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2023 ReportPeers and competitors of Little Green Pharma:
Taro Pharmaceutical IndustriesLITTLE GREEN PHARMA
ABN 44 615 586 215
Annual
Report 2022
FOR THE 9 MONTH PERIOD ENDING
31 MARCH 2022
A world of difference
Contents
1 Who we are
2 Chairman’s letter
3 A message from the Chief Executive Officer
4 Strategy
5 Capability
• Cultivation and production
• Manufacturing
• Product innovation
• Education
• Distribution
6 Environmental, Social, Governance (ESG)
7 Directors’ report
8
Independent auditor’s report
9 Financial report
10 Shareholder information
Corporate Directory
Directors
Mr. Michael Lynch-Bell
Dr. Neale Fong
Ms. Fleta Solomon
Mr. Angus Caithness
Company Secretary
Mr. Alistair Warren
Registered Office
Level 2, Suite 2, 66 Kings Park Road
West Perth, Western Australia 6005
Telephone: +61 8 6280 0050
Facsimile: +61 8 6323 4697
Email:
cosec@lgp.global
Website
www.littlegreenpharma.com
Auditor
Deloitte Touche Tohmatsu
Tower 2, Brookfield Place
123 St George’s Terrace
Perth, Western Australia 6000
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, Western Australia 6000
Website: www.investorcentre.com/contact
Securities Exchange
Australian Securities Exchange Limited
Central Park, 152-158 St Georges Terrace
Perth, Western Australia 6000
ASX Code: LGP
ABN: 44 615 586 215
Notice of AGM
The Annual General Meeting of Little Green Pharma Ltd will be held at 3:00pm (WST) on 12 Friday August 2022.
This meeting will be held at the Company’s Registered Office unless otherwise advised.
1
Who we are
We are Little Green Pharma Ltd (Little Green
Pharma, LGP, the Company or Group): Australia's
most trusted medicinal cannabis company and a
leading global medicinal cannabis supplier.
Internationally, we are growing rapidly as a leading supplier across
Europe, as we develop and roll-out bespoke strains for our distribution
partners, while continuing to grow the LGP brand across key markets.
In Australia, we have become Australia's most trusted medicinal
cannabis brand, as our popular Australian and Danish GMP flower and
oil product suite, paired with our industry-leading engagement teams,
provide patients and prescribers with access to world-class medicines
and support services.
Today, our strategy is focused on three key goals: rapidly grow sales,
rightsize and optimise operations, and provide an industry-leading
patient and prescriber experience across all key markets.
Our longstanding experience in best-practice product development
and manufacturing, paired with supply and distribution relationships,
position the Company perfectly for future industry evolution by allowing
LGP to supply bespoke products into countries with even the most
rigorous pharmaceutical requirements.
Meanwhile, we continue clinical studies into the safety and efficacy
of our medicines while developing new and innovative medicinal
formulations for our patients in the future.
We are proud to be Little Green Pharma,
transforming lives for the better.
1
We're big on changing lives.
We are passionate about transforming lives.
Our vision is to reimagine cannabis medicines and do
extraordinary things for our patients.
It’s at the heart of everything we do, and defines our culture.
We are proud of what we've done and where we're going.
We are Little Green Pharma.
2
LITTLE GREEN PHARMA Annual Report 2022 2
Chairman's
letter
Dear Shareholders,
The 2022 financial year has been another strong year for Little Green Pharma.
Despite a shortened 9 month reporting period
online and in-person support teams to
resulting from the change in year end to 31 March,
significantly improve prescriber and patient
during its 2022 financial year the LGP Group has
educational tools and access to medicinal
made an enormous amount of progress across
cannabis products
almost every dimension of its business. From the
period 1 July 2021 to 31 March 2022 (financial year),
the Group:
• successfully integrated its Danish cultivation
and manufacturing facility acquired in June
2021, including completing capital works to
lower costs, improve productivity, and reduce
exposure to EU power prices; right-sizing
headcount; and significantly advancing a
• completed construction of its expanded Western
Australian manufacturing facilities and significantly
grew its Australian-based genetics program
• continued to be the primary supplier of medicinal
cannabis products to the French medicinal
cannabis pilot, which is anticipated to give LGP
a significant first-mover advantage in a future
legalised French market
comprehensive genetics program to provide
• progressed a range of clinical studies into
premium strains and product flexibility
• entered into keystone supply agreements
with distribution partners such as AMP for the
distribution of LGP-branded products; won
a government tender for the supply of flower
products to Italy, positioning it well for future,
larger tenders; shipped two new products
from Denmark to the Australian market; and
successfully registered the only domestically
produced cannabis flower medicine in Denmark
• continued to grow its sales in the Australian
market, as it rolled-out a series of innovative
the use of LGP products for the treatment of
obesity, symptom treatment for children with
cancer, and symptom treatment for patients
with HIV, as well as progressing its Schedule 3
CBD product registration with a successful pre-
submission meeting with the Therapeutic Goods
Administration (TGA)
• completed the first phase of its QUEST study, the
world's largest clinical study into the treatment
of chronic conditions with medicinal cannabis,
as well as obtaining ethics approval to initially
expand the study in Australia and subsequently
into other jurisdictions
3
Today, LGP has supply
pathways into the UK,
Germany, France, Italy,
Poland, Denmark and
Portugal, and access
to over 65% of EU and
UK citizens.
• continued to progress its product registrations
in jurisdictions with challenging regulatory
The entire Little Green Pharma team has worked
tirelessly over this period to grow the Company's
standards such as Poland
• was granted its Schedule 9 licence to
business and expertise, and I'd like to thank them all
here, personally, for their hard work and dedication.
As always, and on behalf of the Board and the
manufacture and supply psilocybin from its WA
Company I'd also like to thank you, our shareholders
production facilities, as well as announcing its
and stakeholders, for the support and dedication
intention to demerge its psychedelics business,
you have shown us over our journey.
Reset Mind Sciences Limited, later this year.
Your sincerely
Post-financial year, the Company continued
to significantly grow its supply channels into
Germany, the United Kingdom and Portugal,
including the it's entry into a significant,
Michael Lynch-Bell
guaranteed offtake agreement with Four 20
Independent Non-Executive Chair
Pharma, one of the largest and most successful
distributors in Germany, as well as its entry
into key product exclusivity agreements with
longstanding distribution partner Demecan in
Germany and Sana Life Sciences in the UK. The
Company has also agreed with Canopy Growth
Corporation to defer repayment of CAD 3.57m of
its loan until 31 December 2022.
These successes position LGP well as it continues
to develop new and innovative strains for several
EU markets today, while progressing product
registrations for potentially more lucrative EU
markets tomorrow.
4
LITTLE GREEN PHARMA Annual Report 2022 3
A message from the
Chief Executive Officer
Message to shareholders
For Little Green Pharma, the 9 months to 31 March
the previous comparative 9 month period of 1 July
2022 was a huge year, as the Company relentlessly
2020 – 31 March 2021.
pursued a broad suite of projects and initiatives in
Australia, Denmark, and overseas.
In the genetics space, our genetics program
continues to produce strains bespoke designed
The result has been outstanding: the Company
to meet the in-market needs of customers and
now has a high-volume GMP-licensed cultivation
patients, with the Company spending significant
and manufacturing facility located in the European
time and resources in developing out a world-class
Union, capable of scaling to meet almost any third-
bank of cannabis cultivars. As of writing, LGP has
party demand. The Group’s success in developing
over 20 strains in various stages of development,
partnerships with key distributors in Germany and
with the Group’s recent entry into exclusive supply
the UK is clear, as is its evolution towards a contract
agreements with key partners Four 20 Pharma,
portfolio with minimum exclusivity and guaranteed
Demecan and Sana testimony to the success of
take-or-payment commitments. Our secret sauce is
the program.
the shared development of bespoke flower strains
sold exclusively to key purchasers in high-volume
jurisdictions such as Germany, paired with the
continued roll-out of LGP branded oil and flower
products in the same jurisdictions.
This European presence also allows the Group
to compete in markets not previously available,
such as Italy, Portugal and Scandinavia, while also
dramatically reducing approval time and logistics
and costs. Importantly, it positions Little Green
Pharma perfectly to take advantage of significant
new markets in France, Italy and Poland as they
either grow or open up in the future. To date, the
These developments position LGP Denmark as a
key ingredient to LGP’s success in meeting current
market demand, while granting the potential to
access more challenging and lucrative European
markets in the future.
In Australia, the Company continues to achieve
construction and production goals, with its Western
Australian facility completing commissioning of
its manufacturing facilities post-financial year,
and with LGP showing it can ramp production up
and down in response to market demand without
product quality impairment.
growth of LGP’s international sales (i.e. excluding
The Company also increased the number of
local Australia and Denmark sales) year-on-year
Australian prescribers by 21% from the previous
has been significant: during the current financial
12 month financial year, and by 64% against a
year, LGP’s international sales increased by 72%
comparative 9 month financial year, as well as
from the previous financial year, and by 114% from
increasing its patients by 12% compared to the
5
50+%
Revenue growth from previous financial year
12% and 63%
Increases in Australian patients*
21% and 64%
Increases in active Australian prescribers*
72% and 114%
Increases in international sales*
3 New medicinal cannabis products launched
* Comparisons with previous financial year and comparative reporting period of 1 July 2020 – 31 March 2021 respectively.
previous 12 month financial year, and by 63%
With two fully operational world class facilities in
against a comparative 9 month financial year.
geographically favourable locations, LGP now has
LGP also continued to achieve strong growth with
revenue of over $10.52 million for the 9 month
reporting period, being an increase of over 50% on
the building blocks to deliver on its core strategy
of supplying material volumes of product into the
European market while maintaining a dominant
position in Australia. With a strong market share
the previous 12 month financial year. If extrapolated
in Australia, its quickly growing sales pipeline in
on a straight-line basis for a further quarter, LGP
Germany and the United Kingdom, the near-term
would have achieved a 100% increase in revenue
legalisation of medicinal cannabis in France, and
growth for the same 12 month period.
the ability to deliver into Italy and Scandinavia
The Company is also considering all levers to
manage our current capital, including engaging in
right-sizing operations, optimising projects, and
improving existing yields with new strains and new
technology as we look to get as operationally lean
as possible, while still supplying the high-quality
products that underpin LGP’s reputation.
In relation to COVID, the primary disruptions
related to management travel restrictions from
Perth, including to Denmark to help integrate the
Danish Facility. In addition, COVID has resulted in
additional time and expense delays in all logistics
operations, including in Australia, Denmark, and
overseas. Finally, the war in the Ukraine has also
(amongst others), the Group is now focusing
on prioritising its operations to efficiently and
effectively meet the needs and demands of
customers, prescribers and patients.
We know where we need to get to, and you – our
shareholders – can remain confident we have the
tools, ambition and expertise to get there as soon
as possible.
Lastly, I’d like to give my heartfelt thanks to the
entire Little Green Pharma team in Australia,
Denmark and around the world – it is due to your
passion, hard work, talent and perseverance that
we continue to do extraordinary things for patients
and help solve real problems.
added likely temporary additional costs to LGP’s
Yours in Health,
operational costs in Denmark, as the cost of
power across Europe increases in response to
gas shortages across the continent. However,
LGP’s recent right-sizing of operations and capital
expenditure are designed to help mitigate some of
Fleta Solomon
these additional costs.
Chief Executive Officer
Little Green Pharma Annual Report 2022
6
LITTLE GREEN PHARMA Annual Report 2022 4
Strategy
LGP’s core strategy remains
unchanged: build sales in operating
jurisdictions, leverage the resulting
manufacturing expertise and
capacity to unlock high-value
offshore markets, and continue to
develop new and innovative products
to gain short-term market share and
facilitate long-term growth.
7
However, in the past 9 months LGP has refined its
core strategy into the following initiatives:
• build the most trusted patient and prescriber
engagement teams in Australia
• develop and supply high-quality bespoke strains
for key distribution partners across Europe
• enter into exclusive supply arrangements with
partners for LGP branded medicines, including
for markets with high regulatory barriers to
entry such as Italy, Poland, Portugal and France;
and
• continue its high potential drug development
and R&D programs, including new meet-the-
market products and key research initiatives
The success of this strategy is evident in LGP’s
year-on-year growth in prescriber and patient
numbers and product sales; its entry into various
foundational supply and distribution agreements
with key partners such as Four 20 Pharma,
Demecan and Sana Life Sciences; its development
of a world-class genetics portfolio in Denmark;
and its participation in a range of clinical studies
and continued evolution of its world-class QUEST
research initiative.
The Company’s growth strategy comprises three key pillars:
1
Patient acquisition
in operating
jurisdictions
Sales in Australia and
Denmark demonstrate
market validity and generate
immediate cashflow to
support development of
international pathways.
2
Clear pathway to
international sales
Early mover commercial
volumes in international
markets the primary
mechanism to secure and
grow offshore market share.
3
Product and drug
delivery innovations
Develop unique delivery
systems for patients in
the future to solve real
patient problems and
differentiate LGP.
Little Green Pharma Annual Report 2022
8
LITTLE GREEN PHARMA Annual Report 2022 5
Capability
LGP now has all the building blocks in
place to achieve profitability and beyond.
Cultivation and production
LGP has over 35 tonnes of installed biomass
Distribution
In Europe, LGP has supplied or has existing
cultivation capacity in two world-class GMP-
arrangements with key partners for supply into 7
certified oil and flower manufacturing facilities
jurisdictions, including Denmark, Germany, the UK,
in Denmark and Western Australia. Following
France, Poland, Portugal and Italy, representing
its successful capex modification to its Danish
access to over 65% of EU and UK citizens. In
Facility and move to a perpetual harvest model, the
Australia, it has the most trusted prescriber and
Company continues to right-size its operations to
patient engagement teams in the country and
align with its contracted commitments.
sold over 48,000 units of product in the 9 month
Product innovation
LGP has a broad genetics portfolio comprising
financial year alone. Internationally, the Company
grew its sales by more than 72% from the previous
financial year, and by more than 114% from the
over 20 cannabis strains in different stages of
previous comparative 9 month period (1 July 2020
development; is poised to roll out its international
– 31 March 2021).
successor to the world’s largest quality of life
study using cannabis for the treatment of chronic
conditions; and is participating in a range of clinical
Geographic diversification
LGP has major production facilities in both the
studies utilising LGP products.
northern and southern hemispheres, including in the
EU, as well as existing distribution pathways into a
diverse range of markets.
Access to emerging markets
LGP remains extremely well-positioned to take
advantage of the substantial and emerging French and
Italian medicinal cannabis markets, given its long-term
role as primary supplier to the French pilot and the
high barriers to entry for Italian flower tenders.
9
Cultivation and
production
LGP Denmark
During the financial year, LGP Denmark invested in
LGP Australia
In Australia, LGP continued to experience high
new LED grow lights and fogging systems, changed
demand for cannabis flower medicines produced
its cultivation process to a “perpetual harvest”
from its WA facility. During the financial year, the
model, and implemented an extensive genetics
Company successfully ramped up its cultivation
program with over 20 new strains currently under
and production capacity and continued to refine
development.
LGP Denmark’s capital improvements resulted
in a doubling of yield per plant in its upgraded
grow-rooms with no commensurate increase in
cultivation cost per plant, while the success of
its genetics program was borne out by the entry
into three key supply agreements post-year end
its cultivation techniques, to produce cultivars with
a consistent, reliable cannabinoid profile, and to
maximise yield. LGP's WA facility has the capacity to
produce up to 3 tonnes of dried biomass per annum
destined for Australian and overseas markets.
Operational right-sizing
Since February 2022, the Company has engaged
with Four 20 Pharma GmbH (Four 20 Pharma),
in the right-sizing of its cultivation and production
Deutsche Medizinalcannabis GmbH (Demecan) and
operations, to ensure alignment between production
Sana Life Sciences Ltd (Sana) for the funding and
capacity and contracted commitments, and to
development of bespoke genetics for the German
minimise exposure of its Danish Facility to increased
and UK markets.
power prices resulting from the war in Ukraine.
Little Green Pharma Annual Report 2022
10
LITTLE GREEN PHARMA Annual Report 2022 5
CAPABILITY
Manufacturing
The LGP Group recognises that global medicinal cannabis markets are not static, and frequently evolve with a
swiftness more comparable to a fast-moving consumer goods market. Because of this, LGP has implemented
a substantial and wide-ranging genetics program, as well as optimising its new equipment and production
validation processes to ensure it can meet consumer demand for new products. The Company now has a
clear understanding of the GMP product validation timelines for the generation of new products and has
spent considerable time and resources optimising its facilities to ensure the rapid turnaround of new strains
as these are developed.
LGP Denmark
During the financial year, LGP Denmark invested
LGP Australia
During the financial year, LGP completed the
in a cannabis flower packing line enabling packing
expansion to its WA manufacturing facility and
of up to 40 x 5g packs per minute and resulting
commenced commissioning of the expanded
in substantially reduced labour costs and loss of
facility. The expansion provides greater capacity for
product due to overfilling.
post-harvest flower drying and the manufacture of
LGP Denmark also registered “Billinol”, the first
locally grown cannabis flower in Denmark and
received its GMP licence to operate its QC
laboratory as an independent business under the
name of Lab Services Denmark ApS.
cannabis flower medicines, cannabis extracts (oils),
tinctures and APIs.
