General Capital Releases 2024 Annual Report
General Capital Limited
Level 8, General Capital House,
115 Queen Street, Auckland CBD
PO Box 1314, Shortland Street,
Auckland, New Zealand. 1140.
Phone +64 9 304 0145
General Capital Releases 2024 Annual Report
General Capital, the NZX listed financial services Group, has today released its Annual Report for the
year ended 31 March 2024.
A copy of the Annual Report is also available on the Company’s website at:
www.gencap.co.nz/financial-reports.
The Managing Director, Mr. Brent King, said "We are very pleased to present our Annual Report to our
shareholders and to the NZX today. It has been a very positive year for General Capital with another
record financial result for the year ended 31 March 2024. This year, we have achieved significant
milestones and delivered a strong financial performance, with a 25% increase in revenue to $17.17
million and a 17% rise in Net Profit After Tax to $2.63 million. These results reflect our dedicated
efforts and strategic initiatives in a challenging and dynamic market environment.”
This announcement was approved by the Directors of General Capital Limited.
ENDS
For further information contact:
Brent King
Managing Director
General Capital Limited
+64 21 632 660
Brent.King@gencap.co.nz
27 June 2024
---
General Capital Limited
Annual Report
For the year ended 31 March 2024
Contents
Directors’ Profiles 2-3
General Finance Directors and Executive 4
Directors’ Report 5-7
Corporate Governance Statement 8-19
Independent Auditors’ Report 20-23
Consolidated Financial Statements:
Consolidated Statement of Comprehensive Income 24
Consolidated Statement of Financial Position 25
Consolidated Statement of Changes in Equity 26
Consolidated Statement of Cash Flows 27
Notes to the Consolidated Financial Statements 28-55
Shareholder and Statutory Information 56-60
Corporate Directory 61
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 Master of Commerce degree in Business
Administration. He has business experience in several sectors including
property development, oil and gas services, automotive importing and
distribution, insurance broking and tourism.
Mr Bugo sits on the Board of private and public companies in Malaysia and
New Zealand, is a Trustee of World Wildlife Fund Malaysia and a passionate
supporter of the Tourette’s Association of New Zealand.
BRENT DOUGLAS KING, BCom, CA
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 years until he resigned in 2005. He holds a number of public and
private directorships. He has more than twenty-five years’ experience in
financial, investment banking, underwriting, capital raising and accounting
areas and has assisted a number of public and private companies. Brent is
also a member of the New Zealand Institute of Directors.
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 the General Capital Board on 1 March 2022.
2
GREGORY STEPHEN JAMES MCom (Hons), CA
Non-executive Independent Director
Greg James is a Senior Partner of Taxation and Mergers and Acquisitions at
Findex, New Zealand’s 5th largest accounting firm. Greg has over 30 years
of tax structuring and consulting experience and is a member of Chartered
Accountants Australia and New Zealand. Prior to joining Findex, Greg
worked for PricewaterhouseCoopers, including spending 8 years working
in Hong Kong and New York. During his career, Greg has worked with
numerous listed and newly listed companies and has extensive experience
sourcing equity and debt funding for clients. Greg has a strong interest in
cricket and is currently a director of Parnell Cricket Club and is on the board
of Remuera Parnell Sports Community Charitable Trust. He is also a
member of China ASEAN and is a director of a number of its group
companies.
MEGAN DOMINIQUE GLEN BCom, BSc
Non-executive Director
Megan is currently a Director in Forsyth Barr’s investment banking team
and was previously a Director with Ascentro Capital Partners and a
manager in the NZ Super Fund’s Direct Investments team. Megan spent
over five years with Credit Suisse’s investment banking group in New York
as part of their Financial Sponsors Group supporting private equity firms
with acquisitions, divestments and refinancing. Megan started her career
at First NZ Capital, now Jarden, advising some of New Zealand’s largest
corporates. Megan is currently a member of the New Zealand Takeovers
Panel and has previously held Board directorships and observer roles for
private companies in New Zealand and Australia.
ANITA MARIA KILLEEN LLB
Non-executive Independent Director
Anita is a Barrister specialising in financial crime and fraud, civil and
criminal litigation, and governance and dispute resolution. Ms Killeen
holds a variety of governance roles in the legal, financial, local
government, education, health and not for profit sectors including having
served as Chair of the Auckland Regional Amenities Funding Board, as
Chair and National President of Fertility New Zealand, as Deputy Chair of
Ngāi Tai ki Tāmaki Commercial Investment Board, Deputy Chair of NetSafe
New Zealand, Independent Director of the Domain Name Commission,
and Director of the SPCA Auckland.
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 Chartered Accountants Australia and New Zealand
(CAANZ) and practised as a Chartered Accountant in public practice from
1980 until April 2023. He retired as a Partner in Price Waterhouse in 1996
and 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 Coffee Company Ltd (previously known as Cooks
Global Foods Ltd) as well as 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. He subsequently consulted to receivers in relation to
loan recoveries and in 2017 joined General Finance as Executive Director
Lending and Credit. He retired from this role in 2020 and has continued with
the company as an independent Non-Executive Director.
NICK PIMENOV BCom, CA
Chief Financial Officer
Nick is a Chartered Accountant with over 13 years industry experience.
Nick’s background is in audit as well as over 8 years of finance and
commercial experience in large NZ companies (2degrees, Academic
Colleges Group, and Sime Darby Motors).
4
Directors’ Report
The Directors of General Capital Limited (GEN), the NZX listed Financial Services Group, are pleased to present
another record financial result for the year ended 31 March 2024. This year, we have achieved significant
milestones and delivered a strong financial performance, with a 25% increase in revenue to $17.17 million and
a 17% rise in Net Profit After Tax to $2.63 million. These results reflect our dedicated efforts and strategic
initiatives in a challenging and dynamic market environment.
