Notes to the
1. CORPORATE INFORMATION
The nancial statements of MGC Pharmaceuticals Limited
for the year ended 30 June 2018 were authorised for issue in
accordance with a resolution of Directors on 31 August 2018.
These consolidated nancial statements and notes represent
those of MGC Pharmaceuticals Limited (the “Company”) and
Controlled Entities (the “consolidated group” or “Group”).
2. SIGNIFICANT ACCOUNTING POLICIES
a) Statement of Compliance
The nancial statements are general purpose nancial
statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001 as appropriate for ‘for-prot’ orientated
entities. Australian Accounting Standards set out accounting
policies that the AASB has concluded would result in nancial
statements containing relevant and reliable information about
transactions, events and conditions. Compliance with Australian
Accounting Standards ensures that the nancial statements
and notes also comply with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standard Board (“IASB”). Material accounting policies adopted in
the preparation of these nancial statements are presented below
and they have been consistently applied unless otherwise stated.
b) Basis of Preparation
The nancial statements have been prepared on an accruals basis
and are based on historical costs, modied, where applicable, by
the measurement at fair value of selected non-current assets,
nancial assets and nancial liabilities.
The preparation of the nancial statements requires the
use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying
the consolidated group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are signicant to the nancial
statements are disclosed in note 3.
Financial report prepared on a going concern basis.
The nancial statements have been prepared on the going
concern basis of accounting, which assumes the continuity of
normal business activities and the realisation of assets and
settlement of liabilities in the ordinary course of business.
During the year ended 30 June 2018 the consolidated group
incurred a loss from continuing operations of $8,990,470 (2017:
$8,502,025), net operating cash outows of $5,886,790 (2017:
$4,655,863) and year-end cash and cash equivalents balance of
$9,858,977 (2017: $11,363,902). Net losses include one-off non-
cash adjustments of $1,900,000 (2017: $1,290,000) relating to
the re-measurement of performance shares (note 19) and a share
based payment expense of $1,072,681 (2017: $2,052,053).
The consolidated group cashow forecasts for the 12 months
ending 31 August 2019 indicate that the consolidated group
will be in a position to meet its committed operational and
administrative expenditure and thus continue to operate
as a going concern.
In the Directors’ opinion there are therefore reasonable
grounds to believe that the consolidated group will be able
to pay its debts as and when they become due and payable.
If the consolidated group are unable to continue as a going
concern, then assets and liabilities will not be discharged in
the normal course of business and at values specied in the
c) Principles of Consolidation
The consolidated nancial statements comprise the nancial
statements of MGC Pharmaceuticals Ltd and its subsidiaries
as at 30 June 2018 (“the Group”).
Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over
the investee. Specically, the Group controls an investee if
and only if the Group has:
• Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement
with the investee; and
• The ability to use its power over the investee
to affect its returns.
| Annual Report 2018
Notes to the Financial Statements