General Capital releases 2021 Annual Report

General Capital Limited
Level 8, General Capital House,
115 Queen Street, Auckland CBD
PO Box 1314, Shortland Street,
Auckland, New Zealand. 1140.
Phone +64 9 304 0145


General Capital releases 2021 Annual Report

General Capital, the NZX listed financial services Group, has today released its Annual
Report for the year ended 31 March 2021.

A copy of the Annual Report is also available on the Company’s website at:
www.gencap.co.nz/financial-reports.

Managing Director, Mr. Brent King said, “We are pleased with the 33% growth in total
assets achieved in a year which was challenging for all due to the Covid-19 pandemic. The
Group is now well placed for profitable growth with bank deposits of $10.3m at 31 March
2021 and continued strong balance sheet growth post balance date.”

The annual shareholders meeting is now expected to be held in late August 2021. The
formal Notice of Meeting is expected to be released in late July.


For further information contact:

Mr. Brent King
Managing Director
+64 21 632 660
Brent.King@gencap.co.nz


30 June 2021

---

General Capital Limited
Annual Report
For the year ended 31 March 2021
Contents
Directors’ Pr
ofiles 2-3
General Fin
ance Directors and Executive 4
Directors’ Rep
ort 5- 10
Corporate Go
vernance Statement 11- 21
Independent Auditor
s’ Report 22-27
Consolidated
Financial Statements:
Consolidated
Statement of Comprehensive Income 28
Consolidated St
atement of Financial Position 29
Consolidated St
atement of Changes in Equity 30
Consolidated St
atement of Cash Flows 31
Notes to the Consol
idated Financial Statements 32-70
Shareholder an
d Statutory Information 71- 76
Corporate
Directory 77
1

Directors’ P rofiles


REWI HAMID BUGO B.Sc., M.Com.
Non-Executive Chairman
Rewi Hamid Bugo has been a Non-executive Director of General Capital Limited
since 13 June 2017 and was elected Chairman of the Board of Directors following
the acquisition of Corporate Holdings Limited in August 2018. Mr Bugo is a
graduate of the University of Canterbury, Christchurch, where he obtained a
Bachelor of Science in Management Science and a Master of Commerce in
Business Administration. He has business experience in several sectors including
oil and gas, property development, insurance broking and travel and tourism.

Mr Bugo sits on the Board of several private companies in Malaysia and New Zealand, is a Trustee of World
Wildlife Fund Malaysia, and is Vice Chairman of the Sarawak Chapter of the Malaysia New Zealand Chamber of
Commerce.



BRENT DOUGLAS KING, BCom, CA, CMA
Managing Director

Brent Douglas King has been the Managing Director of General Capital Li mited
and its subsidiaries since 3 August 2018. Prior to that date, Mr King was a non-
executive Director since 30 September 2011. He was also the founder and
Managing Director of the Dorchester Group of Companies for seventeen (17)
years until he resigned in 2005. He holds a number of public and private
directorships. He has more than twenty-five (25) years’ experience in financial,
investment banking, underwriting, capital raising and accounting areas and has
assisted a number of public and private companies.




HUEI MIN LIM, LLB (Hons), MNZM, CMInstD
Non-e xecutive Independent Director

Huei Min Lim (also known as Lyn Lim) is a Non-Executive Director of General
Capital Limited and has been since 21 December 2011. Lyn Lim is also on the
boards of the Auckland Regional Amenities Funding Board and Restaurant
Brands New Zealand Limited. She is also a trustee of the Asia New Zealand
Foundation.

Lyn has also served on the boards of Auckland University of Technology (AUT),
the New Zealand Shareholders' Association, Public Trust, the New Zealand
China Trade Association, the Hong Kong and New Zealand Business Association, was the Chair of the New
Zealand Chinese Youth Trust and held the positions of Trustee, Deputy Chair and Chair of Foundation North. She
has been a member of ANZ Private Bank External Advisory Board and has served as a council member of the
Auckland District Law Society Inc. In 2017, Lyn was appointed as a Member of the New Zealand Order of Merit
for her services to New Zealand-Asia relations and governance. Lyn is a Chartered Member of the New Zealand
Institute of Directors, a member of the New Zealand Law Society and a member and Vice Chair of the Women
in Business Committee of the Inter Pacific Bar Association.



2

Directors’ Profiles (Continued)



GRAEME IAIN BROWN BCom
Non-e xecutive Independent Director
Graeme Iain Brown has been a director of General Capital Limited since 20
December 2017. He is a graduate of the University of Otago where he obtained a
Bachelor of Commerce. He has over 20 years’ experience in the Malaysian
plantation industry. He has been the Managing Director of Keresa Plantations
Sdn. Bhd. since 1997. Keresa Plantations is one of just a few RSP0 certified
plantations in Sarawak. Graeme also founded Keresa Mill Sdn. Bhd. in 2005, which
has been a pioneer in the successful implementation of advanced milling
technologies for FFB processing.

Graeme has been an Executive Director of Sarawakiana Realty Sdn. Bhd., a
property company, since 1996, and Malesiana Tropicals Sdn. Bhd., a tissue culture company, since 2000 as well
as being a Director of several private companies, including Rajang Wood Sdn. Bhd., a plantation holding
company, since 1996.




SIMON JOHN M
c
ARLEY LLB(Hons)
Non-e xecutive Independent Director
Simon John McArley has been a director of General Capital Limited since 20
December 2017. He graduated from Victoria University, Wellington in 1984
with an LLB (Hons). Simon is a lawyer by training who specialises in corporate
governance and risk.

Af` ter almost 20 years in private practice with Kensington Swan, specialising in
banking and securities law, Simon took up regulatory positions with NZX as
acting Head of Regulation and the (then) Securities Commission as acting
Director Primary Markets. Simon went on to join the Serious Fraud Office (SFO) as General Manager Capital
Markets and Corporate Fraud in 2011 where he had responsibility for the successful investigation and
prosecution of finance sector fraud uncovered by the GFC. After 12 months as acting Director of the SFO, Simon
left the SFO in late 2013 and has since been consulting with government and private sector entities on
governance and risk management issues. Simon has also held governance positions with commercial and not for
profit entities. Simon is a member of the New Zealand Law Society. Simon is also a keen sailor and has extensive
coastal and blue water experience.




3

General Finance Directors and Executive

DONALD FREDERICK HATTAWAY CA, ACIS
General Finance Limited Chairman and Independent Non-Executive Director

Don is a member of the Chartered Accountants Australia and New Zealand
(CAANZ) and has practised as a Chartered Accountant in public practice since
1980. He retired as a Partner in Price Waterhouse in 1996 and has specialised in
acting for small or medium sized enterprise businesses since then often fulfilling
the role of finance director for those companies. Don was the Chairman of listed
banking software technology company Finzsoft Solutions Ltd. Don is a previous
Chairman of the Board of Directors of the Auckland Cricket Association.

He has held a previous public company directorship with Cooks Global Foods Ltd as well as directorships with a
number of private companies.

ROBERT GARRY HART LLB (Hons) Waikato University (1998), PG Dip
Management.
General Finance Limited Independent Non-Executive Director

Rob is a director of Waikato law firm Ellice Tanner Hart, who has practised law
for 16 years. In this role he has wide experience acting on finance and security
related matters involving various tiers of lenders. He also advises clients on
governance and insolvency related matters. Rob was previously a director of New
Zealand Cricket Incorporated and is currently deputy chair of Balloons Over
Waikato Trust which annually stages Waikato’s largest event.

Rob is a member of the New Zealand Sports Tribunal and has held directorships with a number of private
companies.


GREGORY JOHN PEARCE B. Com.
General Finance Limited Independent Non-Executive Director
Greg is a lending and credit specialist having held roles with large companies
(Telecom and Air New Zealand) and a senior role with Dorchester Finance Limited
being General Manager Lending and Credit from 1997 to 2008. Since that time,
he has consulted and contracted to receivers in relation to loan recoveries.







JONATHAN CLARK BCom, CA
General Capital Limited Chief Financial Officer
Jonathan is a Chartered Accountant and has been a member of the Chartered
Accountants Australia and New Zealand (CAANZ) since 2013. He has over 10 years
post -university working experience, including several years working on statutory
external audit engagements for a chartered accounting firm and other accounting
and finance roles for listed and unlisted companies.




4

Directors’ Report

The uncertainties and headwinds of the Covid-19 pandemic have resulted in an unprecedented year for the
Group, for New Zealand and worldwide. We are pleased that the Group was able to continue on its strong growth
path whilst prioritising the wellbeing of its employees and other stakeholders during one of the most difficult
social and economic times in recent history.


1.0 The Year

The lockdowns in New Zealand disrupted the flow of normal business and in particular required a significant
review of risk settings. We went into the 2020 calendar year with strong prospects but quickly pared back our
bullish approach in March 2020 due to the uncertainties surrounding the pandemic.

There was uncertainty locally and worldwide as to how bad the outcome would be and how quickly any recovery
would be. As our major subsidiary, General Finance, raises funds from the public, our focus was to reduce risk
as much as possible.

The Directors and Management reduced the risk profile of the Group in 5 ways:

• We significantly increased the cash reserves that we held. This reduced the Group’s income (deposits
at banks produce significantly lower returns than lending).
• We ensured all staff and management worked from home and that they were safe and able to
undertake their duties without undue stress.
• We took steps to ensure that our deposit investors who were in legitimate financial stress were able to
access their deposits without placing undue risk on the Group.
• We reduced the risk profile of our lending book.
• We reduced costs where possible.
The original plan for the Group, when it was listed (via the reverse listing) in 2018, was to raise sufficient capital
over time to grow the business. All shareholders were issued 7.75 cent warrants (GENWA) with an expiry date
of 31 March 2020 and 9.00 cent warrants (GENWB) with an expiry date of 30 November 2021. We had expected
that following good growth and management (proof of concept), shareholders would exercise their warrants
and the Group would receive an equity injection of between $5m and $10m by 31 March 2020. The
developments with the pandemic created challenges for the achievement of this capital inflow, and we needed
to progress with existing capital.

The plan to significantly grow in size and profitability was dependent partly on this capital raise. With the
challenges of the pandemic and the smaller capital base, we had to work with our existing resource and to
protect the Group from the potential outcomes. The New Zealand population was lucky that the restrictions
were relatively strict and that the border was well protected. This meant that whilst we suffered disruption,
there were no widescale outbreaks or significant damage to the local economy.

Alongside the pandemic were the responses by the Government and RBNZ, namely the large Covid-19 subsidies,
the significant drop in the OCR and the wider economic stimulus packages. It was hard to predict how effective
the stimulus would be and for how long. Accordingly, the Group took a cautious approach to liquidity
management and instead of growing its lending book, it held significant cash reserves at high funding costs while
market interest rates were declining. Our deposit investor terms are generally longer than our borrower terms,
which means we are safer from a liquidity perspective, but have a disadvantage if interest rates drop quickly.

Throughout the 2020 year, the Group was being told by regulators of the likelihood of negative interest rates
and instructing us to ensure that our systems were ready to deal with it. Fortunately, New Zealand has not
experienced a negative interest rate environment to date. During the early stages of the pandemic, General
Finance was in regular with its trustee and the RBNZ to talk through observations and strategies.

5

Directors’ Report (Continued)

During the 2021 financial year, the Group invested in bonds to diversify into longer term fixed interest assets as
a response to the falling interest rate environment and to increase the yield on the excess liquidity that was
being held. The Group had a reasonable return from its investment in Wellington Airport bonds but the value of
its investment in Auckland Council bonds decreased significantly due to the expected deficit of the Council
combined with the movement in the longer-term bond yields. We sold out of the bonds when the opportunity
presented itself and suffered a loss of $190,085. Economic commentators generally did not anticipate speed of
the economic recovery including the increase in long term inflation expectations, the resulting increase in long
term yields and the increases in the asset prices including property prices that have occurred over the past year.

Figure 1 below illustrates when General Finance's cash holding reached its maximum point of $24.2m at the end
of July 2020, representing approximately 50% of its total assets at that time. Since October 2020 General
Finance’s loan book has grown significantly which was funded by reducing excess cash holdings, liquidating bond
investments and further depositor funding growth. Towards the end of the March 2021 financial year, the
Group’s balance sheet was optimised for greater profitability whilst maintaining its conservative approaches
with respect to credit risk and liquidity risk.








6

Directors’ Report (Continued)
2.0 Result to 31 March 2021 for the General Capital Group
The
results for this financial year show the results of building the business.
Ke
y points for the 31 March 2021 Group financial statements are:
•Total AssetsUp 33% to $68.2m
•RevenueUp 34% to $4.9m
•Loan ReceivablesUp 54% to $53.7m
•Term DepositsUp 40% to $57.9m
•Net Profit after taxDown 37% to $82k
The key factor as described above was that during the Covid-19 lockdown the group held approximately 50%
of its assets in cash and this increased security but decreased profitability.
Th
e below graph (figure 2) illustrates the strong growth of the Group since the reverse listing transaction in
2018. It is clear that the growth has been achieved without a significant increase in capital.
31 March 2019, 31 March 2020 and 31 March 2021 figures are extracted from audited financial statements of General Capital
Limited (GCL). 31 March 2018 figures are extracted from the 31 March 2018 audited financial statements of Mykco Limited,
the listed shell company prior to the reverse listing transaction that occurred during the March 2019 financial year.
954
127
1,081
8,753
15,155
23,908
9,382
41,782
51,164
9,525
58,639
68,164
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Equity ($000)Total Liabilities ($000)Total Assets ($000)
Figure 2: Balance Sheet Growth
Mykco - 31 March 2018GCL - 31 March 2019GCL - 31 March 2020GCL - 31 March 2021
7

Directors’ Report (Continued)
3.0 Accounts
The Auditors have completed their audit work and they are satisfied on all aspects bar one. The exception is the
carrying value of the goodwill and licences allocated to our research and advisory cash generating unit (the
business of Group subsidiary, Investment Research Group Limited, “IRG”). The Auditors have concluded they
have insufficient audit evidence to support the assumptions we have made in relation to our impairment
assessment and are thus unable to determine if any adjustment to our figures is necessary. This is consistent
with the conclusion the auditors came to in the prior financial year ended 31 March 2020. The IRG business
contributed $191,879 net profit after tax to the group during the year. IRG is currently working on a mandate to
prepare a listing application which it currently expects to be completed by 30 September 2021.
4.0 General Finance Limited
General Finance is the largest operating subsidiary of the Group and has the benefit of most of the Group’s
capital and resources. As described in detail above, General Finance faced headwinds due to Covid-19 pandemic
and the associated uncertainties. Despite this, the balance sheet has continued on the strong growth trajectory
it has been on for the last three years.
12.9
13.2
13.5
12.7
14.5
17.2
20.2
25.2
31.4
40.2
47.7
47.1
51.4
61.0
64.5
9.6
10.2
10.1
9.3
11.1
12.2
15.1
20.1
25.8
34.5
41.8
41.2
45.4
55.2
58.5
3.3
3.0
3.4 3.4
3.4
5.0
5.1
5.2
5.5
5.7
5.8
5.9
6.0
5.8
6.1
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
Figure 2: Growth in General Finance Limited (Subsidiary)
Total Assets ($m)Total Liabilities ($m)Equity ($m)
8

Directors’ Report (Continued)

5.0 Investment Research Group (IRG)

IRG had a good financial year with significant advisory fees being earned in relation to loan structuring for its
clients and the business is now in the final stages of a listing application mandate. This was an excellent effort
considering the unsettled year. IRG made a return on investment of 17.4%
1
in the financial year (and contributed
to the overheads of the Group. The group expects further advisory activity later in the year.

1
Return on investment of 17.4% is calculated by dividing $191,879 (2021 net profit after tax) by $1,100,000 (the amount the
Group paid for the subsidiary in December 2017).

6.0 Governance, Administration and Compliance.

Whilst the economic and social events have been occurring, the General Capital group has had a significant
increase in compliance obligations and costs. The increase in workload demands time, planning and costs. It is
logical that regulators require more reports, systems, procedures, and compliance. We accept that. It is always
difficult to add this on top of issues such as the pandemic. We are committed to managing the market no matter
what develops, to meet all current and new regulatory obligations and to maintain excellent relationships with
the regulators.


7.0 The future

The Group has continued to grow in the 2022 financial year to date. We expect to propose additional capital
raising to shareholders at the annual meeting to foster this growth. As of 25 June 2021, the total assets of the
Group are greater than $74m and we are focused on continuing on this growth path.

It is hard to believe that the Covid-19 event is over. We have all been surprised by the speed of the spread of
infection around the world and the impact on peoples’ lives has been devastating. The events have highlighted
how intertwined the world has become. Movements across borders is now so easy that both Covid-19 and
variations of this disease will be a feature of business for a considerable period to come. We will continue to
take steps to protect the businesses whilst also focusing on growth.


The use of the internet is now the dominant factor in the world. It is good, bad, and out of control.

Our world will have its challenges. It is our job to overcome them. We simply must outperform our competitors
so that we can give our investors superior returns. People will always need to eat, sleep, and use money. We are
well placed to help with the money and the housing components.

Our staff, management and directors are focused on utilising the skills we have developed to generate better
returns for our shareholders and to continue providing good investment returns to our deposit holders whilst
managing risks effectively.

We are pleased with the way the Group has worked through last year’s challenges. We could have been more
aggressive, but we did not know when it would end. We are now well positioned to continue to grow into a very
profitable business.



9

Directors’ Report (Continued)

8.0 Thanks

The Board wishes to thank the management, staff, contractors and subsidiary directors of the Group for the
excellent efforts and performance during a particularly challenging year. We know that the Group’s result would
have been far better without the Covid-19 impact.

We also understand that shareholders have had to wait for a return on their investment. We thank you for your
patient support and we are working hard to reward you. We look forward to seeing shareholders at the General
Meeting this year.







Rewi Hamid Bugo Brent Douglas King
Chairman Managing Director



10

Corporate Governance Statement

The Board of Directors (“Board”) and management of General Capital Limited (“the Company”) are committed
to ensuring that the Company adheres to best practice governance principles and maintains the highest ethical
standards. The Board regularly reviews and assesses the Company’s governance structures to ensure that they
are consistent, both in form and in substance, with best practice.

Key governance documents that have been adopted by the Company are published on the Company’s website
at www.gencap.co.nz/corporate-governance
.

The Board framework and governance practices for the year ended 31 March 2021 were compliant with the
requirements of the NZX rules.

The NZX Corporate Governance Code can be found on the NZX Website at:
www.nzx.com/regulation/nzx-rules-
guidance/corporate-governance-code.

The Governance Code contains eight (8) principles and various recommendations for each principle . The Board
has reported on the Company’s compliance with each of the recommendations which are included below.


Principal 1 – Code of Ethical Behaviour
"Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation."


RECOMMENDATION 1.1
The board should document minimum standards of ethical behaviour to which the issuer’s directors and
employees are expected to adhere (a code of ethics).

The code of ethics and where to find it should be communicated to the issuer’s employees. Training should
be provided regularly. The standards may be contained in a single policy document or more than one policy.

The code of ethics should outline internal reporting procedures for any breach of ethics, and describe the
issuer’s expectations about behaviour, namely that every director and employee:
(a) acts honestly and with personal integrity in all actions;
(b) declares conflicts of interest and proactively advises of any potential conflicts;
(c) undertakes proper receipt and use of corporate information, assets and property;
(d) in the case of directors, gives proper attention to the matters before them;
(e) acts honestly and in the best interests of the issuer, shareholders and stakeholders and as required by law;
(f) adheres to any procedures around giving and receiving gifts (for example, where gifts are given that are of
value in order to influence employees and directors, such gifts should not be accepted);
(g) adheres to any procedures about whistle blowing (for example, where actions of a whistle blower have
complied with the issuer’s procedures, an issuer should protect and support them, whether or not action is
taken); and
(h) manages breaches of the code

Compliance with recommendation during the year ended 31 March 2021:
The Board has a strong belief that ethical behaviour is paramount to good corporate governance and underpins
the reputation of the Company. As such, the ethical principles that were applied by the Board (and required of
Management and employees) w ere in line with the recommendations above.

