $1.5 million which comprised mainly of professional fees.
Revenue and net loss generated by Results including acquisition-related costs, were $3.8 million and $3.7 million, respectively,
since the acquisition date.
Had Results been consolidated from April 1, 2022, as part of the consolidated statement of operations, the consolidated revenue
and net loss would have been approximately $1.5 billion and $53.0 million, respectively, for the twelve months ended March 31,
2023. These figures represent historical results and are not necessarily indicative of future performance.
PUNTER SOUTHALL WEALTH LIMITED
On May 31, 2022, the Company, through CGWM UK completed its acquisition of the private client investment management
business of Punter Southall Wealth Limited (PSW) for cash payment of £164.0 million ($261.4 million), issuance of shares from
CGWM UK of £4.0 million ($6.4 million) and deferred consideration of £6.4 million (C$10.1 million) related to the purchase of
excess regulatory capital. The deferred consideration was paid in October 2022.
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 £100 million (C$159.4 million as of the issuance date of May 31, 2022). In addition,
certain institutional investors have made an additional investment in CGWM UK through the purchase of a new series of Convertible
Preferred Shares in the amount of £65.3 million ($104.1 million as of the acquisition date of May 31, 2022). [Note 8]
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
88 Notes to Consolidated Financial Statements
Also, in connection with the acquisition, the Company adopted a share-based payment plan for certain awards to be made to
certain employees of PSW. [Note 22]
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, are disclosed below.
CONSIDERATION
Cash
Issuance of CGWM UK ordinary shares [Note 8]
Deferred consideration
NET ASSETS ACQUIRED
Cash
Accounts receivable
Equipment and leasehold improvements
Right of use assets
Deferred tax assets
Accounts payable and accrued liabilities
Lease liabilities
Identifiable intangible assets
Deferred tax liability related to identifiable intangible assets
Goodwill
$
$
261,416
6,376
10,140
277,932
22,832
6,653
448
3,073
598
(10,063)
(3,728)
136,022
(33,547)
155,644
277,932
Identifiable intangible assets of $136.0 million were recognized and relate to customer relationships and brand name. The
goodwill of $155.6 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 PSW 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 twelve months after the acquisition date.
The aggregate acquisition-related expenses incurred by the Company during the period ended March 31, 2023 in connection with
the acquisition of PSW were $5.9 million which comprised mainly of professional fees.
Revenue and net income generated by PSW including acquisition-related costs, were $45.9 million and $10.6 million, respectively,
since the acquisition date.
Had PSW been consolidated from April 1, 2022, as part of the consolidated statement of operations, the consolidated revenue
and net loss would have been approximately $1.5 billion and $48.6 million, respectively, for the twelve months ended March 31,
2023. These figures represent historical results and are not necessarily indicative of future performance.
ADAM & COMPANY
During the twelve months ended March 31, 2023, the Company finalized its purchase price accounting in connection with the
acquisition of Adam & Company. There were no changes to the purchase price and fair value of net assets acquired on the date
of the acquisition disclosed in the Company’s audited consolidated financial statements for the year ended March 31, 2022.
The 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:
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
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
Notes to Consolidated Financial Statements 89
$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.
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 & Retail sector based in the US. During the twelve months ended March 31, 2023, the Company
finalized its purchase price accounting. There was a remeasurement of the contingent consideration which resulted in an increase
of $1.5 million in both goodwill and contingent consideration as of and for the twelve months ended March 31, 2023.
During the year ended March 31, 2023, the Company recorded a decline in the fair value of the contingent consideration of
$14.3 million through the consolidated statement of operations. [Note 7]
The 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
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
44,626
101,517
78
1,122
4,070
(77)
(4,070)
5,155
95,239
$
101,517
Identifiable intangible assets of $5.2 million were recognized and relate to the contract book and brand name. The goodwill of
$95.2 million represents the value of expected synergies arising from the acquisition.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
90 Notes to Consolidated Financial Statements
12.
Equipment and Leasehold Improvements
March 31, 2023
Computer equipment
Furniture and equipment
Leasehold improvements
March 31, 2022
Computer equipment
Furniture and equipment
Leasehold improvements
Cost
Balance, March 31, 2021
Reclassification
Additions
Disposals
Foreign exchange
Balance, March 31, 2022
Acquisitions of Results and PSW [Note 11]
Additions
Disposals
Foreign exchange
Balance, March 31, 2023
Accumulated amortization and impairment
Balance, March 31, 2021
Reclassification
Amortization
Disposals
Foreign exchange
Balance, March 31, 2022
Amortization
Disposals
Foreign exchange
Balance, March 31, 2023
Cost
$
Accumulated
amortization
$
Net book
value
$
19,906
34,957
107,560
162,423
21,197
28,965
91,779
16,957
26,884
70,402
114,243
17,522
25,564
64,212
141,941
107,298
Computer
equipment
$
Furniture and
equipment
$
Leasehold
improvements
$
24,024
1,879
3,348
(7,052)
(1,002)
21,197
10
2,875
(4,620)
444
19,906
29,751
—
2,346
(2,796)
(336)
28,965
110
6,874
(1,177)
185
34,957
90,871
(2,038)
15,050
(11,035)
(1,069)
91,779
366
15,860
(1,245)
800
107,560
Computer
equipment
$
Furniture and
equipment
$
Leasehold
improvements
$
21,906
1,478
2,048
(7,041)
(869)
17,522
2,580
(3,604)
459
16,957
26,810
—
1,828
(2,792)
(282)
25,564
2,209
(1,025)
136
26,884
72,860
(1,637)
4,454
(10,817)
(648)
64,212
6,888
(1,152)
454
70,402
2,949
8,073
37,158
48,180
3,675
3,401
27,567
34,643
Total
$
144,646
(159)
20,744
(20,883)
(2,407)
141,941
486
25,609
(7,042)
1,429
162,423
Total
$
121,576
(159)
8,330
(20,650)
(1,799)
107,298
11,677
(5,781)
1,049
114,243
The carrying value of any temporarily idle property, plant and equipment is not considered material as at March 31, 2023 and
March 31, 2022.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
13.
Right-of-Use Assets
Cost
Balance, March 31, 2021
Additions
Extinguishment
Foreign exchange
As at March 31, 2022
Additions
Extinguishment
Foreign exchange
As at March 31, 2023
Amortization
Balance, March 31, 2021
Charge for the year
As at March 31, 2022
Charge for the year
As at March 31, 2023
Net book value as at March 31, 2022
Net book value as at March 31, 2023
The right of use assets comprise mostly of leases for office premises.
¡
14.
