Annual Report 2019

INNOVATIVE
THINKING
ANNUAL REPORT
FOR THE YEAR ENDED 31 MARCH 2019

For more than 52 years, innovative thinking
has underpinned all that we do. It’s what has
made us the biggest second hand automotive
business in New Zealand and one of the
country’s most trusted automotive brands.
Innovative thinking allows us to find better ways
to serve our customers, helping them to buy
and sell cars and get finance and insurance, all
through one trusted source.
It enables us to identify better ways of working
together as a team, across our businesses and
our group, to achieve our ambitions.
It is driven by our people and their passion for
what they do, and we encourage an ‘anything is
possible’ attitude.
However, we know that innovation for the
sake of innovation is not the answer. Doing the
right thing is key and all our solutions must be
beneficial for our customers, our people and our
business.
This year, we are taking another step forward
with innovative thinking.
The automotive industry is changing and we are
looking ahead to ensure we are well positioned
to take advantage of future trends. This takes
innovative thinking - about our business and our
offer - and we are excited about our company’s
potential in this rapidly changing world.
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
Since 2018, Turners has sponsored New Zealand’s
latest racing prodigy, 17 year old Liam Lawson. Liam
is the reigning NZ Toyota Racing Series champion and
NZ GP winner. Picked up by the Red Bull Junior Team this season,
Liam is currently in Europe racing in two series; the all new FIA F3
championship, featuring at 8 rounds of Formula 1 for the Dutch team
MP Motorsport; as well as the contesting the Formula European Masters
(FEM) with Motopark from Germany.
32

AT A GLANCE
FY19 AT A GLANCE
EXPANSION OF NATIONAL RETAIL NETWORK: Relocation
of Whangarei site and opening of new sites in Porirua, New
Plymouth and Wellington City, as well as temporary branch in
Hamilton.
MANAGING HEADWINDS IN IMPORT MARKET: On both
supply and demand side, particularly in Auckland market.
REBRANDING OF BUY RIGHT CARS: Decision made to
rebrand Buy Right Cars to Turners, with project completed in
May 2019.
INCREASED REFERRER NETWORK: 11% increase in active
dealers selling Oxford Finance’s loans, with one in five loans
being ‘auto-approved’ through Turners’ Auto App online loan
approval platform.
FINANCE INTEGRATION: Turners Finance origination fully
committed to Oxford Finance from September 2018.
HIGHER QUALITY LENDING: Repositioning towards high
quality and more profitable lending, aided by the introduction
of comprehensive credit scoring.
IMPROVED INSURANCE LOSS RATIOS: Insurance claims loss
ratios have improved from 78% to 72%.
FUNDING FOR GROWTH: Issue of new $25m, 3-year bond
programme, combined with securitisation warehouse and
banking syndication with the ASB and BNZ.
GROUP STRATEGY REVIEW: Commenced at end of 2018,
with a focus on leveraging strengths and core capabilities,
de-risking and simplifying the business and accelerating
growth in a capital efficient way.
FY20 KEY FOCUS AREAS
AUTO RETAIL: Develop and extend retail footprint, deliver
better digital and mobile customer experience, build
data tools to understand demand, develop new sourcing
opportunities.
FINANCE: Extend distribution through use of APIs and
partnerships, grow direct lending, further automate the credit
decision process.
INSURANCE: Increase distribution, launch new products
through delivery of retail system development, optimise
repair network.
CREDIT MANAGEMENT: Australian corporate customer
acquisition, MYOB / XERO integration, further enhance
Collections Scorecard.
FINANCIAL SNAPSHOT
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
FY15FY16FY17FY18FY19FY15FY16FY17FY18FY19
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GROUP REVENUE
$336.6M
+2%
NET PROFIT AFTER TAX
$22.7M
-3%
SECTOR REVENUE
■ AUTOMOTIVE RETAIL ■ FINANCE AND INSURANCE ■ DEBT MANAGEMENT
NET PROFIT BEFORE TAX
$29.0M
-7%
FULL YEAR DIVIDENDS
17.0 CENTS PER SHARE
+10%
SECTOR OPERATING PROFIT
$33.6M EXCL BRC BRAND WRITE DOWN, +8%
54

CHAIR AND

CEO’S REPORT
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
Revenue was $336.6m for the year, with
$29.0m in Net Profit Before Tax (NPBT).
Excluding a $4.6m one-off, non-cash
adjustment related to the rebranding of
Buy Right Cars, the Company delivered
FY19 NPBT of $33.6m, above Q4 guidance
of $32m and ahead of last year’s result of
$31.1m. Net Profit After Tax (NPAT) was
$22.7m, down 3% from $23.4m in FY18. More
detail on our financial results is provided in
the commentary on page 14.
GROUP STRATEGY REVIEW
The dynamics of the automotive industry are
changing and we are changing our business
too.
In recent months, we have undertaken a
detailed strategic review of our business.
The result has been a decision to simplify
and de-risk the business as well as leverage
core capabilities and strengths (such as the
brand strength in Automotive Retail and the
Turners brand name) in order to accelerate
growth in a capital efficient manner.
We believe this approach will sharpen the
focus on meeting customer needs; improve
the efficiency of the business; and enhance
the returns generated for shareholders.
There is a strong desire to invest in the
brands and businesses where we have
already achieved a leading position. The
shift to a single brand strategy in Auto
Retail, completed in May 2019, is one of the
first projects implemented under the new
strategy.
We have also appointed Jardens (FNZC)
to conduct a strategic review of Oxford
Finance, which has commenced. Whilst
Oxford Finance is a well performing and
growing business with a strong network of
active dealers across the country, the review
of group strategy has highlighted that
building a loan book is very capital intensive
and we may be best to use our capital in
growing our core business in Automotive
Retail.
As a part of the review, we will consider
alternative ownership options for Oxford
Finance. Whatever the outcome, we will
continue to maintain our close relationship
with Oxford Finance and originate loans
through the Turners’ network. Oxford
Finance customers and the existing dealer
network will see no change to the leading
levels of service and quality they currently
experience.
We will also conduct a strategic review
of EC Credit Control in the next 12 to 24
months.
We are applying innovative thinking to
determine what the future will look like for
our company and we are pleased to share
this thinking with you on pages 12 and 13 of
this report.
THE USED CAR ECONOMY
While the used car market remained at
historically strong levels in FY19, with 1.13
million used car transactions in the year
to end of March, it definitely plateaued.
However, underlying medium term demand
is still robust, with over 950,000 cars at 20+
years old.
There continues to be pressure on import
margins. A current oversupply of import
cars is temporarily pushing down pricing
and increased compliance costs are also
having an adverse impact. From 2020, all
imports will be required to have Electronic
Stability Control, which will mostly impact
on the sub-$8,000 budget segment. Our
research shows that most Kiwis are in the
market for a vehicle under $10,000, and over
80% of buyers will purchase a vehicle under
$20,000.
Vehicle margins have recovered from the
low point in October/November last year
and local stock is delivering much stronger
margins. We are benefitting from our
strategy to increase the number of ‘owned’
vehicles we sell, which provide higher
margins.
New Zealand’s vehicle fleet continues to
age. There are over 3.8 million light vehicles
in the used vehicle fleet and around 20% of
these, or 950,000 vehicles, are at or very
near the scrapping age. The scrapping age
has been dropping and is now at 19.5 years
for an import and 17.5 years for a NZ new
car. We’re seeing more cars exiting the fleet
due to the cost of repairs increasing and a
stricter Warrant of Fitness regime.
The number of registered dealers has
dropped 4% to 3,377 over the last 12
months. We still see further consolidation as
inevitable and we are well positioned to take
advantage of this.
IN FY19, TURNERS AUTOMOTIVE GROUP
CONTINUED THE WORK STARTED IN THE
PRIOR YEAR TOWARDS SIMPLIFICATION OF
OUR BUSINESS, WITH A FOCUS ON ORGANIC
GROWTH.
We are now seeing the benefits from the launch
of core brands for each business, common
operating and funding platforms and centralised
locations for our teams. Our business is more
streamlined and more efficient, allowing us to
generate synergies across the group and better
leverage our collective knowledge.
Our expanding retail network and focus on
better quality lending are also generating
positive gains for the business and remain a
focus for the year ahead.
After adjusting for one-off and non-cash items,
Turners’ underlying results for the year were
flat on the last year, mainly due to market
headwinds in the used import vehicle sector
and the impact of impairments from MTF
non-recourse lending (which has now been
discontinued). Some pleasing improvements
were noted in damaged vehicle volumes and
sales and loss ratios in the insurance business.
76

OPERATIONAL PERFORMANCE
Our ability to meet all our customer’s
automotive needs remains a lynchpin of our
business and offers a myriad of advantages.
We can provide an end-to-end customer
journey within our own channels which provide
higher margin transactions, we develop better
customer relationships and we can easily
adapt to meet customer needs with new and
innovative solutions.
Our goal is to be the retailer of choice for
anyone wishing to buy or sell a used vehicle, be
it a car, a truck or a unit of machinery. Our multi-
channel platform ensures we are where our
customers are – online, on Trade Me, in our retail
yards nationwide and in our auction rooms. At
the same time, our finance and insurance offer
allows us to meet all our customer needs at the
time of purchase.
■ AUTOMOTIVE RETAIL
• Revenue: $225.7m +1%
• Operating Profit: $18.3m +10%
• Underlying Op Profit: $14.7m -8%
• 631 staff
• National network of 32 sites and yards
• NPS customer score of 64
Automotive Retail was the largest contributor to
the group in FY19, generating 67% of operating
revenue and 63% of operating profit. Revenue
was slightly up on the prior year to $225.7m,
with operating profit increasing 10% to $18.3m.
This included $3.4m in one-off property gains
associated with the NZTA settlement for Albany.
During the year, the division operated through
two brands, however, as part of the drive
for simplification, a decision was made to
consolidate to a single brand in Auto Retail and
rebrand Buy Right Cars to Turners Cars. This
project has now been completed. The move to a
single brand provides the opportunity to further
leverage the high levels of awareness and the
very strong trust that Kiwis place in the Turners
brand and will also enable marketing and other
cost synergies.
Turners continued to benefit from its national
network and strong online channels, which
provide diversity across regional markets. The
business delivered a 13% increase in operating
profit, offsetting the downturn in Buy Right Cars
which has been adversely impacted by the soft
Auckland market where all but one of its sites
are located.
Approximately 49% of retail sales are cars
owned by Turners, which generate better
margins and an increased opportunity to cross
sell finance and insurance products. Of the
vehicles being sold on consignment, a higher
number of these are ex-lease cars which provide
less margin but provide good late model “NZ
new” cars for sale. While import vehicle margins
are well down, Turners has implemented a
number of initiatives to improve local stock
buying, which delivers higher margins.
Turners has also continued to grow its share of
the niche end-of-life market and is increasingly
being recognised by insurance companies as the
provider of choice.
Our property strategy remains an important
driver for this business. A proportion of reserves
from our insurance business has been allocated
to support the property expansion and assist
in better utilisation of capital in the business.
During the year, we relocated the Whangarei
site and opened two new sites in Wellington and
New Plymouth, both of which are performing
above expectations. The new North Shore
branch is expected to open towards the end
of the 2Q20 and we have plans for a further
seven sites around the country for which two
contracts are already in place.
■ FINANCE
• Revenue: $44.2m +11%
• Operating Profit: $11.1m -5%
• Underlying Op Profit: $10.3m -6%
• Finance book (excluding Turners Finance)
grew by 9% to $254m as at 31 March 2019
• 70 staff
• Average Equifax credit score 547 in 2H19
(450 in 2H18)
The Finance division delivered an 11% increase
in operating revenue to $44.2m, however,
segment profit decreased slightly to $11.1m due
to increased impairments from the MTF non-
recourse offer. In the core lending book, good
progress is being made on repositioning the
borrower profile towards high quality and more
profitable lending, aided by the introduction of
comprehensive credit scoring in March 2019.
We take our responsibilities seriously and
continue to monitor our customer on-boarding
processes to ensure that we are compliant with
legislation including the Credit Contracts and
Consumer Finance Act and the Responsible
Lending Code.
From August 2018, all new loans originated by
Turners Cars are being directed into Oxford
Finance, and the Turners Finance loan book
with MTF will be run down over the next two
years, and we believe has now been adequately
provisioned. New loans originated by Turners
Cars added $28m to the Oxford Finance loan
book in FY19, which grew 9% to $254m as at 31
March 2019.
The number of active dealers selling Turners’
finance offer continues to grow and was up 11%
year on year to 419. One in five loans are now
being “auto-approved” through Turners’ Auto
App online loan approval platform, which makes
it easier and faster for dealers and customers to
gain a response on loan applications.
■ INSURANCE
• Revenue: $48.5m +3%
• Operating Profit: $8.2m +126%
• Underlying Op Profit: $5.2m +137%
• Net Earned Premium $38.0m
• 49 staff
• More than 6,600 Motor Vehicle Breakdown,
Loan Protection and Motor Vehicle
insurance policies sold every month
Autosure has around 50% share of the motor
vehicle mechanical breakdown insurance market.
It is a lower risk insurance business which
provides good returns and offers leverage for
the group through the ability to use insurance
reserves to invest in property. Operating revenue
for the year was up 3% to $48.5m, with segment
profit of $8.2m, which included a $3.0m gain on
sale of an investment property.
The number of new policy sales increased, with
an 8% increase in policies sold through Turners’
Automotive Retail business. Loss ratios have
improved across all insurance products through
the benefits of risk pricing work and tight cost
control in claims management. MBI (Mechanical
Breakdown Insurance) loss ratios were at 72%
for the year, down from 78% the year before,
with a further improvement targeted.
The final step in the large integration project
to combine all Turner’s insurance brands was
completed this year, with the migration to a new
front end retail system which was implemented
in April 2019. A refreshed suite of insurance
products as well as new pricing and vehicle
categories for Mechanical Breakdown insurance
have been launched.
■ CREDIT MANAGEMENT
• Revenue: $18.2m -3%
• Operating Profit: $6.3m +4%
• Underlying Op Profit: $6.2m +9%
• Total debt load $237m, up 15% year on year
• Unredeemed voucher release $0.2m
• 87 staff
EC Credit Control continues to deliver consistent
results with revenue of $18.2m down slightly
on the prior year and segment profit up 4% to
$6.3m. The unredeemed voucher release was
under $0.2m (FY18: $0.4m) and similar levels are
expected to be maintained in FY20.
EC Credit Control’s share of the New Zealand
market continues to grow, with increased debt
load from new and existing customers. Australia
remains more challenging and we continue
to focus on winning new Australian corporate
clients.
The business continues to reap benefits from
the investment into Auto-dialler technology
which is delivering significant cost efficiencies
and an increasing number of calls and
connected calls. This combined with the use
of the debtor scorecard we have developed is
delivering better collections results faster for our
customers.
In total, 28% more debtor actions were taken in
FY19 and total debt load was up 15% to $237m.
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
Our ability to meet all our
customer’s automotive needs
remains a lynchpin of our
business and offers a myriad
of advantages.
98

DIVIDEND
The Board was pleased to declare a final
quarter fully imputed dividend of 5.0 cents
per share, taking total FY19 dividends to 17
cents per share, up from 15.5 cents in FY18.
Following the strategy work, and for the
second year in a row, the Directors have
approved a change in the Dividend Policy,
increasing the payout ratio from 60-70% of
NPAT (previously 50-60% of NPAT).
The Board continues to believe the share
price undervalues the business, and 2.6m
shares have been acquired under the Share
Buyback scheme, which equates to about
3% of shares on issue. The scheme was put
on hold during the strategic review and the
Board will revisit the buy-back programme
in the near-term based on how the stock
performs.

