General Capital Releases 2022 Annual Report
General Capital Limited
Annual Report
For the year ended 31 March 2022
Contents
Directors’ Profiles 2-3
General Finance Directors and Executive 4
Directors’ Report 5-9
Corporate Governance Statement 10-21
Independent Auditors’ Report 22-27
Consolidated Financial Statements:
Consolidated Statement of Comprehensive Income 28
Consolidated Statement of Financial Position 29
Consolidated Statement of Changes in Equity 30
Consolidated Statement of Cash Flows 31
Notes to the Consolidated Financial Statements 32-70
Shareholder and Statutory Information 71-77
Corporate Directory 78
1
Directors’ Profiles
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 Limited
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-executive 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)
SIMON JOHN M
c
ARLEY LLB(Hons)
Non-executive 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.
PAUL WILLIAM ZINGEL Real Estate Agent Licensee, Residential Property
Manager, FinCap Financial Mentor
Non-executive Independent Director
Paul is a real estate professional with extensive property development and
property management experience. He was previously Product Owner and
Director of New Zealand’s first property auction portal, PropFi ® a start-up real
estate technology company that facilitated the sale and purchase of property
through online auctions. Paul has been successfully trading financial markets
for more than twenty years and as a registered Financial Services Provider, he
has managed private investment portfolios and provided insurance services
and financial mentoring throughout his career. Paul joined General Capital
Limited effective 1 March 2022.
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.
VICTOR PLIEV BCom, CA
General Capital Limited Chief Financial Officer
Victor is a Chartered Accountant and has been a member of the Chartered
Accountants Australia and New Zealand (CAANZ) since 2012. He has over 10
years post-university working experience, including several years working in
business advisory roles for a chartered accounting firm and other accounting and
finance roles for listed and unlisted companies. Victor joined General Capital
Group on 28 February 2022.
4
Directors’ Report
The Directors of General Capital are very pleased to present our Annual Report including the Audited Annual
Accounts for the year ending 31 March 2022.
1.0 Background
All shareholders will be familiar with the business and economic conditions of the year ended 31 March 2022.
We do not want to dwel
l on the ne
gative issues and the the impact of Covid. These have been widely discussed
in the media. This has been an excellent year for us, and we want to remain focused on the positive.
We simply acknowledge the fact that times have been challenging with the Covid pandemic dominat
ing most
discussions and decisions.
We have seen this as the challenge of the 2020’s but it is simply up to the leaders to lead their organisations
through this challenge as it will be for the to do so for the next challenge. There is no reason to dwell on th
is
any further.
2.0 Our Year
This year is one of achievement. In the past years we have focused on growth, building our infrastructure, our
market presence and our Brand. That investment has allowed us to grow quickly last year in all aspects of our
business.
General Capit
al Group saw
growth in
DepositsUp 52% to $88.0m
LoansUp 49% to $80.0m
CashUp 128% to $16.7m
Total AssetsUp 51% to $102.9m
RevenueUp 64% to $8.0m
NPAT for the GroupUp 1,540% to $1.3m
The biggest success is that we have been able to increase the size of the business significantly, and also
increase revenue and profits at a faster rate. Growth always incurs cost so to be able to increase the asset size
and the profits is very pleasing.
The biggest positive for us is that we are very well set up for the 2023 year.
2.1 General Finance Credit Rating
General Finance has had a credit rating from Equifax Australasia Credit Ratings Pty Ltd (“Equifax”). Equifax
gives ratings from AAA through to C (excluding ratings attaching to enti
tie
s in default).
Equifax has issued General Finance a credit rating of BB‐ with a Stable Outlook. According to Equifax’s criteria,
this rating is classified as “Near Prime” and has “Low to Moderate” risk level.
General Finance is very pleased with this rating as a number of participants in the financial servic
es sector have
been downgraded due to the impact of the Covid pandemic.
To hold a Credit rating of near prime and low to moderate risk is a strong endorsement of General Finance’s
performance.
5
Directors’ Report (Continued)
31 March 2019 to 31 March 2022 figures are extracted from audited financial statements of General Capital Limited (GCL).
31 March 2018 figures are extracted from the 31 March 2018 audited financial statements of Mykco Limited, the listed shell
company prior to the reverse listing transaction that occurred during the March 2019 financial year.
1.0
0.1
1.1
8.8
15.2
23.9
9.4
41.8
51.2
9.5
58.6
68.2
13.5
89.4
102.9
‐
20.0
40.0
60.0
80.0
100.0
Equity ($mil)Total Liabilities ($mil)Total Assets ($mil)
General Capital Consolidated Balance Sheet
Mykco ‐ 31 March 2018GCL ‐ 31 March 2019GCL ‐ 31 March 2020
GCL ‐ 31 March 2021GCL ‐ 31 March 2022
20.2
25.2
31.4
40.2
47.7
47.1
51.4
61.0
64.5
71.3
79.1
90.7
99.2
15.1
20.1
25.8
34.5
41.8
41.2
45.4
55.2
58.5
65.0
72.2
83.1
89.4
5.1
5.2
5.5
5.7
5.8
5.9
6.0
5.8
6.1
6.9
7.6
9.7
‐
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
75.0
80.0
85.0
90.0
95.0
100.0
105.0
110.0
General Finance Balance Sheet
Total Assets ($m)Total Liabilities ($m)Equity ($m)
6
Directors’ Report (Continued)
3.0 Staff and Directors
There is no question that this year has taken its toll on the staff and Directors. The challenges have been
continuous, and it is an absolute credit to the team to be able to produce this result. The Group must seek ways
to compensate the team memb
ers for their performances. We have seen a number of changes in the staff, and
this is an indication of the impact the year has taken on the team. We are all aware of the labour market and
also the increase in remuneration packages that have been offered by competitors to attract and retain staff.
We need to ensure that we are competitive in the market and have top quality staff to manage our profitable,
fast‐growing businesses.
4.0 General Capital in the Community
We operate in the fantastic community that New Zealand offers us all. Our duty is to run our bus
inesses as well
as we are able.
We aim to be a good New Zealand citizen in all regards. We have undertaken some interesting initiatives this
year and you can find photos of some of these in this Annual Report.
We haven’t undertaken these because we are required to bu
t because we wanted to do so.
Examples
We have made 2 donations to a food bank because we simply couldn’t stand the thought of the people
not having food to eat in New Zealand
We have sponsored the very popular “ Synthony “ because it was a sh
ow piece for New Zealand talented
orchestra performers and New Zealanders can have a great night out without having to spend hundreds
of dollars to watch some international “ star’ and who will take 60% of the proceeds out of New Zealand
We sponsored the North Harbour veter
ans golf tournament because this group of people have given
so much to our country and deserve a little support and thanks
We sponsored a tennis club for the same reason
Obviously, we gain benefits from the above, some being feelings of goodwill, some financial and some simply
from seeing pe
ople bet
ter off. We will continue to make these contributions to our community as we make our
company bigger and better.
5.0 Investment Research Group Ltd. (IRG)
IRG has had a very good year in the advisory area, but it has not undertaken the research for the very popular
IRG yearbook.
Th
e yearbook is an icon in New Zealand, however with the market in turmoil and the difficulty of getting staff
we found it impossible to undertake the project. This reduced revenue and profits for IRG.
We note that the Auditors want forward contracts to justify the carrying value of IRG (including goodwill).
Whilst we respect the Auditors views, we have had a good cash return from this business over the last few
years. IRG contributes a significant amount to the spreading of overhead costs of the General Capital Group.
This is another reason why we are comfortable with the carrying value. We will rev
iew this at th
e end of each
accounting period (the same way we review the carrying value of every asset).
7
Directors’ Report (Continued)
6.0 General Finance Ltd. (General Finance)
General Finance is the largest operating subsidiary of the Group and has the benefit of most of the Group’s
capital and resources. General Finance has performed very well this year. All financial indicates improved and
the balance sheet has continued the strong growth trajectory it has been on for the last three ye
ars.
7.0 Cannabis
The listing of Greenfern Industries Ltd (GFI : NZ) managed by IRG was a significant achievement, considering the
time and the market. It was profitable for General Capital and added to the awareness of General Capital and
IRG. There is no question that the cannabis sector is in rapid gr
owth ar
ound the world, and it is likely that it will
be in the mainstream within 5 years. We hope New Zealand will be part of that sector in a measured, medical
way.
8.0 Governance, Administration and Compliance
We operate in a sector that is one of the most regulated in New Zealand
. We have resp
onsibilities to a large
number of different regulators and supervisors.
The Boards of Directors are all very competent individuals who are qualified in their own fields of expertise.
They take their responsibilities very seriously and they ensure they take all reasonable steps to ensure
compliance with our companies’ obligations.
We respe
ct the need for regulators and their objectives; however, we all note that in every major financial
collapse there are failures. Rules and regulations will not stop this.
We have a major objective to be in the top performers compliance wise and financial performance wise in the
sec
t
or.
The interesting point is how quickly financial markets can change. The Covid pandemic and the Russian invasion
of Ukraine have “arrived“ quickly and had massive impacts on the world economies. Although we have a
comprehensive Risk Management Plan, it is almost impossible to predict such events. We must remain vigilant
and aware to not onl
y protect ourselves against such events but to also take advantage of them.
9.0 The future
The General Capital Group is extremely well placed to take advantage of opportunities over the next few years.
We expect to continue the strong balance sheet growth.
We ex
pect to inc
rease our profit growth
We will increase staff numbers and staff expertise so we can improve our systems and procedures, so
we are more resilient for inevitable financial correction, and more ready to take advantage of the
opportunities.
We will consider new lending niche opportunities to complement ou
r current business.
We will aim to undertake a significant advisory project in the next 2 years.
We will take decisions that will enhance our share value.
We will constantly review regulatory changes (e.g.the Deposit Taker’s Bill) to find a way in which we
can create a nic
he fo
r us for the next decade.
8
Directors’ Report (Continued)
10.0 Summary
This has been an excellent year. This is just one more step in our staircase. We will continue to grow and develop
the General Capital Group. Our business has matured but there are still very significant opportunities that are
untouched. The best is yet to come for the General Capital sh
areholders.
Rewi Hamid Bugo Brent Douglas King
Chairman Managing Director
9
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 2022 were mostly compliant
with the requirements of the NZX rules. 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.
The NZX Corporate Governance Code can be found on the NZX Website at: www.nzx.com/regulation/nzx-rules-
guidance/corporate-governance-code.
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 2022:
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) were 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.
10
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 2022:
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 finan cial 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 Composition & 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-executive Directors (Rewi
Hamid Bugo (Chairman), Huei Min Lim, Paul William Zingel and Simon John McArley) and one (1) Executive
Director (Brent Douglas King).
Huei Min Lim, Paul William Zingel and Simon John McArley are independent directors of the Company.
Paul William Zingel was appointed as a director effective from 1 March 2022. The Board determined that
notwithstanding his association with a significant product holder, there were no particular circumstances that
would materially interfere with his ability to exercise independent judgment and he was identified an
independent director of the Company.
By virtue of the extent of his product holding, Rewi Hamid Bugo has not been identified as an independent
director of the Company and by virtue of being an officer of the Company, Brent Douglas King has not been
identified as an independent director of the Company.
Graeme Iain Brown has ceased being a director on 24 March 2022, he was non-executive and independent
director during the year ended 31 March 2022.
Refe r 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 3
Brent Douglas King 5 N/A
Huei Min Lim 5 3
Graeme Iain Brown 4 3
Simon John McArley 4 3
Paul William Zingel 0 0
The Board also met whenever necessary to deal with specific matters needing attention between scheduled
meetings.
11
Corporate Governance Statement (Continued)
The gender balance of the Group’s Directors and officers was as follows:
as at 31 March 2022 as at 31 March 2021
Directors Officers* Directors Officers*
Female 1 1 1 0
Male 4 3 4 3
Total 5 4 5 3
*Officers excludes any directors of t he 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 2022:
The Board has had in place throughout the year a board charter which sets out the roles and responsibilities of
the Board and management and complies with the recommendation in full. The charter was reviewed and
confirmed by the Board in November 2021.
Th e Boar d Charter has been publishe d on th e 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 2022:
Paul William Zingel has been appointed as director effective from 1 March 2022. The Board follows the
requirements of the NZX Rules, the commentary in the NZX Corporate Governance Code and the requirements
of its nomination procedure. In November 2021 the Board adopted a board skills matrix to assist when
selecting new directors.
The Company’s nomination 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.
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 2022:
Paul William Zingel was appointed as a director effective from 1 March 2022 and has entered into the written
agreement prescribed by the Company’s nomination procedure.
The Company’s nomination procedure 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.
12
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 2022:
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 2022:
The Board recognises the wide-ranging benefits that diversity brings to an organisation.
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. In November 2021 the Board
adopted measurable objectives for achieving diversity and inclusion in accordance with the diversity policy and
will report progress against those measures in future annual reports.
The gender composition of the Company’s directors and officers is included above.
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 2022:
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. In November 2021 the Board
adopted a board skills matrix to assess training and development needs.
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 2022:
Director and Board performance is considered crucial to the success of the Group. 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.
13
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 2022:
As detailed in the Board Composition section above, 4 of the 6 Directors have been identified as Independent
Directors of t he 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, the board charter
provides the opportunity for non-executive directors to regularly 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 2022:
Rewi Hamid Bugo is the Chair of t he Company and Brent Douglas King is the Managing Director (CEO). By virtue
of the extent of his product holding, Rewi Hamid Bugo has not been identified as an independent director of the
Company and by virtue of being an officer of the Company, Brent Douglas King has not been identified as an
independent director of the Company.
Principle 3 – Board Committees
“The boar d shoul d use committees where this wil l enhanc e its effectiveness in key areas, while stil l r etaining
boar d responsibility.”
Recommendation 3.1
An issuer’ s audi t committee shoul d oper ate unde r 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 2022:
General Capital Limited has an Audit Committee which comprises the following non-executive directors:
Simon John McArley (Chair of Audit Committee, I ndependent Director)
Huei Min Lim (Independent Director)
Paul William Zingel (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 Committee 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.
14
Corporate Governance Statement (Continued)
The Company’s Audit Committee Charter was reviewed by the committee and the Board in November 2021 and
confirmed. 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 onl y attend audi t committee meetings at the invitation of the audi t committee.
Compliance with recommendation during the year ended 31 March 2022:
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 i s 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 2022:
Remuneration committee responsibilities were dealt with by the full Board during the year ended 31 March
2022. Employees only attended meetings at the invitation of t he Board.
The responsibilities included recommending remuneration packages fo r directors for consideration by
shareholders and to approve Managing Director and senior management remuneration. Any directors who
were conflicted on 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 2022:
Nomination committee responsibilities were dealt with by the full Board during the year ended 31 March 2022.
The Company’s nomination 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.
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 2022:
Given the size and scale of the Company's business and the resources available, the Board has not considered it
necessary to have any other board committees during the year. The Board will review this periodically.
15
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 2022:
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 2022:
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 2022:
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 2022:
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.
16
Corporate Governance Statement (Continued)
For the financial year ended 31 March 2022, 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 transp
arent
manner. Actual director remuneration should be clearly disclosed in the issuer’s annual report.
Compliance with recommendation during the year ended 31 March 2022:
Shareholders approved a tota l Directors’ remuneration fee pool of $300,000 pe r 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.
The Directors fees pool has remained unchanged for 5 years and during this time the Group has grown by over
8 times. The Directors are proposing to recommend to this year’s Annual Meeting to increase the Director's
fee pool to $450,000. This will allow for additional Directors as well as an increase to existing Directors for the
increase in responsibilities. Note the fee pool includes payments to Directors of subsidiaries.
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 2022:
Remuneration of directors has been determined in line with the process noted under recommendation 3.3
above and in accordance with the Company’s remuneration policy.
The Company’s remuneration policy is included in the Company’s Board Policies and Procedures document
wh ich 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 an
d the performance
criteria used to determine performance-based payments.
Compliance with recommendation during the year ended 31 March 2022:
Information in relation to the remuneration arrangements in place for Brent King (Managing Director) are
included in the Shareholder and Statutory Information section of the Annual Report.
17
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 2022:
The Group is 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 has been under review for some time.
Completion of this exercise has been delayed by resource constraints and other disruptions related to the Covid-
19 pandemic. The Board is committed to completing this work in the coming year.
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 2022:
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.
18
Corporate Governance Statement (Continued)
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.
Compliance with recommendation during the year ended 31 March 2022:
In accordance with the Company’s board charter and Audit Committee charter, the Board in conjunction with
the Audit Committee were responsible fo r oversight of and communication with the external auditor and
reviewed th e quality and cos t of the aud it underta ken by the Company’s external auditor. The Board in
conjunction with the Audit Committee als o assesse s th e auditor’s independence on an annu al basis.