Goodwill and Other Intangible Assets
Notes to Consolidated Financial Statements 91
$
$
133,122
61,424
(4,020)
(1,660)
188,866
19,430
(7,813)
1,381
201,864
47,906
23,894
71,800
26,335
98,135
117,066
103,729
Brand
names
(indefinite
life)
$
Goodwill
$
Brand
names
$
Customer
relationships
$
Technology
$
Trading
licenses
$
Fund
management
contracts
$
Contract
book
Favorable
lease
Client
books
Total
$
Gross amount
Balance, March 31, 2021
702,747
44,930
544
163,546
39,632
625
38,781
6,150
526
— 294,734
Additions
Foreign exchange
Reclassification
142,821
(12,657)
—
— 1,382
—
—
(42)
—
52,116
(8,345)
184
2,541
(1,704)
(184)
Balance, March 31, 2022
832,911
44,930
1,884
207,501
40,285
Additions
Foreign exchange
Adjustments
184,853
27,823
1,594
—
—
—
274
120
—
137,795
4,006
8,599
—
470
—
Balance, March 31, 2023
1,047,181
44,930
2,278
353,895
44,761
—
(8)
—
617
—
(14)
—
603
— 4,308
— 1,931
62,278
(1,947)
—
(80)
—
(3)
—
— (12,129)
—
—
36,834
10,378
523 1,931
344,883
—
535
—
682
859
—
—
42
—
— 142,757
(66)
—
10,545
—
37,369
11,919
565 1,865
498,185
Accumulated amortization and
impairment
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)
Amortization
Impairment
Foreign exchange
—
— (805)
(19,040)
(3,127)
(101,729)
—
—
—
—
(76)
(842)
(1,787)
—
(479)
—
—
14
(3,369)
(3,626)
— (183)
(30,150)
—
—
(384)
(641)
—
(42)
—
7
(842)
(3,388)
Balance, March 31, 2023
(424,361)
(1,574)
(125,750)
(32,512)
(603)
(19,389)
(11,493)
(565)
(384)
(192,270)
Net book value
March 31, 2022
March 31, 2023
510,279
44,930
1,191
103,420
622,820
44,930
704
228,145
11,379
12,249
—
—
21,198
3,152
— 1,723
186,993
17,980
426
— 1,481
305,915
Identifiable intangible assets purchased through the acquisitions of Genuity Capital Markets (Genuity), the initial 50% 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, Sawaya, PSW and
Results are customer relationships, trading licences, fund management contracts, contract book, technology and brand names
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
92 Notes to Consolidated Financial Statements
acquired through the acquisitions of Petsky Prunier, Adam & Company and Sawaya, 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
UK & Europe
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,
2023
$
March 31,
2022
$
March 31,
2023
$
March 31,
2022
$
March 31,
2023
$
March 31,
2022
$
$
44,930 $
—
—
44,930
— $
— $
—
206,664
31,304
101,732 $
189,608
—
—
—
—
—
—
—
89,944
292,145
2,763
88,644
127,434
2,861
44,930 $
206,664
31,304
89,944
292,145
2,763
146,662
189,608
—
88,644
127,434
2,861
$
44,930 $
44,930 $
622,820 $
510,279
667,750 $
555,209
Goodwill acquired in connection with PSW [Note 11] is included in the Canaccord Genuity Wealth Management (UK Wealth) CGU
and goodwill acquired in connection with Results is included in the Canaccord Genuity Capital Markets UK & Europe for the purpose
of goodwill impairment testing. [Note 11]
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, and whenever 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; 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. The Company considers the relationship between its
market capitalization and the book value of its equity, among other factors, when reviewing for indicators of impairment.
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 93
Cash flow estimates for each of these CGUs were based on management assumptions as described above and utilized a
compounded annual growth rate and a terminal growth rate. The discount rates, compound annual growth rates and terminal
growth rates for each CGU are summarized in the table below.
Canaccord Genuity Capital Markets CGUs
Canada
US
UK & Europe
Canaccord Genuity Wealth Management CGUs
UK & Crown Dependencies (Channel Islands)
UK & Crown Dependencies (UK wealth)
Australia
Discount rate
Compound annual
Growth rate
Terminal growth rate
March 31,
2023
March 31,
2022
March 31,
2023
March 31,
2022
March 31,
2023
March 31,
2022
14.0%
14.0%
14.0%
12.5%
12.5%
14.0%
12.5%
12.5%
—
12.5%
12.5%
12.5%
10.9%
2.5%
10.0%
5.0%
7.5%
5.0%
5.0%
0.0%
—
5.0%
5.0%
5.0%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
—
2.5%
2.5%
2.5%
Due to the effect of weak equity market conditions globally and particularly in Canada, the Canadian capital markets operation
experienced substantial declines in business activity and revenue and has incurred material losses on a year-to-date basis. With
these adverse changes in the business environment, continued weakness in commodity prices and a challenging outlook as negative
economic conditions persist, it was determined that the carrying value of our Canadian capital markets CGU exceeded its fair
value during an interim test as at December 31, 2022. As a result, the Company recorded an impairment charge in respect of
goodwill of $101.7 million during the three months ended December 31, 2022. In addition, the Company recorded an impairment
charge related to the unamortized intangible assets of $0.8 million allocated to the Canadian capital markets CGU.
Sensitivity testing was conducted as part of the impairment test of goodwill and indefinite life intangible assets for the Canaccord
Genuity Capital Markets – UK & Europe CGU. The sensitivity testing included assessing the impact that reasonably possible
declines in revenue estimates for the twelve month period ending on March 31, 2024, declines in growth rates after that period
and increases in the discount rates would have on the recoverable amounts of the CGUs, with other assumptions being held
constant. An increase of the discount rate of 1.8 percentage points, a decrease in the estimated revenue for the twelve month period
ending March 31, 2024 of $2.6 million, a decrease in the five year compound annual growth of 2.1 percentage points or a
decrease in the terminal growth rate of 2.4% may result in the estimate of the recoverable amount declining below the carrying
value with the result that an impairment charge may be required. Any such impairment charge 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.
15.
Income Taxes
The major components of income tax expense are as follows:
Consolidated statements of operations
Current income tax expense
Current income tax expense
Adjustments in respect of prior years
Deferred income tax expense (recovery)
Origination and reversal of temporary differences
Impact of change in tax rates
Income tax expense reported in the statements of operations
March 31,
2023
$
March 31,
2022
$
$
22,125 $ 122,348
(276)
(1,952)
20,173
122,072
138
(2)
136
(14,301)
(67)
(14,368)
20,309 $ 107,704
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
94 Notes to Consolidated Financial Statements
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 (loss) income before income taxes
Income tax (recovery) expense at the statutory rate of 27.0% (2022 – 27.0%)
Difference in tax rates in foreign jurisdictions
Permanent differences
Impairment of goodwill and intangible assets
Change in accounting and tax base estimate
Impact of change in tax rate
Share-based payments
Other
Income tax expense reported in the statements of operations
March 31,
2023
$
March 31,
2022
$
(34,433)
(9,370)
(5,443)
8,815
26,414
835
(1,671)
1,446
(717)
378,269
102,129
(1,978)
7,441
—
2,074
1,957
(1,470)
(2,449)
$ 20,309 $107,704
The following were the deferred tax assets and liabilities recognized by the Company and movements thereon during the year:
Unrealized (loss) 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,
2023
$
$ (5,778) $
1,103
16,978
2,551
34,968
9,025
53,221
(82,348)
5,285
$ 35,005 $
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,
2023
$
$(27,992) $
170
19,492
534
4,400
1,170
918
5,530
(4,086)
$
136 $
March 31,
2022
$
17,398
498
(11,337)
553
(10,189)
250
(12,302)
12,845
(12,084)
(14,368)
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 (expense) 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,
2023
$
$ 90,733 $
(55,728)
$ 35,005 $
March 31,
2022
$
98,224
(24,875)
73,349
March 31,
2023
$
73,349
(136)
(34,191)
(5,722)
1,705
$ 35,005 $
March 31,
2022
$
67,677
14,368
(12,255)
742
2,817
73,349
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 $6.3 million [2022 – $2.8 million] in the UK & Europe and $6.3 million [2022 – $6.5 million] in the US
have been recognized as deferred tax assets. The losses in these jurisdictions can be carried forward indefinitely. Tax loss carryforwards
of $24.1 million [2022 – $30.8 million] in Canada have been recognized as a deferred tax asset and can be carried forward
20 years.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 95
At the balance sheet date, the Company has tax loss carryforwards of approximately $23.8 million [2022 – $22.4 million] and
other temporary differences of $nil [2022 – $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.
16.
Subordinated Debt
Loan payable, interest payable monthly at prime + 4% per annum, due on demand
March 31,
2023
$
7,500
March 31,
2022
$
7,500
The loan payable is subject to a subordination agreement and may only be repaid with the prior approval of the CIRO. As at
March 31, 2023 and 2022, the interest rates for the subordinated debt were 10.7% and 6.7%, respectively. The carrying value of
subordinated debt approximates its fair value due to the short-term nature of this liability.
17.
Bank Loan
Loan
Less: Unamortized financing fees
Current portion
Long-term portion
March 31,
2023
$
310,192
(3,070)
307,122
13,342
293,780
March 31,
2022
$
154,498
(2,457)
152,041
6,574
145,467
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, Adam & Company and PSW. During the year ended March 31, 2023, the Company obtained an
additional bank loan of £100.0 million (C$166.8 million as of March 31, 2023) [Note 11]. The loan is repayable in instalments
of principal and interest and matures in September 2024. The interest rate on this loan is 7.177% per annum as at March 31, 2023
[March 31, 2022 – 3.375% per annum].
