NZAI delivers net profit above guidance for FY21

NZ Automotive
Investments Limited
17 Levene Pl,
Mt Wellington,
Auckland, 1060
+64 (9) 666 0158

info@nzautomotiveinvestments.co.nz
nzautomotiveinvestments.co.nz


28 May 2021
Market Announcement
NZX:NZA

NZAI delivers net profit above guidance

Performance highlights FY21 (All figures in NZD as at 31 March 2021. Comparisons are made against
FY20)
• Underlying net profit after tax
1
of $3.8 million, slightly above guidance range of $3.3 - $3.7 million
• Actual net profit after tax decreased $1.0 million to $3.2 million and includes costs to list company
of $0.7 million
• Underlying EBITDA
1
including finance income of $7.8 million, decreased $0.9 million
• Revenue and income
2
decreased 13.4% to $66.1 million
• Full year dividend declared of 5.0 cps, representing a gross dividend yield of 6.5% (based on
share price of $1.07
3
), to be paid 17 June-21
• Underlying earnings per share
1
of 8.4 cps (Actual EPS 7.0 cps)
• Automotive business has held up well and proven to be resilient in the face of Covid-19

AUCKLAND, 28 May 2021 – NZ Automotive Investments Limited (NZAI) (NZX:NZA) today reports full
year earnings to 31 March 2021 (FY21), achieving NPAT slightly above guidance and delivering a strong
dividend yield, demonstrating the ongoing profitability and resilience of the business.

FY21 revenue and income
2
of $66.1m decreased by $10.3 million on FY20, with an estimated $7.4 million
due to the effects of Covid-19 (NZAI could not fully trade for 68 days or 19% of the year) and a further
estimated $6.9 million due to the impact from closing five less profitable dealerships. These revenue
reductions were offset by growth of $3.3 million in the underlying 2 Cheap Cars retail business as well as
$0.7 million growth in finance income from the automotive finance business (NZ Motor Finance).

In the second half of FY21, sales volumes from existing dealerships recovered to FY20 levels. Group
second half FY21 revenues of $35.5m versus $37.2m in the second half of FY20 were based on a
reduced dealership footprint and the effects of the February/March lockdown in Auckland.

Underlying EBITDA
1
including finance income decreased from $8.7 million in FY20 to $7.8 million in FY21.
The effects of Covid-19, as well as additional corporate costs associated with becoming a listed company,
contributed to the $0.9 million reduction.

Actual NPAT decreased $1.0 million from $4.2 million in FY20 to $3.2m in FY21 including $0.6 million of
costs (post tax) to list the company. Underlying FY21 NPAT
1
of $3.8m is slightly above guidance.

The Board of Directors are pleased to declare a dividend of 5.0 cps for FY21, to be paid on 17 June 2021.
The dividend represents 60% of underlying net profit after tax
1
in accordance with the Group’s dividend
1

2
policy. This represents a gross dividend yield of approximately 6.5% based on the share price of $1.07,
being the closing price on 27 May 2021. The record date will be 9 June 2021.

During FY21, NZAI appointed an experienced Board, including independent directors, and vehicle finance
expert David Page as CEO, to provide strong governance, to lead the company’s expansion and drive its
growth strategy.

In February 2021, NZAI successfully listed on the New Zealand Stock Exchange (NZX), going public via
a direct listing on the NZX main board. No new securities were issued in conjunction with the listing.
During the reporting period, NZAI also raised net capital of $3.3 million to fund the continued growth of
its loan book under its subsidiary NZ Motor Finance and secured a bank facility of $5.0 million to help
further fund the loan book beyond FY21.

CEO David Page said: “With a proven track record, strong governance and management in place, NZAI
is now focused on implementing its strategic roadmap for growth.”

“The direct listing will support NZAI’s long-term growth and provide NZAI access to capital in the future
for expansion, in particular to grow the vehicle finance business.”

NZAI’s FY21 and Covid-19 impact
Like other retail businesses, NZAI’s operations and the broader automotive industry were significantly
impacted by the lockdowns relating to Covid-19 during FY21. Throughout the year, the company has had
to be agile in responding to the disruptions and uncertainty. Nevertheless, the results for FY21 were
affected by the lockdowns, where the company could not fully trade for at least 68 days, or 19% of the
year. In the first half of FY21, sales volumes from existing sites have largely recovered to FY20 levels.

Automotive Retail (2 Cheap Cars)
CEO David Page said: “The 2 Cheap Cars underlying business has held up well and proven to be resilient
in the face of Covid-19.”

2 Cheap Cars sold 8,207 cars in FY21, 2,812 less than in FY20 where it sold 11,019. Four dealerships
were closed in FY20 due to being less profitable than expected, with one further dealership (in Dunedin)
closing in FY21. Covid-19, coupled with the closure of the five dealerships, had a knock-on effect for
revenue in FY21.

2 Cheap Cars is vertically integrated from procurement to the point of sale, with staff from its Japanese
subsidiary, Car Plus, directly attending Japanese car auctions. Having a presence in Japan allows NZAI
to keep the cost of its vehicles low, manage quality and buy at scale. It also meant 2 Cheap Cars was
able to maintain a strong supply chain through Covid-19; supply constraints continue to be addressed by
the business.

NZAI has seen sales of electric and hybrid electric vehicles (EV/HEV) almost double in the last 12 months;
21% of sales were EV/HEV in the last quarter of FY21, up from 8% at the same time in the prior year.
From September to January, 2 Cheap Cars averaged over 100 EV/HEV sales per month. The company
is well placed to service the growing demand for this type of vehicle.

In line with its strategy, NZAI has been focused on improving its digital offering, including streamlining
internal processes. During the period, 2 Cheap Cars redeveloped its website to integrate with the sales
process across the country’s car yards, and to make it easier for customers to purchase cars online.

2

3
Automotive Finance (NZ Motor Finance)
NZAI’s automotive finance subsidiary commenced trading in July 2019, and is intended to be a growth
area for future financial performance. NZ Motor Finance grew its loan book by 138% in FY21, an increase
from $1.6 million to $3.8 million as at 31 March 2021. The number of loans totaled 461.

Approximately a third of 2 Cheap Cars customers require vehicle finance at point of sale based on FY21
statistics. By offering its own car finance to customers buying their vehicles from 2 Cheap Cars, NZ Motor
Finance can originate its loans with minimal acquisition and administrative costs.

Selective lending to NZ Motor Finance’s core audience has continued, and the business has seen 0.11%
of loans written off in FY21.

Outlook
NZAI’s long-term strategy is to leverage its retail business to build a diversified automotive services group.
NZAI’s automotive finance business will continue to be a focus area for growth.

CEO David Page said: “NZAI remains focused on the digital transformation of the business and its
processes, as well as growing and investing in our team, securing relevant partnerships and maximising
operational efficiency.

“Growing the automotive finance business loan book will continue to be a key focus. We also have a long-
term strategy when it comes to electric and hybrid vehicles – this will be an area of focus to grow market
share, and we will be looking to leverage opportunities with electric and hybrid vehicles over time.”

Demand remains strong for used vehicles across 2 Cheap Cars dealerships in April and May 2021.

1
excludes transaction costs to list the Company on NZX (Underlying NPAT and underlying EBITDA are non-IFRS measures)
2
includes government wage subsidy received of $0.6m
3
NZAI share price as of end of day, 27 May 2021

Shareholder enquiries:
David Page
CEO
+64 21 980 795
David.p@nzautomotiveinvestments.co.nz
Haydn Marks
CFO
+64 21 2211 040
Haydn.m@nzautomotiveinvestments.co.nz

About NZAI
NZAI is an integrated used automotive group operating throughout New Zealand via two subsidiaries:
Automotive Retail and Vehicle Finance. NZAI’s mission is to deliver quality cars and financing solutions
at the most affordable prices to the average New Zealander. Operating under the “2 Cheap Cars” brand,
its Automotive Retail company is one of the largest used vehicle sellers in New Zealand with 12
dealerships across the country. Its Vehicle Finance company operates under the “NZ Motor Finance”
brand. It was established in 2019 to diversify earnings and provide a further growth opportunity for NZAI.
It originates loans entirely from cross-selling to Automotive Retail customers, which allows NZ Motor
Finance to grow its finance book with minimal acquisition and administrative costs.
www.nzautomotiveinvestments.co.nz

3

---

Results announcement




Results for announcement to the market
Name of issuer NZ Automotive Investments Limited
Reporting Period 12 months to 31 March 2021
Previous Reporting Period 12 months to 31 March 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$65,366 -14%
Total Revenue $66,125 -13%
Net profit/(loss) from
continuing operations
$3,199 -24%
Total net profit/(loss) $3,199 -24%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.05040000
Imputed amount per Quoted
Equity Security
$0.01960000
Record Date 09/06/2021
Dividend Payment Date 17/06/2021
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.75 $1.91
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Additional shares issued during the FY21 year
Authority for this announcement
Name of person

authorised
to make this announcement
David Page
Contact person for this
announcement
Haydn Marks
Contact phone number 021 2211 040
Contact email address haydnmarks@nzautomotiveinvestments.co.nz
Date of release through MAP

27/05/2021

Audited financial statements accompany this announcement.

---

NZ AUTOMOTIVE INVESTMENTS LIMITED NZX LISTING PROFILE2
NZ AUTOMOTIVE
INVESTMENTS LIMITEd
(FORMERLY 2CC HOLdINGS LIMITEd)
FiNANCiAL STATEMENTS
31 MARCH 2021

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Table of Contents
For the Year Ended 31 March 2021
Page
Company Directory
3
Directors' Report
4
Independent Auditor's Report
5-6
Consolidated Statement of Profit or Loss and Other Comprehensive Income
7
Consolidated Statement of Changes in Equity
8
Consolidated Statement of Financial Position
9-10
Consolidated Statement of Cash Flows
11
Notes to and forming part of the Consolidated Financial Statements
12-33
Borrowings.
Borrowin
2

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Company Directory
As at 31 March 2021
Nature of Business
Used car retail and motor vehicle finance
Registered Office
BDO Auckland
Level 4
4 Graham Street
Auckland
Directors
Yusuke Sena
Eugene Williams
Karl Smith (appointed 10 September 2020)
Francis Charles Wingfield Bolt (appointed 17 December 2020)
Tracy Leanne Rowsell (appointed 01 December 2020)
David Page (appointed 28 September 2020, resigned 11 December 2020)
Michele Margaret Kernahan (appointed 15 February 2021)
Share Capital
45,554,500 Ordinary Shares
Bankers
ASB Bank
Accountants
BDO Auckland
Level 4
4 Graham Street
Auckland
Independent Auditor
Grant Thornton New Zealand Limited
Auckland
Solicitors
Lowndes Jordan
3

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Directors' Report
For the Year Ended 31 March 2021
Approved for and on behalf of the Board of Directors
Director
Director
27/05/2021
Date
Borrowings.
Borrowings
The Board of Directors of NZ Automotive Investments Limited (formerly 2CC Holdings Limited) present their Annual Report including
the consolidated financial statements of the Group for the year ended 31 March 2021.
The Board of Directors of NZ Automotive Investments Limited (formerly 2CC Holdings Limited) authorised the issue of these
consolidated financial statements on this 27 day of May 2021:
4

Grant Thornton New Zealand Audit
Limited
L4, Grant Thornton House
152 Fanshawe Street
P O Box 1961
Auckland 1140