11
Product innovation
A component of LGP's core strategy is the development of innovative
pharmaceutical products specifically designed to improve patient outcomes.
This includes launching an expanded range of
The results from this study will ultimately provide a
medicinal cannabis oil and flower products to
rich source of real-world evidence to accompany
meet immediate patient demand in Australian and
LGP's medicines and provide increased prescriber
overseas markets; scientific validation of these
and patient confidence.
medicines through real-world clinical studies;
and the development of innovative prescription
medicines, including novel delivery systems and
precisely formulated cannabinoid products.
LGP has also successfully been granted ethics
approval for an additional clinical study called
QUEST – Global Initiative, which will focus on the
health economic impact of medicinal cannabis on
During the financial year, LGP's hallmark quality
patients with chronic disease. This study is expected
of life study, the QUEST Initiative, successfully
to commence Australian recruitment in the second
completed its recruitment phase in December
quarter of financial year 2023 with international
2021. At the close of the recruitment more than
expansion to Europe and the UK to follow.
130 participating doctors across Australia had
successfully enrolled 3,364 patients, making the
QUEST Initiative the largest longitudinal medicinal
cannabis study globally.
QUality-of-life, Evaluation STudy
A world of discovery
12
LITTLE GREEN PHARMA Annual Report 2022 5
CAPABILITY Product innovation
Product innovation
Clinical investigations
Gathering data is an important pathway to formal registration of
medicinal cannabis as an authorised prescription medicine or
over-the-counter therapeutic. Clinical investigation and trial
outcomes which produce independent, clinically-valid findings
help inform the Company’s future clinical trial plans and product
development pipeline.
Queensland University trial for the relief of
symptoms of advanced cancer in children
In addition to the successful completion
of its 151-patient trial for the treatment of
chronic refractory pain using LGP Classic
10:10, the Company recently partnered
Partnership in proprietary obesity research
In September 2021, LGP partnered with
internationally-renowned metabolic
disease researcher Professor Marco
Falasca and Curtin University to
research the efficacy of medicinal
with Queensland University of Technology
cannabis in the treatment of obesity and
to evaluate the efficacy and safety of
related disorders. This research will be
LGP Classic 10:10 and 1:100 in the relief of
conducted in three stages with the third
symptoms associated with advanced cancer
stage to be completed by 1 February
(e.g., pain, anorexia, insomnia, and anxiety)
2023. The global obesity treatment drug
in patients under 21 years old. This is a
market was valued at US$729.9 million
landmark study, as to date very few studies
in 2019 and is forecast to reach US$1.08
investigating the efficacy of THC have been
billion by 2027, at a compounded annual
conducted involving children.
growth rate of 5.0%.1
French HIV research expands LGP's
brand presence
Successful pre-submission meeting with
TGA for Schedule 3 registration
LGP has partnered with internationally
On 21 December 2021, the Company
renowned infectious disease expert Dr.
held a pre-submission meeting with
Thierry Prazuck and his team at the Centre
the TGA during which it successfully
Hospitalier Regional d Órleans in France to
presented its clinical trial strategy
conduct a clinical trial evaluating the impact
for its proposed over-the-counter
of CBD intake on symptoms and inflammation
Schedule 3 CBD medication. Based on
in adults living with HIV, using LGP's CBD50
this meeting, the Company now has a
medicine. Research partnerships such as
clear understanding of the pathway to
this solidify the Company's brand presence
product registration.
and scientific strength in France, a significant
emerging medicinal cannabis market.
1. Coherent Market Insights, “Obesity Management Drugs Market Report 2020 -2027”. Sep 2020:
Available: https://www.coherentmarketinsights.com/market-insight/anti-obesity-drugs-market-2824
13
Genetics program
During the financial year, the Company commenced a
significant genetics development program intended to give
LGP greater adaptability to the continuously evolving medicinal
cannabis markets in the EU and elsewhere. This genetics
program analyses market trends and potential future scenarios
for cannabis final products and, using this data, looks to develop
novel cannabinoid combinations as well as specific traits such
as increased yield or decreased processing requirements. The
Company now has a broad suite of high-potential genetics in
various stages of development and has already seen success
with the Company’s entry into two key supply agreements with
Four 20 Pharma and Demecan for bespoke strains.
LITTLE GREEN PHARMA Annual Report 2022
14
5
CAPABILITY
Education
~12,000
New patients for
the financial year*
Supporting healthcare
professionals to make
a world of difference.
*Compared to 7,300 for the comparative reporting period 1 July 2020 to 31 March 2021.
Engagement Team
Customer Care Team
Healthcare practitioner education and outreach
During the financial year LGP also expanded its
remains a critical component of LGP’s commercial
Customer Care Team. LGP’s Customer Care Team is
strategy. During the financial year, LGP's industry-
responsible with supporting patients throughout their
leading practitioner engagement team continued
medicinal cannabis journey, from finding practitioners
to engage with healthcare professionals to support
familiar with medicinal cannabis prescribing, to
their education into the benefits of cannabinoid
medicines, including:
• online training courses, webinars, and virtual
meetings typically provided by independent
medical practitioners and frequently with
specialised content around particular
conditions
• support of practitioners with education and
assistance to navigate the TGA application
process, with strong medical science liaison
representation across both east and west coasts
• development of an accredited medicinal
cannabis course for pharmacists
• provision of portals for patients and healthcare
professionals to access a range of resources to
improve professional knowledge, as well as its
Greenchoices.com.au directory that connects
patients to doctors familiar with prescribing
medicinal cannabis.
15
supporting patients with clinic, prescriber and
pharmacy engagement. LGP's Customer Care Team
has emerged as the industry's most trusted and
effective customer support service and has become a
key distinguishing feature from the services provided
by other medicinal cannabis sponsors in Australia.
LGP brand and website refresh
Post-financial year, LGP also launched a refresh of
its global brands as well as introducing new
global and jurisdiction-specific websites: see
www.littlegreenpharma.com These sites have been
significantly updated and improved to enable
efficient access to a
realm of specialised
educational and
support resources
for practitioners,
pharmacists, and
patients alike.
Distribution
Consistent with its long-term core strategy, the
Company has continued to build its Australian sales to
generate immediate cash flow to underpin development
of its international pathways, while supplying early-mover
commercial volumes into international markets to grow
offshore market share.
During the current 9 month financial year 1, the Company achieved
strong Australian and international sales growth with over a 50% increase
in revenue to $10.52 million, up from $7 million for the 12 month period
from 1 July 2020 to 30 June 2021. Extrapolated on a straight-line basis for
a further quarter, LGP would have achieved a 100% increase in revenue
growth for the same 12 month period.
Australian sales and distribution
International sales and distribution
During the financial year, the Australian medical
During the financial year, the Company integrated
cannabis market continued to grow, with strong
patient demand and over 101,000 SAS B approvals
granted via the TGA's Special Access Scheme.
and rightsized its Danish production facility by:
• reorienting its production capability towards
lower-cost, higher-yielding grow-rooms
The Australian medicinal cannabis market also
continued to evolve, with a distinct shift towards
cannabis flower products as a preferred dosing
formulation. As at the date of this report, almost
half of the current prescriptions in the Australian
operating under a perpetual harvest model,
achieved through targeted capex upgrade
works to key grow rooms, the implementation
of new packing equipment, and the alignment
of its production capacity to meet committed
market are for cannabis flower products.
contract quantities
During the financial year:
• LGP released three new dried cannabis
flower medicines, including its Billy Buttons
THC16%, Billy Buttons THC19% and Sky Mist
CBD14% products, with LGP developing more
flower strains for sale in Australia in the next
financial year
• LGP's four CBD-dominant oil medicines grew in
popularity
• LGP developed online platforms designed to
help facilitate patient access to practitioners
familiar with prescribing medicinal cannabis, and
to assist patients receive medicinal cannabis
products delivered directly to their homes.
• undertaking substantial investment in its
genetics program, resulting in the ongoing
development of over 20 new strains designed
to meet and anticipate future market evolution
in key jurisdictions.
These significantly improved capabilities give
the Company capacity to develop and cultivate
bespoke cannabis strains for exclusive distribution
partners in key EU and global markets, as well as
developing its own range of LGP-branded flower
and oil products.
16
LITTLE GREEN PHARMA Annual Report 2022 5
CAPABILITY Distribution
Distribution
Denmark
Germany
In Denmark, LGP secured the country's first
In Germany, LGP continued to rapidly grow its
domestically produced cannabis flower product
registration for LGP’s “Billinol” THC16, following an
approximate 2.5-year application and registration
process. With this registration the Company
became the only domestic producer of medicinal
cannabis flower (and one of only two suppliers
of medicinal cannabis flower) in the country; and
since its introduction demand has increased
steadily with Billinol already the dominant flower
product available in Denmark. This product
registration not only gives LGP a privileged position
in the Danish medicinal cannabis market but also
gives LGP access to certain Nordic countries under
distribution capacity with:
• a further large-volume 3-year exclusive supply
agreement for up to 1.3T per annum of three
prospective LGP strains with existing key
distribution partner, Demecan;
• a Company-first guaranteed take-or-pay
contract for at least $7.5 million over 2.5 years for
the exclusive supply of LGP's recently developed,
high-THC SMS strain with Four 20 Pharma, one
of the largest and most successful medicinal
cannabis distributors in Germany; and
• entry into a 3-year exclusive distribution
mutual recognition schemes, with LGP expecting
agreement with AMP Medical Products GmbH
to sell the medicine into other European territories
(AMP) for the exclusive supply of two LGP-
during financial year 2023.
branded medicinal cannabis oils, as well as
the non-exclusive supply for other oils in LGP's
portfolio.
17
United Kingdom
Italy
During the financial year, LGP agreed a 3-year
During the financial year LGP was awarded a
supply agreement with Sana for the exclusive
€200,000 tender for the supply of medicinal
supply of LGP’s 10:10 Classic Oil into the UK and
cannabis flower from its Danish Facility to the
Crown Dependencies, including the non-exclusive
Italian Government. Italian Government tenders
supply of certain LGP medicinal cannabis oil and
are currently the sole pathway for cannabis flower
flower products from LGP’s Australian operations
supplies into Italy and impose some of the highest
as well as a prospective balanced strain currently
GMP product quality standards globally. With the
under development in Denmark.
award, LGP joined a small group of international
France
LGP continued to be the primary supplier of
medicines to the French medicinal cannabis pilot
in partnership with local distributor, Intsel Chimos.
The pilot is currently the sole pathway for the supply
cannabis producers qualified to supply to cannabis
flower medicines to Italy, with only two suppliers
bidding for the tender and only Aurora having
successfully tendered in the past. The award
positions LGP well for upcoming future and
significantly larger Italian tenders.
of medicinal cannabis into France, with only three
other producers awarded a supply role to the trial.
Poland
The trial is anticipated to catalyse legalisation of a
In April 2021, the Company signed an exclusive
€4 billion French market, with LGP set to capitalise
distribution agreement with MedezinSp. s.o.o, a
on its brand equity and first mover status.
subsidiary of Pelion SA, the largest operator in the
Polish and Lithuanian healthcare sector, for the
exclusive supply of certain LGP branded products
into Poland. A dossier for product registration
was submitted in June 2021 and is currently being
evaluated by the Polish Office for Registration of
Medicinal Products, Medical Devices and Biocidal
Products.
Portugal
In March 2022, LGP signed a three-year agreement
for the non-exclusive supply of LGP’s Desert Flame
and Billy Buttons products to Alkannoli LDA in
Portugal, with marketing authorisations currently
being sought for the products.
18
Today, LGP has supply pathways
into UK, Germany, France, Italy,
Poland, Denmark and Portugal,
and access to over 65% of EU
and UK citizens.
LITTLE GREEN PHARMA Annual Report 2022 6
Environmental, Social,
Governance (ESG)
A World of Difference
19
Pathway to sustainability –
green, on both sides of the equation
LGP’s core business of supplying cannabis medicines to
patients suffering a variety of medical conditions means
the Company already has a strong ESG profile.
In particular, LGP's product and service offerings mean the Company
automatically scores very strongly across three of the Six Dimensions of
Impact, being economic vitality, lifetime well-being, and societal enablement.
Meanwhile, LGP's Green Committee focuses on the Group's performance
against the remaining Six Dimensions of Impact with the goal of identifying any
remaining deficiencies and facilitating the Company’s ESG compliance journey.
We believe these efforts will create distinctive
competencies and create value for the benefit
of both shareholders and society.
The following table sets out the Six Dimensions
of Impact including the Company’s current
performance and areas of focus:
LITTLE GREEN PHARMA Annual Report 2022
20
LITTLE GREEN PHARMA Annual Report 2022 6
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) A World of Difference
Impact dimension
Areas of focus
Status
Highlights
Economic
vitality
Meaningful
occupational purpose
Group employees are engaged in meaningful careers that
contribute significant economic benefits to broader society
and stakeholders.
Creating jobs across
supply chain (internal
& external)
Group engages a broad and diverse workforce and
contractor base across entire supply chain, from cultivation
through to distribution and stakeholder engagement.
Regional and
community
contribution
Group provides significant employment and recruitment
opportunities in regional WA and regional Denmark.
Environmental
sustainability
Energy consumption
and management
Pesticide and
contaminant
management
Water and wastewater
management
Group purchases 100% renewable power for its WA
production facilities and 50% renewable power for its
Denmark facility. Company also reviewing actions and
activities required to achieve carbon neutrality.
Denmark facility disposes of its organic waste to a local
Danish renewable power producer who in turn generates
and supplies waste heat to LGP’s Danish Facility used to
warm the facility and reduce power consumption.
The Group uses organic, non-hazardous, non-dangerous
protectants as part of its integrated pest management
regime.
The WA facility uses hydroponic watering systems that
minimise water loss and maximise application.
The Denmark facility collects rain water from the rooftops
of all its facilities and uses this to water its crops. All
excess water from watering is collected in tanks and
reused. The facility can store up to 9,000m3 of rainwater
on site in closed basins.
Little Green Pharma Annual Report 2022
Only wastewater from processing and cleaning in WA are
disposed via sewerage systems.
Waste and hazardous
materials
Lifetime
well-being
Improving quality of
life of patients and
employees
Provide benefits and
opportunities for
employee growth
All organic waste is composted on site at WA facility, while
LGP’s Denmark facility currently provides its organic waste
to a local Danish renewable power producer who in turn
generates and supplies waste heat to LGP’s Danish Facility
used to warm the facility and reduce power consumption.
Rockwool used in LGP’s Danish production facilities is
redelivered to producer and recycled.
In LGP’s WA facilities, ethanol is reclaimed and disposed of
in compliance with all regulatory requirements.
LGP’s products and services significantly and positively
impact patient quality of life.
A flat management structure, broad geographic reach and
rapidly growing Group provides broad and frequent
opportunities for the development and growth of LGP
employees.
Supplying reliable
medicines to patients
Company has consistently provided high-quality cannabis
medicines to the Australian and European markets since 2018.
Product quality and
safety
Customer welfare
All Company medicines meet stringent regulatory
requirements for all applicable markets and Company’s
pharmacovigilance activities demonstrate a beneficial safety
and risk / benefit profile for its medicines.
Company strives to address all prescriber and patient
concerns and has received consistently positive feedback
and testimonials.
21
Impact dimension
Areas of focus
Status
Highlights
Ethical
capacity
Compassionate
access
Company offers a compassionate access program to eligible
patients.
Data security
Board gender
and independent
governance
structure
Strong leadership
and business ethics
Company utilises high security rated platforms and software
in connection with storage of any personal information and
complies with applicable privacy guidelines.
Company currently has 25% female Board representation and
is presently reviewing Board structure and composition, with
view to increasing number of Non-Executive Directors.
Company enjoys high-performing leadership and
management culture with robust business ethics and
practices.
Selling practices and
product labelling
Company has helped pioneer innovative and lawful sales and
marketing practices in a restrictive regulatory environment.
Societal
enablement
Patient feedback
Customer service
Access and
affordability
Company consistently receives positive feedback
and testimonials and its pharmacovigilance activities
demonstrate a beneficial safety and risk/benefit profile for its
medicines.
Company provides excellent customer, prescriber and
patient service and frequently goes beyond the call to assist
stakeholders.
Company provides significant support to prescribers and
patients seeking to access medicinal cannabis, including
through various product and educational platforms as well as
medical science liaison and customer care teams. Company
also provides a compassionate access program as well as
access to reduced price cannabis medicines through health
insurance partnerships and clinical studies.
Access and
inclusion
Employee health &
safety
Group has developed a robust safety culture and enjoys a
positive safety record since commencement of operations at
all facilities.
Employee
engagement &
inclusion
Workplace
transparency
Group has strong employee engagement and inclusion
practices, including through internal communications, reward
programs and Company-sponsored activities and events.
Company strives to provide an inclusive workplace for a
diverse workforce, including flexible working practices.