The Group’s code of ethics complies with the recommendation in full. Employees are required to read the code
of ethics, and periodic training is provided. The code of ethics has been published on the Company’s website at
www.gencap.co.nz/corporate-governance
.


11

Corporate Governance Statement (Continued)

RECOMMENDATION 1.2
An issuer should have a financial product dealing policy which extends to employees and directors.

Compliance with recommendation during the year ended 31 March 2021:
The Board had a financial products trading policy in place for employees and directors during the financial year.
This policy requires prior approval of all transactions in General Capital Limited quoted securities and other
restricted securities, specifies blackout periods for trading and defines prohibited trading.

The financial products trading policy is included in the Company’s Board Policies and Procedures document
which is published on the Company’s website at www.gencap.co.nz/corporate-governance
.


PRINCIPLE 2 – Board C omposition & Performance
“To ensure an effective board, there should be a balance of independence, skills, knowledge, experience and
perspectives.”

Board Composition
Board members who have a wide range of business, technical and financial background lead the Company. The
Board is responsible and accountable to shareholders and other stakeholders for the Company’s performance
and its compliance with applicable laws and standards.

The Board of Directors currently comprises five (5) directors, four (4) of which are Non -e xecutive Directors (Rewi
Hamid Bugo (Chairman), Huei Min Lim, Graeme Iain Brown and Simon John McArley) and one (1) Executive
Director (Brent Douglas King).

Huei Min Lim, Graeme Iain Brown and Simon John McArley are independent directors of the Company.

By virtue of being a significant product holder, Rewi Hamid Bugo has not been identified as an independent
director of the Company.

Refer to the Directors’ Profiles section of this Annual Report for further details.

Board Meetings

The Company’s Board meetings are conducted in accordance with proper process. This enables the Board to
peruse any board papers and review any issues to be deliberated at the Board meeting to enable Directors to
make informed decisions.

A total of 5 (five) Board Meetings were held during the financial year under review. Board attendance has been
recorded as follows:
Board Members Board Audit Committee
Rewi Hamid Bugo (Chairman) 5 5
Brent Douglas King 5 N/A
Huei Min Lim 5 5
Graeme Iain Brown 5 5
Simon John McArley 5 5

The Board also met whenever necessary to deal with specific matters needing attention between scheduled
meetings.

12

Corporate Governance Statement (Continued)


The gender balance of the Group’s Directors and officers was as follows:


as at 31 March 2021 as at 31 March 2020

Directors Officers* Directors Officers*
Female 1 0 1 0
Male 4 1 4 1
Total 5 1 5 1
*Officers excludes any directors of the Company.

RECOMMENDATION 2.1
The board of an issuer should operate under a written charter which sets out the roles and responsibilities of
the board. The board charter should clearly distinguish and disclose the respective roles and responsibilities
of the board and management.

Compliance with recommendation during the year ended 31 March 2021:

The Board adopted an updated Board Charter during the year which sets out the roles and responsibilities of the
Board and Management and complies with the recommendation in full.

The Board Charter has been published on the Company’s website at www.gencap.co.nz/corporate-governance
.

RECOMMENDATION 2.2
Every issuer should have a procedure for the nomination and appointment of directors to the board.

Compliance with recommendation during the year ended 31 March 2021:

There were no new directors appointed during the year. The Board follows the requirements of the NZX Rules
as well as the commentary in the NZX Corporate Governance Code when selecting new directors.

The Company’s procedure for nomination and appointment of directors is included in the Company’s Board
Policies and Procedures document which is published on the Company’s website at
www.gencap.co.nz/corporate-governance
.

RECOMMENDATION 2.3
An issuer should enter into written agreements with each newly appointed director establishing the terms of
their appointment.

Compliance with recommendation during the year ended 31 March 2021:

There were no new directors appointed during the year. The Company intends to comply with this requirement
for future newly appointed directors.

The Company’s procedure for nomination and appointment of directors which sets out the form of agreement
to be used is included in the Company’s Board Policies and Procedures document which is published on the
Company’s website at www.gencap.co.nz/corporate-governance
.


13

Corporate Governance Statement (Continued)

RECOMMENDATION 2.4
Every issuer should disclose information about each director in its annual report or on its website, including a
profile of experience, length of service, independence and ownership interests and director attendance at
board meetings.

Compliance with recommendation during the year ended 31 March 2021:
All of the information detailed in the recommendation is included in the Annual Report and can be found in the
Directors Profiles, Corporate Governance Statement and Shareholder and Statutory Information sections.

RECOMMENDATION 2.5
An issuer should have a written diversity policy which includes requirements for the board or a relevant
committee of the board to set measurable objectives for achieving diversity (which, at a minimum, should
address gender diversity) and to assess annually both the objectives and the entity’s progress in achieving
them. The issuer should disclose the policy or a summary of it.

Compliance with recommendation during the year ended 31 March 2021:
The Board
recognises the wide-ranging benefits that diversity brings to an organisation.

The gender composition of the Company’s directors and officers is included above.

The Company’s diversity policy is included in the Company’s Board Policies and Procedures document which is
published on the Company’s website at www.gencap.co.nz/corporate-governance
.

RECOMMENDATION 2.6
Directors should undertake appropriate training to remain current on how to best perform their duties as
directors of an issuer.

Compliance with recommendation during the year ended 31 March 2021:
The Company’s Board understand their obligations as Directors of a publicly listed Company and undertake
training when necessary to remain current on how to best perform their duties.

RECOMMENDATION 2.7
The board should have a procedure to regularly assess director, board and committee performance.

Compliance with recommendation during the year ended 31 March 2021:
Director and Board performance is considered crucial to the success of the Company and its subsidiaries. The
Board regularly reviews its performance and the performance of its members. This includes an assessment of
whether the composition of the board is adequate and whether any training is needed for Directors.

The Company’s procedure for nomination and appointment of directors is included in the Company’s Board
Policies and Procedures document which is published on the Company’s website at
www.gencap.co.nz/corporate-governance
.



14

Corporate Governance Statement (Continued)

RECOMMENDATION 2.8
A majority of the board should be independent directors.

Compliance with recommendation during the year ended 31 March 2021:
As detailed in the Board Composition section above, 3 of the 5 Directors have been identified as Independent
Directors of the Company. Of the 2 remaining directors, 1 is a Non-executive Director.

The Board consider that the current composition of the Board during the year was satisfactory to make decisions
in the best interests of the Entity and its shareholders. In addition to this, non -executive directors periodically
confer without executive directors or other senior executives present. Any directors who are conflicted on
certain matters are unable to participate in the decisions made in relation to those matters.

RECOMMENDATION 2.9
An issuer should have an independent chair of the board. If the chair is not independent, the chair and CEO
should be different people.

Compliance with recommendation during the year ended 31 March 2021:
Rewi Hamid Bugo is the Chair of the Company and Brent Douglas King is the Managing Director (CEO). By virtue
of being a significant product holder, Mr Bugo is not an independent director of the Company.


Principle 3 – Board Committees
“The board should use committees where this will enhance its effectiveness in key areas, while still retaining
board responsibility.”

Recommendation 3.1
An issuer’s audit committee should operate under a written charter. Membership on the audit committee
should be majority independent and comprise solely of non-executive directors of the issuer. The chair of the
audit committee should be an independent director and not the chair of the board.

Compliance with recommendation during the year ended 31 March 2021:
General Capital Limited has an Audiit Committee w hich comprises the following non -executive directors:

Simon John McArley (Chair of Audit Committee, Independent Director)
Huei Min Lim (Independent Director)
Graeme Iain Brown (Independent Director)
Rewi Hamid Bugo (Non-executive Director)

The audit committee responsibilities include the following:
1. Ensuring that processes are in place and monitoring those processes so that the board is properly and
regularly informed and updated on corporate financial matters;
2. Recommending the appointment and removal of the independent auditor;
3. Meeting regularly to monitor and review the independent and internal auditing practices;
4. Having direct communication with and unrestricted access to the independent auditor and any internal
auditors or accountants;
5. Reviewing the financial reports and advising all Directors whether they comply with the appropriate
laws and regulations; and
6. Ensuring that the Key Audit Partner is changed at least every 5 years.
The Audit, Finance and Risk Committee now comprises a majority of independent directors and no executive
directors. Simon John McArley has a financial background in accordance with the requirements of NZX Listing
Rule 2.13.1.
15

Corporate Governance Statement (Continued)

The Company’s Audit Committee Charter has been published on the Company’s website at
www.gencap.co.nz/corporate-governance
.

Recommendation 3.2
Employees should only attend audit committee meetings at the invitation of the audit committee.

Compliance with recommendation during the year ended 31 March 2021:
Non -committee members including employees only attend audit committee meetings at the invitation of the
audit committee.

Recommendation 3.3
An issuer should have a remuneration committee which operates under a written charter (unless this is carried
out by the whole board). At least a majority of the remuneration committee should be independent directors.
Management should only attend remuneration committee meetings at the invitation of the remuneration
committee.

Compliance with recommendation during the year ended 31 March 2021:
Remuneration committee responsibilities were dealt with by the full Board during the year ended 31 March
2021. Employees only attended meetings at the invitation of the Board.

The responsibilities included recommending remuneration packages for directors for consideration by
shareholders and to approve Managing Director and senior management remuneration. Any directors who
were conflicted on certain matters were unable to participate in the decisions made in relation to those
matters.

The Company’s remuneration policy is included in the Company’s Board Policies and Procedures document
which is published on the Company’s website at www.gencap.co.nz/corporate-governance
.

Recommendation 3.4
An issuer should establish a nomination committee to recommend director appointments to the board (unless
this is carried out by the whole board), which should operate under a written charter. At least a majority of
the nomination committee should be independent directors.

Compliance with recommendation during the year ended 31 March 2021:
Nomination committee responsibilities were dealt with by the full Board during the year ended 31 March 2021 .

The Company’s procedure for nomination and appointment of directors is included in the Company’s Board
Policies and Procedures document which is published on the Company’s website at
www.gencap.co.nz/corporate-governance
.

Recommendation 3.5
An issuer should consider whether it is appropriate to have any other board committees as standing board
committees. All committees should operate under written charters. An issuer should identify the members of
each of its committees, and periodically report member attendance.

Compliance with recommendation during the year ended 31 March 2021:
The Board has not considered it necessary to have any other board committees during the year.

16

Corporate Governance Statement (Continued)


Recommendation 3.6
The board should establish appropriate protocols that set out the procedure to be followed if there is a
takeover offer for the issuer including any communication between insiders and the bidder. It should disclose
the scope of independent advisory reports to shareholders. These protocols should include the option of
establishing an independent takeover committee, and the likely composition and implementation of an
independent takeover committee.

Compliance with recommendation during the year ended 31 March 2021:
In the event of a takeover bid, the Board would determine the appropriate actions to take including the scope
of independent advisory reports to shareholders, and whether an independent takeover committee should be
established in accordance with the takeover response procedure.

The Company’s takeover response procedure is included in the Company’s Board Policies and Procedures
document which is published on the Company’s website at www.gencap.co.nz/corporate-governance
.


PRINCIPLE 4 – Reporting & Disclosure
“The board should demand integrity in financial and non-financial reporting, and in the timeliness and balance
of corporate disclosures.”

Recommendation 4.1
An issuer’s board should have a written continuous disclosure policy.

Compliance with recommendation during the year ended 31 March 2021:
The Company’s Board is committed to keeping investors and the market informed of all material information
about the Company and its performance in line with the NZX listing rules and has done so throughout the period.

The Company’s continuous disclosure policy is included in the Company’s Board Policies and Procedures
document which is published on the Company’s website at www.gencap.co.nz/corporate-governance
.

Recommendation 4.2
An issuer should make its code of ethics, board and committee charters and the policies recommended in the
NZX Code, together with any other key governance documents, available on its website.

Compliance with recommendation during the year ended 31 March 2021:
Key governance documents that have been adopted by the Company are published on the Company’s website
at www.gencap.co.nz/corporate-governance
.

Recommendation 4.3
Financial reporting should be balanced, clear and objective. An issuer should provide non-financial disclosure
at least annually, including considering material exposure to environmental, economic and social
sustainability factors and practices. It should how operational or non-financial targets are measured. Non-
financial reporting should be informative, include forward looking assessments, and align with key strategies
and metrics monitored by the board.

Compliance with recommendation during the year ended 31 March 2021:

Financial Reporting
The Board is responsible for ensuring that the financial statements give a true and fair view of the financial
position of the Group and have been prepared using appropriate accounting policies, consistently applied and
supported by reasonable judgements and estimates and for ensuring all relevant financial reporting and
accounting standards have been followed.
17

Corporate Governance Statement (Continued)


For the financial year ended 31 March 2021, the Directors believe that proper accounting records have been
kept which enable, with reasonable accuracy, the determination of the financial position of the Company and
the Group and facilitate compliance of the financial statements with the Financial Reporting Act 1993.

The Managing Director and Chief Financial Officer have confirmed in writing to the Board that the Company’s
financial reports present a true and fair view in all material aspects.

Non-financial reporting
Due to its current size, the Company is in the early stages of considering how and to what extent it should report
on non-financial information such as environmental, social and governance matters (ESG). The Company does
not currently have a formal ESG reporting framework, however this is being considered by the Board with the
intention that the Company will report on these non-financial matters in the future.


PRINCIPLE 5 – Remuneration
“The remuneration of directors and executives should be transparent, fair and reasonable.”

Recommendation 5.1
An issuer should recommend director remuneration packages to shareholders for approval in a transparent
manner. Actual director remuneration should be clearly disclosed in the issuer’s annual report.

Compliance with recommendation during the year ended 31 March 2021:
Shareholders approved a total Directors’ remuneration fee pool of $300,000 per annum in the Special Meeting
of shareholders on 31 July 2018. Director remuneration is disclosed in the Shareholder and Statutory Information
section of the Annual Report.

Recommendation 5.2
An issuer should have a remuneration policy for remuneration of directors and officers, which outlines the
relative weightings of remuneration components and relevant performance criteria.

Compliance with recommendation during the year ended 31 March 2021:
Remuneration of directors has been determined in line with the process noted under recommendation 3.3
above and with the Company’s remuneration policy.

The Company’s remuneration policy is included in the Company’s Board Policies and Procedures document
which is published on the Company’s website at www.gencap.co.nz/corporate-governance
.

Recommendation 5.3

An issuer should disclose the remuneration arrangements in place for the CEO in its annual report. This should
include disclosure of the base salary, short term incentives and long-term incentives and the performance
criteria used to determine performance-based payments.

Compliance with recommendation during the year ended 31 March 2021:
Information in relation to the remuneration arrangements in place for Brent King (Managing Director) is included
in the Shareholder and Statutory Information section of the Annual Report.


18

Corporate Governance Statement (Continued)


PRINCIPLE 6 – Risk Management
“Directors should have a sound understanding of the material risks faced by the issuer and how to manage
them. The Board should regularly verify that the issuer has appropriate processes that identify and manage
potential and material risks.”

Recommendation 6.1

An issuer should have a risk management framework for its business and the issuer’s board should receive
and review regular reports. An issuer should report the material risks facing the business and how these are
being managed.

Compliance with recommendation during the year ended 31 March 2021:
The Company and its subsidiaries are committed to proactively managing risk and this has been the responsibility
of the entire Board with the assistance of the audit committee during the period. The Board delegates day to
day management of risks to the Managing Director. The executive team and senior management are required
to regularly identify the major risks affecting the business and develop structures, practices and processes to
manage and monitor these risks.

The Board is satisfied that the Group has in place a risk management process to effectively identify, manage and
monitor the Group’s principal risks. The Group maintains insurance policies that it considers adequate to meet
its insurable risks.

The Company’s Risk Management and Compliance framework is currently being reviewed and updated.

Recommendation 6.2

An issuer should disclose how it manages its health and safety risks and should report on its health and safety
risks, performance and management.

Compliance with recommendation during the year ended 31 March 2021:
The Group operates with a small number of employees in a relatively low health and safety risk office
environment. Despite this, the Board recognises that effective management of health and safety is essential for
the operation of a successful business, and endeavours to prevent harm and promote wellbeing for employees,
contractors and customers.

The Board is responsible for ensuring that the systems used to identify and manage health and safety risks are
fit for purpose, being effectively implemented, regularly reviewed and continuously improved. The Group has a
Health and Safety Policy in place. All new incidents, near misses, or hazards identified are reported to the Board.


PRINCIPLE 7 – Auditors
“The board should ensure the quality and independence of the external audit process.”

Recommendation 7.1
The board should establish a framework for the issuer’s relationship with its external auditors. This should
include procedures:
(a) for sustaining communication with the issuer’s external auditors;
(b) to ensure that the ability of the external auditors to carry out their statutory audit role is not impaired or
could be reasonably be perceived to be impaired;
(c) to address what, if any, services (whether by type or level) other than their statutory audit roles may be
provided by the auditors to the issuer; and
(d) to provide for the monitoring and approval by the issuer’s audit committee of any service provided by the
external auditors to the issuer other than in their statutory audit role.


19

Corporate Governance Statement (Continued)


Compliance with recommendation during the year ended 31 March 2021:
In accordance with the Company’s Board Charter and Audit Committee Charter, the Board in conjunction with
the Audit Committee were responsible for oversight of and communication with the external auditor and
reviewed the quality and cost of the audit undertaken by the Company’s external auditor. The Board in
conjunction with the Audit Committee also assesses the auditor’s independence on an annual basis.

For the financial year ended 31 March 2021, Baker Tilly Staples Rodway was the external auditor for the
Company. Baker Tilly Staples Rodway were automatically re-appointed under the Companies Act 1993 at the
Company’s 2019 annual meeting. The statutory audit services are fully separated from non-audit services to
ensure that appropriate independence is maintained. The amount of fees paid to Baker Tilly Staples Rodway for
audit and other services is identified in note 7.2 in the notes to the consolidated financial statements.

Baker Tilly Staples Rodway has provided the Board with written confirmation that, in their view, they were able
to operate independently during the year.

Recommendation 7.2
The external auditor should attend the issuer’s Annual Meeting to answer questions from shareholders in
relation to the audit.

Compliance with recommendation during the year ended 31 March 2021:
Baker Tilly Staples Rodway is invited to attend the annual meeting, and the lead audit partner is available to
answer questions from shareholders at that meeting. Baker Tilly Staples Rodway attended the 2020 annual
meeting.

Recommendation 7.3
Internal audit functions should be disclosed.

Compliance with recommendation during the year ended 31 March 2021:
The Company and its subsidiaries have internal controls in place including monitoring and checking that internal
controls are operating effectively. The Company d id not have a dedicated internal auditor role during the period.


Principle 8 – Shareholder Rights & Relations
“The board should respect the rights of shareholders and foster constructive relationships with shareholders
that encourage them to engage with the issuer.”

Recommendation 8.1
An issuer should have a website where investors and interested shareholders can access financial and
operational information and key corporate governance information about the issuer.

Compliance with recommendation during the year ended 31 March 2021:
Financial statements, NZX announcements and Directors’ profiles are included on the website at
www.gencap.co.nz
. Key governance documents that have been adopted by the Company are published on the
Company’s website at www.gencap.co.nz/corporate-governance.

Recommendation 8.2
An issuer should allow investors the ability to easily communicate with the issuer, including providing the
option to receive communications from the issuer electronically.

Compliance with recommendation during the year ended 31 March 2021:
All shareholders are given the option to elect to receive electronic communications from the Company.

20

Corporate Governance Statement (Continued)


Recommendation 8.3
Quoted equity security holders should have the right to vote on major decisions which may change the nature
of the company in which they are invested in.

Compliance with recommendation during the year ended 31 March 2021:
Shareholders have been given the right to vote on all major decisions in line with the NZX Rules during the year
ended 31 March 2021.

Recommendation 8.4
If seeking additional equity capital, issuers of quoted equity securities should offer further equity security
holders of the same class on a pro rata basis and on no less favourable terms, before further equity securities
are offered to other investors.

