General Capital (GEN:NZ) announces very strong results

General Capital Limited
Level 7, 12-26 Swanson Street,
PO Box 1314, Shortland Street,
Auckland, New Zealand. 1140.
Phone +64 9 304 0145
Fax +64 9 358 3858



General Capital (GEN:NZ) announces very strong results

General Capital Limited (GEN), the NZX listed financial services group has announced its financial
results to 31 March 2020.

Mr. Brent King, Managing Director said, “We have had strong growth in all aspects of our finance
business (General Finance Limited).”

Key Points for the 31 March 2020 Group financial statements are:

 Total Assets UP 114% to $51.2m
 Net Revenue UP 48% to $2.0m
 Term Deposits UP 178% to $41.5m
 Cash at 31-3-2020 UP 326% to $12.6m
 Net Profit after tax UP 128% to $130k


“The advisory business, Investment Research Group Limited (IRG), has two active mandates at 31
March 2020. The mandates are investment advisory contracts centered on early stage bioscience and
medical cannabis entities. The impacts of COVID-19 and the lockdown have slowed progress on the
mandates; however, the Group expects that they will be profitable for the advisory business in the
March 2021 financial year.”, said Mr. King.

Further announcements will be made in due course.

Annual Report and Annual Meeting

The Chairman of General Capital Limited, Mr. Rewi Bugo said, “We expect to release our Annual
Report within two weeks, and we are planning to hold our Annual Meeting in August 2020.

We hope to be able give further positive news as the year progresses; however, we are all aware of
how uncertain of the future is. The world is facing a very unpredictable short-term future. Our plan is
to continue to build on the strong base we have built.”


For further information contact:

Brent King
Managing Director
General Capital Limited
+64 21 632 660
Brent.King@gencap.co.nz

29 June 2020

---

Results announcement
Name of issuer
Reporting Period
Previous Reporting Period
Currency
Revenue from continuing
operations
Total Revenue
Net profit/(loss) from continuing
operations
Total net profit/(loss)
Amount per Quoted Equity
Security
Imputed amount per Quoted
Equity Security
Record Date
Dividend Payment Date
Net tangible assets per Quoted
Equity Security
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
Name of person authorised to
make this announcement
Contact person for this
announcement
Contact phone number
Contact email address
Date of release through MAP
Brent.King@gencap.co.nz
+64 21 632 660
Brent King
Managing Director
$130
Percentage change
70%
128%
128%
Results for announcement to the market
12 months to 31 March 2020
12 months to 31 March 2019
Amount (000s)
$3,641
General Capital Limited
New Zealand Dollars ($)
Refer to Directors' Report
Authority for this announcement
Jonathan Clark
Chief Financial Officer
29/06/2020
$3,641 70%
Not applicable
Current periodPrior comparable period
$0.0386 $0.0354
Interim/Final Dividend
It is not proposed to pay dividends.
Not applicable
Not applicable
$130
1

DIRECTORS' REPORT
BACKGROUND
AUDIT
FINANCIAL PERFORMANCE
Year ended Year ended
31 Mar 2020 31 Mar 2019Var% Change
Net profit / (loss) after tax
$129,556 ($458,088)$587,644
128%
Earnings / (loss) per share
0.08 (0.46) 0.54
117%
31 Mar31 Mar
20202019Var% Change
Total assets
$51,163,507 $23,907,684 $27,255,823
114%
Total liabilities
$41,781,500 $15,155,024 $26,626,476
176%
Total equity
$9,382,007 $8,752,660$629,347
7%
Net tangible assets (NTA) per share
(cents per share) 3.86 3.54 0.32
9%
Net assets (NA) per share
(cents per share) 5.80 5.69 0.11
2%
General Capital Limited ("the Company") acquired Corporate Holdings Limited ("CHL") and subsidiaries on 3 August
2018. As the acquisition of CHL was deemed to be a reverse acquisition for accounting purposes, the attached
financial statements and results represent a continuation of the consolidated financial statements of Corporate
Holdings Limited.
The financial information presented up to 3 August 2019 comprises Corporate Holdings Limited and its two
subsidiaries (General Finance Limited and Investment Research Group Limited). From 3 August 2018, the financial
informationcomprisestheconsolidatedresultsoftheCompany,CorporateHoldingsLimited,andthetwosubsidiaries
of Corporate Holdings Limited.
The attached financial information has been audited and has been qualified by the auditor (Baker Tilly Staples
Rodway) with respect to the following items:
-Thecarryingvalueofgoodwillandotherindefinitelifeintangibleassetsallocatedtotheresearchandadvisorycash
generating unit totalling $1.1 million at 31 March 2020.
Baker Tilly StaplesRodway wasunable to obtain sufficient evidence to support the forecasted cash flowsand other
assumptions that underly the impairment testing done by the Group for the research and advisory CGU.
The Group’s Annual Report for the year ended 31 March 2020 is in the process of being completed and audited.
2