Company outsources appropriate tasks to a local disability
employment provider at its WA production facility.
Group generally provides transparent communications,
updates and feedback to workforce, with any deficiencies
primarily attributable to pace of Group growth and
development.
Employee gender
and age diversity
Group has a workforce comprising 62% women, with an age
range of between 21 – 73 and an average age of 43.
1. Reference - Boston Consulting Group (April 2021), Young D and Gerard M, How to Tell if Your Business Model is Creating Environmental and Societal Benefits.
KEY
Achieved
Limited progress
On track
22
LITTLE GREEN PHARMA Annual Report 2022 7
Directors' report
The Directors present
this report for the
9 month period ended
31 March 2022.
Directors
As at the date of this report, the Directors
of the Company are:
Mr. Michael Lynch-Bell
Independent Non-Executive Chair
Dr. Neale Fong
Independent Non-Executive Director
Ms. Fleta Solomon
Chief Executive Officer
Mr. Angus Caithness
Executive Director
The Directors listed above held these positions
throughout the financial year.
The Directors listed as Independent Directors have
been independent throughout the financial year.
23
Information on Directors
Michael Lynch-Bell Independent Non-Executive Chair
Michael is an experienced corporate finance executive and consultant. Michael was
appointed on 13 November 2018. His early Ernst & Young career was focused on
auditing clients within the oil and gas sectors and later added mining to his portfolio.
Michael also led Ernst & Young’s UK IPO and Global Natural Resources transaction
teams in the Transaction Advisory practice. He has been involved advising companies
on fundraising, re-organisations, transactions, corporate governance as well as IPOs.
Michael is a former Chair of the Bureau and current member of UNECE’s Expert Group
on Resource Measurement, a non-executive Director of Barloworld Limited (JSE:BAW),
and Senior Independent Director and Remuneration Committee Chair of Gem
Diamonds Limited (LSE:GEMD). Michael is also Chair of the Company's Remuneration
and Nomination Committee.
Dr. Neale Fong Independent Non-Executive Director
Neale is a registered medical practitioner with over 35 years in senior leadership roles
in private hospitals, the public health systems, management consulting, academia,
health research, aged care and not for profit organisations. Neale is currently CEO
of Bethesda Health Care and formerly was Director General of the West Australian
Department of Health. Neale is an experienced ASX company director and is currently
independent chair of Intelicare (ASX:ICR). He is a former non-executive director of
Neurotech International Limited (ASX:NTI) and executive chair of Chrysalis Resources
Limited (ASX:CYS), and has been a Fellow of the Australian Institute of Company
Directors since 2001. Neale is also Chair of the Company’s Audit and Risk Committee.
Fleta Solomon Chief Executive Officer
Fleta drives the strategic vision of the business and as Chief Executive Officer of
Little Green Pharma has grown the company from a medicinal cannabis startup to an
industry leading medicinal cannabis brand in Australia and overseas.
Fleta has 20 years’ experience in corporate and consumer health markets, is a
graduate of the Australian Institute of Company Directors (GAICD), and holds a
Bachelor of Science and an MBA from the University of Western Australia.
Angus Caithness Executive Director
Angus is an experienced corporate finance executive and consultant in Australia and
international markets. Angus has ASX experience as a non-executive Director of Lindian
Resources (ASX:LIN), CFO of Hunnu Coal (ASX:HUN) and Company Secretary for the IPO
of Haranga Resources (ASX:HAR). Following these roles, Angus acted as CFO of Tavan
Tolgoi, the owner of the world’s largest coking coal deposit looking at a US$10 billion
dual listing in London and Hong Kong prior to the change in the Mongolian government.
Angus was previously an Executive Director at Ernst & Young in London and Australia
specialising in initial public offerings of large cap mining companies. Angus is a
Harvard Business School alumnus, a Chartered Accountant, has a Master of Science
and is a fellow of the Financial Services Institute of Australasia.
LITTLE GREEN PHARMA Annual Report 2022
24
7
DIRECTORS' REPORT
Reporting and comparative periods
On 15 February 2022, the Company resolved to change its financial year to 1 April to 31 March to align with
the current reporting period at its Danish Facility and optimise accounting team and consultant availability
during the year end process.
For the purposes of this Annual Report, the 9 month period between 1 July 2021 and 31 March 2022 is the
Company’s financial year, with the previous comparative reporting period being 1 July 2020 to 31 March 2021.
Board and Committees
The Directors held five Directors’ meetings, five Audit and Risk Committee meetings and three Remuneration
and Nomination Committee meetings during the financial year:
Directors’
Meetings
Audit and Risk
Committee
Remuneration and
Nomination Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Mr. Michael Lynch-Bell
Dr. Neale Fong
Ms. Fleta Solomon
Mr. Angus Caithness
5
5
5
5
5
5
5
5
5
5
NA
5
5
5
2
5
3
3
3
NA
3
3
3
3
In addition, 31 circular resolutions were passed.
Principal activities
Review of operations
During the financial year the principal
The operational review contained in both the Strategy
activities of the Company were:
section at page 7 and the Capability section at page 9
• the cultivation of medicinal cannabis,
procurement of raw materials and
the production of medicinal cannabis
medicines
• the establishment and continued
development of distribution pathways
within Australia, the EU and other
international jurisdictions
• ongoing research and development into
new medicinal cannabis products and
delivery technologies.
In the Directors’ view, there were no
significant changes to the principal activities
of the Company during the financial year.
forms part of this Directors’ Report.
During the 9 month financial year:
• LGP generated $10,529,947 in revenue reflecting a loss
of $18,051,760 (compared to the previous financial
year’s profit after tax of $22,215,518, predominately
reflecting the impact of the bargain purchase of the
Denmark Facility)
• the Company experienced record demand in Australia
with over 11,900 new patients, a 12% increase in new
patients from the previous financial year, and a 63%
increase compared to the previous comparative
reporting period of 1 July 2020 – 31 March 2021
• over 680 Australian health professionals prescribed the
Group’s medicinal cannabis products, which included
a 21% increase in new active prescribers from the
previous financial year, and a 64% increase in new active
prescribers compared to the previous comparative
reporting period of 1 July 2020 – 31 March 2021.
25
As at 31 March 2022, more than 27,100 patients
have been prescribed the Group’s medicinal
cannabis products by more than 930 healthcare
professionals in Australia alone.
Meanwhile, gross margin decreased to 52% in the
financial year ended 31 March 2022, down from 82%
in the previous financial year, predominately due
to an increase in the sale of medicinal cannabis
flower with a lower margin and a reduction in the
estimated fair value of flower at the date of harvest
compared to the prior year.
As at 31 March 2022, the Group had a cash
position of $20 million. On 30 June 2022 the
Company will pay CAD 7.5 million of its loan with
Canopy Growth Corporation with the parties
agreeing to defer repayment of CAD 3.57 million at
an interest rate of 8.57% until 31 December 2022.
During the financial year, the Group’s key focus
was on integrating, right-sizing and improving the
Danish Facility and its product offering, finalising
the expansion of its WA production operations,
further developing sales channels into Europe
and internationally, and providing educational and
service support to healthcare professionals and
patients in Australia.
Meanwhile, the Group’s research and development
activities continue to be focussed on the development
of new and innovative drug delivery systems and
products to meet current and future market demand.
The Group had a significant number of key
achievements during its 9 month financial year and
up to the date of this report, including:
• the signing of a large-volume take-or-pay
exclusive supply agreement with one of
• the signing of into a 3-year medicinal cannabis oil
distribution agreement with AMP for the exclusive
distribution of two LGP-branded oil medicines
and the non-exclusive supply of three others in
Germany, subject to certain minimum exclusivity
commitment quantities
• the signing of into a 3-year purchase agreement
with Sana for the exclusive supply of LGP’s
10:10 cannabis oil as well as non-exclusive
supply of LGP-branded cannabis medicines
into the UK and Crown Dependencies, for
a potential annual revenue opportunity of
$1.4 million (£820,000) post-ramp up for the
exclusive oil product alone based on minimum
exclusivity commitment quantities
• the successful award of a $0.3 million
(€200,000) Italian flower tender, with LGP one
of only two suppliers bidding for the tender
and with only one other company having been
successful in the past, positioning LGP well for
future tenders
• the completion of the Company's Western
Australian manufacturing facility expansion
• the successful registration of LGP Denmark’s
Billinol THC16 cannabis flower medicine as the
only domestically produced medicinal cannabis
flower product in Denmark
• the receipt of the first shipments of LGP
Denmark’s Billy Buttons THC16 and THC19
cannabis flower medicines into Australia
• the establishment of a significant genetics
portfolio (20+ strains) with multiple strains
in different stages of development at LGP’s
Denmark Facility, as well as the significant
expansion of new genetics available in LGP’s
Western Australian Facilities
Germany’s largest and most successful cannabis
distributors, Four 20 Pharma, for the supply of the
• the receipt of a Schedule 9 licence endorsement
enabling LGP to manufacture and supply
Company’s new SMS strain into Germany, for an
psilocybin at its WA manufacturing facilities, and
estimated minimum value of $7.5 million over its
30-month term, with first deliveries expected to
start in the coming financial year.
• the signing of a 3-year supply agreement
with Demecan with a minimum purchase
commitment to maintain exclusivity of 1.3
tonnes per annum post ramp-up period for
three prospective high-THC strains currently
under development, with first deliveries
the announcement of the Company's intention
to demerge LGP’s wholly-owned psychedelics
business, Reset Mind Sciences Limited
• the continued sponsorship of the QUEST
Initiative, a large-scale observational quality of
life study into the treatment of chronic conditions
with medicinal cannabis
• LGP's continued status as primary supplier to the
French medicinal cannabis pilot in France, with over
expected to start in the coming financial year
20,000 units delivered during the financial year
26
LITTLE GREEN PHARMA Annual Report 2022 7
DIRECTORS' REPORT
COVID-19
During the financial year the Company’s operations
were not materially impacted by COVID-19, although
the pandemic did result in increased costs and
delays to imports, procurement and deliveries both
within Australia and to and from the EU, as well as
travel restrictions from Perth to Denmark which
impacted integration of the Danish Facility and
proposed travels to the east coast to meet with
stakeholders and suppliers.
War in Ukraine
The ongoing war in Ukraine has also impacted
on European power prices given the impact on
Russian gas supplies, with the consequence that
power prices have risen significantly across all EU
Likely future developments
Likely developments in the operations of the
Company, and the expected results of those
operations in future financial years, other than
matters and assumptions noted in the financial
report relating to Going Concern, have not been
included in this report as these are likely to result in
unreasonable prejudice to the Company.
Environmental issues
The Company’s operations are not regulated by any
significant environmental regulation under a law of
the Commonwealth or of a State or Territory.
Dividends
There were no dividends paid or declared in the
countries including Denmark. LGP has sought to
reporting period.
mitigate its exposure to Danish power prices by
right-sizing its production profile and undertaking
capex (including LED lighting and additional
Remuneration report
The Remuneration Report detailed on pages 29 to 34 of
fogging) in key grow-rooms which have helped
this Annual Report forms part of this Directors’ Report.
reduce the Company’s power demand.
Company performance
against expectations
The Company's operations during the year
performed as expected in the opinion of the
Directors save that production and sales from
LGP’s Danish Facility did not ramp up as quickly as
expected.
Significant changes in the
state of affairs
Directors’ securities
The Directors’ interests in securities are set out in
the Remuneration Report. These remain unchanged
as at the date of that Remuneration Report.
Performance rights
During the previous financial year, the executives
successfully achieved the share price milestone
conditions for the 3 million long-term incentive
performance rights issued to them prior to the
Company’s Initial Public Offering. During the previous
financial year, 1 million of those 3 million performance
There were no significant changes in the nature or
rights vested upon achievement of the share price
situation of the Company that occurred during the
milestones and were exercised by the executives.
financial year that are not otherwise disclosed in
this report.
After balance sheet date events
No matters or circumstances have arisen since
the end of the financial year which significantly
affected, or may significantly affect, the operations
of the Company, the results of those operations,
or the state of affairs of the Company in future
financial years, other than the three exclusive supply
During the financial year:
• a further 1 million performance rights of these
3 million performance rights vested due to the
continued employment of the executives with
the Company, with 500,000 of these vested
performance rights being exercised and
converting to 500,000 ordinary shares; and
• in July 2021, shareholders approved the issue to
the executives of a further 3 million performance
agreements with Four 20 Pharma, Demecan and
rights subject to the Company achieving share price
Sana and the deferred repayment of CAD 3.57 million
milestones of $0.95, $1.10 and $1.25 and a continued
plus interest of its loan from Canopy Growth until 31
service condition. To date, these share price
December 2022 referred to above.
milestone conditions have not been achieved.
27
Auditor’s Independence
Declaration
The Auditor’s Independence Declaration set out
The Deed also entitles the Director or Officer to
access Company documents and records, subject
to undertakings as to security and maintenance
of privilege, and to receive Directors’ and Officers’
on page 40 of this Annual Report forms part of this
insurance cover paid for by the Company.
Directors’ Report.
Corporate Governance
Statement
The Company’s Corporate Governance Statement
During or since the end of the financial period, the
Company has paid or agreed to pay a premium
in respect of a contract of insurance insuring the
Directors and Officers of the Company and its
subsidiaries, against certain liabilities incurred
can be found at https://investor.littlegreenpharma.
in that capacity. The terms of that policy prohibit
com/site/investor-centre/corporate-governance-
disclosure of the total amount of the premiums paid
statement-2022
for that contract of insurance.
Company Secretary
Mr. Alistair Warren (LLB. BA. Grad. Dip. Applied
Proceedings
The Company did not bring any proceedings
Econs.) is General Counsel and Company Secretary
against any party or seek to intervene in any such
for the Company. Alistair was previously inhouse
proceedings during the financial year. The Company
legal counsel at BHP Group Ltd and a legal
was not a party to any proceedings during the year.
practitioner in private practice with Freehills lawyers
(now Herbert Smith Freehills).
Non-audit services
Indemnification and insurance
of Directors and Officers
Under the Company’s constitution, the Company
indemnifies any current or former Director,
Company Secretary or Officer of the Company or
The Directors confirm no non-audit services were
provided by the auditor (or by another person or firm
on the auditor’s behalf) during the financial year.
Signed in accordance with a resolution of the
Directors:
a subsidiary of the Company out of the property
Michael Lynch-Bell
of the Company against (a) any liability incurred by
Independent Non-Executive Chair
Fleta J Solomon
Chief Executive Officer
30 June 2022
that person in that capacity, (b) legal costs incurred
in connection with proceedings, or (c) legal costs
incurred in good faith in obtaining legal advice on
issues relevant to their performance of functions
and duties if approved in accordance with Company
policy, except where the Company is forbidden by
law to indemnify against such liability or costs or
would be void under law.
Each Director and Officer has also entered into
a Deed of Indemnity, Access and Insurance that
provides for indemnity against liability as a Director
or Officer, except to the extent such liability is
prohibited by the Corporations Act 2001 or any
applicable law or recovered under a separate policy
of insurance. Pursuant to the Deed, Directors and
Officers may also obtain independent professional
advice at the Company’s cost in connection with
any matter connected with the discharge of that
person’s responsibilities, subject to the Board’s
written consent, as well as advice in connection with
any claim prior to the Company assuming conduct
for the claim or with the Board’s consent.
28
LITTLE GREEN PHARMA Annual Report 2022 7
DIRECTORS' REPORT
Remuneration report
The remuneration report sets out the Company’s remuneration strategy
for the financial year ended 31 March 2022 and provides detailed
information on the remuneration outcomes for the Key Management
Personnel in accordance with the requirements of the Corporations Act
2001 and its regulations.
Remuneration philosophy
The Remuneration Committee is responsible for
making remuneration recommendations to the
Board for the Directors and Key Management
Remuneration Report for
financial year 2021
The Company’s Remuneration Report for
financial year 2021 was adopted by shareholders
Personnel. In line with its Charter, the Remuneration
in November 2021.
Committee is responsible for:
• reviewing and approving the executive
remuneration policy to enable the Company
to attract and retain executives and directors
who will create value for shareholders
• ensuring that the executive remuneration policy
demonstrates a clear relationship between key
director performance and remuneration; and
recommending to the Board the remuneration of
executive and non-executive Directors
• fairly and responsibly rewarding executives
having regard to the performance of the
Group, the performance of the executive and
the prevailing remuneration expectations in
the market; and reviewing the Company's
recruitment, retention and termination policies
and procedures for senior management
• reviewing and approving the remuneration of
direct reports to the Chief Executive Officer, and
other senior executives as appropriate; and
• reviewing and approving any equity-based
plans and other incentive schemes.
Relationship between the
remuneration policy and
Company performance
The performance measures for the Company’s
short-term incentive plan (STI Plan) and long-term
incentive plan (LTI Plan) have been tailored to align
with financial and operational objectives which
create value for shareholders. The Remuneration
Committee has designed the STI and LTI Plans to
motivate, retain and reward executive performance
aligned to the Company’s strategic objectives.