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
March 31,
2023
$
34,148
28,674
19,134
12,000
48,579
142,535
(23,297)
119,238
(26,712)
92,526
March 31,
2022
$
30,351
29,919
24,732
16,340
55,635
156,977
(31,429)
125,548
(23,928)
101,620
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
96 Notes to Consolidated Financial Statements
19.
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, 2023
March 31, 2022
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 (“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 Shares”), 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.
On June 1, 2022, the Company announced the reset of the dividend rate on its Cumulative 5-year Rate Reset First Preferred
Shares, Series C (the “Series C Preferred Shares”). Quarterly cumulative cash dividends, as declared, were paid at an annual rate
of 4.993% for the five years ended 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%.
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, 2022 and
have the option on June 30 every five years thereafter. The number of shares tendered for conversion by the conversion deadline
of June 15, 2022 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, 2022 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. No
shares were redeemed on June 30, 2022.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 97
March 31, 2023
March 31, 2022
Amount
$
686,043
—
(1,334)
(118,364)
Number of
shares
99,594,391
—
(122,355)
(11,994,885)
Amount
$
685,270
(3,411)
(1,505)
(104,188)
Number of
shares
99,697,799
(495,100)
(122,355)
(11,023,169)
566,345
87,477,151
576,166
88,057,175
20.
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
Balance, March 31, 2021
Shares issued in connection with settlement of Petsky Prunier deferred consideration
Shares issued in connection with exercise of PSOs (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
Shares issued in connection with settlement of Sawaya deferred consideration
Shares issued in connection with exercise of PSO
Shares purchased and cancelled under the normal course issuer bid
Balance, March 31, 2023
Number of
shares
108,191,331
736,850
609,046
(6,451,612)
(3,387,816)
99,697,799
195,993
285,899
(585,300)
99,594,391
Amount
$
749,500
—
4,098
(44,801)
(23,527)
685,270
2,883
1,924
(4,034)
686,043
On August 18, 2022, 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 4,959,281 of its common shares during the period from August 21, 2022 to August 20,
2023 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, 2023, there were 502,000 shares purchased under the NCIB.
There were also 83,300 shares purchased under the NCIB during the year ended March 31, 2022 and cancelled during the year
ended March 31, 2023.
[iii] (LOSS) EARNINGS PER COMMON SHARE
(Loss) earnings per common share
Net (loss) income attributable to CGGI shareholders
Preferred share dividends
Net (loss) income attributable to common shareholders
Weighted average number of common shares (number)
Basic (loss) earnings per share
Diluted (loss) earnings per common share
Net (loss) income attributable to common shareholders
Weighted average number of common shares (number)
Dilutive effect in connection with LTIP (number)
Shares payable in connection with Results deferred consideration (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)
For the years ended
March 31,
2023
$
March 31,
2022
$
$
$
(90,104) $
(10,948)
(101,052)
87,381,995
(1.16) $
246,314
(9,484)
236,830
94,871,398
2.50
(101,052)
236,830
n/a
n/a
n/a
n/a
n/a
n/a
94,871,398
10,922,398
—
783,972
2,856,706
109,434,474
Diluted (loss) earnings per common share
$
(1.16) $
2.16
For the year ended March 31, 2023, the instruments involving potential common shares were excluded from the calculation of
diluted loss per share as they were anti-dilutive.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
98 Notes to Consolidated Financial Statements
21.
Dividends
COMMON SHARE DIVIDENDS
The Company declared the following common share dividends during the year ended March 31, 2023:
Record date
June 17, 2022
September 2, 2022
December 2, 2022
February 24, 2023
Payment date
Cash dividend per
common share
Total common
dividend amount
June 30, 2022 $
September 15, 2022 $
December 15, 2022 $
March 10, 2023 $
0.085
0.085
0.085
0.085
$
$
$
$
8,429
8,431
8,431
8,461
On June 16, 2023, the Board of Directors approved a dividend of $0.085 per common share, payable on July 4, 2023, with a
record date of June 23, 2023. [Note 28]
PREFERRED SHARE DIVIDENDS
Record date
June 17, 2022
September 16, 2022
December 23, 2022
March 17, 2023
Payment date
Cash dividend per
Series A Preferred
Share
Cash dividend per
Series C Preferred
Share
Total preferred
dividend amount
June 30, 2022 $
September 30, 2022 $
January 3, 2023 $
March 31, 2023 $
0.251750
0.251750
0.251750
0.251750
$
$
$
$
0.312060
0.427310
0.427310
0.427310
$
$
$
$
2,391
2,852
2,852
2,852
On June 16, 2023, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2023 to
Series A Preferred shareholders of record as at June 23, 2023. [Note 28]
On June 16, 2023, the Board approved a cash dividend of $0.42731 per Series C Preferred Share payable on June 30, 2023 to
Series C Preferred shareholders of record as at June 23, 2023. [Note 28]
22.
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.
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 8,198,677 RSUs [year ended March 31, 2022 – 4,825,572 RSUs] granted in lieu of cash compensation to employees
during the year ended March 31, 2023. The Trusts purchased 6,951,114 common shares [year ended March 31, 2022 – 4,531,020
common shares] during the year ended March 31, 2023.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 99
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, 2023 was $10.17. [March 31, 2022 – $13.45].
Awards outstanding, March 31, 2021
Grants
Vested
Forfeited
Awards outstanding, March 31, 2022
Grants
Vested
Forfeited
Awards outstanding, March 31, 2023
Common shares held by the Trusts, March 31, 2021
Acquired
Released on vesting
Common shares held by the Trusts, March 31, 2022
Acquired
Released on vesting
Common shares held by the Trusts, March 31, 2023
[ii] INDEPENDENT DIRECTOR DEFERRED SHARE UNITS
Number
11,663,809
4,825,572
(5,096,244)
(212,602)
11,180,535
8,198,677
(5,979,398)
(115,399)
13,284,415
Number
11,588,393
4,531,020
(5,096,244)
11,023,169
6,951,114
(5,979,398)
11,994,885
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, 2023, the Company granted 81,920 DSUs [2022 – 53,629 DSUs]. The carrying amount of the
liability relating to DSUs at March 31, 2023 was $3.9 million [2022 – $7.7 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, 2023 was
$9.6 million [March 31, 2022 – $5.4 million].
[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.
The PSUs were measured at fair value on the grant date. Changes in the 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.
The carrying amount of the liability recognized in accounts payable and accrued liabilities relating to PSUs at March 31, 2023 was
$106.9 million [March 31, 2022 – $140.2 million].
[v] PERFORMANCE STOCK OPTIONS
The Company adopted a performance share option (PSO) plan for certain senior executives. The PSOs have a term of five years
and will time-vest rateably over four years (with one-third vesting on each of the second, third and fourth anniversaries of the date
of the grant). The PSOs will also be subject to market (stock price) performance vesting conditions, and have a four times
exercise price cap on payout value (i.e., the gain on the exercise of the options is limited to three times the exercise price).
During the year ended March 31, 2023, the stock price performance vesting conditions had been met on all the outstanding options.
A total of 4,855,668 options outstanding (net of options already exercised) had met both stock price performance and time-based
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
100 Notes to Consolidated Financial Statements
vesting conditions and are therefore fully vested and outstanding as of March 31, 2023. A total of 4,122,335 PSOs expired on
June 14, 2023. In addition, 600,000 PSOs will expire on August 16, 2023.