OUTLOOK
We have identified our Automotive Retail
business as Turner’s core strength. The long-
term dynamics of this market are strong
with hundreds of thousands of ageing
vehicles needing to be replaced over the
next decade. We are well positioned to take
advantage of this, as well as the expected
consolidation of the dealer network.
Expansion of the national network will
continue as we strengthen Turners’ omni-
channel approach – ensuring that it has a
strong and consistent customer experience
in all channels where consumers are
looking to buy or sell cars, including online,
through social media or ‘in person’. We
will also continue to develop our inhouse
property expertise and leverage reserves
within the insurance business to deliver on
the property strategy and enhance capital
efficiency.
We have identified a number of growth
opportunities across all businesses, which
take advantage of the changing dynamics
of the industry – digital disruption, increased
regulation, an increasing shift to online
channels, alternative ownership models and
industry consolidation. The new strategy will
help position Turners to take advantage of
investments in these opportunities as they
arise.
Accessing and analysing the wealth of
valuable data within each business is a
priority. This will provide us with better
insights and, with innovative thinking, could
substantially improve the way consumers
buy and sell vehicles.
We are excited about what the future
holds for our company and the changing
landscape ahead of us. Delivering value to our
shareholders remains a priority and we look
forward to providing a further update at our
Annual Shareholder’s Meeting in Auckland on
18 September 2019.
Grant Baker Todd Hunter
Chairman Chief Executive
Officer
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
TURNERS LIMITED
Consolidated statement of financial position for the year ended 31 March 2016
2016
2015
Notes
$’000
$’000
Assets
Cash and cash equivalents10
13,810
12,339
Financial assets at fair value through profit or loss11
18,455
17,350
Trade receivables12
9,575
7,394
Inventory13
14,156
8,984
Finance receivables14
167,598
142,827
Other receivables and deferred expenses15
8,505
5,946
Reverse annuity mortgages16
9,734
13,253
Property, plant and equipment19
11,108
8,319
Tax receivables
-
433
Deferred tax asset20
4,024
8,532
Intangible assets21
105,338
103,595
Total assets362,303
328,972
Liabilities
Other payables22
22,270
17,790
Deferred revenue23
6,049
7,476
Tax payables
990
71
Derivative financial instruments
49
-
Borrowings24
174,816
156,995
Life investment contract liabilities32
15,629
16,378
Insurance contract liabilities32
12,688
9,260
Total liabilities232,491
207,970
Shareholders’ equity
Share capital25
136,127
135,294
Other reserves
(52)
(23)
Retained earnings
(6,263)
(14,269)
Total shareholders’ equity129,812
121,002
Total shareholders’ equity and liabilities362,303
328,972
For and on behalf of the Board

G.K. BakerP.A. Byrnes
Chairman DirectorExecutive Director
Authorised for issue on 22 June 2016
The accompanying notes from part of these financial statements
1110

INNOVATIVE THINKING
DEFINING OUR FUTURE
“The automotive industry
is changing and we are
looking ahead to ensure
we are well positioned to
take advantage of future
trends. This requires
innovative thinking
- about our business
and our offer - and we
are excited about our
company’s potential in
this changing world.”
LOOKING AT OUR BUSINESS IN THIS
CONTEXT, THERE ARE FOUR THINGS
THAT STAND OUT
• The strength of the Turners brand
• The complexity of our existing business
model
• The opportunity available in NZ’s ageing
vehicle fleet
• And the growing customer demand for
digitisation.
Our ambition is for Turners is to be
New Zealand’s best place to buy
and sell vehicles with continually
high customer satisfaction. We’ve
identified three key strategic pathways
that we believe will help us achieve
our goal and improve the return for
shareholders.
SIMPLIFY THE BUSINESS
With single brands for each of our sectors;
a focus on core products and a strategic
review of business units where we don’t hold
dominant market position.
DE-RISK THE BUSINESS
By continuing to write higher quality loans,
early adoption of comprehensive credit
reporting, actively engaging with regulators
in regards to compliance and regulatory
changes, and focusing on loan origination
rather than underwriting credit risk.
GROW THE BUSINESS
By continuing to expand our auto retail
footprint across NZ, shifting marketing
investment into digital platforms, leveraging
data analytics to buy and sell smarter,
evolving the customer experience in person
and online, and looking for innovation and
disruptive opportunities within the auto
sector.
Work has already started in much of these
areas with projects such as the brand
consolidation now completed. More recently,
we have appointed Jardens (FNZC) to
conduct a strategic review of Oxford
Finance. And we have engaged experts in
social media and data analytics to build our
online presence and strategy.
We have a number of strengths – a strong
balance sheet, a large customer base, a
great consumer brand and rich data assets.
This puts us in a unique position to partner
with other parties to harness the changing
market dynamic. Our criteria for any
investment is that it must be highly adjacent
to the auto market, have alignment with the
Turners’ brand, and significantly improve the
way customer needs are met.
WHAT DOES THIS MEAN FOR OUR
STAKEHOLDERS?
We’ll have a narrower focus concentrating
on growing the brands where we have
a dominant position. We’ll be more
competitive with a leaner, more competitive
business model. We’ll be more customer
relevant, capital efficient, have a lower risk
profile and less complex business model,
which will allow us to continue to offer high
yielding shareholder returns.
We’re looking to the future to ensure the
sustainability of our business in a changing
industry and we’re excited about the
potential this offers.
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
THE USED-CAR INDUSTRY IS ON THE CUSP OF SOME
SIGNIFICANT CHANGES, CREATING BOTH OPPORTUNITIES
AND THREATS
• Customers are more informed than ever and delivering great
customer outcomes is vital to survive and prosper.
• Big data and technology are changing how and where we do
business.
• Regulation and compliance across all our businesses is
increasing.
• While most of our customers still like to visit a physical site
to view and test drive a car, more and more of the customer
experience is transitioning online... and the number of online
purchases is also growing. In our other businesses, such as
finance and insurance, there’s an even greater shift to online
where our customers can transact conveniently and quickly.
• Aggregator and comparison sites are proliferating... again,
it’s all about customers wanting to be informed and able to
access the best option at the best price in the easiest way to
meet their needs.
• Industry consolidation is inevitable and we are in the midst of
this right now.
• Finally, looking at the big picture, there’s potentially greater
industry disruption from alternative ownership models which
could see people moving away from owning one, two or more
cars per household, to flexible ownership and subscription
models.
1312

FY19 FINANCIAL

COMMENTARY
This financial commentary should be read in conjunction
with the full financial statements and Notes to the Financial
Statements in the FY19 Annual Report.
Revenue grew to $336.6m in FY19, up 2% from $330.5m in FY18,
with Automotive Retail contributing 67% of operating revenue.
Excluding the $4.6m adjustment for the Buy Right Cars brand
write-off, net profit before tax (NPBT) was $33.6m, above Q4
guidance and ahead of last year’s result.
Underlying NPBT excludes those items which are one-off or
non-cash costs. Property sales and acquisitions had the biggest
impact this year, with proceeds from the sale of property and
the settlement from NZTA following the compulsory acquisition
of the North Shore site. The other major item is the Buy
Right Cars brand write off adjustment of $4.6m. The total
unredeemed voucher release for EC Credit Control was under
$0.2m, with similar levels expected in FY20.
A reconciliation of Underlying to Reported NPBT is below.
Turners Group and the insurance business were the biggest
contributors to operating profit. In Automotive Retail, the gains
made by Turners Group were offset by Buy Right Cars, which is
being affected by the tough market conditions in the Auckland
used import market. The finance result was impacted by
impairments in the high risk MTF non-recourse lending, which
we have now discontinued. Insurance reflects improvements in
claims management, as well as a $3.0m gain on the sale of an
investment property in Wiri. EC Credit delivered an increase on
the back of improving New Zealand collections performance.
Finally, corporate and other costs includes the one off non-
cash impact of the Buy Right Cars brand write off of $4.6m
(compared to a release of earn out consideration in the prior
year).
FY19 Net Profit After Tax (NPAT) was $22.7m, compared to $23.4m in FY18.
NPATA is NPAT with tax adjusted addback of amortised acquisition intangibles.
This was down 3% to $24.4m.
DIVIDEND
Turners Automotive Group is a strong yielding stock, with a quarterly dividend payment structure.
A final quarter fully imputed dividend of 5.0 cents per share took full year dividends to 17 cents per
share, up from 15.5 cents in FY18. Following the strategy work, and for the second year in a row, the
Directors have enhanced the dividend policy with an increase in the payout ratio to 60% to 70% of
NPAT (previously 50% to 60% of NPAT).
BALANCE SHEET
Turners has a strong balance sheet. The cash balance reduced year on year due to the investment
of insurance reserves into longer dated term deposits. The change in Finance Receivables reflects
growth in Oxford Finance offset by the rundown in the MTF non-recourse ledger. Property, plant and
equipment increased due to development of new sites in Whangarei and North Shore. The increase
in Insurance contract liabilities reflects growth in Autosure policy sales.
$000sFY19FY18
Cash and cash equivalents15,86625,145
Financial assets at fair value66,25253,378
Finance Receivables290,017289,799
Inventory38,85938,596
Property, Plant and Equipment39,08435,945
Other Assets37,37037,887
Intangible Assets166,734170,982
Total Assets654,182651,732
Borrowings312,863317,373
Other Payables33,90638,588
Deferred Tax13,91818,786
Insurance Contract Liabilities51,78548,376
Other Liabilities15,33614,286
Total Liabilities427,808437,409



0
5
10
15
20
25
30
35
40
$ MILLIONS
FY18
Auto Retail
FinanceCollection...Adjusted...
InsuranceCorporate...Adjustment...
FY19
FY18:FY19 NET PROFIT BEFORE TAX
$000sFY19FY18Var
Underlying NBPT25,77525,953-0.7%
Other Adjustments
EC Vouchers164433
Worsley Prestige revaluation830820
MTF Share revaluation0590
Acquisition adjustments-4,5702,664
Sale of Property3,457673
Property Settlement Albany site3,3930
Total Adjustments3,2745,180-36.8%
Reported NPBT 29,04931,133-6.7%
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
1514

FUNDING MIX
Turners’ funding platform was further strengthened during the year, with the issue of a
new $25m, 3-year Bond programme. Combined with the Securitisation Warehouse and
the banking syndication with the ASB and BNZ, this provides the Group with a diversified
funding structure and adequate headroom for forecast business growth.
The previous Bond programme matured in September 2018, with 52% conversion into shares.
FIVE YEAR FINANCIAL PERFORMANCE
$ MillionsFY15FY16FY17FY18FY19
Total Revenue 97.3170.3251.0330.5336.6
Net Profit Before Tax19.021.624.631.129.0
Net Profit After Tax18.115.617.623.422.7
Earnings Per Share*32.824.725.529.326.2
Dividends Per Share*10.0 13.014.515.517.0
Financial Position
Finance Receivables142.8167.6207.1289.8290.0
Total Assets329.0367.1556.6651.7654.2
Borrowings157.0174.8265.9317.4312.9
Shareholder Funds121.0129.8171.7214.3226.4
Shares on issue
(Millions as at 31 March)*
63.163.474.584.886.9
*FY15 adjusted for 10:1 share consolidation which occurred in March 2016
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
1716

THE BOARD
GRANT BAKER
Non-executive Chairman | Appointed September 2009
As businessmen go, Grant Baker is probably at the more
unconventional end of the spectrum. The co-founder
of The Business Bakery has a number of successes
under his belt, including the 42 Below vodka venture
and Trilogy International, which sold to Chinese Citic
Group, amongst a number of other ventures he has been
involved in.
With a 7.02% shareholding, Grant is long term committed
investor in Turners Automotive Group. As an avid
collector of specialist vehicles and motor racing
enthusiast, both as a competitor and as a backer of
young up and coming drivers, he is passionate about the
strong Turners brand and its focus on cars. He has wide
experience at a senior level in both public and private
New Zealand companies and has been Chairman of
Turners Automotive Group since September 2009.
PAUL BYRNES
Deputy Chairman and Non-executive Director
Appointed February 2004
Paul Byrnes is a chartered accountant, a professional
director and an investor with over 25 years’ experience
in senior and CEO roles in private and listed companies.
His career has included the management buyout of
previously listed Holeproof Industries, consulting and
participation in merger and acquisition opportunities and
business ‘turnaround’ management. Paul was appointed
CEO and Executive Director of Dorchester Pacific in
May 2008 (now Turners Automotive Group), handing
over the CEO role to Todd Hunter in June 2016. Paul is
entrepreneurial at heart but combines this with a wealth
of top class governance experience (Top Energy and
Hellaby Holdings) and the real world CEO experience of
bringing a finance company positively out of the GFC.
Paul has a 2.86% shareholding in Turners Automotive
Group.
MATTHEW HARRISON
Non-executive Director | Appointed December 2012
Matthew Harrison has extensive management experience
and a background in finance and business administration.
He is the former Managing Director of EC Credit
Control, the debt recovery business acquired in 2012
and has great experience dealing with credit cycles
and credit management. He joined EC Credit Control in
1998, following senior management roles in the courier
industry. Matthew joined the Turners Automotive Group
Board in 2012 and represents his family interests, which
have a 7.73% combined holding in the company. Matthew
is a self-confessed “car nut” and has owned some very
special cars over the years including a McLaren P1. He
is very enthusiastic about the future of Turners and,
given his large shareholding and love for automobiles,
is strongly committed to seeing Turners continue its
successful journey.
ALISTAIR PETRIE
Non-executive Director | Appointed February 2016
Alistair Petrie has over 15 years of senior management experience in both
private and listed companies in the agribusiness sector. He has extensive
knowledge in sales and marketing in both international and domestic
environments, which is particularly useful for some of the challenges and
opportunities Turners has importing vehicles from Japan. He has a number
of directorships with companies that have a focus on growth and innovation,
and he represents the interests of Bartel Holdings, which has a 10.99%
shareholding in Turners Automotive Group. Alistair worked for many years
at Turners & Growers, the original parent company of Turners Auctions,
which provides a nice connection at Board level back to those foundational
brand values of “trust and integrity”. Alistair has a BSC (hons) from
Newcastle Upon Tyne university and an EMBA from Melbourne University.
JOHN ROBERTS
Independent Director | Appointed July 2015
John Roberts has extensive experience in the financial services industry,
having held the role of Managing Director of credit bureau Veda
International for 10 years, during which time the Veda Advantage business
was successfully listed on the ASX. John previously had over 15 years in
advertising, with CEO roles with Saatchi & Saatchi in New Zealand and Asia
Pacific, before heading up MasterCard in New Zealand for three years. John
is currently a director of Centrix, a leading credit rating agency in NZ, and
this keeps him connected with the financial sector and the NZ credit cycle.
John’s advertising and branding experience has been invaluable across a
number of projects within the business and he continues to add value and
thought leadership around the use of data and analytics, drawing on his
Veda NZ experience.
ANTONY VRIENS
Independent Director | Appointed January 2015
Antony Vriens has been a director and chairman of Turners’ insurance
subsidiary, DPL Insurance (now Autosure), since 2012. He is a highly
experienced financial services industry professional, with demonstrated
success as a senior executive and consultant in insurance and wealth
management businesses across Asia Australia and New Zealand. Antony
currently holds the position of VP of Technical Insurance Services for
Manulife Asia responsible for digital transformation. He brings a hands on,
practical and commercial approach and a strong technology focus to his
Board role. His relationships across the insurance industry and regulators
are highly valuable to the Turners business and his collaborative approach is
embraced by both the board and management.
MARTIN BERRY
Independent Director | Appointed August 2018
Martin Berry is a seasoned global financial services executive, having run
large international businesses for the likes of ANZ, Citibank, Barclays and
Standard Chartered. He later focused on more entrepreneurial ventures
with a successful track record of having built, acquired and sold several
companies with values in excess of USD $100m. Martin has a strong focus
on technology and emerging opportunities with networks and business
relationships throughout the Pacific and Asian region. He founded and
now runs venture capital firm Brandhaus Capital Partners out of Singapore,
investing across the region with a strong focus on fintech. Martin’s
experience in the financial services sector combined with his entrepreneurial
acumen are an asset for the Turners group.
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
1918