T +64 9 308 2570
F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd










To the Shareholders of NZ Automotive Investments Limited (formerly 2CC Holdings Limited)
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of NZ Automotive Investments Limited (the “Company”) and its subsidiaries (the “Group”)
on pages 7 to 33 which comprise the consolidated statement of financial position as at 31 March 2021, and the consolidated statement of profit or
loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of NZ Automotive
Investments Limited as at 31 March 2021 and its financial performance and cash flows for the year then ended in accordance with New Zealand
Equivalents to International Financial Reporting Standards (“NZ IFRS”) issued by the New Zealand Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (“ISAs (NZ)”) issued by the New Zealand Auditing
and Assurance Standards Board. 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 International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by
the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ International Code of
Ethics for Professional Accountants (including International Independence Standards) (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 we have no relationship with, or interests in, the Group.
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 period. 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.
Why the audit matter is significant How our audit addressed the key audit matter
Revenue recognition – NZ Automotive Investments Ltd
The Group has recognised revenue of $65m (FY 2020: $ 76m)
(Note 7). NZAI Group’s net sales comprises revenue from the
sale of cars, insurance agent commissions and interest agent
commissions.
Revenue is recognised when the control associated with a good
or service (or in aggregate thereof) representing a distinct
performance obligation is transferred from the Group to the
customer.
To address the risk associated with revenue recognition, the following
audit procedures were carried out:
• Evaluated the design and operational effectiveness of
management's internal controls related to revenue recognition.
• Reviewed revenue recognition policies for appropriateness
and compliance with relevant accounting standards.
• Performed analytical procedures by projecting the revenue
listing by the model of the cars in a scatter diagram and
identifying outliers.
• Selected a sample of transactions and inspected supporting
documentation, cash received and assessed whether all
Independent Auditor’s Report

2

Why the audit matter is significant How our audit addressed the key audit matter
There are a number of factors that could affect this reported
amount, including the risk for revenue recognition policies being
incorrectly applied or recognised in an incorrect period. This
presents a key audit matter due to the financial significance and
nature of net sales in the financial statements.
criteria related to revenue recognition has been met before
being recognised as revenue.
• Performed revenue cut off procedures by selecting a sample
of revenue samples before and after year end and testing
whether cut off on revenue was accurate.
Other Matter
The consolidated financial statements of the Group previously called 2CC Holdings Limited were unaudited. However the subsidiary (2 Cheap
Cars Limited) which made up the majority of the Group (refer to Segment Reporting note 6) for the year ended 31 March 2020 was audited by
another auditor who expressed an unmodified opinion on those statements on 7 August 2020.
Information Other than the Consolidated Financial Statements and Auditor’s Report thereon
The Directors are responsible for the annual information. The other information comprises the annual report. The annual report is expected to be
made available after the date of this auditor’s report. Our opinion on the consolidated financial statements does not cover the other information
and we do not and will 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 identified above when it
becomes available 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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to report that fact.
Directors’ responsibilities 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 for such internal control as the Directors determine is necessary to enable the preparation of 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.
A further description of the auditor’s responsibilities for the audit of the consolidated financial statements is located on the External Reporting
Board’s website at: https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Restriction on use of our report
This report is made solely to the Group’s shareholders, as a body. Our audit work has been undertaken so that we might state to the Group’s
shareholders, as a body 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 the Group and the Group’s shareholders, as a body, for our
audit work, for this report or for the opinion we have formed.
Grant Thornton New Zealand Audit Limited

VJ Black
Auckland

27 May 2021

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 March 2021
MAR 2021 MAR 2020
Note$'000$'000
Revenue
Revenue and income7
65,36676,316
Sundry income8
75958
Expenses
Cost of sales
(51,688)(59,412)
Administration expenses
(2,032)(2,527)
Advertising expenses
(1,201)(1,710)
Depreciation expenses
(1,972)(2,029)
Employee benefits (short term)
(2,806)(3,039)
Finance expenses10
(413)(529)
Listing cost
(695)-
Property and related expenses
(627)(935)
Profit before income tax9
4,6916,193
Income tax expense11
(1,492)(1,964)
Profit for the period
3,1994,229
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss
Translation of foreign operations
8684
Total other comprehensive income
8684
Total comprehensive income for the period
3,2854,313
Profit for the year attributable to:
Owners of the Company
3,1994,204
Non-controlling interest
-25
3,1994,229
Total comprehensive income attributable to:
Owners of the Company
3,2854,288
Non-controlling interest
-25
3,2854,313
$$
Earnings per share
Basic earnings per share24
0.070.28
Diluted earnings per share24
0.120.28
The accompanying notes form part of these consolidated financial statements
7

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2021
Share
Capital
Retained
Earnings
Amalgamation
Reserve
Non-
Controlling
Interests
Total Equity/
(Accumulated
Losses)
Note$'000$'000$'000$'000$'000$'000$'000
Balance at 1 April 201916
15,4426,8157(35,442)(13,178)70(13,108)
Profit for the period
-4,204--4,204254,229
Translation of foreign operations
--84-84-84
Total comprehensive income for the period
-4,20484-4,288254,313
Transactions with owners of the Group in their capacity as owners
Dividends paid
-(958)--(958)(28)(986)
Total transactions with owners of the Group
-(958)--(958)(28)(986)
Balance at 31 March 2020
15,44210,06191(35,442)(9,848)67(9,781)
Balance at 1 April 202016
15,44210,06191(35,442)(9,848)67(9,781)
Profit for the period
-3,199--3,199-3,199
Translation of foreign operations
--(86)-(86)-(86)
Total comprehensive income for the period
-3,199(86)-3,113-3,113
Transactions with owners of the Group in their capacity as owners
Movement in NCI
-24--24(67)(43)
Movement in share capital
23,902---23,902-23,902
Movement in Amalgamation
---(514)(514)-(514)
Dividends paid
-(1,064)--(1,064)-(1,064)
Total transactions with owners of the Group
23,902(1,040)-(514)22,348(67)22,281
Balance at 31 March 2021
39,34412,2205(35,956)15,613-15,613
Borrowings
Foreign
Currency
Translation
Reserve
Attributable to the Owners of the Company
Total
attributable to
equity holders
of parent
The accompanying notes form part of these consolidated financial statements
8

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Consolidated Statement of Financial Position
As at 31 March 2021
MAR 2021MAR 2020
Note$'000$'000
Equity
Share capital16
39,34415,442
Amalgamation reserve3(k)
(35,956)(35,442)
Foreign currency translation reserve591
Retained earnings
12,22010,061
Equity attributable to owners of the parent15,613(9,848)
Non-controlling interest
-67
Total equity15,613(9,781)
Current liabilities
Trade and other payables18
2,0951,763
Employee benefit liabilities19
871699
Borrowings20
8,4208,000
Other current liabilities
3519
Income tax payable
724817
Derivative financial liabilities2543-
Related party payable222020,017
Lease liability23
1,6001,575
Total current liabilities
13,80832,890
Non-current liabilities
Lease liability
23
5,0036,308
Total non-current liabilities
5,0036,308
Total liabilities
18,81139,198
Total equity and liabilities
34,42429,417
The accompanying notes form part of these consolidated financial statements
9

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Consolidated Statement of Financial Position (continued)
As at 31 March 2021
MAR 2021MAR 2020
Note$'000$'000
Current assets
Cash and cash equivalents138,2671,775
Trade and other receivables152,5591,001
Derivative financial assets25-294
Loans receivable211,591676
Inventories14
11,89215,246
Total current assets
24,30918,992
Non-current assets
Plant, property and equipment12
1,1761,418
Intangible assets
42
Loans receivable21
2,212926
Deferred tax asset11
477428
Right-of-use assets23
6,2467,651
Total non-current assets
10,11510,425
Total assets
34,42429,417
Approved for and on behalf of the Board of Directors.
27/05/2021
DirectorDate
27/05/2021
DirectorDate
The accompanying notes form part of these consolidated financial statements
10

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2021
MAR 2021 MAR 2020
Note$'000$'000
Cash Flows from Operating Activities
Proceeds from sale of goods64,47175,884
Cash payments to suppliers and employees(55,309)(71,535)
Government grants received600-
Loans receivable advanced2,123
(1,764)
Proceeds from loans receivable(3,589)231
Interest received14159
Interest paid - retail operations(247)(289)
GST paid(1,671)(630)
Income tax paid(695)(2,111)
Net Cash Inflow from Operating Activities5,697(55)
Cash Flows from Investing Activities
Purchase of property, plant and equipment(176)(1,352)
Proceeds from sale of property, plant and equipment19735
Net Cash Outflow from Investing Activities(157)(617)
Cash Flows from Financing Activities
Dividends paid26(1,078)(985)
Principal elements of lease liability payments23(1,529)(1,480)
Advance to related party--
Interest paid - finance operations(165)(257)
Repayments from related parties417
Finance Facility Advance420-
Proceeds from capital raised163,555-
Cost of capital raised16(243)-
Net Cash Outflow from Financing Activities964(2,705)
Net Increase in cash and cash equivalents6,504(3,377)
Cash and Cash Equivalents at Beginning of Period1,7755,024
Effect of exchange rate fluctuations(12)128
Cash and Cash Equivalents at End of Period138,2671,775
Borrowings.
The accompanying notes form part of these consolidated financial statements
11

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
1.Reporting entity
2.Basis of preparation
(a)Statement of compliance
(b)Basis of measurement
• Derivative financial instruments (Note 25)
• Loans receivable (Note 21)
(c)Functional and presentation currency
(d)
Going Concern and COVID-19
Based on the impact of COVID-19, automotive retail profit before tax for FY21 is lower than FY20. However, the Group also expects that sales numbers in
FY22 will return to FY20 levels, barring any further disruptions related to COVID-19. In the longer term, the Company believes that health concerns
relating to COVID-19 may support greater demand for private vehicles, as opposed to public transport or other shared transport options. Also, given the
nature of the Group's cars as necessities for its customers, the Company believes it will be well positioned to weather any extended economic downturn.
The consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (GAAP) and the
requirements of the Financial Markets Conduct Act 2013. They comply with New Zealand equivalents to International Financial Reporting Standards (“NZ
IFRS”) and other applicable Financial Reporting Standards, as appropriate for Tier 1 for-profit entities. The consolidated financial statements also
comply with International Financial Reporting Standards ("IFRS").
As a result of the COVID-19 pandemic, there was a substantial reduction in economic activity throughout the world as governments have introduced
measures in a bid to slow transmission of the virus.
As a result of the COVID-19 pandemic, there has been a substantial reduction in economic activity throughout the world, as governments have introduced
measures (such as the closure of all non-essential businesses and the cancellation of all public events) in a bid to halt, or at least slow, transmission of
the virus. At the time of signing the financial statements, there is uncertainty about how much further economic activity will fall and how long the
period of reduced economic activity will last.
NZ Automotive Investments Limited (formerly 2CC Holdings Limited) (the Company) is a company domiciled in New Zealand.
The Company is incorporated in New Zealand, registered under the Companies Act 1993 and is publicly traded on the New Zealand Stock Exchange.
These consolidated financial statements comply with the requirements of the Companies Act 1993 and the Financial Markets Conduct Act 2013.
These consolidated financial statements as at 31 March 2021 comprise the Company and its subsidiaries: 2 Cheap Cars Limited, NZ Motor Finance
Limited, 2CC International Limited, 2 Cheap Rental Cars Limited, 2CC (Canada) Inc. and Car Plus K.K. (collectively, the Group).
2CC (Canada) Inc. has ceased trading and was liquidated by 31 March 2021. 2 Cheap Rental Cars Limited has ceased trading and as at 31 March 2021 only
holds a lease on a property which is utilised by the Group.
The Group is primarily involved in used car retail and motor vehicle finance.
The consolidated financial statements were authorised for issue by the Board of Directors on 27 May 2021.
The consolidated financial statements have been prepared on the historical cost basis except that certain assets and liabilities are measured at fair value
where stated under their specific accounting policies.
These consolidated financial statements for the Group are presented in New Zealand dollars ($), which is the Company's functional and the Group's
presentation currency. All financial information presented has been rounded to the nearest thousand dollars.
The ongoing pandemic has increased the estimation uncertainty in the preparation of these consolidated financial statements. The Group has developed
accounting estimates based on forecasts of economic conditions which reflect expectations and assumptions as at March 2021 about future events that
are reasonable in the circumstances. There is a significant degree of judgement involved with these assumptions. The accounting estimates impacts by
the pandemic are detailed under Note 21Loans Receivable.
The impact of COVID-19 and outlook like other retail businesses, the Group and the general automotive sector were significantly impacted by the
shutdowns relating to COVID-19 which occurred from 23 March 2020 to 13 May 2020 and 12 August 2020 to 23 September 2020. The first lockdown applied
to all sites of the Group and affected the business significantly, with cars sold in April 2020 being down 99% (compared to April 2019). The second
lockdown primarily only affected Auckland sites but still had a significant impact on the business. Car sales in August 2020 were down 43% compared to
August 2019. After each lockdown, trading recovered strongly back to normal levels, reflecting the nature of the Group's car sales as necessary purchases
for its customers. During the period the Group received government grants in the form of COVID-19 related wage subsidies from the New Zealand
Government.
12