The following is a summary of the Company’s PSOs as at March 31, 2023:
Balance, March 31, 2021
Exercised
Balance, March 31, 2022
Grants
Exercised
Balance, March 31, 2023
Number of PSOs
Weighted average
exercise price ($)
$
$
$
6,237,001
(609,046)
5,627,955
300,000
(705,620)
5,222,335
6.78
6.73
6.79
8.77
6.73
6.92
Under IFRS 2, “Share-Based Payments”, the impact of market conditions, such as a target share price upon which vesting is
conditioned, should be considered when estimating the fair value of the PSOs. A Monte Carlo simulation is used to simulate a
range of possible future stock prices for the Company over the period from the grant date to the expiry date of the PSOs. The purpose
of this modelling is to use a probabilistic approach for estimating the fair value of the PSOs under IFRS 2. The following
assumptions were used in the Monte Carlo model for grants made in the year ended March 31, 2023:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life
3.78%
48.60%
3.39%
4 years
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 PSOs.
[vi] PSW CONDITIONAL SHARE PLAN
In connection with the acquisition of PSW [Note 11], the Company adopted a share-based payment plan in the amount of
£2.5 million (CAD $4.2 million) in respect of CGWM UK ordinary shares for certain key employees of PSW. The plan is subject to
various vesting conditions and accordingly, the Company recognizes the cost of such awards as an expense over the applicable
vesting period.
[vii] 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
For the years ended
March 31,
2023
$
45,426
(561)
4,029
635
8,685
1,281
59,495
March 31,
2022
$
82,452
342
5,435
1,393
55,465
1,740
146,827
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 101
23.
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(1)
Canaccord Genuity Financial Planning Limited(1)(4)
Canaccord Genuity Wealth Limited(1)
Canaccord Genuity Wealth Group Limited(1)
Canaccord Genuity Wealth (International) Holdings Limited(1)
Hargreave Hale Limited(1)
CG Wealth Planning Limited(1)
Adam & Company Investment Management Limited(1)(4)
Punter Southall Wealth Limited(1)(4)
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(2)
Canaccord Genuity (Australia) Limited(2)
Canaccord Genuity Financial Limited(2)
Patersons Asset Management Limited(2)
Canaccord Genuity Asia (Beijing) Limited
The Balloch Group Limited
Canaccord Genuity Asia (Hong Kong) Limited
Canaccord Genuity (Dubai) Ltd.(3)
Canaccord Genuity Wealth Group Holdings (Jersey) Limited(1)
Canaccord Genuity Hawkpoint Limited
Canaccord Genuity Management Company Limited(4)
% 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
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,
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
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%
94.5%
100%
100%
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%
n/a
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%
(1) The company issued Convertible Preferred Shares to certain institutional investors and certain equity instruments in CGWM UK within the context of the transaction value and reflecting a 5.55%
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 a 33.1% equity equivalent interest. [Note 8]
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
102 Notes to Consolidated Financial Statements
(2) 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, 2023 the Company is considered to have a 67.3% interest because of the shares held in a trust controlled by Canaccord Financial Group (Australia) Pty Ltd. [March 31,
2022 – 67.3%] [Note 8].
(3) The Company sold its interest in Canaccord Genuity (Dubai) Ltd. subsequent to March 31, 2023.
(4) This company was wound-up as part of an internal restructuring subsequent to March 31, 2023.
[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, 2023 and 2022:
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,
2023
$
48,804
892
49,696
March 31,
2022
$
33,585
736
34,321
March 31,
2023
$
18,115
600
March 31,
2022
$
12,009
1,271
[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.
24.
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, Adam & Company and PSW 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 Results is allocated to Canaccord Genuity Capital Markets UK and Europe
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 103
For the years ended
March 31, 2023
Canaccord
Genuity
Capital
Markets
$
Canaccord
Genuity
Wealth
Management
$
156,187
126,588
362,549
116,900
25,067
5,562
591,772
34,356
2,005
338
76,593
3,240
Corporate
and Other
$
1,155
—
—
—
13,585
(5,500)
Total
$
749,114
160,944
364,554
117,238
115,245
3,302
Canaccord
Genuity
Capital
Markets
$
174,826
463,118
488,579
158,232
8,985
9,334
Canaccord
Genuity
Wealth
Management
$
587,001
98,607
4,478
744
21,580
7,997
March 31, 2022
Corporate
and Other
$
16
—
—
2
5,463
17,040
Total
$
761,843
561,725
493,057
158,978
36,028
34,371
698,759
10,303
490,833
29,662
89,292
1,669
1,278,884
41,634
924,199
6,784
512,719
20,192
109,468
617
1,546,386
27,593
15,756
3,383
18,848
1,477
7,133
25,296
32,739
5,926
3,446
7,379
2,952
—
26,335
36,058
54,539
7,403
15,278
1,366
13,072
537
5,444
20,861
8,852
8,660
—
—
—
—
—
—
102,571
11,629
11,629
—
(14,278)
—
55
—
55
—
—
—
—
—
—
—
—
—
—
23,894
22,422
23,598
9,197
3,172
195
1,674
—
—
8,519
8,519
5,932
5,932
192
192
(43,966)
21,651
116,715
23,293
(107,182)
(44,944)
(34,433)
—
341,838
20,007
143,679
22,670
(107,248)
(42,677)
378,269
—
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
Impairment of goodwill and
intangible assets
102,571
Fair value adjustment of
non-controlling interest
derivative liability
Change in fair value of
—
contingent consideration
(14,278)
Costs associated with
redemption of convertible
debentures
Share of loss of an
associate
(Loss) Income before
intersegment allocations
and income taxes
Intersegment allocations
(Loss) income before income
taxes
(65,617)
93,422
(62,238)
(34,433)
321,831
121,009
(64,571)
378,269
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):
Canada
UK, Europe & Crown Dependencies
United States
Australia
$
For the years ended
March 31,
2023
$
454,741 $
440,003
487,769
127,884
March 31,
2022
$
692,432
430,850
673,997
248,723
$
1,510,397 $
2,046,002
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
104 Notes to Consolidated Financial Statements
The following table presents selected figures pertaining to the financial position of each geographic location:
UK &
Crown
Dependencies
$
9,399
413,393
251,564
674,356
Canada
$
31,692
—
47,903
79,595
United
States
$
4,076
206,664
186
210,926
Australia
$
3,013
2,763
6,262
12,038
$
$
$
15,847
101,732
48,932
$
9,796
216,078
127,117
$
5,506
189,608
3,746
$
3,494
2,861
7,198
166,511
$
352,991
$
198,860
$
13,553
$
Total
$
48,180
622,820
305,915
976,915
34,643
510,279
186,993
731,915
As at March 31, 2023
Equipment and leasehold improvements
Goodwill
Intangible assets
Non-current assets
As at March 31, 2022
Equipment and leasehold improvements
Goodwill
Intangible assets
Non-current assets
25.
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, 2023 and 2022:
Type of capital
Preferred shares
Common shares
Deferred consideration
Contributed surplus
Retained earnings
Accumulated other comprehensive income
Shareholders’ equity
Non-controlling interests
Subordinated debt
Bank loan
March 31,
2023
$
205,641
566,345
8,495
49,400
119,552
105,206
1,054,639
343,998
7,500
307,122
March 31,
2022
$
205,641
576,166
11,378
64,241
251,540
69,103
1,178,069
238,700
7,500
152,041
1,713,259 $
1,576,310
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 CIRO
• 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, Punter Southwall 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)
• 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 GROUP INC. / 2023 ANNUAL REPORT
Notes to Consolidated Financial Statements 105
• Canaccord Genuity (Dubai) Ltd. is subject to regulation in the United Arab Emirates by the Dubai Financial Services Authority
(DFSA). The Company sold its interest in Canaccord Genuity (Dubai) Ltd subsequent to March 31, 2023
• 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, 2023.
26.
Client Money
At March 31, 2023, the UK & Europe operations held client money in segregated accounts of $3.280 billion (£1.967 billion)
[2022 – $2.859 billion (£1.740 billion)]. This client money comprises of $7.121 million (£4.270 million) [2022 – $7.345 million
(£4.469 million)] of cash to settle outstanding trades and $3.272 billion (£1.962 billion) [2022 – $2.852 billion (£1.735 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.
27.