LEADERSHIP

TEAM
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
Todd Hunter
Chief Executive Officer
Aaron Saunders
Group Chief Financial Officer
James Searle
Group General Manager
Insurance
David Wilson
Chief Executive Officer
EC Credit Control
Jeremy Rooke
General Manager Digital Strategy
Simon Gould-Thorpe
Group Chief Information Officer
Greg Hedgepeth
CEO Turners Automotive Retail
Todd Hunter
Chief Executive Officer
Todd is a strong and experienced senior executive, with a background in marketing, sales and
accounting in both large global and domestic businesses. Before joining Turners Auction in 2006
Todd worked for Microsoft NZ and Ernst and Young. He was appointed CEO of NZX listed Turners
Auctions in 2013, and took on the CEO role for the wider Turners Automotive Group in 2016. Todd is
a chartered accountant and holds a Bachelor and Diploma of Commerce from Auckland University.
Aaron Saunders
Group Chief Financial Officer
Aaron joined Turners Group NZ in 2006. He has a strong background in financial and management
accounting, at both a strategic and operating level in local and international markets. Over the last
20 years, Aaron has worked across a broad range of company sizes and industries including vehicle
importation and distribution, broadcasting and the finance sector. Aaron is a full member of the
New Zealand Institute of Chartered Accountants and holds a Bachelor of Commerce from Auckland
University.
Simon Gould-Thorpe
Group Chief Information Officer
Simon joined Turners in 2010. With over 30 years’ experience in IT, he has led dynamic and innovative
IT Teams to success across a wide range of industries. His current role has seen the delivery of
significant advancements to assist Turners business transformation, including the development
of new core systems and the introduction of key business and process automation. Turners IT
utilizes leading technologies and follows best practice IT management including DevOps and Agile
methodologies.
Greg Hedgepeth
CEO Turners Automotive Retail
Greg joined Turners in 2017 as CEO of the Automotive Retail Division, with responsibility for Turners
Cars, Trucks & Machinery and the Damaged & End of Life business. He is an experienced automotive
executive and has previously held a number of senior roles with BMW Group NZ and Armstrong
Motor Group, one of NZ’s largest private owned retail automotive networks. With a Bachelor of
Commerce from Auckland University and a number of years working for Saatchis both in NZ and the
US, Greg brings a strong sales and marketing focus to his role.
James Searle
Group General Manager Insurance
James is responsible for operational performance and development of life and consumer (vehicle
and finance related) insurance products. James has over 25 years’ experience in the New Zealand
insurance industry having worked across underwriting, portfolio management, relationship
management and marketing roles for major insurance companies including IAG and Lumley General
Insurance.
David Wilson
Chief Executive Officer EC Credit Control
Dave joined EC Credit in 2007 and was appointed to his current role in April 2015. He has over 20
years’ experience in the banking, finance and recruitment industries, and has worked in the credit
management industry since 2001. Dave has a Diploma in Business Studies.
Jeremy Rooke
General Manager Digital Strategy
Jeremy joined Turners Automotive Group in 2009. His role involves leading the application of new
technologies, business models and channels to enable and expand Turners’ digital capabilities.
Jeremey holds degrees in Law and Arts, and prior to Turners, worked as a business analyst and
projects manager on several large transformative IT programmes, most notably in the insurance
sector.
2120

FINANCIAL REPORTS
FOR THE YEAR ENDED
31 MARCH 2019
TURNERS AUTOMOTIVE GROUP ANNUAL REPORT 2019
2322

INDEPENDENT AUDITOR’S REPORT
for the year ended 31 March 2019
INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019


24
Level 9, 45 Queen Street, Auckland 1010
PO Box 3899, Auckland 1140
New Zealand
T:+64 9 309 0463
F:+64 9 309 4544
E:auckland@bakertillysr.nz
W:www.bakertillysr.nz
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Turners Automotive Group Limited
Report on the Audit of the Consolidated Financial Statements

Opinion
We have audited the consolidated financial statements of Turners Automotive Group Limited and its
subsidiaries ('the Group') on pages 31 to 93, which comprise the consolidated statement of financial position
as at 31 March 2019, and the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at 31 March 2019, and its consolidated financial performance
and its consolidated cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards ('NZ IFRS') and International Financial Reporting Standards ('IFRS').

Our report is made solely to the Shareholders of Turners Automotive Group Limited, in accordance with the
Companies Act 1993. Our audit work has been undertaken so that we might state those matters which we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than Turners Automotive Group Limited and the
Shareholders of Turners Automotive Group Limited, for our audit work, for our report or for the opinions we
have formed.

Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ('ISAs (NZ)').
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordance
with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the
New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants (‘IESBA Code’), and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other than in our capacity as auditor and provider of other assurance services we have no relationship with, or
interests in, Turners Automotive Group Limited or any of its subsidiaries. The provision of these other assurance
services has not impaired our independence.

25

In addition to this, principals and employees of our firm deal with the Group on normal terms within the ordinary
course of trading activities of the business of the Group. This has not impaired our independence.

Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current year. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Key audit matters are selected from the matters
communicated with the Directors, but are not intended to represent all matters that were discussed with them.
Key Audit Matter How our audit addressed the key audit matter
Impairment testing of Goodwill and Other
I
ndefinite Life Intangible Assets
As disclosed in Note 20 of the Group’s
consolidated financial statements the Group has
goodwill of $92.5m allocated across five of the
Group’s cash-generating units (‘CGUs’) and
brand assets of $67.1m allocated across two of
those CGUs. Goodwill and brand assets were
significant to our audit due to the size of the
assets and the subjectivity, complexity and
uncertainty inherent in the measurement of the
recoverable amount of these CGUs for the
purpose of the required annual impairment test.
The measurement of a CGUs recoverable
amount includes the assessment and
calculation of its ‘value in-use’.

Management has completed the annual
impairment test for each of these five CGUs as
at 31 March 2019.
Management has engaged an external valuation
expert to assist in the annual impairment testing
of the five CGUs.
This annual impairment test involves complex
and subjective estimation and judgement by
Management on the future performance of the
CGUs, discount rates applied to future cash flow
forecasts, and future market or economic
conditions.

Our audit procedures among others included:
Evaluating Management’s determination of the Group’s five
CGUs based on our understanding of the nature of the Group’s
business and the economic environment in which the segments
operate. We also analysed the internal reporting of the Group to
assess how the CGUs are monitored and reported.
Challenging Management’s assumptions and estimates used to
determine the recoverable value of its indefinite life intangible
assets, including those relating to forecasted revenue, cost,
capital expenditure and discount rates, by adjusting for future
events and corroborating the key market related assumptions to
external data.
Procedures included:
oEvaluating the logic of the value-in-use calculations
supporting Management’s annual impairment test and
testing the mathematical accuracy of these calculations;
oEvaluating Management’s process regarding the
preparation and review of forecasts;
oComparing forecasts to Board approved forecasts;
oEvaluating the historical accuracy of the Group’s
forecasting to actual historical performance;
oChallenging and evaluating the forecast growth
assumptions;
oEvaluating the inputs to the calculation of the discount
rates applied;
oEngaging our own internal valuation experts to evaluate the
logic of the value-in-use calculation and the inputs to the
calculation of the discount rates applied;
oEvaluating Management’s sensitivity analysis for
reasonably possible changes in key assumptions; and
oPerforming our own sensitivity analyses for reasonably
possible changes in key assumptions, the two main
assumptions being: the discount rate and forecast growth
assumptions.
Evaluating the related disclosures about indefinite life intangible
assets which are included in Note 20 in the Group’s consolidated
financial statements.

2524

INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019
INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019
26

Key Audit Matter How our audit addressed the key audit matter
Valuation of Finance Receivables
i
ncluding the adoption of NZ IFRS 9 Financial Instruments
As disclosed in Note 14 of the Group’s consolidated
financial statements the Group has finance receivable
assets of $290.0m. Finance receivable assets were
significant to our audit due to the size of the assets and
the subjectivity, complexity and uncertainty inherent in
the recognition of impairment in respect of finance
receivables and the amount of that impairment.

Management has prepared impairment models to
complete its assessment of impairment for the Group’s
finance receivables as at 31 March 2019.
This assessment involves complex and subjective
estimation and judgement by Management on credit
risk and the future cash flows of the finance receivables.
As disclosed in Note 31 and Note 14, on 1 April 2018,
the Group adopted NZ IFRS 9 Financial Instruments,
which resulted in the Group having to develop new
impairment models to assess impairment under the
expected credit losses model specified in NZ IFRS 9.
In accordance with the transitional provisions outlined in
NZ IFRS 9, the Group has applied the cumulative effect
method and therefore the comparative information has
not been restated and continues to be reported under
NZ IAS 39.

As at 31 March 2018, the Group had finance receivable
assets of $289.8m, as disclosed in Note 31, on 1 April
2018 upon adoption of NZ IFRS 9, the Group finance
receivable assets were restated from $289.8m to
$286.6m.
Our audit procedures among others included:
Evaluating the design and operating effectiveness of the
key controls over finance receivable origination, ongoing
administration and impairment model data and
calculations;
Challenging and evaluating Management’s assessment
of the impact of adopting NZ IFRS 9, the logic, key
assumptions, and calculation of its new impairment
models against the requirements specified in NZ IFRS 9
for recognising expected credit losses on financial
assets;
For individually assessed finance receivables, examining
those finance receivables and forming our own
judgements as to whether the impairment provision
recognised by Management was appropriate;
For the collectively assessed finance receivables,
challenging and evaluating the logic of Management’s
impairment models and the key assumptions used with
our own experience as at 1 April 2018 (on adoption of NZ
IFRS 9) and as at 31 March 2019 (at reporting date).
Also, testing key inputs used in the impairment models
and the mathematical accuracy of the calculations within
the models;
Evaluating the related disclosures about the adoption NZ
IFRS 9 in Note 31 in the Group’s consolidated financial
statements;
Evaluating the related disclosures (including the
accounting policies) about finance receivable assets, and
the risks attached to them which are included in Note 5
and 14 in the Group’s consolidated financial statements.



27

Key Audit Matter How our audit addressed the key audit matter
Valuation of Insurance Contract Liabilities
As disclosed in Note 34 of the Group’s consolidated
financial statements the Group has insurance contract
liabilities of $51.8m. The Group’s insurance contract
liabilities were significant to our audit due to the size of
the liabilities and the subjectivity, complexity and
uncertainty inherent in estimating the impact of claims
events that have occurred but for which the eventual
outcome remains uncertain.

Management has engaged an external actuarial expert
to estimate the Group’s insurance contract liabilities as
at 31 March 2019.
Our audit procedures among others included:
Evaluating the design and operating effectiveness of the
key controls over insurance contract origination, ongoing
administration, integrity of data provided to
Management's external actuarial expert used in the
estimation process and Management’s review of the
estimates;
Evaluating the competence, capabilities, objectivity and
expertise of Management's external actuarial expert and
the appropriateness of the expert's work as audit
evidence for the relevant assertions;
Agreeing the data provided to Management's external
actuarial expert to the Group’s records;
Engaging our own actuarial expert to assist in
understanding and evaluating:
othe work and findings of the Group’s external
actuarial expert engaged by Management;
othe Group’s actuarial methods and assumptions to
assist us in challenging the appropriateness of
actuarial methods and assumptions used by
Management;
Assessing the selection of methods and assumptions
with a view to identify management bias;
Evaluating the related disclosures about insurance
contract liabilities, and the risks attached to them which
are included in Note 34 in the Group’s consolidated
financial statements.



2726

INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019
INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019
28

Other Information
The Directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 March 2019 (but does not include the consolidated
financial statements and our auditor’s report thereon).

Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of audit opinion or assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.

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 nothing to report in this regard.

Responsibilities of the Directors for the Consolidated Financial Statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of the consolidated financial statements that are
free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Directors are responsible on behalf of the Group for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.


29

As part of an audit in accordance with ISAs (NZ), we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
Conclude on the appropriateness of the use of the going concern basis of accounting by the Directors and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements re present the underlying transactions
and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.


2928

INDEPENDENT AUDITOR’S REPORT cont.
for the year ended 31 March 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2019
Turners Automotive Group Limited
Consolidated statement of comprehensive income for the year ended 31 March 2019
2019
2018
Notes
$’000
$’000
Revenue from continuing operations
7
328,358
325,047
Other income
7
8,221
5,423
Cost of goods sold
(133,126)
(137,332)
Interest expense7
(14,952)
(14,344)
Impairment provision expense
7
(7,892)
(6,380)
Subcontracted services expense
(12,888)
(10,777)
Employee benefits (short term)
(52,756)
(51,911)
Commission
(14,581)
(12,107)
Advertising expense
(3,918)
(4,001)
Depreciation and amortisation expense7
(5,785)
(5,627)
Property and related expenses
(10,945)
(10,644)
Systems maintenance
(1,471)
(1,822)
Claims
(26,804)
(32,021)
Movement in life insurance liabilities34
(718)
(82)
Insurance deferred acquisition costs
(423)
3,387
Impairment of intangible brand asset
(4,300)
-
Other expenses
(16,971)
(15,676)
Profit before taxation29,049
31,133
Taxation (expense)/benefit8
(6,330)
(7,773)
Profit for the year22,719
23,360
Cash flow hedges
(364)
(170)
Foreign currency translation differences
(26)
2
Total other comprehensive income (390)
(168)
Total comprehensive income for the year22,329
23,192
Earnings per share (cents per share)
Basic earnings per share 9
26.21
29.26
Diluted earnings per share
9
27.28
28.87
The accompanying notes form part of these financial statements
Other comprehensive income for the year (which may subsequently be reclassified to
profit/loss), net of tax
The accompanying notes form part of these financial statements
30

From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current year and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.