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
(d)
Going Concern and COVID-19 - continued
• Profit before tax for the period ended 31 March 2021 was $4,691k (March 2020: $6,193k);
• Operating cashflows for the period ended 31 March 2021 were a net inflow of $5,697k (March 2020: a net outflow of $55k) (Note 17).
(e)Critical accounting estimates and judgements
• Measurement of loss allowance on the loans receivable (Note 3(i))
• Measurement of the inventory provision (Note 3(h))
• Measurement of contract liability on commission income (Note 3(c))
• Measurement of useful life on property, plant and equipment (Note 3(g))
• Measurement of lease term - lease liability and right of use assets (Note 3(m))
Fair value measurement
A number of assets and liabilities included in the Group’s financial statements require measurement at, and/or disclosure of, fair value.
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data)
(f)Changes in accounting policies
New standards, interpretations and amendments adopted during the period
NZ IFRS 8 Segment Reporting, and NZ IAS 33 Earnings per share
The Group has applied NZ IFRS 8 and NZ IAS 33 to these financial statements.
Amendments to NZ IFRS 16: COVID-19-Related Rent Concessions
The amendment becomes effective for annual reporting periods commencing on or after 1 June 2020.
The Group has elected to early adopt the amendment in the period.
Accordingly, COVID-19-related rent concessions received by the Group as lessee are recognised in profit or loss as a variable lease payments.
Following the amendment, the Group is not required to account for the rent concessions as lease modifications, subject to meeting certain criteria.
In particular, information about the sources of estimation uncertainty that have the most significant effect on the amounts recognised in the
consolidated financial statements are described below.
New standards impacting the Group that have been adopted in the consolidated financial statements for the year ended 31 March 2021, and which have
given rise to the changes in the Group's accounting policies are as follows:
Based on these factors, the Directors consider that the Group is a going concern and the financial statements have been prepared on that basis.
The Directors have assessed the likely impact of COVID-19 on the Group and have concluded that, for the 12 months from the date of signing the
financial statements, COVID-19 will not impact the ability of the Group to continue operating, because:
The Group measures the following item at fair value.
- Financial instruments (notes 3(i))
The preparation of the consolidated financial statements, requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible.
Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation
technique utilised are (the ‘fair value hierarchy’):
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value
measurement of the item. Transfers of items between levels are recognised in the period they occur.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
13

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies
Details of the Group’s significant accounting policies are provided below.
(a)
Subsidiaries
NameCountry of incorporation andProportion of ownership
principal place of businessinterest
Mar 2021Mar 2020Mar 2021Mar 2020
2 Cheap Cars LimitedNew Zealand100%99%0%1%
NZ Motor Finance LimitedNew Zealand100%89%0%11%
2CC International LimitedNew Zealand100%100%0%0%
2 Cheap Rental Cars LimitedNew Zealand100%100%0%0%
2 Cheap Cars (Canada) Inc.Canada0%100%0%0%
Car Plus K.K
Japan
100%100%0%0%
(b)
(iii) Foreign currency non-monetary assets and liabilities
In preparing the consolidated financial statements, all intercompany balances, transactions, unrealised gains and losses resulting from intra-group
transactions and dividends have been eliminated in full.
Foreign currency
2CC (Canada) Inc. has ceased trading and was liquidated by 31 March 2021. 2 Cheap Reantal Cars Limited has ceased trading and as at 31 March 2021
only holds a lease on a property which is utilised by the Group.
At balance date, foreign monetary assets and liabilities are translated to the functional currency at the closing rate and exchange variations are
recognised in profit or loss.
Non-Controlling interests
Ownership/voting interest
The subsidiaries of NZ Automotive Investments Limited (formerly 2CC Holdings Limited), all of which have been included in these consolidated financial
statements, are as follows:
Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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 financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences.
The Group has applied the same accounting policies and methods of computation in these financial statements as its previous annual financial
statements, except for those detailed in note 2(e) above.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity. Intra-group
transactions and balances are therefore eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases.
(i) Foreign currency transactions
(ii) Foreign currency monetary assets and liabilities
Foreign non-monetary assets and liabilities that are measured at fair value are translated to the functional currency at exchange rates at the date the
fair value was determined. Any foreign currency arising difference due to translating to functional currency are recognised in profit or loss.
Foreign non-monetary assets and liabilities that are measured based on historical costs are translated using the exchange rate at the date of the
transactions. Any foreign currency difference arising due to translating to functional currency are recognised in profit or loss.
Transactions in foreign currencies are translated to the functional currency at exchange rates at the dates of the transactions. Foreign currency
differences arising from settlement at a different exchange rate are recognised in profit or loss.
Basis of consolidation
14

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(c)Revenue
Performance obligations and timing of revenue recognition
(d)Insurance contracts
NZ IFRS 17 becomes effective for annual reporting periods commencing on or after 1 January 2023.
(iii) Sale of scrap parts
NZ IFRS 17 provides a scope exception for certain contracts that provide waivers (forgiveness) of loan balances upon the occurrence of specified events.
Rather than accounting for these waivers as insurance contracts, the scope exemptions permits the Group to elect to account for such loans entirely as
financial instruments.
Revenue is recognised at a point-in-time, with the transfer of control determined as the point purchaser takes final physical possession of the scrap
parts.
(iv) Commissions received (booking fee, sales, finance)
(i) Vehicles sold
Payment received from customers before revenue is recognised and presented as a “Contract liability” in the statement of financial position.
Revenue is recognised at a point-in-time, with the transfer of control determined as the point purchaser takes final physical possession of the vehicle.
The specific revenue recognition policies associated with the Group’s distinct performance obligations (as presented in Note 7) are detailed below.
Where the ultimate transaction price receivable is subject to variability (such as in the case of vehicle returns or clawbacks on commissions) revenue is
recognised only to the extent that it is highly probable that the revenue recognised would not be subsequently reversed.
Where a single contract contains two or more distinct performance obligations, the total transaction price of the contract is allocated between the
separate performance obligations based on their stand-alone-sales-prices, and represents the revenue to be recognised with respect to that separate
performance obligation.
Revenue is recognised on anover-time basis subject to meeting specific criteria, otherwise, revenue is recognised at apoint-in-time, being the point
that the customer obtains control of the good or service subject to various indicators.
The Group recognises revenue on a net basis as an “Agent” (rather than on a gross basis as “Principal”) when (i) it is not the party primarily responsible
for fulfilling to provide goods or services to the end customer, (ii) when it does not assume the (inventory) risk of the goods or services, and/or (iii) it
does not have discretion in setting the price payable by the end customer.
Revenue is recognised on an agent basis at apoint-in-time, with the transfer of control determined as the point the end customer enters into a signed
finance agreement with the finance provider (principal). As the uncertainty associated with any commission clawbacks is resolved, previously deferred
revenue recognised as contract liabilities is released and recognised as revenue.
(v) Interest revenue calculated using the effective interest method
Interest revenue comprises interest on loans receivable and cash and cash equivalents. Interest revenue is recognised based on the effective interest
method.
(ii) Insurance policies
Commission revenue is recognised on an agent basis at apoint-in-time, with the transfer of control determined as the point the end customer enters
into a signed life insurance policy with the insurance provider (principal). As the uncertainty associated with any commission clawbacks is resolved,
previously deferred revenue recognised as contract liabilities is released and recognised as revenue.
Revenue is measured based on the consideration to which the Group expects to be entitled to, excluding amounts collected on behalf of third parties
and net of rebates, discounts and payments to customers that are not in consideration for separate goods or services provided. This represents the fair
value of total consideration payable, including both cash and in the case of vehicles sold, any vehicle trade-ins.
Receivables resulting from revenue being recognised before the Company is able to contractually invoice for the goods or services provided is recognised
and presented as a “Contract asset” in the statement of financial position.
Revenue is recognised when the control associated with a good or service (or in aggregate thereof) representing a distinct performance obligation is
transferred from the Group to the customer.
15

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(d)Insurance contracts - continued
- Use of interest-bearing borrowings (interest rate risk); and
- Purchases in foreign currencies (foreign currency risk).
(e)Tax
(i)
(ii)
(iii)
(f)Employee benefits
(i) Short-term employee benefits
(ii) Defined contribution plans (Kiwisaver etc.)
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future
taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
temporary differences arising on the initial recognition of goodwill; and
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss,
temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that the timing of the reversal of
the temporary differences is controlled by the Group and it is probable that they will not reverse in the foreseeable future.
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of
the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Contributions to defined contribution plans are recognised in the consolidated statement of profit or loss and other comprehensive income in the year to
which they relate.
These include salaries and wages accrued up to the reporting date and annual leave earned, but not yet taken at the reporting date. The Group
recognises a liability and an expense for bonuses where they are contractually obliged or where there is a past practice that has created a constructive
obligation.
Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss, except to the extent that they relate to
items recognised directly in equity or in other comprehensive income. In such cases, the tax is also recognised directly in equity or in other
comprehensive income, respectively.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years. Current tax also includes any tax liability arising from the declaration of
dividends.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. Deferred tax is not recognised for:
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions and whether additional taxes
and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many
factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of
existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
The Group has elected to apply this scope exemption. Further details of the accounting policy relating to Loans receivable to which the scope exemption
directly effects can be found in Note 4.
16