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, 2023 and 2022:
Balance, March 31, 2021
Additions
Utilized
Balance, March 31, 2022
Additions
Utilized
Balance, March 31, 2023
Legal
provisions
$
Restructuring
provisions
$
8,551
2,515
(4,419)
6,647
13,363
(1,874)
18,136
1,806
—
(231)
1,575
—
(51)
1,524
Total
provisions
$
10,357
2,515
(4,650)
8,222
13,363
(1,925)
19,660
Commitments, litigation proceedings and contingent liabilities
In the normal course of business, the Company is involved in litigation, and as of March 31, 2023, 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,
2023, 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 is subject to certain rules, regulations, and other regulatory requirements specific to the broker-dealer business
and, as such, the Company operates within a regulatory framework involving certain governmental agencies and organizations. As
a regulated entity and in the normal course, the Company is subject to periodic reviews and examinations by those agencies
and organizations. The Company maintains policies and procedures designed to ensure compliance with these rules, regulations
and requirements, but, in the event that a regulatory authority determines that there was a failure by the Company to follow or comply
with certain procedures or a regulatory requirement or there is a deficiency in the Company’s records or reports or some other
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
106 Notes to Consolidated Financial Statements
compliance or financial failure then the Company may agree to pay a fine or penalty or agree to certain other sanctions, or,
alternatively, a regulatory authority may impose a fine, penalty or other sanction. If such circumstances arise, the Company records
a provision for any matter where a payment is considered probable and can be reasonably estimated.
In connection with this regulatory oversight, the Company is involved in an enforcement matter arising from a regulatory review of
the Company’s wholesale market making activities. Although the Company expects that the underlying enforcement matter will be
resolved in the ordinary course and expects that the resolution of the enforcement matter will not have a material impact on its
financial condition or results of operations, the Company may incur a significant penalty and additional costs related to its business
or become subject to other terms or conditions that may adversely impact its business. An estimate for a settlement of the
enforcement matter has been recorded as of March 31, 2023, based on management’s judgment and based on the information
currently available to the Company, but because the ultimate resolution of this matter is not known and the amount of the loss is
uncertain, the Company may be required to make a payment that is more than the amount recorded. In determining the estimate,
management referred to previous enforcement matters that were settled by other companies recognizing that facts and circumstances
in such cases were significantly different than those in the Company’s current matter. These other cases reflected a wide range
of settlement payments, and it is reasonably possible that an actual settlement will exceed the estimate currently recorded as of
March 31, 2023. An actual estimate of any such excess cannot be made at this time. Adjustments will be recorded in subsequent
periods if further information becomes available that changes the estimate.
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
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
provides services only 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 favor 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.
Risks associated with emerging industries such as the cannabis industry 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 Company may be unable to recover amounts in respect of any indemnity claims.
28.
Subsequent Events
1. BUSINESS COMBINATION
On May 29, 2023, the Company, through its Canadian wealth management business, completed its previously announced
acquisition of Mercer Global Investments Canada Limited’s Canadian private wealth business for cash consideration of $2.4
million and contingent consideration subject to achievement of certain performance targets.
2. DIVIDENDS
On June 16, 2023, the Board of Directors approved a dividend of $0.085 per common share, payable on July 4, 2023, with a
record date of June 23, 2023. [Note 21]
On June 16, 2023, the Board approved a cash dividend of $0.25175 per Series A Preferred Share payable on June 30, 2023 to
Series A Preferred shareholders of record as at June 23, 2023. [Note 21]
On June 16, 2023, the Board approved a cash dividend of $0.42731 per Series C Preferred Share payable on June 30, 2023 to
Series C Preferred shareholders of record as at June 23, 2023. [Note 21]
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
107
SUPPLEMENTAL INFORMATION
Advisory note: This supplemental information is not audited and should be read in conjunction with the audited financial statements
contained herein.
FINANCIAL HIGHLIGHTS(1)(2)(3)
(C$ thousands, except for AUM, AUA, common and preferred share
information, financial measures and percentages)
Financial results
Revenue
Expenses
Income taxes expense
Net (loss) income
Net (loss) income attributable to CGGI shareholders
Net (loss) income attributable to common shareholders
For the years ended and as at March 31
2023
2022
2021
2020
2019
1,510,397
1,544,830
20,309
(54,742)
(90,104)
(101,052)
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
Business segment
(Loss) 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 & Europe
AUM – Australia
Total
Common share information
Per common share ($)
Basic (loss) earnings
Diluted (loss) earnings
Common share price ($)
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
(65,617)
93,422
(62,238)
8,834
35,694
55,101
5,432
96,227
(1.16)
(1.16)
12.58
6.24
10.95
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
87,477
99,594
104,498
87,382
n.a.
1,144,253
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
8,540
8,540
8,540
8,540
8,540
Dividends per common share
Common dividend yield (closing common share price)
0.34
3.1%
0.32
2.6%
0.25
2.2%
0.20
4.6%
0.20
3.4%
(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 32.7% non-controlling interest has been recognized for the three months and fiscal 2023 [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]. The operating results of CGWM UK have been fully consolidated, and a
5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the three and twelve months ended
March 31, 2023 [three and twelve months ended March 31, 2022 — 1.5%].
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, Sawaya since December 31, 2021, PSW since May 31, 2022 and Results
since August 17, 2022.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
108 Supplemental Information
Condensed Consolidated Statements of Operations and Retained Earnings(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
Acquisition-related costs
Impairment of goodwill and other assets
Fair value adjustment of non-controlling interests derivative
liability
Change in fair value of contingent consideration
Loss on extinguishment of convertible debentures
Share of loss (gain) of an associate
Income before income taxes
Income taxes expense (recovery)
Net income for the year
Non-controlling interests
Net (loss) 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
2023
2022
2021
2020
2019
749,114
160,944
364,554
117,238
115,245
3,302
1,510,397
936,872
96,083
21,986
85,482
54,539
138,461
41,634
36,058
26,335
—
7,403
102,571
11,629
(14,278)
—
55
1,544,830
(34,433)
20,309
(54,742)
35,362
(90,104)
251,540
(30,936)
(10,948)
—
—
—
—
119,552
62.0%
40.3%
102.3%
(2.3)%
(59.0)%
(3.6)%
(1.16)
(1.16)
792,853
708,304
9,240
1,510,397
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
—
9,197
—
8,519
—
5,932
192
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
—
5,922
—
—
—
4,354
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
556,475
294,241
142,228
125,830
51,008
20,785
1,190,567
738,313
83,964
18,094
66,666
33,678
113,612
32,594
12,053
22,866
1,921
(124)
—
—
—
—
207
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
716,625
83,577
41,719
64,930
25,453
100,768
24,280
15,513
—
13,070
3,064
—
—
—
8,608
304
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
(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 32.7% non-controlling interest has been recognized for the three and twelve months ended March 31, 2023
[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]. The operating results of CGWM UK have been fully
consolidated, and a 5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the three and
twelve months ended March 31, 2023 [three and twelve months ended March 31, 2022 — 1.5%].
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, Sawaya since December 31, 2021, PSW since May 31, 2022 and Results
since August 17, 2022.
