Auscann : Annual Report

Company Information

DIRECTORS	CORPORATE GOVERNANCE
Dr Malcolm Washer	The Company's corporate governance policies can be accessed at:
Elaine Darby	https://www.auscann.com.au/investor-centre/corporate-governance.html
Harry Karelis (resigned 15 December 2017)
Hon. Cheryl Edwardes AM	AUDITORS
Bruce Linton	PKF MACK
Level 4, 35 Havelock Street
	Bruce McHarrie
West Perth WA 6005
David Pryce (alternate for Bruce Linton)
SHARE REGISTRY
COMPANY SECRETARY
	COMPUTERSHARE INVESTOR SERVICES Pty Ltd
Ms Susan Hunter	Level 11, 172 St Georges Terrace
Perth WA 6000
REGISTERED OFFICE
Suite 8, Level 2, 57 Shenton Avenue	STOCK EXCHANGE
Joondalup WA 6027	Australian Securities Exchange Ltd
WEBSITE	ASX CODE
www.auscann.com.au	AC8
2

Content

Letter from the Chairman ............................................................................................................................................ 4-5

Letter from the Managing Director .............................................................................................................................. 6-7

DIRECTORS' REPORT ...................................................................................................................................................... 8

Director Information ................................................................................................................................................... 8-11

State of Affairs .......................................................................................................................................................... 12-13

Review of Operation ................................................................................................................................................. 14-23

Auditor's Independence Declaration ............................................................................................................................. 24

FINANCIAL REPORT ...................................................................................................................................................... 25

Consolidated Statement of Profit or Loss and Other Comprehensive Income .............................................................. 26

Consolidated Statement of Financial Position .............................................................................................................. 27

Consolidated Statement of Changes in Equity .............................................................................................................. 28

Consolidated Statement of Cash Flows ......................................................................................................................... 29

Notes to the Financial Statements ........................................................................................................................... 30-56

Directors' Declaration ................................................................................................................................................... 57

Independent Auditor's Report .................................................................................................................................. 58-63

ASX Additional Information ...................................................................................................................................... 64-69

Letter from the Chairman

4

On behalf of the Board of AusCann Group Holdings Ltd, I am pleased to present the 2018 Annual Report to shareholders.

In the fiscal year ended June 30 2018, AusCann continued to make strong progress in solidifying its position as a leader in the development of cannabinoid medicines.

From day one, AusCann has had the aim of providing Australia and select international markets with high-quality, cost-effective and clinically-validated cannabinoid medicines and I am proud to say our achievements this year have brought us closer to this goal.

In the first half of the fiscal year, AusCann became one of the first companies to obtain the necessary licences to both cultivate medicinal cannabis and manufacture cannabinoid medicines in Australia.

Acquiring the licences completed AusCann's objective of becoming fully integrated across the medical cannabis supply chain and progressed our strategy of becoming a leading supplier of high-quality cannabinoid medicines to Australia and the world.

On the topic of export, we welcomed the Federal Government's decision in January to allow manufactured cannabinoid medicines to be exported from Australia, a regulatory change from which AusCann is well positioned to benefit.

That same month, we signed a Heads of Agreement with Australian Pharmaceutical Industries Limited (API), Australia's leading wholesaler of pharmaceutical products. Collaboration with API provides AusCann with immediate logistics support, and future distribution model for our planned suite of registered cannabinoid medicines.

To drive awareness and knowledge of the therapeutic benefits of medicinal cannabis, AusCann also expanded its medical outreach programme throughout the year with the appointment of three Medical Liaison Managers and the development of online educational courses. This program ensures practitioners have access to the necessary information to confidently prescribe cannabinoid medicines.

During the year, AusCann made significant progress with its partner Fundación Daya in Chile. AusCann and Fundación Daya have formed a joint venture called DayaCann which successfully harvested its second cannabis crop in June 2018. We were pleased to see a major increase in yield on the first crop and note that resulting medicines may now be provided to Chilean patients under a new special access scheme.

We ended the fiscal year with the appointment of a Master Grower for oversight of our medicinal cannabis cultivation operations in Australia with a cultivation research agreement with Canadian group Jade Cannabis. Through these initiatives, we will be able to maximise the yields in our cultivation operations.

We have hit the ground running in the 2019 fiscal year, having raised over A$35m and completed a successful pilot study for innovative final dose cannabinoid capsules in the first quarter. We are well-funded and targeting production of our first cannabinoid pharmaceuticals in 2019. We hope you will continue with us on our journey.

I thank my fellow Board members, our Managing Director Elaine Darby and the AusCann team for their commitment and hard work over the past year. I would also like to thank our shareholders for your continued support.

Yours sincerely,

Dr Mal Washer MBBS, DHlthSci

Chairman