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(g)Property, plant and equipment
(i) Recognition and measurement
(ii) Subsequent expenditure
(iii) Depreciation
Leasehold improvements4.0% - 30.0% DV
Furniture and fittings8.0% - 67.0% DV
Motor vehicles10.0% - 40.0% DV
Computer equipment20.0% - 67.0% DV
Workshop equipment10.0% - 67.0% DV
(h)Inventories
Vehicles acquired via trade-in from car sales with customers are initially measured at their trade-in date fair value.
(i)Financial instruments
The Group recognises financial instruments when it becomes a party to the contractual provisions of the instrument.
(i) Financial assets – classification and subsequent measurement
Financial instruments are initially measured at fair value. For those financial instruments that are classified as amortised cost this includes directly
attributable transaction costs. For those financial instruments classified as at fair value through profit or loss, any directly attributable transaction costs
are expensed in profit or loss as incurred. Financial liabilities are measured net of transaction costs.
These financial assets represent those held to collect SPPI, and include: Trade and other receivables; Loans receivable (those that do not include waiver
clauses); Cash and cash equivalents (including cash in hand, deposits held at call with banks).
These financial assets are subsequently measured at amortised cost using the effective interest rate method, less impairment (as detailed below).
Financial assets are classified based on whether their repayments represent solely payments of principal and interest (SPPI), and whether the instrument
is held to collect those repayments, and/or to be sold.
At Amortised cost
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Ongoing repairs and maintenance is expensed as incurred.
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the
carrying amount of the item) is recognised in profit or loss.
For plant and equipment, depreciation is based on the cost of an asset less its residual value. Significant components of individual assets that have a
useful life that is different from the remainder of those assets are depreciated separately.
Depreciation methods, useful lives and residual values are reviewed at reporting date and adjusted if appropriate.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Depreciation is recognised in profit or loss on a diminishing value basis over the estimated useful lives of each component of an item of property, plant
and equipment.
Inventories are measured at the lower of cost and net realisable value with due allowance for any damaged and obsolete stock items. The cost of
inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing
them to their existing location and condition.
The useful lives and depreciation method used for significant items of property, plant and equipment are as follows:
17

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(i)Financial instruments - continued
Impairment allowances forTrade receivables
Impairment allowances for Loans receivable
- significant financial difficulty of the borrower;
- granting to the borrower a concession for economic or contractual reasons relating to the borrower’s financial difficulty;
that the Group would not consider otherwise; or
- it is probable that the borrower will enter bankruptcy or other financial reorganisation.
Impairment allowances for
Cash and cash equivalents
Balances held with “investment grade” counterparties a significant increase in credit risk is deemed not be present.
At Fair value through profit or loss (non-derivatives)
Accordingly, these balances are classified and measured subsequently as at fair value through profit or loss.
At Fair value through profit or loss (derivatives)
(ii) Financial liabilities - classification and subsequent measurement
- a breach of contract, such as a default or being more than 90 days past due;
Repayments of these loans are recognised as reductions in the carrying amount, with fair value gains or losses at each reporting date recognised in profit
or loss.
Financial liabilities are classified as at fair value through profit or loss if it is held-for-trading, it is a derivative or it is designated as such on initial
recognition, otherwise the it is classified as At Amortised cost.
Are recognised based on the simplified approach within NZ IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. On
confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written off against the associated impairment
allowance.
Are recognised based on a forward-looking expected credit loss (“ECL”) model. The methodology used to determine the amount of the allowance is
based on whether there has been a significant increase in credit risk since initial recognition of the financial asset.
For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised (“Stage 1”).
For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised (“Stage
2”). The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
For those that are determined to be credit impaired (in default), lifetime expected credit losses along with interest income on a net basis are recognised
(“Stage 3”). The Group considers a financial asset to be in default when the financial asset is more than 90 days past due, as well as observable evidence
with respect to:
When determining whether there has been a significant increase in credit risk since initial recognition of the financial asset, and when estimating ECLs,
the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative
and quantitative information and analysis, based on the Group’s historical experience and informed credit assessment and includes forward looking
information.
The gross carrying amount of Loans receivable is written off when the Group has no reasonable expectation of recovering the balance in its entirety or a
portion thereof.
Derivatives financial assets represent “in the money” derivative contracts that are classified and measured subsequently as at fair value through profit or
loss, with fair value gains or losses at each reporting date recognised in profit or loss.
These financial assets represent Loans receivable (that include waiver clauses). In applying the scope exemption in NZ IFRS 17 Insurance Contracts to
these contracts, such that they are accounted for as financial assets in their entirety, the presence of the waiver clauses results in repayments not
representing SPPI. Loans receivable includes loans on which customers voluntarily elect to opt for additional Asset Waiver and/or Income Waiver products
which are offered by the Company.
18

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(i)Financial instruments - continued
At Amortised cost
The include:Trade and other payables; Borrowings; Lease liabilities.
These financial liabilities are subsequently measured at amortised cost using the effective interest rate method.
At Fair value through profit or loss (derivatives)
(iii) Derecognition of financial assets and financial liabilities
Financial assets
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
(iv) Impairment of non-financial assets
(j)
(k)Goods and services tax
Impairment losses are reversed when there is a change in the estimate used to determine the recoverable amount and there is an indication that the
impairment loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. All impairment
losses are reversed through profit or loss.
The estimated recoverable amount of non-financial assets is the greater of their 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 an asset that does not generate largely independent cash inflows, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets and inventories, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in
which case a new financial liability based on the modified terms is recognised at fair value.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the
carrying amount of assets and are recognised in profit or loss.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive
the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
With the exception of trade payables and receivables, all items are stated exclusive of Goods and Services Tax.
A cash-generating unit is the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of
the other assets or groups of assets.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash
assets transferred or liabilities assumed) is recognised in profit or loss.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity,
net of any tax effects.
Ordinary shares
Derivatives financial liabilities represent “out of the money” derivative contracts that are classified and measured subsequently as At Fair value through
profit or loss, with fair value gains or losses at each reporting date recognised in profit or loss.
19

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(l)Reserves
Amalgamation reserve
(m)Leases
All leases in which the Group is a lessee are accounted for by recognising aRight-of-use asset and aLease liability except for:
· Leases of low value assets; and
· Leases with a duration of 12 months or less.
(i) Initial measurement
Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of theLease liability also includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the Group if it is reasonable certain to assess that option;
Right-of-use assets are initially measured at the amount of the Lease liability, reduced for any lease incentives received, and increased for:
·
Lease payments made at or before commencement of the lease;
· Initial direct costs incurred; and
(ii) Subsequent measurement
(iii) Remeasurement
(iv) Modifications to lease agreements
Increases in scope:
· In all other cases (whether that is an extension to the lease term, or one or more additional assets being leased), the lease liability is remeasured using
the revised discount rate applicable on the modification date, with the right-of-use asset being adjusted by the same amount.
When the Group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the modification:
· If the renegotiation results in one or more additional assets being leased for an amount commensurate with the stand-alone price (i.e. market rate) for
the additional rights-of-use obtained, the modification is accounted for as a separate lease in accordance with the above policy.
Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term. Right-of-use assets are also subject to impairment assessment at reporting date.
The amalgamation reserve represents the difference between the fair value of consideration paid and the carrying amount of net assets in a business
combination where the acquirer and acquiree are controlled by the same (ultimate) party (business combination under common control).
Subsequent to initial measurement Lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made.
When the Group revises its determination of the use (or non-use) of renewal and/or termination options, the carrying amount of the lease liability is
adjusted to reflect the payments to make over the revised term, which are discounted at the revised discount rate.
The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised,
however this is discounted at the original discount rate.
In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term.
For changes in lease payments as a result of COVID-19, the carrying value of lease liabilities is revised and discounted at the original discount rate, with a
corresponding adjustment to profit or loss (variable lease payment).
· The amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset (typically make-
good provisions on buildings).
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined
by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group’s incremental
borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they
depend on an index or rate, however in such cases the initial present value determination assumes that the variable element will remain unchanged
throughout the lease term.
Payments associated with all leases of low-value assets and short-term leases of equipment and vehicles are recognised on a straight-line basis as an
expense in profit or loss.
· any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.
20

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
3.Significant accounting policies - continued
(m)Leases - continued
Decreases in scope:
The right-of-use asset is adjusted by the same amount.
(n)
Government grants
(o)Finance income and finance expenses
(p)Intangible assets
The estimated useful lives for the current and comparative periods are as follows:
Trademarks10 years
Amortisation methods and useful lives are reviewed at each reporting date and adjusted if appropriate.
(q)Cash and cash equivalents
Intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use.
Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Finance expenses comprise interest expense on borrowings.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using
the effective interest method.
Grants that compensate the Group for expenses incurred are recognised as income in profit or loss on a systematic basis in the periods in which the
associated expenses are recognised.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet.
The lease liability is then further adjusted to ensure its carrying amount reflects the amount of the renegotiated payments over the renegotiated term,
with the modified lease payments discounted at the rate applicable on the modification date.
·
Both the carrying amount of the lease liability and right-of-use asset are reduced by the same proportion to reflect the partial of full termination of the
lease with any difference recognised in profit or loss.
21

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
4.
Valuation techniqueSignificant unobservable inputs
Loans and receivables –At Amortised cost
Book value
(Level 3: disclosure only, refer Note 21)
Discounted cash flow
(Level 3: refer Note 21)
BorrowingsBook value
(Level 3: disclosure only, refer Note 20)
Derivatives -At Fair Value through profit and lossMarket to market
(Level 3: disclosure only, refer Note 25)
Note
Carrying
Amount
Fair value
(level 3)
$'000$'000
Assets
Cash and cash equivalents
138,2678,267
Trade and other receivables
152,5592,559
Loans receivable - At Amortised cost
21829876
Loans receivable - At Fair value through profit or loss
212,9982,998
Total assets
14,65314,700
Liabilities
Trade and other payables
182,0952,095
Borrowings
208,4208,420
Derivative financial liabilities
254343
Related party payable
222020
Total liabilities
10,57810,578
Note
Carrying
Amount
Fair value
$'000$'000
Assets
Cash and cash equivalents
131,7751,775
Trade and other receivables
151,0011,001
Derivative financial assets
25294294
Loans receivable - At Amortised cost
21463494
Loans receivable - At Fair value through profit or loss
211,1481,148
Total assets
4,6814,712
Liabilities
Trade and other payables
181,7631,763
Borrowings
208,0008,000
Related party payable
2220,01720,017
Total liabilities
29,78029,780
Borrowings relate to facilities that are repaid within a short timeframe.
Refer to Note 21 for fair value measurement information regardingLoans receivable.
Interest rate - 15.95% - 17.95%
Provision for default 2%
Determination of fair values
The following table shows the valuation techniques used as well as the significant unobservable inputs used.
Item
Loans and receivables –At Fair Value through
profit and loss
· Timing and amount of future
cash flows
31 March 2020
The carrying amount of cash and cash equivalents, trade and other receivables and trade and other payables has been determined to be a reasonable
approximation of the fair value of the financial instrument given the short-term nature of these financial instruments.
· Effect of eligible loan waiver
features
Interest rate - 2.75%
Year end foreign exchange rate
NZD $1: JPY 77.3677
Average foreign exchange rate
on derivative liabilities NZD $1:
JPY 76.83
Face value versus carrying amounts
The fair value of financial assets and liabilities, together with the carrying amounts shown in the Consolidated Statement of Financial Position, are as
follows.
31 March 2021
22