DIRECTORS' REPORT (CONTINUED)
31 Mar31 Mar
20202019Var% Change
Finance Segment
$441,716$124,765$316,951
254%
Research and Advisory Segment
($15,903)$93,971 ($109,874)
-117%
Corporate and Other Segment
($296,257) ($676,824)$380,567
56%
Group$129,556 ($458,088)$587,644
128%
Refer to the attached financial information for detailed segmental results.
Finance Segment
Research and Advisory Segment
Corporate and Other Segment
A large majority of the loss incurred in the the prior year ended 31 March 2019 was in relation to the acquisition
expensesandcostofacquiringthelistedshellcompanytotalling$509,207.Theremainderofthecostsinthissegment
relate to the costs of operating a listed entity, including compliance and other costs.
As described in the background information above, the listed entity was only part of the prior year Group financial
informationfrom3August2018.Thepredominantreasonfortheincreaseincostsbetween2019and2020(excluding
the costs of acquisition) was the extra four months of expenses.
It hasbeen a very positiveyear in the finance segment with a year on year growth of102% in loan receivablesand
178%intermdepositliability,whichwerethekeydriversofthe71%yearonyearincreaseinnetrevenueand254%
year on year increase in net profit generated from the segment.
Wholly owned subsidiary General Finance Limited, a Non-bank Deposit Taker licenced by the ReserveBank ofNew
Zealand, obtained a credit rating during the year and added additional staff resourcing to allow for the growth.
Further information on General Finance Limited's credit rating can be found on its website at
www.generalfinance.co.nz
.
Theresearchandadvisorysegmentwasawardedtwosignificantinvestmentbankingadvisorycontractsinthesecond
halfofthefinancialyear.Bothofthesecontractsrelatedto earlystageentitiesin thehealthcare and biotechnology
sectors.Unfortunately,duetotheCOVID-19pandemic,expectedcapitalraisingactivityaswellasprogressonproject
milestoneswasdelayed.Thismeantthatthesegmentwasnotabletogenerateasmuchrevenuefromtheseprojects
duringthe2020financialyearasanticipated(totalsegmentrevenueof $165,000comparedtobudgetof$337,000).
Further revenue is expected to be generated from these projects in the 2021 financial year.
The Group made a profit before tax of $129,556 for the year ended 31 March 2020. This can be broken down as
follows:
3

DIRECTORS' REPORT (CONTINUED)
COMPARISON TO 31 MARCH 2020 PROSPECTIVE INFORMATION ("FORECAST")
Refer to the attached financial information for detailed comparison to prospective financial information
20202020
Highlights:
ActualForecastVariance
$$$
Net revenue
2,038,144 3,534,877 (1,496,733)
Net profit after income tax expense
129,556 1,313,112 (1,183,556)
Total Assets
51,163,507 58,202,639 (7,039,132)
Total Liabilities
41,781,500 47,810,153 (6,028,653)
Total Equity
9,382,007 10,392,486 (1,010,479)
Key drivers of variances:
As noted in the Group's 31 March 2019 annual report which compared the 2019 results to the 2019 prospective
financial information, the growth in the finance receivables book and term deposit liabilities was not asfast aswas
originallyanticipated.Whilstthebalancesheetgrowthhasbeensignificantintheyearended31March2020,dueto
delayed growth, the loan receivable book is $15.8m behind forecast as at 31 March 2020 and the term deposit
liabilitiesare $5.9m behind forecastasat 31 March 2020. This, combined with a higher proportion of assetsheld in
cash and cash equivalentsat 31 March 2020 than forecasted, representsthemajority ofthe variancein totalassets
and total liabilities.
Theslowerthananticipatedgrowthandhighproportionofcashandcashequivalentsinthebalancesheetresultedin
alowernetinterestmargin($1.1millionlowerthanforecast)andlowernetfeeandcommissionincome($0.2million
lower than forecast). This, combined with less revenue than forecasted from the research and advisory segment
resulted in net profit after tax of approximately $1.2m behind forecast.
4

20202019
$$
Interest income
2,846,439 1,479,226
Interest expense
(1,441,213) (640,270)
Net interest income
1,405,226 838,956
Fee and commission income
553,686 281,176
Fee and commission expense
(128,699) (92,332)
Net fee and commission income
424,987 188,844
Revenue from contracts with customers
227,715 347,702
Cost of sales
(32,545) (24,368)
Gross profit from contracts with customers
195,170 323,334
Other income
12,761 28,163
Net revenue
2,038,144 1,379,297
Release / (increase) in allowance for expected credit losses
(54,999) 19,456
Personnel expenses
(746,680) (603,011)
Occupancy expenses
(117,373) (90,176)
Depreciation
(4,444) (3,493)
Amortisation of intangible assets
(22,793) (18,201)
Other expenses
(901,392) (603,152)
Acquisition expenses
- (103,927)
Loss on acquiring listed shell
- (405,280)
(1,847,681) (1,807,784)
Profit / (loss) before income tax expense
190,463 (428,487)
Income tax (expense) / benefit
(60,907) (29,601)
Net profit / (loss) after income tax expense
129,556 (458,088)
Other comprehensive income
Items that will not be reclassified to profit or loss
(153,094) (14,862)
Income tax on these items
43,273
-
Other comprehensive income / (loss) for the year, net of tax
(109,821) (14,862)
Total comprehensive income / (loss)
19,735 (472,950)
Earnings per share (cents per share)
0.08 (0.46)
Diluted earnings per share (cents per share)
0.08 (0.36)
GENERAL CAPITAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
Changes in the fair value of equity investments at fair value
through other comprehensive income
5