For the financial year ended 31 March 2022, 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 annual meeting held 3 September 2021. 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 2022:
Baker Tilly Staples Rodway are invited to attend the annual meeting, and the lead audit partner is expected
to be available to answer questions from shareholders at that meeting. Baker Tilly Staples Rodway attended
the annual meeting held 3 September 2021.
Recommendation 7.3
Internal audit functions should be disclosed.
Compliance with recommendation during the year ended 31 March 2022:
The Group has internal controls in place including monitoring and checking that internal controls are operating
effectively. Due to its current size, the Board believes that it was uneconomic and unnecessary for the Company
to have a dedicated internal auditor role during the period. The Board will regularly review this position.
19
Corporate Governance Statement (Continued)
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 2022:
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 2022:
All shareholders are given the option to elect to receive electronic communications from the Company.
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 2022:
Shareholders have been given the right to vote on all major decisions in line with the NZX Rules during the year
ended 31 March 2022.
20
Corporate Governance Statement (Continued)
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 2022:
During the year ended 31 March 2022, the Company:
a.Issued 8,333,333 ordinary shares at 6.00 cents per share for proceeds totalling $500,000 on 27
September 2021 under a placement to Borneo Capital Limited. 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.
b.Issued 6,667,775 ordinary shares at 6.00 cents per share for proceeds totalling $400,000 on 8 December
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.
c.Issued 34,782,609 ordinary shares at 5.75 cents per share for proceeds totalling $2,000,000 on 23
February 2022 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
These issues of financial products were approved by product holders at the 2021 Annual meeting. In the notice
of meeting the directors highlighted that they believed that the likely outcome of and the cost of extending this
offer to all shareholders was not in the best interest of the Company or its shareholders.
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 2022 annual shareholders meeting. Again the directors
of the Company 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 2022:
The Board encourages shareholder participation in meetings and understands that shareholders need sufficient
time to consider information prior to meetings. The notice of the 2021 annual meeting was posted on the
Company’s website more than 20 working days prior to the meeting. Due to Covid 19 restrictions the 2021
annual meeting was subsequently adjourned for a further 7 working days.
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 2022, 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 2022, 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 (2021: $1.06m) on the Group’s consolidated statement of financial position as at 31 March 2021 and 31
March 2022. 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 International Code of Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board and
the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities
23
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 below to be the key audit matters to be communicated in our report.
Key Audit Matter How our audit addressed the key audit matter
Applicability of the going concern basis of
accounting
As disclosed in Note 2 and 4.2 of the Group’s
consolidated financial statements, these
consolidated financial statements have been
prepared on a going concern basis, which
contemplates continuity of normal business
activities and the realisation of assets and the
settlement of liabilities in the ordinary course of
business.
As described in Note 4.1 of the Group’s
consolidated financial statements, the ongoing
COVID-19 pandemic, current adverse macro
and micro economic conditions and adverse
global events, have lowered economic activity
and confidence.
The application of the going concern basis of
accounting was significant to our audit due to
the subjectivity, complexity and uncertainty
inherent in assessing the impact
the ongoing
COVID-19 pandemic, current adverse macro
and micro economic conditions and adverse
global events will have of the Group’s forecast
earnings, cash flow and financial position.
Management has prepared forecast earnings,
cash flows and financial position models as
part of its assessment of whether the Group’s
application of the going concern basis of
accounting was appropriate for the 31 March
2022 consolidated financial statements.
Given the nature of the Group’s business, being
a non-bank deposit taker and mortgage lender,
term deposit re-investment and new deposit
investment rates are critical to the Group’s
application of the going concern basis of
accounting.
This assessment involves complex and
subjective estimation and judgement by
Our audit procedures among others included:
• Evaluating Management’s assessment as to whether potential impacts
as a result of the implications of the ongoing COVID-19 pandemic,
current adverse macro and micro economic conditions and adverse
global events could be material;
• Evaluating Management’s response plan to the potential impacts
identified as a result of the implications of the ongoing COVID-19
pandemic, current adverse macro and micro economic conditions and
adverse global events;
• Evaluating Management’s assessment of the direct and indirect financial
impacts of the ongoing COVID-19 pandemic, current adverse macro and
micro economic conditions and adverse global events on the carrying
value of the Group’s reported assets and liabilities, and reported amounts
of revenues and expenses;
• Evaluating Management’s assessment of the Group’s ability to continue
to apply the going concern basis of accounting, and the appropriateness
of this considering present economic conditions;
Procedures included:
o Evaluating Management’s process regarding the preparation and
review of forecast financial statements (balance sheet, income
statement, and cash flow statement);
o Comparing Management’s forecasts to Board approved forecasts;
o Evaluating the cash flow requirements of the Group for twelve
months from the date of signing the financial statements based on
Management’s forecasts;
o Evaluating the liquidity of existing financial assets on the Group’s
Statement of Financial Position;
o Evaluating the actual term deposit reinvestment and new term
deposit investment rates since March 2021 and comparing them
to Management’s forecasts up to the date of the signing of these
financial statements;
o Challenging Management’s assumptions, estimates and
judgements used; and
24
Key Audit Matter How our audit addressed the key audit matter
Management on the future performance,
cashflows and position of the Group.
Management have also performed sensitivity
analysis for reasonably possible changes in key
forecast assumptions.
o Evaluating Management’s sensitivity analysis for reasonably
possible changes in key assumptions, with an emphasis on the
potential downside scenarios and the resultant impact on available
funds (these scenarios included stressed analysis which
considered the reduction in the property values of loan securities, a
reduction in the actual term deposit reinvestment rates and new
term deposit investment rates).
• Evaluating the disclosures related to the Group’s application of the going
concern basis of accounting and the impact of the ongoing COVID-19
pandemic, current adverse macro and micro economic conditions and
adverse global events on the Group which are included in the Group’s
consolidated financial statements.
Impairment assessment of loan receivables
As disclosed in Note 11 of the Group’s financial
statements, the Group has loan receivable
assets of $80.9m 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
2022.
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 loss 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 ongoing COVID-19
pandemic, current adverse macro and micro economic conditions and
adverse global events 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 ongoing 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 ongoing COVID-19 pandemic, current adverse macro and micro
economic conditions and adverse global events on key assumptions
used). Also, testing key inputs used in the collective impairment models
and the mathematical accuracy of the calculations within the model;
• Evaluating the changes made to the expected credit losses impairment
model to capture the effect of the changing economic environment at 31
March 2022 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
25
Key Audit Matter How our audit addressed the key audit matter
• 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 2022.
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 to 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 ongoing COVID-19 pandemic, current
adverse macro and micro economic conditions and adverse global
events).
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.
26
Other Matter - Matters relating to our Independent Auditor’s Report on the financial statements of the
Group for the year ended 31 March 2021
Our Independent Auditor’s Report on the consolidated financial statements of the Group for the year ended 31 March
2021 dated 29 June 2021 was a Qualified Opinion, the Basis for Qualified Opinion upon which was as follows:
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.
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 2022 (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.
27
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
A
further description of the auditor’s responsibilities for the audit of the consolidated financial statements is located
at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
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
30 June 2022
20222021
Note$$
Interest income
5 5,574,439 3,533,401
Interest expense
5 (2,976,011) (2,246,097)
Net interest income
2,598,428 1,287,304
Fee and commission income
5 1,894,291 933,176
Fee and commission expense
5 (500,302) (247,997)
Net fee and commission income
1,393,989 685,179
Revenue from contracts with customers
5 512,588 279,045
Cost of sales
5 (57,290) (37,696)
Gross profit from contracts with customers
455,298 241,349
Modification gain on loan receivables
5
‐ 86,489
Other income
5 36,931 48,193
Net revenue
4,484,646 2,348,514
Increase in allowance for expected credit losses
11 (66,266) (27,372)
Personnel expenses
(1,010,670) (781,919)
Occupancy expenses
‐ (89,485)
Depreciation
(150,996) (17,085)
Amortisation of intangible assets
14 (5,230) (23,431)
Realised losses on bonds sold
7.1‐ (190,085)
Other operating expenses
7.2 (1,362,869) (1,098,404)
(2,596,031) (2,227,781)
Profit before income tax expense
1,888,615 120,733
Income tax (expense) / benefit8 (547,952) (38,967)
Net profit after income tax expense
1,340,663 81,766
Other comprehensive income
Items that will not be reclassified to profit or loss
15, 17(c)
(144,144) (11,487)
Income tax on these items8, 17(c)
‐ ‐
Other comprehensive income / (loss) for the year, net of tax (144,144) (11,487)
Total comprehensive income
1,196,519 70,279
Earnings per share (cents per share)9
0.78 0.05
Diluted earnings per share (cents per share)90.78 0.05
The accompanying notes are an integral part of these financial statements.
GENERAL CAPITAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
Changes in the fair value of equity investments at fair value
through other comprehensive income
28
GENERAL CAPITAL LIMITED
20222021
Note$$
Equity
Share capital17(a) 13,025,575 10,249,211
Accumulated (losses) / earnings 752,916 (594,651)
Reserves17(c) (245,798) (129,267)
Total equity
13,532,693 9,525,293
Assets
Cash and cash equivalents10 16,661,570 7,292,267
Accounts receivables 17,350 194,727
Related party receivables18‐ 110,868
Other current assets 229,725 94,215
Bank deposits10 2,450,000 3,000,000
Loan receivables11 80,027,661 53,710,781
Deferred tax asset8.2 135,049 126,922
Property, plant and equipment 29,431 13,508
Right of use assets13 146,750 293,500
15 288,442
401,086
Intangible assets and goodwill14 2,918,716 2,926,365
Total assets
102,904,694 68,164,239
Liabilities
Accounts payable and other payables 613,770 402,750
Related party payables18 13,191 10,229
Term deposits16 88,047,219 57,863,184
Lease liability13 174,364 307,207
Income tax payable 523,457 55,576
Total liabilities
89,372,001 58,638,946
Net assets
13,532,693 9,525,293
The accompanying notes are an integral part of these financial statements.
Net tangible assets (NTA) per share (cents per share)4.93 3.97
Net assets (NA) per share (cents per share)6.36 5.85
The financial statements are signed on behalf of the Board.
Rewi Bugo Brent King
ChairmanManaging Director
Authorised for issue on:
30 June 2022
Investments
AS AT 31 MARCH 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
29
GENERAL CAPITAL LIMITED
Note$$$$
10,176,204 (117,780) (676,417) 9,382,007
‐ ‐ 81,766 81,766
15, 17(c)
‐ (11,487) ‐ (11,487)
‐ (11,487) 81,766 70,279
17(a) 73,007 ‐ ‐ 73,007
17(b), 19‐ ‐ ‐ ‐
73,007 ‐ ‐ 73,007
10,249,211 (129,267) (594,651) 9,525,293
‐ ‐ 1,340,663 1,340,663
15, 17(c)
‐ (144,144)‐ (144,144)
‐ (144,144) 1,340,663 1,196,519
17(a) 2,776,364
‐ ‐ 2,776,364
‐ (6,903) 6,903 ‐
17(b), 19
‐
34,516 ‐ 34,516
2,776,364 27,613
6,903 2,810,880
13,025,575 (245,798) 752,916 13,532,693
Total comprehensive income for
the year
Accumulated
(losses) /
earnings
Share capital
Total transactions with owners in
their ca
pacity as owners
Transactions with owners in their
capacity as owners:
Contributions of equity net of
transaction costs
Balance at 31 March 2021
Profit for the year
Other comprehensive income for
the year
Contributions of equity net of
transaction costs
Issue of warrants to directors and
senior managers
Share based payments
Issue of warrants to directors and
senior managers
Total transactions with owners in
their ca
pacity as owners
Balance at 31 March 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Total equity
Profit for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Reserves
Balance at 1 April 2020
30
GENERAL CAPITAL LIMITED
20222021
Note
$$
Cash flow from operating activities
Interest received
5,629,044 3,329,027
Receipts from customers
2,049,602 1,055,068
Other income
5,690 7,961
Payments to suppliers and employees
(2,849,016) (2,046,491)
Interest paid
(2,710,853) (2,155,363)
Income tax paid
(88,198) (23,006)
2,036,269 167,196
Term deposits (net receipts)
29,953,748 16,320,142
Finance receivables (net advances)
(25,995,057) (18,407,676)
Net cash (used in) / provided by operating activities 20
5,994,960 (1,920,338)
Cash flow from investing activities
Proceeds from the sale of bonds
194,018 4,334,514
Purchase of property, plant and equipment
(20,169) (10,356)
Purchase of software
‐ ‐
Investment in bank deposits
550,000 (3,000,000)
Investment in bonds
‐ (4,718,617)
Investment in equities
20,800 (28,184)
Net cash provided by / (used in) investing activities
744,649 (3,422,643)
Cash flow from financing activities
Issue of ordinary shares
2,776,364 73,007
Lease Payments
(146,670)‐
Net cash provided by financing activities
2,629,694 73,007
Reconciliation of cash and cash equivalents
7,292,267 12,562,241
9,369,303 (5,269,974)
10
16,661,570 7,292,267
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 2022
Net cash flows from operating activities before changes in
operating assets and liabilities
31
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 1: REPORTING ENTITY
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 mortgage lending);
‐ Research and advisory (listing and capital management).
The consolidated financial statements were authorised for issue by the directors on 28 June 2022.
NOTE 2: BASIS OF PREPARATION
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 statements are presented in New Zealand dollars which is the Group's currency. Unless otherwise indicated, amounts in the
financial statements these amounts have been rounded to the nearest dollar.
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.
These financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the
realisation of assets and the settlement of liabilities in the ordinary course of business, in accordance with historical cost concepts, as modified
by the revaluation of certain assets and liabilities as identified in the accounting policies below.
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to al l periods presented in these consolidated financial statements, and
have been applied consistently by Group entities.
3.1 Basis of consolidation
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.
Transactions eliminated on consolidation
Intra‐group balances and transactions, and any unrealised income and exp enses arising from intra‐group transactions, are eliminated in
preparing the consolidated financial statements.
32
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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 usingthe 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 are an integral component of the effective interest rate over the expected life of the
financial asset or liability.
Loan fees and commissions
Lending fee income (such as loan establishment fees) that is integral to the effective yield of a loan held at amortised cost is capitalised as part
of the amortised cost and deferred over the life of the loan using the effective interest method. Lending fees not directly related to the
origination of a loan (account maintenance fee) are recognised over the period of service. Incremental and directly attributable costs (such as
commissions) associated with the origination of a financial asset (such as loans) and financial liabilities (such as term deposits) are capitalisedas
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
Advisory contracts generally span a period of three months to one and a half years. Management determine the performance obligation(s)
inherent in the contract at contract inception and recognise revenue uponcompletion of each of the performance obligations. Performance
obligations include advice provided to the entity and sometimes include the success of a project. There are specific billing milestones built into
each contract and payment is generally due within 30 to 60 days of the milestone.
Yearbook and research sales
This includes revenue related to the sale of publications and fees for advertisements in the publications. The performance obligation for the
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
Other finance fees charged by the Group that do not relate to the origination of finance receivables (for instance loan holding fees). 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 termsof 30 to 60 days. Contract assets are recognised for any performance
obligations which have been satisfied in advance of billing to clients. The amounts are transferred to accounts receivable when 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
Financial assets and financial liabilities are recognised in the Group’sstatement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, 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 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
‐ the contractual terms of the financial asset give rise on specified datesto cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI)*:
‐ the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the
financial assets; and
‐ the contractual terms of the financial asset give rise on specified datesto cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Despite the foregoing, the Group makes the following irrevocable election/designation at initial recognition of a financial asset:
‐ the Group irrevocably elects to present subsequent changes in fair value of an equity investment in other comprehensive income if certain
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.
The Group’s financial assets measured at amortised cost include, trade receivables, loan receivables, and other receivables. The Group’s assets
measured at FVTOCI* include listed corporate and local government bonds. The Group has no assets measured at FVTPL**.
(i) Amortised cost and effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the
relevant period. For financial assets, the effective interest rate is therate that exactly discounts estimated future cash receipts (including all fees
and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
excluding expected credit losses, through the expected life of the financial asset, or, where appropriate, a shorter period, to the gross carrying
amount of the financial asset on initial recognition.
The amortised cost of a financial asset is the amount at which the financialasset is measured at initial recognition minus the principal
repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the
maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before
adjusting for any loss allowance.
Interest income is recognised using the effective interest method for financial assets measured subsequently at amortised cost and at FVTOCI*.
For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the
amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so
that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying
amount of the financial asset.
(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.