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
4.
IncreasesDecreasesIncreasesDecreases
Significant unobservable inputs
$'000$'000$'000$'000
Discount rate used231 (256)166 (184)
(+/- 5%)
Default provision used201 (201)145 (145)
(+/- 5%)
Waiver provision rate used157 (157)113 (113)
(+/- 5%)
5.
Through its operations, the Group is exposed to the following financial risks:
(a) Credit risk
(b) Market risk
(c) Liquidity risk
(d) Currency risk
(a) Credit risk
The Group has an Audit & Risk Committee that monitors credit risk as part of its wider duties.
Cash and cash equivalents held with financial institutions are presented in the table below:
31 March 2021Credit rating *InvestmentsTotal
$'000$'000$'000
ASB BankAA-7,959-7,959
Mitsui BankA-1308-308
8,267-8,267
31 March 2020Credit rating *InvestmentsTotal
$'000$'000$'000
ASB BankAA-1,565-1,565
Mitsui BankA-1135-135
TD Canada TrustA-1+-7575
1,700751,775
* Standard & Poor's
Interest rates on interest bearing cash and cash equivalents and investments range between 0.11% - 0.20% (2020: 0.11% - 0.20%).
Financial instruments - risk management
The Board has overall responsibility for the determination of the Group's risk management objectivies and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receives monthly reports from the Chief Financial Officer through which it reviews the
effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The Group's internal finance team also review
the risk management policies and processes and report their findings to the Audit Committee.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Groups competitiveness and
flexibility. Further details regarding these policies as they relate to the specific financial risks that the Group is exposed to are set out below:
Credit risk is the risk of financial loss to the Group if a counterparty to a financial asset fails to meet their contractual obligations. The Group's exposure
to credit risk is represented by the carrying amount of cash and cash equivalents and investments.
The Group only holds cash and cash equivalents and investments with financial institutions that are independently determined credit ratings of "A" or
higher.
Cash and cash
equivalents
Determination of fair values - continued
The sensitivity analysis of a reasonably possible change in one significant unobservable input, holding other inputs constant, of level 3 financial
instruments is provided below:
31 March 2021
Profit or loss
Other comprehensive income
(net of tax)
Cash and cash
equivalents
23

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
5.
(b) Market risk
Market risk arises from the Group's:
- Use of interest-bearing borrowings (interest rate risk); and
- Purchases in foreign currencies (foreign currency risk).
i. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
ii. Foreign exchange risk
During the current reporting period the Group has purchased used cars with purchase prices denominated in foreign currencies (YEN).
There are open forward exchange contracts of $6.4m at the end of the reporting period (2020: $6.6m).
The net foreign exchange loss recognised for the year was $0.97m (2020: $0.77m gain).
(c) Liquidity risk
The following table sets out the contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities:
As at 31 March 2021
$'000$'000$'000$'000$'000$'000
Trade and other payables2,00392---2,095
Borrowings8,000420---8,420
Lease liabilities4081,1911,3623,642-6,603
Total10,4111,7031,3623,642-17,118
As at 31 March 2020
Trade and other payables1,569194---1,763
Borrowings8,000----8,000
Lease liabilities3771,1991,5904,717-7,883
Total9,9461,3931,5904,717-17,646
(d) Currency risk
The Group is exposed to currency risk arising from Japanese Yen ('JPY'). Currency risk arises from the future transactions, recognised assets and
liabilities, and investments.
Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this the
Group maintains a monthly forecast on its future cash position to ensure it can meet financial obligations when they fall due.
The Board receives monthly financial statements which include statements of financial position, performance and cash flows, as well as
budge/forecast variance reports, to ensure it holds or will hold cash equivalents to meet its obligations.
Up to 3
months
Between 3
and 12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5 yearsTotal
The Group currently does not have any sales transactions denominated in foreign currencies, however the Group has purchases transactions
denominated in foreign currencies.
To mitigate foreign exchange risk on significant plant and equipment purchases, the Group enters into forward exchange contracts to match the
timing and amount of payments due. Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are
subsequently remeasured to their fair value at the end of each reporting period.
The Group does not apply hedge accounting to these transactions, and they are classified as held for trading for accounting purposes and are
accounted for at fair value through profit or loss. They are presented as current assets or liabilities to the extent they are expected to be settled
within 12 months after the end of the reporting period. They are considered level 2 fair value measurements being based on the present value of
future cash flows based on the forward exchange rates at the reporting date.
Financial instruments - risk management - continued
The Group is exposed to fair value interest rate risk from its fixed / variable rate borrowing and lease liabilities, with rates between 3.3% (2020:
3.3%).
24

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
6.Segment reporting
Description of segments
Reportable segments have been identified as follows:
Automotive retail
Finance
Other
Operating Segments
As at 31 March 2021
2 Cheap Cars
Limited
NZ Motor
Finance
Limited
Others
Elimination -
Inter-entity
transactions
Total
$'000$'000$'000$'000$'000
Revenue including interest65,5151,0042,158 (2,551)66,126
Cost of sale (52,656)- (1,058)2,026 (51,688)
Interest expense - finance (9) (586)89493 (13)
Operating expense (6,893) (397) (1,348)- (8,638)
Operating profit5,95721 (159) (32)5,787
Cost to list Company (418)- (278)- (696)
Dividend received--1,435 (1,435)-
Interest expense - trading (383)- (17)- (400)
Net profit before tax5,15621981 (1,467)4,691
As at 31 March 2020
2 Cheap Cars
Limited
NZ Motor
Finance
Limited
Others
Elimination -
Inter-entity
transactions
Total
$'000$'000$'000$'000$'000
Revenue including interest75,7713265,248(4,972)76,373
Cost of sale(60,390)(2)(364)1,375(59,381)
Interest expense - finance-(22)-15(7)
Operating expense(8,862)(443)(1,772)807(10,270)
Operating profit6,519(141)3,112(2,775)6,715
Dividend received-- (2,727)2,727-
Interest expense - trading(522)--- (522)
Net profit before tax5,997(141)385(48)6,193
The Group operates in a single Geographic segment, New Zealand.
7.
Revenue from contracts with customers
MAR 2021 MAR 2020
$'000$'000
Sale of cars58,10570,022
Sale of other goods-36
Fair value gain on Loans742271
Interest on bank accounts, short term deposits and investments14466
Agent commissions received
--
- Insurance agent commissions4,22858
- Interest agent commissions2,1475,213
- Other agent commissions
-649
Total revenue from contracts with customers
65,36676,316
Timing of transfer of goods and services
Point of sale income
65,22376,250
Over time income
14466
65,36676,316
Management has determined the operating segments based on the components of 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.
25

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
8.
Sundry income
MAR 2021 MAR 2020
$'000$'000
Gain on sale of property, plant and equipment-15
Government grants received
1
599-
Other
16043
Total sundry income
75958
1
During the period the Group received government grants in the form of COVID-19 related Wage subsidies from the New Zealand Government.
Revenue from motor vehicle finance operations is included in finance income detailed in Note 7.
9.Profit before income tax
Note
MAR 2021 MAR 2020
$'000$'000
Profit before income tax includes the following:
Audit fees(60)(38)
Depreciation - property, plant and equipment12
(304)
(313)
Depreciation - right-of-use assets23
(1,669)
(1,714)
Employee benefit expenses - excluding direct wages included in cost of sale
Wages and salaries2,687
2,977
KiwiSaver - including direct wages167136
10.
Finance expenses
Note
MAR 2021 MAR 2020
$'000$'000
Interest expense on financial liabilities measured at amortised cost(166)(250)
Interest expense on lease liabilities
23(234)
(279)
Other
(13)-
Finance expenses(413)(529)
11.Income tax
(a)Income tax recognised in profit or loss and other comprehensive income
MAR 2021 MAR 2020
Income tax recognised in profit or loss
$'000$'000
Current tax1,5412,015
Deferred tax(49)(51)
Total income tax expense1,4921,964
(b)Reconciliation of income tax expense
MAR 2021 MAR 2020
$'000$'000
Profit before income tax expense4,6916,193
Tax expense at the domestic tax rate (28%)1,3131,734
Permanent differences284(602)
Timing differences4595
Intergroup eliminations(115)776
Recognition of tax losses-3
Effects of tax rate in foreign jurisdictions149
Income tax expense1,5412,015
26

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
11.
Income tax - continued
(c)Deferred tax
MAR 2021 MAR 2020
$'000$'000
Balance at the beginning of the period428377
Current period movement4951
Deferred tax asset477428
Made up of:
Deferred tax asset2,2302,571
Deferred tax liability(1,753)(2,143)
Net balance as per above477428
Deferred tax assets are attributable to the following:
Inventory provision127116
Employee benefits160140
Bad debt1319
Others129
Contract liabilities6480
Lease liabilities1,8542,207
Right-of-use asset(1,753)(2,143)
477428
12.
Property, plant and equipment
Leasehold
improvements
Motor
vehicles
Furniture and
fittings
Computer
equipment
Workshop
equipment
Total
$'000$'000$'000$'000$'000$'000
Cost
Balance at 1 April 2020724319655497492,244
Additions2461164332176
Disposals(42)(31)(69)(21)(19)(182)
Balance at 31 March 2021706349602519622,238
Accumulated depreciation
Balance at 1 April 2020(172)(90)(246)(309)(9)(826)
Depreciation(52)(92)(60)(91)(9)(304)
Disposals1273318474
Effect of exchange rate-(6)---(6)
Balance at 31 March 2021(212)(181)(273)(382)(14)(1,062)
Net book value
At 31 March 2021494168329137481,176
Leasehold
improvements
Motor
vehicles
Furniture and
fittings
Computer
equipment
Workshop
equipment
Total
$'000$'000$'000$'000$'000$'000
Cost
Balance at 1 April 2019666280656346151,963
Additions90398516037411
Disposals(32)-(86)(9)(3)(130)
Balance at 31 March 2020724319655497492,244
Accumulated depreciation
Balance at 1 April 2019(116)(113)(197)(193)(2)(621)
Depreciation(58)(54)(70)(124)(7)(313)
Disposals277218-108
Effect of exchange rate------
Balance at 31 March 2020(172)(90)(246)(309)(9)(826)
Net book value
At 31 March 2020552229409188401,418
The Group has reviewed each items of property, plant and equipment and no impairment charge was recognised for the year ended 31 March 2021 (March
2020: Nil).
27