Our total assets have grown by 20%, reaching $163.33 million, underscoring our solid financial foundation.
Despite the prevailing headwinds faced by the New Zealand economy, our commitment to prudent financial
management has enabled us to maintain stability and foster growth. We recognize the vital role of our
stakeholders, whose unwavering support and trust have been instrumental in achieving these results.
On 6 December 2023 Equifax reaffirmed the credit rating of General Finance Limited, a wholly owned subsidiary
of General Capital, as BB with a Stable Outlook. This reaffirmation reflects our robust financial health and our
ability to navigate through regulatory and market changes effectively.
Key Financial Highlights
FY24 (31 Mar 2024) FY23 (31 Mar 2023) Change
Revenue $17,171,443 $13,709,253 +25%
Net Profit After Tax $2,633,161 $2,258,243 +17%
Total Assets $163,330,631 $136,087,859 +20%
Total Equity $26,811,417 $24,252,770 +11%
Net Tangible Assets (NTA) per Share 6.65 cps 5.94 cps +12%
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
FY 2020FY 2021FY 2022FY 2023FY 2024
Revenue
5
Strong Management of Arrears, Net Interest Margin and Costs
General Finance, our wholly owned subsidiary, has successfully navigated a challenging economic landscape
through astute financial management. The team has excelled in managing and reducing both credit losses and
arrears, all while maintaining a stable cost-to-income ratio and a robust Net Interest Margin (NIM).
Despite a decrease in NIM, primarily driven by higher prevailing interest rates and a general economic softening,
General Finance's strategic approach ensured strong retention of the margin. Through careful control of credit
losses and arrears, the subsidiary achieved significant reductions, underscoring the effectiveness of its risk
management practices. This prudent strategy not only safeguarded the company's financial stability but also
positioned it well for future growth opportunities.
FY24 (31 Mar 2024) FY23 (31 Mar 2023) Change
NIM (%) 2.90% 4.48% -35%
Credit Losses (%) 0.35% 0.70% -50%
Arrears (%) 0.74% 11.61% -94%
Cost to Income Ratio (%) 56.25% 56.57% -1%
Regulatory Update
The significant regulatory changes being driven by the Deposit Takers Act 2023 and the Deposit Compensation
Scheme (“DCS”) has been a focus of both the Board and Management due to its impact on General Finance.
As a RBNZ regulated non-bank deposit taker General Finance is eligible to apply to be included in the DCS and it
is our intention to do so. The Board and Management believe that, whilst General Finance will be required to
pay a levy to be part of the scheme and be subject to enhanced prudential regulation by the RBNZ, the benefits
of having a guarantee for the first $100,000 of deposits will likely result in a significant net benefit for General
Finance that will drive a significant increase in term deposits once it comes into force in mid-2025 impacting the
2026 financial year and beyond.
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY 2020FY 2021FY 2022FY 2023FY 2024
Net Profit After Tax
6
Outlook
Looking ahead to the 2025 financial year, we anticipate a continuation of the growth and profitability trends
driven by our strategic initiatives and market conditions. Our priorities include expanding our loan book,
enhancing our research and advisory services, and maintaining strong liquidity. We expect to see further growth
in secured term deposits and a continued focus on sustainable value creation for our shareholders.
Acknowledgements
We would like to express our gratitude to our shareholders, customers, and employees for their continued
support and confidence in General Capital Ltd. We also extend our appreciation to our fellow Directors and
management team for their dedication and hard work.
Rewi Hamid Bugo Brent Douglas King
Chairman Managing Director
7
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 where practical and maintains the
highest ethical standards. The Board regularly reviews and assesses the Company’s governance structures to
ensure, where practical, 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 2024 was largely compliant with
the requirements of the NZX Code. The Governance Code contains eight (8) principles and various
recommendations for each principle. The Board has reported on the Company’s compliance with each of the
recommendations which are included below.
The Board is reporting against the revised NZX Corporate Governance Code dated 1 April 2023 and 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 – Ethical Standards
"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 2024:
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. The code of ethics has been published on the Company’s website at www.gencap.co.nz/corporate-
governance.
8
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 2024:
The Board has a financial products trading policy in place for employees and directors. This policy requires prior
approval of all transactions in General Capital Limited quoted securities and other restricted securities, specifies
blackout periods for trading and defines prohibited trading.
The financial products trading policy is included in the Company’s Board Policies and Procedures document
which is published on the Company’s website at www.gencap.co.nz/corporate-governance.
PRINCIPLE 2 – Board 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. In
November 2021 the Board adopted a board skills matrix to assist in maintaining a balance ensuring it has a
balance of independence, skills, knowledge, experience and perspectives. The Board believes it complies with
the recommendation.
The Board is responsible and accountable to shareholders and other stakeholders for the Company’s
performance and its compliance with applicable laws and standards.
Directors
As at 31 March 2024 the Board of Directors comprised six directors, five of which are Non-executive Directors
(Rewi Hamid Bugo (Chairman), Paul William Zingel, Gregory Stephen James, Megan Dominique Glen and Anita
Maria Killeen) and one Executive Director (Brent Douglas King).
Paul William Zingel, Gregory Stephen James and Anita Maria Killeen 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 family connection 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.
Gregory Stephen James was appointed as a director effective from 28 September 2022. The Board determined
that there were no particular circumstances that would materially interfere with his ability to exercise
independent judgement and he was assessed as an independent director of the Company.
Anita Maria Killeen was appointed as a director effective from 1 February 2024. The Board determined that there
were no particular circumstances that would materially interfere with her ability to exercise independent
judgement and she was assessed as an independent director of the Company.