*FVTOCI ‐ Fair Value Through Other Comprehensive Income
**FVTPL ‐ Fair Value Through Profit or Loss
34
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Stage 1
12‐month ECL**(past due 30 days or less)
Sta
ge 2
Lifetime ECL** not credit impaired (between 30 and 90 days past due)
Sta
ge 3
Lifetime ECL** credit impaired (greater than 90 days past due)
**ECL ‐ Expected Credit Losses
Where loans are in default or otherwise credit impaired, ECLs** that result from all possible default events over the life of the
loan are reco
gnised.
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 reco
gnised.
(i) Significant increase in credit risk
In assessing whether the credit risk on a financial asset has increased significantly since initial recognition, the Group compares the risk of a
default occurring on the financial asset at the reporting date with the risk of a default occurring on the financial asset at the date of initial
recognition. In making this assessment, the Group considers its historical loss experience and adjust this for current observable data. This data
includes any payment defaults by the borrower, known or expected defaultsby 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.
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
expected credit losses is updated at each reporting date to reflect a significant change in credit risk since initial recognition of the respective
financial assets.
The Group recognises lifetime ECL** for trade and other receivables. The expected credit losses on these financial assets are estimated using a
provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of
money where appropriate (also refer note 4.3).
For loan receivables, the Group applies a three‐stage approach to measuring ECLs**. Loans may migrate through the following stages based on
their change in credit quality.
Modification of financial assets
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not
result in the derecognition of that financial asset, the Group recalculates the gross carrying amount of the financial asset and recognises a
modification gain or loss in profit or loss. The gross carrying amount of the financial asset shall is recalculated as the 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.
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. the residential property value) in the credit assessment. The loans are predominantly advanced on twelve‐month terms but range between
three‐month and four‐year terms. Credit risk information is updated and monitored regularly. Loan receivables are subject 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.
Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a financial asset has increased significantly
since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable
information that demonstrates otherwise, 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. The Group
regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them
as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
*FVTOCI ‐ Fair Value Through Other Comprehensive Income
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 reco
gnised.
35
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
**ECL ‐ Expected Credit Losses
(ii) Definition of default
The Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and
supportable information to demonstrate that a more lagging default criterion is more appropriate, 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).
v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probabilityof default, loss given default (i.e. the magnitude of the loss if there is
a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted for
forward-looking information including macroeconomic factors as described above. Given the Group’s loan book is all secured over property, the
single most significant factor for loss given default is the value of the security property, any known or expected uninsured 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.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. In
instances where the probability of default has increased significantly (a significant increase in credit risk), or where the loan is in default, the
expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending when 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.
If the Group has measured the loss allowance for a financial asset at an amount equal to lifetime ECL** in the previous reporting period, but
determines at the current reporting date that the conditions for lifetimeECL** are no longer met, the Group measures the loss allowance at an
amount equal to 12-month ECL** at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying
amount through a loss allowance account.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss.
(iv) Write
-off policy
The Group writes off a financial asset when there is information indicating that the borrower is in severe financial difficulty and there is no
realistic prospect of recovery, for example an unsecured financial asset whereby the borrower has no realistic ability to meet their financial
obligations to the Group. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures,
taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.
*LVR ‐ Loan to Valuation Ratio
36
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Cash and cash equivalents
3.5 Leases
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 liability is measured at initial recognition minus
the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount
and the maturity amount.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
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
difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or
loss.
Cash includes demand deposits with an original term of less than 183 days which are considered highly liquid investments that are readily
convertible into cash and used by the Group as part of day‐to‐day cash management.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
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.
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.
The Group leases an office premises and carparks. Rental contracts are typically made for fixed periods but may have extension options as
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 right of use asset and a corresponding liabilityat the date at which the leased asset is available for use by the Group.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right of use asset is depreciated over
the shorter of the asset's useful life and the lease term on a straight‐line basis.
37
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Intangible assets
3.7 Taxation
Licences acquired as part of business combinations are capitalised separately from goodwill as intangible assets if their value can be measured
reliably on initial recognition and it is probable that the expected future economic benefits that are attributable to the asset will flow to the
Group.
Intangible assets comprise goodwill, acquired licences, Bartercard trade dollars and computer software.
Goodwill and acquired licences are indefinite life intangibles subject to annual impairment testing. Goodwill is allocated to cash‐generating units
for the purpose of impairment testing. The allocation is made to those cash‐generating units or groups of cash‐generating units that are
expected to benefit from the business combination in which the goodwill arose, identified according to the respective operating segment. Refer
to note 4.4 and note 14.
Income tax for the period comprises current and deferred tax. Current and deferred tax are recognised as an expense or income in the profit or
loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity),
in which case the tax is also recognised outside profit or loss.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at balance date
after taking advantage of all allowable deductions under current taxation legislation and any adjustment to tax liabilities in respect of previous
years.
Deferred tax is provided using the liability method, providing for temporary differences between the amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the amount of assets and liabilities, using tax rates enacted or substantively enacted as at balance date.
Deferred taxation assets arising from temporary differences or income tax losses, are recognised only to the extent that it is probable that a
future taxable profit will be available against which the asset can be utilised.
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 leaseterm, 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.
Bartercard Trade Dollars are units of electronic currency held by the Group which can be used to pay for products and services from other
Bartercard members instead of paying in cash. They are non‐monetary assets which are classified as indefinite life intangible assets. The assets
are recognised at cost less accumulated impairment losses. The trade dollars are acquired as earned and consumed as utilised and are tested at
least annually for impairment or when indication of an impairment exist. An impairment loss is recognised whenever the carrying amount of a
Bartercard exceeds its recoverable amount. The estimated recoverable amount of intangible assets ‐ Bartercard Trade Dollars 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 purchases of services are
recognised in the statement of comprehensive income in the period in whichthe transaction occurs. Where trade credits are used to purchase
an asset, the asset is capitalised and recognised in the statement of financial position.
Computer software is recognised in the statement of financial position atcost less accumulated amortisation and impairment losses. Direct
costs associated with the purchase and installation of software licences and the development of software for internal use are capitalised where
project success is probable and the capitalisation criteria is met. Cost associated with planning and evaluating computer software and
maintaining a system after implementation are expensed. Computer software costs are amortised on a straight‐line basis (three years).
In the statement of cash flows, lessees present:
‐ Short‐term lease payments, payments for leases of low‐value assets and variable lease payments not included in the measurement of the lease
liability as part of operating activities;
‐ Cash paid for the interest portion of a lease liability as either operating activities or financing activities, as permitted by NZ IAS 7 Statement of
Cash Flows (the Group has opted to include interest paid as part of operating activities, consistent with its presentation of interest paid on
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 2022
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.8 Impairment of non‐financial assets
3.9 Em
ployee benefits
3.10 Statement of cash flows
3.11 Com
paratives
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
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.
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually or more frequently if
events or changes in circumstances indicate that they might be impaired. Intangible assets not yet available for use are tested for impairment
annually or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
The Group conducts an annual internal review of asset values, which is usedas a source of information to assess for any indicators of
impairment. External factors, such as changes in expected future processes, technology and economic conditions, are also monitored for
indicators of impairment. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs to sell and value in use. Value in use is determined by estimating future cash flows from the use
and ultimate disposal of the asset and discounting these to their present value using a pre‐tax discount rate that reflects current market rates
and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash‐generating units). Impairment losses directly reduce the carrying amount of assets and are recognised in
profit or loss.
Non‐financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Deferred taxation assets are reduced to the extent that it is no longer probable that the related tax asset will be realised. Any reduction is
recognised in profit or loss.
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.
Where necessary, comparative information has been reclassified and represented for consistency with current year.
Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave are recognised in respect of employees' services up to the reporting date. They are measured at
the amounts expected to be paid when the liabilities are settled.
Superannuation plans
The Group pays contributions to superannuation plans, such as Kiwisaver.The Group has no further payment obligations once the contributions
have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as
an asset to the extent that a cash refund or a reduction in the future payments is available.
39
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.2 A
pplicability of the going concern basis of accounting
Whilst the COVID‐19 pandemic, Global Inflation, Supply Chain Disruptionand Political instability and measures implemented have lowered
overall economic activity and confidence (described above), Managementhave assessed and determined that the Group’s application of the
going concern basis of accounting remains appropriate.
The Group has responded to the above economic conditions 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 concern
basis of accounting. This forecast cashflows took into consideration theGroup’s expectation of the impact of the pandemic on its earnings, cash
flow and financial position.
‐ Assessed the direct and indirect financial impacts of the pandemic on the carrying value of reported amounts of assets, liabilities, revenues and
expenses.
‐ Implemented and enacted appropriate health and safety responses.
4.1 Increased level of inherent uncertainty in the significant accounting estimates and judgments arising from the ongoing global pandemic of
coronavirus disease 2019
The current global pandemic of the novel coronavirus disease 2019 (‘COVID‐19’) is still an evolving situation, along with the cessation of COVID‐
related government support, rising interest rates, rapidly rising inflation, skills shortages, and challenging international conditions, global supply
chain disruptions, and the flow on effects from the conflict between Ukraine and Russia and European geopolitical uncertainty, which is having a
significant impact on energy prices, as well as financial markets across the globe. The ongoing COVID‐19 pandemic, current adverse macro and
micro economic conditions and adverse global events mentioned have lowered overall economic activity and confidence is resulting in
significant volatility and instability in financial markets and economic uncertainty. Consequently, there has been an increase in the level of
inherent uncertainty in the critical accounting estimates and judgements applied by Management in the preparation of these financial
statements. As at the date of the signing of these financial statements, all reasonably known and available information with respect to the
COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events has been taken into consideration in the
critical accounting estimates and judgements applied by Management, and all reasonably determinable adjustments have been made in
preparing these financial statements.
As a result of the pandemic, the Group anticipates that lowered levels of economic activity and confidence will continue for at least the short to
medium term and may result in increased business failures and unemployment levels in New Zealand. However, currently the economic activity
is considerably stronger than expected.
Consequently, the Company has concluded that there has been an increase inthe level of inherent uncertainty in the significant accounting
estimates and judgements applied by Management in the preparation of these financial statements (refer note 4.2 and 4.3).
These financial statements have been prepared based upon conditions existing as at 31 March 2022 and consider those events occurring
subsequent to that date that provide evidence of conditions that existed at the end of the reporting period. As the outbreak of the COVID‐19
pandemic occurred before 31 March 2022, 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
ongoing COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events 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.
Cashflow forecast and going concern
When preparing the prior year (31 March 2021) 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.
40
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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
Consistent with 31 March 2021 disclosures, there have been no material direct or indirect impacts on the reported amount of assets and
liabilities. Refer to note 4.3 below for further information on expected credit losses on loans receivable.
The Group has performed much more favourably than the highly stressed scenarios which were assumed in the forecasts (and sensitivities)
prepared for the 31 March 2021 financial statements going concern consideration. This is detailed further below:
1) The Group forecasted a reduction in term deposit reinvestment rates to 60%. Actual average annual reinvestment rate was 76% for the
March 2022 financial year.
2) The Group forecasted a reduction in new term deposit investments to $Nil. Actual new term deposit investments was an average of $3.3m
per month for the 2022 financial year (2021: Actual new term deposit investment was an average of $2.6m).
3) The Group assumed that 50% of maturing loans, not past due date, will be repaid on contractual maturity date, with the balance rolled over
at the existing interest rates and repaid after a further 12 months. The Group's lending activity has increased and accordingly the loan book has
grown to a new record high level of $80.9m as at 31 March 2022 (2021: $54.5m).This increase in the loan book was funded by growth in term
deposits and share issues. The growth in the loan book has resulted in increased profitability.
Loans in arrears increased from $2.0m at 31 March 2021 to $2.6m at 31 March 2022. However, as a percentage of the loan book it has reduced
to 3.24% as at 31 March 2022 from 3.69% as at 31 March 2021. $487k of loans are in arrears past 90 days as at 31 March 2022 (2021: $Nil). There
were no loan write‐offs in the year ended 31 March 2022 (March 2021: $nil).
4) The Group also performed sensitivities which forecasted a reduction inloan security values (residential property values) by 25%. The March
2022 monthly property report dated 14 April 2022published by the Real Estate Institute of New Zealand (REINZ) showed that the median price
for residential property had increased by 7.9% nationally from March 2021to March 2022 with the REINZ House Price Index increasing by 9%
nationally year on year.
5) The Group forecasted no cash inflows from the research and advisory cashgenerating unit in the 31 March 2022 financial yearunder a
stressed scenario. During the 31 March 2022 financial year the cash generating unit generated pre‐tax free cash flows of $99,663 (March 2021:
$204,724) (excluding $120,000 (March 2021: $72,000) shares received as net revenue), 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 continue at the 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 Group's lending policies).
4. No significant reduction in loan security values is anticipated, however Management recognises that given the current adverse macro and
micro economic conditions and adverse global events, the resulting increases in interest rates and inflation, in particular could have an impact
on loan security values. As a result, Management have performed sensitivity analysis, factoring in a 25% drop in property values (as described
further in the note).
5. No significant reduction of the net interest margin (the difference between lending and term deposit liabilities) in the event of the Reserve
Bank of New Zealand (RBNZ) increasingthe official cash rate due to elevated inflation rates which could lead to a potential increase in cost of
term deposit liabilities.
6. The research and advisory cash generating unit to continue generating positive cash flows.
Accordingly, Management have assessed and determined based on forecastsprepared for greater than 12 months from the date of signing, that
the Group’s application of the going concern basis of accounting remains appropriate. The Company has also performed similar highly stressed
forecasts (and sensitivity) scenarios, to that performed as at 31 March 2021 for the 31 March 2022 going concerns consideration.
41
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.3 Allowance for expected credit losses
*ECL ‐ Expected Credit Losses
OngoingCOVID‐19pandemic,currentadversemacroandmicroeconomicconditionsandadverseglobaleventsonloanreceivables/expected
credit losses
Ongoing COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events have impacted negatively on
some borrowers’ ability to make their payments as they fell due, this included:
1)Lending insƟtuƟons increasing their processing Ɵmes
2)DifficulƟes in markeƟng properƟes
3)DifficulƟes in proving borrowers future income
4)Delays in supply chains
5)Delays in the council approvals
6)The availability of funding for potenƟal purchasers of the properƟes the Group has security over.
Loans in arrears increased to $2.6m at 31 March 2022 (from $2.0m million at 31 March2021). This is a lower percentage of total loan book than
last year. $0.5m loans past due by greater than 90 days at 31 March 2022 (up from $Nil at 31 March 2021). There were no loan write‐offs in the
year ended 31 March 2022 (March 2021: $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 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 though a combination of the assessed lifetime credit default and probability default (referred
to as 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
Expected credit losses (‘ECL’)* are measured as an allowance equal to 12‐month ECL*, or lifetime ECL* for assets with a significant increase in
credit risk or in default or otherwise credit impaired. In assessing whether the credit risk of an asset has increased significantly, the Company
considers its historical loss experience and adjust this 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 could impact on their ability to repay either interest or principal amounts on their due date. The
Company also considers changes or forecast changes to macroeconomic factors including property prices, unemployment, interest rates, gross
domestic product and inflation.
In instances where the probability of default has increased significantly (a significant increase in credit risk), or where the loan is in default, the
expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending when the
loan to valuation ratio (LVR)** exceeds 75%. This means in general that theGroup 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.
Management regularly reviews and adjusts its ECL* estimates, judgements, assumptions, and methodologies as data becomes available.
Changes in these estimates, judgements, assumptions, and methodologiescould have a direct impact on the level of credit provision and credit
impairment charge recorded in the financial statements (refer Note 11 Loan Receivables).
If the 12‐month ECL* rate for loans without a significant increase in credit risk increased/(decreased) by 0.2% higher/(lower) as at 31 March
2022, the loss allowance on finance receivables would have been $158,258higher/(lower) (March 2021: $106,313higher/(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 2022, the loss allowance on finance receivables would have been $17,890 higher/(lower) (March 2021: $13,023 higher/(lower)).
**LVR ‐ Loan to Valuation Ratio
42
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
4.4 Impairment analysis of goodwill and other indefinite life intangible assets
*ECL ‐ Expected Credit Losses
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. With regard to Goodwill and Licences, performing this analysis requires management to estimate future cash
flows to be generated by the cash‐generating unit, which entails making judgements, including the expected rate of growth of revenues and
expenditures, assets and liabilities, and the resulting cashflows. Judgements also need to be made about the appropriate discount rate to apply
when valuing future cash flows.
A sensitivity analysis performed by Management has highlighted that the carrying value of the Goodwill and other assets in the research and
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 2022.
The highest loan to valuation ratio (LVR)** of the Group’s loan book as at 31March 2022 was 70.6% (March 2021: 75.0%) and the weighted
average LVR of the loan book was 55.3% (March 2021: 54.6%), 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 March2022
(factoring in selling costs and time value of money):
1) A 25% drop in residential property values would result in a loss in the range of $0 ‐ $50,000 (March 2021: $150,000 – $200,000).