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
13.Cash and cash equivalents
Cash and cash equivalents
Held withCredit RatingCredit RatingInterestInterestMAR 2021MAR 2020
31 Mar 202131 Mar 202031 Mar 202131 Mar 2020$'000$'000
Cash at bank
ASB Bank & Mitsui Bank
AA- & A-10.11%0.11%8,2671,764
Term deposits
TD Canada Trust
A-1+0.20%0.20%-11
Total cash and cash equivalents8,2671,775
14.
Inventories
$'000$'000
Gross stock on hand
12,35015,680
Inventory provision
(458)(435)
Merchandise
-1
Total inventories
11,89215,246
15.
Trade and other receivables
MAR 2021MAR 2020
$'000$'000
Trade receivables21585
Less: Impairment allowance(17)(67)
Net trade receivables
19818
Lease deposits and bonds217216
Financial assets At Amortised cost
415234
Prepayments2,069295
GST receivable-467
Other current assets755
Total trade and other receivables
2,5591,001
Trade receivables generally have terms of 30 days and are interest free. Trade receivables of a short-term duration are not discounted.
16.
Share capital
MAR 2021MAR 2020
Number of Ordinary Shares
Opening balance
15,000,00015,000,000
Shares issued capital raise
3,509,500-
Shares issued staff incentives
45,000-
Shares issued buy back of non controlling interest
413,358-
Shares issued conversion shareholder loans to shares
14,012,144-
Share split
12,574,498-
Total issued and autorised capital
45,554,50015,000,000
MAR 2021MAR 2020
$'000$'000
Dollar value of Ordinary Shares
Opening balance
15,442 15,442
Shares issued capital raise
3,510-
Cost of capital raise
(243)-
Shares issued staff incentives
45-
Shares issued buy back of Non controlling interests
590-
Shares issued conversion shareholder loans to shares
20,000-
Share split
--
Total issued and autorised capital
39,344 15,442
All issued shares are fully paid and have no par value. The holders of ordinary shares are entitled to receive dividends as declared from time to time and
are entitled to one vote per share at meetings of the Group and rank equally with regard to the Group's residual assets.
MAR 2021MAR 2020
Cash and cash equivalents in the Interim Consolidated Statement of Financial Position comprise cash at bank and short term deposits with
an original maturity of three months or less which are subject to an insignificant risk of changes in value.
As cash and cash balances are held with counterparties with “investment grade” credit ratings, there is not deemed to be a significant increase in credit
risk associated with the Group’s Cash and cash equivalents balance. Credit rating is as per Standard & Poor.
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24
hours’ notice with no loss of interest. See note 3(p) for the group’s other accounting policies on cash and cash equivalents.
28

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
17.
Notes supporting statement of cash flows
(i) Reconciliation of the net cash flow from operating activities to profit
$'000$'000
Net Profit for the year
3,199 4,229
Adjustments for non-cash and other items:
Depreciation of property, plant and equipment
1,973 2,027
Amortisation of intangible fixed assets
- -
Loss/(gain) on sale of property, plant and equipment
85 150
MAR 2021MAR 2020
Foreign exchange
(235) (393)
Income tax expense
1,492 1,964
Finance expense
166 250
Impairment of related parties
47 -
3,528 3,998
Adjustments for movements in working capital:
(Increase)/decrease in trade and other receivables (2,181)
(1,341)
Increase/(decrease) in trade and other payables (566)
(285)
(Increase)/decrease in Inventory 3,355
(4,004)
608 (5,630)
Cash generated from operations
7,335 2,597
Income taxes paid
(1,638) (2,652)
Net cash flows from operating activities
5,697 (55)
(ii) Changes in liabilities arising from financing activities
18.
Trade and other payables
MAR 2021MAR 2020
$'000$'000
Trade payables
1,577
1,432
Financial liabilities At Amortised cost1,5771,432
Contract liabilities
228
284
GST payable
(153)
-
Deferred wage subsidy received
-
28
Other payables
443
19
Total trade and other payables
2,0951,763
Trade payables generally have terms of 30 days and are interest free. Trade payable of a short-term duration are not discounted.
19.
Employee benefit liabilities
MAR 2021MAR 2020
$'000$'000
Liability for annual leave
613
444
Wages payables
258
255
871699
20.
Borrowings
MAR 2021MAR 2020
$'000$'000
Trade finance facility8,420
8,000
The interest rates at 31 March 2021 varied from 1.98% to 2.76% (March 2020 : 2.27% to 2.88%).
The loan facilities are up for review on expire on 31 December 2021.
All covenants on facilities were met throughout the year.
29

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
21.Loans receivable
At Amortised CostAt Fair value through
Total
profit and loss
Opening balance (1 Apr 2019)
Gross carrying value
---
Less: Impairment allowance
---
Total Loans receivable
---
Movements during the period
Advances of loans to customers
5241,0181,542
Repayments of loans by customers
(87)(141)(228)
Movement in accrued interest
26-26
Fair value gain/(loss)
-271271
Closing balance (31 Mar 2020)
Gross carrying value
4631,1481,611
Less: Impairment allowance
(9)-(9)
Total Loans receivable
454 1,148 1,602
Movements during the period
Advances of loans to customers7112,3743,085
Repayments of loans by customers
(431)(1,059)(1,490)
Movement in accrued interest86-86
Fair value gain/(loss)
-535535
Closing balance (31 Mar 2021)
Gross carrying value
8292,9983,827
Less: Impairment allowance
(24)-(24)
Total Loans receivable
805 2,998 3,803
Current portion
406 1,209
1,615
Less: Impairment allowance
(24)-(24)
Non-current portion
423 1,789
2,212
Total Loans receivable
805 2,998
3,803
The effective interest rate on Loans receivable at Amortised cost are 15.95% - 17.95% (31 Mar 2020: 15.95% - 17.95%).
GrossCollectiveNet
Expectedfinanceimpairmentfinance
loss ratereceivablesprovisionreceivables
%
$'000$'000$'000
Current
2% 3,826 (24) 3,802
Past due up to 30 days
2%1
-1
Past due 30 - 60 days
---
Past due 60 - 90 days
---
in default
---
2% 3,827 (24) 3,803
Current
2% 1,611 (9) 1,602
Past due up to 30 days
2%
---
Past due 30 - 60 days
---
Past due 60 - 90 days
---
in default
---
2% 1,611 (9) 1,602
The following table details the risk profile of the Group's provision matrix for loan receivables collectively assessed for impairment.
31 March 2021
31 March 2020
Loans receivable measured at fair value (financial instruments that include waiver based clauses) are modelled at fair value and include an effective default
risk impairment rate of 2% which is factored into the inputs of the valuation.
Loans Receivable measured at amortised cost (financial assets which represent solely payments of principal and interest) have been impaired at 2%, using
the expected credit loss model. See note 3(h)i for further details.
The impairment rate used is higher than the current actual current rate of impairment, which stood at 0.11% to Mar-21 (Mar 20: Nil). Consideration was
made with reference to additional default risks that could be caused from the effects that COVID-19 could have on borrowers ability to repay debt and was
taken into account when determining the impairment rate.
30

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
21.Loans receivable - continued
20212020
$'000$'000
Movement in the impairment provisions:
Specific impairment provision
Opening balance
(9)
-
Impairment release through profit or loss
(11) (9)
Amounts written off
(4)
-
(24) (9)
22.
Related parties
Identity of related parties
Key management personnel
MAR 2021MAR 2020
$'000$'000
Short-term employee benefits1,076992
Defined contribution plans
30
29
Total key management personnel remuneration
1,1061,021
Transactions with related parties
Balance outstanding at balance date
MAR 2021MAR 2020MAR 2021MAR 2020
$'000$'000$'000$'000
E & Co Trust
---10,000
Sena Family Trust---10,000
Eugene Williams109109
Yusuke Sena108108
20172020,017
23.
Leases
The Group leases a number of properties and equipment in the jurisdiction from which it operates.
(i) Right of use Assets
MAR 2021MAR 2020
$'000$'000
Opening Balance
7,651 -
Additions
560 9,365
Less:
Depreciation
(1,669) (1,714)
Disposals
(296) -
Closing Balance
6,246 7,651
(ii) Lease Liabilities
Opening Balance
7,883 -
Additions
563 9,363
Interest
234 279
Gain on changes to leases
17 -
Less:
Disposals
(278) -
Repayments
(1,682) (1,751)
COVID Relief
(120) -
Effects of movements in exchange rates
(14) (8)
Closing Balance
6,603 7,883
Current portion
1,600
1,575
Non-current portion
5,003
6,308
Total lease liabilities
6,603 7,883
The Company has a related party relationship with its key management personnel being the Directors and Executive Officers.
The loans of $20m from E & Co Trust and Sena Family Trust were capitalised on 2 November 2020 (Note 16). 14,012,144 new shares were issued at a value
of $20,000,000
Key management personnel represent the Board of Directors, and the Senior Leadership team including the Managing Directors, Chief Executive Officer
and Chief Financial Officer.
Transactions for the period
31

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
23.
Leases - continued
(ii) Balance sheet and cash flow statement
MAR 2021MAR 2020
$'000$'000
Carrying amount of RoU asset(by asset class)
· Premises
6,246
7,651
· Equipment
--
Total cash outflow related to leases (principal repayments)
(1,682)(1,751)
Total cash outflow related to leases (interest)
(234)(279)
(i) Variable lease payments
(ii) Lease term – use of renewal and termination options
· Period: 2 – 10 years
·
Annual payments: $159,613 (based on current lease payment amounts).
(i) Amounts recognised in the financial statements
(ii) Short-term lease expense (excluding leases of 1 month or less)
24.Earnings per share
Diluted earnings per share assumes conversion of all dilutive potential ordinary shares in determining the denominator.
MAR 2021MAR 2020
Numerator$'000$'000
Profit for the year and earnings (basic and diluted EPS)3,1974,229
MAR 2021MAR 2020
DenominatorNo. sharesNo. shares
Number of shares (basic EPS)45,554,50015,000,000
Weighted average number of shares (diluted EPS)27,731,04215,000,000
EPS Basic0.070.28
EPS dilluted0.120.28
25.Derivative financial instruments
26.Dividends
MAR 2021 MAR 2020
$'000$'000
Final dividend of 7.19 cents (Last year: Nil cents) per
Ordinary share proposed and paid during the year
relating to the previous year's results 1,078-
Interim dividend of Nil cents (Last year: 6.57 cents) per
Ordinary share paid during the year-985
1,078985
These are all leases that exclude 1 month or less in duration, which management have assessed do not qualify as a lease under NZ IFRS16 and have not
been capitalised as a result.
Basic earnings per share (EPS) is calculated by dividing the profit attributable to shareholders of the Group by the weighted average number of ordinary
shares on issue during the year, excluding shares held as treasury stock.
As standard industry practice, several of the Groups property leases are subject to periodic CPI increases and/or market rent reviews. A 1% increase in
these payments would result in an additional $8,453 cash outflow compared to the current period’s cash outflow.
The Group’s property leases typically include renewal and termination options. The Group must assess whether it reasonably expects (or not) to exercise
these when determining the lease term.
As at 31 March 2021, there are 3 leases where the group has assessed it does not reasonably expect to exercise all available renewal options, resulting in
potential future lease payments not currently being included in the lease liability recognised for these leases:
Forward contracts were taken out during the year to provide cover for risks that could potentially arise from foreign currency fluctuations in the buying &
selling of inventories. If the contracts are realised at fair market value at balance date, this would result in a foreign exchange loss on derivatives of
$43,237 as at 31 March 2021 (March 2020: Foreign exchange gain of $293,550).
32

NZ AUTOMOTIVE INVESTMENTS LIMITED (FORMERLY 2CC HOLDINGS LIMITED)
Notes to and forming part of the Consolidated Financial Statements
For the Year Ended 31 March 2021
27.Imputation Credits MAR 2021 MAR 2020
$'000$'000
Imputation credits at 1 April(2,091)(376)
New Zealand Tax payments, net of refunds(1,788)(2,097)
Imputation credits attached to dividends received(559)371
Imputation credits attached to dividends paid97711
(3,461)(2,091)
Imputation Credits at 31 March available
The imputation credits are available to shareholders of the company:
- Through the company
- Through subsidiaries
28.Contingent liabilities
There are no other known contingent liabilities.
29.Subsequent events
No significant event have occurred subsequent to balance date (2020: None).
ASB Bank Limited has given a guarantee to the landlord on behalf of the Company to secure premises. The maximum guarantee is for $541,145 (March
2020: $537,442). This is secured by the arrangements detailed in note 18.
33