Compliance with recommendation during the year ended 31 March 2021:
During the year ended 31 March 2021, the Company:
a. Issued ordinary shares for GENWA warrants that were exercised by Shareholders in accordance with
the terms of the warrants.
b. Issued 1,216,136 ordinary shares at 6.25 cents per share for proceeds totalling $76,009 on 31 March
2021 under a placement to a wholesale investor. The placement was done to expand the Company’s
working capital and the directors of the Company determined that the limited scale of the capital raising
did not justify the cost of a wider offer to all shareholders at that time.
No other capital raising activities were undertaken during the year.

The directors of the Company expect to propose additional capital raising in the coming year to support the
capital requirements of General Finance Limited and to expand the working capital of the Company. The
proposal is expected to be included with the notice of the 2021 annual shareholders meeting. The directors of
the Company currently consider that the likely outcome of and the cost of extending this offer to all shareholders
is unlikely to be in the best interest of the Company or its shareholders.

Recommendation 8.5
The board should ensure that the notices of annual or special meetings of quoted equity security holders is
posted on the issuer’s website as soon as possible and at least 20 working days prior to the meeting.

Compliance with recommendation during the year ended 31 March 2021:
The Board encourages shareholder participation in meetings and understands that shareholders need sufficient
time to consider information prior to meetings. The notice of the 2020 annual meeting was posted on the
Company’s website more than 20 working days prior to the meeting.
21

22

Level 9, 45 Queen Street, Auckland 1010
PO Box 3899, Auckland 1140
New Zealand
T: +64 9 309 0463
F: +64 9 309 4544
E:
auckland@bakertillysr.nz
W: www.bakertillysr.nz

INDEPENDENT AUDITOR’S REPORT
To the Shareholders of General Capital Limited
Report on the Audit of the Consolidated Financial Statements

Qualified Opinion
We have audited the consolidated financial statements of General Capital Limited and its subsidiaries ('the
Group') on pages 28 to 70, which comprise the consolidated statement of financial position as at 31 March
2021, and the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including significant accounting policies.

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our
report, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at 31 March 2021, and its consolidated financial performance
and its consolidated cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards ('NZ IFRS') and International Financial Reporting Standards ('IFRS').


Our report is made solely to the Shareholders of the Group. Our audit work has been undertaken so that we
might state to the Shareholders of the Group those matters 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 Shareholders of the Group as a body, for our audit work, for our report
or for the opinions we have formed.

Basis for Qualified Opinion
The Group’s goodwill and other indefinite life intangible assets allocated to its research and advisory cash-
generating unit (‘the research and advisory CGU’), as disclosed in Note 14 of these consolidated financial
statements,
is carried at $1.06m (2020: $1.06m) on the Group’s consolidated statement of financial position
as at 31 March 2020 and 31 March 2021. We were unable to obtain sufficient appropriate audit evidence to
support critical assumptions and estimates used to determine the recoverable amount of the goodwill and
other indefinite life intangible assets allocated to the research and advisory CGU, specifically the achievability
of forecast future revenue growth, the associated cash flows and the discount rate applied. Consequently, we
were unable to determine whether any adjustments to these amounts were necessary.

We conducted our audit in accordance with International Standards on Auditing (New Zealand) ('ISAs (NZ)').
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordance
with Professional and Ethical Standard 1 (Revised) 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’ Code of Ethics for

23

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 qualified opinion.

Other than in our capacity as auditor, our firm carries out other assignments for General Capital Limited and its
subsidiaries in the area of taxation compliance services. The provision of these other services has not impaired
our independence.

Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current year. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified
Opinion section, we have determined the matters described below to be the key audit matters to be
communicated in our report.

Key audit matter How our audit addressed the key audit matter
Valuation of loan receivables
As disclosed in Note 11 of the
Group’s financial statements, the
Group has loan receivable assets
of $54.5m consisting of short and
long-term loans secured by
residential (including apartments)
and commercial property. Loan
receivable assets were significant
to our audit due to the size of the
assets and the subjectivity,
complexity and uncertainty
inherent in the timing of the
recognition of impairment in
respect of loan receivables and the
amount of that impairment.
Management has prepared
impairment models to complete its
assessment of impairment for the
Group’s loan receivables as at 31
March 2021.
This assessment involves complex
and subjective estimation and
judgement by Management on
credit risk and the future cash
flows of the loan receivables.
Our audit procedures among others included:
• Understanding and evaluating the Group’s internal controls relevant to the
accounting estimates used to determine the recoverable value of the
Group’s finance receivables;
• Evaluating the design and operating effectiveness of the key controls over
loan receivable origination, ongoing administration and impairment model
data and calculations;
• Selecting a representative sample of loan receivables and agreeing these
loan receivables to the loan agreement, client acceptance documents,
mortgage documents, and valuations performed on acceptance;
• Challenging and evaluating Management’s logic, key assumptions, and
calculation of its expected credit losses models against the requirements
specified in NZ IFRS 9 for recognising expected credit losses on financial
assets;
• For individually assessed loan receivables, examining those finance
receivables and forming our own judgements as to whether the expected
credit losses provision recognised by Management was appropriate
(including the consideration of the impact of the COVID-19 pandemic on the
expected credit losses provision);
• Testing the key inputs and the mathematical accuracy of the calculations of
the loan to value ratio analysis used to individually assess the recoverability
of loan receivables. We have specifically challenged the valuation of the
underlying security and performed sensitivity analyses for reasonably
possible changes to the key inputs (including the consideration of the
impact of the COVID-19 pandemic on the valuation of the underlying
security);
• For the 12 months expected credit loss provision, challenging and
evaluating the logic within Management’s model and key assumptions used
with our own experience (including the consideration of the impact of the
COVID-19 pandemic on key assumptions used). Also, testing key inputs
used in the collective impairment models and the mathematical accuracy of
the calculations within the model;

24

Key audit matter How our audit addressed the key audit matter
• Evaluating the changes made to the expected credit losses impairment
model to capture the effect of the changing economic environment at 31
March 2021 compared to the economic environment at the date when the
historical data used to determine the expected credit losses was collected;
• Evaluating the selection of valuation methods, inputs and assumptions with
a view to identifying Management bias;
and
• Evaluating the related disclosures (including the accounting policies and
accounting estimates) about loan receivable assets, and the risks attached
to them which are included in the Group’s consolidated financial
statements.
Impairment assessment of
goodwill and other indefinite life
intangible assets
As disclosed in Note 14 of the
Group’s consolidated financial
statements, the Group has
goodwill of $2.35m and indefinite
life intangible assets of $0.3m,
allocated across the two cash-
generated units (‘CGU’s’). Goodwill
and other indefinite intangible
assets were significant to our audit
due to the size of the assets and
the subjectivity, complexity and
uncertainty inherent in the
measurement of the recoverable
amount of these CGU’s for the
purpose of the required annual
impairment test. The
measurement of a CGU’s
recoverable amount includes the
assessment and calculation of its
‘value-in-use’.
Management has completed the
annual impairment test for each of
the two CGU’s as at 31 March
2021.
This annual impairment test
involves complex and subjective
estimation and judgement by
Management on the future
performance of the CGU’s,
discount rates applied to the future
cashflow forecasts and future
market and economic conditions.
In addition, the Basis for Qualified
Opinion section of our report
describes that we were unable to
obtain sufficient appropriate audit
evidence to support critical
assumptions and estimates used
to determine the recoverable value
of the goodwill and other indefinite
life intangible assets allocated the
research and advisory CGU.
Our audit procedures among others included:
• Understanding and evaluating the Group’s internal controls relevant to the
accounting estimates used to determine the recoverable value of the
Group’s CGUs;
• Evaluating Management’s determination of the Group’s CGUs based on our
understanding of the nature of the Group’s business and the economic
environment in which the segments operate. We also analysed the internal
reporting of the Group to assess how the CGUs are monitored and reported;
• Challenging Management’s assumptions and estimates used to determine
the recoverable value of its indefinite life intangible assets, including those
relating to forecasted revenue, cost, capital expenditure and discount rates,
by adjusting for future events and corroborating the key market related
assumptions to external data (including the consideration of the impact of
the COVID-19 pandemic).
Procedures included:
o Evaluating the logic of the value-in-use calculations supporting
Management’s annual impairment test and testing the mathematical
accuracy of these calculations;
o Evaluating Management’s process regarding the preparation and
review of forecast financial statements (balance sheet, income
statement, and cash flow statement);
o Comparing forecasts to Board approved forecasts;
o Evaluating the historical accuracy of the Group’s forecasting to actual
historical performance;
o Evaluating the inputs to the calculation of the discount rates applied;
o Engaging our own internal valuation experts to evaluate the logic of
the value-in-use calculation and the inputs to the calculation of the
discount rates applied;
o Evaluating the forecasts, inputs and any underlying assumptions with
a view to identifying Management bias;
o Evaluating Management’s sensitivity analysis for reasonably possible
changes in key assumptions; and
o Performing our own sensitivity analyses for reasonably possible
changes in key assumptions, the two main assumptions being: the
discount rate and forecast growth assumptions.
• Evaluating the related disclosures (including the accounting policies and
accounting estimates) about goodwill and other indefinite life intangible
assets, which are included in the Group’s consolidated financial statements.

25

Other Information
The Directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 March 2021 (but does not include the consolidated
financial statements and our auditor’s report thereon).

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

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

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

26

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.

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

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

27

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

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

Matters Relating to the Electronic Presentation of the Audited Consolidated Financial Statements
This audit report relates to the consolidated financial statements of General Capital Limited and its subsidiaries
for the year ended 31 March 2021 included on General Capital Limited’s website. The Directors of General
Capital Limited are responsible for the maintenance and integrity of General Capital Limited’s website. We have
not been engaged to report on the integrity of General Capital Limited’s website. We accept no responsibility
for any changes that may have occurred to the consolidated financial statements since they were initially
presented on the website.

The audit report refers only to the consolidated financial statements named above. It does not provide an
opinion on any other information which may have been hyper linked to or from these consolidated financial
statements. If readers of this report are concerned with the inherent risks arising from electronic data
communication they should refer to the published hard copy of the audited consolidated financial statements
and related audit report dated 29 June 2021 to confirm the information included in the audited consolidated
financial statements presented on this website.

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

The engagement partner on the audit resulting in this independent auditor’s report is G K Raniga.

BAKER TILLY STAPLES RODWAY AUCKLAND
Auckland, New Zealand
29 June 2021

20212020
Note$$
Interest income
5 3,533,401 2,846,439
Interest expense
5 (2,246,097) (1,441,213)
Net interest income
1,287,304 1,405,226
Fee and commission income
5 933,176 553,686
Fee and commission expense
5 (247,997) (128,699)
Net fee and commission income
685,179 424,987
Revenue from contracts with customers
5 279,045 227,715
Cost of sales
5 (37,696) (32,545)
Gross profit from contracts with customers
241,349 195,170
Modification gain on loan receivables
5 86,489 -
Other income
5 48,193 12,761
Net revenue
2,348,514 2,038,144
Increase in allowance for expected credit losses
11
(27,372) (54,999)
Personnel expenses
(781,919) (746,680)
Occupancy expenses
(89,485) (117,373)
Depreciation
(17,085) (4,444)
Amortisation of intangible assets
14
(23,431) (22,793)
Realised losses on bonds sold
7.1
(190,085) -
Other operating expenses
7.2
(1,098,404) (901,392)
(2,227,781) (1,847,681)
Profit before income tax expense
120,733 190,463
Income tax (expense) / benefit8
(38,967) (60,907)
Net profit after income tax expense
81,766 129,556
Other comprehensive income
Items that will not be reclassified to profit or loss
15, 17(c)
(11,487) (153,094)
Income tax on these items8, 17(c)
-
43,273
Other comprehensive income / (loss) for the year, net of tax
(11,487) (109,821)
Total comprehensive income
70,279 19,735
Earnings per share (cents per share)9
0.05 0.08
Diluted earnings per share (cents per share)9
0.05 0.08
The accompanying notes are an integral part of these financial statements.
GENERAL CAPITAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
Changes in the fair value of equity investments at fair value
through other comprehensive income
28

GENERAL CAPITAL LIMITED
20212020
Note$$
Equity
Share capital
17(a) 10,249,211 10,176,204
Accumulated losses
(594,651) (676,417)
Reserves
17(c) (129,267) (117,780)
Total equity
9,525,293 9,382,007

Assets
Cash and cash equivalents
10 7,292,267 12,562,241
Accounts receivables
194,727 10,859
Related party receivables
18 110,868 79,823
Other current assets
94,215 266,523
Bank deposits
10 3,000,000 -
Loan receivables
11 53,710,781 34,855,849
Deferred tax asset
8.2 126,922 96,004
Property, plant and equipment
13,508 8,008
Right of use assets
293,500 -
15 401,086
237,389
Intangible assets and goodwill
14 2,926,365 3,046,811
Total assets
68,164,239 51,163,507
Liabilities
Accounts payable and other payables
402,750 319,381
Related party payables
18 10,229 2,925
Income tax payable
55,576 8,697
Lease liability
307,207 -
Term deposits
16 57,863,184 41,450,497
Total liabilities
58,638,946 41,781,500
Net assets
9,525,293 9,382,007
The accompanying notes are an integral part of these financial statements.
Net tangible assets (NTA) per share (cents per share)
3.97 3.86
Net assets (NA) per share (cents per share)
5.85 5.80
The financial statements are signed on behalf of the Board.
Rewi Bugo Brent King
ChairmanManaging Director
Authorised for issue on:29 June 2021
Investments
AS AT 31 MARCH 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
29

GENERAL CAPITAL LIMITED
Note$$$$
9,573,495 (14,862) (805,973) 8,752,660
- - 129,556 129,556
- (109,821) - (109,821)
- (109,821) 129,556 19,735
17(a)
602,709 - - 602,709
17(b), 19
- 6,903 - 6,903
602,709 6,903 - 609,612
10,176,204 (117,780) (676,417) 9,382,007
- - 81,766 81,766
15, 17(c)
- (11,487) - (11,487)
- (11,487) 81,766 70,279
17(a)
73,007 - - 73,007
73,007 - - 73,007
10,249,211 (129,267) (594,651) 9,525,293

Total comprehensive income for
the year
Accumulated
losses
Share capital
Total transactions with owners in
their capacity as owners
Transactions with owners in their
capacity as owners:
Contributions of equity net of
transaction costs
Balance at 31 March 2020
Profit for the year
Other comprehensive income for
the year
Contributions of equity net of
transaction costs
Issue of warrants to directors and
senior managers
Total equity
Profit for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Reserves
Balance at 1 April 2019
Total transactions with owners in
their capacity as owners
Balance at 31 March 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
30

GENERAL CAPITAL LIMITED
20212020
Note
$$
Cash flow from operating activities
Interest received
3,329,027 2,520,543
Receipts from customers
1,055,068 491,332
Other income
7,961 12,761
Payments to suppliers and employees
(2,046,491) (2,041,737)
Interest paid
(2,155,363) (1,242,655)
Income tax paid
(23,006) (21,083)
Finance receivables (net advances)
(18,407,676) (17,091,608)
Net cash (used in) / provided by operating activities 20
(18,240,480) (17,372,447)
Cash flow from investing activities
Proceeds from the sale of bonds
4,334,514 -
Purchase of property, plant and equipment
(10,356) (6,276)
Purchase of software
- (4,444)
Investment in bank deposits
(3,000,000) -
Investment in bonds
(4,718,617) -
Investment in equities
(28,184) -
Net cash provided by / (used in) investing activities
(3,422,643) (10,720)
Cash flow from financing activities
Issue of ordinary shares
73,007 602,709
Term deposits (net receipts)
16,320,142 26,393,382
Net cash provided by financing activities
16,393,149 26,996,091
Reconciliation of cash and cash equivalents
12,562,241 2,949,317
(5,269,974) 9,612,924
10
7,292,267
12,562,241

Cash and cash equivalents at end of the reporting period
Net (decrease) / increase in cash and cash equivalents held
during the reporting period
Cash and cash equivalents at beginning of the reporting
period
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MARCH 2021
31

NOTE 1: REPORTING ENTITY
The consolidated financial statements were authorised for issue by the directors on 29 June 2021.
NOTE 2: BASIS OF PREPARATION
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
3.1 Basis of consolidation
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
General Capital Limited ("the Company") is incorporated and domiciled in New Zealand. General Capital Limited is registered under the
Companies Act 1993.
General Capital Limited is a FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013.
The consolidated financial statements of General Capital Limited and its subsidiaries (together "the Group") have been prepared in
accordance with the Companies Act 1993 and the Financial Markets Conduct Act 2013.
The Group is a for profit entity.
The Group's principal activities are:
- Finance (deposit taking and lending);
- Research and advisory (investment advisory and research provider).
These financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand ("NZ GAAP").
They comply with New Zealand Equivalents to International Financial Reporting Standards ("NZ IFRS") and other applicable Financial
Reporting Standards, as appropriate for profit oriented entities. These consolidated financial statements also comply with International
Financial Reporting Standards ("IFRS").
The financial report has been prepared under the historical cost convention, as modified by revaluations for certain classes of assets and
liabilities to fair value as described in the accounting policies below.
Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoallperiodspresentedintheseconsolidatedfinancialstatements,and
have been applied consistently by Group entities.
Thesefinancial statementshavebeenpreparedona goingconcernbasis, whichcontemplatescontinuityof normal business activitiesand
therealisationof assetsandthesettlementofliabilitiesin theordinary courseof business, in accordancewith historicalcost concepts, as
modified by the revaluation of certain assets and liabilities as identified in the accounting policies below.
AsignificanteventaroseinMarch2020,priortoreportingdate,namelytheglobalpandemicofcoronavirusdisease2019,thathashadand
isexpectedtocontinuetohaveanimpactontheGroup'searnings,cashflowsandfinancialposition.Refertonotes4.1and24 forfurther
information.TheDirectorsandManagementhavedeterminedthattheGroup’sapplicationofthegoingconcernbasisofaccountingremains
appropriate in light of this event, refer to note 4.2.
The financial statements are presented in New Zealand dollars which is the Group'scurrency. Unlessotherwise indicated, amounts inthe
financial statements these amounts have been rounded to the nearest dollar.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements.
Subsidiaries
Subsidiaries are all entities controlled by the Group. The financial statements of subsidiaries are included in consolidated financial
statements from the date that control commences until the date that control ceases.
32

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.2 Revenue and expense recognition
3.3 Financial instruments
(a) Interest income and expense
Interest income and interest expense
Interest income and interest expense is recognised in profit or loss using the effective interest method. The effective interest method
calculates the amortised cost of a financial asset or liability and allocates the interest income and directly related fees (including loan
origination fees) and transaction costs (including commission expenses) that arean integral component ofthe effectiveinterest rateover
the expected life of the financial asset or liability.
Loan fees and commissions
Lendingfeeincome(suchasloanestablishmentfees)thatisintegraltotheeffectiveyieldofaloanheldatamortisedcostiscapitalisedas
partoftheamortisedcostanddeferredoverthelifeoftheloanusingtheeffectiveinterestmethod.Lendingfeesnotdirectlyrelatedtothe
originationofaloan(accountmaintenancefee)arerecognisedovertheperiodofservice.Incrementalanddirectlyattributablecosts(such
as commissions) associated with the origination of a financial asset (such as loans) and financial liabilities (such as term deposits) are
capitalised as part of the amortised cost and deferred over the life of the financial instrument using the effective interest method.
(b) Revenue from contracts with customers:
Advisory fee revenue
Advisorycontractsgenerallyspanaperiodofthreemonthstooneandahalfyears.Managementdeterminetheperformanceobligation(s)
inherentinthecontractatcontractinceptionandrecogniserevenueuponcompletionofeachoftheperformanceobligations.Performance
obligationsincludeadviceprovidedtotheentityandsometimesincludethesuccessofaproject. Therearespecificbillingmilestonesbuilt
into each contract and payment is generally due within 30 to 60 days of the milestone.
Yearbook and research sales
Thisincludesrevenuerelatedtothesaleofpublicationsandfeesforadvertisementsinthepublications.Theperformanceobligationforthe
advertising fees is satisfied when the publications are published and available to be purchased by customers, and include the contracted
advertisements. Payment is generally due within 30 to 60 days from production. The performance obligation relating to the sale of
publications is satisfied upon delivery of the publications. Payment is generally due within 30 to 60 days from delivery.
Other fee income
OtherfinancefeeschargedbytheGroupthatdonotrelatetotheoriginationoffinancereceivables(forinstanceloanholdingfees).These
fees are charged and recognised upon satisfaction of the conditions stipulated in the contract.
Assets and liabilities arising from revenue from contracts with customers
Accounts receivables are non-interest bearing and are generally on terms of 30 to 60 days. Contract assets are recognised for any
performanceobligationswhichhavebeensatisfiedinadvanceofbillingtoclients.Theamountsaretransferredtoaccountsreceivablewhen
billed to customers. Contract costs are capitalised in respect of directly attributable contract costs (such as directly related allocations of
personnel costs) which relate to revenue which has not been recognised. Costs are only recognised if the amounts are expected to be
recovered from customers, are amortised when the associated revenue is billed to the customer, and are subject to impairment testing.
Contract liabilities are recognised in respect of any amounts billed to customers in advance of satisfaction of the associated performance
obligations.
Initial recognition
FinancialassetsandfinancialliabilitiesarerecognisedintheGroup’sstatementoffinancialpositionwhentheGroupbecomesapartytothe
contractual provisions of the instrument.
Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisition
orissueoffinancialassetsandfinancialliabilitiesareaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,as
appropriate, on initial recognition.
(c) Other
Other expense recognition
All other expenses are recognised in profit or loss as incurred.
33