2) A 25% drop in commercial property values would result in no loan losses (March 2021: $nil).
The above sensitivity analysis factors in the expected selling costs of the property as well as the time value of money over the expected time to
sell (or to refinance) the property (expected to be no greater than six‐months based on the Group's experience. The sensitivity analysis does not
factor in potential increases in underlying security value since the origination of the loan.
Expected credit losses:
1) Based on the history of the Group's loan book over the last eight years, the average annual write‐offs as a percentage of the average loan
receivable balance over the same period was less than 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 Ongoing COVID‐19
pandemic, current adverse macro and micro economic conditions and adverse global events 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
2021: 0.25%) 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 andfor 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 ongoing
COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events.
ImpactofongoingCOVID‐19pandemic,currentadversemacroandmicroeconomicconditionsandadverseglobaleventsonimpairmentanalysis
of goodwill and other indefinite life intangible assets
When completing the impairment analysis of goodwill and other indefinitelife intangible assets, the Group has taken into consideration all
reasonably known and available information with respect to the ongoing COVID‐19 pandemic, current adverse macro and micro economic
conditions and adverse global events 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 the expected impacts of ongoing COVID‐19 pandemic,
current adverse macro and micro economic conditions and adverse global events. Notwithstanding the impacts of the above, the results of the
model show that there is still significant headroom in the unit.
2. Research and Advisory CGU*** ‐ In the forecasted cash flows used in the CGU*** impairment analysis, the Group has factored in the
expected impacts on ongoing COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events 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.
***CGU ‐ Cash Generating Unit
**LVR ‐ Loan to Valuation Ratio
43
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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
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*
When calculating fair value of the four equity securities carried at FVTOCI*, the Group has taken into consideration all reasonably known and
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.
Bartercard uses an electronic currency called a Bartercard Trade Dollar.The Group earns Bartercard Trade Dollars for the goods it sells to
customers (trade debits) and uses the Bartercard Trade Dollars to make purchases (trade credits) from other Bartercard holders. The assets
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.
The useful life of the intangible assets are reviewed each period to determine whether events and circumstances continue to support the
indefinite useful life estimate.
*FVTOCI ‐ Fair Value Through Other Comprehensive Income
44
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 5: SEGMENT REPORTING
$ $ $$$$
5,608,931 2 1 5,608,934 (34,495) 5,574,439
1,894,291 ‐ ‐ 1,894,291 ‐ 1,894,291
‐ 394,900 ‐ 394,900 112,769 507,669
‐ 4,919 ‐ 4,919 ‐ 4,919
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
5,690 2,875 281,854 290,419 (253,488)36,931
7,508,912 402,696 281,855 8,193,463 (175,214) 8,018,249
(2,970,937)‐ (5,074) (2,976,011) ‐ (2,976,011)
(500,302)‐ ‐ (500,302)‐ (500,302)
‐ (46,301)‐ (46,301) (10,989) (57,290)
4,037,673 356,395 276,781 4,670,849 (186,203) 4,484,646
(66,266) ‐ ‐ (66,266)‐ (66,266)
‐ ‐ ‐ ‐ ‐ ‐
(811,571)(73,018) (126,081) (1,010,670) ‐ (1,010,670)
(98,435) ‐ (57,791) (156,226) ‐ (156,226)
(525,588)(2,658) 3,860 (524,386) (23,566) (547,952)
1,536,878 177,643 (332,808) 1,381,713 (41,050) 1,340,663
100,708,611 1,354,605 1,086,776 103,149,992 (245,298) 102,904,694
89,394,880 49,493 172,598 89,616,971 (245,298) 89,371,673
Acquisition of property, plant and equipment, intangible assets, and other non‐current assets (excluding non‐current finance receivables):
$ $ $$$$
‐ 109,426 ‐ 109,426 ‐ 109,426
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ 46,088 46,088 ‐ 46,088
‐ (109,426) 109,426 ‐ ‐ ‐
‐ ‐ 155,514 155,514 ‐ 155,514
Management has determined the operating segments based on the componentsof the Group that engage in business activities, which have
discrete financial information available and whose operating results are regularly reviewed by the Group's chief operating decision maker. The
chief operating decision maker has been identified as the Board of Directors. The Board of Directors makes decisions about how resources are
allocated to the segments and assesses their performance.
Three reportable segments have been identified as follows:
‐ Finance: Deposit taking and short term property mortgage lending.
‐ Research and Advisory: Provides investment advisory services and produces and sells investment research and publications.
‐ Corporate and Other: Corporate function and investment activities.
Other
Transfers / reallocations
between
segments
EliminationsConsolidated
Other income
Increase in
allowance for
expected credit losses
Realised losses on bonds sold
Revenue ‐ fee income
(finance receivables)
Revenue from contracts with
customers
Personnel expenses
‐ Advisory fee revenue
‐ Yearbook and research
‐ Other fee income
Modification gain on loan
receivables
Cost of sales
Year ended 31 Mar 2022FinanceTotal Segments
Depreciation and
amortisation
Income tax (expense) /
benefit
Total revenue
Interest expense
Fee and commission expense
Net revenue
Corporate and
Other
Research and Advisory
Corporate and
OtherEliminationsConsolidated
Net profit / (loss) after tax
Total Assets
Revenue ‐ interest income
Acquired through settlement
of transactions
/ balances
Recognition of right of use
assets on new leases
Total Liabilities
Year ended 31 Mar 2022Finance
Research and Advisory
Total Segments
45
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 5: SEGMENT REPORTING (CONTINUED)
$ $ $$$$
3,535,620 3 3 3,535,626 (2,225) 3,533,401
933,176 ‐ ‐ 933,176 ‐ 933,176
‐ 357,642 ‐ 357,642 (119,894) 237,748
‐ 41,297 ‐ 41,297 ‐ 41,297
‐ ‐ ‐ ‐ ‐ ‐
49,770 ‐ ‐ 49,770 36,719 86,489
39,996 42,382 107,819 190,197 (142,004)48,193
4,558,562 441,324 107,822 5,107,708 (227,404) 4,880,304
(2,245,554)‐ (543)(2,246,097) ‐ (2,246,097)
(257,997)‐ ‐ (257,997) 10,000 (247,997)
‐ (48,686)‐ (48,686) 10,990 (37,696)
2,055,011 392,638 107,279 2,554,928 (206,414) 2,348,514
(27,372) ‐ ‐ (27,372)‐ (27,372)
(190,085)‐ ‐ (190,085)‐ (190,085)
(649,118)(57,519) (75,282) (781,919) ‐ (781,919)
(33,529) ‐ (6,987) (40,516)‐ (40,516)
(59,587)105 4,910 (54,572) 15,605 (38,967)
223,429 191,879 (284,738) 130,570 (48,804)81,766
66,073,514 1,318,154 1,030,284 68,421,952 (257,713) 68,164,239
58,446,662 132,059 269,134 58,847,855 (208,909) 58,638,946
Acquisition of property, plant and equipment, intangible assets, and other non‐current assets (excluding non‐current finance receivables):
$ $ $$$$
‐ 107,762 ‐ 107,762 ‐ 107,762
193,535 ‐ 112,194 305,729 ‐ 305,729
‐ ‐ 85,356 85,356 ‐ 85,356
‐ (107,762) 107,762 ‐ ‐ ‐
193,535 ‐ 305,312 498,847 ‐ 498,847
Modification gain on loan
Realised losses on bonds sold
ConsolidatedYear ended 31 Mar 2021FinanceResearch and Advisory
Corporate and
OtherTotal Segments Eliminations
Increase in allowance for
ex
pected credit losses
Revenue ‐ fee income
(finance receivables)
Total Assets
Revenue ‐ interest income
Total Liabilities
Acquired through settlement
of transactions
/ balances
Total revenue
Total Segments Eliminations
Income tax (expense) /
Interest expense
Other
Transfers / reallocations
between segments
Other income
Recognition of right of use
assets on new leases
Corporate and
OtherYear ended 31 Mar 2021FinanceResearch and Advisory
Revenue from contracts with
customers
‐ Advisory fee revenue
‐ Yearbook and research
Consolidated
Fee and commission expense
Cost of sales
Net revenue
Personnel expenses
Net profit / (loss) after tax
‐ Other fee income
Depreciation and
amortisation
46
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 6: RISK MANAGEMENT
6.1 Credit risk
20222021
$$
Northland
1,388,706 1,998,048
Auckland
59,428,249 39,195,570
Waikato
4,252,908 2,691,087
Bay of Plenty
927,117 102,093
Wellington
8,035,737 5,037,443
Other North Island
2,975,800 1,878,632
Canterbury
2,448,442 1,315,784
Otago
1,461,075 2,240,299
Total
80,918,034 54,458,956
To manage credit on finance receivables the Group performs credit evaluations on all customers requiring advances. The approval process
considers a number of factors including the value of the security compared to the value of the amount to be borrowed ("loan to valuation ratio"
or "LVR"**), the creditworthiness of the borrower and their ability to repay.
The Group operates a credit risk (lending) policy which stipulates the Group's requirements regarding the security and LVR** of the borrowing,
the credit worthiness of borrowers, geographical spread, maximum loan exposure size and credit approval authority levels. Decisions on
whethertoapproveordeclineloans aremadebythecreditcommitteeinlinewith the Group's credit risk policy. Loan receivables are subject to
regular scrutiny, as a key component of credit risk management. This includes a review of the borrower’s repayment history and any interest
arrears; any changes in the borrowers circumstances which could impact ontheir 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.
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations, and arises
principally from the Group's loan receivables, cash and cash equivalents and accounts receivable.
As at 31 March 2022 the Group’s loan advances are secured as follows: first mortgages 100% (March 2021: 99.8%), second mortgages 0.0%
(March 2021: 0.2%), combined first and second mortgages 0.0% (March 2021:0.0%). There were no unsecured loans as at 31 March 2022
(March 2021: 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 2022, advances by the Group in the North Island residential property sector represented 95.2% (March 2021: 93.5%) of its total
exposure, with 73.5% (March 2021 72.1%) being in the Auckland market. The geographical profile of loan receivables is analysed further as
follows:
As at 31 March 2022 the Group’s advances were primarily secured over properties which are categorised as follows: residential housing 85.4%
(March 2021: 85.8%), residential bare land 10.7% (March 2021: 8.5%), residential development property 0.0% (March 2021: 0.0%) and
commercial property 3.8% (March 2021: 5.7%). In some cases, secondary securities may be taken over other property types.
The maximum credit exposure of the Group, assuming a zero value for collateral is $104,859,668 (2021: 66,373,304). This includes loans
receivable of $80,918,034 (2021: $54,458,956),undrawn loan commitments of $4,812,714 (2021: $1,316,486), bank deposits of $19,111,570
(2021: $10,292,267), accounts receivable of $17,350 (2021: $194,727) and related party receivables of $Nil (2021: $110,868). Of this exposure,
81.8% is covered by collateral over properties (2021: 84.1%) and 18.2% is deposited with registered New Zealand banks (2021: 15.5%).
**LVR ‐ Loan to Valuation Ratio
47
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 6: RISK MANAGEMENT (CONTINUED)
20222021
Number of
Ex
posures
Number of
Exposures
Less than $100,000
‐ ‐
Between $100,000 and $250,000
8 10
Between $250,000 and $500,000
23 31
Between $500,000 and $1,000,000
40 27
Between $1,000,000 and $1,500,000
9 6
Between $1,500,000 and $2,000,000
9 5
Between $2,000,000 and $2,500,000
4 1
Between $2,500,000 and $3,000,000
2 2
Between $3000,000 and $3,500,000
1 ‐
Total No. of Exposures
96 82
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:
20222021
$$
Up to 30 Days
834,359 706,420
31 ‐ 60 Days
1,301,738 1,302,341
61 ‐ 90 Days
‐ ‐
91 ‐ 120 Days
487,279 ‐
120+ Days
‐ ‐
Total
2,623,376 2,008,761
*ECL‐ Ex
pected Credit Losses
12‐month ECL*
Gross loans receivable totalling$834,359 (March 2021: $706,420) were past due and the Group has concluded there has not
been a significant increase in credit risk.
Lifetime ECL* not credit impaired
Gross loans receivable totalling $1,301,738 (March 2021: $1,302,341) were past due by between 30 and 90 days andthe Group
has concluded there has been a significant increase in credit risk.
Lifetime ECL* credit impaired
Gross loans receivable totalling$487,279 (March 2021: $Nil) 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 atbalance date, the Group holds deposits in New Zealand Registered
Banks including 46.2% with Bank of New Zealand (2021: 99.6%), 0.1% with ASBBank (2021: 0.2%) and 1.2% with ANZ Bank New Zealand (2021:
0.2%) and 52.4% with Heartland Bank (2021: 0.0%).
The concentration of the credit exposure to the six largest exposures is 18.8% (March 2021: 23.2%) of the total loan portfolio. The Group has
elected to disclose the largest six exposures as this is considered to provide a meaningful indication of concentration of credit risk. 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:
The provision for expected credit losses for performing and under‐performing loans is detailed and explained in note 11. Gross past due loan
receivables total $2,623,376 (March 2021: $2,008,761) which equates to 3.2% (March 2021: 3.7%) of total loan receivables.
48
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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.
2022Total0 ‐ 6 7 ‐ 1213 ‐ 24 24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
16,669,772 16,669,772 ‐ ‐ ‐
Bank deposits (>=183 days)
1
2,469,773 2,469,773 ‐ ‐ ‐
Other financial assets
47,977
47,977 ‐ ‐ ‐
Loan receivables
84,500,841 40,802,322 40,491,805 3,206,714 ‐
Totals
103,688,363 59,989,844 40,491,805 3,206,714 ‐
Financial liabilities
Term deposits
91,171,614 34,980,104 33,643,302 18,046,626 4,501,582
Lease liability
174,364 87,182 87,182 ‐ ‐
Other payables
750,342 750,342 ‐ ‐ ‐
Totals
92,096,320 35,817,628 33,730,484 18,046,626 4,501,582
Net cashflow
11,592,042 24,172,215 6,761,321 (14,839,912) (4,501,582)
2021Total0 ‐ 6 7 ‐ 1213 ‐ 24 24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
7,300,469 7,300,469 ‐ ‐ ‐
Bank deposits (>=183 days)
1
3,019,773 3,019,773 ‐ ‐ ‐
Other financial assets
305,595
305,595 ‐ ‐ ‐
Loan receivables
57,904,712 18,598,749 24,593,585 9,802,023 4,910,355
Totals
68,530,549 29,224,586 24,593,585 9,802,023 4,910,355
Financial liabilities
Term deposits
60,177,665 18,460,422 20,981,517 18,473,850 2,261,876
Lease liability
326,040 81,510 81,510 163,020 ‐
Other payables
104,031 104,031 ‐ ‐ ‐
Totals
60,607,736 18,645,963 21,063,027 18,636,870 2,261,876
Net cashflow
7,922,813 10,578,623 3,530,558 (8,834,847) 2,648,479
1
Bank deposits with an original term of greater or equal to 183 days.
The following tables set out the undiscounted contractual cash flows, and the undiscounted expected cash flows, of the Group’s financial assets
and liabilities.
The Group operates a liquidity risk policy and endeavours to maintain sufficient funds to meet its commitments based on forecasted cash flow
requirements. Management has internal control processes and contingency plans to actively manage the lending and borrowing portfolios to
ensure the net exposure to liquidity risk is minimised. The exposure is reviewed on an on‐going basis from daily procedures to monthly reporting
as part of the Group's liquidity management policies and processes.
Contractual Cash Flows
Contractual Cash Flows
49
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 6: RISK MANAGEMENT (CONTINUED)
2022Total0 ‐ 6 7 ‐ 1213 ‐ 24 24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Cash and cash equivalents
16,729,369 16,729,369 ‐ ‐ ‐
Bank deposits (>=183 days)
1
2,472,313 2,472,313 ‐ ‐ ‐
Other financial assets
47,977 47,977 ‐ ‐ ‐
Loan receivables
88,171,853 22,149,436 22,061,385 42,357,931 1,603,101
Totals
107,421,511 41,399,094 22,061,385 42,357,931 1,603,101
Financial liabilities
Term deposits
96,084,633 16,049,163 14,691,395 29,246,723 36,097,352
Lease liability
174,364 87,182 87,182 ‐ ‐
Other payables
750,342 750,342 ‐ ‐ ‐
Totals
97,009,339 16,886,687 14,778,577 29,246,723 36,097,352
Net cashflow
10,412,172 24,512,407 7,282,808 13,111,208 (34,494,251)
2021Total0 ‐ 6 7 ‐ 1213 ‐ 24 24+
MonthsMonthsMonthsMonths
$$$$$
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)
1
Bank deposits with an original term of greater or equal to 183 days.