Megan Dominique Glen was appointed as a director effective from 17 February 2023. Megan Dominique Glen
was not assessed to be an independent director of the Company as she was nominated by API No 1 Limited
Partnership (API) to represent API’s stake in the Company (currently 23.92% of the Company’s ordinary shares)
and her appointment was supported by the Board of Directors.
By virtue of the extent of his significant product holding, Rewi Hamid Bugo has not been assessed as an
independent director of the Company due to shares held directly or indirectly in the Company.
As an executive and significant product holding in the Company, Brent Douglas King has also been assessed as a
non-independent director of the Company.
Refer to the Directors’ Profiles section of this Annual Report for further details.
9
Huei Min Lim resigned as a director with effect from 31 May 2023.
Simon John McArley resigned as a director with effect from 17 July 2023.
Prior to their resignations both Simon John McArley and Huei Min Lin were determined by the Board to be
independent directors as there were no particular circumstances that would materially interfere with their
ability to exercise independent judgement.
Board and Committee 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 eight Board Meetings were held during the financial year under review.
Board attendance has been recorded as follows:
Board Members Board Audit CommiƩee
Rewi Hamid Bugo (Chairman) 8 5
Brent Douglas King 8 N/A
Huei Min Lim 1 1
Simon John McArley 2 2
Paul William Zingel 8 5
Gregory Stephen James 8 5
Megan Dominique Glen 7 N/A
The Board also met whenever necessary to deal with specific matters needing attention between scheduled
meetings.
The gender balance of the Group’s Directors and officers was as follows:
as at 31 March 2024 as at 31 March 2023
Directors Officers* Directors Officers*
Female 2 1 2 1
Male 4 3 5 3
Total 6 4 7 4
*Officers excludes any directors of the Company.
RECOMMENDATION 2.1
The board of an issuer should operate under a written charter which sets out the roles and responsibilities of
the board. The board charter should clearly distinguish and disclose the respective roles and responsibilities
of the board and management.
Compliance with recommendation during the year ended 31 March 2024:
The Board has had in place throughout the year a written Board Charter which sets out the roles and
responsibilities of the Board and management and complies with the recommendation in full.
The Board Charter has been published on the Company’s website at www.gencap.co.nz/corporate-governance.
10
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 2024:
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.
The Board follows the requirements of the NZX Rules as well as the commentary in the NZX Corporate
Governance Code and the requirements of its nomination procedure. In November 2021 the Board also adopted
a board skills matrix to assist when selecting new directors.
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 2024:
The Company’s nomination procedure sets out the form of agreement to be used. The Company’s Board Policies
and Procedures document is published on the Company’s website at www.gencap.co.nz/corporate-governance.
Written agreements have been entered into in accordance with the procedure with all directors appointed
during the year.
RECOMMENDATION 2.4
Every issuer should disclose information about each director in its annual report or on its website, including:
a. a profile of experience, length of service, and ownership interests.
b. the director attendance at board meetings; and
c. the board’s assessment of the director’s independence, including a description as to why the board
has determined the director to be independent if one of the factors listed in table 2.4 applies to the
director, along with a description of the interest, relationship or position that triggers the
application of the relevant factor.
Compliance with recommendation during the year ended 31 March 2024:
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 (Principle 2) 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. An issuer within the S&P/NZX 20 Index at the commencement of its reporting period should have a
measurable objective for achieving gender diversity in relation to the composition of its board, that is to have
not less than 30% of its directors being male and not less than 30% of its directors being female, within a
specified period. An issuer should disclose its diversity policy or a summary of it.
Compliance with recommendation during the year ended 31 March 2024:
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. The Board has set gender
diversity targets to have a minimum of 30% female Directors and 30% female management.
The gender composition of the Company’s directors and officers is included above. As at 31 March 2024 33% of
Directors and 25% of Management are female.
11
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 2024:
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 and have reviewed this during the year
to 31 March 2024.
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 2024:
Director and Board performance is considered crucial to the success of the Group. The Board has a procedure
for assessing director, board and committee performance which is published on the Company’s website at
www.gencap.co.nz/corporate-governance.
RECOMMENDATION 2.8
A majority of the board should be independent directors.
Compliance with recommendation during the year ended 31 March 2024:
As detailed in the Board Composition section above, three of the six directors have been identified as
independent directors of the Company. Of the 3 remaining directors, 2 are non-executive directors.
Following the resignation of Huei Min Lim with effect from 31 May 2023 the Board did not have a majority of
independent directors. The subsequent resignation of Simon John McArley on 17 July 2023 further reduced the
number of independent directors until the appointment of Anita Maria Killeen on 1 February 2024. The Board
continues to assess the Board composition and will make an appropriate appointment or other adjustment in
due course.
The Board consider that the composition of the Board during the financial year ended 31 March 2024 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.
Compliance with recommendation during the year ended 31 March 2024:
The Chair of the Board, Rewi Hamid Bugo, has been assessed as a non-independent director. Whilst this does
not meet the Code recommendation, the Board believes that the current Chair continues to contribute to a
culture of openness and constructive challenge that allows for diversity of views to be considered by the Board.
RECOMMENDATION 2.10
The chair and the CEO should be different people.
Compliance with recommendation during the year ended 31 March 2024:
The Chair and the CEO were different people.
12
Principle 3 – Board Committees
“The board should use committees where this will enhance its effectiveness in key areas, while still retaining
board responsibility.”
Recommendation 3.1
An issuer’s audit committee should operate under a written charter. Membership on the audit committee
should be majority independent and comprise solely of non-executive directors of the issuer. The chair of the
audit committee should be an independent director and not the chair of the board.