NZ AUTOMOTIVE INVESTMENTS LIMITED NZX LISTING PROFILE1

---

FY21 RESULTS
PRESENTATION
FULL YEAR FiNANCiAL RESULTS
TO MARCH 2021
28 MAY 2021
NZ AUTOMOTIVE INVESTMENTS
1

IMPORTANT NOTICE & DISCLAIMER
ThispresentationisgivenonbehalfofNZAutomotiveInvestmentsLimited(NZAI),(NZX:NZA).
Informationinthispresentationisforgeneralinformationpurposesonlyandisnotanofferorinvitationforsubscriptionorpurchaseof,
orarecommendationtoinvestinNZAIsecurities.
Thepresentationshouldbereadinconjunctionwith,andissubjectto,NZAI’slatestsetoffinancialstatementsfortheperiodended31
March2021,releasedontheNZX.
ThepresentationincludesforwardlookingstatementsaboutNZAIandtheenvironmentthatitoperatesin,whicharesubjectto
uncertaintiesoutsideofNZAI’scontrol.NZAI’sresultsorperformancemayvaryfromthesestatements.Alsoincludedarestatements
relatingtopastperformance,whichshouldnotberegardedasareliableindicatoroffutureperformance.
Thepresentationmaycontaininformationfromthirdpartiesbelievedtobereliable,butnorepresentationsorwarrantiesaremadeasto
theaccuracyorcompletenessofsuchinformation.
Non-GAAPandnon-IFRSmeasuresareusedasmanagementandtheBoardbelievetheyprovideusefulinformationforreadersto
assistintheunderstandingofNZAI’sfinancialperformance.Non-GAAPandnon-IFRSmeasuresdonothaveastandardisedmeaning
andshouldnotbeviewedinisolationorbeconsideredsubstitutesformeasuresreportedinaccordancewithNZIFRS.Thesemeasures
havenotbeenindependentlyauditedorreviewed.
Allinformationpresentediscurrentat31March2021,unlessotherwisestated.AllcurrencyamountsarepresentedinNZdollars,
unlessotherwisestated.
AuthorisedforreleasebytheBoardofDirectors.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
2

NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
AGENDA
1. BUSINESS HiGHLiGHTS | DAVID PAGE, CEO
2. FINANCIAL RESULTS | HAYDN MARKS, CFO
3. STRATEGY | DAVID PAGE, CEO
4. OUTLOOK
5. Q&A
3

1.BUSINESS
HiGHLiGHTS
DAViD PAGE
CHiEF EXECUTiVE OFFiCER
4

PERFORMANCE HIGHLIGHTS
$
3.8M
down 9.6%
UNDERLYiNG NPAT
1
$
7.8M
down 10.7%
UNDERLYiNG EBiTDA
1
$
66.1M
down 13.4%
REVENUE & iNCOME
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
$
6.4M
up $6.5m
UNDERLYiNG NET
OPERATiNG CASHFLOW
1
5.0CPS
SHARE
up 2.7 cps
2
DiViDEND (CPS)
11.7%
up 0.3%
UNDERLYiNG EBiTDA
MARGiN
1
1.Excludes transaction costs to list the Company.
2.Based on number of ordinary shares on issue post share restructure.
NB. Percentage change and other comparatives are based on results from the same period last year.
NZAI DELiVERS NET PROFiT ABOVE GUiDANCE
5

BUSiNESS UPDATES
BOARD & MANAGEMENT
APPOiNTMENTS
During FY21, NZAI appointed
an experienced Board, including
independent directors, and
vehicle finance expert David
Page as CEO, to provide strong
governance, lead the
company’s expansion and drive
its growth strategy. See
Appendix A for Board and
Management profiles.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
DiRECT LiSTiNG
NZAI successfully listed on the
New Zealand Stock Exchange
(NZX), going public via a direct
listing on the NZX main board.
No new securities were issued
in conjunction with the listing.
COVID-19
Like other retail businesses,
NZAI’s operations and the
broader automotive industry
were impacted by the
lockdowns relating to Covid-19
during FY21.
NZAI could not fully trade for at
least 68 days, or 19% of the
financial year.
Throughout the year, the
company has had to be agile in
responding to the disruptions
and uncertainty. Nevertheless,
the results for FY21 were
affected by the lockdowns.
OUTLOOK
Demand remains strong in April.
Growing the automotive finance
business will continue to be a
focus area for growth.
NZAI expects the automotive
retail business to re-capture lost
revenue associated with Covid-
19 disruptions.
EV/HEV demand will continue
to grow, NZAI expects to sell a
higher proportion.
6

USED CAR MARKET: COVID IMPACT
COViD19
•The2CheapCarsunderlyingbusinesshasheldup
wellandproventoberesilientinthefaceofCovid-
19.
•UsedcarimportmarketinNewZealanddown
18.0%inFY21.
•2CheapCarsrevenuedown13.4%at$65.5m
includingadditionalimpactofdealershipclosures
duringFY20.
•2CheapCarsprofitpercarup3.4%withimproved
marginsfromincreasedsalesofhighervaluecars.
•Continueddealershipoptimisationandsupply
initiativesexpectedtodeliverfuturebenefits.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
JanFebMarAprMayJunJulAugSepOctNovDec
TOTAL USED CAR REGiSTRATiONS
201920202021
Source: NZTA and Autofile.
RESiLiENT USED CAR MARKET iN FACE OF ONGOiNG SUPPLY CHAiN CONSTRAiNTS
7

COMPANY STRUCTURE
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
8

UPDATE ON SUBSiDiARiES
AUTOMOTiVE RETAiL (2 CHEAP CARS)
EV/HEVFOCUS
NZAIhasseensalesofelectricandhybridelectricvehicles(EV/HEV)almost
doubleinthelast12months;21%ofsaleswereEV/HEVinthelastquarterof
FY21,upfrom8%atthesametimeintheprioryear.FromSeptemberto
January,2CheapCarsaveragedover100EV/HEVsalespermonth.The
companyiswellplacedtoservicethegrowingdemandforthistypeofvehicle.
SeeAppendixBforEV/HEVsalesmixgrowth.
DiGiTALTRANSFORMATiON
Duringtheperiod,2CheapCarsredevelopeditswebsitetointegratewiththe
salesprocessacrossthecountry’scardealerships,andtomakeiteasierfor
customerstopurchasecarsonline.
READERSDiGESTQUALiTYAWARD
2CheapCarsisawinneroftheReader’sDigestSilverQualityServiceAwardin
theusedvehicledealershipcategory.ThisawardisvotedbyNewZealanders.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
12
$
1.59K
7.5%
Dealerships
Est market share of
used car imports
Cars sold in FY21
Average profit per car
8,207
3
3. Based on used car nationwide import data from Autofile April 2020 to March 2021.
9

UPDATE ON SUBSiDiARiES
AUTOMOTiVE FiNANCE (NZ MOTOR FiNANCE)
GROWTHiNLOANBOOK
NZAI’sautomotivefinancesubsidiaryisrelativelynewandisintendedtobea
growthareaforfuturefinancialperformance.NZMotorFinance(NZMF)grewits
loanbookapproximately138%inFY21,anincreasefrom$1.6mto$3.8masat
31March2021.Thenumberofloanstotaled461.
VERTiCALiNTEGRATiON
30%of2CheapCarscustomersrequirevehiclefinanceatpointofsalebased
onFY21.Byofferingitsowncarfinancetocustomersbuyingtheirvehiclesfrom
2CheapCars,NZMotorFinancecanoriginateitsloanswithminimalacquisition
andadministrativecosts.
CREDiTPERFORMANCE
Selective lending to NZ Motor Finance’s core audience has continued, and the
business has seen 0.11% of loans written off in FY21.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
$3.8M
30%
Current finance book
size
Percentage of automotive
retailer customers that
require finance
Number of loans
461
4.6%
Percentage of retail car
sales NZMF financed
10

HAYDN MARKS
CHiEF FiNANCiAL OFFiCER
FiNANCiAL
RESULTS
2.
11

FY21 RESULTS UPDATE
NZAIDELiVERSFY21RESULTSLiGHTLYABOVEGUiDANCEANDDECLARESFULLYEARDiViDEND
•FY21totalrevenuesandincomeof$66.1m,representinga(13.4%)declineonFY20duetoCovid-19lockdownsandeffectfrom
closing5dealerships,mainlyinFY20.
•H2FY21revenuesandincomerecoveredto$35.5mversus$37.2minH2FY20onlowersalesdealershipfootprint.
•Loanbookgrew138%,to$3.8mwithfinanceincomegrowing208%to$1.0m.
•LargelyduetotheimpactsofCovid-19,underlyingEBITDA
4
includingfinanceincomeof$7.8misdown($0.9m).
•DecreaseinunderlyingNPAT
4
to$3.8m,down(9.6%)onFY20,up$0.1monguidance.
•ConsiderablyimprovedunderlyingnetoperatingcashflowonFY20,increasingto$6.4m.
•Underlyingearningspershareof8.4cps.
•Fullyeardividenddeclaredof5.0cps.Basedon27May-21marketclosesharepriceof$1.07,thisrepresentsagrossyieldof6.5%.
.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
4. Excluding transaction costs to list the Company.
12

FY21 DRiVERS OF FY21 PERFORMANCE
REVENUE AND iNCOME WAS RESiLiENT THROUGH FY21 COViD-19 PANDEMiC
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
•NZAI’s 2 Cheap Cars retail business was impacted
by Covid-19 disruptions.
•The business was not able to fully trade for 19% (68
days) of the year.
•Despite this, revenue & income across the Group of
$66.1m was down (13.4%) against FY20.
•Revenue was impacted by an estimated $6.9m from
the closure of five dealerships -closed largely in
FY20.
•Covid-19 impacted the retail business by an
estimated $7.4m in lost revenue (includes offset of
wage subsidy of $0.6m).
•Offset by higher retail priced cars as well as growing
the NZMF loan book.
13
76.4
66.1
3.3
0.7
6.9
7.3
FY20Retail dealership
closures
Retail Covid-19
disruption
Retail increase in
ave sales price
Loan book
growth
FY21
NZD m
MOVEMENTS iN REVENUE BETWEEN FY21-FY20

FY21 CASHFLOW
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
NZAI CLOSES FY21 iN A STRONG CASH POSiTiON TO PAY FULL YEAR DiViDEND & FUND WORKiNG CAPiTAL
•Operating cashflow improved to $5.7m on the back of
holding lower inventory levels of FY20.
•Normalisedoperating cashflow $6.4m, after adding back
one-off costs to list company of $0.7m.
•Received $0.6m in Covid-19 relief wage subsidy.
•NZMF lent $3.6m to customers in FY21.
•Successfully raised net $3.3m of capital to fund loan
book growth.
14
Cash flow summaryFY21FY20Change
Net operating cash flow 5.7 (0.1)5.8
Investing cash flow (0.2) (0.6)0.5
Financing cash flow1.0 (2.7)3.7
Net cash flow
6.5 (3.4)9.9
Cash equivalents8.3 1.8 6.5