GENERAL CAPITAL LIMITED
20202019
$$
Equity
Share capital
10,176,204 9,573,495
Accumulated losses
(676,417) (805,973)
Reserves
(117,780) (14,862)
Total equity
9,382,007 8,752,660

Assets
Cash and cash equivalents
12,562,241 2,949,317
Accounts receivables
10,859 19,246
Related party receivables
79,823 -
Loan receivables
34,855,849 17,277,204
Other current assets
266,523 114,844
Income tax receivable
- 45,450
Deferred tax asset
96,004 38,408
Property, plant and equipment
8,008 6,176
237,389 190,483
Intangible assets and goodwill
3,046,811 3,266,556
Total assets
51,163,507 23,907,684
Liabilities
Accounts payable and other payables
319,381 246,624
Related party payables
2,925 7,942
Income tax payable
8,697 -
Term deposits
41,450,497 14,900,458
Total liabilities
41,781,500 15,155,024
Net assets
9,382,007 8,752,660
Net tangible assets (NTA) per share (cents per share)
3.86 3.54
Net assets (NA) per share (cents per share)
5.80 5.69
AS AT 31 MARCH 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Investments
6

GENERAL CAPITAL LIMITED
$$$$$
1,448,503 4,747,418 - (280,728) 5,915,193
- - - (19,119) (19,119)
- (1,167,314) - (48,038) (1,215,352)
1,448,503 3,580,104 - (347,885) 4,680,722
- - - (458,088) (458,088)
- - (14,862) - (14,862)
- - (14,862) (458,088) (472,950)
5,080,104 (3,580,104) - - 1,500,000
1,121,259 - - - 1,121,259
1,923,629 - - - 1,923,629
8,124,992 (3,580,104) - - 4,544,888
9,573,495 - (14,862) (805,973) 8,752,660
- - - 129,556 129,556
- - (109,821) - (109,821)
- - (109,821) 129,556 19,735
602,709 - - - 602,709
- - 6,903 - 6,903
602,709 - 6,903 - 609,612
10,176,204 - (117,780) (676,417) 9,382,007

Other comprehensive income for
the year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
Share capital
Redeemable
Preference
Shares
Reserves
Accumulated
losses
Total equity
Balance at 31 March 2018 as
originally presented
- Change in accounting policy
- Impact of finalisation of
acquisition accounting
Restated total equity as at 1 April
2018
Loss for the year
Balance at 31 March 2019
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Conversion of redeemable
preference shares
Issue of shares on acquisition of
subsidiary
Contributions of equity net of
transaction costs
Total transactions with owners in
their capacity as owners
Profit for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Contributions of equity net of
transaction costs
Issue of warrants to directors and
senior managers
Total transactions with owners in
their capacity as owners
Balance at 31 March 2020
7

GENERAL CAPITAL LIMITED
20202019
$$
Cash flow from operating activities
Interest received
2,520,543 1,376,467
Receipts from customers
491,332 393,838
Other income
12,761 27,783
Payments to suppliers and employees
(2,041,737) (1,587,300)
Interest paid
(1,242,655) (585,614)
Income tax paid
(21,083) (142,421)
Finance receivables (net advances)
(17,091,608) (8,516,032)
Net cash (used in) / provided by operating activities
(17,372,447) (9,033,279)
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired)
-85,736
Purchase of property, plant and equipment
(6,276)(2,629)
Purchase of software
(4,444)(32,742)
Net cash provided by / (used in) investing activities
(10,720) 50,365
Cash flow from financing activities
Issue of ordinary shares
602,709 1,923,628
Term deposits (net receipts)
26,393,382 5,058,474
Net cash provided by financing activities
26,996,091 6,982,102
Reconciliation of cash and cash equivalents
2,949,317 4,950,129
9,612,924 (2,000,812)
12,562,241
2,949,317
Net (decrease) / increase in cash and cash equivalents held
during the reporting period
Cash and cash equivalents at end of the reporting period
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MARCH 2020
Cash and cash equivalents at beginning of the reporting
period
8