Compliance with recommendation during the year ended 31 March 2024:
General Capital Limited has an Audit Committee which as at 31 March 2024 comprised the following non-
executive directors.
Gregory Stephen James (Chair of the Audit Committee, Independent Director)
Paul William Zingel (Independent Director)
Rewi Hamid Bugo (Non-executive Director)
Huei Min Lim resigned as a director with effect from 31 May 2023.
Simon John McArley resigned as a director with effect from 17 July 2023 and Gregory Stephen James was
subsequently appointed Chair of the Audit Committee.
The Audit Committee operates under a written charter and its 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. Gregory
Stephen James has a financial background in accordance with the requirements of NZX Listing Rule 2.13.1 as
did Simon John McArley prior to that.
The Company’s Audit Committee Charter has been published on the Company’s website at
www.gencap.co.nz/corporate-governance.
Recommendation 3.2
Employees should only attend audit committee meetings at the invitation of the audit committee.
Compliance with recommendation during the year ended 31 March 2024:
Non-committee members including employees only attend Audit Committee meetings at the invitation of the
Chair of the Audit Committee.
13
Recommendation 3.3
An issuer should have a remuneration committee which operates under a written charter (unless this is carried
out by the whole board). At least a majority of the remuneration committee should be independent directors.
Management should only attend remuneration committee meetings at the invitation of the remuneration
committee.
Compliance with recommendation during the year ended 31 March 2024:
The Board established a Remuneration Committee in the year ended 31 March 2024. Employees only attended
meetings at the invitation of the Board.
The responsibilities included recommending remuneration packages for directors for consideration by
shareholders and to approve Managing Director and senior management remuneration.
A Remuneration Committee was held on the 26
th
of March 2024 and the majority of the committee members
are Independent Directors.
The Company’s remuneration policy is included in the Company’s Board Policies and Procedures document and
the Remuneration Charter 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 2024:
Nomination committee responsibilities were dealt with by the full Board during the year ended 31 March 2024.
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 2024:
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.
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 2024:
The company has a written takeover response procedure approved by the Board.
14
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 2024:
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 2024:
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.
Compliance with recommendation during the year ended 31 March 2024:
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.
For the financial year ended 31 March 2024, 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.
RECOMMENDATION 4.4
An issuer should provide non-financial disclosure at least annually, including considering material exposure
to environmental, social sustainability and governance factors and practices. It should explain 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 2024:
Due to its nature and size the Company did not provide non-financial disclosure during the financial year ended
31 March 2024. 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.
15
PRINCIPLE 5 – Remuneration
“The remuneration of directors and executives should be transparent, fair and reasonable.”
Recommendation 5.1
An issuer should have a remuneration policy for the remuneration of directors. An issuer should recommend
director remuneration packages to shareholders for approval in a transparent manner. Actual director
remuneration should be clearly disclosed in the issuer’s annual report.
Compliance with recommendation during the year ended 31 March 2024:
The Company’s remuneration policy which covers 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.
Actual director remuneration is disclosed in the Shareholder and Statutory Information section of this Annual
Report.
Recommendation 5.2
An issuer should have a remuneration policy for remuneration of executives which outlines the relative
weightings of remuneration components and relevant performance criteria.
Compliance with recommendation during the year ended 31 March 2024:
Remuneration of executives 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
which is published on the Company’s website at www.gencap.co.nz/corporate-governance.
Recommendation 5.3
An issuer should disclose the remuneration arrangements in place for the CEO in its annual report. This should
include disclosure of the base salary, short term incentives and long-term incentives and the performance
criteria used to determine performance-based payments.
Compliance with recommendation during the year ended 31 March 2024:
Information in relation to the remuneration arrangements in place for Brent Douglas King (Managing Director)
are included in the Shareholder and Statutory Information section of this Annual Report.
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 2024:
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 and the Corporate Counsel. 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 and report regularly to the Audit Committee and Board.
16
The Company’s Risk Management and Compliance framework has been reviewed and approved by the Board in
the year ended 31 March 2024. The Risk Management Programme includes a Risk Management Plan, Group Risk
Register and a Compliance Obligations Register. The Programme is further supported by a number of policies
focusing on various key risks for the Group including credit, liquidity, operational and market risk.
The Group also maintains insurance policies that it considers adequate to meet its insurable risks.
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 2024:
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. All new
incidents, near misses, or hazards identified are reported to the Board by the Health and Safety Officer.
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 2024:
In accordance with the Company’s board charter and Audit Committee charter, the Board in conjunction with
the Audit Committee were responsible for oversight of and communication with the external auditor and
reviewed the quality and cost of the audit undertaken by the Company’s external auditor. The Board in
conjunction with the Audit Committee also assesses the auditor’s independence on an annual basis.
For the financial year ended 31 March 2024, Grant Thornton New Zealand Audit Limited was the external auditor
for the Company. The statutory audit services are fully separated from non-audit services to ensure that
appropriate independence is maintained. The amount of fees paid for audit and other services is identified in
note 16 in the notes to the consolidated financial statements.
Grant Thornton New Zealand Audit Limited has provided the Board with written confirmation that, in their view,
they were able to operate independently during the year.
17
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 2024:
Grant Thornton New Zealand Audit Limited is invited to attend the annual meeting, and the lead audit partner
is expected to be available to answer questions from shareholders at that meeting. Grant Thornton New Zealand
Audit Limited attended the annual shareholder meeting.
Recommendation 7.3
Internal audit functions should be disclosed.
Compliance with recommendation during the year ended 31 March 2024:
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.
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 2024:
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 by designing its
shareholder meeting arrangements to encourage shareholder participation and by providing shareholders the
option to receive communications from the issuer electronically.