‐60% term deposit reinvestment rate for 31 March 2022 (March 2021: 60%).
‐
Term deposit reinvestments are made for a weighted average 18‐month term at 6.26% pa (March 2021: 18‐month term at 3.90% pa).
‐
$2,020,591 of the Term deposits held by related parties has been approved for early withdrawal on 1 April 2022 (refer to note 18).
‐
Expected Cash Flows
Expected Cash Flows
50% of loans (March 2021: 50%) not past due repay on existing contractual maturity date, with the balance rolled over at their existing
interest rates and repaid after a further 12 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 past experience, current market conditions and
the future outlook including the ongoing COVID‐19 pandemic, current adverse macro and micro economic conditions and adverse global events
estimated impacts:
50
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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
2022
Amount ‐1% Profit ‐1% Equity +1% Profit +1% Equity
Financial Assets
$ $ $ $ $
Cash and cash equivalents
16,661,570 (166,616) (119,964) 166,616 119,964
Finance Receivables
80,918,034 (809,180) (582,610) 809,180 582,610
Financial Liabilities
Term Deposits
88,134,578 881,346 634,569 (881,346) (634,569)
Total increase / (decrease)
(94,450) (68,005) 94,450 68,005
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
6.4 Assets carried at fair value
Level 1Fair value is calculated using quoted prices in active markets.
Level 2
Level 3Fair value is estimated using inputs for the asset or liability that are not based on observable market data.
2022
Note Level 1 Level 2 Level 3 Total
Fair value assets
$$
$ $
15
116,790 ‐ 171,652 288,442
2021
Level 1 Level 2 Level 3 Total
Fair value assets
$$
$ $
15
‐ ‐ 401,086 401,086
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).
Interest rate risk is the risk of loss to the Group arising from adverse changes in interest rates. The Group's financing activities are exposed to
interest rate risk in respect of its interest earning assets and interest bearing liabilities. Changes to interest rates can impact the Group's
financial results by affecting the interest spread earned on these assetsand liabilities. Interest rates for finance receivables, term deposits,and
bank deposits (other than those on call) are fixed for the term of their respective contracts. Interest rates are repriced on contractual 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).
As at 31 March 2021, the Group's investment in Greenfern Industries Limited (refer note 15) was an unlisted investment. During the year ended
31 March 2022, Greenfern Industries Limited was listed on the New Zealand Stock Exchange, and as a result the inputs into the fair value
measurement changed from Level 3 to Level 1 of the fair value hierarchy.
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 2022
NOTE 7: OTHER EXPENSES
7.1 Realised losses on bonds sold
7.2 Other o
perating expenses
Included in other expenses are the following amounts:
20222021
$$
Directors fees
227,401 177,833
Auditors Remuneration
‐ Audit and other assurance services
‐ Audit of financial statements
212,626 144,375
‐ Audit of quarterly trustee certificates
3,623 3,623
‐ Other Services
‐Taxation compliance
17,084 14,392
Total remuneration paid to auditors
233,333 162,390
NOTE 8: TAXATION
8.1 Income tax
20222021
$$
Net operating profit / (loss) before taxation
1,888,615 120,733
Income tax (expense) / benefit at prevailing rates
(528,812) (33,805)
Tax impact of expenses not deductible for tax purposes
(21,452)(6,142)
Over‐provision of tax in prior year
2,312 980
Taxation expense per the statement of comprehensive income
(547,952) (38,967)
Comprising:
‐ Current tax
(556,079) (69,885)
‐ Deferred tax
8,127 30,918
(547,952) (38,967)
8.2 Deferred tax asset
20222021
$$
Balance at beginning of year
126,922 96,004
(Charged) / credited to profit or loss
Increase / (decrease) in impairment loss provision
18,555 7,664
Increase / (decrease) in accrued expenses
7,137 (2,043)
Increase / (decrease) in lease liability
(40,620)89,442
Increase / (decrease) in unearned income
(18,035)18,035
Increase / (decrease) in right of use asset
41,090 (82,180)
8,127 30,918
(Charged) / credited to other comprehensive income
Changes in the fair value of equity investments at fair value through other comprehensive income
‐ ‐
135,049 126,922
A loss of $190,085 was realised from the bonds sold during the 2021 Financial Year due to the bond value movements. Interest income of
$35,267 was earned from the bonds during the year ended 31 March 2021. The bonds were all sold by 31 March 2021 with an outstanding
settlement amount receivable of $194,018 as at 31 March 2021.
52
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 8: TAXATION (CONTINUED)
Deferred tax attributed to:
20222021
$$
Deferred tax assets:
Impairment loss provision
56,643 38,088
Accrued expenses
27,401 20,264
Fair value of equity investments at fair value through other comprehensive income
43,273 43,273
Lease Liability
48,822 89,442
Unearned income
‐
18,035
176,139 209,102
Deferred tax liabilities
Right of use assets
41,090 82,180
Net deferred tax assets
135,049 126,922
8.3 Im
putation credit account
20222021
$$
Balance at beginning of year
115,958 93,220
Tax Paid
88,478 18,942
Withholding tax deducted from interest received
‐ 4,868
Tax Refund Received
(41)(1,072)
204,395 115,958
NOTE 9: EARNINGS PER SHARE
20222021
CentsCents
0.78 0.05
0.78 0.05
20222021
Basic earnings per share
$$
1,340,663 81,766
1,340,663 81,766
20222021
NumberNumber
172,610,675 161,657,561
172,610,675 161,657,561
Weighted average number of ordinary shares used as the denominator in calculating
diluted earnings per share
Diluted earnings per share attributable to the ordinary equity holders
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating basic earnings per share:
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating diluted earnings per share:
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
Basic earnings per share attributable to the ordinary equity holders
53
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 10: CASH AND CASH EQUIVALENTS
20222021
$$
Bank call deposits
11,261,570 3,842,267
Bank term deposits (original maturity of less than 183 days)
5,400,000 3,450,000
16,661,570 7,292,267
Bank term deposits (original maturity of greater than 183 days)
2,450,000 3,000,000
2,450,000 3,000,000
Interest Rates:
On Call: Between 0.00% and 1.40% (March 2020: Between 0.00% and 0.50%).
Bank term deposits:
‐ Less than 183 days: Between 1.10% and 1.85% (March 2021: Between 0.80% and 1.05%).
‐ Greater than or equal to 183 days: Between 1.50% and 2.05% (March 2021: Between 1.60% and 1.85% per annum).
NOTE 11: LOAN RECEIVABLES
20222021
$$
First mortgage advances
80,918,034 54,351,134
Second mortgage advances
‐ 107,822
80,918,034 54,458,956
Less deferred fee income and expenditure
(688,078)
(612,146)
Less impairment allowance
(202,295) (136,029)
Net carrying value
80,027,661
53,710,781
Current portion
76,954,475 40,292,033
Non‐current portion
3,073,186 13,418,748
80,027,661 53,710,781
Primar
y loan security
Residential housing
69,125,122 46,751,105
Residential bare land
8,691,870 4,607,409
Commercial property
1
3,101,042 3,100,442
80,918,034 54,458,956
Interest rate: Between 5.45% and 12.90% (2021: Between 5.45% and 16.50%).
Effective interest rate: Between 5.79% and 28.78% (2021: Between 5.79% and 18.73%).
For loans that are in default, additional interest of u
p to 10% is charged.
Loan receivables represent loans at commercial interest rates. Current loan receivables are contractually repayable within 12 months. Non‐
current loan receivables are contractually repayable within 12 months to 20 months of balance date.
At year end there was $4,812,714 in outstanding loan commitments (loans approved and accepted not yet drawn) including future capitalised
interest (March 2021: $1,316,486).
1
The Group commenced lending on commercial properties during the current financial year ended March 2021. The Group’s lending policy
allows for a maximum of 30% of total lending to be secured over commercial properties. During the year ended 31 March 2022 the Group had
3.8% of commercial lending (2021: 5.7%).
54
Borrower
payment terms are profiled as follows:
20222021
$$
Interest only paid monthly
74,273,683 44,299,684
Interest capitalised
6,644,351 10,159,272
Total loan receivables
80,918,034 54,458,956
20222021
$$
Interest income
652,758 537,839
Loan Fees
1,609,775 795,481
Total
2,262,533 1,333,320
Reconciliation of
gross loan receivable balance movements through ECL* stages:
Lifetime ECL* Lifetime ECL*
12 month not creditcredit
ECL*impaired impairedTotal
$$$$
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
New loan advances
74,835,252 ‐ ‐ 74,835,252
Repayments
(47,073,833) (1,302,341) ‐
(48,376,174)
Transfer to lifetime not credit impaired
(1,301,738) 1,301,738 ‐ ‐
Transfer to lifetime credit impaired
(487,279) ‐
487,279
Balance as at 31 March 2022
79,129,017 1,301,738 487,279 80,918,034
*ECL ‐ Ex
pected Credit Losses
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 11: LOAN RECEIVABLES (CONTINUED)
The core lending activity of the Group is providing, through a broker network, short term and bridging finance secured by mortgage over
residential property. The majority of loans are entered into with a maturity date within 12 months, with a proposal that repayment will be
funded by the sale of the secured property or through refinancing by the borrower. General Finance Limited lending policy allows for a
maximum “loan to security value” of 75% (excluding fees and charges) on advances, unless approved by the full board of General
Finance Limited. There are no loans with loan to valuation ratio above 75% at the reporting date (2021: none).
At balance date, 30.7% (March 2021: 25.0%) of loans by number and 22.1% (March 2021: 18.9%) by value represent loans that have been rolled
over and are into their second or subsequent credit periods. Where loans have been rolled over, their classification in these consolidated
financial statements as current or non‐current, or as past due, is based on payment due dates as per the terms of the extended 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 2022
NOTE 11: LOAN RECEIVABLES (CONTINUED)
Reconciliation of movements in impairment allowance by stage:
Lifetime ECL* Lifetime ECL*
12 month not creditcredit
ECL*impaired impairedTotal
$$$$
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 ‐ ‐
Reduction in expected credit losses %
(32,126) ‐ ‐ (32,126)
Balance as at 31 March 2021
132,773 3,256 ‐ 136,029
New loan advances
231,071 ‐ ‐ 231,071
Repayments
(145,351) (3,256) ‐ (148,607)
Transfer to lifetime not credit impaired
(3,254) 3,254 ‐ ‐
Transfer to lifetime credit impaired
(1,505) ‐ 1,505 ‐
Reduction in expected credit losses %
(16,198) ‐ ‐ (16,198)
Balance as at 31 March 2022
197,536 3,254 1,505 202,295
NOTE 12: INVESTMENT IN SUBSIDIARIES
Subsidiary
20222021
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.
*ECL ‐ Expected Credit Losses
**LVR ‐ Loan to Valuation Ratio
I
n instances where the probability o
fdefault has increased significantly (a significant increase in credit risk), or where the loan is in default, the
expected credit loss (or loss given default) may not increase significantly due to the Group’s lending criteria which prohibits lending when the
loan to valuation ratio (LVR)** exceeds 75%. This means in general that theGroup 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.
The LVR** of loans with a significant increase in credit risk or in default was in a range of 50.5% ‐ 68.2% as at 31 March 2022 (53.9% ‐ 63.0% as at
31 March 2021), 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 2022
NOTE 13: LEASES
Right of use assetsOffice Premises
and Carparks
$
As at 1 April 2020‐
Additions305,729
Depreciation(12,229)
As at 31 March 2021
293,500
Additions‐
Depreciation(146,750)
As at 31 March 2022
146,750
Lease Liability
20222021
$$
Balance at beginning of year
307,207 ‐
Additions
‐ 305,729
Accretion of interest
13,827 1,478
Payments
(146,670)‐
Total loan receivables
174,364 307,207
Current
174,364 149,195
Non‐current
‐ 158,012
174,364 307,207
NOTE 14: INTANGIBLE ASSETS
Bartercard
Trade
GoodwillLicencesDollars SoftwareTotal
$$$$$
Year ended 31 March 2021
Opening net book amount
2,350,730 277,000 389,782 29,299
3,046,811
Additions
‐‐
11,858
‐
11,858
Disposals
‐‐(108,873) ‐
(108,873)
Amortisation charge
‐‐‐(23,431)
(23,431)
Closing net book amount
2,350,730 277,000 292,767 5,868 2,926,365
At 31 March 2021
Cost
2,350,730 277,000 292,767 70,293 2,990,790
‐ ‐ ‐ (64,425) (64,425)
Net book amount
2,350,730 277,000 292,767 5,868 2,926,365
Accumulated amortisation and impairment
The Group entered into a two‐year office premises and carpark lease with a commencement date of 1 March 2021. The lease is for a term of two
years and includes four further rights of renewal of six months each. Manag
ement do not expect the renewal rights to be exercised as the Group
is
expected to grow in size and headcount over the next twoyears
and as such will require a larger office premises. Accordingly, the extension
periods have not been included in the lease term in the calculation of the lease liability. The undiscounted potential future rental payments
relating to these extension periods which are not included in the lease term total $174,364 (2021: $326,041).
The Group had a lease obligation from 1 March 2021. In the period up to 28 February 2021 and in the prior year ended 31 March 2020, the
Group paid a share of office premises lease costs to Moneyonline Limited, arelated company. There was no formal agreement in place in
relation to this arrangement. Costs were allocated monthly based on the office space utilised by the Company. The costs are included in
occupancy costs in the statement of comprehensive income, and further information on related party transactions can be found in note 18.
57
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
Bartercard
Trade
GoodwillLicencesDollars SoftwareTotal
$$$$$
Year ended 31 March 2022
Opening net book amount
2,350,730 277,000 292,767 5,868
2,926,365
Additions
‐‐30,020 ‐
30,020
Disposals
‐‐(32,439) ‐
(32,439)
Amortisation charge
‐‐‐(5,230)
(5,230)
Closing net book amount
2,350,730 277,000 290,348 638 2,918,716
At 31 March 2022
Cost
2,350,730 277,000 290,348 70,293 2,988,371
‐ ‐ ‐ (69,655) (69,655)
Net book amount
2,350,730 277,000 290,348 638 2,918,716
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,
expected future profitability and the workforce of the CGU's*. Management have assessed that there is no foreseeable limit to the period of
time over which the goodwill and licences are expected to generate net cash inflows for the Group and as such they have been 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 afive year period. Cash flows beyond the five year period are
extrapolated using the estimated long term growth rates stated below. Thegrowth 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 withgoodwill 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‐tax free cash flows to equity holders (FCFE)** have been forecasted based on growth in the non‐bank deposit taking / residential lending
business within the current constraints of the licence / trust deed. The forecasted growth in net cash flows is driven primarily by the net interest
and fee margin from forecasted growth in deposit funding and the loan book.For reference purposes, pre‐tax FCFE** was $2,028,008 (2021:
$309,804). Significant expenditure has been incurred since the businesswas purchased by the Group to ensure that the business has the
capacity and resources to allow for the growth.
*CGU ‐ Cash Generating Unit
**FCFE ‐ Free Cash flows to Equity Holders
Accumulated amortisation and impairment
58
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
31 March 2022 AssumptionsTotal AssetsTotal LiabilitiesRevenueExpenditureFCFE
Year one growth assumptions40.0%40.7%72.2%78.0%
56.5%
1
Year two growth assumptions10.9%8.2%33.8%29.4%47.3%
Year three growth assumptions9.9%7.4%9.7%10.9%6.6%
Year four growth assumptions9.4%7.1%8.9%7.8%12.0%
Year five growth assumptions8.7%6.5%8.2%7.5%10.1%
Terminal growth beyond year 5
2.0%
Pre‐tax discount rate 15.7%
31 March 2021 AssumptionsTotal AssetsTotal LiabilitiesRevenueExpenditureFCFE**
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%
Research and advisory CGU*
31 March 2022 AssumptionsNet RevenueExpenditure
Working Capital
Movements
Pre‐tax FCFF***
Actual 31 March 2022 year
2
356,395 (176,094) 39,362 219,663
Forecast 2023
285,300 (165,838) ‐ 119,462
Forecast 2024
404,100 (161,250) ‐ 242,850
Forecast 2025
406,238 (158,612) ‐ 247,626
Forecast 2026
412,331 (155,992) ‐ 256,339
Forecast 2027
418,516 (157,461) ‐ 261,055
1.5%
17.4%
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.
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) by 25%, decreasing and increasing the terminal growth rate by 0.5%, and decreasing and increasing the discount rate by 1%. These
reasonably possible changes in assumptions did not result in an impairment to the CGU* (2021: the same sensitivity analysis did not result in an
impairment to the CGU*).
