General Capital (GEN:NZ) Announces Discussions on Goodwill

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 (GEN:NZ) Announces Discussions on Goodwill

Listed financial services group General Capital (GEN:NZ) advises it is in discussion with the
FMA concerning the carrying value of Investment Research Group Ltd (IRG) in the books of
General Capital. IRG was purchased in August 2017 for $1.0m. It has generated $1,180,000
for General Capital over the 4 years.

The issue was driven by the Audit Qualification of the 2022 accounts concerning this
matter.

Managing Director Brent King said” Carrying value of intangible assets is always arbitrary as
it deals with the future. Last year IRG had a very good year with the listing of cannabis
company Greenfern Industries Ltd. Based on the trading of IRG and the outlook for 2023
and beyond the Board was comfortable to retain the carrying value. The amount in question
is less than 1% of total assets.”

We have received a letter from FMA and we are working through a response. There seem
to be several misunderstandings and misinterpretations of the Goodwill issue. We will
continue to work the matter through with FMA and update the market as appropriate.

Mr. King said “We understand the reason that FMA is making an enquiry and we will be
working with them. The Directors are confident that the correct processes have been
followed in previous accounts. Items such as weighted average cost of capital (WACC),
growth rates etc. can vary substantially as interest rates move. We will ensure that these
are fully explained in the future accounts.”


For further information contact:

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

15 November 2022

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