Matters Relating to the Electronic Presentation of the Audited Consolidated Financial Statements
This audit report relates to the consolidated financial statements of Turners Automotive Group Limited and its
subsidiaries for the year ended 31 March 2019 included on Turners Automotive Group Limited’s website. The
Directors of Turners Automotive Group Limited are responsible for the maintenance and integrity of Turners
Automotive Group Limited’s website. We have not been engaged to report on the integrity of Turners
Automotive Group Limited’s website. We accept no responsibility for any changes that may have occurred to
the consolidated financial statements since they were initially presented on the website.

The audit report refers only to the consolidated financial statements named above. It does not provide an
opinion on any other information which may have been hyper linked to or from these consolidated financial
statements. If readers of this report are concerned with the inherent risks arising from electronic data
communication they should refer to the published hard copy of the audited consolidated financial statements
and related audit report dated 28 June 2019 to confirm the information included in the audited consolidated
financial statements presented on this website.

Legislation in New Zealand governing the preparation and dissemination of consolidated financial statements
may differ from legislation in other jurisdictions.

The engagement partner on the audit resulting in this independent auditor’s report is D I Searle.


BAKER TILLY STAPLES RODWAY AUCKLAND
Auckland, New Zealand
28 June 2019
3130

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2019
Turners Automotive Group Limited
Consolidated statement of changes in equity for the year ended 31 March 2019
Cash flow
Share Share Translation hedge Retained
capital options reserve reserve earnings Total
Notes$’000$’000$’000$’000$’000 $’000
Balance at 31 March 2017168,809208(23)6 2,716 171,716
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)2630,339---- 30,339
Employee share based payments27-493---493
Dividend paid28---- (11,417) (11,417)
Total transactions with shareholders in their capacity as owners30,339493-- (11,417) 19,415
Comprehensive income
Profit---- 23,360 23,360
Other comprehensive income--2(170)- (168)
Total comprehensive income for the year, net of tax--2(170) 23,360 23,192
Balance at 31 March 2018199,148 701(21)(164) 14,659 214,323
Change in accounting policies
Impact of the implementation of NZ IFRS 1531----(345) (345)
Impact of the implementation of NZ IFRS 931---- (2,292) (2,292)
---- (2,637) (2,637)
Balance at 1 April 2018 (restated)199,148701(21)(164) 12,022 211,686
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)26
13,388----13,388
Capital buy back26
(6,141)----(6,141)
Employee share based payments27
-326---326
Dividend paid28
----(15,214) (15,214)
Total transactions with shareholders in their capacity as owners
7,247326--(15,214)(7,641)
Comprehensive income
Profit
----22,71922,719
Other comprehensive income
--(26)(364)-(390)
Total comprehensive income for the year, net of tax
--(26)(364)22,71922,329
Balance at 31 March 2019206,3951,027(47)(528)19,527226,374
The accompanying notes form part of these financial statements
The accompanying notes form part of these financial statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 March 2019
Turners Automotive Group Limited
Consolidated statement of financial position for the year ended 31 March 2019
2019
2018
Notes
$’000
$’000
Assets
Cash and cash equivalents10
15,866
25,145
Financial assets at fair value through profit or loss11
66,252
53,378
Trade receivables12
12,471
11,323
Inventory13
38,859
38,596
Finance receivables14
290,017
289,799
Other receivables, deferred expenses and contract assets15
10,955
11,747
Reverse annuity mortgages16
8,294
9,997
Investment property17
5,650
4,820
Property, plant and equipment19
39,084
35,945
Intangible assets20
166,734
170,982
Total assets654,182
651,732
Liabilities
Other payables21
33,906
38,588
Financial liability at fair value through profit or loss22
116
226
Contract liabilities23
2,642
1,793
Deferred tax24
13,918
18,786
Tax payables
4,570
5,029
Derivative financial instruments
524
111
Borrowings25
312,863
317,373
Life investment contract liabilities34
7,484
7,127
Insurance contract liabilities34
51,785
48,376
Total liabilities427,808
437,409
Shareholders’ equity
Share capital26
206,395
199,148
Other reserves
452
516
Retained earnings
19,527
14,659
Total shareholders’ equity226,374
214,323
Total shareholders’ equity and liabilities654,182
651,732
For and on behalf of the Board

G.K. BakerP.A. Byrnes
Chairman DirectorDeputy chairman
Authorised for issue on 28 June 2019
The accompanying notes from part of these financial statements
The accompanying notes form part of these financial statements
TURNERS LIMITED
Consolidated statement of financial position for the year ended 31 March 2016
2016
2015
Notes
$’000
$’000
Assets
Cash and cash equivalents10
13,810
12,339
Financial assets at fair value through profit or loss11
18,455
17,350
Trade receivables12
9,575
7,394
Inventory13
14,156
8,984
Finance receivables14
167,598
142,827
Other receivables and deferred expenses15
8,505
5,946
Reverse annuity mortgages16
9,734
13,253
Property, plant and equipment19
11,108
8,319
Tax receivables
-
433
Deferred tax asset20
4,024
8,532
Intangible assets21
105,338
103,595
Total assets362,303
328,972
Liabilities
Other payables22
22,270
17,790
Deferred revenue23
6,049
7,476
Tax payables
990
71
Derivative financial instruments
49
-
Borrowings24
174,816
156,995
Life investment contract liabilities32
15,629
16,378
Insurance contract liabilities32
12,688
9,260
Total liabilities232,491
207,970
Shareholders’ equity
Share capital25
136,127
135,294
Other reserves
(52)
(23)
Retained earnings
(6,263)
(14,269)
Total shareholders’ equity129,812
121,002
Total shareholders’ equity and liabilities362,303
328,972
For and on behalf of the Board

G.K. BakerP.A. Byrnes
Chairman DirectorExecutive Director
Authorised for issue on 22 June 2016
The accompanying notes from part of these financial statements
TURNERS LIMITED
Consolidated statement of financial position for the year ended 31 March 2016
2016
2015
Notes
$’000
$’000
Assets
Cash and cash equivalents10
13,810
12,339
Financial assets at fair value through profit or loss11
18,455
17,350
Trade receivables12
9,575
7,394
Inventory13
14,156
8,984
Finance receivables14
167,598
142,827
Other receivables and deferred expenses15
8,505
5,946
Reverse annuity mortgages16
9,734
13,253
Property, plant and equipment19
11,108
8,319
Tax receivables
-
433
Deferred tax asset20
4,024
8,532
Intangible assets21
105,338
103,595
Total assets362,303
328,972
Liabilities
Other payables22
22,270
17,790
Deferred revenue23
6,049
7,476
Tax payables
990
71
Derivative financial instruments
49
-
Borrowings24
174,816
156,995
Life investment contract liabilities32
15,629
16,378
Insurance contract liabilities32
12,688
9,260
Total liabilities232,491
207,970
Shareholders’ equity
Share capital25
136,127
135,294
Other reserves
(52)
(23)
Retained earnings
(6,263)
(14,269)
Total shareholders’ equity129,812
121,002
Total shareholders’ equity and liabilities362,303
328,972
For and on behalf of the Board

G.K. BakerP.A. Byrnes
Chairman DirectorExecutive Director
Authorised for issue on 22 June 2016
The accompanying notes from part of these financial statements
3332

CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2019
Turners Automotive Group Limited
Consolidated statement of cash flows for the year ended 31 March 2019
2019
2018
Notes
$’000
$’000
Cash flows from operating activities
Interest received45,02341,925
Receipts from customers279,472281,031
Interest paid(12,184)(9,609)
Payment to suppliers and employees(272,052)(266,124)
Income tax paid
(10,752)(5,824)
29,50741,399
Net increase in finance receivables
(34,926)(75,248)
Net decrease in reverse annuity mortgages
2,54566
Net (increase)/decrease of financial assets at fair value through profit or loss
(12,163)(41,937)
Net (withdrawals)/contributions from life investment contracts16(5,765)
(44,528)(122,884)
Net cash (outflow)/inflow from operating activities
30
(15,021)(81,485)
Cash flows from investing activities
Proceeds from sale of property, plant, equipment, intangibles and held for sale assets
9,3884,098
Purchase of property, plant and equipment
(10,646)(22,013)
Purchase of intangible assets
(2,107)(839)
Purchase of subsidiaries
-(3,733)
Sale/(purchase) of investments
41(21)
Net cash inflow/(outflow) from investing activities
(3,324)(22,508)
Cash flows from financing activities
Net bank loan advances/(repayments)
20,57039,005
Proceeds from the issue of shares7,10029,656
Proceeds from the issue of bonds(561)-
Other borrowings(2,837)2,837
Dividend paid(15,214)(11,417)
Net cash inflow/(outflow) from financing activities
9,05860,081
Net movement in cash and cash equivalents
(9,287)(43,912)
Add opening cash and cash equivalents
25,145
69,069
Translation difference
8
(12)
Closing cash and cash equivalents
15,86625,145
Represented By:
Cash at bank10
15,866
25,145
Closing cash and cash equivalents
15,86625,145
The accompanying notes from part of these financial statements
Net cash outflow from operating activities before changes in operating assets and
liabilities
Changes in operating assets and liabilities arising from cash flow movements
The accompanying notes form part of these financial statements
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



1. REPORTING ENTITY
Turners Automotive Group Limited, ('the Company') is incorporated and domiciled in New Zealand. Turners Automotive Group Limited is
registered under the Companies Act 1993.

Turners Automotive Group Limited is a FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013.

The consolidated financial statements of Turners Automotive Group Limited and its subsidiaries (together ‘the Group’) have been prepared in
accordance with the Companies Act 1993 and the Financial Markets Conduct Act 2013.

The Group is a for profit entity.

The Group's principal activities are:
• automotive retail (second hand vehicle retailer)
• finance and insurance (loans and insurance products); and
• credit management (collection services).

The financial statements were authorised for issue by the directors on 28 June 2019.

2. BASIS OF PREPARATION
2.1 Statement of Compliance
These financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand ('NZ GAAP').
They comply with New Zealand Equivalents to International Financial Reporting Standards ('NZ IFRS') and other applicable Financial
Reporting Standards, as appropriate for profit oriented entities. These financial statements also comply with International Financial Reporting
Standards ('IFRS').

2.2 Basis of measurement
The financial report has been prepared under the historical cost convention, as modified by revaluations for certain classes of assets and
liabilities to fair value and life insurance contract liabilities and related assets to net present value as described in the accounting policies
below.

2.3 Functional and Presentation Currency and Rounding
These financial statements are presented in New Zealand Dollars ($) which is the Company's functional currency. All values are rounded to
the nearest thousand ($000), except when otherwise indicated.

3. SIGNIFICANT ACCOUNTING POLICIES
Except as detailed in note 31, the accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by Group entities.

3.1 Adoption of new and revised Standards and Interpretations
New standards and amendments and interpretations to existing standards that came into effect during the current accounting period beginning
on 1 April 2018 that materially impact the Group’s financial statements are as follows:
• NZ IFRS 15 'Revenue from Contracts with Customers'; and
• NZ IFRS 9 'Financial Instruments'.
The other standards did not have a material impact on the Group’s financial statements and did not require retrospective adjustment.

Refer to note 31 for the impact of implementing these new standards.
3.2 New standards and amendments and interpretations to existing standards that are not yet effective for the current accounting
period beginning on 1 April 2018
The following relevant standards and interpretations have been issued at the reporting date but are not yet effective.

NZ IFRS 16 'Leases'
NZ IFRS 16 'Leases' will replace NZ IAS 17 ‘Leases’. NZ IFRS 16 eliminates the distinction between operating and finance leases for lessees
and will result in lessees bringing most leases onto their Statements of Financial Position.

The main changes affect lessee accounting only – lessor accounting is mostly unchanged from NZ IAS 17.

NZ IFRS 16 introduces the following:
• Use of a control model for the identification of leases. This model distinguishes between leases and service contracts on the basis of
whether there is an identified asset controlled by the customer.
• Distinction between operating and finance leases is removed. Assets (a right of use asset) and liabilities (a lease liability reflecting future
lease payments) will now be recognised in respect of all leases, with the exception of certain short term leases and leases of low value
assets

The effective date is annual reporting periods beginning on or after 1 January 2019, the financial year beginning 1 April 2019.

The indicative impacts of implementing NZ IFRS 16 are as follows for all leases that the Group is a party to:
Initial recognition and measurement:
• Initially the ROU asset would be measured its carrying amount as if NZ IFRS 16 had been applied since the commencement of the lease,
but discounted using the Group's incremental borrowing rate at the date of initial application; and
3534

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



• Recognition of a lease liability, which would reflect the initial measurement of the present value of lease payments, including reasonably
certain renewals.

Subsequent measurement:
• ROU asset: Depreciate the ROU asset based on NZ IAS 16 ‘Property, plant and equipment’.
• Lease liability: Accrete liability based on the effective interest method, using a discount rate determined at lease commencement (as
long as a reassessment and a change in the discount rate have not occurred) and reduce the liability by payments made.

NZ IFRS 16 will have a material impact on the Group's financial statements. The Group’s operating lease commitments as at 31 March 2019
are set out in note 32.

The Group has elected to adopt the Cumulative effect approach under which the Group will not restate comparative information.
Based on existing lease arrangements, the preliminary assessment of the adoption of IFRS 16, is expected to result in the recognition of the
following:

As at 1 April 2019, the recognition of the following on the Group’s Statement of Financial Position:
• a ROU asset of $30.3m;
• a lease liability of $36.9m;
• a net movement in deferred tax of $1.8m (comprised of an increase in deferred tax assets of $10.3m and deferred tax liabilities of $8.5m);
and
• a decrease in retained earnings of $4.8m.

For the year ended 31 March 2020, the recognition of the following on the Group’s Statement of Comprehensive Income:
• a decrease in rental expense (included within Property and related expenses) of $8.6m;
• an increase in depreciation expense of $6.4m;
• an increase in finance costs of $1.9m; and
• a decrease in tax expense of $0.1m.

As at 31 March 2020, the recognition of the following on the Group’s Statement of Financial Position:
• a ROU asset of $23.9m;
• a lease liability of $30.1m; and
• a net movement in deferred tax of $1.7m (comprised of an increase in deferred tax assets of $8.4m and deferred tax liabilities of $6.7m);
and
• a decrease in retained earnings of $4.5m.

For the year ended 31 March 2020, overall there would be no impact on the Group’s Statement of Cash flows, however there would be an
increase in net cash from operating activities of $6.6m and corresponding decrease in net cash from/(used in) financing activities $6.6m.