Prior to its initial public offering (IPO) in February
2020, the Company’s LTI Plan sought to maximise
shareholder benefit though the issue of
performance rights tied to Company valuation and
options with premium exercise prices. Subsequently
in conjunction with its IPO, the Company aligned its
LTI Plan with performance rights targeting increases
in the Company’s share price, including initial share
price milestones of $0.55, $0.65 and $0.75, each
of which have been achieved, and subsequently
performance rights with higher price milestones,
being $0.95, $1.10 and $1.25, which have not been
achieved to date. Beginning financial year 2021, the
Company has moved towards aligning executive
performance with revenue, EBITDA, free cash flow
and cost reduction milestones to drive the Company
towards profitability.
29
Key Management Personnel
The Remuneration Report details the performance
and remuneration of Key Management Personnel
• the Executive Director for the period 1 July 2021
to 31 March 2022 was $209,885 (annualised:
$270,000) plus 10% superannuation.
(KMP) for the financial year 2022. KMPs are defined
During the financial year, the Chief Executive
as persons having authority and responsibility for
Officer also received car-parking benefits of $3,150
directing and controlling the activities of an entity
(annualised: $4,200).
directly or indirectly. The KMPs comprise:
• Non-Executive Directors, being the Chair
Mr. Michael Lynch-Bell and non-executive
director Dr. Neale Fong; and
• members of the executive team, being Ms. Fleta
Solomon (Chief Executive Officer) and Mr. Angus
Caithness (Executive Director). The executives
are accountable for managing operational
activities, financial control, and risk management
of the Company.
Components of remuneration
– Executive team
Variable Remuneration – Short
Term Incentive Plan
The STI Plan is a variable remuneration component
and comprises an annual cash incentive linked
to the achievement of specific performance
milestones that are both financial and non-financial
in nature.
The performance milestones are clearly defined
and measurable and based on achievements
that are consistent with the Company’s strategic
objectives and the goal of enhancing shareholder
value. The Remuneration Committee assesses and
approves the executives' performance against
During financial year 2022, remuneration was
these milestones.
structured according to the relevant employment
For the period 1 July 2021 to 30 June 2022, the
agreements and performance measures in place.
STI Plan set revenue, EBITDA, free cash flow, R&D,
Each of the executive team’s employment
agreements to 31 March 2022 consisted of fixed
remuneration, an STI Plan, and an LTI Plan. In
addition, the Chief Executive Officer received
car-parking benefits.
No other bonuses or skill-based payments were
received by the executives during the reporting period.
Fixed remuneration and
associated benefits
The executives receive fixed remuneration plus
superannuation. This remuneration is reviewed
annually and there is no guarantee of increases to
remuneration in any contracts of employment.
The base salary for:
• the Chief Executive Officer for the period 1 July
2021 to 31 March 2022 was $234,615 (annualised:
$305,000) plus 10% superannuation;
culture, and personal performance measures, with
executives entitled to 40% of their base salary for
achievement of all milestones and up to 70% of
their base salary for exceedance of all milestones.
Following the change in financial year in February
2022, the Board resolved to end the previous
FY2021-22 STI Plan for the period 1 July 2021 - 30
June 2022 and assess the executives against the
STI Plan performance requirements as at 31 March
2022, in order to align with the Company’s adjusted
financial year.
Following assessment of STI Plan performance,
the executives received the following short term
incentive payments and the Company has accrued
the following amounts for the adjusted financial year
ending 31 March 2022:
• Chief Executive Officer: $24,400; and
• Executive Director: $21,600.
30
LITTLE GREEN PHARMA Annual Report 2022 7
DIRECTORS' REPORT
Variable remuneration – Long Term Incentive Plan
The LTI Plan is an equity incentive designed to create sustainable growth and shareholder value.
In the prior reporting period, the executives successfully achieved the share price milestone conditions
of the 3 million long-term incentive performance rights issued to the executives prior to the Company’s
Initial Public Offering. Since that time, 2 million of these performance rights have vested and 1.5 million of
these vested performance rights have been exercised, resulting in the issue of 1.5 million ordinary shares in
the Company to the executives. The vesting of the remaining 1 million performance rights is subject to the
continued employment of the executives for 24 months from the date of satisfaction of the relevant share
price milestones.
During the year in August 2021, the Chief Executive Officer and Executive Director were issued 3 million
performance rights on the following terms:
Class*
Milestone
Milestone
Expiry
Period
Date
F
G
H
20 Day VWAP
equalling $0.95
3 years
from issue
20 Day VWAP
equalling $1.10
3 years
from issue
20 Day VWAP
equalling $1.25
3 years
from issue
5 years
from issue
5 years
from issue
5 years
from issue
Number of Performance Rights
Chief Executive
Officer
Executive
Director
Fair value
(each tranche)
500,000
500,000
$420,100
500,000
500,000
$408,000
500,000
500,000
$395,700
Total
1,500,000
1,500,000
$1,223,800
* The exercise price of each of the securities is $0.00.
Upon satisfaction of the relevant milestone and
The LTI Plan in the 2022 financial year included
subject to the executive remaining employed by
participation in an Employee Share Incentive Plan
the Company at the relevant vesting date, the
performance rights will vest in equal tranches:
• on satisfaction of the relevant milestone;
• 12 months after the date of the relevant
milestone is satisfied; and
• 24 months after the date of the relevant
milestone is satisfied.
The performance rights will lapse if an executive’s
employment is terminated for cause or poor
performance, or if the executive resigns. Early
vesting of the performance rights occurs on a
change of control or is permitted at the Board’s
discretion including among other things, termination
of a participant’s employment, engagement, or
(ESIP) that entitled the executives to up to 50% of
their base salaries in equity in the Company, based
on the Company's performance and calculated
using the closing share price at the end of the
previous financial year. Following assessment of
the ESIP for financial year 2022 the executives were
awarded 25% of their base salaries in equity in the
Company. Vesting of the awarded entitlements,
assuming continued employment, occurs as follows:
20% at the end of the financial year; 40% on the first
anniversary of the financial year; and 40% on the
second anniversary of the financial year.
Other performance rights and options
office with the Company due to death, permanent
In February 2022, the Executive Director exercised
incapacity, mental incapacity, redundancy,
3.5 million options with an exercise price of $0.30
resignation, retirement or any other circumstance
resulting in the Company receiving $1.05 million and
in which the Board may exercise its discretion. No
issuing 3.5 million ordinary shares.
dividends are payable on performance rights.
31
Service contracts
Chief Executive Officer
The structure of the Chief Executive Officer’s
remuneration is in accordance with her employment
agreement dated 1 December 2019. Ms. Fleta
Solomon is entitled to receive a base salary of
$305,000 plus superannuation per annum and is
also entitled to participate in the Company’s STI and
LTI Plans.
Express provisions in the agreement protect the
Company’s confidential information and intellectual
property and either Ms. Fleta Solomon or the
Company can terminate the agreement by giving six
months’ notice in writing to the other party.
The Company may summarily terminate the
agreement on the grounds of, among other things,
serious or persistent breaches of the terms of the
agreement, gross or wilful misconduct or if Ms. Fleta
Solomon is found guilty of any conduct which results
in damage to the reputation or the business of the
Company.
Executive Director
The structure of the Executive Director’s
remuneration is in accordance with his employment
agreement dated 1 December 2019. Under that
agreement, Mr. Angus Caithness is to receive a
base salary of $270,000 plus superannuation. Mr.
Angus Caithness is also entitled to participate in the
Company’s STI and LTI Plans.
Express provisions in the agreement protect the
Company’s confidential information and intellectual
property, and either Mr. Angus Caithness or the
Company can terminate the agreement by giving six
months’ notice in writing to the other party.
The Company may summarily terminate the
agreement on the grounds of, among other things,
serious or persistent breaches of the terms of the
agreement, gross or wilful misconduct, or if Mr.
Angus Caithness is found guilty of any conduct
which results in damage to the reputation or the
business of the Company.
Components of remuneration
– Non-Executive Directors
As per the ASX Listing Rules the aggregate
remuneration of Non-Executive Directors shall
be determined by a resolution approved by
shareholders at a general meeting. The aggregate
remuneration threshold is currently set at $500,000
per annum as approved by shareholders at a
General Meeting in November 2021.
Non-Executive Directors receive fixed remuneration
plus superannuation for their services with
Mr. Michael Lynch-Bell receiving $122,400 plus
superannuation per annum, and Dr. Neale Fong
receiving $ 61,200 plus superannuation per annum.
Presently no additional fee is paid to Non-Executive
Directors for being a member of any Board
committees.
Mr. Michael Lynch Bell and Dr. Neale Fong also hold:
• 300,000 and 150,000 retention share rights,
respectively, which were issued prior to the
Company’s IPO and vest on the third anniversary
of the admission of the Company to the Official
List of the ASX, subject to the Non-Executive
Director remaining employed by the Company
at the vesting date. Each retention share right
entitles the Non-Executive Director to the issue of
one ordinary share in the Company
• 70,000 and 35,000 retention share rights,
respectively, which were approved by
shareholders at a General Meeting held on 19
July 2021 and which vest on 20 February 2024,
subject to the Non-Executive Director remaining
employed by the Company at the vesting date.
Each retention share right entitles the Non-
Executive Director to the issue of one ordinary
share in the Company.
No other bonuses or skill-based payments were
received by the Non-Executive Directors during the
reporting period.
32
LITTLE GREEN PHARMA Annual Report 2022 7
DIRECTORS' REPORT
KMP STATUTORY AND SHARE BASED REPORTING
F. Solomon
A. Caithness
M. Lynch-Bell
N. Fong
FY2022
(9 months)
FY2021
(12 months)
FY2022
(9 months)
FY2021
(12 months)
FY2022
(9 months)
FY2021
(12 months)
FY2022
(9 months)
FY2021
(12 months)
Salary and fees1
234,615
224,958
209,885
204,000
100,521
44,457
45,900
32,300
Shares rights in lieu of salary
Living away from home
allowance
-
-
44,726
126,627
-
-
63,510
-
Other non cash benefits1
18,655
13,701
(4,280)
35,754
Post employment benefits
16,834
35,660
16,834
28,272
Short term incentive - cash
24,400
161,927
21,600
140,600
Long term incentive - shares
with milestone achieved2
Long term incentive - shares
with milestone outstanding3
Long term incentive -
retention shares4
160,124
282,757
156,260
282,757
148,214
78,867
148,214
78,867
-
-
-
-
-
-
-
86,421
-
-
-
-
-
-
-
-
-
43,463
-
-
4,590
3,069
-
-
-
-
-
-
-
-
-
-
33,947
32,858
16,973
16,429
Expense for year
602,842
969,223
548,513
833,760
134,468
163,736
67,463
95,261
Performance related
55%
54%
59%
60%
N/A
N/A
N/A
N/A
1. Other non cash benefits represent car parking paid for by the company as well as movements in the annual leave and
long service leave provisions.
2. Performance rights for which hurdles have been met, but service condition outstanding.
3. Performance rights for which neither the performance hurdles nor the service conditions have been met: 3 Tranches of
500,000 performance rights each for Fleta Solomon and Angus Caithness with share price hurdles of $0.95, $1.10 and
$1.25 and a two year service condition from the date of hurdle achievement.
4. Retention rights for which service condition outstanding.
MOVEMENTS IN ORDINARY SHARES HELD BY KMPs
Balance at start of
financial year
Issued on exercise of
convertible securities
Disposals / other
Balance at end of
financial year
Fleta Solomon
20,255,439
-
Angus Caithness
6,410,942
4,000,000
Michael Lynch-Bell
Dr. Neale Fong
833,743
1,012,567
-
75,458
-
-
-
-
20,255,439
10,410,942
833,743
1,088,025
33
SHARE BASED REPORTING
F. Solomon
A. Caithness
M. Lynch-Bell
N. Fong
Performance Rights
Performance Rights
Options
Retention Rights
Retention Rights
Share
Rights
Award date
19-07-211
16-01-20
19-07-211
16-01-20
19-09-17
19-07-211
16-01-20
19-07-211
16-01-20
26-11-20
Expiry date
19-07-26
16-01-25
19-07-26
19-01-25
19-09-22
20-02-26 20-02-23 20-02-26 20-02-23
25-11-22
Average fair value of
each instrument
$0.82
$0.40
$0.82
$0.40
$0.04
$0.84
$0.45
$0.84
$0.45
$0.40
Vesting period years
3.0
Exercise price
-
3.0
-
3.0
-
3.0
-
3.0
$0.30
3.0
-
3.0
-
3.0
-
3.0
-
0.0
-
1,500,000 1,500,000 1,500,000 1,500,000 3,500,000
70,000
550,000
35,000
275,000
116,871
Number of
instruments
Instruments
vested prior to
30 June 2021
Instruments vested
financial year
31 March 2022
Instruments
still to vest at
31 March 2022
Instruments
exercised financial
year 30 June 2021
Number of
instruments held
at 1 July 2021
Number of
instruments granted
during the financial
year
Grant date fair value
of instruments
exercised
Exercise date fair
value of instruments
exercised
Instruments
exercised during
31 March 2022
Grant date fair value
of instruments
exercised
Exercise date fair
value of instruments
exercised
Number of
instruments held at
31 March 2022
-
-
-
-
-
-
-
-
-
-
(500,000)
(500,000)
-
-
(500,000)
(3,500,000)
(125,000)
(116,871)
(500,000)
-
-
-
(250,000)
-
-
-
1,500,000 500,000 1,500,000 500,000
70,000
300,000
35,000
150,000
-
-
500,000
1,000,000
-
-
500,000
1,000,000 3,500,000
1,500,000
-
1,500,000
-
-
-
-
-
-
$211,500
$320,000
-
-
-
-
-
-
-
-
$211,500
$320,000
500,000
3,500,000
$199,000
$129,500
$220,000 $1,050,0002
-
-
250,000
300,000
-
-
125,000
41,413
150,000
75,458
700,000
-
35,000
-
-
-
-
-
-
-
$112,500
$112,500
-
-
-
-
-
-
-
-
$56,250
$22,742
$56,250
$22,742
-
-
-
75,458
$41,438
$47,161
1,500,000 1,000,000 1,500,000 500,000
-
70,000
300,000
35,000
150,000
-
Post year end, Ms. Fleta Solomon was awarded 86,648 share rights vesting over 2 years relating to ESIP for the 31 March 2022 financial
period and Mr. Angus Caithness was awarded 76,705 share rights on the same terms. The expense recognised by the Company during the
period relating to these share rights was $33,669 and $29,805 respectively.
1. As approved at 19 July 2021 Shareholder meeting, 1,500,000 Performance Rights were issued to Ms. Fleta Solomon and 1,500,000
Performance Rights were issued to Mr. Angus Caithness, evenly split into three tranches with share price milestones of $0.95, $1.10 and
$1.25 and subject to a continued service condition; 70,000 Director Retention Rights were issued to Mr. Michael Lynch-Bell; and 35,000
Director Retention Rights were issued to Mr. Neale Fong.
2. This valuation is net of the $0.30 exercise price paid for the exercise of the options.
This marks the end of the remuneration report.
34
LITTLE GREEN PHARMA Annual Report 2022 8
Independent
Auditor’s Report
35
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Deloitte Touche Tohmatsu
Perth WA 6000
ABN 74 490 121 060
GPO Box A46
Perth WA 6837 Australia
Tower 2
Brookfield Place
Tel: +61 8 9365 7000
123 St Georges Terrace
Fax: +61 8 9365 7001
Perth WA 6000
www.deloitte.com.au
GPO Box A46
Perth WA 6837 Australia
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff LLiittttllee
GGrreeeenn PPhhaarrmmaa LLttdd
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff LLiittttllee
GGrreeeenn PPhhaarrmmaa LLttdd
Opinion
We have audited the financial report of Little Green Pharma Ltd (the “Company”) and its subsidiaries (the “Group”)
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
which comprises the consolidated statement of financial position as at 31 March 2022, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
Opinion
statement of cash flows for the 9 month period then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information, and the directors’ declaration.
We have audited the financial report of Little Green Pharma Ltd (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 31 March 2022, the consolidated statement of
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
including:
statement of cash flows for the 9 month period then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information, and the directors’ declaration.
• Giving a true and fair view of the Group’s financial position as at 31 March 2022 and of its financial performance
for the 9 month period then ended; and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
• Giving a true and fair view of the Group’s financial position as at 31 March 2022 and of its financial performance
Basis for Opinion
for the 9 month period then ended; and
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
Basis for Opinion
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the “Code”) that are relevant to our audit of the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
for Professional Accountants (including Independence Standards) (the “Code”) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
Material Uncertainty Related to Going Concern
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
We draw attention to Note 1(c) in the financial report, which indicates that the Group has incurred a net loss of
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
$18,286,249 during the 9 month period ended 31 March 2022 (net profit of $22,515,518 for 12 months ended 30 June
2021), and net cash outflows from operating and investing activities totalled $24,828,596 (30 June 2021: $17,883,965
Material Uncertainty Related to Going Concern
outflow). These events or conditions, along with other matters as set forth in Note 1(c), indicate that a material
uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern. Our opinion
We draw attention to Note 1(c) in the financial report, which indicates that the Group has incurred a net loss of
is not modified in respect of this matter.