Compliance with recommendation during the year ended 31 March 2024:
The Company held a purely physical annual shareholder meeting in 2023. The Board will continue to assess
whether to use a hybrid meeting format in the future taking into account shareholder feedback. 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 2024:
Shareholders have been given the right to vote on all major decisions in line with the NZX Rules during the year
ended 31 March 2024.
18
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 2024:
During the year ended 31 March 2024 no capital raising activities were undertaken.
Should the directors of the Company seek additional capital raising in the future they will consider whether the
offer will be extended to all shareholders at that time.
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 2024:
The Board encourages shareholder participation in meetings and understands that shareholders need sufficient
time to consider information prior to meetings. The notice of the 2023 annual meeting and extraordinary
meeting was posted on the Company’s website more than 20 working days prior to the meeting.
19
Grant Thornton New Zealand Audit Limited
L4, Grant Thornton House
152 Fanshawe Street
PO Box 1961
Auckland 1140
T +64 9 308 2570
www.grantthornton.co.nz
Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd.
To the Shareholders of General Capital Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of General Capital Limited (the “Company”) and its subsidiaries
(together the “Group”) on pages 24 to 55 which comprise the consolidated statement of financial position as at 31 March 2024,
and the consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated
statement of cashflows for the year then ended, and notes to the consolidated financial statements, including material
accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position
of General Capital Limited as at 31 March 2024 and its financial performance and cash flows for the year then ended in
accordance with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) issued by the New
Zealand Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)) issued by the New
Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance Practitioners
(including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor and the provision of other assurance services, we have no relationship with, or interests
in, the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Independent Auditor’s Report
20
Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd.
Why the audit matter is significant How our audit addressed the key audit matter
Allowance for impairment losses from loan
receivables
The allowance for impairment losses from loan
receivables to customers amounts to $472,500 in the
financial statements as at 31 March 2024.
The assessment of the allowance for impairment losses
(expected credit losses) is complex and requires
significant judgement and estimation. Key areas of
judgment included the identification of loans with an
increase in credit risk and assumptions used in the credit
loss model, for both the 12 month and lifetime expected
credit losses.
This was a key audit matter due to the significance of the
judgements and estimates applied in determining the
allowance for impairment losses from loan receivables on
the financial statements.
The principles for determining the allowance for
impairment losses from loan receivables are described in
note 4.1 and the review of the allowance for impairment
losses is disclosed in note 6 of the consolidated financial
statements.
We have:
•Obtained an understanding of the lending processes and
controls and models used to determine the allowance for
impairment losses from loan receivables, including event
identification, collateral valuation and how management’s
estimates and judgements are determined.
•For a selection of loans issued by the Company, we
inspected the loan agreement and other available
information that formed part of management’s loan
approval process (such as credit scores and security
details), and reviewed management’s approval process
controls, to determine whether loans were appropriately
approved and that the information available supported
any conclusions reached about the expected credit loss
at that point.
•We identified loans for which we believed there may be
indicators of impairment. We considered management’s
conclusions regarding impairment for each of these loans
individually.
•For each significant identified loan with indicators of
impairment, we tested whether there was adequate
security against each advance in order to recover the
outstanding balance. Where provided, we considered
adequacy of third-party valuations, and also verified any
prior ranking securities to independent sources.
•For the collective provisioning model, we:
(a)Recalculated the provision based on the input
factors identified by management as part of the
expected credit loss methodology; and
(b)Assessed the calculation of the expected credit
losses model against the requirements of NZ IFRS 9
Financial Instruments for the recognition and
measurement of 12 month and lifetime expected
credit losses on financial assets; and
(c)Assessed the judgements made by management
regarding the assumptions used for the expected
credit loss methodology, including challenging the
appropriateness of current and future external
factors.
•We assessed the appropriateness of the Group
disclosures in the financial statements against the
requirements of the accounting standards.
Impairment assessment of goodwill and other
indefinite life intangible assets
The Group has goodwill of $1,813,589 in the
consolidated financial statements as at 31 March 2024.
We have:
•Obtained an understanding of the Group’s internal
controls relevant to the accounting estimates used to
21
Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd.
Why the audit matter is significant How our audit addressed the key audit matter
This matter was considered to be one of the areas which
had the greatest impact on our overall audit as:
•annual impairment tests involve complex and
subjective estimation and judgement by
Management on the future performance of the cash
generating units (CGU’s), discount rates applied to
the future cashflow forecasts and future market and
economic conditions. Change in assumptions and
the methodology applied may have a material
impact on the measurement of the impairment of
goodwill and other indefinite life intangible assets.
Management has completed the annual impairment test
for each of the two CGU’s as at 31 March 2024, and the
measurement of each CGU’s recoverable amount
includes the assessment and calculation of its ‘value-in-
use’.
The principles for determining and analysing the
impairment of goodwill and other indefinite life intangible
assets are described in note 4.2 and the review of the
accumulated impairment is disclosed in note 10 of the
consolidated financial statements.
determine the recoverable value of the Group’s CGU’s
and assessed for reasonableness.
•Evaluated 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.
•Challenged Management’s assumptions and estimates
used to determine the recoverable value of its material
indefinite life intangible assets, including those relating to
forecasted revenue, expenditure and discount rates
applied.
•Evaluated the logic of the value-in-use calculations
supporting Management’s annual impairment test and
testing the mathematical accuracy of these calculations.
•Evaluated Management’s process regarding the
preparation and review of forecast financial statements
(statement of financial position, statement of
comprehensive income, and cash flow statement),
including comparing forecasts to Board approved
forecasts, and evaluating the historical accuracy of the
Group’s forecasting to actual historical performance.