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ii) Financial assets at FVTOCI
Equity Instruments at FVTOCI
On initial recognition, the Group made an irrevocable election (on an instrument by instrument basis) to designate investments in equity
instruments as at FVTOCI.
Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at
fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the
investments revaluation reserve. The cumulative gain or loss is not be reclassified to profit or loss on disposal of the equity investments,
instead, it is transferred to retained earnings. Fair value is determined in the manner described in note 15.
Financialassetsmeasuredatamortisedcostincludecashandcashequivalents,loanreceivablesandtradereceivables.Assetsmeasuredat
FVTOCI include listed corporate and local government bonds. The Group has no assets measured at FVTPL.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the
classification of the financial assets.
Classification of financial assets
Financial assets that meet the following conditions are measured subsequently at amortised cost:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
-thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandintereston
the principal amount outstanding.
Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the
financial assets; and
-thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandintereston
the principal amount outstanding.
Despite the foregoing, the Group makes the following irrevocable election/designation at initial recognition of a financial asset:
-theGroupirrevocablyelectstopresentsubsequentchangesinfairvalueofanequityinvestmentinothercomprehensiveincomeifcertain
criteria are met; and
- the Group irrevocably designates a financial asset that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch.
(i) Amortised cost and effective interest method
The effectiveinterest methodis amethod of calculating theamortised costof a financial asset and ofallocating interest income over the
relevantperiod.Forfinancialassets,theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashreceipts(includingall
feesandpointspaidorreceivedthatformanintegralpartoftheeffectiveinterestrate,transactioncostsandotherpremiumsordiscounts)
excluding expected credit losses, through the expected life of the financial asset, or, where appropriate, a shorter period, to the gross
carrying amount of the financial asset on initial recognition.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal
repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the
maturityamount, adjustedfor anylossallowance.Thegrosscarryingamount of a financialasset isthe amortisedcost of a financialasset
before adjusting for any loss allowance.
Interestincomeisrecognisedusingtheeffectiveinterestmethodforfinancialassetsmeasuredsubsequentlyatamortisedcost.Forfinancial
assets other than purchased or originated credit‑impaired financial assets, interest income is calculated by applying the effective interest
rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit‑impaired (see
below).
Forfinancialassetsthathavesubsequentlybecomecredit‑impaired,interestincomeisrecognisedbyapplyingtheeffectiveinterestrateto
the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit‑impaired financial instrument
improvessothatthefinancialassetisnolongercredit
‑
impaired,interestincomeisrecognisedbyapplyingtheeffectiveinterestratetothe
gross carrying amount of the financial asset.
34

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Stage 1
12-month ECL (past due 30 days or less)
Stage 2
Lifetime ECL not credit impaired (between 30 and 90 days past due)
Stage 3
Lifetime ECL credit impaired (greater than 90 days past due)
Modification of financial assets
Whenthecontractualcashflowsofafinancialassetarerenegotiatedorotherwisemodifiedandtherenegotiationormodificationdoesnot
resultinthederecognitionofthatfinancialasset, theGrouprecalculatesthegrosscarryingamountofthefinancialassetandrecognisesa
modificationgainor lossin profit or loss.The grosscarrying amountof thefinancial assetshall isrecalculated asthe present value of the
renegotiated or modified contractual cash flows that are discounted at the financial asset’s original effective interest. Any costs or fees
incurred adjust the carrying amount of the modified financial asset and are amortised over the remaining term of the modified financial
asset.
Where there has been no evidence of a significant increase in credit risk since initial recognition, ECLs that result from
possible default events within 12 months are recognised.
Where there has been a significant increase in credit risk, ECLs that result from all possible default events over the life of the
loan are recognised.
Where loans are in default or otherwise credit impaired, ECLs that result from all possible default events over the life of the
loan are recognised.
The nature of the Group’s loan receivables is property lending with a predominant focus on the underlying security value of the loan
receivable(i.e.theresidentialpropertyvalue)inthecreditassessment.Theloansarepredominantlyadvancedontwelve-monthtermsbut
rangebetweenthree-monthandfour-yearterms.Creditriskinformationisupdatedandmonitoredregularly.Loanreceivablesaresubject
to ongoing scrutiny, as a key component of credit risk management, with reporting of summarised credit risk information to the Group’s
directors on at least a monthly basis.
Irrespectiveoftheoutcomeoftheaboveassessment,theGrouppresumesthatthecreditriskonafinancialassethasincreasedsignificantly
since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable
information that demonstrates otherwise, for instance when the Group is made aware of a property sale and purchase agreement or
refinancing agreement which provides sufficient evidence that all of the borrower’s obligations including default interest will be met.
TheCompanyregularlymonitorstheeffectivenessofthecriteriausedtoidentifywhethertherehasbeenasignificantincreaseincreditrisk
and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before theamount
becomes past due.
Dividends on these investments in equity instruments are recognised in profit or loss in accordance with IFRS 9.
The Group has designated all investments in equity instruments as at FVTOCI on initial application of IFRS 9 (see note 15).
Impairment of Financial Assets
The Group recognises a loss allowance for expected credit losses on financial assets that are measured at amortised cost. The amount of
expectedcreditlossesisupdatedateachreportingdatetoreflectasignificantchangeincreditrisksinceinitialrecognitionoftherespective
financial assets.
TheGrouprecogniseslifetimeECLfortradeandotherreceivables.Theexpectedcreditlossesonthesefinancialassetsareestimatedusinga
provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general
economicconditionsandanassessment ofboththecurrent aswellastheforecast directionof conditionsatthereportingdate,including
time value of money where appropriate.
Forloanreceivables,theGroupappliesathree-stageapproachtomeasuringECLs.Loansmaymigratethroughthefollowingstagesbasedon
their change in credit quality.
(i) Significant increase in credit risk
Inassessingwhetherthecreditriskonafinancialassethasincreasedsignificantlysinceinitialrecognition,theGroupcomparestheriskofa
defaultoccurringonthefinancialassetatthereportingdatewiththeriskofadefaultoccurringonthefinancialassetat thedateofinitial
recognition. In making this assessment, the Group considers itshistorical lossexperience andadjust thisfor current observable data.This
data includes any payment defaults by the borrower, known or expected defaults by the borrower on similar obligations (other loans),
uninsured deterioration of the security property and any changes in the borrowers circumstances which could impact on their ability to
repay either interest or principal amounts on their due date. The Group also considers changes or forecast changes to macroeconomic
factors including property prices, unemployment, interest rates, gross domestic product and inflation.
35

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire.
Onderecognitionofa financialassetmeasuredat amortisedcost, thedifferencebetweentheasset’scarryingamountandthesum ofthe
consideration received and receivable is recognised in profit or loss.
(ii) Definition of default
TheGroupconsiders thatdefaulthasoccurredwhenafinancialasset ismorethan90dayspastdueunlesstheGrouphasreasonableand
supportable information to demonstrate that a more lagging default criterion is more appropriate, for instance when the Group is made
aware of a property sale and purchase agreement or refinancing agreement which provides sufficient evidence that all of the borrower’s
obligations including default interest will be met.
(iii) Credit
‑
impaired financial assets
A financial asset is credit‑impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred. Evidence that a financial asset is credit‑impaired includes observable data about the following events:
a) an increase in loan to valuation ratio caused by either declining property security values or increases in the loan balance;
b) significant financial difficulty of the borrower; and
c) a breach of contract, such as a default or past due event (see (ii) above).
(iv) Write
‑
off policy
TheGroupwritesoffafinancialassetwhenthereisinformationindicatingthattheborrowerisinseverefinancialdifficultyandthereisno
realisticprospectofrecovery,forexampleanunsecuredfinancialassetwherebytheborrowerhasnorealisticabilitytomeettheirfinancial
obligationstotheGroup.FinancialassetswrittenoffmaystillbesubjecttoenforcementactivitiesundertheGroup’srecoveryprocedures,
taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.
v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if
thereisadefault)andtheexposureatdefault.Theassessmentoftheprobabilityofdefaultandlossgivendefaultisbasedonhistoricaldata
adjustedfor forward‑lookinginformation includingmacroeconomic factorsas describedabove. Giventhe Group’sloan bookis allsecured
overproperty,thesinglemostsignificantfactorforlossgivendefaultisthevalueofthesecurityproperty,anyknownorexpecteduninsured
deterioration of the property, or any forecast reduction in property values.
As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
Forfinancialassets,theexpectedcreditlossisestimatedasthedifferencebetweenallcontractualcashflowsthatareduetotheGroupin
accordancewiththecontractandallthecashflowsthattheGroupexpectstoreceive, discountedattheoriginaleffectiveinterest rate.In
instanceswheretheprobabilityofdefaulthasincreasedsignificantly(asignificantincreaseincreditrisk),orwheretheloanisindefault,the
expectedcredit loss(or lossgivendefault) maynot increasesignificantly dueto theGroup’s lendingcriteria whichprohibits lendingwhen
the loan to valuation ratio (LVR) exceeds 75%.
This means in general that the Group expects that the present value of expected cash flows from a loan in default to approximate the
carrying value of the loan prior to the default event, except in cases where the LVR has increased considerably due to a reduction in the
security property valuation or a significant increase in the loan balance.
IftheGrouphasmeasuredthelossallowanceforafinancialassetatanamountequaltolifetimeECLinthepreviousreportingperiod,but
determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an
amount equal to 12‑month ECL at the current reporting date.
TheGrouprecognisesanimpairment gainorlossinprofit or lossfor allfinancial assetswith a correspondingadjustmentto their carrying
amount through a loss allowance account.
36

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Cash and cash equivalents
3.5 Leases
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in
a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liability;
- any lease payments made at or before the commencement date less any lease incentives received;
- any initial direct costs; and
- restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or
loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise mobile phones.
Extension options are included in the Group’s leases and are exercisable only by the Group and not by the respective lessor.
TheGroupleasesanofficepremisesandcarparks.Rentalcontractsaretypicallymadeforfixedperiodsbutmayhaveextensionoptionsas
described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
Leases are recognised as a rightof useasset anda correspondingliability at the dateat whichthe leasedasset isavailable for use bythe
Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease
periodsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityforeachperiod.Therightofuseassetis
depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Financial Liabilities
Classification of Financial Liabilities
Financial liabilities are measured at amortised cost.
Financial liabilities measured at amortised cost
At initial recognition financial liabilities are measured at fair value plus transaction costs that are directly attributable to the issue of the
financial liabilities. The amortised cost of a financial liability is the amount at which the financial liabilityis measuredat initial recognition
minustheprincipalrepayments,plusthecumulativeamortisationusingtheeffectiveinterestmethodofanydifferencebetweenthatinitial
amount and the maturity amount.
Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialliabilityandofallocatinginterestexpenseoverthe
relevantperiod.Theeffectiveinterest rateistheratethatexactlydiscountsestimatedfuturecashpayments(includingallfeesandpoints
paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
The Group's financial liabilities measured at amortised cost include trade and other payables and term deposits.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The
differencebetweenthecarryingamountofthefinancialliabilityderecognisedandtheconsiderationpaidandpayableisrecognisedinprofit
or loss.
Cashincludesdemanddepositswithanoriginalterm oflessthan183dayswhichareconsideredhighlyliquidinvestmentsthat arereadily
convertible into cash and used by the Group as part of day-to-day cash management.
Assetsandliabilitiesarisingfromaleaseareinitiallymeasuredonapresentvaluebasis.Leaseliabilitiesincludethenetpresentvalueofthe
following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable;
- variable lease payment that are based on an index or a rate;
- amounts expected to be payable by the lessee under residual value guarantees;
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
37

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Intangible assets
3.7 Taxation
BartercardTradeDollarsareunitsofelectroniccurrencyheldbytheGroupwhichcanbeusedtopayforproductsandservicesfromother
Bartercard members instead of paying in cash. They are non-monetary assets which are classified as indefinite life intangible assets. The
assetsarerecognisedatcostlessaccumulatedimpairmentlosses.Thetradedollarsareacquiredasearnedandconsumedasutilisedandare
testedatleastannuallyforimpairmentorwhenindicationofanimpairmentexist. Animpairmentlossisrecognisedwheneverthecarrying
amountofabartercardexceedsitsrecoverableamount.Theestimatedrecoverableamountofintangibleassets-BartercardTradeDollars
are the greater of their fair value less costs to sell or value in use. Trade debits arising from sales to customers and trade credits from
purchasesofservicesarerecognisedinthestatementofcomprehensiveincomeintheperiodinwhichthetransactionoccurs.Wheretrade
credits are used to purchase an asset, the asset is capitalised and recognised in the statement of financial position.
Computersoftwareisrecognisedinthestatementoffinancialpositionatcostlessaccumulatedamortisationandimpairmentlosses.Direct
costs associated with the purchase and installation of software licences and the development of software for internal use are capitalised
whereprojectsuccessisprobableandthecapitalisationcriteriaismet.Costassociatedwithplanningandevaluatingcomputersoftwareand
maintaining a system after implementation are expensed. Computer software costs are amortised on a straight-line basis (three years).
Incometaxfortheperiodcomprisescurrentanddeferredtax.Currentanddeferredtaxarerecognisedasanexpenseorincomeintheprofit
or loss,exceptwhentheyrelatetoitems thatarerecognisedoutsideprofit or loss(whether inothercomprehensiveincomeordirectlyin
equity), in which case the tax is also recognised outside profit or loss.
Currenttaxistheexpected taxpayable onthe taxableincome for the period, using tax rates enactedor substantivelyenacted at balance
dateaftertakingadvantageofallallowabledeductionsundercurrenttaxationlegislationandanyadjustmenttotaxliabilitiesinrespectof
previous years.
Deferred tax is provided using the liability method, providing for temporary differences between the amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the amount of assets andliabilities, usingtax ratesenacted or substantively enactedas at balance
date.
Deferredtaxationassetsarisingfromtemporarydifferencesorincometaxlosses,arerecognisedonlytotheextentthatitisprobablethata
future taxable profit will be available against which the asset can be utilised.
The Group has applied judgement to determine the lease term for lease contracts which include renewal options. The assessment of
whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease
liabilities and right-of-use assets.
A deferred tax asset is raised for the tax impact of the changes in recognised lease related assets and liabilities.
Licences acquired as part of business combinations are capitalised separately from goodwill as intangible assets if their value can be
measuredreliablyoninitialrecognitionanditisprobablethattheexpectedfutureeconomicbenefitsthatareattributabletotheassetwill
flow to the Group.
Intangible assets comprise goodwill, acquired licences, bartercard trade dollars and computer software.
Goodwillandacquiredlicencesareindefinitelifeintangiblessubjecttoannualimpairmenttesting.Goodwillisallocatedtocash-generating
unitsfor thepurposeof impairment testing.Theallocationismadetothosecash-generatingunitsor groups ofcash-generating unitsthat
are expected to benefit from the business combination in which the goodwill arose, identified according to the respective operating
segment. Refer to note 4.4 and note 14.
In the statement of cash flows, lessees present:
-Short-termleasepayments,paymentsforleasesoflow-valueassetsandvariableleasepaymentsnotincludedinthemeasurementofthe
lease liability as part of operating activities;
-Cashpaidfortheinterestportionofaleaseliabilityaseitheroperatingactivitiesorfinancingactivities,aspermittedbyNZIAS7Statement
ofCashFlows(theGrouphasoptedtoincludeinterestpaidaspartofoperatingactivities,consistentwithitspresentationofinterestpaidon
financial liabilities); and
- Cash payments for the principal portion for a lease liability, as part of financing activities.
38

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.8 Impairment of non-financial assets
3.9 Employee benefits
3.10 Statement of cash flows
3.11 Comparatives
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
Deferredtaxationassetsarereducedtotheextentthatitisnolongerprobablethattherelatedtaxassetwillberealised.Anyreductionis
recognised in profit or loss.
There are a number of significant accounting treatments which include complex or subjective judgments and estimates that may affect the
reported amounts of assets in these financial statements. Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
An explanation of the judgments and estimates made by the Group in the process of applying its accounting policies, that have the most
significant effect on the amounts recognised in the financial statements, are set out below.
Where necessary, comparative information has been reclassified and represented for consistency with current year.
Wages, salaries and annual leave
Liabilitiesforwages,salariesandannualleavearerecognisedinrespectofemployees'servicesuptothereportingdate.Theyaremeasured
at the amounts expected to be paid when the liabilities are settled.
Superannuation plans
The Group pays contributions to superannuation plans, such as Kiwisaver. The Group has no further payment obligations once the
contributionshavebeenpaid.Thecontributionsarerecognisedasanemployeebenefitexpensewhentheyaredue.Prepaidcontributions
are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
The statement of cash flows has been prepared using the direct approach modified by netting certain cash flows in order to provide more
meaningful disclosure. These include reverse loan receivables and term deposit liabilities. The advances to and repayments received from
borrowers in relation to loan receivables are considered operating activities and are reported on a net basis in the Statement of Cash Flows.
Proceeds from deposits issued and repayments to deposit investors are considered financing activities and are also reported on a net basis
in the Statement of Cash Flows.
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually or more
frequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired.Intangibleassetsnotyetavailableforusearetested
for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. The Group conducts an annual internal review of asset values, which is used as a source of information to assess for any
indicators of impairment. External factors, such as changes in expected future processes, technology and economic conditions, are also
monitored for indicators of impairment. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount isthehigher of anasset’sfair valuelesscoststosellandvalueinuse.Valueinuseis determinedby estimatingfuture cashflows
from the use and ultimate disposal of the asset and discounting these to their present value using a pre-tax discount rate that reflects
currentmarketratesandtherisksspecifictotheasset.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsfor
whichthereareseparatelyidentifiablecashflows(cash-generatingunits).Impairmentlossesdirectlyreducethecarryingamountofassets
and are recognised in profit or loss.
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairmentat eachreporting
date.
39