$18,286,249 during the 9 month period ended 31 March 2022 (net profit of $22,515,518 for 12 months ended 30 June
2021), and net cash outflows from operating and investing activities totalled $24,828,596 (30 June 2021: $17,883,965
outflow). These events or conditions, along with other matters as set forth in Note 1(c), indicate that a material
uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
36
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
LITTLE GREEN PHARMA Annual Report 2022
8
INDEPENDENT AUDITOR’S REPORT
Our procedures in relation to going concern included, but were not limited to:
•
Inquiring of management and the directors in relation to events and conditions that may impact the assessment
on the Group’s ability to pay its debts as and when they fall due;
Our procedures in relation to going concern included, but were not limited to:
• Challenging the assumptions contained in management’s cash flow forecast, including the timing of expected
cash flows;
Inquiring of management and the directors in relation to events and conditions that may impact the assessment
on the Group’s ability to pay its debts as and when they fall due;
•
• Assessing the impact of events occurring after balance date on the financial statements; and
• Assessing the adequacy of the disclosures related to going concern in Note 2(c) to the consolidated financial
• Challenging the assumptions contained in management’s cash flow forecast, including the timing of expected
statements.
cash flows;
statements.
• Assessing the impact of events occurring after balance date on the financial statements; and
Key Audit Matters
• Assessing the adequacy of the disclosures related to going concern in Note 2(c) to the consolidated financial
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
Key Audit Matters
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition
to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
described below to be the key audit matters to be communicated in our report.
financial report for the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition
to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters
described below to be the key audit matters to be communicated in our report.
KKeeyy AAuuddiitt MMaatttteerr
VVaalluuaattiioonn ooff BBiioollooggiiccaall aasssseettss
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
in Note 2(u)
‘Significant
As disclosed
KKeeyy AAuuddiitt MMaatttteerr
accounting judgements and estimates’ and
VVaalluuaattiioonn ooff BBiioollooggiiccaall aasssseettss
Note 4 ‘Biological assets’, as at 31 March
2022 the Group held $1.08 million of
‘Significant
in Note 2(u)
As disclosed
biological assets. This balance relates to the
accounting judgements and estimates’ and
value of the plants being cultivated carried at
Note 4 ‘Biological assets’, as at 31 March
fair value less estimated costs to sell. In order
2022 the Group held $1.08 million of
to determine the fair value of the plants,
biological assets. This balance relates to the
management prepare a fair value model
value of the plants being cultivated carried at
which requires them to exercise significant
fair value less estimated costs to sell. In order
judgement in respect of:
to determine the fair value of the plants,
management prepare a fair value model
•
which requires them to exercise significant
• Cannabinoid yield per gram; and
judgement in respect of:
•
Stage of plant growth.
Yield per plant;
Yield per plant;
•
• Cannabinoid yield per gram; and
•
Stage of plant growth.
Our procedures included, but were not limited to:
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
• Obtaining an understanding of the processes and relevant
controls used by management to determine fair value;
Our procedures included, but were not limited to:
• Assessing the appropriateness of the valuation methodology;
• Checking the arithmetic accuracy of the valuation model;
• Obtaining an understanding of the processes and relevant
• Assessing and challenging the key assumptions in the
controls used by management to determine fair value;
valuation model as follows:
• Assessing the appropriateness of the valuation methodology;
o Yield per plant based on historical actuals;
• Checking the arithmetic accuracy of the valuation model;
o Cannabinoid yield per gram based historical actuals;
• Assessing and challenging the key assumptions in the
o Stages of plant growth based on historical actuals;
valuation model as follows:
o Average production cost per gram by comparing to
o Yield per plant based on historical actuals;
historical trends and testing a sample of recent costs to
o Cannabinoid yield per gram based historical actuals;
external supporting evidence; and
o Stages of plant growth based on historical actuals;
o Sales price less cost to sell by agreeing to different types
o Average production cost per gram by comparing to
or revenue contracts; and
historical trends and testing a sample of recent costs to
Performing sensitivity analysis on the key assumptions
external supporting evidence; and
outlined above.
o Sales price less cost to sell by agreeing to different types
We also assessed the appropriateness of the disclosures in note 4
•
to the financial statements.
Performing sensitivity analysis on the key assumptions
outlined above.
or revenue contracts; and
•
Other Information
We also assessed the appropriateness of the disclosures in note 4
to the financial statements.
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the 9 month period ended 31 March 2022 but does not include the financial report and
Other Information
our auditor’s report thereon.
The directors are responsible for the other information. The other information comprises the information included in
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
the Group’s annual report for the 9 month period ended 31 March 2022 but does not include the financial report and
conclusion thereon.
our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
37
2
2
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report, or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
nothing to report in this regard.
so, consider whether the other information is materially inconsistent with the financial report, or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
Responsibilities of the Directors for the Financial Report
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
Responsibilities of the Directors for the Financial Report
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
and is free from material misstatement, whether due to fraud or error.
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
Auditor’s Responsibilities for the Audit of the Financial Report
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
Auditor’s Responsibilities for the Audit of the Financial Report
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
the economic decisions of users taken on the basis of this financial report.
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
maintain professional scepticism throughout the audit. We also:
the economic decisions of users taken on the basis of this financial report.
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
maintain professional scepticism throughout the audit. We also:
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,
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
misrepresentations, or the override of internal control.
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
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
misrepresentations, or the override of internal control.
Group’s internal control.
•
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
related disclosures made by the directors.
Group’s internal control.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
related disclosures made by the directors.
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 financial report
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
cease to continue as a going concern.
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
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.
38
3
3
LITTLE GREEN PHARMA Annual Report 2022
8
•
INDEPENDENT AUDITOR’S REPORT
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
whether the financial report represents the underlying transactions and events in a manner that achieves fair
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
presentation.
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
From the matters communicated with the directors, we determine those matters that were of most significance in the
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
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
From the matters communicated with the directors, we determine those matters that were of most significance in the
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
communication.
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
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Opinion on the Remuneration Report
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
We have audited the Remuneration Report included in pages 29 to 34 of the Directors’ Report for the 9 month period
ended 31 March 2022..
Opinion on the Remuneration Report
In our opinion, the Remuneration Report of Little Green Pharma Ltd, for the 9 month period ended 31 March 2022,
We have audited the Remuneration Report included in pages 29 to 34 of the Directors’ Report for the 9 month period
complies with section 300A of the Corporations Act 2001.
ended 31 March 2022..
Responsibilities
In our opinion, the Remuneration Report of Little Green Pharma Ltd, for the 9 month period ended 31 March 2022,
complies with section 300A of the Corporations Act 2001.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Responsibilities
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
Auditor’s Independence Declaration
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s Independence Declaration
DELOITTE TOUCHE TOHMATSU
DELOITTE TOUCHE TOHMATSU
NNiiccoollee MMeenneezzeess
Partner
Chartered Accountants
Perth, 30 June 2022
NNiiccoollee MMeenneezzeess
Partner
Chartered Accountants
Perth, 30 June 2022
39
4
4
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
Tower 2
www.deloitte.com.au
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Directors
Little Green Pharma Ltd
Level 2, 66 Kings Park Rd
WEST PERTH WA 6005
30 June 2022
The Directors
Little Green Pharma Ltd
Level 2, 66 Kings Park Rd
WEST PERTH WA 6005
Dear Directors
30 June 2022
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo LLiittttllee GGrreeeenn PPhhaarrmmaa LLttdd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of Little Green Pharma Ltd.
Dear Directors
As lead audit partner for the audit of the financial report of Little Green Pharma Ltd for the 9 month period ended
31 March 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of:
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo LLiittttllee GGrreeeenn PPhhaarrmmaa LLttdd
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
•
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
•
of independence to the directors of Little Green Pharma Ltd.
any applicable code of professional conduct in relation to the audit.
As lead audit partner for the audit of the financial report of Little Green Pharma Ltd for the 9 month period ended
31 March 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of:
Yours sincerely
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
DELOITTE TOUCHE TOHMATSU
Yours sincerely
NNiiccoollee MMeenneezzeess
Partner
Chartered Accountants
DELOITTE TOUCHE TOHMATSU
NNiiccoollee MMeenneezzeess
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
40
LITTLE GREEN PHARMA Annual Report 2022
9
Financial
report
41
Consolidated Statement of
Financial Position as at March 2022
Note
31 March
2022
30 June
2021
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Biological assets
Inventory
Assets held for sale
Prepaid expenses
Total current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Refundable deposits
Other financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Loan note
Liabilities associated with assets held for sale
Lease liability
Employee benefit obligations
Total current liabilities
External borrowings
Lease liability
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Reserves
Accumulated profit/(deficit)
Total shareholders' equity
3
4
5
6
7
8
9
10
11
6
9
12
13
9
12
14
20,086,504
5,599,794
1,076,173
7,109,242
997,347
578,301
35,447,361
40,269,169
3,656,846
965,244
5,885,656
-
868,086
51,645,001
59,394,347
54,065,269
674,686
190,196
197,839
40,753
714,212
1,345,710
834,085
-
60,497,821
95,945,182
56,959,276
108,604,277
3,199,094
11,876,669
241,424
98,495
1,133,445
16,549,127
3,783,719
114,882
18,399
3,917,000
20,466,127
3,486,056
11,365,891
-
204,644
830,817
15,887,408
-
1,215,832
-
1,215,832
17,103,240
75,479,055
91,501,037
90,254,064
104,250
(14,879,259)
86,197,119
1,896,928
3,406,990
75,479,055
91,501,037
The accompanying notes form an integral part of these consolidated financial statements and the
comparative information has been updated to reflect the finalisation of the provisional accounting for the
acquisition accounting of LGP Denmark ApS. – refer to note 17.
42
LITTLE GREEN PHARMA Annual Report 2022
9
FINANCIAL REPORT
Consolidated Statement of Profit and
Loss and Other Comprehensive Income
for the 9 months ended 31 March 2022
Revenue
Medicinal cannabis sales
Commercial rent
Cost of sales
Cost of goods sold
Gain on changes in fair value of biological assets
Gross margin
Expenses
General and administrative
Sales and marketing
Education
Research and development
Commissioning costs
Licences, permits and compliance costs
Loss from operations
Other income
Interest income
Finance expense
Research and development incentive
Government grants
Gain on bargain purchase
Net foreign exchange
(Loss) /profit before tax
Tax expense
(Loss) /profit after tax from continuing operations
Loss for the year from discontinuing operations
(Loss) /profit after tax
Other comprehensive income
Note
15
Period ended
31 March 2022
Year ended
30 June 2021
10,279,593
250,354
7,003,630
-
(7,147,052)
2,132,993
5,515,888
(4,257,423)
(3,626,459)
(790,297)
(5,415,119)
(8,616,331)
(1,955,355)
(24,660,984)
(2,760,749)
1,532,891
5,775,772
(3,516,736)
(2,109,737)
(714,030)
(1,780,218)
-
(1,867,725)
(9,988,446)
(19,145,096)
(4,212,674)
63,078
31,487
(543,528)
2,368,174
184,228
-
(1,010,103)
(18,051,760)
-
39,287
(91,542)
3,379,527
520,777
22,591,696
(11,553)
22,215,518
-
-
(18,051,760)
22,215,518
(234,489)
-
(18,286,249)
22,215,518
5
16
17
18
6
Exchange fluctuations on translation of foreign operations
Total comprehensive (loss)/profit net of tax
(2,306,128)
(20,592,377)
95,593
22,311,111
Net profit/(loss) per share from continuing operations
Basic (cents)
Diluted (cents)
Weighted average number of shares outstanding
Basic
Diluted
(7.65)
(7.65)
14.45
13.40
235,922,394
235,922,394
153,720,092
165,763,095
The accompanying notes form an integral part of these consolidated financial statements and the comparative
information has been updated to reflect the finalisation of the provisional accounting for the acquisition
accounting of LGP Denmark ApS. – refer to note 17.
43
Consolidated Statement of
Changes in Equity
for the 9 months ended 31 March 2022
Share capital
No. Shares
$
Share based
payment
reserve
Translation
reserve
Accumulated
(deficit)/profit
Total
As at 30 June 2020
133,501,069
29,944,260
1,217,194
(56,013)
(18,808,528)
12,296,913
Loss after tax
Translation reserve
Total comprehensive income
-
-
-
-
-
-
Share placements
87,025,586
54,300,000
Capital raising costs
-
(2,238,199)
Options exercised
6,850,000
2,055,000
-
-
-
-
-
-
Share based payments
-
-
1,615,389
Transfer on vesting
2,508,000
1,077,740
(1,077,740)
Shares in lieu of payments
1,247,977
497,100
-
Shares in lieu of salary
1,475,316
561,218
102,505
-
22,215,518
22,215,518
95,593
-
95,593
95,593
22,215,518
22,311,111
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54,300,000
(2,238,199)
2,055,000
1,615,389
-
497,100
663,723
As at 30 June 2021
232,607,948
86,197,119
1,857,348
39,580
3,406,990
91,501,037
Loss after tax
Translation reserve
Total comprehensive income
-
-
-
-
-
-
Share placements
2,713,801
1,799,250
-
-
-
-
Share based payments
-
-
1,618,639
Employee share plan
620,000
350,300
(350,300)
Transfer on vesting
500,000
153,730
(153,730)
Options exercised
3,500,000
1,651,159
(498,653)
Shares in lieu of salary
269,465
102,506
(102,506)
-
(18,286,249)
(18,286,249)
(2,306,128)
-
(2,306,128)
(2,306,128)
(18,286,249)
(20,592,377)
-
-
-
-
-
-
-
-
-
-
-
-
1,799,250
1,618,639
-
-
1,152,506
-
As at 31 March 2022
240,211,214
90,254,064
2,370,798 (2,266,548)
(14,879,259)
75,479,055
The accompanying notes form an integral part of these consolidated financial statements and the comparative
information has been updated to reflect the finalisation of the provisional accounting for the acquisition accounting of
LGP Denmark ApS. – refer to note 17.
44
LITTLE GREEN PHARMA Annual Report 2022
9
FINANCIAL REPORT
Consolidated Statement of Cash Flows
for the 9 months ended 31 March 2022
Operating activities
Net (loss)/profit before tax
Items not involving cash
Changes in fair value of biological assets
Depreciation and amortisation
Share-based payments
Interest income
Interest expense
Unrealised foreign exchange differences
Gain on derecognition of lease asset
Gain on bargain purchase
Changes in non-cash operating working capital
Inventory and biological assets
Accounts receivable
Prepaid expenses
Accounts payable and accrued liabilities
Employee benefits obligations
Period ended
31 March
2022
Year ended
30 June
2021
(18,286,249)
22,215,518
(2,132,993)
1,004,135
1,753,877
-
471,964
966,320
(50,446)
(1,532,891)
685,266
2,823,093
(11,178)
72,173
-
-
-
(22,591,696)
700,130
(1,740,141)
289,785
(465,625)
321,027
(3,843,564)
(2,416,011)
(174,463)
(346,867)
(28,960)
Net cash flows used in operating activities
(17,168,216)
(5,149,580)
Investing activities
Purchase of plant and equipment
Purchase of intangible assets
Net cash flows used in investing activities
Financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Payments for lease liabilities
Net cash flows from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Effect of changes in foreign exchange
Cash and cash equivalents, end of period
(7,630,905)
(29,475)
(7,660,380)
1,050,000
3,770,000
-
(94,315)
4,725,685
(20,102,911)
40,269,169
(79,754)
20,086,504
(10,572,939)
(2,161,446)
(12,734,385)
54,116,801
1,016,000
(1,016,000)
(245,822)
53,870,979
35,987,014
4,273,564
8,591
40,269,169
The accompanying notes form an integral part of these consolidated financial statements and the comparative
information has been updated to reflect the finalisation of the provisional accounting for the acquisition
accounting of LGP Denmark ApS. – refer to note 17.
45
Notes to Consolidated
Financial Statements
1. NATURE OF OPERATIONS AND BASIS OF PREPARATION
Little Green Pharma Ltd ACN 615 586 215 (the Company, LGP) was incorporated in Australia and is
a for profit company limited by shares. The financial report covers LGP and its controlled entities
(the Group). The Company’s registered office is at Level 2, 66 Kings Park Road, West Perth, 6005
Western Australia.
On 15 February 2022 the Company resolved to change its financial year to 31 March. The current
reporting period is for a 9 month period ending 31 March 2022 and the comparative reporting
period is for a 12 month period ending 30 June 2021.
a) Statement of compliance
These consolidated general purpose financial statements have been prepared in accordance with
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001 which ensures compliance with the International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
The Company is a for-profit entity for the purpose of preparing the financial statements which were
authorised for issue by the Board of Directors on 30 June 2022.
b) Basis of measurement
The financial statements have been prepared on the historical cost basis, except for certain assets
that are measured at revalued amounts or fair value, as explained in accounting polices below.