NZ IFRS 17 Insurance Contracts
NZ IFRS 17, ‘Insurance Contracts’, will replace NZ IFRS 4, ‘Insurance Contracts’. Under the NZ IFRS 17, insurance contract liabilities will be
calculated at the present value of future insurance cash flows with a provision for risk. The discount rate applied will reflect current interest
rates. If the present value of future cash flows would produce a gain at the time an insurance contract is issued, the model would also require
a "contractual service margin" to offset the day 1 gain. The contractual service margin would be amortized over the life of the insurance
contract. There would also be a new income statement presentation for insurance contracts, including a revised definition of revenue and
additional disclosure requirements. NZ IFRS 17 will also have accommodations for certain specific types of insurance contracts. Short-duration
insurance contracts will be permitted to use a simplified unearned premium liability model until a claim is incurred. For some contracts, in
which the cash flows are linked to underlying items, the liability value will reflect that linkage.

The effective date is annual reporting periods beginning on or after 1 January 2021.

The Group is yet to assess the impact of NZ IFRS 17. The Group intends to adopt NZ IFRS 17 no later than the financial year beginning 1
April 2021.

3.3 Basis of consolidation
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is
transferred to the Group. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group 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 Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the aquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less
• the net recognised amount of the identifiable assets acquired and liabilities assumed.
When an excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business
combination are expensed as incurred.

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity,
then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss or other comprehensive income as appropriate.

Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill
is recognised as a result. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based
on a proportionate amount of the net assets of the subsidiary.

Subsidiaries
Subsidiaries are all entities controlled by the Group. The financial statements of subsidiaries are included in consolidated financial statements
from the date that control commences until the date that control ceases.

Loss of control
On loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components
of equity related to the subsidiary. Any surplus or deficit arising on loss of control is recognised in profit or loss. If the Group retains an interest
in the previous subsidiary, the interest is measured at fair value at the date control is lost. Subsequently it is accounted for as an equity-
accounted investee or as an available for sale asset depending on the influence retained.

Investments in associates (equity accounted investees)
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant
influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes
transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of
equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases.

Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements.

3.4 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currency of Group entities at exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency
at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional
currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency
translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured
based on historical costs are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss.

Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to New
Zealand Dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to New Zealand
Dollars at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve
(translation reserve) in equity. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the
cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the
relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment
in an associate or joint venture, that includes a foreign operation, while retaining significant influence or joint control, the relevant proportion
of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable
future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign
operation and are recognised in other comprehensive income, and are presented in the translation reserve in equity.

3.5 Revenue and expense recognition
The principal sources of revenue are sales of goods, sales of service, interest income, fees, commissions, and insurance premium income.

3.5.1 Revenue from contracts with customers
Sales of goods
Sales of goods comprise sales of motor vehicle and commercial goods owned by the Group. Sales of goods are recognised when the customer
gains control of the goods. This normally occurs on receipt of a deposit, full payment or approval of financing.

Sales
‑related warranties associated with goods cannot be purchased separately and they serve as an assurance that the products sold comply
with agreed
‑upon specifications and cover the standard period established by legislation.
3736

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



There is no material amount of variable consideration under these contracts nor is there the existence of a significant financing component.

Sales of service
Auction commission is recognised at a point in time in the accounting period in which the service is rendered. Payment for services is normally
deducted from the proceeds from the sale. Other than those provided by legislation no warranties are provided by the Group. There is no
material amount of variable consideration under these contracts nor is there the existence of a significant financing component.

Other sales revenue comprises services rendered preparing the asset for sale and commission earned on the sale of third party products.
Services rendered while preparing the asset for sale are recognised over time in the accounting period in which the service is rendered, and
a contract asset is recognised for amounts relating to services rendered not yet invoiced. Payment for services rendered are either deducted
from the proceeds from the sale or raised as a trade receivable. Other than those provided by legislation no warranties are provided by the
Group. There are no rebated or volume discounts. Commissions earned on the sale of third party products is recognised at a point in time
when the sale is made. Payment is usually received when the sale is made.
Other than those provided by legislation no warranties are
provided by the Group. There are no rebates or volume discounts.

Collection income, which is largely fees and commission earned for collecting debt on behalf of third parties and the sale of customised terms
of trade documents, is recognised at a point in time in the accounting period in which the service is rendered, by reference to completion of
the specific transaction assessed on the basis of the actual service provided as a proportion of the total service to be provided. Payment is
either deducted from the monies collected or raised as trade receivable and therefore a contract liability is recognised over the period in which
the services are performed representing the Group’s right to consideration for the services performed to date. If the consideration promised
includes a variable amount for rebates, refunds or credit, then the Group estimates the amount of variable consideration, to the extent that it
is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur, and recognises a contract liability.
Other than those provided by legislation no warranties are provided by the Group. Costs to obtain contracts such as commissions are
recognised as contract assets and incurred when the related revenue for the contract is released to profit or loss.

Voucher income
Voucher income is the proceeds from the sale of a voucher that on presentation entitles the holder to either load a debt for collection or
register of a security on the Personal Property Securities Register (‘PPSR’)., Voucher income is recognised, at a point in time, when the
voucher is redeemed and the debtor’s information is loaded into the collection system or a security is registered on the PPSR. Payment is
normally received when the voucher is sold, and voucher income is initially recognised as a contract liability. For those vouchers that are
unredeemed, voucher income is recognised after a period of time based on historical non-redemption patterns. Estimates are readjusted as
necessary based on movements in the actual non-redemption patterns. Other than those provided by legislation no warranties are provided
by the Group. There is no material amount of variable consideration under these contracts nor is there the existence of a significant
financing component.
Costs to obtain contracts such as commissions are recognised as contract assets and incurred when the related
revenue for the contract is released to profit or loss.

For the accounting policies applied prior to the adoption of IFRS15 please refer to note 31.

3.5.2 Financial instruments
Interest income and expense
Interest income and expense is recognised in the profit or loss using the effective interest method.

The effective interest method calculates the amortised cost of a financial asset or financial liability and allocates the interest income or interest
expense over the relevant period. The calculation includes all fees paid or received and directly related transaction costs that are an integral
part of the effective interest rate. The interest income or expense is allocated over the life of the instrument and is measured for inclusion in
profit and loss by applying the effective interest rate to the instruments amortised cost.

Lending and funding - fees and commissions
Lending fee income (such as booking and establishment fees) that is integral to the effective yield of a loan held at amortised cost is capitalised
as part of the amortised cost and deferred over the life of the loan using the effective interest method. Lending fees not directly related to the
origination of a loan (account maintenance fee) are recognised over the period of service.

Incremental and directly attributable costs (such as commissions) associated with the origination of a financial asset (such as loans) and
financial liabilities (such as borrowings) are capitalised as part of the amortised cost and deferred over the life of the financial instrument using
the effective interest method.

3.5.3 Insurance Contracts
Premium income and acquisition costs
Recurring premiums on life insurance contracts are recognised as revenue when payable by the policyholder. Where policies provide for the
payment of amounts of premiums on specific due dates, such premiums are recognised as revenue when due. Unpaid premiums are only
recognised as revenue during the days of grace and are not recognised where policies are deemed to have lapsed at reporting date.

General insurance premiums comprise the total premiums payable for the whole period of cover provided by contracts entered into during the
reporting period and are recognised on the date on which the policy commences. Premiums include any adjustments arising in the reporting
period for premium receivables written in respect of business written in prior accounting periods. Premiums collected by intermediaries, but
not yet received, are assessed based on known sales and are included in written premium.

Unearned premiums are those proportion of premiums written in a year that relate to periods of risk after the reporting date. Unearned
premiums are calculated on a daily pro rata basis. The proportion attributable to subsequent periods is deferred as a provision for unearned
premiums.

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



Under life investment contracts deposits are received from policyholders which are then invested on behalf of the policyholders. No premium
income is recognised as revenue. Fees deducted from members' accounts are accounted for as fee income.

Those direct and indirect costs incurred during the financial period arising from the acquiring or renewing of insurance contracts are deferred
to the extent that these costs are recoverable out of future premiums from insurance contracts. All other acquisitions costs are recognised as
an expense when incurred.

Subsequent to initial recognition, the deferred acquisitions cost asset (DAC) for life insurance contracts is amortised over the expected life of
the contracts. DAC for general insurance contracts is amortised over the period in which the revenues are earned.

An impairment review is performed at each reporting date or more frequently when an indication of impairment arises. When the recoverable
amount is less than the carrying value, an impairment loss is recognised in profit or loss. DACs are also considered in the liability adequacy
test for each reporting period.

DACs are derecognised when the related contracts are either settled or disposed of.

Claims expense
Claims expenses represent claim payments adjusted for the movement in the outstanding claims liability.

General insurance claims expenses are recognised when claims are notified with the exception of claims incurred but not reported for which
a provision is estimated. Life insurance contract claims are recognised when a liability has been established. Claims under life investment
contracts represent withdrawals of investment deposits and are recognised as a reduction in the life investment contract liabilities.

3.5.4 Other
Other income
Dividend income is recorded in the profit or loss when the Group’s right to receive the dividend is established.

Other expense recognition
All other expenses are recognised in profit or loss as incurred.

3.6 Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or
loss.

Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention
in the marketplace.

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification
of the financial assets.

Classification of financial assets
Financial assets that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the
financial assets; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:
• the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if
certain criteria are met; and
• the Group may irrevocably designate a financial asset that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing
so eliminates or significantly reduces an accounting mismatch.

(i) Amortised cost and effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the
relevant period.
3938

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019




For financial assets other than purchased or originated credit‑impaired financial assets (i.e. assets that are credit‑impaired on initial
recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit
losses, through the expected life of the financial asset, or, where appropriate, a shorter period, to the gross carrying amount of the financial
asset on initial recognition. For purchased or originated credit‑impaired financial assets, a credit‑adjusted effective interest rate is calculated
by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial
recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal
repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity
amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before
adjusting for any loss allowance.

Interest income is recognised using the effective interest method for financial assets measured subsequently at amortised cost and at FVTOCI.
For financial assets other than purchased or originated credit‑impaired financial assets, interest income is calculated by applying the effective
interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit‑impaired (see
below).

For financial assets that have subsequently become credit‑impaired, interest income is recognised by applying the effective interest rate to
the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit‑impaired financial instrument improves
so that the financial asset is no longer credit‑impaired, interest income is recognised by applying the effective interest rate to the gross carrying
amount of the financial asset.

Financial assets measured at amortised cost include cash and cash equivalents, trade receivables, finance receivables, reverse annuity
mortgages and other receivables.

(ii) Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. Specifically:
• Investments in equity instruments are classified as at FVTPL, unless the Group designates an equity investment that is neither held for
trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition.
• Financial assets that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL. In addition, financial
assets that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such
designation eliminates or significantly reduces a measurement or recognition inconsistency (so called ‘accounting mismatch’) that would
arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Group has not designated
any financial assets as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in
profit or loss to the extent they are not part of a designated hedging relationship (see hedge accounting policy). Fair value is determined in
the manner described in note 5.5.

Financial assets measured at FVTPL include unitised funds, fixed interest securities and term deposits.

The Group has no financial assets measured at FVTOCI.

Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets that are measured at amortised cost and contract assets.
The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument.

The Group recognises lifetime ECL for trade receivables and contract assets. The expected credit losses on these financial assets are
estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date,
including time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures
the loss allowance for that financial instrument at an amount equal to 12‑month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12‑month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.

(i) Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition,
the Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the
financial instrument at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative
information that is reasonable and supportable, including historical experience and forward‑looking information that is available without undue
cost or effort.

The nature of the Group’s finance receivables (second tier retail and commercial lending) means there is little or no updated credit risk
information that is routinely obtained and monitored on an individual instrument until a customer breaches the contractual terms.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019




Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a financial asset has increased significantly
since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable
information that demonstrates otherwise.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and
revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes
past due.

(ii) Definition of default
The Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and
supportable information to demonstrate that a more lagging default criterion is more appropriate.

(iii) Credit‑impaired financial assets
A financial asset is credit‑impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Evidence that a financial asset is credit‑impaired includes observable data about the
following events:
a) significant financial difficulty of the borrower;
b) a breach of contract, such as a default or past due event (see (ii) above); and
c) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation.

(iv) Write‑off policy
The Group writes off a financial asset when there is information indicating that the borrower is in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the borrower has been placed under liquidation or has entered into bankruptcy proceedings. Financial
assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where
appropriate. Any recoveries made are recognised in profit or loss.

v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there
is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted
by forward‑looking information as described above.

As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date. No further
advances are allowed against financial assets in default.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period,
but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at
an amount equal to 12‑month ECL at the current reporting date, except for assets for which simplified approach was used.

The Group recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying
amount through a loss allowance account.

Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains
substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest
in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the
proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss

Financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL. However, financial
liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies
are measured in accordance with the specific accounting policies set out below.

Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a business combination,
(ii) held for trading or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:
• it has been acquired principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual
pattern of short‑term profit‑taking; or
• it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument.

4140

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a business combination may be
designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is
evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information
about the grouping is provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be
designated as at FVTPL.

Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss
to the extent that they are not part of a designated hedging relationship (see Hedge accounting policy).

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is
attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of
changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The
remaining amount of change in the fair value of liability is recognised in profit or loss. Changes in fair value attributable to a financial liability’s
credit risk that are recognised in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred
to retained earnings upon derecognition of the financial liability.

Fair value is determined in the manner described in note 5.5.

Financial liabilities measured at FVTPL include contingent consideration.

Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held‑for‑trading, or (iii) designated as
at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The
difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit
or loss.

When the Group exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange
is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group
accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the
recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the
new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 percent different
from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the
difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification
should be recognised in profit or loss as the modification gain or loss within other gains and losses.

Derivative financial instruments
The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign
exchange forward contracts, and interest rate swaps.

Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair
value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a
financial liability. Derivatives are not offset in the financial statements unless the Group has both legal right and intention to offset.

A derivative is presented as a non‑current asset or a non‑current liability if the remaining maturity of the instrument is more than 12 months
and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

Hedge accounting
The Group designates certain derivatives as hedging instruments in respect of interest rate risk in cash flow hedges.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along
with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge
and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting changes in cash flows of the hedged
item attributable to the hedged risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:
• there is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective
for that designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the
hedge) so that it meets the qualifying criteria again.

Cash flow hedges
The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as
cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to
the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss.

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when
the hedged item affects profit or loss, in the same line as the recognised hedged item. However, when the hedged forecast transaction results
in the recognition of a non‑financial asset or a non‑financial liability, the gains and losses previously recognised in other comprehensive income
and accumulated in equity are removed from equity and included in the initial measurement of the cost of the non‑financial asset or
non‑financial liability. This transfer does not affect other comprehensive income. Furthermore, if the Group expects that some or all of the loss
accumulated in the cash flow hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.

The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after
rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The
discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in cash flow
hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast
transaction is no longer expected to occur, the gain or loss accumulated in cash flow hedge reserve is reclassified immediately to profit or
loss.

For the accounting policy applied prior to the adoption of IFRS9 please refer to note 31.