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.2 Applicability of the going concern basis of accounting
Cashflow forecast and going concern
When preparing the prior year (31 March 2020) financial statements, the Group determined the main potential downside impacts of the
pandemic on the Group’s earnings, cash flows, financial position and application of the going concern basis of accounting to be the
following:
1) A reduction in term deposit reinvestment rates.
2) A reduction in new term deposit investments.
3) The inability for borrowers to make loan payments on their contractual repayment dates.
4) A reduction in loan security values (residential property values).
5) Reduced net cash flows from the research and advisory cash generating unit.
Cashflow forecast and going concern
When preparing the prior year (31 March 2020) financial statements, the Group determined the main potential downside impacts of the
pandemic on the Group’s earnings, cash flows, financial position and application of the going concern basis of accounting to be the
following:
1) A reduction in term deposit reinvestment rates.
2) A reduction in new term deposit investments.
3) The inability for borrowers to make loan payments on their contractual repayment dates.
4) A reduction in loan security values (residential property values).
5) Reduced net cash flows from the research and advisory cash generating unit.
Whilst the COVID-19 pandemic and measures implemented have lowered overall economic activity and confidence (described above),
Management have assessed and determined that the Group’s application of the going concern basis of accounting remains appropriate.
The Group has responded to the pandemic in the following ways:
- Undertook an analysis of its forecast cashflows to evaluate of the appropriateness of the Group’s continued application of the going
concernbasisofaccounting.ThisforecastcashflowstookintoconsiderationtheGroup’sexpectationof theimpactofthepandemiconits
earnings, cash flow and financial position.
-Assessedthedirectandindirectfinancialimpactsofthepandemiconthecarryingvalueofreportedamountsofassets,liabilities,revenues
and expenses.
- Implemented and enacted appropriate health and safety responses.
- Implemented cost saving measures.
4.1 Increased level of inherent uncertainty in the significant accounting estimates and judgments arising from the ongoing global
pandemic of coronavirus disease 2019
As disclosed in the 31 March 2020 financial statements, on 11 March 2020 the World Health Organization declared an ongoing global
outbreak of a novel coronavirus, known as ‘coronavirus disease 2019’ (‘COVID-19’), a pandemic.
In response the New Zealand Government has implemented a range of:
- public health and social measures to prevent and contain the transmission of COVID-19; and
- economic responses to provide financial stimulus and welfare support to mitigate the economic impacts of the pandemic.
Asaresultofthepandemic,theGroupanticipatesthatloweredlevelsofeconomicactivityandconfidencewillcontinueforatleasttheshort
to medium term and may result in increased business failures and unemployment levels in New Zealand.
Consequently, the Group has concluded that there has been an increase in the level of inherent uncertainty in the significant accounting
estimates and judgements applied by Management in the preparation of these financial statements.
These financial statements have been prepared based upon conditions existing as at 31 March 2021 and consider those events occurring
subsequenttothatdatethatprovideevidenceofconditionsthatexistedattheendofthereportingperiod. AstheoutbreakoftheCOVID-
19 pandemic occurred before 31 March 2021, its impacts are considered an event that is indicative of conditions that arose prior to
reporting period. Accordingly, as at the date of signing these financial statements, all reasonably known and available information with
respect to the COVID-19 pandemic has been taken into consideration in the critical accounting estimates and judgements applied by
Management (refer note 4.2 and 4.3 below) and all reasonably determinable adjustments have been made in preparing these financial
statements.
40

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
Direct and indirect financial impacts of the pandemic on the carrying value of reported amounts of assets and liabilities
TheGrouphasperformedmuchmorefavourablythanthehighlystressedscenarioswhichwereassumedintheforecastpreparedforthe31
March 2020 financial statements going concern consideration. This is detailed further below:
1)TheGroupforecastedareductionintermdepositreinvestmentratesfrom79%actualforthe31March2020financialyearto25%forthe
6 months ending 30 September 2020 and 50% for the 6 months ending 31 March 2021. The actual weighted average term deposit
reinvestment rate was 43% in the 6-month period ended 30 September 2020 and 57% in the 6-month period ended 31 March 2021.
2) The Group forecasted a reduction in new term deposit investments from an average of $2.4 million actual per month for the 2020
financial year to $Nil. Actual new term deposit investments for the year ended 31 March 2021 averaged $2.6 million monthly.
3)TheGroupassumedthat50%ofmaturingloanswouldnotberepaidontheirexpectedrepaymentdateincludingexpecteddelaysdueto
the Covid-19 government restrictions. Whilst there were some delays encountered due mostly to government restrictions, the gross loan
book decreased from its 31 March 2020 balance of $35.2 million to a low point of $24.0 million at 31 July 2020 due to loan repayments and a
conservativeriskmanagementapproachtakenbytheGrouptoincreasecashreserves.Sincethen,theGroup’slendingactivityhasincreased
andaccordinglytheloanbookhasgrowntoanewrecordhighlevelof$54.5mat31March2021.Thisincreaseintheloanbookwasfunded
by growth in term deposits along with a reduction in the high cash reserves. The growth in the loan book has resulted in increased
profitability towards the end of the financial year and post 31 March 2021 balance date.
Loansinarrearsreducedto$2.0mat31March2021(from$5.4millionat31March2020)with$nilloanspastduebygreaterthan90days
at 31 March 2021 (down from $0.9 million at 31 March 2020).
There were no loan write-offs in the year ended 31 March 2021 (March 2020: $nil).
4)TheGroupforecastedareductioninloansecurityvalues(residentialpropertyvalues)by25%.TheMarch2021monthlypropertyreport
dated 15 April 2021 published by the Real Estate Institute of New Zealand (REINZ) showed that the medianhouse pricehad increasedby
24.3% nationally year on year with the REINZ House Price Index increasing by 24.0% nationally year on year.
5) TheGroupforecastednocashinflowsfrom theresearchandadvisorycashgeneratingunitinthe31 March2021 financialyear undera
stressed scenario. The cash generating unit generated pre-tax free cash flows of $200,724 (excluding $72,000 shares received as net
revenue) during the 31 March 2021 financial year, refer to note 14 for further details.
Based on the current pandemic and economic conditions in New Zealand, the Company currently expects the favourable trends above to
continue including:
1. Term deposit reinvestment rates to gradually return to historical averages of 70-80%.
2. New term deposit investments to continue growing.
3. Loans will be repaid on or close to their maturity date (with the exception of loans rolled over in line with the Company’s lending policies).
4. No significant reduction in loan security values.
5. The research and advisory cash generating unit to continue generating positive cash flows.
Accordingly,Managementhaveassessedanddeterminedbasedonforecastspreparedforgreaterthan12monthsfromthedateofsigning,
that the Group’s application of the going concern basis of accounting remains appropriate.
Cost saving measures
1. Term deposit interest rates were further reduced in May 2020 in line with the global interest rate trends.
2. Other cost savings initiatives have been implemented where possible.
Consistent with 31 March 2020 disclosures, there have been no material direct or indirect impactson thereported amountof assetsand
liabilities. Refer to note 4.3 below for further information on expected credit losses on loans receivable.
41

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.3 Allowance for expected credit losses
Impact of COVID-19 on loan receivables / expected credit losses
TheCOVID-19AlertLevel4andLevel3restrictionsimpactednegativelyonborrowers’abilitytopaymonthlyinterestand/ortorepaytheir
loans by the due date because of the following:
1) Delays by banks in processing refinancing applications from our borrowers.
2) Borrowers were unable to effectively market their properties for sale.
3) In some cases, borrower income had reduced and impacted on their ability to service their loans.
These factors have improved since COVID-19 restrictions were reduced. Loans in arrears reduced to $2.0 million at 31 March 2021 (from
$5.4 million at 31 March 2020) with $nil loans past due by greater than 90 days at 31 March 2021 (down from $0.9 million at 31 March
2020). There were no loan write-offs in the year ended 31 March 2021 (March 2020: $nil).
Calculation of loss allowance
When measuring ECL the Group uses reasonable and supportable forward looking information, which is based on assumptions for the future
movement of different economic drivers and how these drivers will affect each other.
Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and
those that the Group would expect to receive, taking into account cash flows from collateral and integral credit enhancements.
Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given
time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.
The ECL is calculated on an individual loan basis by applying an expected loss factor to the loan balance. The expected loss factor is
determined from the Group historical loss experience data.
Historical loss experience data is reviewed by management and adjustments made to reflect current and forward looking economic and
credit conditions. In addition, management recognise that a certain level of imprecision exists in any model used to generate risk grading
and provisioning levels. As such an adjustment is applied for model risk.
Significant increase in credit risk
Expectedcreditlosses(‘ECL’)aremeasuredasanallowanceequalto12-monthECL,orlifetimeECLforassetswithasignificantincreasein
creditriskorindefaultorotherwisecreditimpaired.Anassetmovestodoubtfulwhenitscreditriskhasincreasedsignificantlysinceinitial
recognition.Inassessingwhetherthecreditriskofanassethassignificantly,theGroupconsidersitshistoricallossexperienceandadjustthis
for current observable data. This data includes any payment defaults by the borrower, known or expected defaults by the borrower on
similar obligations (other loans), uninsured deterioration of the security property and any changes in the borrowers circumstances which
couldimpactontheirabilitytorepayeitherinterest orprincipalamountsontheirduedate.TheGroupalsoconsiderschangesorforecast
changes to macroeconomic factors including property prices, unemployment, interest rates, gross domestic product and inflation.
Ininstanceswheretheprobabilityofdefaulthasincreasedsignificantly(asignificantincreaseincreditrisk),orwheretheloanisindefault,
the expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending
whentheloantovaluationratio(LVR)exceeds75%.ThismeansingeneralthattheGroupexpectsthatthepresentvalueofexpectedcash
flows from a loan in default to approximate the carrying value of the loan prior to the default event, except in cases where the LVR has
increased considerably due to a reduction in the security property valuation or a significant increase in the loan balance.
Management regularly reviews and adjusts its ECL estimates, judgements, assumptions, and methodologies as data becomes available.
Changes in these estimates, judgements, assumptions, and methodologies could have a direct impact on the level of credit provision and
credit impairment charge recorded in the financial statements (refer Note 11 Loan Receivables).
Ifthe12-monthECLrateforloanswithoutasignificantincreaseincreditriskincreased/(decreased)by0.2%higher/(lower)asat31March
2021, the loss allowance on finance receivables would have been $106,313 higher/(lower) (March 2020: $67,347 higher/(lower)).
If the lifetime ECL rate for loans with a significant increase in credit risk and credit impaired loans increased/(decreased) by 1.0%
higher/(lower) as at 31 March 2020, the loss allowance on finance receivables would have been $13,023 higher/(lower) (March 2020:
$15,163 higher/(lower)).
42

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.4 Impairment analysis of goodwill and other indefinite life intangible assets
The carrying value of goodwill and indefinite life intangible assets (including licences and bartercard trade dollars) is assessed at least
annually to ensure that it is not impaired.
WithregardtoGoodwillandLicences,performingthisanalysisrequiresmanagementtoestimatefuturecashflowstobegeneratedbythe
cash-generating unit, which entails making judgements, including the expected rate of growth of revenues and expenditures, assets and
liabilities,andtheresultingcashflows.Judgementsalsoneedtobemadeabouttheappropriatediscountratetoapplywhenvaluingfuture
cash flows.
AsensitivityanalysisperformedbyManagementhashighlightedthatthecarryingvalueoftheGoodwillandotherassetsintheresearchand
advisory CGU are highly reliant on the achievement of revenue forecasts from advisory projects.
Management have performed a fair value less costs of disposal impairment test in relation to the carrying value of the bartercard trade
dollars asset at 31 March 2021.
Thehighestloantovaluationratio(LVR)oftheGroup’sloanbookasat31 March2021was75.0% (March2020: 77.0%)andtheweighted
average LVR of the loan book was 54.6% (March 2020: 55.8%), based on loan security valuations on origination of the loan.
According to sensitivity analysis performed on the property security valuations underlying the Group’s loan receivables as at 31 March 2021:
1) A 10% drop in residential property values would result in no loan losses (March 2020: $nil).
2) A 20% drop in residential property values would result in no loan losses (March 2020: $10,000 – $20,000).
3) A 25% drop in residential property values would result in a loss in the range of $150,000 - $200,000 (March 2020: $200,000 – $250,000).
4) A 25% drop in commercial property values would result in no loan losses (March 2020: $nil).
Theabovesensitivityanalysisfactorsintheexpectedsellingcostsofthepropertyaswellasthetimevalueofmoneyovertheexpectedtime
tosell(or torefinance) theproperty(expectedtobenogreater thansix-monthsbasedontheGroup'sexperience.Thesensitivityanalysis
does not factor in potential increases in underlying security value since the origination of the loan. Residential property prices in New
Zealandhaveincreasedonaverageyearonyearto31March2021(refertofurthercommentsonresidentialpropertyvaluetrendsinnote
4.2).
Expected credit losses:
1)BasedonthehistoryoftheGroup'sloanbookoverthelasteightyears,theaverageannualwrite-offsasapercentageoftheaverageloan
receivable balance over the same period was 0.10%. This would be an appropriate basis for 12-month expected credit losses in ‘normal’
economic conditions.
2) The Group recognises that New Zealand’s economic forecast for the next 12 months is uncertain due to the impacts of the COVID-19
pandemic as described above. As a result, the Group has concluded that the probability of default has increased. However due to the
Company’s well secured loan book (as described above), the loss given default and expected credit losses have increased but not by a
material amount. As such, the Group has determined that 0.25% (March 2020: 0.31%) of the gross loan balance is a more appropriate
expectation of losses for the next 12 months.
3) Lifetime ECL’s for loans with a significant increase in credit risk and for loans in default have been calculated based on the Group’s
expectations for discounted net cash flows from the respective loan receivables over the expected remaining life of the loans in light of
COVID-19.
Impact of COVID-19 on impairment analysis of goodwill and other indefinite life intangible assets
Whencompletingtheimpairmentanalysisofgoodwillandotherindefinitelifeintangibleassets,theGrouphastakenintoconsiderationall
reasonably known and available information with respect to the COVID-19 pandemic (as described in note 4.2).
Expected impact on cash-generating units
1. Finance CGU - The forecasted cash flows used in the impairment analysis factor in theexpected impactsof COVID-19.In particular the
Growth path that General Finance originally forecasted is now expected to be significantly delayed as a result of the pandemic and the
economic impact. Notwithstanding the impacts of the above, the results of the model show that there is still significant headroom in the
unit.
2.ResearchandAdvisoryCGU-IntheforecastedcashflowsusedintheCGUimpairmentanalysis,theGrouphasfactoredintheexpected
impacts on COVID-19 on the probability of sourcing advisory projects, the project milestones and the impact on timing of cashflows.
Notwithstanding the impacts of the above, the results of the impairment testing resulted in no impairment to the CGU.
Further information on the impairment analysis, assumptions and sensitivity analysis can be found in note 14.
43

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.5 Valuation of equity securities classified as financial assets at FVTOCI
4.6 Classification of Bartercard Trade Dollars
BartercardusesanelectroniccurrencycalledaBartercardTradeDollar.TheGroupearnsBartercardTradeDollars for the goodsit sellsto
customers(tradedebits)andusestheBartercardTradeDollarstomakepurchases(tradecredits)fromotherBartercardholders.Theassets
have been classified as indefinite life intangible assets.
Management have classified the Bartercard Trade Dollars as having an indefinite useful life based on the analysis of relevant factors
including:
- the participants in the Bartercard network;
- the availability of relevant goods and services in the Bartercard network;
- an assessment of the future viability of the Bartercard platform as a means of payment;
- the level of expenditure required to maintain a Bartercard account and the Group's intention to continue paying these maintenance fees.
Theuseful lifeof the intangibleassets arereviewed eachperiod todetermine whether events andcircumstances continueto support the
indefinite useful life estimate.
The equity securities held by the Group are required to be carried at fair value. Fair value of the investments has been estimated using
inputs for the asset or liability that are not based on observable market data (Level 3 inputs).
Impact of COVID-19 on equity securities classified as financial assets at FVTOCI
WhencalculatingfairvalueofthefourequitysecuritiescarriedatFVTOCI,theGrouphastakenintoconsiderationallreasonablyknownand
available information with respect to the COVID-19 pandemic (as described in note 4.1).
Further information on the judgements made, assumptions and estimates are included in note 6.4 and note 15.
44

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 5: SEGMENT REPORTING
$$$$$$
3,535,620 3 3 3,535,626 (2,225) 3,533,401
933,176 - - 933,176 - 933,176
- 357,642 - 357,642 (119,894) 237,748
- 41,297 - 41,297 - 41,297
- - - - - -
49,770 - - 49,770 36,719 86,489
39,996 42,382 107,819 190,197 (142,004) 48,193
4,558,562 441,324 107,822 5,107,708 (227,404) 4,880,304
(2,245,554) - (543) (2,246,097) - (2,246,097)
(257,997) - - (257,997) 10,000 (247,997)
- (48,686) - (48,686) 10,990 (37,696)
2,055,011 392,638 107,279 2,554,928 (206,414) 2,348,514
(27,372) - - (27,372) - (27,372)
(190,085) - - (190,085) - (190,085)
(649,118) (57,519) (75,282) (781,919) - (781,919)
(33,529) - (6,987) (40,516) - (40,516)
(59,587) 105 4,910 (54,572) 15,605 (38,967)
223,429 191,879 (284,738) 130,570 (48,804) 81,766
66,073,514 1,318,154 1,030,284 68,421,952 (257,713) 68,164,239
58,446,662 132,059 269,134 58,847,855 (208,909) 58,638,946
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
- 107,762 - 107,762 - 107,762
193,535 - 112,194 305,729 - 305,729
- - 85,356 85,356 - 85,356
- (107,762) 107,762 - - -
193,535 - 305,312 498,847 - 498,847
Realised losses on bonds sold
Personnel expenses
Depreciation and
amortisation
Income tax (expense) /
benefit
ManagementhasdeterminedtheoperatingsegmentsbasedonthecomponentsoftheGroupthatengageinbusinessactivities,whichhave
discretefinancialinformationavailableandwhoseoperatingresultsareregularlyreviewedbytheGroup'schiefoperatingdecisionmaker.
The chief operating decision maker has been identified as the Board of Directors. The Board of Directors makes decisions about how
resources are allocated to the segments and assesses their performance.
Three reportable segments have been identified as follows:
- Finance: Deposit taking and short term property mortgage lending.
- Research and Advisory: Provides investment advisory services and produces and sells investment research and publications.
- Corporate and Other: Corporate function and investment activities.
Other
Transfers / reallocations
between segments
Total Segments Eliminations Consolidated
Revenue - interest income
Revenue - fee income
(finance receivables)
Revenue from contracts with
customers
- Advisory fee revenue
- Yearbook and research sales
- Other fee income
Modification gain on loan
receivables
Other income
Total revenue
Interest expense
Fee and commission expense
(finance receivables)
Cost of sales
Net revenue
Increase in allowance for
expected credit losses
Year ended 31 Mar 2021Finance
Research and
Advisory
Corporate and
Other
Research and
Advisory
Corporate and
Other Total Segments Eliminations Consolidated
Net profit / (loss) after tax
Total Assets
Acquired through settlement
of transactions / balances
Recognition of right of use
assets on new leases
Total Liabilities
Year ended 31 Mar 2021Finance
45

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 5: SEGMENT REPORTING (CONTINUED)
$$$$$$
2,842,352 4,025 62 2,846,439 - 2,846,439
552,225 1,461 - 553,686 - 553,686
- 91,151 - 91,151 - 91,151
- 50,633 - 50,633 - 50,633
85,931 15,579 - 101,510 (15,579) 85,931
12,761 2,249 111,091 126,101 (113,340) 12,761
3,493,269 165,098 111,153 3,769,520 (128,919) 3,640,601
(1,440,704) (491) (18) (1,441,213) - (1,441,213)
(128,699) - - (128,699) - (128,699)
- (32,545) - (32,545) - (32,545)
1,923,866 132,062 111,135 2,167,063 (128,919) 2,038,144
(54,999) - - (54,999) - (54,999)
(603,058) (71,444) (72,178) (746,680) - (746,680)
(26,303) - (934) (27,237) - (27,237)
(60,892) 2,372 (2,387) (60,907) - (60,907)
441,716 (15,903) (296,257) 129,556 - 129,556
49,138,302 1,301,131 989,136 51,428,569 (265,062) 51,163,507
41,734,879 199,152 112,531 42,046,562 (265,062) 41,781,500
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
- 13,108 - 13,108 - 13,108
4,444 - 206,276 210,720 - 210,720
- (13,108) 13,108 - - -
4,444 - 219,384 223,828 - 223,828
ConsolidatedYear ended 31 Mar 2020Finance
Research and
Advisory
Corporate and
Other Total Segments Eliminations
Increase in allowance for
expected credit losses
Revenue - fee income
(finance receivables)
Total Assets
Revenue - interest income
Total Liabilities
Acquired through settlement
of transactions / balances
Other
Transfers / reallocations
between segments
Other income
Fee and commission expense
(finance receivables)
Cost of sales
Net revenue
Personnel expenses
Net profit / (loss) after tax
Total revenue
Total Segments Eliminations
Income tax (expense) /
benefit
Interest expense
Consolidated
- Other fee income
Depreciation and
amortisation
Corporate and
OtherYear ended 31 Mar 2020Finance
Research and
Advisory
Revenue from contracts with
customers
- Advisory fee revenue
- Yearbook and research sales
46