Certain comparative amounts have been re-presented to conform with the current period’s
presentation to better reflect the nature of the financial position and performance of the Group, in
particular:
• On 8 February 2022, LGP announced its intention to demerge Reset Mind Sciences Ltd. In
addition, the board resolved to dispose of the Group’s Lab Services Denmark ApS entity and
negotiations with several interested parties have subsequently taken place. In accordance
with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, the Group has:
o presented the loss from Reset Mind Sciences Ltd and Lab Services Denmark ApS
separately from its continuing operations in its Consolidated Statement of Profit or Loss
and Other Comprehensive Income in the current period and re-presentation of amounts
presented in the prior period. Refer to Note 6 for further details;
o presented the assets and liabilities of Reset Mind Sciences Ltd and Lab Services Denmark
ApS as held for sale separately from other assets and liabilities in the Consolidated
Statement of Financial Position as at 31 March 2022 with no re-presentation of amounts
presented in the prior period. Refer to Note 6 for further detail; and
o continued to present the Consolidated Statement of Changes in Equity and Consolidated
Statement of Cash Flows including both continuing and discontinued operations.
• Restated the comparative information to reflect the finalisation of the provisional accounting
for the acquisition accounting of LGP Denmark ApS. Refer to Note 17 for further detail.
46
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
c) Going concern
These consolidated financial statements have
been prepared on the going concern basis which
assumes that the Group will be able to realise its
assets and discharge its liabilities in the normal
course of business for the foreseeable future.
The Group incurred a net loss of $18,286,249 during
the 9 month period ended 31 March 2022 (net profit
of $22,215,518 for 12 months ended 30 June 2021),
and net cash outflows from operating and investing
activities totalled $24,828,596 (30 June 2021:
$17,883,965). As at 31 March 2022, the Group had
cash and cash equivalents of $20,086,504 and had
net current assets of $18,898,234.
Subsequent to year end, the Group has agreed
with Canopy Growth Corporation to defer
repayment of CAD 3.57 million of the Loan Note
until 31 December 2022.
• Securing agreement and receipt of proceeds
from the sale of the Danish GMP Lab operations;
• Receipt of the government Research and
Development tax incentive of $2.3 million which
is accrued for in Note 3;
• Repayment of the deferred amount of CAD 3.57
million of the Loan Note with Canopy Growth
Corporation until 31 December 2022
• Drawing down on the existing $2.0 million
financing facility with National Australia Bank
as required; and
• Managing costs and production in line with
the cash flow forecast.
Whilst the Directors are confident of the Group’s ability
to continue as a going concern, due to the factors
mentioned above, there is a material uncertainty that
may cast doubt whether the Group will be able to
continue as a going concern and therefore, whether it
will realise its assets and discharge its liabilities in the
The Group has prepared a cash flow forecast to
normal course of business.
30 June 2023 which demonstrates there is the
necessary working capital for the Group to continue
its ongoing operations. This is dependent upon a
combination of the following:
• Continuing the sales growth rate consistent with
The consolidated financial statements do not
include adjustments relating to the recoverability
and classification of recorded asset amounts
or to the amounts and classification of liabilities
that might be necessary should the Group not
that achieved in the 9 month period;
continue as a going concern.
d) Basis of consolidation
These consolidated financial statements include the accounts of the Company and its subsidiaries. All
intercompany transactions and balances are eliminated on consolidation. Subsidiaries are all entities over
which the Company has control. The Company controls an entity when the Company is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
The Company has the following subsidiaries:
Name of Entity
Country of
Incorporation
Functional
Currency
Ownership
31 March 2022
30 June 2021
Little Green Pharma AG
Germany
Little Green Pharma Switzerland GmbH
Switzerland
LGP Operations Pty Ltd
LGP Holdings Pty Ltd
Reset Mind Sciences Limited*
Little Green Pharma ApS
Lab Services Denmark ApS#
Australia
Australia
Australia
Denmark
Denmark
Euro
CHF
AUD
AUD
AUD
DKK
DKK
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
* On 30 September 2021 LGP Alternative Therapies Pty Ltd changed its name to Reset Mind Sciences Limited and
converted into a public company.
# On 21 March 2022 Lab Services Denmark ApS was incorporated.
47
e) Functional and presentation currency
The Company’s and Group’s functional currency is Australian dollars and the Group’s presentation currency
is also Australian dollars. All amounts presented are in Australian dollars unless otherwise specified.
f) New and revised Australian Accounting Standards
In the current year, the Company has applied all new and revised standards and interpretations issued by
the Australian Accounting Standards Board that are relevant to its operations or effective for accounting
periods starting on or after 1 July 2021. The Group did not have to change its accounting policies or make
retrospective adjustments as a result of adopting these standards.
2. ACCOUNTING POLICIES
a) Cash and cash equivalents
d) Property, plant and equipment
Cash and cash equivalents include cash and
Property, plant and equipment are carried at cost
redeemable short-term deposits with a maturity
less accumulated depreciation. Property, plant and
of less than three months held at major financial
equipment are depreciated over their expected
institutions.
b) Biological assets
The Group measures biological assets consisting
of cannabis plants at fair value less cost to sell up
to the point of harvest, which becomes the basis
for the cost of work in progress or finished goods
inventories after harvest.
Gains or losses arising from changes in fair value
less cost to sell are included in the results of
operations of the related period.
c) Inventory
lives based on the following:
• Land – not depreciated
• Buildings – units of production
• Production equipment – units of production
• Office leasehold improvements – life of the lease
• Office equipment – 2 to 5 years straight line
Depreciation for plant and equipment is recorded
once the asset is available for use.
An item of plant and equipment is derecognised
upon disposal or when no future economic benefits
are expected to arise from the continued use of the
asset. Any gain or loss arising on disposal of the
asset, determined as the difference between the net
Inventory which is classified as work in progress
disposal proceeds and the carrying amount of the
consists of harvested or purchased cannabis
asset, is recognised in profit or loss.
Residual values and estimated useful lives are
reviewed annually.
intended to be processed into oil or sold as flower
and is valued at the lower of cost and net realisable
value. Harvested cannabis is transferred from
biological assets at its fair value at harvest less
costs to sell, which becomes deemed cost. Any
subsequent post-harvest costs are capitalised
to work in progress. Inventory consisting of work
in progress and finished goods is written down to
its net realisable value if the carrying amount of
inventory exceeds its estimated selling price less
costs of disposal. Any amount written down is
recognised as part of cost of goods sold. Cost is
determined using the average cost basis.
48
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
e) Financial instruments
i. Financial assets
ii. Amortised cost
The Group classifies its financial assets initially at
This category includes financial assets that are
fair value at the time of acquisition. Subsequently,
held within a business model with the objective
they are measured at amortised cost, at fair value
to hold the financial assets in order to collect
through other comprehensive income, or at fair
contractual cash flows that meet the solely
value through profit or loss. Upon initial recognition,
management determines the classification of its
financial assets based upon the purpose for which
the financial assets were acquired. Measurement
and classification of financial assets is determined
principal and interest (SPPI) criterion. Financial
assets classified in this category are measured
at amortised cost using the effective interest
method.
based on the entity’s business model for managing
iii. Fair value through profit or loss (FVTPL)
the financial assets and the contractual cash flow
characteristics of the financial asset. Management
may, at initial recognition, irrevocably designate a
financial asset as measured at fair value through
profit or loss to prevent a measurement or
recognition inconsistency.
Financial assets are derecognised when they
This category includes quoted equity instruments
which the Company has not irrevocably elected,
at initial recognition or transition, to classify at fair
value through other comprehensive income. This
category would also include debt instruments whose
cash flow characteristics fail the SPPI criterion or are
not held within a business model whose objective is
mature or are sold and substantially all the risks
either to collect contractual cash flows, or to both
and rewards of ownership have been transferred.
collect contractual cash flows and sell. Financial
Expected credit losses on trade receivables is
assets in this category are recorded at fair value with
determined based on an individual assessment
changes recognised in profit or loss.
of each receivable taking into account the credit
worthiness of the counterparty, the days past due,
iv. Financial liabilities
general economic conditions and any subsequent
The Group initially recognises financial liabilities
trading history. These losses are recognised
at fair value and are subsequently measured at
separately in the profit or loss.
amortised cost.
f) Intangible assets
Intangible assets are recorded at cost and
amortised over their estimated useful lives at the
following annual rate:
• Computer software – 2 to 5 years straight line
• Patents – 20 years straight line
• Pharmaceutical quality systems – 10 years
straight line
Pharmaceutical quality systems are developed to
provide the policies, procedures and standards
required for Good Manufacturing Practice (GMP)
with amortisation to be recognised from the
commencement of manufacturing activities in the
Company’s own facility.
Estimated useful lives are reviewed annually.
49
g) Foreign currency translation
Transactions in currencies other than the
functional currency of the relevant entity are
recorded at exchange rates prevailing on the
dates of the transactions. At the end of each
reporting period, monetary assets and liabilities
denominated in foreign currencies are translated
at the period-end exchange rate. Revenues and
expenses are translated at the exchange rates
approximating those in effect on the date of the
transactions. Exchange gains and losses arising
on translation are included in net loss. For the
purpose of presenting consolidated financial
statements, assets and liabilities of the Group’s
foreign operations are translated at exchange
rates prevailing on the reporting date. Income
and expense items are translated at the average
exchange rate for the period. Any exchange
differences which arise are recognised in other
comprehensive income and accumulated in a
foreign exchange translation reserve.
h) Revenue recognition and gross
margin
Revenue is recognised at the transaction price,
which is the amount of consideration to which
the Group expects to be entitled in exchange for
transferring promised goods to a customer.
i) Research and development
Research costs are expensed as incurred.
Development expenditures are capitalised only if
development costs can be measured reliably, the
product or process is technically and commercially
feasible, future economic benefits are probable,
and the Group intends to and has sufficient
The Group’s contracts with customers for the
resources to complete the development to use or
sales of dried cannabis and cannabis oil consist
sell the assets. Other development expenditures
of one performance obligation being the delivery
are expensed as incurred. Other than certain patent
of that product to the customer. Revenue is
recognised at that date as this represents the
point in time when control has been transferred
to the customer with only the passage of time
required before payment is due. Payment terms
are generally 30 days.
Cost of sales represents the deemed cost
of inventory that arose from the fair value
measurement of biological assets, subsequent
post-harvest costs capitalised to inventory,
purchased dried cannabis, costs to produce
cannabis oils capitalised to inventory and
packaging costs.
development costs, to date, no development costs
have been capitalised.
j) Employee benefits
Provision is made for employee benefits such as
wages, salaries and annual leave arising from
services rendered to the end of the reporting
period. Employee benefits which are expected to be
wholly settled within one year have been measured
at the amounts expected to be paid when the
liability is settled. Where an obligation in respect
of long term employee benefits arises, that benefit
is discounted to determine its present value. Re-
measurements are recognised in the profit or loss in
the period in which they arise.
50
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
k) Share-based payments
i. Equity settled transactions
The Company grants options and performance rights to directors, officers and employees under the Group’s
Share Incentive Plan. The fair value of these instruments are recognised as an expense over the vesting
period with a corresponding increase in equity. An individual is classified as an employee when they are an
employee for legal or tax purposes (direct employee) or provide services similar to those performed by a
direct employee, including directors of the Company. At each financial position reporting date, the amount
recognised as an expense is adjusted to reflect the actual number of instruments that are expected to vest.
No expense is recognised for awards that do not ultimately vest except for equity-settled transactions for
which vesting is conditional upon a market or non-vesting condition.
Instruments with a graded vesting schedule are accounted for as separate grants with different vesting
periods and fair values. The fair value is measured using the Black-Scholes option pricing model or other
appropriate models taking into account the terms and conditions upon which the instruments were granted.
Where the terms of an equity settled award are modified, the minimum expense recognised is the expense as
if the terms had not been modified. An additional expense is recognised for any modification which increases
the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as
measured at the date of modification. When an equity award is cancelled, it is treated as if it vests on the date
of the cancellation and any expense not recognised for the award is recognised immediately.
Equity-settled share-based payment transactions with parties other than employees are measured at the
fair value of the goods or services received, except where that fair value cannot be estimated reliably, in
which case they are measured at the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
ii. Cash settled transactions
A liability is recognised for the fair value of cash settled transactions. The fair value is measured initially
and at each reporting date up to and including the settlement date, with changes in fair value recognised
in employee benefits expense. The fair value is expensed over the period until the vesting date with
recognition of a corresponding liability. The fair value is determined based on the expected value of cash to
be settled for the liability.
l) Goods and services tax
Revenue, expenses and assets are recognised net
of the amount of goods and services tax (GST),
except where the amount of GST incurred is not
recoverable from the Australian Taxation Office
(ATO). Receivables and payable are stated inclusive
of GST. Cash flows in the statement of cash
flows are included on a gross basis and the GST
component of cash flows arising from investing
and financing activities which is recoverable from,
or payable to, the taxation authority is classified as
operating cash flows.
51
m) Income taxes
Income tax expense comprises current and
deferred tax. Income tax is recognised in profit or
loss except to the extent that it relates to items
recognised directly in equity. Current tax expense
is the expected tax payable on taxable income for
the year, using tax rates enacted or substantively
enacted at period end, adjusted for amendments
to tax payable with regard to previous years.
Deferred tax is recorded using the liability method,
providing for temporary differences, between
the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used
for taxation purposes. Temporary differences are
not provided for the initial recognition of assets or
liabilities that affect neither accounting nor taxable
loss, and differences relating to investments in
subsidiary to the extent that they will probably not
reverse in the foreseeable future. The amount of
n) Research and development
incentives
deferred tax provided is based on the expected
The research and development incentive which is
manner of realisation or settlement of the carrying
received annually based on the previous financial
amount of assets and liabilities, using tax rates
years research and development expenditure is
enacted or substantively enacted at the end
recognised when there is reasonable assurance
of the reporting period. A deferred tax asset is
that the Company will comply with the required
recognised only to the extent that it is probable
that future taxable profits will be available against
conditions for that incentive to be received. Where
refundable, the refund is treated as other income.
which the asset can be utilised.
Deferred tax assets are recognised for all
deductible temporary differences and unused tax
losses to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences and losses can be utilised.
A provision is recognised for those matters for
which the tax determination is uncertain, but it
is considered probable that there will be a future
outflow of funds to a tax authority. The provisions
are measured at the best estimate of the amount
expected to become payable.
o) Government grants
Government grants are not recognised until there is
reasonable assurance that the Company will comply
with the conditions attaching to them and that the
grants will be received.
Government grants that are receivable as
compensation for expenses already incurred or for
the purpose of giving immediate financial support
to the Group with no future related costs are
recognised in profit or loss in the period in which
they become receivable and are recognised in other
income on a gross basis.
p) Profit / (Loss) per share
Basic loss per share is computed by dividing total
net loss attributable to the Group for the year by the
weighted average number of shares of the Group
outstanding during the year. When the Group is in
a loss position, all potential share issuances on the
exercise of options or warrants is anti-dilutive. In the
event of a loss position, diluted loss per share is the
same a basic loss per share.
52
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
q) Leases
r) Impairment of long-lived assets
The Group assesses whether a contract is or
At the end of each reporting period, the Group’s
contains a lease, at inception of the contract.
assets are reviewed to determine whether there is
The Group recognises a right-of-use asset and a
any indication that those assets may be impaired. If
corresponding lease liability with respect to all lease
such indication exists, the recoverable amount of the
arrangements in which it is the lessee, except for
asset is estimated in order to determine the extent
short-term leases (defined as leases with a lease
of the impairment, if any. The recoverable amount
term of 12 months or less) and leases of low value
is the higher of fair value less costs to sell and value
assets (such as tablets and personal computers,
in use. Fair value is determined as the amount that
small items of office furniture and telephones).
would be obtained from the sale of the asset in an
For these leases, the Group recognises the lease
arm’s length transaction between knowledgeable and
payments as an operating expense on a straight-
willing parties. In assessing value in use, the estimated
line basis over the term of the lease unless another
future cash flows are discounted to their present value
systematic basis is more representative of the time
using a pre-tax discount rate that reflects current
pattern in which economic benefits from the leased
market assessments of the time value of money
assets are consumed.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its
incremental borrowing rate.
Lease payments included in the measurement of
the lease liability comprise:
• fixed lease payments (including in-substance
fixed payments), less any lease incentives
receivable;
• the amount expected to be payable by the
lessee under residual value guarantees; and
• the exercise of extension options which are
reasonably certain to be exercised.
and the risks specific to the asset. If the recoverable
amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is
reduced to its recoverable amount and the impairment
loss is recognised in profit or loss for the period. For an
asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the
cash generating unit to which the asset belongs.
Management considers both external and internal
sources of information in determining if there
are any indications that the Group’s plant and
equipment or intangible assets are impaired.
Management considers the market, economic, and
legal environment in which the Group operates that
are not within its control and affect the recoverable
amount of its plant and equipment and intangible
assets. Management considers the manner in which
the plant and equipment and intangible assets are
The lease liability is presented as a separate line in
being used or are expected to be used, and indication
the consolidated statement of financial position.
of economic performance of the assets. Where an
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.