•Engaged 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, including
evaluating the forecasts, inputs and any underlying
assumptions with a view to identifying Management bias.
•Performed our own sensitivity analyses for reasonably
possible changes in key assumptions, the two main
assumptions being: the discount rate and forecast growth
assumptions.
•Evaluated the related disclosures (including the
accounting policies and accounting estimates) around
goodwill and other indefinite life intangible assets, which
are included in the Group’s consolidated financial
statements.
Information Other than the Consolidated Financial Statements and Auditor’s Report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Company’s Annual Report 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.
22
Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd.
Directors’ responsibilities for the Consolidated Financial Statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated financial
statements in accordance with New Zealand equivalents to International Financial Reporting Standards issued by the New
Zealand Accounting Standards Board, and for such internal control as the Directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs
(NZ) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the consolidated financial statements is located on the
External Reporting Board’s website at: https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Restriction on use of our report
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that we might
state to the Company’s shareholders, as a body, those matters which we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinion we have
formed.
Grant Thornton New Zealand Audit Limited
Ryan Campbell
Partner
Auckland
26 June 2024
23
20242023
Note$$
Interest income
9
13,679,143 10,618,423
Interest expense
9
(8,096,442) (5,223,799)
Net interest income
5,582,701 5,394,624
Fee and commission income
9
3,327,444 2,980,148
Fee and commission expense
9
(862,307) (781,120)
Net fee and commission income
2,465,137 2,199,028
Revenue from contracts with customers
9
138,466 65,626
Cost of sales
9
(17,426) (4,006)
Gross profit from contracts with customers
121,040 61,620
Other income
9
26,390 45,056
Gross Profit
8,195,268 7,700,328
Increase in allowance for expected credit losses
(59,087) (573,970)
Personnel expenses
(1,791,560) (1,218,362)
Occupancy expenses
(105,378) -
Depreciation
(11,313) (125,797)
Amortisation and impairment of intangible assets
10
(21,334) (537,779)
Other operating expenses
(2,620,994) (1,900,329)
(4,609,666) (4,356,237)
Profit before income tax expense
3,585,602 3,344,091
Income tax expense
17
(952,441) (1,085,848)
Net profit after income tax expense
2,633,161 2,258,243
Other comprehensive income
Items that will not be reclassified to profit or loss
13(b)
(31,240) (73,713)
Income tax on these items
(43,273)
-
Other comprehensive loss for the year, net of tax (74,513) (73,713)
Total comprehensive income
2,558,648 2,184,530
Earnings per share (cents per share)
14
0.72 0.98
Diluted earnings per share (cents per share)
14
0.72 0.98
The accompanying notes are an integral part of these financial statements.
GENERAL CAPITAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Changes in the fair value of equity investments at fair value
through other comprehensive income
24
GENERAL CAPITAL LIMITED
20242023
Note$$
Equity
Share capital
13(a)
21,561,120 21,561,120
Accumulated earnings 5,381,065 3,011,160
Reserves
13(b)
(130,768) (319,510)
Total equity
26,811,417 24,252,770
Assets
Cash and cash equivalents
5
15,303,073 14,072,194
Accounts receivables 4,850 46,213
Related party receivables
19
235 725
Other current assets 334,828 347,467
Bank deposits
5
12,714,591 9,937,974
Loan receivables
6
132,163,725 108,771,965
Property, plant and equipment 31,907 33,732
12
126,624
214,730
Deferred tax asset
17.2
182,173 313,454
Intangible assets and goodwill
10
2,468,625 2,349,405
Total assets
163,330,631 136,087,859
Liabilities
Accounts payable and other payables 1,033,694 816,766
Related party payables
19
6,366 117,410
Term deposits
7
135,118,547 109,886,032
Income tax payable 360,607 1,014,881
Total liabilities
136,519,214 111,835,089
Net assets
26,811,417 24,252,770
The accompanying notes are an integral part of these financial statements.
Net tangible assets (NTA) per share (cents per share) 6.65 5.94
Net assets (NA) per share (cents per share) 7.37 6.67
The financial statements are signed on behalf of the Board.
Rewi Bugo Brent King
ChairmanManaging Director
Authorised for issue on:25-Jun-24
Investments
AS AT 31 MARCH 2024
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
25
GENERAL CAPITAL LIMITED
Note$$$$
13,025,575 (245,799) 752,916 13,532,692
- - 2,258,243 2,258,243
13(b)
- (73,713) - (73,713)
- (73,713) 2,258,243 2,184,530
8,535,545 - - 8,535,545
8,535,545 - - 8,535,545
21,561,120 (319,511) 3,011,160 24,252,769
- - 2,633,161 2,633,161
- (74,513) - (74,513)
- (74,513) 2,633,161 2,558,648
263,256 (263,256)
-
21,561,120 (130,768) 5,381,065 26,811,417
The accompanying notes are an integral part of these financial statements.