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 6: RISK MANAGEMENT
6.1 Credit risk
20212020
$$
Northland
1,998,048 2,068,544
Auckland
39,195,570 18,012,270
Waikato
2,691,087 4,189,996
Bay of Plenty
102,093 2,037,576
Wellington
5,037,443 4,398,852
Other North Island
1,878,632 2,672,401
Canterbury
1,315,784 1,810,227
Otago
2,240,299 -
Total
54,458,956 35,189,866
The maximum credit exposure of the Group, assuming a zero value for collateral is $66,373,304 (2020: 48,565,201). This includes loans
receivableof$54,458,956(2020:$35,189,866),undrawnloancommitmentsof$1,316,486(2020:$742,412),bankdepositsof$10,292,267
(2020: $12,542,241), accounts receivable of $194,727 (2020: $10,859) and related party receivables of $110,868 (2020: $79,823). Of this
exposure, 84.0% is covered by collateral over properties (2020: 74.0%) and 15.5% is deposited with registered New Zealand banks (2020:
25.8%).
TomanagecreditonfinancereceivablestheGroupperformscreditevaluationsonallcustomersrequiringadvances.Theapprovalprocess
considersanumberoffactorsincludingthevalueofthesecuritycomparedtothevalueoftheamounttobeborrowed("loantovaluation
ratio" or "LVR"), the creditworthiness of the borrower and their ability to repay.
TheGroupoperatesacreditrisk(lending)policywhichstipulatestheGroup'srequirementsregardingthesecurityandLVRoftheborrowing,
the credit worthiness of borrowers, geographical spread, maximum loan exposure size and credit approval authority levels. Decisions on
whether to approve or decline loans are made by the credit committee in line with the Group's credit risk policy. Loan receivables are
subjecttoregularscrutiny,asakeycomponentofcreditriskmanagement. Thisincludesareviewoftheborrower’srepaymenthistoryand
any interest arrears; any changes in the borrowers circumstances which could impact on their ability to repay either interest or principal
amounts on their due date and any movement in the security value.
The Group is exposed to a variety of financial risks comprising credit risk, liquidity risk, market risk (interest rate risk) and fair value risk.
Creditriskistherisk of financial lossto theGroup ifa counterpartyto afinancial instrument fails tomeet itscontractual obligations, and
arises principally from the Group's loan receivables, cash and cash equivalents and accounts receivable.
Asat31March2021theGroup’sloanadvancesaresecuredasfollows:firstmortgages99.8%(March2020:96.1%),secondmortgages0.2%
(March2020:1.0%),combinedfirstandsecondmortgages0.0%(March2020:2.9%).Therewerenounsecuredloansasat31 March2021
(March 2020: none).
Loan receivables credit exposures are concentrated in the residential property sector, particularly in the North Island and the Auckland
Market. As at 31 March 2021, advances by the Group in the North Island residential property sector represented 93.5% (March 2020:
94.9%)ofitstotalexposure,with72.1%(March202051.2%)beingintheAucklandmarket. Thegeographicalprofileofloanreceivablesis
analysed further as follows:
As at 31 March 2021 the Group’s advances were primarily secured over properties which are categorised as follows: residential housing
85.8% (March 2020: 83.5%), residential bare land 8.5% (March 2020: 5.4%), residential development property 0.0% (March 2020: 11.1%)
and commercial property 5.7% (March 2020: 0.0%). In some cases, secondary securities may be taken over other property types.
47

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 6: RISK MANAGEMENT (CONTINUED)
20212020
Number of
Exposures
Number of
Exposures
Less than $100,000
- 1
Between $100,000 and $250,000
10 17
Between $250,000 and $500,000
31 25
Between $500,000 and $1,000,000
27 17
Between $1,000,000 and $1,500,000
6 8
Between $1,500,000 and $2,000,000
5 1
Between $2,000,000 and $2,500,000
1 -
Between $2,500,000 and $3,000,000
2 -
Total No. of Exposures
82 69
As shown in the aging analysis of past-due loans below, the balance comprises:
Stage 1
Stage 2
Stage 3
Aging analysis – past due but not considered under-performing loans:
20212020
$$
Up to 30 Days
706,420 3,905,889
31 - 60 Days
1,302,341 610,369
61 - 90 Days
- -
91 - 120 Days
- 546,788
120+ Days
- 359,168
Total
2,008,761 5,422,214
12-month ECL
Grossloansreceivabletotalling$706,420 (March2020: $3,905,889) werepastdueandtheGrouphasconcludedtherehas
not been a significant increase in credit risk.
Lifetime ECL not credit impaired
Gross loans receivable totalling $1,302,341 (March 2020: $610,369) were past due by between 30 and 90 days and the
Group has concluded there has been a significant increase in credit risk.
Lifetime ECL credit impaired
Gross loans receivable totalling $nil (March 2020: $905,956) were past due by greater than 90 days and the Group has
concluded there has been a significant increase in credit risk.
The Group is also exposed to credit risk from deposits held with banks. As at balance date, the Group holds deposits in New Zealand
RegisteredBanksincluding99.6%withBankofNewZealand(2020:99.3%),0.2%withASBBank(2020:0.2%)and0.2%withANZBankNew
Zealand (2020: 0.5%).
Theconcentrationof thecreditexposuretothesixlargestexposuresis23.2% (March2020:22.2%)of thetotalloanportfolio. TheGroup
haselectedtodisclosethelargestsixexposuresasthisisconsideredtoprovidea meaningfulindicationofconcentrationofcreditrisk.An
exposure is calculated as the total of all loan exposures to a single borrower or group of linked borrowers. The size of loan exposures is
analysed further as follows:
Theprovisionforexpectedcreditlossesforperformingandunder-performingloansisdetailedandexplainedinnote11.Grosspastdueloan
receivables total $2,008,761 (March 2020: $5,222,214) which equates to 3.7% (March 2020: 15.4%) of total loan receivables.

48

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 6: RISK MANAGEMENT (CONTINUED)
6.2 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its obligations associated with financial liabilities as they fall due.
2021Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
7,300,469 7,300,469 - - -
Bank deposits (>183 days)
1
3,019,773 3,019,773 - - -
Other financial assets
305,595 305,595 - - -
Loan receivables
57,904,712 18,598,749 24,593,585 9,802,023 4,910,355
Totals
68,530,549 29,224,586 24,593,585 9,802,023 4,910,355
Financial liabilities
Term deposits
60,177,665 18,460,422 20,981,517 18,473,850 2,261,876
Lease liability
326,040 81,510 81,510 163,020 -
Other payables
104,031 104,031 - - -
Totals
60,607,736 18,645,963 21,063,027 18,636,870 2,261,876
Net cashflow
7,922,813 10,578,623 3,530,558 (8,834,847) 2,648,479
2020Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
12,586,940 12,586,940 - - -
Other financial assets
83,221 83,221 - - -
Loan receivables
36,794,218 20,544,067 12,085,213 2,720,171 1,444,767
Totals
49,464,379 33,214,228 12,085,213 2,720,171 1,444,767
Financial liabilities
Term deposits
43,666,922 13,544,847 14,189,421 11,776,984 4,155,670
Other payables
76,217 76,217 - - -
Totals
43,743,139 13,621,064 14,189,421 11,776,984 4,155,670
Net cashflow
5,721,240 19,593,164 (2,104,208) (9,056,813) (2,710,903)
1
Bank deposits with an original term of greater than 183 days.
The followingtables set out the undiscounted contractual cash flows, and the undiscounted expected cash flows, of the Group’s financial
assets and liabilities.
TheGroupoperatesaliquidityriskpolicyandendeavourstomaintainsufficient fundstomeetitscommitmentsbasedon forecastedcash
flow requirements. Management has internal control processes and contingency plans to actively manage the lending and borrowing
portfoliostoensurethenetexposuretoliquidityriskisminimised.Theexposureisreviewedonanon-goingbasisfromdailyproceduresto
monthly reporting as part of the Group's liquidity management policies and processes.
Contractual Cash Flows
Contractual Cash Flows
49

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 6: RISK MANAGEMENT (CONTINUED)
2021Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
7,307,242 7,307,242 - - -
Bank deposits (>183 days)
1
3,026,500 3,026,500 - - -
Other financial assets
305,595 305,595 - - -
Loan receivables
60,052,839 10,200,816 13,243,507 26,687,091 9,921,425
Totals
70,692,176 20,840,153 13,243,507 26,687,091 9,921,425
Financial liabilities
Term deposits
62,233,207 7,918,102 8,995,915 19,268,522 26,050,668
Lease liability
326,040 81,510 81,510 163,020 -
Other payables
104,031 104,031 - - -
Totals
62,663,278 8,103,643 9,077,425 19,431,542 26,050,668
Net cashflow
8,028,898 12,736,510 4,166,082 7,255,549 (16,129,243)
2020Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
12,620,950 12,620,950 - - -
Other financial assets
83,221 83,221 - - -
Loan receivables
38,437,399 10,990,318 6,819,638 17,822,591 2,804,852
Totals
51,141,570 23,694,489 6,819,638 17,822,591 2,804,852
Financial liabilities
Term deposits
44,968,870 11,235,268 7,439,464 7,856,748 18,437,390
Other payables
76,217 76,217 - - -
Totals
45,045,087 11,311,485 7,439,464 7,856,748 18,437,390
Net cashflow
6,096,483 12,383,004 (619,826) 9,965,843 (15,632,538)
1
Bank deposits with an original term of greater than 183 days.
-60% term deposit reinvestment rate for 31 March 2021.
-31 March 2020 term deposit reinvestment rate assumptions:
-
25% for maturities up to 30 September 2020;
-
50% for maturities up to 31 March 2021; and
-
60% for maturities after 31 March 2021.
-
Term deposit reinvestments are made for a weighted average 18-month term (March 2020: 18 months)
-
The table above shows management’s expected maturities of existing financial assets and liabilities. In determining the expected cash flow,
the following assumptions have been made based on management’s best estimate having regard to current market conditions and past
experience:
Expected Cash Flows
Expected Cash Flows
50%ofloans(March2020:50%)notpastduerepayonexistingcontractualmaturitydate,withthebalancerolledoverattheirexisting
interest rates and repaid after a further 12 months.
50

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 6: RISK MANAGEMENT (CONTINUED)
6.3 Market risk
The table below summarises the sensitivity of the Group’s financial assets and liabilities to interest rate risk.
Carrying
2021
Amount -1% Profit -1% Equity +1% Profit +1% Equity
Financial Assets
$ $ $ $ $
Cash and cash equivalents
7,292,267 (72,923) (52,505) 72,923 52,505
Finance Receivables
54,458,956 (544,590) (392,105) 544,590 392,105
Financial Liabilities
Term Deposits
57,929,500 579,295 417,092 (579,295) (417,092)
Total increase / (decrease)
(38,218) (27,518) 38,218 27,518
Carrying
2020
Amount -1% Profit -1% Equity +1% Profit +1% Equity
Financial Assets
$ $ $ $ $
Cash and cash equivalents
12,562,241 (125,622) (90,448) 125,622 90,448
Finance Receivables
35,189,866 (351,899) (253,367) 351,899 253,367
Financial Liabilities
Term Deposits
41,520,102 415,201 298,945 (415,201) (298,945)
Total increase / (decrease)
(62,320) (44,870) 62,320 44,870
6.4 Assets carried at fair value
Level 1 Fair value is calculated using quoted prices in active markets.
Level 2
Level 3 Fair value is estimated using inputs for the asset or liability that are not based on observable market data.
2021
Note Level 1 Level 2 Level 3 Total
Fair value assets
$$
$ $
15
- - 401,086 401,086
2020
Level 1 Level 2 Level 3 Total
Fair value assets
$$
$ $
15
- - 237,389 237,389
Refer to the note annotated for more detail on the valuation methodology.
Financial assets at fair value through other
comprehensive income - investment in equities
Financial assets at fair value through other
comprehensive income - investment in equities
Fair value is estimated using inputs other than quoted prices in level 1 that are observable for the assets or liability,
either directly (as prices) or indirectly (derived from prices).
InterestrateriskistheriskoflosstotheGrouparisingfromadversechangesininterestrates.TheGroup'sfinancingactivitiesareexposed
tointerestrateriskinrespectofitsinterestearningassetsandinterestbearingliabilities.ChangestointerestratescanimpacttheGroup's
financialresultsbyaffectingtheinterestspreadearnedontheseassetsandliabilities.Interestratesforfinancereceivables,termdeposits,
andbankdeposits(otherthanthoseoncall)arefixedfor thetermoftheir respectivecontracts.Interestratesarerepricedoncontractual
maturity dates of the financial instruments. There is a risk that different financial instruments (such as finance receivables and term
deposits) are repriced on different dates, i.e. a repricing risk (refer to contractual cash flows under liquidity risk for repricing dates).
Market risk is the risk that changes in market prices, such as interest rates will affect the Group's income or the value of its holdings of
financial instruments.
51

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 7: OTHER EXPENSES
7.1 Realised losses on bonds sold
7.2 Other operating expenses
Included in other expenses are the following amounts:
20212020
$$
Directors fees
177,833 152,808
Auditors Remuneration
- Audit and other assurance services
- Audit of financial statements
144,375 121,800
- Audit of quarterly trustee certificates
3,623 3,623
- Other Services
-Taxation compliance
14,392 9,592
Total remuneration paid to auditors
162,390 135,015
NOTE 8: TAXATION
8.1 Income tax
20212020
$$
Net operating profit / (loss) before taxation
120,733 190,463
Income tax (expense) / benefit at prevailing rates
(33,805) (53,330)
Tax impact of expenses not deductible for tax purposes
(6,142) (7,577)
Over-provision of tax in prior year
980 -
Taxation expense per the statement of comprehensive income
(38,967) (60,907)
Comprising:
- Current tax
(69,885) (75,230)
- Deferred tax
30,918 14,323
(38,967) (60,907)
8.2 Deferred tax asset
20212020
$$
Balance at beginning of year
96,004 38,408
(Charged) / credited to profit or loss
Increase / (decrease) in impairment loss provision
7,664 15,400
Increase / (decrease) in accrued expenses
(2,043) (1,077)
Increase / (decrease) in lease liability
89,442 -
Increase / (decrease) in unearned income
18,035 -
Increase / (decrease) in right of use asset
(82,180) -
30,918 14,323
(Charged) / credited to other comprehensive income
Changes in the fair value of equity investments at fair value through other comprehensive income
- 43,273
126,922 96,004
DuringtheyeartheGrouppurchasedlistedcorporateandlocalgovernmentbondstotaling$4,718,617todiversifytheliquidassetsheldby
theGroupintolongertermfixedinterestinvestments.Thebondsweredesignatedatfairvaluethroughothercomprehensiveincomeupon
initialrecognition.Whenworldwideinflationexpectations andlong-term interestrates startedto increase, the Groupthen determinedto
divest from theseinvestments.Alossof $190,085 wasrealisedfrom thebondssoldduringthe2021Financial Year duetothebondvalue
movements.Interestincomeof$35,267wasearnedfromthebondsduringtheyearended31March2021.Thebondswereallsoldby31
March 2021. There were no bond investments made during the prior year ended 31 March 2020.
52

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 8: TAXATION (CONTINUED)
Deferred tax attributed to:
20212020
$$
Deferred tax assets:
Impairment loss provision
38,088 30,424
Accrued expenses
20,264 22,307
Fair value of equity investments at fair value through other comprehensive income
43,273 43,273
Lease Liability
89,442 -
Unearned income
18,035
-
209,102 96,004
Deferred tax liabilities
Right of use assets
82,180 -
Net deferred tax assets
126,922 96,004
8.3 Imputation credit account
20212020
$$
Balance at beginning of year
93,220 73,232
Tax Paid
18,942 19,988
Withholding tax deducted from interest received
4,868 -
Tax Refund Received
(1,072) -
115,958 93,220
NOTE 9: EARNINGS PER SHARE
20212020
CentsCents
0.05 0.08
0.05 0.08
20212020
Basic earnings per share
$$
81,766
129,556
81,766
129,556
20212020
NumberNumber
161,657,561
159,603,804
161,657,561
159,603,804
Diluted earnings per share attributable to the ordinary equity holders
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating basic earnings per share:
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating diluted earnings per share:
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
Weighted average number of ordinary shares used as the denominator in calculating
diluted earnings per share
Basic earnings per share attributable to the ordinary equity holders
53

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 10: CASH AND CASH EQUIVALENTS
20212020
$$
Cash
- 20,000
Bank call deposits
3,842,267 6,842,241
Bank term deposits (original maturity of less than 183 days)
3,450,000 5,700,000
7,292,267 12,562,241
Bank term deposits (original maturity of greater than 183 days)
3,000,000 -
3,000,000 -
Interest Rates:
On Call: Between 0.00% and 0.50% (March 2020: Between 0.00% and 1.60%).
Bank term deposits:
- Less than 183 days: Between 0.80% and 1.05% (March 2019: Between 2.40% and 2.75%).
- Greater than 183 days: Between 1.60% and 1.85% (March 2020: None).
NOTE 11: LOAN RECEIVABLES
20212020
$$
First mortgage advances
54,351,134 33,806,493
Second mortgage advances
107,822 349,917
Combined first and second mortgage advances
1
- 1,033,456
54,458,956 35,189,866
Less deferred fee income and expenditure
(612,146) (225,360)
Less impairment allowance
(136,029) (108,657)
Net carrying value
53,710,781 34,855,849
Current portion
40,292,033 31,009,328
Non-current portion
13,418,748 3,846,521
53,710,781 34,855,849
Primary loan security
Residential housing
46,751,105 29,382,682
Residential bare land
4,607,409 1,902,826
Residential development property
- 3,904,358
Commercial property
2
3,100,442 -
54,458,956 35,189,866
Interest rate: Between 5.45% and 16.50% (2020: Between 7.05% and 16.50%).
Effective interest rate: Between 5.79% and 18.73% (2019: Between 10.04% and 20.34%).
For loans that are in default, additional interest of up to 10% is charged.
1
Loanadvancesecuredbyfirstmortgageover onepropertyandsecondmortgageoveranother property. Classifiedasasecondmortgage
for the purposes of calculating General Finance Limited's (subsidiary entity) capital ratio in accordance with the Deposit Takers (Credit
Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010.
Loanreceivablesrepresentloansatcommercialinterestrates. Currentloanreceivablesarecontractuallyrepayablewithin12months.Non-
current loan receivables are contractually repayable within 12 months to 3 years of balance date.
At year end there was $1,316,486 in outstanding loan commitments including future capitalised interest (March 2020: $742,412).
2
TheGroupcommencedlendingoncommercialpropertiesduringthecurrentfinancialyearendedMarch2021.TheGroup’slendingpolicy
allows for a maximum of 30% of total lending to be secured over commercial properties (5.7% at 31 March 2021).
54