Right-of-use assets are depreciated over the
shorter period of lease term and useful life
of the underlying asset. If a lease transfers
ownership of the underlying asset or the cost
of the right-of-use asset reflects that the
Group expects to exercise a purchase option,
the related right-of-use asset is depreciated
over the useful life of the underlying asset. The
depreciation starts at the commencement date
of the lease.
53
impairment loss subsequently reverses, the carrying
amount of the asset is increased to the lesser of the
revised estimate of recoverable amount, and the
carrying amount that would have been recorded had
no impairment loss been recognised previously.
s) Segment reporting
A segment is a component of the Group that engages in
business activities in which revenues and expenses are
incurred, that has distinguishable financial information
available, and whose operating results are regularly
reviewed by the chief operating decision maker. The
nature of products sold, cultivation and manufacturing
processes and customers have similar economic
characteristics. The nature of the regulatory environment
is consistent in the markets the Group operates in.
t) Business combinations
Acquisitions of businesses are accounted for using the acquisition method with the consideration being measured
at fair value and any acquisition related costs being expensed. At the acquisition date, the fair value of all identifiable
assets and liabilities are recognised, except that deferred tax balances and any employee benefit obligations are
recognised and measured in accordance with IAS 12 and IAS 19 respectively. If the fair value of the assets and
liabilities which have been acquired is greater than the consideration paid, the difference is recognised as a gain on
bargain purchase in the profit and loss. Initial estimates are made on a provisional basis, with final fair values being
determined within 12 months of the acquisition.
u) Significant accounting judgments and estimates
The preparation of financial statements in conformity with Australian Accounting Standards requires management
to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported revenues and expenses during the year. Actual results may
differ from these estimates.
Significant estimates are evaluation and assumptions about the future and other sources of estimation
uncertainty that management has made, that could result in a material adjustment to the carrying amounts of
assets and liabilities. Significant estimates used in the preparation of these consolidated financial statements
include, but are not limited to, the following:
Biological assets and inventory
Deferred income taxes
The Group measures biological assets consisting of
In assessing the probability of realising deferred
cannabis plants at fair value less cost to sell up to
the point of harvest. Calculating the value requires
management to estimate, among others, expected
yield on harvest, expected selling price and remaining
costs to be incurred up to the point of harvest.
income tax assets, management makes estimates
related to expectations of future taxable income,
expected timing of reversals of existing temporary
differences and the likelihood that tax positions taken
will be sustained upon examination by applicable tax
The Group measures inventory at the lower of
authorities. In making its assessments, management
cost and net realizable value and estimates selling
gives additional weight to positive and negative
price, the estimated costs of completion and the
evidence that can be objectively verified.
estimated costs necessary to make the sale.
Share based compensation
The fair value of share based compensation
expense is estimated using the Black-Scholes
option pricing model or other similar models and
relies on a number of estimated inputs, such as
the expected life of the option, the volatility of the
underlying share price, and the risk-free rate of
return. For share based compensation dependent
upon milestones, significant estimates are required
as to the probability of that milestone being
achieved. Changes in the underlying estimated
inputs may result in materially different results.
Business combinations
When a business combination occurs, the fair value
of the assets and liabilities acquired is estimated on
a provisional basis due to the inherent difficulties in
both identifying all assets and liabilities acquired as
well as determining their fair values. Management
has used a third party valuation report to determine
the fair value of the fixed assets while all other fair
values have been determined using the judgements
and estimates as detailed within this “Significant
accounting judgments and estimates” note.
Research and development incentive
The research and development incentive receivable
is based on management’s best estimate of the
nature and amount of expenditure incurred during
the year that will meet the required rebate criteria.
54
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
3. ACCOUNTS RECEIVABLE
The Group's trade and other receivables is comprised of:
Trade receivables
Allowance for expected credit loss
Research and development incentive receivable
Goods and services tax receivable
Other receivables
31 March
2022
1,849,909
-
30 June
2021
773,311
-
2,329,066
1,889,424
288,264
1,132,555
382,933
611,178
5,599,794
3,656,846
Trade receivables are recognised and carried at original invoice value less any allowance for expected credit
losses. They are non-interest bearing and generally on 30-day terms.
The Group has a limited number of counter parties who it trades with on a regular basis and as such does not
expect to incur any material credit losses.
The Company receives an annual research and development tax incentive from the Australian Government
on eligible expenditure incurred during the financial year. For the financial year ended 31 March 2022, eligible
expenditure is expected to result in a rebate of $2.329 million (2021: $1.889 million).
55
4. BIOLOGICAL ASSETS
The movement associated with the Group’s biological assets is as follows:
Opening balance
Costs incurred
Acquired as part of business combination
Transfer to inventory
Unrealised changes in fair value
31 March
2022
965,244
30 June
2021
13,857
5,483,958
2,316,760
-
111,122
(7,480,816)
(3,009,386)
2,107,787
1,532,891
1,076,173
965,244
Biological assets are classified as Level 3 on the fair value hierarchy with the following inputs and
assumptions being subject to significant volatility and uncontrollable factors, which could significantly
affect the fair value of the biological assets in future periods:
• plant waste – wastage of plants based on various stages of growth;
• yield per plant – represents the weighted average grams of dry cannabis expected to be harvested from a
cannabis plant, based on historical yields;
• cannabinoid yield per gram – represents the weighted average cannabinoids expected to be obtained from a
dry gram of cannabis, based on historical yields;
• selling price, less costs to sell – based on estimated selling price per gram of dry cannabis based on historical
sales and expected sales;
• percentage of costs incurred to date compared to the total costs to be incurred (to estimate the fair value of an
in-process plant) – represents estimated costs to bring a gram of cannabis from propagation to harvest; and
• stage of plant growth – represents the weighted average age in of the plant out of the average growing cycle as
at period end date.
In the current period, the biological assets were approximately 48% complete (30 June 2021 - 34%) as to the next
expected harvest date. The average number of days from the point of propagation to harvest is 91 days.
A 20% increase or decrease in the estimated yield of cannabis per plant would result in an increase or decrease
in the fair value of biological assets of $215,234 at 31 March 2022 (30 June 2021 - $140,000). A 25% increase or
decrease in the average selling price per gram less cost to sell would result in an increase or decrease in the fair
value of the biological assets of $269,043 at 31 March 2022 (30 June 2021 - $175,000). At harvest, the estimated
fair value of a gram of biomass is $3.50 (30 June 2021 - $4.00).
5. INVENTORY
The Group's inventory is comprised of:
Supplies and consumables
Work in progress
Finished goods
31 March
2022
119,687
30 June
2021
320,473
5,996,982
4,449,550
992,573
1,115,633
7,109,242
5,885,656
In the current period, $67,943 worth of inventory was written down to its recoverable amount. In addition to this,
as part of the commissioning of the Danish Facility while creating its own genetics, $8,616,331 was incurred
producing medicinal cannabis flower for which the genetics were licenced from Canopy Growth Corp. Under the
production licence all product which has not been sold by 21 December 2022 must be destroyed. These costs
have not been capitalised to inventory on the basis that the Company does not yet have a contracted purchaser
for this these specific strains nor are there a history of sales. Under the licence agreement, cultivation of the
Canopy Growth Corp strains must cease by 21 June 2022.
56
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
6. ASSETS AND LIABILITIES HELD FOR SALE
In February 2022, LGP announced the intention to demerge Reset Mind Sciences Ltd. In addition, the board
has resolved to dispose of the Group’s Lab Services Denmark Aps operations and negotiations with several
interested parties have subsequently taken place. These operations, which are expected to be disposed
of within 12 months, have been classified as a disposal group held for sale and presented separately in the
statement of financial position. The proceeds of disposal of Lab Services Denmark ApS are expected to
substantially exceed the carrying amount of the related net assets and there will be no loss related to the
demerger of Reset Mind Sciences Ltd and therefore no impairment has been recognised. The major classes
of assets and liabilities comprising the operations classified as held for sale are as follows:
Results of assets held for sale
Effect on statement of profit or loss and other comprehensive income
31 March
2022
30 June
2021
Revenue
General and administrative
Research and development
Licences, permits and compliance costs
Net foreign exchange
Loss before tax from disposal group
Attributable tax expense
Loss after tax from disposal group
Cashflow from discontinued operations
Cashflow from financing activities
Effect on the financial position of the Group as at 31 March 2022
Current assets
Cash and cash equivalents
Accounts receivable
Non-current assets
Plant and equipment
Plant under construction
Assets classified as held for sale
Current liabilities
Accounts payable and accrued liabilities
Liabilities associated with the assets classified as held for sale
Net assets of disposal group
-
(48,781)
(152,340)
(33,318)
(50)
(234,489)
-
(234,489)
-
8,075
271,966
461,620
255,686
997,347
241,424
241,424
755,923
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57
7. PROPERTY, PLANT AND EQUIPMENT
The Group’s plant and equipment comprised of:
Land &
buildings
Leasehold
improvements
Production
equipment
Office
equipment
Assets under
construction
Total
Cost
As at 30 June 2020
Additions
-
-
6,536,768
1,083,903
128,924
514,932
321,977
62,003
Acquisition of subsidiary
37,034,042
-
8,792,065
250,303
Transfers
Write-off asset
-
-
301,012
(274,956)
(26,056)
(143,575)
-
(53,201)
As at 30 June 2021
37,034,042
7,209,137
9,922,989
361,973
-
-
-
-
-
-
7,749,595
898,912
46,076,410
-
(196,776)
54,528,141
Additions
6,833,149
3,660
1,056,489
122,726
1,722,464
9,738,488
Write-off asset
(33,421)
(2,270)
(47,710)
Transfers
7,177,768
(7,177,768)
-
Assets moved to held
for sale
Foreign exchange
movements
-
(2,106,383)
-
-
(477,005)
-
-
-
-
-
(83,401)
-
(255,686)
(732,691)
(148,232)
(1,934)
-
(2,256,549)
As at 31 March 2022
48,905,155
32,759
10,306,531
482,765
1,466,778
61,193,988
Accumulated depreciation
As at 30 June 2020
Depreciation
Transfers
Write-off asset
As at 30 June 2021
-
-
-
-
-
(76,178)
(95,934)
(89,414)
(293,172)
(88,368)
(16,582)
(69,936)
58,040
143,575
-
11,896
53,201
(295,711)
(126,262)
(40,899)
Depreciation
(356,271)
(137,743)
(136,458)
(130,657)
Transfers
(419,969)
419,969
-
Write-off asset
3,595
2,270
77,536
Assets move to held
for sale
Foreign exchange
movements
-
(353,218)
-
-
15,386
(269,546)
(51,663)
As at 31 March 2022
(1,125,863)
(11,215)
(439,344)
(223,219)
Carrying value
As at 30 June 2021
37,034,042
6,913,426
9,796,727
321,074
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(261,526)
(398,122)
-
196,776
(462,872)
(761,129)
-
83,401
15,386
(674,427)
(1,799,641)
54,065,269
As at 31 March 2022
47,779,292
21,544
9,867,187
259,546
1,466,778
59,394,347
Assets under construction are not depreciated until brought into use.
The following amount of $6,300,286 in Land & Buildings is pledged as security in relation to the external
borrowings. Refer to note 13 for further detail.
58
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
8. INTANGIBLE ASSETS
The Group’s intangible assets comprised of:
Cost
As at 30 June 2020
Additions
Write-off asset
As at 30 June 2021
Additions
Patents &
trademarks
Computer
software
Pharmaceutical
quality system
Total
112,518
7,807
-
120,325
-
97,650
57,813
-
155,463
29,475
452,032
662,200
96,914
162,534
-
-
548,946
824,734
-
29,475
As at 31 March 2022
120,325
184,938
548,946
854,209
Accumulated amortisation
As at 30 June 2020
Amortisation
Write-off of asset
As at 30 June 2021
Amortisation
As at 31 March 2022
Carrying value
As at 30 June 2021
As at 31 March 2022
(15,988)
(6,639)
-
(22,627)
(4,513)
(27,140)
97,698
93,185
(25,837)
(26,624)
-
(52,461)
(23,313)
(75,774)
103,002
109,164
-
(41,825)
(35,434)
(68,697)
-
-
(35,434)
(110,522)
(41,175)
(69,001)
(76,609)
(179,523)
513,512
714,212
472,337
674,686
59
9. RIGHT-OF-USE ASSETS & LEASE LIABILITIES
The movement associated with the Group’s right-of-use assets are as follows:
As at 30 June 2020
Additions
Disposals
Depreciation
As at 30 June 2021
Additions
Disposals
Depreciation
As at 31 March 2022
The Group's lease liabilities is comprised of:
Current lease liability
Non-current lease liability
Right of use assets
1,655,148
18,740
(151,592)
(176,586)
1,345,710
-
(1,077,342)
(78,172)
190,196
31 March
2022
98,495
114,882
30 June
2021
204,644
1,215,832
213,377
1,420,476
The Group’s head office lease is for a term of five years expiring 31 August 2024. The Group previously
leased the production facility in Australia however on 16 August 2021, the land on which the production
facility sits along with two adjacent properties were purchased.
10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The Group's accounts payable and accrued liabilities is comprised of:
Trade and other payables
Accrued liabilities
11. LOAN NOTE
31 March
2022
30 June
2021
1,545,352
1,042,427
1,653,742
2,443,629
3,199,094
3,486,056
The Group is a party to a secured Loan Note in relation to the Little Green Pharma Denmark ApS
acquisition. The Loan Note is secured over the land and buildings held by Little Green Pharma
Denmark ApS, with an interest rate of 5% per annum due on 30 June 2022. Subsequent to year
end, the Group has agreed with Canopy Growth Corporation to defer repayment of CAD 3.57
million of the Loan Note until 31 December 2022.
60
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
12. EMPLOYEE BENEFIT OBLIGATIONS
The Group's employee benefit obligation is comprised of:
Current liabilities
Annual leave
Employee benefits
Non-current liabilities
Long service leave
31 March
2022
30 June
2021
364,891
768,554
18,399
1,151,844
620,997
209,820
-
830,817
13. EXTERNAL BORROWINGS
During the period, the Group obtained a secured external loan of $3,770,000 (30 June 2021: Nil) from
National Australia Bank. The loan has an effective interest rate of 3.795% and an amortised cost of
$3,783,719 and is due for repayment on 31 December 2024. In addition, the Group obtained a revolving
credit facility of $2,000,000 (30 June 2021: Nil) which has not been drawn down on. The loan and the
revolving credit facility are secured over the land and buildings held by LGP Holdings Pty Ltd. These
assets are classified as property, plant and equipment with a value of $6,300,286 (30 June 2021: Nil).
14. SHARE CAPITAL
At 31 March 2022 a total of 240,211,214 ordinary shares had been issued (30 June 2021 - 232,607,948).
Non cash investing activities for the period ended 31 March 2022 included issuing 2,713,801 ordinary
shares in lieu of cash at a weighted average issue price of $0.66 per share, for the acquisition of the
production facilities totalling $1,799,250. Non cash financing activities for the period ended 31 March
2022 included issuing 889,465 ordinary shares to employees at a weighted average issue price of
$0.51 per share totalling $452,806.
3,500,000 options with an exercise price of $0.30 were also exercised during the period.
15. MEDICINAL CANNABIS SALES
The Group's medicinal cannabis sales is comprised of:
Type of medicinal cannabis sales
Oil products
Flower products
Period ended
31 March
2022
Year ended
30 June
2021
6,779,227
3,500,366
10,279,593
6,497,845
505,785
7,003,630
16. RESEARCH DEVELOPMENT INCENTIVE
The Company has recognised $2,368,174 (30 June 2021: $3,379,527) in income relating to the expected
research and development incentive rebate associated with expenditure incurred during the period
ended 31 March 2022.
61
17. BUSINESS COMBINATIONS
Acquisition of Canopy Growth Denmark ApS (LGP Denmark ApS)
On 21 June 2021, the Company acquired 100% of the securities in Canopy Growth Denmark ApS (renamed
to LGP Denmark ApS) for C$20 million, with C$10 million being paid on completion and a loan note of C$10
million due on 30 June 2022 to Canopy Growth Corporation remaining in LGP Denmark ApS. LGP Denmark
ApS is a world class cannabis GACP cultivation and EU-recognised GMP licensed cannabis manufacturing
facility located in Denmark (“Denmark Facility”) and qualifies as a business as defined in AASB 3 Business
Combinations.
The amounts recognised in respect of the fair values of the assets and liabilities acquired are set out below:
Cash and cash equivalents
Biological assets
Inventory
Prepaid expenses
Plant and equipment
Accounts payable and accrued liabilities
Deferred payment
Employee benefits
Deferred tax assets/(liabilities)
Contingent liabilities
Provisional
30 June
2021
605,337
Adjustment
-
1,019,828
(1,019,828)
1,479,331
(1,368,209)
659,070
46,076,410
(1,792,195)
(11,365,891)
(523,881)
-
-
-
-
-
-
-
-
-
Final
31 March
2022
605,337
-
111,122
659,070
46,076,410
(1,792,195)
(11,365,891)
(523,881)
-
-
Fair value of assets and liabilities acquired
36,158,009
(2,388,037)
33,769,972
Gain on bargain purchase
(24,979,733)
2,388,037
(22,591,696)
Consideration
11,178,276
Consideration net of cash and adjustments
10,572,939
Net profit per share
Basic (cents)
Diluted (cents)
16.01
14.84
-
-
(1.56)
(1.44)
11,178,276
10,572,939
14.45
13.40
The fair value of the assets and liabilities are finalised. The adjustment between the provisional fair
value of the assets and liabilities presented at 30 June 2021 and the final fair value of the assets and liabilities
presented at 31 March 2022, relate to the biological asset and the flower inventory acquired. On reassessment
the fair value of those assets has been determined to be nil. The remaining balance within inventory
represents the fair value of the consumables.