3.7 Insurance contracts
Insurance contracts are those contracts that transfer significant insurance risk and are accounted for in accordance with the requirements of
NZ IFRS 4 Insurance Contracts. The Group issues the following insurance contracts:
• Long-term insurance contracts with fixed and guaranteed terms, these contracts insure events associated with human life (for example,
death) over a long duration;
• Temporary life insurance contracts covering death disablement, disability and redundancy risks; and
• Short term motor vehicle contracts covering comprehensive, third party and mechanical breakdown risks.

The Group has determined that all assets of the Group’s subsidiary, DPL Insurance Limited, are assets backing policy liabilities and are
managed and reported in accordance with a mandate approved by the DPL Insurance Limited’s Board.

The liability for life insurance contracts is determined in accordance with Appendix C of NZ IFRS 4 Insurance Contracts and Professional
Standard No 20 of the New Zealand Society of Actuaries. In terms of these standards, the liability is determined using the methodology
referred to as Margin on Service (MoS). Under MoS the excess premium received over claims and expenses, 'the profit margin', is recognised
over the life of the contract in a manner that reflects the pattern of risk accepted from the policyholder 'the service'. Longer-term lines of
business (annuities, funeral plan) are valued using the projection method, and shorter-term life and longer-term life contracts written on yearly
renewable premiums, are valued using the accumulation method, as provided for in NZ IFRS 4.

General insurance contract liabilities include claims provision and the provision for unearned premium. The outstandings claims provision is
based on the estimated ultimate cost of all claims incurred but not settled at the reporting date, whether reported or not, together with related
claims handling cost and a reduction for the expected value of salvage and other recoveries. Delays can be experienced in the notification
and settlement of claims, therefore the ultimate cost of these cannot be known at reporting date and are estimated based on past experience.
The liability is not discounted for the time value of money and is derecgonised when the obligation to pay the claim expires, is discharged or
is cancelled.

The provision for unearned premiums represent the portion of premiums received or receivable that relates to risks that have not yet expired
at the reporting date. The provision is recognised when contracts are entered into and premiums are charged, and is brought to account as
premium income over the term of the contract in accordance with the pattern of insurance service provided under the contract.

Liability adequacy testing is performed in terms of NZ IFRS 4 in order to test the adequacy of all insurance liabilities recorded in the statement
of financial position, net of deferred acquisition costs. Liability adequacy testing is performed at a portfolio level of contracts that are subject
to broadly similar risks and are managed together as a single portfolio.

3.8 Life investment contracts
Life investment contracts are those contracts with minimal insurance risk and are accounted for in accordance with NZ IFRS 15 'Revenue
from Contracts with Customers' (refer note 3.5.1) and NZ IFRS 9 'Financial Instruments' (refer note 3.5.2). The life investment contacts are
unit-linked and fair value of a unit linked contract is determined using the current unit values that reflect the fair value of the financial assets
backing the contract, multiplied by the number of units attributable to the contract holder.

3.9 Inventories
Inventories comprise primarily motor vehicles held for sale and are stated at the lower of cost or net realisable value. Cost comprises purchase
price, shipping cost, compliance cost and other sundry related costs. Estimated selling prices are based upon recent observed vehicle sales
prices for comparable vehicles. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale.


4342

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



3.10 Investment property
Investment property is held for capital appreciation and comprises land that was transferred from finance receivables through the exercise of
the Group’s security interest in a finance receivable that was in default.

Investment property is initially recognised at fair value on date of transfer or purchase and subsequently carried at fair value. The fair value of
investment properties is determined by a qualified independent external valuer (refer note 17).

Any gains or losses arising from a change in fair value of the investment property is recognised in profit or loss. Subsequent expenditure is
charged to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the period in
which they are incurred.

3.11 Property, plant and equipment
Property, plant and equipment are recognised in the statement of financial position at cost less accumulated depreciation and impairment
losses. Land is not depreciated. Depreciation is calculated on all other property, plant and equipment on a diminishing value or straight-line
basis to allocate the costs, net of any residual amounts, over their useful lives.

The rates for the following asset classes are:

Diminishing value Straight line
Leasehold improvements, furniture and
fittings, office equipment

7.5 - 60.0%

3 - 15 years
Computer equipment 31.2 - 48.0% 3 - 5 years
Motor vehicles and equipment 26.0 - 31.2% 3 - 7 years
Signs and flags - 3 - 12 years

3.12 Intangible assets
Intangible assets comprise goodwill, acquired separable corporate brands, acquired customer relationships and computer software. Goodwill
and corporate brands are indefinite life intangibles subject to annual impairment testing.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or
groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according
to operating segment.

Corporate brands and customer relationships acquired as part of a business combination are capitalised separately from goodwill as intangible
assets if their value can be measured reliably on initial recognition and it is probable that the expected future economic benefits that are
attributable to the asset will flow to the Group.

Corporate relationship assets are amortised on the straight line basis over the expected life (2 – 10 years) of the relationship
and are
recognised in the statement of financial position at cost less accumulated amortisation and impairment losses.

Computer software is recognised in the statement of financial position at cost less accumulated amortisation and impairment losses.

Direct costs associated with the purchase and installation of software licences and the development of software for internal use are capitalised
where project success is probable and the capitalisation criteria is met. Cost associated with planning and evaluating computer software and
maintaining a system after implementation are expensed. Computer software costs are amortised on a diminishing value basis (rate of 50%)
or on a straight-line basis (one to five years).

3.13 Leases in which the Group is lessee
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis
over the period of the lease.

3.14 Taxation
Income tax for the period comprises current and deferred tax. Current and deferred tax are recognised as an expense or income in the profit
or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in
equity), in which case the tax is also recognised outside profit or loss.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at balance date
after taking advantage of all allowable deductions under current taxation legislation and any adjustment to tax liabilities in respect of previous
years.

Deferred tax is provided using the liability method, providing for temporary differences between the amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the amount of assets and liabilities, using tax rates enacted or substantively enacted as at balance date.

Deferred taxation assets arising from temporary differences or income tax losses, are recognised only to the extent that it is probable that a
future taxable profit will be available against which the asset can be utilised. Deferred taxation assets are reduced to the extent that it is no
longer probable that the related tax asset will be realised. Any reduction is recognised in profit or loss.



NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



3.15 Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually or more frequently if
events or changes in circumstances indicate that they might be impaired. Intangible assets not yet available for use are tested for impairment
annually or more frequently if events or changes in circumstances indicate that they might be impaired.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. The Group conducts an annual internal review of asset values, which is used as a source of information to assess for any
indicators of impairment. External factors, such as changes in expected future processes, technology and economic conditions, are also
monitored for indicators of impairment. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. Value in use is determined by estimating future cash flows
from the use and ultimate disposal of the asset and discounting these to their present value using a pre-tax discount rate that reflects current
market rates and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). Impairment losses directly reduce the carrying amount of assets and are
recognised in profit or loss.

Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

3.16 Managed funds
DPL Insurance Limited, a wholly owned subsidiary, has saving plans, which are not open to new members, with assets managed by a third
party investment manager. The assets and liabilities of these funds are included in the financial statements.


3.17 Employee benefits
Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave are recognised in respect of employees' services up to the reporting date. They are measured
at the amounts expected to be paid when the liabilities are settled.

Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured at the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.

Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit
attributable to the Company’s shareholders after certain adjustments. The Group recognises an accrual where contractually obliged or where
there is a practice that has created a constructive obligation.

Share based payments
The cost of options issued to employees under the Group’s share option plan is measured by reference to fair value of the options at the date
on which they are granted. Service and non-market performance conditions are not taken into account when determining the grant date fair
value, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that
will ultimately vest. Market conditions are reflected within the grant date fair value.

The cost of equity settled transactions is recognised over the vesting period. If the service condition is not met during the vesting period, the
expense is revised to reflect the best available estimate of the number of equity instruments expected to vest. Where awards include market
and non-vesting conditions, the transactions are treated as vested irrespective of whether the market or non-vesting conditions is satisfied,
provided that all other performance and/or service conditions are satisfied.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share refer note 9).

Superannuation plans
The Group pays contributions to superannuation plans, such as Kiwisaver. The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

3.18 Statement of cash flows
The statement of cash flows has been prepared using the direct approach modified by netting certain cash flows in order to provide more
meaningful disclosure to better reflect the activities of the Group's customers or the party providing funding to the Group than those of the
Group. These include reverse annuity mortgages, finance receivables and borrowings.

3.19 Comparatives
Where necessary, comparative information has been reclassified and represented for consistency with current year. Comparative information
has not been restated for the impact on application of NZ IFRS 15 and NZ IFRS 9.

4. USE OF ESTIMATES AND JUDGEMENTS
In preparing the financial statements in accordance with NZ IFRS, IFRS and applicable reporting standards management has made
judgements, estimates and assumptions that affect the application of accounting policies and about the future that affect the reported amounts
4544

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual
results could differ from those estimates.

Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The principal areas of judgement in preparing these financial
statements are set out below.

Provision for impairment on loan receivables
Significant increase in credit risk
As explained in note 3.6, ECL are measured as an allowance equal to 12 month ECL for performing assets, or lifetime ECL for doubtful or in
default assets. An asset moves to doubtful when its credit risk has increased significantly since initial recognition. IFRS 9 does not define what
constitutes a significant increase in credit risk. In assessing whether the credit risk of an asset has significantly increased the Group takes into
account qualitative and quantitative reasonable and supportable forward looking information.

Calculation of loss allowance
When measuring ECL the Group uses reasonable and supportable forward looking information, which is based on assumptions for the future
movement of different economic drivers and how these drivers will affect each other.

Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those
that the Group would expect to receive, taking into account cash flows from collateral and integral credit enhancements.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given
time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

If the ECL rates on performing finance receivables increased/(decreased) by 1% higher (lower) as at 31 March 2019, the loss allowance on
finance receivables would have been $0.024 million higher/(lower).

If the ECL rates on doubtful or in default finance receivables increased/(decreased) 1% higher (lower) as at 31 March 2019, the loss allowance
on finance receivables would have been $0.153 million higher/(lower).

Impairment of goodwill
The carrying value of goodwill is assessed at least annually to ensure that it is not impaired. Performing this assessment generally requires
management to estimate future cash flows to be generated by the cash-generating unit, which entails making judgements, including the
expected rate of growth of revenues, margins expected to be achieved and the appropriate discount rate to apply when valuing future cash
flows (refer note 20). A sensitivity analysis of the recoverable amounts of the CGU’s is disclosed in note 20.

When estimating future cash flows, Management’s judgements include forecasting year-on-year movements in the operating assets of
individual CGUs such as:
• for the Finance and Turners Group (NZ) CGUs, the movement in their portfolios of finance receivables and related movement in debt
financing;
• for the Turners Group (NZ) and Buy Right Cars CGUs, the movement in inventory levels, trade payables and related movement trade
financing; and
• for the DPL Insurance CGU, the movement in deferred insurance contract premiums and acquisition costs, and solvency capital
requirements.

Liabilities arising from claims made under insurance contracts
Liabilities arising from claims made under insurance contracts are estimated based on the terms of cover provided under an insurance contract.

The estimation of the ultimate liability arising from claims made under insurance contracts is based on a number of actuarial techniques that
analyse experience, trends and other relevant factors. The estimate process involves using Group specific data, relevant industry data and
general economic data, including but not limited to, claim frequencies, average claim sizes and historical trends (refer note 34A).


Impairment of corporate brands
The carrying values of brands are assessed at least annually to ensure that it is not impaired. Performing this assessment generally requires
management to estimate future cash flows to be generated by the related investment or a cash-generating unit, which entails making
judgements, including the expected rate of growth of revenues, margins expected to be achieved and the appropriate discount rate to apply
when valuing future cash flows (refer note 20).

Unredeemed voucher liabilities
The Group's estimate of the unredeemed voucher liability is based on historic redemption patterns. Changes in the redemption pattern of
unredeemed vouchers could affect the reported value of this liability. At year end, the Group readjusted the unredeemed prepaid collection
voucher liability write off methodology based on movements in the actual redemption patterns to reflect the continued decline in the redemption
of historically issued prepaid collection vouchers. The change in accounting estimate resulted in a $0.2m (2018: $0.7m) decrease in the
unredeemed voucher liability (note 23).

Valuation of investment properties
The fair value of the investment property has been determined by an independent qualified valuer. Note 17 sets out the valuation
methodology, key assumptions and sensitivity analysis. The fair value of the investment property is subjective and changes to the
assumptions can have a significant impact on profit and the fair value.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



The derecognition of finance receivables
The Group follows the guidance in and NZ IFRS 9 'Financial Instruments', in transactions where substantially all the risks and rewards of
ownership of a financial asset are neither retained nor transferred, the Group derecognises the transferred asset if control over that asset is
relinquished. The rights and obligations retained in the transfer, such as servicing assets and liabilities, are recognised separately as assets
and liabilities, as appropriate. If control over the asset is retained, the Group continues to recognise the asset to the extent of its continuing
involvement, which is determined by the extent to which it remains exposed to changes in the value of the transferred asset. This
determination of whether risks and rewards of ownership of a financial asset are neither retained nor transferred requires significant
judgement (refer note 3.6). Prior to derecognition, the Group assesses whether the finance receivables qualify for derecognition using the
criteria noted above.

Fair value measurement
The fair value of financial instruments that are not quoted in active markets are determined using discounted cash flow models. To the extent
practical, models use observable data however normal volatilities require management to make estimates. Changes in assumptions about
these factors could affect the reported fair values of financial instruments (refer note 11 and 22).

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is
regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or
regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted
market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by
using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. The fair value of level 3
instruments is determined by using valuation techniques based on a range of unobservable inputs. The Group establishes fair value by
using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially
the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances. Investments in
equity instruments that do not have a quoted market price in an active market and whose fair values cannot be reliably measured are
recognised and subsequently carried at cost.

Specific valuation techniques used to value financial instruments in each level are detailed in notes 5.5 and 17.

5. RISK MANAGEMENT
The financial condition and operating results of the Group are affected by a number of key financial and non-financial risks. Financial risks
include credit risk, liquidity risk and market risk. The non-financial risks include insurance risk, which is covered in note 34, and fair value risk
relating to the Group’s Investment property.

5.1 Financial instrument by category



5.2 Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations, and arises
principally from the Group's cash and cash equivalents, derivative financial instruments, financial assets at fair value through profit or loss
(excluding equities held in unitised funds), trade receivables, finance receivables, reverse annuity mortgages, and other receivables.

The Group’s cash and cash equivalents, derivative financial instruments and financial assets at fair value through profit or loss (excluding
equities in unitised funds) are placed with registered banks.

Carrying value
20192018
$’000$’000
Financial assets
Cash and cash equivalents15,86625,145
Financial assets at fair value through profit or loss66,25253,378
Amortised cost
Trade receivables12,47111,323
Finance receivables290,017289,799
Other receivables and deferred expenses3,7766,111
Reverse annuity mortgages8,2949,997
396,676395,753
Financial liabilities
Other payables25,24724,043
Financial liability at fair value through profit or loss116226
Borrowings312,863317,373
338,226341,642
4746

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



Management assesses the credit quality of trade customers, taking into account their financial position, past experience and other factors.
Individual risk limits are set based on these assessments. The use of credit limits by trade customers is regularly monitored by management.
Sales to public customers are settled in cash, bank cheques or using major credit cards, mitigating the credit risk.