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 11: LOAN RECEIVABLES (CONTINUED)
Borrower payment terms are profiled as follows:
20212020
$$
Interest only paid monthly
44,299,684 29,098,627
Interest capitalised
10,159,272 6,091,239
Total loan receivables
54,458,956 35,189,866
20212020
$$
Interest income
537,839 282,068
Loan Fees
795,481 427,987
Total
1,333,320 710,055
Reconciliation of gross loan receivable balance movements through ECL stages:
Lifetime ECL Lifetime ECL
12 month not creditcredit
ECLimpaired impairedTotal
$$$$
Balance as at 31 March 2019
17,460,269 - - 17,460,269
New loan advances
30,848,719 - - 30,848,719
Repayments
(13,119,122) - - (13,119,122)
Transfer to lifetime not credit impaired
(610,369) 610,369 - -
Transfer to lifetime credit impaired
(905,956) - 905,956 -
Balance as at 31 March 2020
33,673,541 610,369 905,956
35,189,866
New loan advances
52,166,464 - - 52,166,464
Repayments
(31,381,049) (610,369) (905,956) (32,897,374)
Transfer to lifetime not credit impaired
(1,302,341) 1,302,341 - -
Balance as at 31 March 2021
53,156,615 1,302,341 - 54,458,956
The core lending activity of the Group is providing, through a broker network, short term and bridging finance secured by mortgage over
residentialproperty. Themajorityofloansareenteredintowithamaturitydatewithin12months,withaproposalthatrepaymentwillbe
fundedbythesaleofthesecuredpropertyorthroughrefinancingbytheborrower.TheGroup’slendingpolicyallowsforamaximum“loan
to security value” of 75% (excluding fees and charges) on advances.
Atbalancedate,25.0%(March2020:37.1%)ofloansbynumberand29.2%(March2020:31.6%)byvaluerepresentloansthathavebeen
rolled over and are into their second or subsequent credit periods. Where loans have been rolled over, their classification in these
consolidatedfinancialstatementsascurrentornon-current,oraspastdue,isbasedonpaymentduedatesasperthetermsoftheextended
contract, and not as per the original or preceding contract.
Loan fees (for all loans) and interest (for capitalised interest loans) are capitalised to the loan balances when charged and recognised over
the life of the loans using the effective interest method. The associated cash is received when the loans are repaid (or partially repaid).
Income recognised during the financial year from amounts capitalised to loan receivables were as follows:
55

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 11: LOAN RECEIVABLES (CONTINUED)
Reconciliation of movements in impairment allowance by stage:
Lifetime ECL Lifetime ECL
12 month not creditcredit
ECLimpaired impairedTotal
$$$$
Balance as at 31 March 2019
53,658 - - 53,658
New loan advances
95,252 - - 95,252
Repayments
(40,253) - - (40,253)
Transfer to lifetime not credit impaired
(1,885) 1,885 - -
Transfer to lifetime credit impaired
(2,797) - 2,797 -
Balance as at 31 March 2020
103,975 1,885 2,797 108,657
New loan advances
161,076 - - 161,076
Repayments
(96,896) (1,885) (2,797) (101,578)
Transfer to lifetime not credit impaired
(3,256) 3,256 - -
Movement due to reduction in ECL %
(32,126) - - (32,126)
Balance as at 31 March 2021
132,773 3,256 - 136,029
NOTE 12: INVESTMENT IN SUBSIDIARIES
Subsidiary
20212020
Corporate Holdings Limited (CHL)Holding company
100.0%100.0%
General Finance LimitedFinance
100.0%100.0%
Investment Research Group LimitedResearch and advisory
100.0%100.0%
Commercial and General Finance LimitedDormant
100.0%100.0%
General Finance & Investments LimitedDormant
100.0%100.0%
General Finance & Leasing LimitedDormant
100.0%100.0%
General Leasing LimitedDormant
100.0%100.0%
General Loan and Finance LimitedDormant
100.0%100.0%
Mykco Limited (previously named General Capital Limited) Dormant
100.0%100.0%
All subsidiaries have a 31 March balance date.
Ininstanceswheretheprobabilityofdefaulthasincreasedsignificantly(asignificantincreaseincreditrisk),orwheretheloanisindefault,
the expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending
whentheloantovaluationratio(LVR)exceeds75%.ThismeansingeneralthattheGroupexpectsthatthepresentvalueofexpectedcash
flows from a loan in default to approximate the carrying value of the loan prior to the default event, except in cases where the LVR has
increased considerably due to a reduction in the security property valuation or a significant increase in the loan balance.
TheLVRofloanswithasignificantincreaseincreditriskorindefaultwasinarangeof53.9%-63.0%asat31March2021(44.9%-64.3%as
at 31 March 2020), based on the security property valuation at origination.
Ownership Interest Held
56

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 13: LEASES
Right of use assetsOffice Premises
and Carparks
$
As at 1 April 2019-
As at 31 March 2020
-
Additions305,729
Depreciation(12,229)
As at 31 March 2021
293,500
Lease Liability
20212020
$$
Balance at beginning of year
- -
Additions
305,729 -
Accretion of interest
1,478 -
Payments
- -
Total loan receivables
307,207 -
Current
149,195 -
Non-current
158,012 -
307,207 -
NOTE 14: INTANGIBLE ASSETS
Bartercard
Trade
GoodwillLicencesDollars SoftwareTotal
$$$$$
Year ended 31 March 2020
Opening net book amount
2,350,730 277,000 591,178 47,648
3,266,556
Additions
- -
13,988
4,444
18,432
Disposals
- - (215,384) -
(215,384)
Amortisation charge
- - - (22,793)
(22,793)
Closing net book amount
2,350,730 277,000 389,782 29,299 3,046,811
At 31 March 2020
Cost
2,350,730 277,000 389,782 70,293 3,087,805
- - - (40,994) (40,994)
Net book amount
2,350,730 277,000 389,782 29,299 3,046,811
Accumulated amortisation and impairment
TheGroupenteredintoatwo-yearofficepremisesandcarparkleasewithacommencementdateof1March2021.Theleaseisforatermof
twoyearsandincludesfourfurtherrightsofrenewalofsixmonthseach.Managementdonotexpecttherenewalrightstobeexercisedas
theGroupisexpectedtogrowinsizeandheadcountoverthenexttwoyearsandassuchwillrequirealargerofficepremises.Accordingly,
the extension periods have not been included in the lease term in the calculation of the lease liability. The undiscounted potential future
rental payments relating to these extension periods which are not included in the lease term total $326,041.
TheGrouphadaleaseobligationfrom1March2021.Intheperiodupto28February2021andintheprioryearended31March2020,the
GrouppaidashareofofficepremisesleasecoststoMoneyonlineLimited,arelatedcompany. Therewasnoformalagreementinplacein
relation to this arrangement. Costs were allocated monthly based on the office space utilised by the Company. The costs are included in
occupancy costs in the statement of comprehensive income, and further information on related party transactions can be found in note 18.
57

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Bartercard
Trade
GoodwillLicencesDollars SoftwareTotal
$$$$$
Year ended 31 March 2021
Opening net book amount
2,350,730 277,000 389,782 29,299
3,046,811
Additions
- - 11,858 -
11,858
Disposals
- - (108,873) -
(108,873)
Amortisation charge
- - - (23,431)
(23,431)
Closing net book amount
2,350,730 277,000 292,767 5,868 2,926,365
At 31 March 2021
Cost
2,350,730 277,000 292,767 70,293 2,990,790
- - - (64,425) (64,425)
Net book amount
2,350,730 277,000 292,767 5,868 2,926,365
Impairment testing for cash-generating units (CGU) containing brands and licences
Goodwill
Allocated to the finance CGU
1,323,729 1,323,729
Allocated to the research and advisory CGU
1,027,001 1,027,001
2,350,730 2,350,730
Licences with an indefinite useful life
Allocated to the finance CGU
247,000 247,000
Allocated to the research and advisory CGU
30,000 30,000
277,000 277,000
Finance CGU
The aggregate carrying amounts of goodwill and indefinite life licences are outlined above. Goodwill primarily relates to growth
expectations,expectedfutureprofitabilityandtheworkforceoftheCGU's.Managementhaveassessedthatthereisnoforeseeablelimitto
theperiodoftimeoverwhichthegoodwillandlicencesareexpectedtogeneratenetcashinflowsfortheGroupandassuchtheyhavebeen
assessed as having an indefinite useful life.
The recoverable amount of the CGUs has been determined based on value in use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are
extrapolated using the estimated long term growth rates stated below. The growth rate does not exceed the long term average for the
products, industries or country in which the CGUs operate. For each of the CGU's with goodwill and indefinite life licences, the key
assumptions, long term growth rate and discount rate used in the value in use calculations are as follows.
Pre-taxfreecashflowstoequityholders(FCFE)havebeenforecastedbasedongrowthinthenon-bankdeposittaking/residentiallending
business within the current constraints of the licence / trust deed. The forecasted growth in net cash flows is driven primarily by the net
interestandfeemarginfrom forecastedgrowthindepositfundingandtheloanbook.For referencepurposes, pre-taxFCFE was$309,804
(2020:$613,698). SignificantexpenditurehasbeenincurredsincethebusinesswaspurchasedbytheGrouptoensurethatthebusinesshas
the capacity and resources to allow for the growth.
Accumulated amortisation and impairment
58

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
31 March 2021 AssumptionsTotal Assets Total Liabilities Revenue ExpenditureFCFE
Year one growth assumptions24.1%21.6%36.5%17.1%
303.6%
1
Year two growth assumptions28.0%29.9%27.9%22.1%51.0%
Year three growth assumptions26.2%27.3%27.0%23.6%38.1%
Year four growth assumptions21.9%22.1%23.8%19.6%35.7%
Year five growth assumptions21.7%21.7%22.0%18.3%31.3%
Terminal growth beyond year 5
2.0%
Pre-tax discount rate 13.9%
31 March 2020 AssumptionsTotal Assets Total Liabilities Revenue ExpenditureFCFE
Year one growth assumptions-6.5%-7.8%18.1%27.1%-24.0%
Year two growth assumptions55.5%63.4%24.0%21.3%45.6%
Year three growth assumptions41.3%43.9%49.1%35.6%137.2%
Year four growth assumptions6.3%5.0%19.7%15.1%37.1%
Year five growth assumptions6.1%4.8%5.9%4.4%10.6%
Terminal growth beyond year 5
2.0%
Pre-tax discount rate 13.0%
Research and advisory CGU
31 March 2021 AssumptionsNet Revenue Expenditure
Working Capital
Movements
Pre-tax FCFF
Actual 31 March 2021 year
2
392,635 (123,357) 7,446 276,724
Forecast 2022
353,545 (181,467) - 172,079
Forecast 2023
358,849 (184,189) - 174,660
Forecast 2024
364,231 (186,952) - 177,280
Forecast 2025
369,695 (189,756) - 179,939
Forecast 2026
375,240 (192,602) - 182,638
Terminal growth beyond year five
1.5%
Pre-tax discount rate16.3%
In assessing the impairment of the goodwill and licences in the finance CGU, a sensitivity analysis for reasonable possible changes in
assumptions was performed. This included decreasing and increasing the years 1-5 forecasted cash flows (based on the above growth
assumptions)by25%,decreasingandincreasingtheterminalgrowthrateby0.5%,anddecreasingandincreasingthediscountrateby1%.
ThesereasonablypossiblechangesinassumptionsdidnotresultinanimpairmenttotheCGU (2020: thesame sensitivityanalysis didnot
result in an impairment to the CGU).
Pre-tax free cash flows to the firm (FCFF) has been forecasted based on expected revenue and expenditure growth in the research and
advisory business.
1
AnticipatedgrowthinFCFEislarge($303.6%)comparedtotheanticipatedgrowthinassets(24.1%).ThisisbecauseMarch2021FCFEwas
impactedbyhighreservesofcashheldduringthatyearduetotheuncertaintyaroundtheCovid-19pandemicandrealisedlossesonbonds
soldinthatyear.Inadditiontothis,duetothenatureoffinancebusinesses,thebenefitsofthebalancesheetgrowthinthe2021financial
year are not fully realised until the following year (for instance the expected interest income from new lending).
59

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
31 March 2020 AssumptionsNet Revenue Expenditure
Working Capital
Movements
3
Pre-tax FCFF
Actual 31 March 2020 year
132,062 (152,586) (116,022) (136,546)
Forecast 2021
337,834 (175,935) 91,151 253,050
Forecast 2022
342,901 (178,574) - 164,327
Forecast 2023
348,045 (181,252) - 166,793
Forecast 2024
353,265 (183,971) - 169,294
Forecast 2025
358,564 (186,731) - 171,833
Terminal growth beyond year five
1.5%
Pre-tax discount rate15.5%
Bartercard trade dollars
Bartercard trade dollars comprise the balance of Bartercard Trade Dollars on hand at period end net of accumulated impairment losses.

Fortheyearsended31March2020and31March2021itwasdeterminedthatthefairvaluelesscostsofdisposaloftheBartercardtrade
dollarswasequivalenttothecarryingvalueoftheassets.Fairvaluelesscostsofdisposalwasdeterminedbasedonthefactthatallmarket
participants(beingotherBartercardmembers)acceptthetermsandconditionsofBartercardwhichstipulatethataBartercardTradeDollar
isequivalenttoaNewZealanddollaratthedateofexchangeinrespectoffuturepurchasesorgoodsandservices.Inaddition,asthereare
no significant disposal costs associated with settling transactions in Bartercard trade dollars, management have determined that the fair
value less costs of disposal are equal to the carrying value of bartercard trade dollars.
3
IntheMarch2020year,therewasanincreaseinreceivables(workingcapital)duetobillingslateinthefinancialyear.Thiswasexpectedto
be received in the 2021 financial year, hence the corresponding working capital decrease in the 2021 forecast.
TheforecastedcashflowsintheMarch2021andMarch2020impairmentanalysisincludeassumptionsaroundtheprobabilityofachieving
certainmilestonesinthetwocontractsthatexistat31 March2020aswell asexpectationsaroundsourcingfutureadvisorycontractsand
the expected resulting cashflows.
In assessing the impairment of the goodwill and licences in the research and advisory CGU, a sensitivity analysis for reasonable possible
changesinassumptionswasperformed.Thisincludeddecreasingandincreasingtheyears1-5forecastcashflowsby100%,decreasingand
increasingtheterminalgrowthrateby0.5%,anddecreasingandincreasingthediscountrateby1%.Areductioninforecastedcashflowsby
100%wouldresultinanimpairmentof$1,057,001(2020:$1,057,001)totheCGU.Anincreaseinthediscountrateby1%wouldresultinan
impairment of $43,498 (2020: no impairment) to the CGU. The other sensitivity movement did not result in an impairment (2020: no
impairment) to the CGU.
Management have determined that a 100% reduction in forecasted cash flows is a reasonably possible change. This is because the cash
flowsoftheresearchandadvisorygrouprelymostsignificantlyonsecuringandcompletingoneormoreadvisoryprojectsperyear.Should
thisnotbeachieved,thenthenetcashflowsoftheCGUmaybebreakevenornegative(netcashoutflow)intheforecastyears.Theforecast
has been developed based on historical performance and current advisory opportunities. As at the date of signing there are no known
adverse factors which would impact on the ability of the CGU to achieve the forecasts.
2
$72,000ofthepre-taxFCFF inthe31March2021year asdisplayedaboverelatestoamountsreceivedinsharesfor advisoryfees, netof
amountspaidinsharesforcommissionexpense.Thesehavebeenincludedinpre-taxFCFFonthebasisthattheresearchandadvisoryCGU
isnotinthebusinessofholdingsharesdespitetheGroup'selectiontodosoandhencethesharescouldhavebeensoldatfairvalueonthe
datetheywerereceived.Shouldthisamountnotbeincludedasacashflow,thenpre-taxFCFFwouldinsteadbe$204,724forthe31March
2021 year. There is no impact on the future year forecasts, nor on the impairment assessment in respect of this.
60

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 15: INVESTMENTS
Note
20212020
$$
Investment in Barter Investments Limited1835,321 37,389
Investment in Sports & Education Corporation Limited18- -
Investment in Cannabis and Bioscience Corporation Limited18265,581 200,000
Investment in Greenfern Industries Limited18100,184 -
401,086 237,389
Investment in Barter Investments Limited
Investment in Sports & Education Corporation Limited
Investment in Cannabis and Bioscience Corporation Limited
The 17.3% (March 2020: 16.3%) equity stake in Cannabis and Bioscience Corporation Limited (CBC) was acquired for the payment of
$200,000 bartercard trade dollars in January 2020 and a further payment of $75,000 bartercard trade dollars in April 2021. CBC is an
unlistedinvestmentholdingscompanyandisarelatedpartybyvirtueofcommondirectorshipasdescribedinnote18.Theinvestmenthas
been classified as a financial asset at fair value through other comprehensive income.
Fair value of CBC investment as at 31 March 2020
The fair value of the investment was estimated by Management to be $0.08 per share as at 31 March 2020 with reference to the
subscriptionpricethattheGrouppaidforCBC'ssharesandwithreferencetootherthirdpartysubscriptionsatthesamepriceleadingupto
and subsequent to 31 March 2020. The subscription price was set based on expectation of returns from the underlying early stage
investmentswithinCBC.Theprobabilityweightedcompoundannualgrowthrateoftheinvestmentsis14.9%,expectedtoberealisedovera
5 year investment period and discounted back at a risk-adjusted discount rate of 24.5%. No amounts were recognised in other
comprehensive income during the year ended 31 March 2020 in relation to fair value movements of the investment.
Inter-relationship between the key unobservable inputs and fair value measurement:
-adecreaseinthecompoundannualgrowthrate(overthe5yearinvestmentperiod)by5%combinedwithanincreaseintheriskadjusted
discount rate by 2% would decrease the fair value by $40,000.
-anincreaseinthecompoundannualgrowthrate(overthe5yearinvestmentperiod)by5%combinedwithadecreaseintheriskadjusted
discount rate by 2% would increase the fair value by $50,000.
The 4.82% stake in Barter Investments Limited is held by Investment Research Group Limited. The investment in the unlisted investment
holdingscompanyisclassifiedasafinancialassetatfairvaluethroughothercomprehensiveincome.Thisequityisnotquotedinanactive
market. The fair value of this equity security is based on the Group's share of the entity's net assets at reporting date as reported in the
entity'sfinancialstatements(valuationtechnique).Themajorityoftheentity'sassetsandliabilitiesarereportedintheirfinancialstatements
at either their fair value or their carrying value which approximates their fair value (the significant unobservable inputs). The inter-
relationshipbetweenkeyunobservableinputsandfairvaluemeasurementisthatanincrease/(decrease)inthenetassetswouldincrease/
(decrease)thefairvalueoftheinvestment.Alossof$2,068hasbeenrecognisedinothercomprehensiveincomeduringtheyearinrelation
to the fair value of the investment (2020: a gain of $1,451).
The 0.96% stake in Sports & Education Corporation Limited (SEC) is held by Investment Research Group Limited and was acquired in late
March 2019 as a portion of revenue for the completion of an advisory project. The investment in the Unlisted Securities Exchange (USX)
listed company which owns various brands in the international sports and education sectors is classified as a financial asset at fair value
throughothercomprehensiveincome.TheequitysecuritiesarequotedontheUnlistedSecuritiesExchangeinNewZealand,howeverthere
has not been significant trading activity in the securities since it was listed in December 2018.
Fair value of SEC investment as at 31 March 2020 and 31 March 2021
SECwasputintoatradinghaltontheUSXon1August2019pendingthereleaseofitsMarch2019AnnualReportwhichstillhasnotbeen
released up to the date of signing these financial statements. When compiling the 31 March 2020 financial statements, the Group
determinedthattheuncertaintyinherent inthe futurecash flowsof theinvestment wereso significantthat itwas unlikelythat a market
participantwouldpayamaterialamountfortheequitystakeheldbytheGroup.TheGroupthereforedeterminedthatariskadjustmentof-
100%pershare(asignificantunobservableinput)beapplied(March2021:-100%).Thisresultedinafairvalueof$nilasat31March2020
(March2021:$nil).Theinter-relationshipbetweenthekeyunobservableinputandfairvaluemeasurementisthatanincrease/(decrease)
intheriskadjustment(anincreasebeingahigherdiscount)would(decrease)/increasethefairvalueoftheinvestment.Afairvaluelossof
$154,545beforetaxwasrecognisedinothercomprehensiveincomeduringthe31March2020financialyearinrelationtothefairvalueof
the investment (March 2021: No fair value movements recognised).
61