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. / 2023 ANNUAL REPORT
Supplemental Information 109
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)
2023
2022
2021
2020
2019
1,008,432
715,078
3,355,203
34,209
90,733
18,101
48,180
928,735
103,729
6,302,400
—
556,303
3,739,992
2,177
13,342
26,712
17,325
—
92,526
98,378
293,780
55,728
7,500
—
343,998
1,054,639
6,302,400
2023
275
499
427
1,201
180
737
394
86
231
—
2,829
145
474
252
119
8,834
35,694
55,101
5,432
96,227
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
2019
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
(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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
110 Supplemental Information
Quarterly 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 (loss)
Net (loss) income attributable to CGGI shareholders
Net (loss) 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 ($)
Basic (loss) earnings
Diluted (loss) earnings
Common share price ($)
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
Fiscal 2023
Fiscal 2022
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
430,389 382,116 380,522 317,370
424,962 462,902 341,490 315,476
4,898
12,468
26,564
(3,004)
17,170 (10,173)
14,779 (12,564)
1,664
1,279
3,763 (82,065)
(92,775)
(95,166)
(4,326)
(7,178)
499,793 552,217 475,161 518,831
403,245 457,234 388,124 419,130
26,648
73,053
72,001
69,650
28,251
66,732
58,645
56,254
25,252
61,785
56,583
54,232
27,553
68,995
58,657
56,266
7,925 (98,819)
29,995
(11,962)
29,083
(31,581)
22,800
22,125
(5,893)
2,477
12,219
(12,802)
71,743
23,919
93,126
28,677
886 (26,820)
72,845
23,696
(9,504)
84,117
44,717
(29,133)
8,834
35,694
55,101
5,432
96,227
8,428
34,735
54,403
5,250
94,388
8,047
33,739
49,992
4,876
88,607
7,952
33,857
52,166
4,694
90,717
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
(0.08)
(0.08)
11.80
8.20
10.95
(1.10)
(1.10)
8.51
6.24
8.39
0.17
0.14
10.10
6.71
6.77
(0.14)
(0.14)
12.58
8.21
8.43
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
86,033
99,186
87,477
99,594
87,215
99,382
87,846
99,186
104,498 104,955 104,907 104,590
88,636
n.a 100,563 102,198 104,981
86,782
87,461
86,661
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
96,138
94,997
8,540
8,540
8,540
8,540
8,540
8,540
8,540
8,540
0.085
0.085
0.085
0.085
0.085
0.085
0.075
0.075
(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 32.7% non-controlling interest has been recognized for the three months and fiscal 2023 [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]. The operating results of CGWM UK have been fully consolidated, and a
5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the three and twelve months ended
March 31, 2023 [three and twelve months ended March 31, 2022 — 1.5%].
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, Sawaya since December 31, 2021, PSW since May 31, 2022 and Results
since August 17, 2022.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Supplemental Information 111
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
Impairment of goodwill and other assets
Fair value adjustment of non-controlling
interests derivative liability
Change in fair value of contingent
consideration
Share of loss (gain) of an associate
Loss on extinguishment of convertible
debentures
Income before income taxes
Income tax expense
Net income (loss) for the period
Non-controlling interests
Net (loss) 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 (loss) earnings per share
Diluted (loss) earnings per share
Canaccord Genuity Capital Markets
Canaccord Genuity Wealth Management
Corporate and Other
Fiscal 2023
Fiscal 2022
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
196,774
50,962
104,649
26,921
45,949
5,134
430,389
188,647
47,494
75,667
35,123
32,085
3,100
382,116
240,303
276,066
24,109
23,417
4,859
6,904
22,343
23,239
12,281
23,915
32,825
43,344
11,533
10,838
6,580
6,552
5,473
13,326
—
—
— 102,571
11,629
(14,278)
10
—
424,962
5,427
1,664
3,763
8,089
(4,326)
64.1%
34.6%
98.7%
1.3%
30.7%
0.9%
(0.08)
(0.08)
226,140
197,109
7,140
430,389
—
—
25
—
462,902
(80,786)
1,279
(82,065)
10,710
(92,775)
62.9%
58.3%
121.1%
(21.1)%
(1.6)%
(21.5)%
(1.10)
(1.10)
196,879
179,688
5,549
382,116
182,770
43,772
101,294
26,973
22,395
3,318
380,522
222,059
23,809
5,400
20,545
10,519
31,536
11,068
6,388
10,333
(179)
—
—
—
12
—
341,490
39,032
12,468
26,564
9,394
17,170
58.4%
31.4%
89.7%
10.3%
31.9%
7.0%
0.17
0.14
205,697
169,288
5,537
380,522
180,923
18,716
82,944
28,221
14,816
(8,250)
317,370
198,444
24,748
4,823
19,355
7,824
30,756
8,195
6,815
6,926
7,582
—
—
—
8
—
315,476
1,894
4,898
(3,004)
7,169
(10,173)
62.5%
36.9%
99.4%
0.6%
n.m.
(0.9)%
(0.14)
(0.14)
164,137
162,219
(8,986)
317,370
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
—
8,519
—
63
—
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
(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 32.7% non-controlling interest has been recognized for the three months and fiscal 2023 [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]. The operating results of CGWM UK have been fully consolidated, and a
5.55% non-controlling interest in the outstanding ordinary shares of Canaccord Genuity Wealth Management Holdings (Jersey) Limited has been recognized for the three and twelve months ended
March 31, 2023 [three and twelve months ended March 31, 2022 — 1.5%].
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, Sawaya since December 31, 2021, PSW since May 31, 2022 and Results
since August 17, 2022.
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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
112 Supplemental Information
Condensed Consolidated Statements of Financial Position
(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 2023
Fiscal 2022
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
893,052
778,289
1,008,432
715,078
946,567 1,034,804 1,788,261 1,790,177 1,725,252 1,364,952
686,983 1,051,229 1,159,854 1,136,754 1,141,213
733,967
3,355,203 3,184,749 3,279,578 3,154,183 3,438,655 3,137,364 4,291,580 3,862,988
17,342
77,264
8,879
21,686
524,875
79,791
6,306,680 6,079,979 6,269,473 6,128,151 7,250,245 7,039,426 7,886,293 7,098,990
55,840
65,928
20,969
51,467
924,062 1,000,600
114,557
109,236
9,568
89,186
24,815
23,724
725,569
79,169
1,967
98,224
22,928
34,643
697,272
117,066
8,012
83,674
20,430
21,271
522,449
76,871
31,777
78,661
20,402
43,883
963,555
113,903
34,209
95,013
18,101
48,180
928,735
103,729
50,011
70,950
18,781
50,849
—
—
536,647
—
440,641
—
556,303
—
634,594
—
567,290
—
876,313 1,219,252
—
Bank indebtedness
Securities sold short
814,493
Accounts payable, accrued liabilities and other 3,739,992 3,481,430 3,717,035 3,682,651 4,853,894 4,436,267 4,988,873 4,780,498
37,013
Income taxes payable
15,432
Current portion of bank loan
Current portion of lease liability
23,898
— 12,399
Current portion of contingent consideration
— 118,321
Short-term loan facility
64,096
Lease liability
19,482
Other long-term liabilities
57,097
Bank loan
19,180
Deferred tax liabilities
7,500
Subordinated debt
—
Convertible debentures
Non-controlling interests
6,337
1,058,919 1,002,780 1,079,840 1,089,983 1,178,069 1,107,972 1,151,429 1,123,244
Shareholders’ equity
6,306,680 6,079,979 6,269,473 6,128,151 7,250,245 7,039,426 7,886,293 7,098,990
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
4,270
6,270
23,233
12,615
—
101,709
81,120
293,255
58,990
7,500
—
325,914
1,552
13,116
26,681
17,547
—
95,887
99,517
294,795
56,368
7,500
—
348,212
1,638
6,182
25,679
27,779
—
101,735
94,460
286,621
54,002
7,500
—
330,355
2,177
13,342
26,712
17,325
—
92,526
98,378
293,780
55,728
7,500
—
343,998
59,284
42,166
154,016
15,010
7,500
—
208,208
8,183
6,836
25,536
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
275
499
427
1,201
180
737
394
86
231
2,829
145
474
252
119
8,834
35,694
55,101
5,556
96,351
Fiscal 2023
Q3
Q2
275
282
498
439
1,212
506
422
1,210
182
737
406
84
229
2,850
148
477
255
116
8,428
34,735
54,403
5,250
94,388
182
730
403
90
230
2,845
149
476
256
113
8,047
33,739
49,992
4,876
88,607
Q1
279
497
422
1,198
143
588
376
92
218
2,615
146
474
221
114
7,952
33,857
52,166
4,694
90,717
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
(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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
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 and
Australia. 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
needs of clients in each of its markets. The Company’s
113
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 (loss) 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 (loss) 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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
114 Glossary
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.
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).