SEGMENT REPORTING
$$$$$$
2,842,352 4,025 62 2,846,439 - 2,846,439
552,225 1,461 - 553,686 - 553,686
- 91,151 - 91,151 - 91,151
- 50,633 - 50,633 - 50,633
85,931 15,579 - 101,510 (15,579) 85,931
12,761 2,249 111,091 126,101 (113,340) 12,761
3,493,269 165,098 111,153 3,769,520 (128,919) 3,640,601
(1,440,704) (491) (18) (1,441,213) - (1,441,213)
(128,699) - - (128,699) - (128,699)
- (32,545) - (32,545) - (32,545)
1,923,866 132,062 111,135 2,167,063 (128,919) 2,038,144
(54,999) - - (54,999) - (54,999)
(603,058) (71,444) (72,178) (746,680) - (746,680)
(26,303) - (934) (27,237) - (27,237)
(60,892) 2,372 (2,387) (60,907) - (60,907)
441,716 (15,903) (296,257) 129,556 - 129,556
49,138,302 1,301,131 989,136 51,428,569 (265,062) 51,163,507
41,734,879 199,152 112,531 42,046,562 (265,062) 41,781,500
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
- 13,108 - 13,108 - 13,108
4,444 - 206,276 210,720 - 210,720
- (13,108) 13,108 - - -
4,444 - 219,384 223,828 - 223,828
GENERAL CAPITAL LIMITED
- Other fee income
ManagementhasdeterminedtheoperatingsegmentsbasedonthecomponentsoftheGroupthatengageinbusinessactivities,whichhave
discretefinancialinformationavailableandwhoseoperatingresultsareregularlyreviewedbytheGroup'schiefoperatingdecisionmaker.
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.
Three reportable segments have been identified as follows:
- Finance
Deposittakingandresidentialmortgagelending(reportablesegmentcommencedon19December2017followingtheacquisitionofGeneral
Finance Limited).
- Research and Advisory
Providesinvestmentadvisoryservicesandproducesandsellsinvestmentresearchandpublications(reportablesegmentcommencedon19
December 2017 following the acquisition of Investment Research Group Limited).
- Corporate and Other
Corporate function and investment activities (the business of the Company was allocated to this reporting segment following the reverse
takeover transaction on 3 August 2018).
Year ended 31 Mar 2020Finance
Research and
Advisory
Corporate and
Other Total Segments Eliminations Consolidated
Revenue - interest income
Revenue - fee income
(finance receivables)
Revenue from contracts with
customers
- Advisory fee revenue
- Yearbook and research sales
Total Assets
Other income
Total revenue
Interest expense
Fee and commission expense
(finance receivables)
Cost of sales
Net revenue
Release / (increase) in
allowance for expected credit
Personnel expenses
Depreciation and
amortisation
Income tax (expense) /
benefit
Net Profit After Tax
Total Liabilities
Year ended 31 Mar 2020Finance
Research and
AdvisoryEliminations Consolidated
Acquired through settlement
of transactions / balances
Other
Transfers / reallocations
between segments
Corporate and
Other Total Segments
9

GENERAL CAPITAL LIMITED
SEGMENT REPORTING (CONTINUED)
$$$$$$
1,475,752 936 2,538 1,479,226 - 1,479,226
281,176 - - 281,176 - 281,176
- 280,320 - 280,320 - 280,320
- 43,967 - 43,967 - 43,967
23,415 - - 23,415 - 23,415
28,163 11,781 - 39,944 (11,781) 28,163
1,808,506 337,004 2,538 2,148,048 (11,781) 2,136,267
(592,791) - (47,479) (640,270) - (640,270)
(92,332) - - (92,332) - (92,332)
- (24,368) - (24,368) - (24,368)
1,123,383 312,636 (44,941) 1,391,078 (11,781) 1,379,297
19,456 - - 19,456 - 19,456
(486,670) (97,207) (19,133) (603,010) - (603,010)
(21,419) (275) - (21,694) - (21,694)
- - (103,927) (103,927) - (103,927)
- - (405,280) (405,280) - (405,280)
(34,705) - 5,103 (29,602) - (29,602)
124,765 93,971 (676,824) (458,088) - (458,088)
21,808,422 1,154,633 997,919 23,960,974 (53,290) 23,907,684
15,065,715 104,822 37,777 15,208,314 (53,290) 15,155,024
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
- - 696,928 696,928 - 696,928
- 255,875 - 255,875 - 255,875
35,212 - - 35,212 - 35,212
6,924 (262,799) 255,875 - - -
42,136 (6,924) 952,803 988,015 - 988,015
Cost of sales
Consolidated
Revenue - interest income
Revenue - fee income
(finance receivables)
Revenue from contracts with
customers
- Advisory fee revenue
- Yearbook and research sales
Year ended 31 Mar 2019Finance
Research and
Advisory
Corporate and
Other Total Segments Eliminations
- Other fee income
Other income
Total revenue
Interest expense
Fee and commission expense
(finance receivables)
Net revenue
Release / (increase) in
allowance for expected credit
Personnel expenses
Depreciation and
amortisation
Acquisition expenses
Cost of acquiring listed shell
Business combinations
Income tax (expense) /
benefit
Net Profit After Tax
Total Assets
Total Liabilities
Year ended 31 Mar 2019
Research and
Advisory
Corporate and
Other Total Segments Eliminations Consolidated
Acquired through settlement
of transactions / balances
Other
Transfers / reallocations
between segments
Finance
10