1
FCFE** 56.5% (March 2021: 303.6%) is high compared to the assets growth of 40.0% (March 2021: 24.1%) due to the nature of finance
businesses, the benefits of the balance sheet growth in the 2023 financial year (March 2021: 2022 financial year) are not fully realised until the
following year (for instance the expected interest income from new lending).
Terminal growth beyond year five
Pre‐tax discount rate
*CGU ‐ Cash Generating Unit
**FCFE ‐ Free Cash flows to Equity Holders
***FCFF ‐ Free Cash flows to the Firm
59
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 14: INTANGIBLE ASSETS (CONTINUED)
31 March 2021 AssumptionsNet RevenueExpenditure
Working Capital
Movements
Pre‐tax FCFF***
Actual 31 March 2021 year
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%
2
$120,000 of the pre‐tax FCFF*** in the 31 March 2022 year as displayed aboverelates to amounts received in shares for advisory fees (March
2021: $72,000), net of amounts paid in shares for commission expense. These have been included in pre‐tax FCFF*** on the basis that the
research and advisory CGU* is not in the business of holding shares despitethe Group's election to do so and hence the shares could have been
sold at fair value on the date they were received. Should this amount not be included as a cash flow, then pre‐tax FCFF*** would instead be
$99,663 for the 31 March 2022 year (March 2021: $204,724). There is no impact on the future year forecasts, nor on the impairment assessment
in respect of this.
The forecasted cash flows in the March 2022 and March 2021 impairment analysis include assumptions around the probability of achieving
certain milestones in the existing contracts as well as expectations around sourcing future advisory contracts and 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
changes in assumptions was performed. This included decreasing and increasing the years 1‐5 forecast cash flows by 100%, decreasing and
increasing the terminal growth rate by 0.5%, and decreasing and increasing the discount rate by 1%. A reduction in forecasted cash flows by
100% would result in an impairment of $1,057,001 (2021: $1,057,001) to the CGU*. An increase in the discount rate by 1% did not result in
impairment (2021: impairment of $43,498) to the CGU*. The other sensitivity movement did not result in an impairment (2021: 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 flows of
the research and advisory group rely most significantly on securing and co mpleting one or more advisory projects per year. Should this not be
achieved, then the net cash flows of the CGU* may be breakeven or negative (n et cash outflow) in the forecast years. The forecast 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.
Bartercard trade dollars
Bartercard trade dollars comprise the balance of Bartercard Trade Dollars on hand at period end net of accumulated impairment losses.
For the years ended 31 March 2022 and 31 March 2021 it was determined that the fair value less costs of disposal of the Bartercard trade dollars
was equivalent to the carrying value of the assets. Fair value less costs of disposal was determined based on the fact that all market participants
(being other Bartercard members) accept the terms and conditions of Bartercard which stipulate that a Bartercard Trade Dollar is equivalent to
a New Zealand dollar at the date of exchange in respect of future purchases or goods and services. In addition, as there are no significant
disposal costs associated with settling transactions in Bartercard trad e dollars, management have determined that the fair value less costs of
disposal are equal to the carrying value of Bartercard trade dollars.
*CGU ‐ Cash Generating Unit
**FCFE ‐ Free Cash flows to Equity Holders
***FCFF ‐ Free Cash flows to the Firm
60
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 15: INVESTMENTS
Note20222021
$$
Investment in Barter Investments Limited18‐ 35,321
Investment in Sports & Education Corporation Limited18‐ ‐
Investment in Cannabis and Bioscience Corporation Limited18171,652 265,581
Investment in Greenfern Industries Limited18116,790 100,184
288,442 401,086
Investment in Barter Investments Limited
Investment in S
ports & Education Corporation Limited
Investment in Cannabis and Bioscience Cor
poration Limited
The 17.3% (March 2021: 17.3%) 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 unlisted investment
holdings company and is a related party by virtue of common directorship as described in note 18. The investment has been classified as a
financial asset at fair value through other comprehensive income.
Fair value of CBC investment as at 31 March 2021 and 31 March 2022
ThefairvalueofthisequitysecurityisbasedontheGroup'sshareoftheentity'snetassetsatreportingdateasreportedintheentity'sfinancial
statements, net of a discount for illiquidityof 20% (valuation technique). Themajorityof theentity'sassetsand liabilitiesarereported intheir
financialstatementsateithertheirfairvalueortheircarryingvaluewhichapproximatestheirfairvalue(thesignificantunobservableinputs).A
loss of $93,929 has been recognised in other comprehensive income during the year in relation to the fair value of the investment (2021: $9,419).
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 $21,000 (2021: $33,000).
Investment Research Group Limited received consideration of $30,000 in Bartercard Dollars for the shares held in Barter Investments Limited
("BIL") as part of the company's wind down. As at 31 March 2022 the Investment Research Group Limited still owns 50,800 shares, however it
does not have beneficial ownership in the shares and is unable to exercise any of the rights that would normally be attached to such shares.
The investment in the unlisted investment holdings is classified as a financial asset at fair value through other comprehensive income. This
equity is not quoted in an active 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's financial statements (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 unobservable inputs).
The inter‐relationship between key unobservable inputs and fair value measurement is that an increase / (decrease) in the net assets would
increase / (decrease) the fair value of the investment.
As the consideration for the beneficial ownership has been received a $15,479 gain was recognised in other comprehensive income during the
year ended 31 March 2022 to clear out the related Fair Value reserve (2021: Aloss of $2,068 has been recognised) and a corresponding loss on
sale of investments of $20,800 was recognised in other operating expenses.
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 through other
comprehensive income. The equity securities are quoted on the Unlisted Securities Exchange in New Zealand, however there 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 2021 and 31 March 2022
ThesharesofSECwereput into a trading halt on the USX on 1 August 2019 pending the release of its March 2019 Annual Report which still has
not been released up to the date of signing these financial statements. This effectively had the effect of delisting the company. When compiling
the 31 March 2021 financial statements, the Group determined that the uncertainty inherent in the future cash flows of the investment were so
significantthatitwasunlikelythatamarketparticipantwouldpayamaterial amount for the equity stake held by the Group. The Group
therefore determined that a risk adjustment of ‐100% per share (a significant unobservable input) be applied (March2022: ‐100%). This resulted
in a fair value of $nil as at 31 March 2021 (March 2022: $nil). The inter‐relationship between the key unobservable input and fair value
measurement is that an increase / (decrease) in the risk adjustment (an increase being a higher discount) would (decrease) / increase the fair
value of the investment. No fair value movements recognised for the ended 31 March 2022 (March 2021: No fair value movements recognised).
The Company continues to trade and the Golf Course continues to be one of the more successful courses in New Zealand.
61
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 15: INVESTMENTS (CONTINUED)
Investment in Greenfern Industries Limited
NOTE 16: TERM DEPOSITS
20222021
$$
Gross term deposit liability
88,134,578 57,929,500
Less deferred commission expenditure
(87,359) (66,316)
Net carrying value
88,047,219 57,863,184
Contractual repayment terms:
On call
22,504 30,151
Within 12 months
66,407,557 37,888,692
Greater than 12 months
21,617,158 19,944,341
88,047,219 57,863,184
Re
payment Terms:On call up to 5 years
Interest Rate:2.95% ‐ 6.25% and 0.15% on call (March 2021: 2.40% ‐ 6.75% and 0.15% on call)
Effective Interest Rate:2.95% ‐ 6.25% and 0.15% on call (March 2021: 2.40% ‐ 6.75% and 0.15% on call)
Securit
y:
The Group has a total of 681 depositors as at 31 March 2022 (March 2021: 545).As at balance date, the largest deposit the Company has is
$2,084,512 (March 2021: $3,030,499) which represents 2.37% (March 2020:5.23%) of total deposits. As at balance date the largest aggregate
deposits under a single deposit holder total $6,185,342 (March 2021: $4,057,508) which represents 7.02% (March 2021: 7.00%) of total deposits
and have a weighted average maturity date of 3.82 months from balance date (March 2021: 3.74 months from balance date). The largest
deposit holder as at 31 March 2022 and 31 March 2021 is a director of General Capital Limited (refer to note 17). As at 31 March 2022
$2,020,591 of the Term deposits held by related parties has been approved for early withdrawal on 1 April 2022 in compliance with the
Company’s ‘early repayment’ terms of offer criteria included in the Company’s Product Disclosure Statement (refer to note 18).
First ranking security interest over the assets and undertakings of General Finance Limited in favour of the
Trustee (subject only to any prior security interests permitted by the Trust Deed and preferential claims given
priority by operation of law).
729,936 shares (representing a 0.86% stake) (March 2021: 50,092 shares (representing a 0.57% stake)) in Greenfern Industries Limited
(Greenfern).
During the year ended 31 March 2021, 40,000 shares were acquired as paymentof advisory fees and 4,000 of those shares were transferred to
the Managing Director in accordance with his contract (also refer note 18). A further 14,092 shares were also acquired for $2 per share during
the year ended 31 March 2021.
During the year ended 31 March 2022, a further 60,000 shares were acquired for $2 per share on 12 October 2021 as payment for advisory fee.
On 21 October 2021, Greenfern Industries Limited undertook a 8:1 share split, which increased the share holding to 880,736 shares. 102,800
shares at $0.25 per share were transferred to a non‐executive director in relation to advisory work (refer note 18) and 48,000 shares at $0.25
per share were transferred to Managing Director in accordance with his contract (refer note 18).
The investment in the listed investment holdings company is classified as a financial asset at fair value through other comprehensive income.
This equity is quoted in an active market for the year ended 31 March 2022 andis worth $0.16 per share at the date, therefore management has
determined to adopt a value of $0.16 per share as at 31 March 2022 as the fair value of the equity. A loss of $65,694 has been recognised in
other comprehensive income during the year in relation to the fair value of the investments (2021: $Nil).
For the year ended 31 March 2021 management has estimated the fair value of the equity securities based on the transaction price for sales of
Greenfern shares of the same class at dates which approximate the date the shares were acquired by the group and at 31 March 2021 year end
(valuation technique). A crowdfunding was carried out by Greenfern in late 2020 at a price $2 per share which raised approximately $2.9m.
Greenfern management have also advised the Company that further shares have been sold since that date at the same price (the significant
unobservable inputs). Management have therefore assessed the fair valueof the shares at $2 per share. The inter‐relationship between key
unobservable inputs and fair value measurement is that an increase / (decrease) in the transaction price for the shares would increase /
(decrease) the fair value of the investment. No amounts have been recognised in other comprehensive income during the year ended 31 March
2021 in relation to the fair value of the investment.
62
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 16: TERM DEPOSITS (CONTINUED)
Further anal
ysis of gross deposit funding is as follows:
Concentration of fundin
g
20222021
$$
Northland
2
,807,079 1,263,690
Auckland
41
,906,519 28,588,679
Waikato
7
,313,812 4,375,175
Ba
y of Plenty
12,694,481 5,519,679
Wellin
gton
10
,276,775 5,261,156
Other North Island
4
,231,432 3,310,551
South Island
7
,490,119 4,654,659
Overseas *
1
,414,361 4,955,911
Total gross term deposit liability
88,134,578 57,929,500
*The largest deposit holder resides overseas and is a director of the Company (refer to note 18).
Contractual maturity of funding
20222021
$$
Maturing in 0 ‐ 6 months33,836,498 17,701,862
Maturing in 6 ‐ 12 months32,636,505 20,238,363
Maturing in 12 ‐ 24 months17,339,988 17,850,727
Maturin
g after 24 months4,321,5872,138,548
Total gross term deposit liability
88,134,578 57,929,500
Profile of de
posit holders
2022202220212021
$$
Deposits over $200,000
96
56,009,077
63
34,500,730
De
posits $100,000 ‐ $200,000
92
13,482,741
58
8,322,533
De
posits $50,000 ‐ $100,000
151
10,932,583
121
8,527,002
De
posits $20,000 ‐ $50,000
182
5,986,582
153
4,987,325
De
posits $10,000 ‐ $20,000
87
1,277,268
77
1,109,070
De
posits under $10,000
73
446,327
73
482,840
Total gross term deposit liability
681
88,134,578
545
57,929,500
63
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 17: EQUITY
NoteNumber$Number$
Ordinary shares(a)212,657,496 13,025,575 162,873,779 10,249,211
(a) Ordinary shares
Number$
Balance at 1 A
pril 2020
161,655,643 10,176,204
Ordinary shares issued on 15 April 2020 ‐ exercise of GENWA Warrants
1
2,000 155
Ordinary shares issued on 31 March 2021 ‐ Share Placement
2
1,216,136 76,009
Transaction costs arisin
g on shares issued
‐ (3,157)
1,218,136 73,007
Balance at 31 March 2021
162,873,779 10,249,211
Ordinary shares issued on 27 September 2021 ‐ Share Placement
3
8,333,333 500,000
Ordinary shares issued on 8/12/21 ‐ Share Placement
4
6,667,775 400,000
Ordinary shares issued on 23/02/22 ‐ Share Placement
5
34,782,609 2,000,000
Transaction costs arisin
g on shares issued
‐ (123,636)
49,783,717 2,776,364
Balance at 31 March 2022 212,657,496 13,025,575
5
On 23 February 2022, the Company issued 34,782,609 shares at 5.75 cents per share under a placement to a wholesale investor.
2021
3
On 27 September 2021, the Company issued 8,333,333 shares at 6.0 cents per share under a placement to Borneo Capital Limited.
4
On 8 December 2021, the Company issued 6,667,775 shares at 6.0 cents per share under a placement to a wholesale investor.
All ordinary shares rank equally and entitle the holder to participate in dividends and to share in the proceeds of winding up the Company in
proportion to the number of and amounts paid on the shares held. One vote is attached to each fully‐paid ordinary share. Shares have no par
value. The Company was listed on the NZAX, the secondary market of the New Zealand Stock Exchange up to 1 July 2019, the date it migrated to
the NZX main board.
2
On 31 March 2021, the Company issued 1,216,136 shares at 6.25 cents per share under a placement to a wholesale investor.
1
2,000 GENWA Warrants were exercised on 31 March 2021 at $0.0775 per warrant for a total exercise price of $155. The Group allowed the
minor parcel warrants to be exercised after the 31 March 2020 expiry date (on 15 April 2020) as the exercise form was received late due to mail
delays.
Ordinary shares
2022
64
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 17: EQUITY (CONTINUED)
(b) Warrants
Number$Number$
Balance at 1 April 2020
2,000 ‐ 320,734,884 6,903
Exercise of GENWA Warrants ‐ 15 April 2020
1
(2,000)‐ ‐ ‐
Balance at 31 March 2021
‐ ‐ 320,734,884 6,903
‐ ‐ (307,684,884)‐
‐ ‐ (12,650,000)(4,672)
‐ ‐ (400,000)(2,231)
‐ ‐ 2,250,000 492
‐ ‐ (2,250,000)(492)
‐ ‐ 8,500,000 33,817
‐ ‐ 8,500,000 35,215
‐ ‐ (4,250,000) (16,908)
‐ ‐ (4,250,000) (17,608)
Balance at 31 March 2022‐ ‐ 8,500,000 34,516
1
Refer to Note 17(a) for further details on warrants exercised.