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.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
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
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, is composed
of revenue per IFRS excluding any applicable fair value adjustments
on certain illiquid or restricted marketable securities, warrants
and options 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, is 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 and UK capital markets
divisions, certain costs included in Corporate & Other
development costs related to the expired management-led
takeover bid for the common shares of the Company, impairment
of goodwill and intangible assets in our Canadian capital
markets operations, costs associated with the redemption of
convertible debentures, costs associated with the reorganization
of CGWM UK, change in fair value of contingent consideration
in connection with prior acquisitions, fair value adjustments to
the derivative liability component of non-controlling interests
in CGWM UK; (iii) overhead expenses excluding significant items
are calculated as expenses excluding significant items less
compensation expense; (iv) net income before taxes after
intersegment allocations and excluding significant items, is
composed of revenue excluding significant items less expenses
excluding significant items; (v) income taxes (adjusted), is
composed of income taxes per IFRS adjusted to
Glossary 115
reflect the associated tax effect of the excluded significant
items; (vi) net income excluding significant items, is net income
before income taxes excluding significant items less income
taxes (adjusted); (vii) non-controlling interests (adjusted), 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, is 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, net income 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,
restructuring costs, 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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
116
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
Terry Lyons has been appointed by the Board of Directors of Canaccord Genuity Group Inc. as its Lead Director. One of his
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 Terry Lyons in writing by mail care of the Corporate
Secretary of Canaccord Genuity Group Inc. It is recommended that such communications be addressed as “Terry Lyons, Lead
Director, Canaccord Genuity Group Inc., c/o Corporate Secretary, 40 Temperance Street, Suite 2100, Toronto, M5H 0B4, TO BE
OPENED BY ADDRESSEE ONLY.” Such communications will be forwarded, unopened, to Mr. Lyons.
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 auditors, including the approval of the external auditors’ 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 Committee, oversees the integrity of the Company’s internal control and information systems.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
CORPORATE GOVERNANCE 117
• The Audit 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 auditors provide recommendations to the Audit Committee on an annual basis in relation to the Company’s internal
controls and information systems
As of March 31, 2023 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, 2023.
Governance
The Board is currently composed of seven directors, five 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 four independent directors. All members of the Audit 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), Michael Auerbach, Amy Freedman, Jo-Anne O’Connor, and Rod Phillips.
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 auditors 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 report 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 auditors’ audit plan and must approve any audit and
non-audit work performed by the external auditors. 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 five unrelated directors: Michael Auerbach (chair), Amy Freedman, Terry Lyons, Jo-Anne O’Connor and Rod Phillips.
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.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
118
Board of Directors
Michael Auerbach
Chair of Corporate Governance and Compensation Committee,
Audit and Risk Committee
Michael Auerbach, age 47, is an entrepreneur, investor, business
consultant, media producer, and private diplomat. Since 2013,
he has served as the founder and managing member of Subversive
Capital LLC, which is dedicated to investing in radical companies
whose core missions subvert the status quo and require sophisticated
regulatory strategies for success. Subversive Capital has been a
pioneering investor in emerging industries, specializing in both early
and late-stage investments as well as SPAC acquisitions. Since
November 2021, he has also served as the managing member of
Subversive Capital Advisor LLC, an SEC-registered investment advisor.
Mr. Auerbach served as the Chief Executive Officer of Subversive
Acquisition LP, which was a publicly traded Canadian special purpose
acquisition company prior to merging into Intercure Ltd., a leading
Israeli cannabis company, in April 2021. Michael served as Chairman
of Subversive Capital Acquisition Corp., which was a publicly
traded Canadian special purpose acquisition company prior to
engaging in the Qualifying Transaction and becoming TPCO Holding
Corp. In his capacity as a private diplomat, Mr. Auerbach serves
as Partner, Head of Business Intelligence, at Dentons Global Advisors
and was former longtime executive of Albright Stonebridge Group,
a part of Dentons Global Advisors, a global consulting firm founded
by former Secretary of State Madeleine Albright. Prior to joining
Albright Stonebridge Group in November 2012, Michael founded and
then sold a risk consulting firm to Control Risks – a leading global
risk consulting firm. Michael started his career during the dot-com
boom of the late 1990s running Panopticon Inc., a VC incubator
concentrating on Internet and mobile technology. Michael was the
Executive Producer of Pseudo Programs – the first Internet Television
network. Mr. Auerbach has also held senior positions at the
Center for American Progress and The Century Foundation, where
he concentrated on issues related to U.S. Foreign Policy, National
Security, and Conflict Resolution. His work has been published
in a variety of national and international publications and he served
as a Visiting Professor at the New School for Social Research. He
has also taught at the University of Cape Town and Cyprus College.
Mr. Auerbach serves as a member of the board of directors and
the lead independent director of Atai Life Sciences N.V., a Nasdaq-
listed, clinical-stage biopharmaceutical company, since June 2021.
He has also served on the board member of Tuscan Holdings Corp.
II, a Nasdaq-listed blank check company, from June 2019 to
December 2022. Mr. Auerbach served on the board of directors of
Tilray Brands Inc., the first Nasdaq-listed global cannabis company,
from February 2018 to May 2021. Mr. Auerbach also sat on the
board of directors of Privateer Holdings, Inc from June 2013 to
December 2019. Privateer Holdings was the leading cannabis private
equity firm that founded Tilray. Mr. Auerbach presently sits on the
boards of the Theodore C. Sorensen Center for International Peace
and Justice, the KiDS Board of NYU’s Hassenfeld Children’s
Hospital, Next for Autism, which produces Night of Too Many Stars,
Finding a Cure for Epilepsy (FACES), and Sophie Gerson Healthy
Youth Foundation.
In addition to Canaccord Genuity Group Inc., Mr. Auerbach is a
director of the following public companies: Atai Life Sciences NV
and The Parent Company (TPCO Holding Corp.)
Daniel Daviau
Dan Daviau, age 58, was appointed President and Chief Executive
Officer and a director of the Company effective on October 1, 2015.
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
Mr. Daviau also served as Chief Executive Officer of Canaccord
Genuity Corp. from October 1, 2015 to June 2023, 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 Goodmans
LLP, 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.
Amy Freedman
Independent director
Audit and Risk Committee, Corporate Governance and Compensation
Committee
Amy Freedman, age 50, is a Partner and Head of Engagement
Fund Investment at Ewing Morris & Co. Investment Partners Ltd.
Ms. Freedman was previously CEO of Kingsdale Advisors, a leading
shareholder services and advisory firm specializing in strategic
and defensive advisory, governance advisory, proxy and voting
analytics and investor communications. Prior to Kingsdale,
Ms. Freedman spent over 15 years in capital markets as an
investment banker with global firms including Stifel and Morgan
Stanley in both Toronto and New York. She holds an MBA and JD
from the University of Toronto.
In addition to Canaccord Genuity Group Inc., Ms. Freedman is a
director of the following public company: Mandalay Resources
Corporation.
David Kassie
David Kassie, age 67, 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 held that office until the appointment of Mr. Daviau
as Chief Executive Officer. Mr. Kassie is now the full-time Chairman
of the Board.
Board of Directors 119
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
(SickKids).
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.
Lead Director, Chair of Audit and Risk Committee, Corporate
Governance and Compensation Committee
Terrence (Terry) Lyons, ICD.D, age 73, is a corporate director
and currently serves as Lead Director and Chair of the Audit and
Risk Committee. He is an Independent Director and Chair of
the Audit Committee of Martinrea International Inc. He is also
a Director of several public and private corporations, including
Mineral Mountain Resources Ltd. and Waterotor Technologies
Inc. (Chairman). Mr. Lyons is a retired Managing Partner of Brookfield
Asset Management, past Chairman of Three Valley Copper
Corp., Polaris Materials Corp. (recently acquired by Vulcan
Materials), Northgate Minerals Corp. (now Alamos Gold), Eacom
Timber Corp. (acquired by Interfor) and Westmin Mining and
Vice-Chairman of Battle Mountain Gold (acquired by Newmont
Gold). He was previously on the Board of Directors of Canaccord
Genuity Group Inc. for 18 years from 2004 to 2022, having
served as Lead Director and Chair of the Audit Committee.