GENERAL CAPITAL LIMITED
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
(b) Applicability of the going concern basis of accounting
There are a number of significant accounting treatments which include complex or subjective judgments and estimates that may affect the
reported amounts of assets in these financial statements. Estimates and judgments 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.
An explanation of the judgments and estimates made by the Group in the process of applying its accounting policies, that have the most
significant effect on the amounts recognised in the financial statements, are set out below.
(a) Increased level of inherent uncertainty in the significant accounting estimates and judgments arising from the ongoing global
pandemic of coronavirus disease 2019
On 11 March 2020 the World Health Organization declared an ongoing global outbreak of a novel coronavirus, known as ‘coronavirus
disease 2019’ (‘COVID-19’), a pandemic.
In response the New Zealand Government has implemented a range of:
- public health and social measures to prevent and contain the transmission of COVID-19; and
- economic responses to provide financial stimulus and welfare support to mitigate the economic impacts of the pandemic.
Thepublichealthandsocialmeasuresimplementedincludedrestrictionsontravel/non-essentialmovement,entrybans/closureofborders,
quarantines, temporary closure of non-essential businesses and schools, and the cancellation of gatherings and events.
These public health and social measures have lowered overall economic activity and confidence, due to a reduced ability for many
businesses to operate, reduced demand for many goods and services, and resulted in significant volatility and instability in financial markets.
The New Zealand Government implemented a four-level COVID-19 alert system which specifies public health and social measures to be
takeninresponsetothepandemic.WithAlertLevel1beingtheleastrestrictiveandonerousandAlertLevel4beingthemost.Underthese
measures,theGroupwasclassifiedasaproviderofessentialservicesandwasabletoundertakeitsnormalbusinessactivitiesintheordinary
course of business.
The economic responses implemented by the New Zealand Government have mitigated some of the economic impacts. These responses
rangefromquantitativeeasingandreductionsinofficialinterestratesbythecentralbankstothereleaseofsignificantgovernmentfinancial
stimulus and welfare support packages.
Asaresultofthepandemic,theGroupanticipatesthattheloweredlevelsofeconomicactivityandconfidencewillcontinueforatleastthe
shorttomediumtermandwilllikelyresultinincreasedbusinessfailuresandunemploymentlevelsinNewZealand.Consequently,theGroup
hasconcludedtherebeenanincreaseinthelevelofinherentuncertaintyinthesignificantaccountingestimatesandjudgementsappliedby
Management in the preparation of these financial statements.
These financial statements have been prepared based upon conditions existing as at 31 March 2020 and consider those events occurring
subsequenttothatdatethatprovideevidenceofconditionsthatexistedattheendofthereportingperiod. AstheoutbreakoftheCOVID-
19pandemicoccurredbefore31March2020itsimpactsareconsideredaneventthatisindicativeofconditionsthatarosepriortoreporting
period. Accordingly, all reasonably known and available information with respect to the COVID-19 pandemic has been taken into
consideration in the critical accounting estimates and judgements applied by Management and all reasonably determinable adjustments
have been made in preparing these financial statements.
Whilst the COVID-19 pandemic and measures implemented have lowered overall economic activity and confidence (described above),
Management have assessed and determined that the Group’s application of the going concern basis of accounting remains appropriate.
The Group has responded to the pandemic in the following ways:
- Undertook an analysis of its forecast cashflows to evaluate of the appropriateness of the Group’s continued application of the going
concernbasisofaccounting.ThisforecastcashflowstookintoconsiderationtheGroup’sexpectationof theimpactofthepandemiconits
earnings, cash flow and financial position.
-Assessedthedirectandindirectfinancialimpactsofthepandemiconthecarryingvalueofreportedamountsofassets,liabilities,revenues
and expenses.
- Implemented and enacted appropriate Health and Safety responses.
- Implemented cost saving measures and actively seeking further cost saving measures where possible.
11