Transfer fair value reserve to
accumulated earnings for FVTOCI
equity investment
Total comprehensive income for
the year
Accumulated
earnings
Share capital
Balance at 31 March 2023
Profit for the year
Other comprehensive income for
the year
Contributions of equity net of
transaction costs
Total transactions with owners in
their capacity as owners
Balance at 31 March 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
Total equity
Profit for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Reserves
Balance at 1 April 2022
26
GENERAL CAPITAL LIMITED
20242023
Note
$$
Cash flow from operating activities
Interest received
13,795,341 10,647,402
Receipts from customers
3,312,918 2,457,853
Other income
3,190 4,755
Payments to suppliers and employees
(5,419,578) (3,753,310)
Interest paid
(7,377,800) (5,898,226)
Income tax paid
(1,475,434) (772,829)
2,838,637 2,685,645
Term deposits (net receipts)
24,485,709 22,534,413
Loan receivables (net advances)
(23,144,390) (28,665,673)
Net cash provided by / (used in) operating activities 18
4,179,956 (3,445,615)
Cash flow from investing activities
Purchase of property, plant and equipment
(9,488) (11,960)
Purchase of Intangible assets
(213,346) -
Investment in bank deposits
(2,776,617) (7,487,974)
Investment in equities
50,374 -
Net cash used in investing activities
(2,949,077) (7,499,934)
Cash flow from financing activities
Issue of ordinary shares
- 8,535,545
Lease payments
- (179,372)
Net cash provided by financing activities
- 8,356,173
Reconciliation of cash and cash equivalents
14,072,194 16,661,570
1,230,879 (2,589,376)
5
15,303,073
14,072,194
The accompanying notes are an integral part of these financial statements.
Cash and cash equivalents at the end of the reporting year
Net increase / (decrease) in cash and cash equivalents held
during the reporting year
Cash and cash equivalents at the beginning of the reporting
year
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Net cash flows from operating activities before changes in
operating assets and liabilities
27
NOTE 1: REPORTING ENTITY
The consolidated financial statements were authorised for issue by the directors on 25 June 2024
NOTE 2: BASIS OF PREPARATION
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
3.1 Revenue and expense recognition
The financial statements are presented in New Zealand dollars which is the Group's functional currency and the presentation currency. Unless
otherwise indicated, amounts in the financial statements have been rounded to the nearest dollar.
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
GeneralCapitalLimited("theCompany")isincorporatedanddomiciledinNewZealand.GeneralCapitalLimitedisregisteredundertheCompanies
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).
These financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the
realisationofassetsandthesettlementofliabilitiesintheordinarycourseofbusiness,inaccordancewithhistoricalcostconcepts,asmodifiedby
the fair value of certain assets and liabilities as identified in the accounting policies below.
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").
(a) Interest income and expense
Interest income and interest expense
Interestincomeandinterestexpenseisrecognisedinprofit orlossusingtheeffectiveinterestmethod.Theeffectiveinterest methodcalculates
theamortisedcostofafinancialassetorliabilityandallocatestheinterestincomeanddirectlyrelatedfees(includingloanoriginationfees)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
Lendingfeeincome(suchasloanestablishmentfees)thatisintegraltotheeffectiveyieldofaloanheldatamortisedcostiscapitalisedaspartof
theamortisedcostanddeferredoverthelifeoftheloanusingtheeffectiveinterestmethod.Lendingfeesnotdirectlyrelatedtotheoriginationof
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 capitalised as part of the
amortised cost and deferred over the life of the financial instrument using the effective interest method.
(b) Revenue from contracts with customers:
Advisory fee revenue
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 upon completion of each of the performance obligations. Performance
obligations includeadviceprovidedtothe entityand sometimesinclude thesuccess of a project. There arespecific billingmilestones builtinto
each contract and payment is generally due within 30 to 60 days of the milestone.
Assets and liabilities arising from revenue from contracts with customers
Accounts receivables are non-interest bearing and are generally on terms of 30 to 60 days.
28
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
3.2 Financial instruments
Interest income is recognised using the effective interest method for financial assets measured subsequently at amortised cost.
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.
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 financial assets at
FVOCI 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.
Financial assets
Allrecognisedfinancialassetsaremeasuredsubsequentlyintheirentiretyateitheramortisedcostorfairvalue,dependingontheclassificationof
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
- thecontractualtermsof thefinancialassetgiverise onspecified datesto cashflows that are solelypayments of principal andinterest onthe
principal amount outstanding.
Financial assets that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI)*:
-thefinancialassetisheldwithinabusinessmodelwhoseobjectiveisachievedbybothcollectingcontractualcashflowsandsellingthefinancial
assets; and
- thecontractualtermsof thefinancialassetgiverise onspecified datesto cashflows that are solelypayments of principal andinterest onthe
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.
TheGroup’sfinancialassetsmeasuredatamortisedcostincludecashandcashequivalents,bankdeposits,tradereceivables,loanreceivables,and
other receivables. The Group’s assets measured at FVTOCI* include investment in equities. The Group has no assets measured at FVTPL**.
*FVTOCI - Fair Value Through Other Comprehensive Income
**FVTPL - Fair Value Through Profit or Loss
The Group has designated all investments in equity instruments as at FVTOCI* on initial recognition.
Initial recognition
Financial assets and financial liabilities are recognised in the Group’s statement 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
offinancialassetsandfinancialliabilitiesareaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,asappropriate,
on initial recognition.
29
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Stage 1
12-month ECL**(past due 30 days or less)
Stage 2
Lifetime ECL** not credit impaired (between 30 and 90 days past due)
Stage 3
Lifetime ECL** credit impaired (greater than 90 days past due)
Where loans are in default or otherwise credit impaired, ECLs** that result from all possible default events over the life of the loan
are recognised.
*FVTOCI - Fair Value Through Other Comprehensive Income
**ECL - Expected Credit Losses
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.
(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 adjusts 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 Group also considers changes or forecast changes to macroeconomic factors including property prices,
unemployment, interest rates, gross domestic product and inflation.
Where there has been a significant increase in credit risk, ECLs** that result from all possible default events over the life of the loan
are recognised.