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 15: INVESTMENTS (CONTINUED)
Investment in Greenfern Industries Limited
NOTE 16: TERM DEPOSITS
20212020
$$
Gross term deposit liability
57,929,500 41,520,102
Less deferred commission expenditure
(66,316) (69,605)
Net carrying value
57,863,184 41,450,497
Contractual repayment terms:
On call
30,151 364,006
Within 12 months
37,888,692 26,053,028
Greater than 12 months
19,944,341 15,033,463
57,863,184 41,450,497
Repayment Terms:On call up to 5 years
Interest Rate:2.40% - 6.75% and 0.15% on call (March 2020: 3.10% - 6.75% and 1.00% on call)
Effective Interest Rate:2.40% - 6.75% and 0.15% on call (March 2020: 3.10% - 6.75% and 1.00% on call)
Security:
Fair value of CBC investment as at 31 March 2021
The fair value of this equity security is based on the Group's share of the entity's net assets at reporting date as reported in the entity's
financial statements, net of a discount for illiquidity of 20% (valuation technique). The majority of the entity's assets and liabilities are
reported in their financial statements at either their fair value or their carrying value which approximates their fair value (the significant
unobservableinputs). Alossof$9,419hasbeenrecognisedinother comprehensiveincomeduringtheyearinrelationtothefair valueof
the investment (2020: $nil).
Inter-relationship between the key unobservable inputs and fair value measurement:
- an increase / decrease in the illiquidity discount by 10% would decrease / increase the fair value of the investment by $33,000.
First ranking security interest over the assets and undertakings of General Finance Limited in favour of the
Trustee(subjectonlytoanypriorsecurityinterestspermittedbytheTrustDeedandpreferentialclaimsgiven
priority by operation of law).
TheGrouphasatotalof 545depositorsasat 31 March2021 (March2020: 471). Asatbalancedate,thelargestdeposit theGrouphasis
$3,030,499 (March 2020: $1,401,819) which represents 5.23% (March 2020: 3.38%) of total deposits. As at balance date the largest
aggregatedepositsunderasingledepositholdertotals$4,057,508(March2020:$4,763,337)whichrepresents7.00%(March2019:11.47%)
of total deposits and have a weighted average maturity date of 3.74 months from balance date (March 2020: 3.10 months from balance
date). The largest deposit holder at 31 March 2021 and 31 March 2020 is a director of the Company (refer to note 18).
50,092 shares (representing a 0.56% stake) in Greenfern Industries Limited (Greenfern) were acquired by the Group during the 31 March
2021year.40,000shareswereacquiredaspaymentofadvisoryfeesand4,000ofthosesharesweretransferredtotheManagingDirectorin
accordance with his contract (also refer note 18). A further 14,092 shares were also acquired for $2 per share.
The investment in the unlisted investment holdings company is classified as a financial asset at fair value through other comprehensive
income. This equity is not quoted in an active market.
ManagementhasestimatedthefairvalueoftheequitysecuritiesbasedonthetransactionpriceforsalesofGreenfernsharesofthesame
classatdateswhichapproximatethedatetheshareswereacquiredbythegroupandat31March2021yearend(valuationtechnique).A
crowdfundingwascarriedoutbyGreenferninlate2020ataprice$2persharewhichraisedapproximately$2.9m.Greenfernmanagement
havealsoadvisedtheCompanythatfurthershareshavebeensoldsincethatdateatthesameprice(thesignificantunobservableinputs).
Managementhavethereforeassessedthefairvalueofthesharesat$2pershare.Theinter-relationshipbetweenkeyunobservableinputs
andfairvaluemeasurementisthatanincrease/(decrease)inthetransactionpricefortheshareswouldincrease/(decrease)thefairvalue
of the investment. No amounts have been recognised in other comprehensive income during the year in relation to the fair value of the
investment (2020: $nil).
62

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 16: TERM DEPOSITS (CONTINUED)
Further analysis of gross deposit funding is as follows:
Concentration of funding
20212020
$$
Northland
1,263,690 1,331,034
Auckland
28,588,679 17,905,252
Waikato
4,375,175 3,350,350
Bay of Plenty
5,519,679 4,259,303
Wellington
5,261,156 2,696,853
Other North Island
3,310,551 2,892,174
South Island
4,654,659 3,496,951
Overseas *
4,955,911 5,588,185
Total gross term deposit liability
57,929,500 41,520,102
*The largest deposit holder resides overseas and is a director of the Company (refer to note 18).
Contractual maturity of funding
20212020
$$
Maturing in 0 - 6 months17,701,862 12,872,122
Maturing in 6 - 12 months20,238,363 13,561,058
Maturing in 12 - 24 months17,850,727 11,171,206
Maturing after 24 months
2,138,5483,915,716
Total gross term deposit liability
57,929,500 41,520,102
Profile of deposit holders
2021202120202020
$$
Deposits over $200,000
63
34,500,730
38
19,755,073
Deposits $100,000 - $200,000
58
8,322,533
62
8,892,406
Deposits $50,000 - $100,000
121
8,527,002
102
7,040,426
Deposits $20,000 - $50,000
153
4,987,325
135
4,360,750
Deposits $10,000 - $20,000
77
1,109,070
70
1,017,019
Deposits under $10,000
73
482,840
64
454,428
Total gross term deposit liability
545
57,929,500
471
41,520,102
Reconciliation of liabilities arising from financing activities
Opening Opening
BalanceFinancingNon-cashBalance
1 AprilCash Flows
Changes
1
31 March
$$$$
For the year ended 31 March 2021
Term deposits41,520,102 16,320,14289,256 57,929,500
Total
41,520,102 16,320,142 89,256 57,929,500
For the year ended 31 March 2020
Term deposits14,928,161 26,393,382198,559 41,520,102
Total
14,928,161 26,393,382 198,559 41,520,102
1
Non-cash changes relate to the movement in unpaid interest in the term deposit balance.
63

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 17: EQUITY
NoteNumber$Number$
Ordinary shares(a)
162,873,779 10,249,211 161,655,643 10,176,204
(a) Ordinary shares
Number$
Balance at 1 April 2019
153,845,313 9,573,495
Ordinary shares issued on 30 September 2019 - exercise of GENWA Warrants
1
7,083,296 548,955
Ordinary shares issued on 30 September 2019 - exercise of GENWB Warrants
1
354 32
Ordinary shares issued on 31 March 2020 - exercise of GENWA Warrants
1
721,292 55,900
Ordinary shares issued on 31 March 2020 - exercise of GENWB Warrants
1
5,388 485
Transaction costs arising on shares issued
- (2,663)
7,810,330 602,709
Balance at 31 March 2020
161,655,643 10,176,204
Ordinary shares issued on 15 April 2020 - exercise of GENWA Warrants
2
2,000 155
Ordinary shares issued on 31 March 2021 - Share Placement
3
1,216,136 76,009
Transaction costs arising on shares issued
- (3,157)
1,218,136 73,007
Balance at 31 March 2021
162,873,779 10,249,211
AllordinarysharesrankequallyandentitletheholdertoparticipateindividendsandtoshareintheproceedsofwindinguptheCompanyin
proportiontothenumber ofandamountspaidonthesharesheld.Onevoteisattachedtoeachfully-paidordinaryshare.Shareshaveno
par value. The Company was listed on the NZAX, the secondary market ofthe NewZealand StockExchange upto 1July 2019, the dateit
migrated to the NZX main board.
Ordinary shares
2020
-7,083,296GENWAWarrantswereexercisedon30September2019at$0.0775perwarrantforatotalexercisepriceof$548,955.This
included 6,630,780 GENWA warrants exercised by Key Management Personnel for a total exercise price of $513,885 (refer to note 18).
-5,388 GENWB Warrants were exercised on 31 March 2020 at $0.09 per warrant for a total exercise price of $485.
-721,292 GENWA Warrants were exercised on 31 March 2020 at $0.0775 per warrant for a total exercise price of $55,900.
-354 GENWB Warrants were exercised on 30 September at $0.09 per warrant for a total exercise price of $32.
3
On 31 March 2021, the Company issued 1,216,136 shares at 6.25 cents per share on 31 March 2021 under a placement to a wholesale
investor.
2
2,000 GENWA Warrants were exercised on 31 March 2021 at $0.0775 per warrant for a total exercise price of $155. The Group allowed the
minor parcel warrants to be exercised after the 31 March 2020 expiry date (on 15 April 2020) as the exercise form was received late due to
mail delays.
2021
1
The following warrants were exercised during the 31 March 2020 Financial year.
64

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 17: EQUITY (CONTINUED)
(b) Warrants
Number$Number$
Balance at 1 April 2019
153,845,313 - 307,690,626
-
Exercise of GENWA Warrants - 30 September 2019
2
(7,083,296) - -
-
Exercise of GENWB Warrants - 30 September 2019
2
- - (354)
-
Exercise of GENWA Warrants - 31 March 2020
2
(721,292) - -
-
Exercise of GENWB Warrants - 31 March 2020
2
- - (5,388)
-
Warrants lapsed on expiry date
3
(146,038,725) -
-
- - 12,650,000
4,672
- - 400,000
2,231
Balance at 31 March 2020
2,000 - 320,734,884 6,903
Exercise of GENWA Warrants - 15 April 2020
2
(2,000) - -
-
Balance at 31 March 2021
- - 320,734,884 6,903
2
Refer to Note 17(a) for further details on warrants exercised.
(c) Reserves
Financial Assets Share-basedTotal
at FVOCIpaymentsReserves
Notes$$$
Balance at 1 April 2019
(14,862) - (14,862)
15
(153,094) - (153,094)
8
43,273 -
43,273
Share-based payment expense
19
- 6,903
6,903
Balance at 31 March 2020
(124,683) 6,903 (117,780)
15
(11,487) - (11,487)
Balance at 31 March 2021
(136,170) 6,903 (129,267)
Issue of GENWB warrants to directors and senior managers - 17
January 2020 (note 19)
Income tax arising on revaluation of financial assets at FVOCI
GENWA WarrantsGENWB Warrants
Atender processwassettledon30September 2019for 7,778,542GENWAwarrantsand15,557,084GENWB warrantsthathadoriginally
beenissuedtoaholdingaccountinrelationtothewarrantissueon11December2018describedabove.TheGENWAwarrantsweresoldto
tenderersfortotalproceedsof$4,068andtheGENWBsharesweresoldfortotalproceedsof$4,718.Aspartofthistransaction,7,540,601
GENWA warrants were purchased by Key Management Personnel for total proceeds of $3,013 and 15,357,084 GENWB warrants were
purchased by Key Management Personnel for total proceeds of $3,068.
Revaluation of financial assets at FVOCI
Revaluation of financial assets at FVOCI
Issue of GENWB warrants to directors and senior managers - 25
June 2019 (note 19)
65

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 18: RELATED PARTY BALANCES AND TRANSACTIONS
The Group had dealings with the following related parties during the reporting periods:
Related partyRelationship
Directors (Refer to Director Profiles)Directors
Alistair Ward
Director of Subsidiary (General Finance Limited) - up to 16 September 2019
Donald HattawayDirector of Subsidiary (General Finance Limited)
Garth Ward
Director of Subsidiary (Corporate Holdings Limited) - up to 14 September 2019
Gregory PearceDirector of Subsidiary (General Finance Limited)
Robert HartDirector of Subsidiary (General Finance Limited)
Almond Draw Limited
Common Director - up to 14 September 2019
Barter Investments LimitedCommon Director
Borneo Capital LimitedCommon Director
Campbell MacPherson LimitedCommon Director
Cannabis & Bioscience Corporation LimitedCommon Director
Ellice Tanner Hart LimitedCommon Director
Equity Investment Advisers LimitedCommon Director
Moneyonline LimitedCommon Director
Pegasus Golf Limited
Sports & Education Corporation Limited
2
Common Director
Related party receivables:
20212020
$$
Cannabis & Bioscience Corporation Limited
96,735
79,823
Moneyonline Limited
14,133
-
110,868 79,823
Related party payables:
20212020
$$
Brent King
5,145
442
Equity Investment Advisers Limited
5,084
2,126
Moneyonline Limited
-
357
10,229 2,925
Other related party balances:
20212020
$$
Term deposits held by directors and subsidiary directors
4,708,940
5,623,275
The above amounts payable to related parties are unsecured, interest-free and repayable on demand.
Major shareholders, directors, directors of subsidiaries and closely related persons or entities to them are considered related parties of the
Group.
Common Director with Sports & Education Corporation Limited
2
(parent company of
Pegasus Golf Limited)
66

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 18: RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)
Transactions with related parties
20212020
Related PartyTypeTransaction
$$
Expense 655,384
645,043
Expense 165,939
177,859
Expense
Recharge of expenses
70,823
107,075
Almond Draw Limited
Expense
Consultant fees
-
7,500
Ellice Tanner Hart Limited
Expense
Legal Fees
3,510
7,692
Expense
Recharge of salary costs
65,005
57,676
Expense
Brokerage paid
62,241
79,984
Expense
Recharge of expenses
-
4,830
Contra expense
Recharge of salary costs
2,643
-
Revenue
Advertising, commission and other revenue
14,240
1,500
Moneyonline Limited
ExpenseRecharge of expenses
3
117,546
132,576
Expense
Recharge of salary costs
2,625
-
Pegasus Golf Limited
2
Revenue
Fees and interest capitalised to loan balance
-
15,506
Revenue
Advisory fees
9,488
91,151
Other related party transactions:
NOTE 19: SHARE BASED PAYMENTS
(a) Warrants issued to directors and senior managers
Equity Investment Advisers
Limited
3
$32,000 (March 2020: $17,000) of the Managing Director's short term remuneration is paid to Moneyonline Limited on behalf of the
Managing Director and accordingly is included in two related party categories above.
Duringtheyearended31March2021,theGrouppurchasedlistedcorporateandlocalgovernmentbondstotaling$4,718,617(March2020:
$nil) and sold listed corporateand localgovernment bondsfor net proceeds totaling$4,545,768 (March2020: $nil) via EquityInvestment
Advisers Limited. Brokerage of $7,188 was charged by Equity Investment Advisers Limited in relation to these trades (March 2020: $nil).
Duringtheyearended31March2021,theGrouppaid$75,000BartercardTradeDollars(March2020:$200,000BartercardTradeDollars)to
acquire shares in Cannabis & Bioscience Corporation Limited. Refer to note 15.
4
$8,000 (March 2020: $nil) of the ManagingDirector's short term remunerationwas settledby thetransfer of 4,000 GreenfernIndustries
Limited shares, also refer to note 15.
Interest paid or capitalised on term deposits held by
KMP or their family members
The issue of warrants provides long-term incentives for directors and senior managers to deliver long-term shareholder value.
Key Management Personnel
(KMP)
1
As detailed in note 17(a), 6,630,780 GENWA warrants were exercised by Key Management Personnel on 30 September 2019 for a total
exercise price of $513,885.
Anissueofupto20millionGENWBwarrantstodirectorsandseniormanagers,tobeallocatedattheBoard'sdiscretion, wasapprovedby
shareholders at a special meeting dated 29 November 2018.
As detailed in note 17(b), 7,540,601 GENWA warrants were purchased by Key Management Personnel for total proceeds of $3,013 and
15,357,084 GENWB warrants were purchased by Key Management Personnel for total proceeds of $3,068 on 30 September 2019.
2
Since30November2018,thedateSports&EducationCorporationLimitedbecamearelatedpartybyvirtueofcommondirectorship.The
related party relationship ceased on 10 October 2019.
1
Key Management Personnel (KMP) includes the Company’s directors, subsidiary company directors, and the Chief Financial Officer.
Cannabis & Bioscience
Corporation Limited
Short term Remuneration
3,

4
67

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 19: SHARE BASED PAYMENTS (CONTINUED)
NumberFair Value $
Balance at 1 April 2019
-
-
12,650,000
4,672
400,000
2,231
Balance at 31 March 2020
13,050,000 6,903
Balance at 31 March 2021
13,050,000 6,903
Fair value of warrants issued to directors and senior managers
Inputs into model
25-Jun-1917-Jan-20
Warrants issued
12,650,000
400,000
Exercise price per warrant
9.00 cents
9.00 cents
6.00 cents
8.00 cents
15.13%20.00%
Risk free interest rate
0.84%0.99%
Fair value per warrant
0.0369 cents
0.5576 cents
Total fair value of warrants issued
3
4,672$ 2,231$
Issue of GENWB warrants to directors and senior managers - 25
June 2019
Issue of GENWB warrants to directors and senior managers - 17
January 2020
Duringtheyearended31March2020,atotalof13,050,000warrantswereissuedtoDirectorsandSeniorManagers,12,650,000on25June
2019 and a further 400,000 on 17 January 2020. No warrants were issued to Directors and Senior Managers in the year ended 31 March
2021
2
The expected price volatility is based on the historical volatility of the shares and adjusted for any expected changes to future volatility.
Transactions in GENWB Warrants (which are also listed on the NZX) have also been considered when determining the expected price
volatility of the Company's shares at grant date.
ThefairvalueatgrantdateofwarrantsissuedisdeterminedusingtheBlackScholesModelthattakesintoaccounttheexerciseprice,the
termofthewarrant,thesharepriceatgrantdateandexpectedpricevolatilityoftheunderlyingshare,theexpecteddividendyield,therisk
free interest rate for the term of the warrants.
The warrants have the same terms as GENWB warrants that were issued to shareholders in December 2018. They are exercisable on or
before 30 November 2021 at 9.00 cents per share for each warrant held.
3
The fair value of warrants on grant date is recorded as a share-based payments expense included within personnel expenses in the
Statement of Comprehensive Income and in reserves (refer note 17(c)).
Share price at grant date
Expected price volatility of the Company's shares
2
Warrants Issued
1
TheabovetableonlyincludesGENWBwarrantsissuedtoDirectorsandSeniorManagersinrespectoftheirservicesprovidedtotheGroup.
ItexcludesanywarrantsthatwereissuedtoDirectorsandSeniorManagersproratawithothershareholdersinrespectoftheirshareholding
at11December2018(refertonote17).FordetailsofDirectorstransactionsandbalancesinsharesandwarrantsrefertoShareholderand
Statutory Information.
Directors' and Senior Managers'
Warrants
1
68

GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 20: RECONCILIATION OF NET SURPLUS WITH CASH FLOWS FROM OPERATING ACTIVITIES
Note20212020
$$
Net profit / (loss) after tax
81,766
129,556
Adjustment for non-cash and other items
Movement in allowance for expected credit losses
27,372
54,999
Modification gain - loans receivable
(86,489)
-
Deferred tax movement through profit or loss
8
(30,918) (14,323)
Depreciation and amortisation
40,516
27,237
Realised losses on bonds sold
7.1
190,085
-
Fair value of warrants issued to directors and senior managers
19
-
6,903
Income received in non-cash financial assets
(80,000)
-
Expenses paid in non-cash financial assets
8,000
-
Adjustment for movements in working capital
(Increase) / decrease in loan receivables (net advances)
(18,407,676) (17,091,608)
(Increase) / decrease in accrued interest on loans receivable
(9,226) (112,604)
(Increase) / decrease in capitalised loan fees
(501,550) (306,999)
(Increase) / decrease in capitalised interest
(293,661) (213,292)
(Increase) / decrease in accounts receivable
2,690
3,292
(Increase) / decrease in related party receivable
(31,045) (79,823)
(Increase) / decrease in prepayments and other current assets
174,786 (151,679)
(Increase) / decrease in prepaid commission
3,289 (41,901)
(Increase) / decrease in bartercard trade dollars
1
22,015
1,396
Increase / (decrease) in income tax payable
46,879
54,147
Increase / (decrease) in deferred income
421,281
95,954
Increase / (decrease) in interest payable
89,256
198,558
Increase / (decrease) in related party payable
8,782 (5,017)
Increase / (decrease) in accounts and other payables
83,368
72,757
Net cash (outflow) / inflow from operating activities
(18,240,480) (17,372,447)
1
Movement is net of $75,000 bartercard trade dollars (March 2020: $200,000 bartercard trade dollars) used for acquisition of an equity
investment (note 15).
69