GENERAL CAPITAL LIMITED
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
(c) Allowance for expected credit losses
Cashflow forecast and going concern
Whilst theCOVID-19 pandemicandmeasuresimplementedhavelowered overalleconomic activityand confidence(described above), the
Group's earnings, cash flow and financial position have not been significantly adversely impacted since the outbreak began.
TheGrouphasdeterminedthatthemainpotentialdownsideimpactsofthepandemicontheGroup’searnings,cashflows,financialposition
and application of the going concern basis of accounting as at 31 March 2020 to be the following:
1) A reduction in term deposit reinvestment rates.
2) A reduction in new term deposit investments.
3) The inability for borrowers to make loan payments on their contractual repayment dates.
4) A reduction in loan security values (residential property values).
5) Reduced net cash flows from the research and advisory cash generating unit.
AttheendofMarch2020,theGrouppreparedrevisedforecastcashflowstakingintoconsiderationtheGroup’sexpectationoftheimpactof
thepandemicfor theperiod upto 30June 2021 which incorporatehighly stressedscenarios of reduced reinvestmentrates, reducednew
term deposit investments and extensions of loan settlement dates.
Under the most stressed scenario the Group assumed:
1) A reduction in term deposit reinvestment rates from 79% actual for the 2020 financial year to 25%.
2) A reduction in new term deposit investments from an average of $2.4 million actual per month for the 2020 financial year to $Nil.
3)Anassumptionthat50%ofloansthatmaturearenotrepaidontheirexpectedrepaymentdate.Theexpectedrepaymentdatesalready
factored in expected delays due to the Covid-19 government restrictions.
4) A reduction in loan security values (residential property values) by 25%.
5) No cash inflows from the research and advisory cash generating unit.
DuetotheGroup’ssignificantlevelsofcashandcashequivalentsat 31March2020($12.6million),and itswellsecuredloanbook,under
therevisedcashflowforecastsandthestressedscenarios,showthattheGroupwillbeabletocontinueitsnormalbusinessactivitiesandthe
realisation of assets and the settlement of liabilities in the ordinary course of business.
Since31March2020uptothedateofwriting(26June2020),theGrouphasperformedbetterthanitsbaserevisedforecastcashflows.The
Group initially saw a reduction in term deposit reinvestment rates, new term deposit investments and an increase in loan arrears, in line
withexpectations.Therehasnot yetbeenanynotableadverseimpactonresidentialpropertyprices, however it isanticipatedtooccurin
thenext12 monthsbyvariousNew Zealandeconomists. PerformancesinceAlert level2hasbeensignificantlybetterthanexpectedwith
cash and cash equivalents further increasing as a result of loan repayments and new term deposit investments.
Accordingly, Management have assessed and determined that the Group’s application of the going concern basis of accounting remains
appropriate.
Significant increase in credit risk
Expectedcreditlosses(‘ECL’)aremeasuredasanallowanceequalto12monthECL,orlifetimeECLforassetswithasignificantincreasein
creditriskorindefaultorotherwisecreditimpaired.Anassetmovestodoubtfulwhenitscreditriskhasincreasedsignificantlysinceinitial
recognition.NZIFRS9doesnotdefinewhatconstitutesasignificantincreaseincreditrisk.Inassessingwhether thecreditriskofanasset
has significantly increased the Group takes into account qualitative and quantitative reasonable and supportable forward-looking
information.
12

GENERAL CAPITAL LIMITED
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
The highest loan to valuation ratio (LVR) of the Group’s loan book as at 31 March 2020 was 77.0% (2019: 74.1%) and the weighted average
LVR of the loan book was 58.5% (2019: 55.2%), based on loan security valuations on origination of the loan. As at 31 March 2020,
approximately 90% of the Group’s loans receivables (both in number and dollar value terms) had security valuations with valuation dates
being less than 12 months old. The remaining loans receivable security valuations were individually assessed and determined as materially in
line with current property values.
There has been no measurable effect on LVRs so far. Now that the property market is able to function normally again the effect on property
values and LVRs will be able to be assessed in coming months. It is possible that there will be a softening in property values but the Group
does not expect it to exceed a range of 5-12%.
Management regularly reviews and adjusts its ECL estimates, judgements, assumptions, and methodologies as data becomes available.
Changes in these estimates, judgements, assumptions, and methodologies could have a direct impact on the level of credit provision and
credit impairment charge recorded in the financial statements.
Ifthe12-monthECLrateforloanswithoutasignificantincreaseincreditriskincreased/(decreased)by0.2%higher/(lower)asat31March
2020, the loss allowance on finance receivables would have been $67,347 higher/(lower).
If the lifetime ECL rate for loans with a significant increase in credit risk and credit impaired loans increased/(decreased) by 1.0%
higher/(lower) as at 31 March 2020, the loss allowance on finance receivables would have been $15,163 higher/(lower).
Impact of COVID-19 on loan receivables / expected credit losses
TheCOVID-19AlertLevel4restrictionsimpactednegativelyonborrowers’abilitytopaymonthlyinterestand/ortorepaytheirloansbythe
due date because of the following:
1) Delays by banks in processing refinancing applications from our borrowers.
2) Borrowers were unable to effectively market their properties for sale.
3) In some cases, borrower income had reduced and impacted on their ability to service their loans.
These factors have improved since COVID-19 restrictions reduced to Alert Level 2 and 1 and are expected to continue to improve as
restrictions are further relaxed.
Theincomeof severalborrowers andtheir abilitytopayinterest maycontinuetobe adverselyaffected. However only asmall number of
loans are likely to be affected and no significant impact of cash flows is expected.
Repayment may be delayed for some borrowers; however, the delays are not expected toexceed 1-3 months. Thesedelays werefurther
stressed in the going concern cash flow forecast described above.
Calculation of loss allowance
WhenmeasuringECLtheGroupusesreasonableandsupportableforwardlookinginformation,whichisbasedonassumptionsforthefuture
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.
ProbabilityofdefaultconstitutesakeyinputinmeasuringECL.Probabilityofdefaultisanestimateofthelikelihoodofdefaultoveragiven
time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.
The ECL is calculated on an individual loan basis by applying an expected loss factor to the loan balance. The expected loss factor is
determined from the Group historical loss experience data.
Historical loss experience data is reviewed by management and adjustments made to reflect current and forward looking economic and
credit conditions. In addition, management recognise that a certain level of imprecision exists in any model used to generate risk grading
and provisioning levels. As such an adjustment is applied for model risk.
Ininstanceswheretheprobabilityofdefaulthasincreasedsignificantly(asignificantincreaseincreditrisk),orwheretheloanisindefault,
the expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending
whentheloantovaluationratio(LVR)exceeds75%.ThismeansingeneralthattheGroupexpectsthatthepresentvalueofexpectedcash
flows from a loan in default to approximate the carrying value of the loan prior to the default event, except in cases where the LVR has
increased considerably due to a reduction in the security property valuation or a significant increase in the loan balance.
13