(c) Reserves
Financial Assets Share‐based Total
at FVOCI* payments Reserves
Notes$$$
Balance at 1 April 2020
(124,683)6,903 (117,780)
15
(11,487)‐ (11,487)
Balance at 31 March 2021
(136,170)6,903 (129,267)
Share‐based payment expense
19
‐ 34,516 34,516
Expired Warrants converted to Retained Earnings
19
‐ (6,903) (6,903)
15
(144,144)‐ (144,144)
Balance at 31 March 2022 (280,314)34,516 (245,798)
Warrants issued on 30 June 2021 lapsed on expiry date of 30
November 2021 (note 19)
Issue of Senior Management warrants ‐ 27 September 2021 (note 19)
Issue of Senior Management warrants ‐ 27 September 2021 (note 19)
Warrants issued on 27 September 2021 lapsed on non satisfaction of
the terms of the warrant (note 19)
Revaluation of financial assets at FVOCI*
Revaluation of financial assets at FVOCI*
GENWA WarrantsGENWB Warrants
Expiry of GENWB warrants to directors and senior managers ‐ issued on
25 June 2019 (note 19)
Expiry of GENWB warrants to directors and senior managers ‐ issued on
17 January 2020 (note 19)
Issue of GENWB warrants to staff, directors and consultants ‐ 30 June
2021 (note 19)
Warrants issued on 27 September 2021 lapsed on non satisfaction of
the terms of the warrant (note 19)
Warrants issued on 11 December 2018 lapsed on expiry date of 30
November 2021
*FVOCI ‐ Fair Value through Other Comprehensive Income
65
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 18: RELATED PARTY BALANCES AND TRANSACTIONS
The Grou
p had dealings with the following related parties during the reporting periods:
Related
partyRelationship
Directors (Refer to Director Profiles)Directors
Graeme Iain BrownDirector u
p to 24 March 2022
Donald Hattawa
yDirector of Subsidiary (General Finance Limited)
Gregory PearceDirector of Subsidiary (General Finance Limited)
Robert HartDirector of Subsidiar
y (General Finance Limited)
Michel Develo
pments LimitedA Director is an ultimate beneficiary (shareholder is Bedford Trust)
Belian Holdin
gs LimitedCommon Director ‐ up to 24 March 2022
Bedford TrustA Director is an ultimate beneficiar
y
Casrom Trustee Company LimitedCommon Director
Romana Benevolent TrustCommon Director of a trustee com
pany
Barter Investments LimitedCommon Director
Borneo Ca
pital LimitedCommon Director
Greenfern Industries LimitedCommon Director
Cannabis & Bioscience Cor
poration LimitedCommon Director
Pros
pect Road Investments LimitedCommon Director
Beaconsfield Nominees LimitedCommon Director
Ellice Tanner Hart LimitedCommon Director
E
quity Investment Advisers LimitedCommon Director
Mone
yonline LimitedCommon Director
Related
party receivables:20222021
$$
Cannabis & Bioscience Corporation Limited
‐ 96,735
Moneyonline Limited
‐ 14,133
‐ 110,868
Related
party payables:20222021
$$
Brent King
2,078 5,145
Equity Investment Advisers Limited
10,469 5,084
Moneyonline Limited
644 ‐
13,191 10,229
Other related
party balances:
20222021
$$
Term deposits held by related parties
1
6,943,400 4,708,940
1
Includes term deposits held by Key Management Personnel, Directors, Directors of subsidiaries, their families and their controlled entities. As
at 31 March 2022 $2,020,591 of the Term deposits held by related parties has been approved for early withdrawal on 1 April 2022 in compliance
with the Company’s ‘early repayment’ terms of offer criteria included in the Company’s Product Disclosure Statement.
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
Grou
p.
66
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 18: RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)
Transactions with related parties20222021
Related PartyTypeTransaction$$
Expense 722,992 655,384
Expense 208,745 165,939
ExpenseRecharge of expenses38,163 70,823
Fixed AssetsRecharge for the purchase of fixed assets 15,717 ‐
Ellice Tanner Hart Limited ExpenseLegal Fees154 3,510
ExpenseRecharge of salary costs4,539 65,005
ExpenseBrokerage paid 104,437 62,241
ExpenseRecharge of expenses1,146 ‐
Contra expense Recharge of salary costs11,740 2,643
RevenueAdvertising, commission and other revenue ‐ 14,240
Moneyonline LimitedExpense
Recharge of expenses
2
35,576 117,546
ExpenseRecharge of salary costs2,625
RevenueLease Income32,400
RevenueAdvisory fees‐ 9,488
Revenue
Advisory & Capital Raising fees
7
375,900 ‐
Other Revenue
Proceeds for the sale of shares
6
30,000 ‐
Expense
Recharge of expenses
5
1,833 ‐
Equity
Commission on share purchase
8
50,000 ‐
Other related party transactions:
During the year ended 31 March 2021, the Group purchased listed corporate and local government bonds totalling $4,718,617 and sold listed
corporate and local government bonds for net proceeds totalling $4,545,768 via Equity Investment Advisers Limited. Brokerage of $7,188 was
charged by Equity Investment Advisers Limited in relation to these trades. There was no such activity for the year ended 31 March 2022.
During the year ended 31 March 2021, the Group paid $75,000 Bartercard Trade Dollars (March 2022: $Nil Bartercard Trade Dollars) to acquire
shares in Cannabis & Bioscience Cor
poration Limited. Refer to note 15.
3
$12,000 (March 2021: $8,000) of the Managing Director's short term remuneration was settled by the transfer of 48,000 Greenfern Industries
Limited shares (March 2021: 4,000), also refer to note 15.
Interest paid or capitalised on term deposits held by KMP
or their family members
Greenfern Industries Limited
2
$34,000 (March 2021: $32,000) 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.
Barter Investments Limited
Michel Developments
Limited
Bedford Trust
1
Key Management Personnel (KMP) includes the Company’s directors, subsidiary company directors, and Chief Financial Officer.
Cannabis & Bioscience
Corporation Limited
Key Management Personnel
(KMP)
1
6
Investment Research Group Limited received consideration of $30,000 from Barter Investments Limited in Bartercard Dollars for the shares
held (refer note 15).
7
$120,000 was paid in shares by Greenfern Industries Limited towards advisory fees during the year ended 31 March 2022 (refer note 15).
Short term Remuneration
2,
3,
4, 5
8
During the year ended 31 March 2022, the Group paid $50,000 commission to Bedford Trust for the share purchase transaction dated 23
February 2022. Refer note 17.
On 27 September 2021, the Company issued 8,333,333 shares at 6.0 cents per share under a placement to Borneo Capital Limited. Refer note 17.
On 23 February 2022, the Company issued 34,782,609 shares at 5.75 cents per share under a placement to Bedford Trust. Refer note 17.
Equity Investment Advisers
Limited
4
$27,500 (March 2021: $Nil) of the Director's short term remuneration was settled by the transfer of 102,800 Greenfern Industries Limited
shares (March 2021: Nil), also refer to note 15.
5
$1,833 (March 2021: $Nil) of the Director's short term remuneration is paid to Michel Developments Limited on behalf of the Director and
accordingly is included in two related party categories above.
67
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 19: SHARE BASED PAYMENTS
(a) Warrants issued to directors and senior mana
gers
Number Fair Value $
Balance at 1 April 2020
13,050,000 6,903
Balance at 31 March 2021
13,050,000 6,903
(12,650,000)(4,672)
(400,000)(2,231)
2,250,000 492
(2,250,000)(492)
8,500,000 33,817
8,500,000 35,215
(4,250,000) (16,908)
(4,250,000) (17,608)
(4,550,000)27,613
Balance at 31 March 2022 8,500,000 34,516
Fair value of warrants issued to directors and senior mana
gers
The warrants have the same terms as GENWB warrants that were issued to shareholders in December 2018. These were exercisable on or
before 30 November 2021 at 9.00 cents
per share for each warrant held.
During the year ended 31 March 2020, a total of GENWB 13,050,000 warrants were issued to Directors and Senior Managers, 12,650,000 on 25
June 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
Warrants issued on 30 June 2021 lapsed on expiry date of 30 November 2021
Issue of Senior Management warrants ‐ 27 September 2021
Warrants issued on 17 January 2020 lapsed on expiry date of 30 November 2021
Issue of Senior Management warrants ‐ 27 September 2021
Warrants issued on 27 September 2021 lapsed on non satisfaction of the terms of the warrant
Warrants issued on 27 September 2021 lapsed on non satisfaction of the terms of the warrant
Warrants issued on 25 June 2019 lapsed on expiry date of 30 November 2021
Issue of GENWB warrants to staff and consultants ‐ 30 June 2021
An issue of up to 20 million GENWB warrants to directors and senior managers, to be allocated at the Board's discretion, was approved by
shareholders at a special meeting dated 29 November 2018.
1
The above table only includes GENWB warrants issued to Directors and Senior Managers in respect of their services provided to the Group. It
excludes any warrants that were issued to Directors and Senior Managers pro rata with other shareholders in respect of their shareholding at 11
December 2018 (refer to note 17). For details of Directors transactions and balances in shares and warrants refer to Shareholder and Statutory
Information.
Directors' and Senior Managers'
Warrants
1
The fair value at grant date of warrants issued is determined using the Black Scholes Model that takes into account the exercise price, the term
of the warrant, the share price at grant date and expected price volatilityof the underlying share, the expected dividend yield, the risk free
interest rate for the term of the warrants.
During the year ended 31 March 2022 17,000,000 Senior Management warrants were issued to eligible senior managers on 27 September 2021.
An Issue was approved at the annual meeting held on 3 September 2021 and was intended to incentivise those eligible senior managers, at no
cost to the Company and in a way that further aligns the interests of shareholders with the interests of senior management.
The Senior Management warrants comprised 8,500,000 2023 warrants which entitled the holder to subscribe for one ordinary share for each
warrant exercised prior to 30 June 2023 at 8.0 cents per share; and 8,500,000 2024 warrants which entitled the holder to subscribe for one
ordinary share for each warrant exercised prior to exercisable prior to 30 June 2024, at 9.0 cents per share.
The Senior Management warrants are not transferable and require the relevant senior manager to remain employed by or a contractor to the
Company at the date of exercise The warrants are not quoted on NZX.
During the year ended 31 March 2022, a total of GENWB 2,250,000 warrants were issued to staff and consultants on 30 June 2021. These were
exercisable on or before 30 November 2021 at 9.00 cents per share for each warrant held.
The issue of warrants provides long‐term incentives for directors and senior managers to deliver long‐term shareholder value.
68
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 19: SHARE BASED PAYMENTS (CONTINUED)
Inputs into model
27‐Sep‐21 27‐Sep‐21 30‐Jun‐21
Warrants issued
8,500,000 8,500,000 2,250,000
Exercise price per warrant
9.00 cents 8.00 cents 9.00 cents
5.90 cents 5.90 cents 5.90 cents
35.34%35.34%35.34%
Risk free interest rate1.18%0.81%0.81%
Fair value per warrant
0.637 cents 0.5305 cents 0.0219 cents
Probability Discount
35%25%0%
Total fair value of warrants issued
3
35,215$ 33,817$ 492$
NOTE 20: RECONCILIATION OF NET SURPLUS WITH CASH FLOWS FROM OPERATING ACTIVITIES
Note20222021
$$
Net profit / (loss) after tax
1,340,663 81,766
Adjustment for non‐cash and other items
Movement in allowance for expected credit losses11
66,266 27,372
Modification gain ‐ loans receivable5
‐ (86,489)
Deferred tax movement through profit or loss8
(8,127) (30,918)
Depreciation and amortisation5
156,226 40,516
Interest on lease liability13
13,827 1,478
Realised losses on bonds sold7.1
‐ 190,085
Fair value of warrants issued to directors and senior managers19
34,516 ‐
Income received in non‐cash financial assets15
(120,000) (80,000)
Expenses paid in non‐cash financial assets18
37,700 8,000
Adjustment for movements in working capital
(Increase) / decrease in loan receivables (net advances)
(25,995,057) (18,407,676)
Increase) / Decrease in term deposits (net receipts)
29,953,749 16,320,142
(Increase) / decrease in accrued interest on loans receivable
(79,380)(9,226)
(Increase) / decrease in capitalised loan fees
(680,516) (501,550)
(Increase) / decrease in capitalised interest
232,498 (293,661)
(Increase) / decrease in modification gain receivable
86,489 ‐
(Increase) / decrease in accounts receivable
(16,641)2,690
(Increase) / decrease in related party receivable
110,868 (31,045)
(Increase) / decrease in prepayments and other current assets
(124,132) 174,786
(Increase) / decrease in prepaid commission
(21,043)3,289
(Increase) / decrease in Bartercard trade dollars
1
32,419 22,015
Increase / (decrease) in income tax payable
467,881 46,879
Increase / (decrease) in deferred income
41,441 421,281
Increase / (decrease) in interest payable
251,331 89,256
Increase / (decrease) in related party payable
2,962 7,304
Increase / (decrease) in accounts and other payables
211,020 83,368
Net cash (outflow) / inflow from operating activities
5,994,960 (1,920,338)
2
The expected price volatility is based on the historical volatility of theshares and adjusted for any expected changes to future volatility.
Transactions in GENWB Warrants (which are also listed on the NZX) have alsobeen considered when determining the expected price volatility of
the Company's shares at grant date.
Expected price volatility of the Company's shares
2
Warrants Issued
1
Movement is net of $30,000 Bartercard trade dollars received in proceeds of an equity investment. March 2021: Movement was net of $75,000
Bartercard trade dollars used for acquisition of an equity investments (note 15).
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
69
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 21: RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Opening Opening
BalanceFinancingNon‐cash/Non‐
Financin
g
Balance
1 AprilCash Flows
Changes
1
31 March
$$$$
For the year ended 31 March 2022
Lease Liability
307,207
(146,670)
13,827 174,364
Total
307,207 (146,670) 13,827 174,364
For the year ended 31 March 2021
Lease Liability
‐ ‐ 307,207 307,207
Total
‐ ‐ 307,207 307,207
NOTE 22: COMMITMENTS AND CONTINGENT LIABILITIES
NOTE 23: EVENTS SUBSEQUENT TO REPORTING DATE
‐
‐the o
perations, in financial years subsequent to reporting date, of the Group, or
‐ the results of those o
perations, or
‐ the state of affairs, in financial
years subsequent to reporting date, of the Group.
1
Non-cash changes relate to the movement in unpaid interest in the term deposit balance. Interest on Lease Liability was recognised in
operating activities $13,827 (2021: $1,478).
There has been no other matter or circumstance, which has arisen since reporting date that has significantly affected or may significantly affect:
Note 4.1 of these financial statements described the impact of the ongoingCOVID‐19 pandemic, current adverse macro and micro
economic conditions and adverse global events which occurred before 31 March 2022 and continues as at the date of the signing of these
financial statements.
The Group has no material commitments (other than loan receivables commitments in the ordinary course of business as described in note 11)
or contingent liabilities at reporting date (2021: none).
70
Ordinary Shares
Rank Registered Holder
Ordinary Shares
Held
%
1Borneo Capital Limited
62,960,957
29.61%
2Lynn Landmark Michel & Mat Floyd Trustee Co (No 1) Limited
34,782,609
16.36%
3Brent Douglas King
22,115,317
10.40%
4Snowdon Peak Investments Limited
14,882,720
7.00%
5Owen Arvind Daji
7,030,463
3.31%
6Olivia Ling
6,667,775
3.14%
7Grant Keith Baker & Donna Jean Baker & Lewis Thomas Grant
6,511,945
3.06%
8Stephen John Sinclair & Jacqueline Margaret Sinclair & Roger Frederick Wallis
6,290,524
2.96%
9John Tomson
6,289,722
2.96%
10Syed Hizam Alsagoff
4,000,000
1.88%
11Zhenhua Qian
3,030,303
1.42%
12Bruce Gregory Speers & Fiorano Trust Limited
2,439,512
1.15%
13New Zealand Depository Nominee Limited
2,143,323
1.01%
14Harrigens Trustees Limited
2,100,945
0.99%
15Garth William Ward
1,839,122
0.86%
16Sii Yih Ting
1,480,000
0.70%
17Michael Alan Matthews
1,406,664
0.66%
18CFS NBDT Interest Limited
1,387,280
0.65%
19Saje Limited
1,333,333
0.63%
20Koon Weng Lee
1,291,325
0.61%
189,983,839
89.34%
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
General Capital Limited ("the Company") is a listed company on the NZX Main Board. Prior to 1 July 2019 the Company was listed on the New
Zealand Alternative Market (NZAX).
The Company had two classes of quoted financial products on issue during the year ended 31 March 2022.
Ordinary shares
All ordinary shares rank equally with one vote attached to each ordinary share. Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to the number of shares held.
GENWB Warrants
Warrants were exercisable on or before 30 November 2021 at 9.00 cents per sh are for each warrant held. Warrants did not have any voting
rights attached to them, nor did they have any entitlement to participate in dividends or the proceeds on the winding up of the Company. The
GENWB Warrants expired on 30 November 2021 and are no longer on issue as at 31 March 2022.
LARGEST HOLDERS OF QUOTED FINANCIAL PRODUCTS (as at 7 J
une 2022 )
71
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
SPREAD OF FINANCIAL PRODUCT HOLDERS (as at 7 June 2022)
Ordinary Shares
Size of Holding
Number of
Shareholders
%
Number of
Ordinary Shares
%
1 ‐ 1,999
496
66.3%
29,696
0.0%
2,000 ‐ 4,999
27
3.6%
78,660
0.0%
5,000 ‐ 9,999
63
8.4%
469,828
0.2%
10,000 ‐ 49,999
63
8.4%
1,427,438
0.7%
50,000 ‐ 99,999
24
3.2%
1,645,683
0.8%
100,000 ‐ 999,999
52
7.0%
15,635,808
7.4%
1,000,000 ‐ 9,999,999
19
2.5%
58,628,780
27.6%
10,000,000 and over
4
0.5%
134,741,603
63.5%
748
100%
212,657,496
100%
Geographic Spread
New Zealand
640
85.5%
203,265,857
95.6%
Malaysia
68
9.1%
8,144,466
3.8%
Rest of World
40
5.3%
1,247,173
0.6%
748
100%
212,657,496
100%
SUBSTANTIAL PRODUCT HOLDERS (as at 31 March 2022)
The following information is provided pursuant to section 293 of the Financial Markets Conduct Act 2013.