To manage credit on finance receivables the Group performs credit evaluations on all customers requiring advances. The approval process
considers a number of factors including: borrower’s past performance, ability to repay, amount of money to be borrowed against the security
and the creditworthiness of the guarantor/co-borrower involved.
The Group operates a lending policy with various levels of authority depending on the size of the loan. A lending and credit committee operates
and overdue loans are assessed on a regular basis by this body.

Risk grades categorise loans according to the degree of risk of financial loss faced and focuses management on the attendant risks. The
current risk grading framework consists of four grades reflecting varying degrees of risk of default and the availability of collateral or other
credit risk mitigation. They are as follows:
• performing – the counterparty has a low risk of default and does not have any past due amounts;
• doubtful –amount is > 30 days past due or there has been a significant increase in credit risk since initial recognition;
• in default - amount is > 90 days past due or evidence indicating the asset is credit impaired; and
• write-off – there is evidence indicating the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery.

The Group implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. The principal collateral types for
finance receivables are:
• mortgages over properties, with the maximum loan to value rate being 75%;
• mortgages over houses for reverse annuity mortgages, with a maximum loan to value ratio of 30% at inception (no new reverse annuity
mortgages have been advanced since 2009);
• charges over vehicle stock for dealer floorplans;
• chattel paper where the Group acts as a wholesale funder;
• charges over business assets such as equipment; and
• charges over motor vehicles.

For finance receivables secured by collateral, estimates of the value of collateral are assessed at the time of borrowing, and are not updated
unless the receivable is being assessed for specific impairment. The allowance for impairment includes the Group's estimate of the value of
collateral held.

For Life investment linked contracts the investments credit risk is appropriate for each particular product and the risk is borne by the policy
holder. There is no significant risk assumed by the Group.

5.3 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its obligations associated with financial liabilities as they fall due.

The Group endeavours to maintain sufficient funds to meet its commitments based on forecasted cash flow requirements. Due to the dynamic
nature of the underlying businesses, flexibility is maintained by having diverse funding sources and adequate committed credit facilities.
Management has internal control processes and contingency plans to actively manage the lending and borrowing portfolios to ensure the net
exposure to liquidity risk is minimised. The exposure is reviewed on an on-going basis from daily procedures to monthly reporting as part of
the Group's liquidity management process.

The liquidity risk for cash flows payable on the life investment contracts liabilities that are unit linked contracts is managed by holding a pool
of readily tradable investment assets (included in financial assets at fair value through profit or loss) and deposits on call. The liability and
supporting assets have been excluded from the maturity analysis below because there is no contractual or expected maturity date for the life
investment contracts and the readily tradable investment assets offset any liquidity risk. The liquidity risk on other insurance cash flows is
managed by holding designated percentages of insurance reserves in liquid assets such as cash and cash equivalents.

The table below analyses the Group’s financial liabilities and net settled derivative financial instruments into relevant maturity groupings based
on the remaining period at reporting date to contractual maturity date. The amounts disclosed in the tables are the contractual and the expected
undiscounted cash flows.

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019







5.4 Market Risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices, will affect the Group's
income or the value of its holdings of financial instruments.

5.4.1 Insurance business
For the investment linked policies the market risk is transferred to the policy holder. The Group earns fees on investment linked policies that
are based on the amount of assets invested and it may receive lower fees should markets fall. Asset allocation for investment linked policies
is decided by the Policy Holder.

In the other insurance business, market risk arises when there is a mismatch between the insurance policy liabilities and the assets backing
those liabilities. Refer to note 34K for insurance liabilities interest rate sensitivity. The insurance business has no significant currency and
equity risk.

5.4.2 Interest rate risk
Interest rate risk is the risk of loss to the Group arising from adverse changes in interest rates. The Group's financing activities are exposed
to interest rate risk in respect of its interest earning assets and interest bearing liabilities. Changes to interest rates can impact the Group's
financial results by affecting the interest spread earned on these assets and liabilities.

Interest rates are managed by assessing the demand for funds, new lending, expected debt repayments and maintaining a portfolio of financial
assets and liabilities, including derivative financial instruments, with a sufficient spread between the Group's lending and borrowing activities.
Exposure to interest rates is monitored by the Board of Directors on a monthly basis.

The interest rates earned on finance receivables are fixed over the term of the contract. When approving interest rates for individual loan
advances, interest rate risk is measured in accordance with the approved lending policy. The Group uses interest rate swap contracts to
convert a portion of its variable rate debt to fixed rate debt. No exchange of principal takes place. The notional principal amount of interest
rate swaps at 31 March 2019 was $74m (2018: $70m) and weighted average interest was 2.23% (2018: 2.24%). There was no hedge
ineffectiveness recognised in profit or loss during the period (2018: $nil).

Turners Finance Limited borrows at fixed rates to fund finance receivables. The terms and the amounts of the finance payables are matched
to each corresponding finance receivable, for which the lending rates are also fixed at inception, thus eliminating the cash flow interest rate
risk on these financial instruments.

The table below summarises the sensitivity of the Group’s financial assets and liabilities to interest rate risk.

0-6 months
7-12
months
13-24
months
25-60
months 60+ months Total
$’000$’000$’000$’000$’000$’000
2019
Contractual unGiscounteG cash floZs
Other payables25,247 - - - -25,247
Derivative cash flow hedges16414217543 -524
Borrowings35,870 17,951 174,007 106,093 - 333,921
61,281 18,093 174,182 106,136 - 359,692
(xpecteG unGiscounteG cash floZs
Other payables25,247 - - - -25,247
Derivative cash flow hedges16414217543 -524
Borrowings35,870 17,951 19,40994,832 213,492 381,554
61,281 18,093 19,58494,875 213,492 407,325
2018
Contractual unGiscounteG cash floZs
Other payables24,043 - - - -24,043
Derivative cash flow hedges29303715 -111
Borrowings88,066 30,690 193,07018,615 - 330,441
112,138 30,720 193,10718,630 - 354,595
(xpecteG unGiscounteG cash floZs
Other payables24,043 - - - -24,043
Derivative cash flow hedges29303715 -111
Borrowings42,352 28,281 30,72883,505 274,473 459,339
66,424 28,311 30,76583,520 274,473 483,493
4948

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019







5.4.3 Currency risk
The Group is exposed to currency risk arising from various currency exposures, primarily with respect to the Australian Dollars (‘AUD’) and
Japanese Yen (‘JPY’). Currency risk arises from the future commercial transactions, recognised assets and liabilities and net investment in
foreign operations.

To ensure the net exposure to EC Credit Control (Aust) Pty Ltd, which has AUD as its functional currency, is kept to an acceptable level, the
Group has a comprehensive transfer pricing policy and converts the AUD unredeemed voucher liability (refer note 23) into a NZD liability by
selling the AUD liability to the New Zealand entity that will be providing the relevant services to settle the liability when the voucher is redeemed.

To limit its exposure to JPY, the Group hedges the anticipated cash flows (mainly purchased inventory) when the commitment is made. All
projected purchases qualify as ‘highly probable’ forecast transactions for hedge accounting purposes.

The table below summarises the Group’s financial exposure to currency risk.



The table below summaries the Group’s sensitivity to +/- 10% foreign exchange fluctuations.





Carrying amount -1% Profit -1% Equity +1% Profit +1% Equity
$’000$’000$’000$’000$’000
2019
Financial Assets
Cash and cash equivalents15,866(159)(114)159114
Financial assets at fair value through profit or loss66,252(663)(477)663477
Finance receivables290,017 (2,900) (2,088)2,9002,088
Reverse annuity mortgages8,294(83)(60)8360
Financial Liabilities
Financial liability at fair value through profit or loss11611(1)(1)
Derivative cash flow hedges524 - (1,404) -295
Borrowings312,8633,1292,253 (3,129) (2,253)
Total increase/(decrease)(675) (1,889)675780
Carrying amount -1% Profit -1% Equity +1% Profit +1% Equity
$’000$’000$’000$’000$’000
2018
Financial Assets
Cash and cash equivalents25,145(251)(181)251181
Financial assets at fair value through profit or loss53,378(534)(384)534384
Finance receivables289,799 (2,323) (1,673)2,3231,673
Reverse annuity mortgages9,997(100)(72)10072
Financial Liabilities
Financial liability at fair value through profit or loss22621(2)(1)
Derivative cash flow hedges111 -(827) -636
Borrowings317,3733,1742,285 (3,174) (2,285)
Total increase/(decrease)(32)(851)32660
20192018
in NZD'000NZ$'000NZ$'000
Net exposure to AUD224122
Net exposure to JPY 1,560 525
In NZD'000-10% Profit -10% Equity +10% Profit +10% Equity
2019
AUD -(25) -21
JPY(177)129145(105)
2018
AUD67(5)(55)4
JPY(306)(43)25134
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019



5.4.4 Equity price risk
Equity price risk is the risk that the Group's profit or loss will fluctuate as a result of changes in share prices. The Group is exposed to equity
price risk through its investment in MTF Shares. A +1%/-1% movement in the MTF share price will increase/(decrease) profit and equity by
$36k/($36k) (2018: $36k/($36k)).
5.5 Assets and liabilities carried at fair value:
The fair value of assets and liabilities carried at fair value as well as the methods used to calculate fair value are summarised in the table
below.

Level 1 the fair value is calculated using quoted prices in active markets.
Level 2 the fair value is estimated using inputs other than quoted prices in level 1 that are observable for the assets or liability, either
directly (as prices) or indirectly (derived from prices).
Level3 the fair value is estimated using inputs for the asset or liability that are not based on observable market data.



Fair value insurance
The financial assets in this category back life investment contract liabilities and are investments in managed funds. The fair value of the
investments in the managed funds are determined by reference to published exit prices, being the redemption price based on the market price
quoted by the fund manager, ANZ New Zealand Investments Limited (refer 5.4.1).

Fair value assets - investment in equities
The fair value of the investment in equities has been estimated by reference to recent transactions with MTF shares (refer 5.4.4).
Fair value liability - term deposits and fixed interest securities
Term deposits are recognised at fair value based on the interest rate set at inception of the term deposit (refer 5.4.2).


Fair value - investment property
The fair value of investment property was determined by an independent registered valuer using the comparable sales methodology (refer
note 17).
This is a level 3 fair value measurement and the key output used in determining the consideration is the probable sales price. A change in
sales price of +/- 5% would increase/(decrease) the total fair value and profit or loss by $0.3m/($0.3m).
Financial liability at fair value through profit or loss – contingent consideration
The fair value of the contingent consideration was determined using estimates of the expected pay out discounted at current borrowing rates.
These financial liabilities are exposed to interest rate risk as disclosed above.



Level 1 Level 2 Level 3Total
$’000$’000$’000$’000
2019
Fair value assets:
Financial assets at fair value through profit or loss - Insurance -7,658 -7,658
Financial assets at fair value through profit or loss - investment in equities -3,595 -3,595
Financial assets at fair value through profit or loss - term deposits54,999 - -54,999
Investment property - -5,6505,650
54,99911,2535,65071,902
Fair value liabilities:
Financial liability at fair value through profit or loss - -116116
Derivative cash flow hedges -524 -524
-524116640
2018
Fair value assets:
Financial assets at fair value through profit or loss - Insurance -7,249 -7,249
Financial assets at fair value through profit or loss - investment in equities -3,629 -3,629
Financial assets at fair value through profit or loss - term deposits42,500 - -42,500
Investment property - -4,8204,820
42,50010,8784,82058,198
Fair value liabilities:
Financial liability at fair value through profit or loss - -226226
Derivative cash flow hedges -111 -111
-111226337
5150

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
TURNERS AUTOMOTIVE GROUP LIMITED
Notes to financial statements for the year ended 31 March 2019





Derivative cash flow hedges
The fair value of forward exchange contracts is determined using forward exchange rates at balance date, with the resulting value discounted
to present value. The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable
yield curves.
Reconciliation of recurring level 3 fair value movements:


During the year there were no movements of fair value assets or liabilities between levels of the fair value hierarchy.
6. SEGMENTAL INFORMATION
6.1 Description of segments
Management has determined the operating segments based on the components of Turners Automotive Group Limited and its subsidiaries
(the Group) that engage in business activities, which have discrete financial information available and whose operating results are regularly
reviewed by the Group's chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors.
The Board of Directors makes decisions about how resources are allocated to the segments and assesses their performance. Geographically
the Group's business activities are located in New Zealand and Australia.
Five reportable segments have been identified as follows:

Automotive retail:
Finance:
Remarketing (motor vehicles, trucks, heavy machinery and commercial goods) and purchasing goods for sale.
Provides asset based finance to consumers and SME's.
Credit management: Collection services, credit management and debt recovery services to the corporate and SME sectors.
Geographically the collections services segment business activities are located in New Zealand and Australia.
Insurance: Marketing and administration of a range of life and consumer insurance products.
Corporate & other: Corporate centre.