GENERAL CAPITAL LIMITED
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
(d) Impairment analysis of goodwill and other indefinite life intangible assets
Since31March2020anduptothedateofwriting(26June2020),therehasbeennoevidencewhichindicatesasofteningoftheresidential
property values in New Zealand that would have a material impact on the Group’s expected credit losses.
AccordingtosensitivityanalysisperformedontheresidentialpropertysecurityvaluationsunderlyingtheGroup’sloanreceivablesasat31
March 2020:
1) A 10% drop in property market values would result in no loan losses.
2) A 20% drop in property values would result in a loss in the range of $10,000 – $20,000.
3) A 25% drop in property values would result in a loss in the range of $200,000 – $250,000.
Theabovesensitivityanalysisfactorsintheexpectedsellingcostsofthepropertyaswellasthetimevalueofmoneyovertheexpectedtime
to sell (or to refinance) the property.
Expected credit losses:
1) Based on the history of the Group loan book over the last 7 years, the average annual write-offs as a percentage of the average loan
receivable balance over the same period was 0.15%. This would be an appropriate basis for 12-month expected credit losses in ‘normal’
economic conditions.
2)TheGrouprecognisesthatNewZealand’seconomicforecastforthenext12monthsisunfavourableduetotheimpactsoftheCOVID-19
pandemic as described above. As a result, the Group has concluded that the probability of default has increased. However due to the
Group’swellsecuredloanbook(asdescribedabove),thelossgivendefaultandexpectedcreditlosseshaveincreasedbutnotbyamaterial
amount.Assuch,theGrouphasdeterminedthat0.31%ofthegrossloanbalanceisamoreappropriateexpectationoflossesforthenext12
months.
3) Lifetime ECL’s for loans with a significant increase in credit risk and for loans in default have been calculated based on the Group’s
expectations for discounted net cash flows from the respective loan receivables over the expected remaining life of the loans in light of
COVID-19.
The carrying value of goodwill and indefinite life intangible assets (including licences and bartercard trade dollars) is assessed at least
annually to ensure that it is not impaired.
WithregardtoGoodwillandLicences,performingthisanalysisrequiresmanagementtoestimatefuturecashflowstobegeneratedbythe
cash-generating unit, which entails making judgements, including the expected rate of growth of revenues and expenditures, assets and
liabilities,andtheresultingcashflows.Judgementsalsoneedtobemadeabouttheappropriatediscountratetoapplywhenvaluingfuture
cash flows.
AsensitivityanalysisperformedbyManagementhashighlightedthatthecarryingvalueoftheGoodwillandotherassetsintheresearchand
advisory cash generating unit ("CGU") are highly reliant on the achievement of revenue forecasts from advisory projects.
Management have performed a fair value less costs of disposal impairment test in relation to the carrying value of the bartercard trade
dollars asset at 31 March 2020.
Impact of COVID-19 on impairment analysis of goodwill and other indefinite life intangible assets
Whencompletingtheimpairmentanalysisofgoodwillandotherindefinitelifeintangibleassets,theGrouphastakenintoconsiderationall
reasonably known and available information with respect to the COVID-19 pandemic.
1. Finance CGU - The forecasted cash flows used in the impairment analysis factor in theexpected impactsof COVID-19.In particular the
Growth path that General Finance originally forecasted is now expected to be significantly delayed as a result of the pandemic and the
economic impact. Notwithstandingthe impacts of the above, the results of the model show that there is still significant headroom in the
unit.
2.ResearchandAdvisoryCGU-IntheforecastedcashflowsusedintheCGUimpairmentanalysis,theGrouphasfactoredintheexpected
impacts on COVID-19 on the probability of sourcing advisory projects, the project milestones and the impact on timing of cashflows.
Notwithstanding the impacts of the above, the results of the impairment testing resulted in no impairment to the CGU.
14