FY21 FiNANCiAL POSiTiON & FUNDiNG
NZ AUTOMOTIVE INVESTMNTS | FY21 INVESTOR PRESENTATION
NZAI iS WELL POSiTiONED FiNANCiALLY TO CARRY OUT
STRATEGY
•Loan book grew to $3.8m. Low write off rate of 0.11%.
•Inventory turnover increased to 94 days from 81 with some
work to do to improve supply processing efficiencies.
•Net capital raised of $3.3m, together with a debt facility of
$5.0m to provide funding for FY22 loan book growth.
•NZMF has $6.7m of funding available for new loans as of 31
March 21.
•Renewed 2CC short term trade finance facility of $8.0m.
8.3
6.7
0.1
1.5
Financing raisedUsed for WCUsed for LendingAvailable
NZD m
NZMF USE OF FUNDS
15
*FY20 equity normalisedto include shareholder loans of $20m that were capitalisedin FY21
Balance sheet summaryFY21FY20*
Cash equivalents8.3 1.8
Inventories
11.9 15.2
Loan receivables
3.8 1.6
Other assets10.5 10.5
Total assets
34.4 29.1
Borrowings
8.4 8.0
Other liabilities
10.4 10.9
Total liabilities
18.8 18.9
Equity
15.6 10.2

DAViD PAGE
CHiEF EXECUTiVE OFFiCER
STRATEGY3.
16

AREAS OF FOCUS AND iNVESTMENT
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
OUTCOME
A STRONGER AND MORE DiVERSiFiED BUSiNESS THAT GENERATES STRONG CASH FLOWS TO
MAXiMiSE DiViDEND YiELDS.
STRATEGiC
PRiORiTiES
LEVERAGE SUPPLY
CHAiN
GROW VERTiCAL
iNTEGRATiON
SiMPLiFY
DiSTRiBUTiON
PLATFORM
IMPROVE DiGiTAL
OFFERiNG
GROW MARKET
SHARE
OBJECTiVES
Leverage the
company’s vertical
integrated supply
chain to source
higher quality cars at
lower prices than
competitors.
Grow NZMF’s loan
book by offering
more automotive
retail customers
finance from NZMF.
Focus and drive
dealerships to
deliver value.
Leverage the
understanding of our
customer
demographics to
maximise sales.
Upgrade digital
platforms to enable
customers to
purchase and pay for
vehicles online.
Build on the
company’s current
capabilities and
focus on high growth
markets.
17
PURPOSE
HELPiNG KiWiS AFFORD GREAT CARS

OUTLOOK4.
18
DAViD PAGE
CHiEF EXECUTiVE OFFiCER

OUTLOOK
The used automotive industry has proven to be resilient throughout Covid-19, with demand remaining strong for used
vehicles across 2 Cheap Cars dealerships in April and May 2021.
Supply of vehicles from Japan remains consistent, we therefore do not expect constraints in FY22.
Forecasted demand for finance continues to be strong, we expect this to grow in the coming year.
•NZAI’s long-term strategy is to leverage its retail business to build a diversified automotive services group. NZAI’s automotivefinance business will
continue to be a focus area for growth.
•NZAIremainsfocusedonthedigitaltransformationofthebusinessanditsprocesses,aswellasgrowingandinvestinginourteam,securingrelevant
partnershipsandmaximisingoperationalefficiency.
•Wealsohavealong-termstrategywhenitcomestoelectricandhybridvehicles–thiswillbeanareaoffocustogrowmarketshare,andwewillbe
lookingtoleverageopportunitieswithelectricandhybridvehiclesovertime.2CheapCarsexpectstocontinuetosellahigherproportionofEV/HEV’s
tomeetthegrowingdemandforthistypeofvehicle.
•The2CheapCarsbusinessisexpectedtore-capturelostFY21revenueassociatedwithCovid-19disruptions.
•Thegroupwilllooktoimprovethe2CheapCarsvehiclesupplyprocessingcapacitythroughmakinginvestmentstosupportgrowthandwhenthe
timeisrightexpectstoexpandthesalesdealershipfootprint.
•NZMFwillcontinuetogrowtheloanbook,bothvertically,through2CheapCarsandwillalsolookforotheropportunitiestogrowthebook.
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
19

Q&A5.
20

APPENDIX
21

APPENDiX A | BOARD AND MANAGEMENT PROFiLES
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
KARL SMITH
CHAIRMAN
Karl is a professional independent director who has over 40 years’ extensive executive and governance experience. His current
directorships include Hamilton Jet, FortHillProperty Limited (Chair) and VetNZLimited. Karl previously held directorships in Ports of
Auckland, Lyttleton Port Company and the Crusaders Franchise Limited. Prior to becoming a professional director, Karl served as
Chief Executive Officer of Gough Group Limited and previously held senior executive positions in PDL Holdings, Progressive
Enterprises, Crane Group and Citibank N.A. Karl was appointed as Director and Chairman of NZAI in September 2020. Karl holds a
Bachelor of Commerce from the University of Canterbury, is a graduate of the Advanced Management Program at Harvard Business
School, is a Fellow of Chartered Accountants Australia and New Zealand and is a chartered member of the Institute of Directors.
EUGENE WiLLiAMS
EXECUTIVE DIRECTOR, CO-FOUNDER
Prior to founding 2CC in 2011 with David Sena, Eugene had been a successful small business owner in the education and FMCG
sectors. Eugene is responsible for sales and marketing and overall strategy of NZAI. He has been a Director of NZAI since its
inception.
DAViD (YUSUKE) SENA
EXECUTIVE DIRECTOR, CO-FOUNDER
David founded 2CC in 2011 with Eugene Williams. He is responsible for all procurement and supply chain aspects of the Company
including compliance, re-conditioning, and logistics. David was born in Japan and has been influential in developing and maintaining
relationships with vehicle suppliers. He has been a Director of NZAI since its inception.
22

APPENDiX A | BOARD AND MANAGEMENT PROFiLES
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
TRACY ROWSELL
DIRECTOR
Tracy is an advisory partner at BDO Auckland, with more than 20 years of experience in providing business advisory and taxation
services to a wide array of local and overseas clients. She has provided advice to 2CC since 2012 and has a close understanding and
knowledge of the business. Tracy has been a Director of NZAI since December 2020.
CHARLES BOLT
INDEPENDENT DIRECTOR
Charles has a background in corporate law and as a senior executive in a major listed company. Beginning his career in capital markets
regulation with the NZX, he then worked for New Zealand law firm Bell Gully before joining Fletcher Building where he most recently
held the role of Group General Counsel and Company Secretary until 2019. He is currently General Counsel for TIL Logistics Group
Limited. Charles holds an LLB from Victoria University and has completed the Senior Executive Programme at Columbia University,
New York. Charles has been a Director of NZAI since December 2020.
MiCHELE KERNAHAN
INDEPENDENT DIRECTOR
Michele is the Chief Executive Officer of New Zealand’s largest temperature-controlled transport and logistics business, Hall’s Group.
Prior to joining Hall’s Group in 2019 she held various Executive roles at Fletcher Building over 21 years, including as ChiefExecutive of
the Building Products division. She holds a Master of Business Administration and Bachelor of Arts from the University of Canterbury
and has completed the Advanced Management Programme at Harvard Business School and other Executive programmes at Wharton
Business School, Stanford School of Business and Melbourne Business School. Michele has been a Director of NZAI since February
2021.
23

APPENDiX A | BOARD AND MANAGEMENT PROFiLES
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
DAVID PAGE
CEO
David has worked across a diverse range of industries, holding a range of large-scale general management roles and corporate
governance responsibilities. David has over 25 years’ asset finance and banking experience, which includes a comprehensive
knowledge of consumer, motor vehicle and commercial asset finance. David recently spent 10 years at ASB, where he was responsible
for setting up the Asset Finance business and growing the Specialist Industries business which included Asset Finance, Franchise
Banking, Healthcare Banking, Professional Services Banking, Maori Financial Solutions, Industry Development and Strategic
Partnerships. David joined NZAI as CEO in December 2020.
HAYDN MARKS
CFO
Haydn has over 20 years of financial management and leadership experience across financial services and technology sectors, including
most recently four years as CFO with a listed technology company, Straker Translations (ASX:STG), where he took the company to IPO
on the ASX in 2018. After starting his career in advisory services in New Zealand, Haydn spent 10 years working in London, most
notably, in a commercial group finance role with banking software company Temenos (TEMN:SWX) and prior to that held finance roles at
Credit Suisse and Visa card. Haydn is a member of Chartered Accountants Australia and New Zealand and holds a Bachelor of
Business from Massey University. Haydn joined the NZAI Group in November 2020.
24

APPENDiX B | EV/HEV SALES MiX GROWS TO 21% OF TOTAL SALES
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
25
Source: NZAI
3%
4%
6%
8%
6%
8%
15%
21%
Q1Q2Q3Q4
HYBRiD / ELECTRiC SALES MiX GROWS
FY20FY21

APPENDiX C | FY21 PERFORMANCE
NZ AUTOMOTIVE INVESTMENTS | FY21 INVESTOR PRESENTATION
NZAI ACHiEVED 11.7% UNDERLYiNG EBITDA MARGiN AFTER RESPONDiNG TO COViD-19 DiSRUPTiONS
26
FY21FY20Change
Revenue and income65.4 76.3 (14.3%)
Sundry income0.8 0.1 1208.8%
Total revenue and income66.1 76.4 (13.4%)
Operating expenses58.4 67.7 (13.8%)
Underlying EBITDA incfinance income7.8 8.7 (10.7%)
Underlying EBITDA Margin11.7%11.4%0.4%
Cost to list company0.7 -
EBITDA inc. finance income7.1 8.7 (18.7%)
D&A2.0 2.0 (2.8%)
EBIT5.1 6.7 (23.5%)
Interest expense0.4 0.5 (13.8%)
NPBT4.7 6.2 (24.3%)
Tax1.5 2.0 (23.9%)
NPAT3.2 4.2 (24.4%)
Underlying NPAT3.8 4.2 (9.6%)
Underlying NPAT Margin5.8%5.5%0.2%

THANK YOU
17 LEVENE PLACE, MT WELLiNGTON, AUCKLAND 1060
WWW.NZAUTOMOTiVEiNVESTMENTS.CO.NZ | PH: +64 9 869 3330
27

---

Distribution Notice





Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer NZ Automotive Investments Limited
Financial product name/description Ordinary Shares
NZX ticker code NZA
ISIN (If unknown, check on NZX
website)
NZNZAE0001S5
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 09/06/2021
Ex-Date (one business day before the
Record Date)
08/06/2021
Payment date (and allotment date for
DRP)
17/06/2021
Total monies associated with the
distribution
1

$2,295,946.80
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency New Zealand Dollars
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.07000000
Total cash distribution
3
$0.05040000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00000000
Section 3: Imputation credits and Resident Withholding Tax
4

Is the distribution imputed Fully imputed
If fully or partially imputed, please
state imputation rate as % applied
5

28%

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
4
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

5

Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

Imputation tax credits per financial
product
$0.01960000
Resident Withholding Tax per
financial product
$0.00350000
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
David Page
Contact person for this
announcement
Haydn Marks
Contact phone number 021 2211 040
Contact email address haydnmarks@nzautomotiveinvestments.co.nz
Date of release through MAP

27/05/2021