Mr. Lyons is a Civil Engineer (UBC) with an MBA from Western
University. He is a Member Emeritus of 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, past Co-Chair of the B.C. Business Hall
of Fame, past Director of the Institute of Corporate Directors
(BC) and a former director of the BC Pavilion Corp. (Pavco). In
2007, he 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., and Mineral Mountain Resources Ltd.
Jo-Anne O’Connor
Audit and Risk Committee, Corporate Governance and
Compensation Committee
Jo-Anne O’Connor, age 63, 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 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.
Rod Phillips
Independent Director
Audit and Risk Committee, Corporate Governance and
Compensation Committee
Rodney (Rod) Phillips, age 58, is a business and public policy
leader and lifelong community volunteer. He was the Member
of Provincial Parliament (MPP) for Ajax, Ontario and served as
Ontario’s Minister of the Environment, Conservation, and Parks,
Minister of Finance, and Minister of Long-term Care. Prior to
his public service, Mr. Phillips was the President and CEO of the
Ontario Lottery and Gaming Corporation, and of Morneau
Shepell (Lifeworks). He began his career as a management
consultant with KPMG. He also worked with Goodmans LLP and
as Chief of Staff to the first Mayor of the amalgamated city of
Toronto. Mr. Phillips was also Canadian Chair and Global Advisory
Board Member of Afiniti and served as Chair of the Board of
Directors for Postmedia Network Inc., and as a member of the
corporate boards of Data Communications Management, Top Aces,
and the Interprovincial Lottery Corporation. Mr. Phillips served
as the volunteer chair of CivicAction and the TELUS Community
Fund and on the Boards of Toronto International Film Festival,
the Canadian Psychiatric Research Foundation, the Global Business
and Economic Roundtable on Addiction and Mental Health,
the Council of the College of Physicians and Surgeons of Ontario,
Bridgepoint Health, and the Toronto Community Foundation.
He is a past President of the Canadian Club of Toronto. Mr. Phillips
has an Honours BA in Political Science and English from the
University of Western Ontario, and an MBA from Wilfrid Laurier
University. He is also a graduate of the Rotman School of
Management Directors Education Program with Institute of
Corporate Directors designation, ICD.D.
Mr. Phillips is currently not a director of any other public
companies.
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
120
Locations
Capital Markets
CANACCORD GENUITY CAPITAL MARKETS
Canada
Toronto
Canaccord Genuity Corp.
40 Temperance St Suite 2100
Toronto, ON
Canada M5H 0B4
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
1250 René-Lévesque Boulevard West
Suite 2930
Montréal, QC
Canada H3B 4W8
Telephone: 514.844.5443
United States
New York
535 Madison Avenue
New York, NY 10022
USA
Telephone: 212.389.8000
New York
33 Whitehall Street, 27th Floor
New York, NY 10004
USA
Telephone: 212.842.6020
New York
888 7th Avenue
New York, NY 10019
USA
Telephone: 212.331.0150
Boston
99 High Street, Suite 1200
Boston, MA 02110
USA
Telephone: 617.371.3900
Toll free: 1.800.225.6201
San Francisco
44 Montgomery Street, Suite 1600
San Francisco, CA 94104
USA
Telephone: 415.229.7171
Toll free: 1.800. 225.6104
Nashville
1033 Demonbreun Street, Suite 620
Nashville, TN 37203
USA
Telephone: 615.490.8500
Minneapolis
45 South 7th Street, Suite 2640
Minneapolis, MN 55402
USA
Telephone: 612.332.2208
Charlotte
227 W. Trade Street, Suite 1820
Charlotte, NC 28202
USA
Telephone: 212.389.8000
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
29 rue de Berri
75008 Paris
France
Telephone: 33.1.56.69.66.66
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
Hainan
Rm 206, 2th Floor, Building 8829,
Walker Park
Hainan Resort Software Community
Chengmai, Hainan 571924
China
Telephone: 86898.6748.6602
Melbourne
Level 42, 101 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
25 Martin Place
Sydney NSW 2000, Australia
Telephone: 61.2.9263.2700
Portsea
3741 Point Nepean Place
Portsea, Victoria 3944, Australia
Locations 121
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
1620 Dickson Avenue, Suite 320
Kelowna, BC
Canada V1Y 9Y2
Telephone: 250.712.1100
Toll free: 1.888.389.3331
Ontario
Toronto
40 Temperance Street, Suite 2100
Toronto, ON
Canada M5H 0B4
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
Oakville
200-1267 Cornwall Road
Oakville, ON
Canada L6J 7T5
Telephone: 905.582.3315
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
201 Portage Avenue, Suite 1010
Winnipeg, MB
Canada R3B 3K6
Telephone: 204.259.2850
Toll free: 1.877.259.2888
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
Edinburgh
4th Floor, 40 Princes Street
Edinburgh EH2 2BY
Telephone: 44.131.380.9500
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
Guernsey – Operations
Operations Centre,
Landes du Marche,
Vale
Guernsey GY1 3TY
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
Worcester
Slip House
Princes Drive
Worcester WR1 2AB
Telephone: 44.1905.953600
York
29 High Petergate
York
Yorkshire YO1 7HP
Telephone: 44.1904.232780
2023 ANNUAL REPORT / CANACCORD GENUITY GROUP INC.
122 Locations
Southampton
Ocean Village Innovation Centre
Ocean Way
Southampton SO14 3JZ
Telephone: 44.23.8212.4170
Birmingham
7th Floor, 4 Temple Row
Birmingham B2 5HG
Telephone: 44.121.230.1910
Guildford
4th Floor, Tempus Court
Onslow Street
Guildford GU1 4SS
Telephone: 44.1483.961100
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
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
40 Temperance Street, Suite 2100
Toronto, ON
Canada M5H 0B4
Telephone: 416.869.7368
CANACCORD GENUITY GROUP INC. / 2023 ANNUAL REPORT
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
40 Temperance Street, Suite 2100
Toronto, ON
Telephone: 416 869 7293
Email: investor.relations@cgf.com
Media Relations and Inquiries
from Institutional Investors
and Analysts
Christina Marinoff
Senior Vice President, Head of Investor Re-
lations & Global Corporate Communications
Phone: 416-687-5507
Email: cmarinoff@cgf.com
The Canaccord Genuity Group Inc.
Annual Report for the year ended March 31,
2023 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
Q1/24
Q2/24
Q3/24
Q4/24
August 3, 2023
November 14, 2023
February 7, 2024
June 5, 2024
September 15, 2023
December 22, 2023
March 15, 2024
June 21, 2024
October 2, 2023
January 2, 2024
April 1, 2024
July 2, 2024
September 1, 2023
December 1, 2023
March 1, 2024
June 21, 2024
September 15, 2023
December 15, 2023
March 15, 2024
July 2, 2024
(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
information, please visit
www.canaccordgenuity.com
Auditor
Ernst & Young LLP
Chartered Professional Accountants
Vancouver, BC
This page intentionally left blank.
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
SVP, Head of Investor Relations &
Global Corporate 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
40 Temperance Street, Suite 2100
Toronto, ON M5H 0B4
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
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
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, Canada
For information about fees paid to
shareholders’ auditors, refer to our
Fiscal 2023 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 4, 2023
10:00 a.m. (Eastern time)
Shareholders and duly appointed
proxyholders can attend the virtual
meeting online by going to
https://web.lumiagm.com/419983261.
EDITORIAL AND DESIGN
SERVICES
The Works Design
Communications Ltd.
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NORTH AMERICA
Bahamas
Boston
Calgary
Charlotte
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
Llandudno
London
Newcastle
Norwich
Nottingham
Southampton
Worcester
York
AUSTRALIA
Adelaide
Albany
Busselton
Melbourne
Perth
Sydney
ASIA
Beijing
Hong Kong
WEALTH MANAGEMENT
OFFICES
CAPITAL MARKETS
OFFICES
www.cgf.com
Des exemplaires en français du présent rapport et des documents
d’information connexes pour l’exercice 2023 peuvent être obtenus à l’adresse :
www.canaccordgenuity.com/fr/relations-investisseurs/relations-investisseurs/rapports-financiers