GENERAL CAPITAL LIMITED
COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION
Consolidated statement of comprehensive income
Unaudited
prospective
Actualinformation*
Year endedYear ended
31 March31 March
20202020Variance
$$$
Interest income
2,846,439 4,363,475 (1,517,036)
Interest expense
(1,441,213) (1,860,370) 419,157
Net interest income
1,405,226 2,503,105 (1,097,879)
Fee and commission income
553,686 696,772 (143,086)
Fee and commission expense
(128,699) (50,000) (78,699)
Net fee and commission income
424,987 646,772 (221,785)
Revenue from contracts with customers
227,715 385,000 (157,285)
Cost of sales
(32,545) (25,000) (7,545)
Gross profit from contracts with customers
195,170 360,000 (164,830)
Other income
12,761 25,000 (12,239)
Net revenue
2,038,144 3,534,877 (1,496,733)
Release / (increase) in allowance for expected credit losses
(54,999) (100,000) 45,001
Personnel expenses
(746,680) (470,000) (276,680)
Occupancy expenses
(117,373) (90,000) (27,373)
Depreciation
(4,444) - (4,444)
Amortisation of intangibles
(22,793) - (22,793)
Other expenses
(901,392) (1,044,000) 142,608
(1,847,681) (1,704,000) (143,681)
Profit before income tax expense
190,463 1,830,877 (1,640,414)
Income tax (expense) / benefit
(60,907) (517,765) 456,858
Net profit after income tax expense
129,556 1,313,112 (1,183,556)
Other comprehensive income
(153,094) - (153,094)
43,273 -
43,273
Other comprehensive income for the year
(109,821) - (109,821)
Total comprehensive income
19,735 1,313,112 (1,293,377)
*Where applicable, amounts have been reclassified for consistency with 31 March 2020 consolidated financial statements.
Prospective consolidated financial statements were prepared for the Group within the disclosure document dated 16July 2018 as part of
thespecialmeetingdated31July2018.Theprospectivefinancialstatementsfortheyearended31March2020arecomparedtotheactual
results achieved for that year.
Changes in the fair value of equity investments at fair value
through other comprehensive income
Income tax on these items
15

GENERAL CAPITAL LIMITED
COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
Consolidated statement of financial position
Unaudited
prospective
Actualinformation*
as atas at
31 March31 March
20202020Variance
$$$
Equity
Share capital
10,176,204 8,282,353 1,893,851
Accumulated losses
(676,417) 2,110,133 (2,786,550)
Other reserves
(117,780) - (117,780)
Total equity
9,382,007 10,392,486 (1,010,479)

Assets
Cash and cash equivalents
12,562,241 4,106,490 8,455,751
Accounts receivables
10,859 152,215 (141,356)
Related party receivables
79,823 - 79,823
Finance receivables
34,855,849 50,642,044 (15,786,195)
Other current assets
266,523 25,000 241,523
Property, plant and equipment
8,008 - 8,008
Deferred tax asset
96,004 49,813 46,191
237,389 -
237,389
Intangible assets and goodwill
3,046,811 3,227,077 (180,266)
Total assets
51,163,507 58,202,639 (7,039,132)
Liabilities
Accounts and other payables
319,381 215,683 103,698
Related party payables
2,925 - 2,925
Income taxation payable
8,697 220,000 (211,303)
Term deposits
41,450,497 47,374,470 (5,923,973)
Total liabilities
41,781,500 47,810,153 (6,028,653)
Net assets
9,382,007 10,392,486 (1,010,479)
Consolidated summarised statement of changes in equity
Unaudited
prospective
Actualinformation*
Year endedYear ended
31 March31 March
20202020Variance
$$$
Total equity as at 1 April 2019
8,752,660 9,079,374 (326,714)
Total comprehensive income for the year
19,735 1,313,112 (1,293,377)
Transactions with owners
609,612 - 609,612
Balance at 31 March 2020
9,382,007 10,392,486 (1,010,479)
*Where applicable, amounts have been reclassified for consistency with 31 March 2020 consolidated financial statements.
Financial assets at fair value through other
comprehensive income
16

GENERAL CAPITAL LIMITED
COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
Consolidated statement of cash flows
Unaudited
prospective
Actualinformation*
as atas at
31 March31 March
20202020Variance
$$$
Cash flow from operating activities
Interest received
2,520,543 4,219,480 (1,698,937)
Receipts from customers
491,332 1,315,258 (823,926)
Other income
12,761 -12,761
Payments to suppliers and employees
(2,041,737) (1,593,782)(447,955)
Interest paid
(1,242,655) (1,470,591)227,936
Income tax paid
(21,083) (355,165)334,082
Finance receivables (net advances)
(17,091,608) (27,356,005) 10,264,397
Net cash provided by operating activities
(17,372,447) (25,240,805) 7,868,358
Cash flow from investing activities
Purchase of property, plant and equipment
(6,276)-(6,276)
Purchase of software
(4,444)-(4,444)
Net cash provided by / (used in) investing activities
(10,720) - (10,720)
Cash flow from financing activities
Issue of ordinary shares
602,709 -602,709
Issue of redeemable preference shares
26,393,382 -26,393,382
Term deposits (net receipts)
-25,595,496 (25,595,496)
Net cash provided by financing activities
26,996,091 25,595,496 1,400,595
Reconciliation of cash and cash equivalents
2,949,317 3,751,799 (802,482)
9,612,924 354,691 9,258,233
12,562,241 4,106,490 8,455,751
*Where applicable, amounts have been reclassified for consistency with 31 March 2020 consolidated financial statements.
Refer to the Directors' report for commentary on variances.
Cash and cash equivalents at beginning of the reporting period
Net (decrease) / increase in cash and cash equivalents held during
the reporting period
Cash and cash equivalents at end of the reporting period
17