Operating segments


Assets
20192018
$'000$'000
Opening balance4,8204,000
Revaluation at reporting date - investment property830820
Closing balance5,6504,820
Reconciliation of recurring level 3 fair value measurements
Liabilities
20192018
$'000$'000
Opening balance2267,611
On acquisition contingent consideration - Motorplus -221
Revaluation at reporting date (110)(3,190)
Settlement of period one and part of period two earn out consideration -(4,416)
Closing balance116226
OPERATING SEGMENTS
RevenueRevenue Revenue
TotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternal
revenuerevenue customersrevenuerevenue customers
201920192019201820182018
$’000$’000$’000$’000$’000$’000
Automotive retail228,672(2,963)225,709226,434(3222)223,212
Finance44,193-44,19339,747-39,747
Credit management18,196-18,19618,677-18,677
Insurance49,206(742)48,46446,923-46,923
Corporate & other17-171,911-1,911
340,284(3,705)336,579333,692(3,222)330,470
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
Operating profit2019
2018
$’000
$’000
Automotive retail18,27416,550
Finance11,11211,735
Credit management6,3216,069
Insurance8,2273,645
Corporate & other
(14,885)(6,866)
Profit/(loss) before taxation
29,04931,133
Income tax
(6,330)(7,773)
Net profit attributable to shareholders22,71923,360
2019
2018
2019
2018
2019
2018
$’000
$’000
$’000
$’000
$’000
$’000
Automotive retail8,3839,311(4,206)(4,767)(2,457)(2,351)
Finance38,54434,432(6,596)(5,829)(413)(348)
Credit management912--(104)(93)
Insurance2,4341,997--(2,746)(2,767)
Corporate & other1722(4,368)(4,438)(65)(68)
49,38745,774(15,170)(15,034)(5,785)(5,627)
Eliminations(218)(690)218690--
49,16945,084(14,952)(14,344)(5,785)(5,627)
Other material non-cash items
2019
2018
2019
2018
$’000
$’000
$’000
$’000
Automotive retail - impairment provisions--(503)(423)
Finance - impairment provisions--(7,436)(5,929)
Insurance - reverse annuity mortgage interest846869--
Corporate & other - write down of brand and collateral--(4,570)-
846869(12,509)(6,352)
Segment assets and liabilities
2019
2018
2019
2018
$’000
$’000
$’000
$’000
Automotive retail132,839152,00688,065115,071
Finance276,356253,832216,996188,217
Credit management31,68528,7805,6866,937
Insurance135,001124,35873,29369,213
Corporate & other195,673205,35683,03078,356
771,554764,332467,070457,794
Eliminations(117,372)(112,600)(39,262)(20,385)
654,182651,732427,808437,409
Depreciation and
amortisation expenseInterest expenseInterest revenue
Revenue from external customers reported to the Board of Directors is measured on the same basis as revenue reported in the profit or loss. Inter-
segment transactions are done on an arms length basis. The Group has no customers representing 10% or more of the Group's revenues.
RevenueExpenses
AssetsLiabilities
5352

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
Acquisition of property, plant & equipment, intangible assets and other non-current assets
2019
2018
$’000
$’000
Automotive retail11,47821,515
Finance671418
Credit management135140
Insurance14,8848,384
Corporate & other7410
27,24230,467
Eliminations(14,489)(7,615)
12,75322,852
Automotive retail segment analysis Revenue Revenue
TotalInter-fromTotalInter-from
divisiondivisionexternaldivisiondivisionexternal
revenue
revenue
customersrevenue
revenue
customers
201920192019
201820182018
$’000$’000$’000
$’000$’000$’000
Auctions46,536(2,805)43,73141,655(472)41,183
Finance17,111-17,11114,711(143)14,568
Fleet101,479-101,479108,047-108,047
Buy Right Cars63,546(158)63,38862,021(2,607)59,414
228,672(2,963)225,709226,434(3,222)223,212
Operating profit2019
2018
$’000
$’000
Auctions5,9753,410
Finance7,9275,724
Fleet5,2434,970
Buy Right Cars(871)2,446
18,27416,550
Division assets and liabilities
2019
2018
2019
2018
$’000
$’000
$’000
$’000
Auctions45,18244,39517,33024,038
Finance43,87766,29436,32860,133
Fleet17,92514,59511,9238,373
Buy Right Cars27,93728,54923,08423,045
134,921153,83388,665115,589
Eliminations(2,082)(1,827)(600)(518)
132,839152,00688,065115,071
Other
AssetsLiabilities
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
7. PROFIT BEFORE TAX
2019
2018
Notes$’000
$’000
Revenue from continuing operations includes:
Interest income
Bank accounts, short term deposits and investments
1,791
1,343
Finance receivables
46,532
42,872
Reverse annuity mortgages
846
869
Total interest income49,169
45,084
Operating revenue
Sales of goods
159,438
163,622
Commission and other sales revenue
48,965
46,730
Finance related insurance commissions
4,199
4,718
Loan fee income
2,950
2,766
Insurance and life investment contract income
42,968
41,685
Collection income
18,187
18,665
Bad debts recovered
897
887
Other revenue
1,585
890
Total operating revenue279,189
279,963
Revenue from continuing operations328,358
325,047
Other income comprises:
Revaluation gain on investments
-
590
Revaluation gain on investment property
830
820
Dividend income
391
349
Gain of sale of property, plant and equipment
3,607
1,000
Gain on compulsory acquisition on leasehold premise by the NZTA
3,393
-
Fair value gain on contingent consideration
-
2,664
8,221
5,423
Revenue from contracts with customers
Over time
Automotive retail
Commission and other sales revenue
23,352
-
Insurance
Motor vehicle insurance commissions
1,731
-
25,083
-
At a point in time
Automotive retail
Sales of goods
159,438
-
Auction commissions
25,613
-
Credit management
Collection income
16,506
-
Voucher income
1,681-
Interest expense
Bank borrowings and other
13,241
12,516
Bonds
1,711
1,828
Total interest expense14,952
14,344
Movement in impairment provisions
Provisions for:
Specific impaired finance receivables
14914619
Collective impairment provision for finance receivables
146,8905,300
Collective impairment on reverse annuity mortgages
16(47)28
Finance receivables bad debts written off
135433
Movement
7,8926,380
5554

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
2019
2018
$’000
$’000
Net operating profit includes the following specific expenses
Depreciation
- Plant, equipment & motor vehicles
675
614
- Leasehold improvements, furniture, fittings & office equipment
864
747
- Computer equipment
519
436
- Signs & flags
96
82
Intangible amortisation
Amortisation of software
1,435
1,587
Amortisation of customer relationships
630
594
Insurance contract liabilities amortisation
Amortisation of policies in force
1,566
1,567
5,785
5,627
Tax advisory fees
104
121
Donations
5
15
Directors’ fees
637
425
Post-employment benefits
1,164
1,314
Loss on sale of property, plant and equipment
-23
Fees paid to auditor
Baker Tilly Staples Rodway Auckland (auditor of the Group)
Audit of financial statements
Audit of annual financial statements
442
441
Other services
Other assurance services
- audit of DPL Insurance Limited solvency return
7
6
- Agreed Upon Procedures in relation to the EC Credit Control Limited trust account
3
3
Total other services
10
9
Total fees paid to Baker Tilly Staples Rodway Auckland
452
450
8. TAXATION
2019
2018
$’000
$’000
Net operating profit before taxation
29,04931,133
Income tax expense at prevailing rates
(8,134)
(8,722)
Tax impact of income not subject to tax
2,035
1,248
Tax impact of expenses not deductible for tax purposes
(125)
(437)
Tax assets recognised
-
93
Under provision in prior years
(106)
45
Taxation (expense)/benefit(6,330)
(7,773)
Comprising:
Current
(10,030)
(9,205)
Deferred
3,958
1,387
Under provision in prior years
(258)
45
(6,330)
(7,773)
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
9. EARNINGS PER SHARE
Basic earnings per share
2019
2018
Profit for the year ($'000)
22,719
23,360
Weighted average number of ordinary shares at 31 March
86,671,483
79,835,734
Basic earnings per share (cents per share)
26.21
29.26
2019
2018
Weighted number of shares
Opening balance
84,802,612
74,523,527
Shares issued for the purchase of Buy Right Cars
-
132,270
Shares issued for the share placement
-
4,377,211
Shares issued for the share purchase plan
-775,873
Shares issued under the staff share scheme
-26,684
Shares issued for the conversion of bonds
2,303,925-
Shares issued for the dealer share scheme
20,766169
Share cancel from the share buy back
(455,820)
-
86,671,48379,835,734
Diluted earnings per share
2019
2018
$’000
$’000
Continuing operations
22,71923,360
Add: interest expense relating to optional convertible bonds, net of tax
5981,196
Add: Long term incentive expense relation to options
326493
Profit for the year
23,64325,049
Weighted number of ordinary shares (diluted)
Weighted average number of shares (basic)86,671,483 79,835,734
Effect of the conversion of bonds- 6,816,220
Effect of the exercise of the options- 107,222
Weighted average number of shares (diluted)86,671,483 86,759,176
Diluted earnings per share (cents per share)27.2828.87
10. CASH AND CASH EQUIVALENTS
2019
2018
$’000
$’000
The carrying value of cash and cash equivalents are denominated in the following currencies:
Australian dollars
6631,046
Japanese yen
142975
New Zealand dollars
15,06123,124
15,86625,145
The calculation of basic earnings per share at 31 March was based on the profit attributable to ordinary shareholders and weighted average
number of ordinary shares outstanding, as follows:
The calculation of diluted earnings per share at 31 March was based on the diluted profit attributable to shareholders and a diluted weighted
average number of ordinary shares outstanding as follows:
The Group's insurance business is required to comply with the solvency standards for licensed insurers issued by the Reserve Bank of New
Zealand. The solvency standards specify the level of assets the insurance business is required to hold in order to meet solvency requirements,
consequently all cash and cash equivalents, held in the insurance business may not be available for use by the wider Group. DPL Insurance's
cash and cash equivalents at 31 March 2019 were $2.2m (2018: $9.2m).
Cash and cash equivalents at 31 March 2019 of $4.6m (2018: $4.9m) belong to the Turners Marque Warehouse Trust 1 are not available to the
Group.
5756

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2019
2018
$’000
$’000
Insurance:
Investments in unitised funds
7,658
7,249
Term deposits
54,999
42,500
Other:
Investment in equities
3,595
3,629
Total66,252
53,378
Investments in unitised funds comprise:
New Zealand and overseas equities
1,309
3,055
Fixed Interest securities
1,350
1,351
Cash
3,141
1,143
New Zealand and overseas property securities
1,858
1,700
Total7,658
7,249
Investments with external investment managers
ANZ New Zealand Investments Limited - Unitised Funds
7,658
7,249
Australian dollars
-
-
New Zealand dollars
58,594
46,129
58,59446,129
Interest rate and currency risk
Credit risk
Refer to note 5 for more information on the risk management policies of the Group.
12. TRADE RECEIVABLES
2019
2018
$’000
$’000
Performing11,63310,068
Doubtful8071,255
In default323275
12,76311,598
Impairment provision(292)(275)
Net trade receivables12,47111,323
Trade receivables are a current asset, with terms of trade usually 30 days or less.
A summarised analysis of the sensitivity of financial assets at fair value through profit or loss, excluding investments in unitised funds (as market
risk on unitised funds is transferred to the policy holder), to interest rate risk and currency risk can be found in note 5.4.
The maximum exposure to credit risk from financial assets at fair value through profit or loss at reporting date, excluding investments in unitised
funds, is the carrying value. The financial assets in this category, excluding equity investments, are invested in term deposits with banks. For
Life investment linked contracts (investment in unitised funds) the investments credit risk is borne by the policy holder, there is no significant
credit risk assumed by the Group.
All term deposits held in the insurance business may not be available for use by the wider Group (refer note 10). DPL Insurance's term deposits
at 31 March 2019 were $55.0m (2018: $42.5m).
The carrying amounts of the financial assets at fair value through profit or loss, excluding investments in unitised funds, are denominated in the
following currencies:
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
Impaired receivables
2019
2018
$’000
$’000
The age of default trade receivables is as follows:
Past due up to 30 days-16
Past due 30 – 60 days-15
Past due 60 – 90 days--
Past due 90+ days323244
323275
The age of doubtful trade receivables is as follows:
Past due up to 30 days722447
Past due 30 – 60 days5916
Past due 60 – 90 days26-
Past due 90+ days-792
8071,255
Movement in the impairment provision:
Opening balance275203
Impairment charge/(release) included in other operating expenses27103
Amounts written off(10)(31)
292275
The carrying amounts of the Group's trade receivables are denominated in the following currencies:
Australian dollars1,099918
New Zealand dollars11,37210,405
12,47111,323
Currency risk
Fair value and credit risk
Refer to note 5 for more information on the risk management policies of the Group.
13. INVENTORY
2019
2018
$’000
$’000
Motor vehicles40,39139,631
Commercial goods
30
14
40,42139,645
Less provision for stock obsolescence(1,562)(1,049)
38,85938,596
Inventories are a current asset.
Movement in provisions for stock obsolescence
Opening balance1,049776
Movement513273
Closing balance1,5621,049
If a trade receivable falls overdue and the Group is unable to enter into an arrangement to recover the amount owed then the receivable is
classified as impaired.
Due to the short-term nature of trade receivables, their carrying value is assumed to approximate their fair value. The maximum exposure to
credit risk from trade receivables at the reporting date is the carrying amount of trade receivables. Credit risk is concentrated predominantly in
New Zealand within the motor trade sector and private household sector, there is no concentration of credit risk on any individual customer.
A summarised analysis of the sensitivity of financial assets included in other receivables to currency risk can be found in note 5.4.
The Group recognises lifetime expected credit loss for trade receivables. Tithe expected credit loss rate is 2.3%. Amounts charged to the
impairment provision are generally written off when there is no expectation of recovering additional cash.
5958

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
14. FINANCE RECEIVABLES
2019
2018
$’000
$’000
Commercial loans
25,831
27,665
Finance leases
6,860
4,902
Consumer loans
266,518
253,168
Property development & investment loans
3,069
8,492
Legacy
1,098
1,426
Gross finance receivables
303,376295,653
Specific impairment provision
(1,915)
(1,592)
Collective impairment provision
(17,680)
(9,702)
Deferred fee revenue and commission expenses
6,236
5,440
290,017
289,799
Current
147,101
144,001
Non-current
142,916
145,798
290,017
289,799
2019
2018
$’000
$’000
Gross financial receivables are summarised as follows:
Performing
262,160
258,433
Doubtful
25,247
28,902
In default
15,969
8,318
303,376
295,653
Movement in specific impaired receivables
Opening balance
2,342
990
Additions
1,179
1,471
Amounts moved to doubtful
(283)
-
Amounts recovered
(422)
(47)
Amounts written off
(439)
(72)
2,377
2,342
The aging of loans specifically assessed are as follows:
Past due up to 30 days
1,944
894
Past due 30 – 60 days
1,305
1,422
Past due 60 – 90 days
572
445
Past due 90+ days
1,695
929
In default
2,377
2,342
7,893
6,032
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2019
Turners Automotive Group Limited
Notes to the financial statements for the year ended 31 March 2019
31 March 2019Gross Collective
Expectedfinance impairment
loss rate receivablesprovision
%$’000$’000
Performing
0.90262,1602,358
Past due up to 30 days
8.7210,552920
Past due 30 – 60 days
19.954,036805
Past due 60 – 90 days
29.251,200351
Past due 90+ days
55.723,9432,197
In default
81.2913,59211,049
295,48317,680
1April 2018 (restated)
Performing
0.92258,9472,387
Past due up to 30 days
8.5110,687909
Past due 30 – 60 days
20.553,319682
Past due 60 – 90 days
25.041,230308
Past due 90+ days
47.164,8922,307
In default
59.6710,5466,293
289,62112,886
2019
2018
$’000
$’000
Movement in the impairment provisions:
Specific impairment provision
Opening balance1,592973
Impairment charge/(release) through profit or loss914619
Amounts written off(591)-
1,9151,592
2019
2018
$’000
$’000
Collective impairment provision
Opening balance9,7025,055
Change in accounting policy3,184-
Impairment charge/(release) through profit or loss6,8905,300
Amounts written off(2,096)(653)
17,6809,702
Total impairment provision19,59511,294
Interest rate and foreign exchange risk
A summarised analysis of the sensitivity of finance receivables to interest rate risk can be found in note 5.4.2.
The Group's finance receivables are all denominated in NZD.
Fair value and credit risk
CarryingFairCarryingFair
amountvalueamountvalue
20192019
20182018
$’000$’000
$’000$’000
Finance receivables290,017290,326289,799289,951
The following table details the risk profile of the Group's provision matrix for finance receivables collectively assessed for impairment. As the
Group's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss
allowance based on past due status is not further distinguished between the Group's different customer base.
6160