The acquisition of Canopy Growth Denmark ApS likely resulted in a gain on bargain purchase due to Canopy
Growth Corporation divesting many of its noncore assets globally and being unwilling to sell the Denmark
operation to a large Canadian or United States competitor.
62
LITTLE GREEN PHARMA Annual Report 2022
9
FINANCIAL REPORT
18. INCOME TAXES
The reconciliation of income tax obtained by applying statutory rates to the profit/(loss) before income
tax is as follows:
Gain / (Loss) for the year before income taxes from continuing operations
(18,051,760)
22,215,518
Gain / (Loss) for the year before income taxes from discontinuing operations
(234,489)
-
31 March
2022
30 June
2021
Statutory tax rate
Add/(deduct)
• Share based payments
• Research and development incentive
• Gain on bargain purchase
• Foreign losses not recognised
• Other
• Movement in deferred tax not recognised/(recognised)
Income tax (benefit)/expense
25.0%
26.0%
(4,571,562)
5,776,035
438,469
806,054
734,004
250,634
-
(5,873,842)
3,008,805
-
168,780
(10,923)
318,234
(1,044,688)
-
-
Total Australian tax losses for which no deferred tax assets has been recognised is $7,608,247 (30 June 2021:
$7,069,776). Utilisation of carry forward tax losses is dependent upon the satisfaction of the requirements of
the Income Tax Assessment Act 1997 within Australia (continuity of ownership and same business test with no
expiry if tests are achieved) and the relevant loss recoupment provisions in subsidiaries in foreign jurisdictions.
The Company has no material uncertainties over income tax treatments in Australia. The Danish subsidiary has
a statutory tax rate of 22% and historic tax losses of the acquired company are not believed to be available for
use by the Group. Current year tax losses from the Danish operations not recognised are $12,035,218.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Deferred tax (asset)/liability
• Biological assets
• Prepayments
• Plant and equipment
• Net lease liability
• Accounts payable and accrued liabilities
• Unrealised FX loss
• 40-880 tax balance
• Employee entitlements
Net deferred tax (asset)/liabilities
Benefit of tax losses not recognised
Net deferred tax (asset)/liability recognised
Deferred tax assets not recognised are $103,954.
63
31 March
2022
30 June
2021
(812,517)
(68,451)
(72,944)
5,795
345,316
41,907
394,262
166,632
-
-
-
(133,396)
(60,563)
(69,132)
19,439
179,594
2,234
93
61,731
-
-
-
19. PAYROLL COSTS
The Group’s payroll costs comprise of:
Salaries and wages(1)
Short term incentive- cash
Post employee benefits
Share based payments
Period ended
31 March
2022
9,081,000
135,236
438,607
1,655,608
11,310,451
Year ended
30 June
2021
2,755,868
148,000
339,222
2,776,214
6,019,304
(1) Included in salaries and wages is annual leave and long service leave employee benefit costs incurred in the period.
20. SHARE BASED PAYMENTS
The Board of Directors has the discretion to determine to whom options, performance rights and other equity
instruments will be granted, the number and exercise price as well as the terms and time frames in which they
will vest and be exercisable.
Options
Balance at 30 June 2020
Granted
Forfeited
Exercised
Balance at 30 June 2021
Granted
Forfeited
Exercised
Balance at 31 March 2022
Performance rights
Balance at 30 June 2020
Granted
Forfeited
Exercised
Balance at 30 June 2021
Granted
Forfeited
Exercised
Balance at 31 March 2022
Number of
options
Weighted average
exercise price
14,923,536
-
(500,000)
(6,850,000)
7,573,536
-
-
(3,500,000)
4,073,536
0.34
-
0.30
0.30
0.38
-
-
0.30
$0.45
Number of
rights
Weighted average
exercise price
7,000,000
-
(2,500,000)
(1,500,000)
3,000,000
4,500,000
-
(500,000)
7,000,000
0.36
-
0.29
0.42
0.39
0.82
-
0.40
$0.66
64
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
On 19 July 2021, the Extraordinary General meeting resolved to issue 4,500,000 performance rights. There
are three classes of rights, each with 1,500,000 rights which entitles the holder to acquire one fully paid
share for nil consideration.
Each class of share right has a price hurdle, being $0.95, $1.10 and $1.25 respectively. A hurdle needs to
be satisfied within three years of the grant date and if achieved, and the employee remains employed
then they will receive a third of the performance rights immediately, a third on the first anniversary of the
milestone being achieved and the final third on the second anniversary. If a vesting hurdle is not achieved
within three years or the employee leaves, the unvested performance rights lapse. The inputs into the
model were as follows:
Weighted average share price
Weighted average exercise price
Expected future volatility
Expected life
Risk free rate
Expected dividend yields
$0.86
Nil
85%
3 years
0.60%
Nil
Expected volatility was determined by calculating the historical volatility of the Group’s share price over
the previous years as well as historical volatility of a basket of comparable companies over recent trading
periods. The expected life used in the model has been adjusted, based on management’s best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural considerations.
On 7 March 2022, 500,000 performance rights were exercised for nil consideration.
Retention rights
Balance at 30 June 2020
Granted
Forfeited
Exercised
Balance at 30 June 2021
Granted
Forfeited
Exercised
Balance at 31 March 2022
Number of
rights
Weighted average
exercise price
-
1,200,000
-
-
1,200,000
105,000
-
-
1,305,000
-
0.30
-
-
0.30
0.84
-
-
0.34
During the reporting period, the Company issued 105,000 retention rights to Non-executive Directors with vesting
occurring on the fourth anniversary of the IPO date (February 2024). Each retention right has a nil exercise price
and a fair value of $0.84. The retention rights were approved at the Extraordinary General meeting.
Employee share incentive plan
During the reporting period the Company issued 620,000 shares and 562,000 share rights under the
Employee Share Incentive Plan relating to the financial year ended 30 June 2021. The equity instruments
had a fair value of $0.565 at grant date. The share rights have a nil exercise price and vest evenly in two
tranches on 30 June 2022 and 30 June 2023 assuming the recipient remains employed by LGP.
In addition, the Company intends to issue share rights under the Employee Share Incentive Plan relating to
the period ended 31 March 2022. The share rights will have a nil exercise price and vest in three tranches
on 31 March 2022, 31 March 2023 and March 2024 assuming the recipient remains employed by LGP.
65
21. FINANCIAL INSTRUMENTS
The classification of the Group’s financial instruments, as well as their carrying amounts and fair values, are as follows:
31 March 2022
30 June 2021
Fair value
Carrying value
Fair value
Carrying value
Financial assets
Amortised cost
Cash and cash equivalents (1)
20,086,504
20,086,504
40,269,169
40,269,169
Accounts receivable (1)
Refundable deposits (1)
FVPTL
4,352,550
4,352,550
3,656,846
3,656,846
197,839
197,839
834,085
834,085
Other financial assets (2)
40,753
40,753
-
-
Financial liabilities
Amortised cost
Accounts payable and accrued liabilities (1)
3,611,784
3,611,784
3,486,056
3,486,056
Loan note
Lease liability
11,876,669
11,876,669
11,365,891
11,365,891
338,189
338,189
1,585,423
1,585,423
(1) The carrying value of the cash and cash equivalents, accounts receivable, refundable deposits, accounts payable and accrued liabilities
and loan note approximate the fair value because of the short-term nature of these instruments.
(2) The Company holds an investment in a non-listed entity. The non-listed shares are not actively traded. As quoted prices in active markets
are unavailable, consideration is given to precedent transactions involving the sale of the company’s shares, as a basis to assess the value
of the equity investment.
The Group is exposed to varying degrees to a variety of financial instrument related risks:
Currency risk
Interest rate risk
The Company’s functional and presentation currency
is the Australian dollar and the majority of its assets,
liabilities, revenue and expenditures are Australian dollar
denominated. The Company's German subsidiary has a Euro
functional currency and the majority of its assets, liabilities
and expenditures are Euro denominated, its Swiss subsidiary
has a CHF functional currency and the majority of its assets,
liabilities and expenditures are Swiss franc denominated and
its Danish subsidiary has a DKK functional currency and the
majority of its assets, liabilities and expenditures are Danish
krone denominated other than the Loan note of $11,876,669
which is denominated in Canadian dollars. A 10% change
in the Danish krone to Canadian exchange rate without a
change in the Australian exchange rate would result in a
foreign exchange gain or loss of $1,187,666 for the Group.
Credit risk
Credit risk is the risk of an unexpected loss to the Group
if a customer or third-party to a financial instrument
fails to meet its contractual obligations. The Group’s
maximum exposure to credit risk as at 31 March 2022 is
the carrying value of its financial assets. The Group’s cash
and refundable deposits are predominately held in large
Australian financial institutions. With regard to receivables,
the Group’s exposure to credit risk is to a limited number
of counterparties who are provided credit in the normal
course of business. The Group has not experienced any
historical losses on receivables and hence the estimated
credit loss is immaterial.
Interest rate risk is the risk the fair value or future cash
flows of a financial instrument will fluctuate because of
changes in market interest rates. Financial assets and
liabilities with variable interest rates expose the Group
to cash flow interest rate risk. The Group does not hold
any material financial liabilities with variable interest rates
other than the National Australia Bank loan of $3,770,000
which has an interest rate of 3.795%. A 10% change in the
interest rate would result in an increase or decrease in the
interest charge of $14,307.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its obligations associated with financial liabilities.
The Group manages its liquidity risk by forecasting cash
flows from operations and anticipating any investing
and financing activities. Management and the Board of
Directors are actively involved in the review, planning and
approval of significant expenditures and commitments. All
liabilities other than lease liabilities and Loan Note fall due
within 6 months with the carrying amount equalling total
contractual cashflows other than the Loan Note which
accrues interest at 5% per annum.
66
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
22. OPERATING SEGMENTS
The Group’s Chief Executive Officer who is the chief operating decision maker has historically managed
the business, made resource allocation decisions and assessed performance based on the operations
as a whole and therefore the consolidated financial statements represented the single operating
segment. The acquisition of the Denmark facility on 21 June 2021 has resulted in the Company operating
in two segments for the financial year ended 31 March 2022, Australia and Europe.
Total assets
Total liabilities
Net assets
Revenue
Expenses
Loss before tax
Tax expense
Loss after tax
23. COMMITMENTS AND CONTINGENCIES
Leases recognised as a liability
Non-cancellable operating leases contracted for capitalised
• Not later than 12 months
• Between 12 months and 5 years
• Greater than 5 years
Australia
Europe
64,144,740
31,800,442
(7,288,608)
(13,177,519)
56,856,132
18,622,923
10,387,095
142,852
(16,389,739)
(12,191,968)
(6,002,644)
(12,049,116)
-
-
(6,002,644)
(12,049,116)
31 March
2022
30 June
2021
98,495
114,882
-
204,644
848,484
367,348
213,377
1,420,476
Previously the Group leased its production facility and its head office in Australia however during
the current period, the production facility and two adjacent properties were acquired extinguishing
commitments totalling $1,384,618.
Bank guarantees
The Group has bank guarantees in the amount of $118,594 outstanding as at 31 March 2022
(30 June 2021: $118,594).
24. CAPITAL MANAGEMENT
The Group’s objective when managing its capital is to ensure sufficient debt and equity financing to fund
its planned operations in a way that maximises the shareholder return given the assumed risks of its
operations. Through the ongoing management of its capital, the Company will modify the structure of
its capital based on changing economic conditions. In doing so, the Company may issue new shares
or take on debt. Annual budgeting is the primary tool used to manage the Group’s capital. Updates are
made as necessary to both capital expenditure and operational budgets in order to adapt to changes in
risk factors, proposed expenditure programs and market conditions.
67
25. PARENT ENTITY
Total current assets
Total non-current assets
Total assets
Total current Liabilities
Total non current liabilities
Total liabilities
Share capital
Reserves
Accumulated deficit
Total shareholder's equity
31 March
2022
32,480,278
44,180,783
76,661,061
(3,144,185)
(3,917,000)
(7,061,185)
90,254,064
2,370,798
(23,024,986)
69,599,876
30 June
2021
47,638,974
26,894,922
74,533,896
(2,462,537)
(1,215,832)
(3,678,369)
86,197,119
1,857,348
(17,198,939)
70,855,528
Net profit/(loss) and comprehensive income
(5,826,047)
257,317
The financial information for the parent entity, Little Green Pharma Ltd, has been prepared on the same
basis as the consolidated financial statements with the exception of its investment in its subsidiaries
which have been accounted for at cost.
26. RELATED PARTY TRANSACTIONS
Salaries and
fees1
Short term
incentive2
Post
employment
Share based
payments
Other2
Total
As at 31 March 2022
Directors
Michael Lynch-Bell
100,521
Dr. Neale Fong
Fleta Solomon
45,900
234,615
Angus Caithness
209,885
-
-
24,400
21,600
-
4,590
16,834
16,834
33,947
16,973
308,338
304,474
-
-
134,468
67,463
18,655
602,842
(4,280)
548,513
590,921
46,000
38,258
663,732
14,375
1,353,268
As at 30 June 2021
Directors
Michael Lynch-Bell
130,878
Dr. Neale Fong
75,763
-
-
Fleta Solomon
269,684
161,927
Angus Caithness
267,510
140,600
-
3,069
35,660
28,272
32,858
16,429
361,624
361,624
-
-
163,736
95,261
140,328
969,223
35,754
833,760
743,836
302,527
67,001
722,535
176,082
2,061,980
(1) Salaries and fees in 30 June 2021 include share rights issued in lieu of salary.
(2) Other benefits represent car parking paid for by the company as well as movements in the annual
leave and long service leave provisions. In the 30 June 2021 it also included a cost of living allowance
for Ms. Fleta Solomon in Switzerland.
68
LITTLE GREEN PHARMA Annual Report 2022 9
FINANCIAL REPORT
27. AUDITORS' REMUNERATION
The auditor of the Group is Deloitte Touche Tohmatsu.
Amounts received or due and receivable by Deloitte for:
Fees to the group auditor for the audit or review of the statutory
financial reports of the Company and subsidiaries
Fees to the group auditor for the audit or review of the statutory
financial reports of the Company and subsidiaries
31 March
2022
30 June
2021
211,991
109,000
47,500
-
259,491
109,000
28. IMPACTS AND RESPONSE TO COVID-19
The Company has taken measures to protect the health and welfare of its staff, maintain cultivation and
manufacturing operations, review its cost base, manage cost exposure and counterparty risk, apply for
cost relief and Government assistance where available, secure supply chains of critical materials and
consumables and defer non-essential research and development. These measures are to ensure LGP
remains well positioned to pursue opportunities post COVID-19.
29. EVENTS AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected,
or may significantly affect, the operations of the Company, the results of those operations, or the state
of affairs of the Company in future financial years other than the signing of supply agreements with
Four20 Pharma and Demecan, both in Germany and Sana Life Sciences in the United Kingdom and
the partial deferral of the Canopy Loan Note referred to in Note 11 which was originally due on 30 June
2022 but will now be split with C$7.5 million due on 30 June 2022 and the remaining C$3.57 million plus
interest of 8.57% per annum due on 31 December 2022.
69
DIRECTORS' DECLARATION
The directors of the Company declare that:
1. The financial statements and notes for the period ended 31 March 2022 are in accordance with the
Corporations Act 2001 and:
a. comply with Australian Accounting Standards, which, as stated in basis of preparation Note 1
to the financial statements, constitutes explicit and unreserved compliance with International
Financial Reporting Standards (IFRS); and
b. give a true and fair view of the financial position and performance of the consolidated entity;
2.
In the directors' opinion, there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they become due and payable.
3. The Directors have been given the declarations by the Chief Executive Officer and the Chief
Financial Officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Michael Lynch Bell
Independent Non-Executive Chair
Fleta Solomon
Chief Executive Officer
70
LITTLE GREEN PHARMA Annual Report 2022 10
Shareholder
information
71
Shareholder information
We are Little Green Pharma Ltd: Australia's most trusted medicinal cannabis company and a
leading global medicinal cannabis supplier.
ORDINARY SHARE CAPITAL
240,266,771 fully paid ordinary shares are held by 11,782 individual shareholders.
All issued ordinary shares carry one vote per share and carry the rights to dividends.
TOP 20 SHAREHOLDERS (CONSOLIDATED) AS AT 6 JUNE 2022
NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED1
MS. FLETA JENNIFER SOLOMON
UBS NOMINEES PTY LTD
BARBRIGHT AUSTRALIA PTY LTD
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