Ordinary Shares
% of voting
(ordinary) shares at
balance date
Borneo Capital Limited 62,960,957
29.61%
Lynn Landmark Michel & Mat Floyd Trustee Co (No 1) Limited 34,782,609
16.36%
Brent Douglas King 22,115,317
10.40%
CFS NBDT Interest Limited 16,270,000
7.65%
136,128,883
As at 31 March 2022 the following shareholders are registered by the company as Substantial Product Holders in the Company, having
disclosed a relevant interest in quoted voting products under the Financial Markets Conduct Act 2013.
72
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS' REMUNERATION AND OTHER BENEFITS
Directors Fees
3
Other Remuneration
$$
Rewi Hamid Bugo
1
33,000 6,300
Brent Douglas King
4
22,000 250,888
Huei Min Lim22,000 ‐
Graeme Iain Brown22,000 ‐
Paul William Zingel1,833 ‐
Simon John McArley
2
27,500 25,700
Donald Frederick Hattaway (director of subsidiary) 33,000 ‐
Robert Garry Hart (director of subsidiary)22,000 ‐
Gregory John Pearce (director of subsidiary)39,118 ‐
222,451 282,888
$
Base salary146,000
Car allowance12,000
Bonus15,000
Kiwisaver Employer Contributions6,370
Cashed up annual leave8,218
Commission
5
38,620
FY22 Share Profit Entitlement Accrual
6
24,681
250,888
Other entitlements of the Managing Director:
2
Other remuneration paid to Simon McArley comprises fees paid for legal services during the year. The figure is shown exclusive of GST.
1
Other remuneration paid to Rewi Bugo comprises commissions paid during the year.
3
The above fees are recorded exclusive of GST, if any.
5
Brent King is entitled to a commission payment of 10% of all fee income earned by the Group. For the avoidance of doubt, this excludes
any fees earned by General Finance Limited in relation to its lending business.
6
Brent King is also entitled to a profit share of 8% of any amount by which the Group's net profit after tax exceeds the benchmark for that
year. That benchmark is the total equity of the Group at the commencement ofthe year, multiplied by the Official Cash Rate (set by the
Reserve Bank of New Zealand) plus 10% per annum. These amounts are to be paidquarterly based on estimates calculated by the Group
Chief Financial Officer. Share Profit entitlement was accrued as at 31 March 2022 as per the above.
4
Other remuneration paid to Brent King comprises salaries and other benefits paid to Brent King in his capacity as Managing Director of
General Capital Limited and its subsidiaries. Brent King's other remuneration is broken down further as follows:
73
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS DEALINGS IN QUOTED FINANCIAL PRODUCTS DURING THE YEAR ENDED 31 MARCH 2022
Date of
Transaction
Number of
Financial
Products
Acquired /
(disposed)
Consideration
(received) / paid
$Relevant Interest
Brent Douglas King
1
8/10/2021Ordinary Shares
(166,667)
Note 7Note 1
Brent Douglas King
1
8/10/2021Ordinary Shares
(1,333,333)
Note 7Note 1
Brent Douglas King
1
8/10/2021Ordinary Shares
(1,000,000)
Note 7Note 1
Brent Douglas King
1
8/10/2021Ordinary Shares
(666,667)
Note 7Note 1
Brent Douglas King
1
8/10/2021Ordinary Shares
(166,667)
Note 7Note 1
Brent Douglas King
1
8/10/2021Ordinary Shares
(229,136)
Note 7Note 1
Brent Douglas King
2
8/10/2021Ordinary Shares
166,667
Note 7Note 2
Rewi Hamid Bugo
3
27/09/2021Ordinary Shares
8,333,333 500,000
Note 3
Rewi Hamid Bugo
3
27/09/2021Ordinary Shares
12,377,869 742,672
Note 3
Graeme Iain Brown
4
27/09/2021Ordinary Shares
(12,377,869) (742,672)
Note 4
Paul William Zingel
5
23/02/2022Ordinary Shares
34,782,609 2,000,000
Note 5
Simon John McArley
6
17/12/2021Ordinary Shares
298
15 Note 6
Simon John McArley
6
17/12/2021Ordinary Shares
30,000
1,560 Note 6
Simon John McArley
6
17/12/2021Ordinary Shares
140,198
7,290 Note 6
Brent Douglas King
2
27/09/2021Senior Management Warrants
4,250,000
Note 8Note 2
Brent Douglas King
2
27/09/2021Senior Management Warrants
4,250,000
Note 9Note 2
Relevant Interests
Other Notes
Financial Product
1
Deemed relevant interest by virtue of Brent Douglas King being a director of Barter Investments Limited (the registered holder).
5
Deemed relevant interest by virtue of Paul William Zingel being an associate of the trustees of Bedford Trust (the registered holders).
3
Deemed relevant interest by virtue of Rewi Hamid Bugo owning more than 20% of the voting products of Borneo Capital Limited (the
registered holder).
4
Deemed relevant interest by virtue of Graeme Iain Brown owning more than 20% of the voting products of Belian Holdings Limited (the
registered holder).
2
Brent Douglas King as the registered holder and beneficial owner.
6
Deemed relevant interest by virtue of Simon John McArley owning more than 20% of the voting products of Prospect Road Investments
Limited (the registered holder).
7
The off‐market transfers of 3,562,470 shares were completed to effect thewinddown of Barter Investments Limited and were made to
shareholders of Barter Investments Limited for no consideration.
9
On 27 September 2021, Brent King in his capacity as a senior manager of General Capital Limited was issued 4,250,000 warrants that entitle
the holder of each warrant to subscribe for cash for one ordinary share in the Company at an exercise price of 9.0 cents per share at any time
prior to 30 June 2024
.
8
On 27 September 2021, Brent King in his capacity as a senior manager of General Capital Limited was issued 4,250,000 warrants that entitle
the holder of each warrant to subscribe for cash for one ordinary share in the Company at an exercise price of 8.0 cents per share at any time
prior to 30 June 2023
.
74
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS QUOTED FINANCIAL PRODUCT HOLDINGS AT 31 MARCH 2022
Ordinary
Shares
Management
Warrants
Secured Deposit
Investments
NumberNumber$
Rewi Hamid Bugo
1
62,960,957 ‐ ‐
Rewi Hamid Bugo
2
‐ ‐ 6,185,342
Brent Douglas King
10,11
22,115,317 8,500,000 ‐
Huei Min Lim 33,590 ‐ ‐
Paul William Zin
gel
3
34,782,609 ‐ ‐
Simon John McArley
4
210,496 ‐ ‐
Simon John McArley
5
‐ ‐ 76,907
Donald Frederick Hattaway (director of subsidiary)
6
‐ ‐ 101,362
Donald Frederick Hattaway (director of subsidiary)
7
‐ ‐ 101,375
Donald Frederick Hattaway (director of subsidiary)
8
892,890 ‐ 272,299
Robert Garry Hart (director of subsidiary)
9
740,741 ‐ ‐
Gregory John Pearce (director of subsidiary) ‐ ‐ 92,091
121,736,600 8,500,000 6,829,376
Relevant Interests
Other Notes
OTHER DIRECTORSHIPS HELD BY DIRECTORS
Brent Douglas King
A.I.S. LimitedEquity Investment Advisers Limited
Askridge Holdings LimitedGeneral Capital LimitedKohaus Limited
Barter Investments LimitedGeneral Finance LimitedMoneyonline Limited
Cannabis & BioScience Corporation LimitedGeneral Finance & Leasing LimitedMykco Limited
CBC Manuka LimitedGeneral Finance & Investments LimitedSharechat.co.nz Limited
CBC Greenfern LimitedGeneral Leasing LimitedSnowdon Peak Investments Limited
CBC Tetramed LimitedGeneral Loan & Finance LimitedRed Hot Investments Limited
Commercial and General Finance LimitedGreenfern Industries Limited
Corporate Holdings LimitedInvestment Research Group Limited
Paul William Zingel
General Capital LimitedPropfi.nz Limited
Online Realty International LimitedPropfi.com Limited
4
Deemed relevant interest by virtue of Simon John McArley being a trustee ofthe Prospect Road Family Trust, the beneficial owner of the
shares issued by Prospect Road Investments Limited (the registered holder).
10
On 27 September 2021, Brent King in his capacity as a senior manager of General Capital Limited was issued 4,250,000 warrants that entitle
the holder of each warrant to subscribe for cash for one ordinary share in the Company at an exercise price of 8.0 cents per share at any time
prior to 30 June 2023.
11
On 27 September 2021, Brent King in his capacity as a senior manager of General Capital Limited was issued 4,250,000 warrants that entitle
the holder of each warrant to subscribe for cash for one ordinary share in the Company at an exercise price of 9.0 cents per share at any time
prior to 30 June 2024
.
9
Deemed relevant interest by virtue of Robert Garry Hart being an associateof the trustees of Wilkinson‐Hart Family Trust (the registered
holders).
5
Deemed relevant interest by virtue of Simon John McArley owning more than 20% of the voting products of Beaconsfield Nominee Limited
(the registered holder).
1
Deemed relevant interest by virtue of Rewi Hamid Bugo owning more than 20% of the voting products of Borneo Capital Limited (the
registered holder).
King Capital & Investment Corporation
2
Rewi Hamid Bugo as the registered holder and beneficial owner.
6
Donald Frederick Hattaway as the registered holder and beneficial owner.
7
Deemed relevant interest by virtue of Donald Frederick Hattaway's family member being the registered holder.
8
Deemed relevant interest by virtue of Donald Frederick Hattaway being a director of Casrom Trustee Company Limited a trustee of Romana
Benevolent Trust
(the registered holders).
3
Deemed relevant interest by virtue of Paul William Zingel being an associate of the trustees of Bedford Trust (the registered holders).
75
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
OTHER DIRECTORSHIPS HELD BY DIRECTORS (Continued)
Rewi Hamid Bugo
Aventura Properties LimitedDidi Capital Sdn Bhd
Bampfylde Holdings LimitedDidi Motorcycles Sdn Bhd
Bay of Islands Property LimitedEra Malindo Sdn Bhd
Borneo Capital LimitedGading Kapital Sdn Bhd
Borneo Investments Limited
Corporate Holdings Limited
General Capital LimitedLama Cipta Sdn Bhd
Global Dominance LimitedMadeit Media Sdn Bhd
Inlet Contractors LimitedMesti Perkasa Sdn Bhd
Inlet Estate LimitedPacific Unit Sdn Bhd
Selwyn Residential LimitedParklane Properties Sdn Bhd
Billion Jasa Sdn BhdPetra Jaya Properties Sdn Bhd
BDC Realty Sdn BhdPJP Dua Sdn Bhd
Delima Pelita Sdn Bhd
Didi Resources Sdn BhdProfile Equity Sdn Bhd
Didi Automotive Sdn BhdReignvest Corporation Sdn Bhd
Graeme Iain Brown (ceased 24 March 2022)
Aventura Properties Limited Keresa Mill Sdn Bhd
Belian Holdings Limited Keresa Plantations Sdn Bhd
Keresa Sdn Bhd
Malesiana Tropicals Sdn Bhd
Asian Acids Pte LtdPascali Sdn Bhd
Asian Corn Sdn Bhd Pesaka Energy Solutions Sdn Bhd
Borneo Plant Technology Sdn Bhd PFS Energy (Malaysia) Sdn Bhd
Fend Digital Pte LimitedPremier Space Sdn Bhd
Grand Evermore Sdn BhdPro‐Formula Sdn Bhd
Huei Min Lim
General Capital LimitedKaya Investments Limited
Hartajaya Investments Limited Restaurant Brands New Zealand Limited
Simon John McArley
General Capital Limited
Beaconsfield Nominees Limited Prospect Road Investments Limited
Donald Frederick Hattaway (director of subsidiary)
General Finance Limited
Casrom Trustee Company Limited
Robert Garry Hart (director of subsidiary)
Balloons Over Waikato Charitable TrustWilkinson‐Hart LP
Te Puke Cricket TrustWilkinson‐Hart GP Limited
Wilkinson‐Hart Trustees Limited
Wilkinson‐Hart Family TrustProject Mansell Limited
Wilkinson‐Hart#2 Family TrustProject One (Norfolk Downs Limited)
Gregory John Pearce (director of subsidiary)
General Finance Limited
No other entires were made in the interest register during the financial period ended 31 March 2022.
Auckland Radiology Group Partnership (ceased
8 November 2021)
Alkaz Sdn Bhd
General Capital Limited (ceased 24 March
2022)
Infinite Property Marketing Sdn Bhd
Ik Chin Travel Services (K) Sdn Bhd
Property Plus Marketing Services Sdn
New Zealand Osteopathic Children's
Foundation Charitable Trust
Rekaruang Sdn Bhd
Santubong Properties Sdn Bhd
Santubong Suites Sdn Bhd
Sara Gemilang Sdn Bhd
Sarasiana Holdings Sdn Bhd
Sarasiana Urusharta Sdn Bhd
Sego Holdings Sdn Bhd
Space Craft Sdn Bhd
Strategen Services Sdn Bhd
Sujicojaya Sdn Bhd
Telagamas Shoji Sdn Bhd
Telaga Air Resourses Sdn Bhd
Thriven Global Bhd
Transnational Insurance Brokers (M) Sdn
Trombol Resort Sdn Bhd
Warble Resources Sdn Bhd
Rajang Wood Sdn Bhd
Sarawakiana Holdings Sdn
Sarawakiana Leisure Sdn Bhd
Sarawakiana Management Sdn Bhd
Sarawakiana Realty Sdn Bhd
Tera Management Sdn Bhd
Waddell Holding Sdn Bhd
Waddell Holdings Pte Ltd
Yun Ming Wood Industries Sdn Bhd
Asia New Zealand Foundation
Auckland Regional Amenities Funding
Board
Prospect Road Services Limited
Greenfern Industries Limited
DDR Limited
Richardsons Cricket Limited
General Finance Limited
76
Remuneration
Ran
ge20222021
$100,000 ‐ $109,999‐1
$110,000 ‐ $119,999‐‐
$120,000 ‐ $129,999‐‐
$130,000 ‐ $139,9991‐
$140,000 ‐ $149,999‐‐
$150,000 ‐ $159,000‐‐
$160,000 ‐ $169,999‐‐
$170,000 ‐ $179,999‐1
$180,000 ‐ $189,999‐‐
$190,000 ‐ $199,9991‐
DONATIONS MADE
Durin
g the year ended 31 March 2022 the Group made total donations of $5,078.
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
EMPLOYEE REMUNERATION
During the year ended 31 March 2022, the number of employees or former employees of the Group not being directors of General Capital
Limited (31 March 2021 included Executive Director of subsidiaries), who received remuneration and other benefits in their capacity as
employees, the value of which exceeded $100,000 for the year was as follows:
Number of Em
ployees
77
REGISTERED OFFICE:General Capital Limited
Level 8, General Capital House
115 Queen Street
Auckland 1010
New Zealand
PO Box 1314
Shortland Street
Auckland 1010
New Zealand
Email:info@gencap.co.nz
Web:www.gencap.co.nz
Phone:(09) 526 5000
AUDITOR:Baker Tilly Staples Rodway
Level 9, Tower Centre
45 Queen Street
Auckland CBD
Auckland 1010
SHARE REGISTER:Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
BANKERS:Bank of New Zealand
ANZ Bank New Zealand Limited
ASB Bank Limited
Westpac New Zealand Limited
Heartland Bank Limited
GENERAL CAPITAL LIMITED
CORPORATE DIRECTORY
78
IRG is a research house and it is also a örm of Investment Bankers.
IRG is an NZX Sponsor. Management of IRG have listed companies and or been a
Director of companies on all Equity Boards of NZX. This includes: NZSX, NZAX,
NCM, NXT.
IRG Investment Yearbook
Investment Research Group
---
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 2022 Annual Report
General Capital, the NZX listed financial services Group, has today released its Annual
Report for the year ended 31 March 2022.
A copy of the Annual Report is also available on the Company’s website at:
www.gencap.co.nz/financial-reports.
The Chairman of the Board of Directors, Mr. Rewi Bugo said, “We are very pleased to
present our Annual Report to our shareholders and to NZX today. It has been a very
positive year for General Capital with very strong growth in all aspects of our business.
The growth in our total assets of 51%, and the growth in our net profit of 1540% were
particularly pleasing. General Capital has started the new year very positively and it is
well positioned for further strong growth this year.”
The annual shareholders meeting is expected to be held in September 2022.
For further information contact:
Mr. Brent King
Managing Director
+64 21 632 660
Brent.King@gencap.co.nz
30 June 2022
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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