Modification of financial assets
Whenthecontractualcashflowsofafinancialassetarerenegotiatedorotherwisemodifiedandtherenegotiationormodificationdoesnotresult
inthederecognitionofthatfinancialasset,theGrouprecalculatesthegrosscarryingamountofthefinancialassetandrecognisesamodification
gainorlossinprofitorloss.Thegrosscarryingamountofthefinancialassetisrecalculatedasthepresentvalueoftherenegotiatedormodified
contractual cash flows that are discounted at the financial asset’s original effective interest rate. Any costs or fees incurred adjust the carrying
amount of the modified financial asset and are amortised over the remaining term of the modified financial asset.
Where there has been no evidence of a significant increase in credit risk since initial recognition, ECLs** that result from possible
default events within 12 months are recognised.
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.
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.
30
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
**ECL - Expected Credit Losses
(iv) Write
‑
off policy
TheGroupwritesoffafinancialassetwhenthereisinformationindicatingthattheborrowerisinseverefinancialdifficultyandthereisnorealistic
prospectofrecovery,forexampleanunsecuredfinancialassetwherebytheborrowerhasnorealisticabilitytomeettheirfinancialobligationsto
theGroup.FinancialassetswrittenoffmaystillbesubjecttoenforcementactivitiesundertheGroup’srecoveryprocedures,takingintoaccount
legal advice where appropriate. Any recoveries made are recognised in profit or loss.
(iii) Credit
‑
impaired financial assets
Afinancialassetiscredit‑impairedwhenoneormoreeventsthathaveadetrimentalimpactontheestimatedfuturecashflowsofthatfinancial
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).
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.
*LVR - Loan to Valuation Ratio
(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.
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
determinesatthecurrentreportingdatethattheconditionsforlifetimeECL**arenolongermet, theGroupmeasuresthelossallowanceatan
amount equal to 12‑month ECL** at the current reporting date.
TheGrouprecognisesanimpairmentgainorlossinprofitorlossforallfinancialassetswithacorrespondingadjustmenttotheircarryingamount
through a loss allowance account.
v) Measurement and recognition of expected credit losses
Themeasurementofexpectedcreditlossesisafunctionoftheprobabilityofdefault,lossgivendefault(i.e.themagnitudeofthelossifthereisa
default) andtheexposure atdefault.Theassessment of theprobabilityof default andlossgivendefaultisbasedonhistoricaldata adjustedfor
forward‑lookinginformationincludingmacroeconomicfactorsasdescribedabove.GiventheGroup’sloanbookisallsecuredover 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
expectedcreditloss(orlossgivendefault)maynotincreasesignificantlyduetotheGroup’slendingcriteriawhichprohibitslendingwhentheloan
to valuation ratio (LVR)* exceeds 75%.
This meansin generalthat theGroup expectsthat thepresent valueof expectedcash flowsfrom aloan indefault toapproximate thecarrying
valueoftheloanpriortothedefaultevent,exceptincaseswheretheLVR*hasincreasedconsiderablyduetoareductioninthesecurityproperty
valuation or a significant increase in the loan balance.
31
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
3.3 Cash and cash equivalents
3.4 Intangible assets
3.5 Taxation
Financial Liabilities
Classification of Financial Liabilities
Financial liabilities are measured at amortised cost.
Atinitialrecognitionfinancialliabilitiesaremeasuredatfairvalueplustransactioncoststhataredirectlyattributabletotheissueofthefinancial
liabilities. The amortised cost of a financial liability is the amount at which the financial liability is measured at initial recognition minus the
principalrepayments,plusthecumulativeamortisationusingtheeffectiveinterestmethodofanydifferencebetweenthatinitialamountandthe
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
relevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashpayments(includingallfeesandpointspaidor
receivedthatformanintegralpartoftheeffectiveinterestrate,transactioncostsandotherpremiumsordiscounts)throughtheexpectedlifeof
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 other payables, term deposits and lease liability. The Group derecognises
financialliabilitieswhen,andonlywhen,theGroup’sobligationsaredischarged,cancelledorhaveexpired.Thedifferencebetweenthecarrying
amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
Cashand cashequivalents includesdemand deposits with anoriginal term of lessthan or equal to3 months which areconsidered highlyliquid
investments that are readily convertible into cash and used by the Group as part of day-to-day cash management.
Intangible assets comprise goodwill, acquired licences, Bartercard trade dollars, computer software, and customer relationship.
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 4.2
and note 10.
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 which the 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 at cost 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).
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.
Customer relationship is recognised in the statement of financial position at cost less accumulated amortisation and impairment losses. Direct
costs associated with the purchase are capitalised to the cost. Customer relationship cost is amortised on a straight-line basis (five years).
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.
32
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
3.6 Impairment of non-financial assets
3.7 Standards and interpretations to published standards that are not yet effective
NOTE 4: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
4.1 Allowance for expected credit losses
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.
Significant increase in credit risk
Expectedcreditlosses(‘ECL’)aremeasuredasanallowanceequalto12-monthECL,orlifetimeECLforassetswithasignificantincreaseincredit
riskorindefaultorotherwisecreditimpaired.Inassessingwhetherthecreditriskofanassethasincreasedsignificantly,theGroupconsidersits
historical loss experience and adjusts this for current observable data. This data includes any payment defaults by the borrower, known or
expected defaultsby theborrower onsimilar obligations(other loans), uninsured deteriorationof thesecurity propertyand anychanges inthe
borrowers circumstances which could impact on their ability to repay either interest or principal amounts on their due date. The Group also
considerschangesorforecastchangestomacroeconomicfactorsincludingpropertyprices,unemployment,interestrates,grossdomesticproduct
and inflation.
Expected credit losses:
1) Based on the history of the Group’s loan book over the last three years, the average annual write-offs as a percentage of the average
loan
receivable balance over the same period was 0.10%.
2) The Group has concluded that adopting a more conservative estimate of 0.25% (March 2023: 0.25%) of the gross loan balance is a more
prudentandappropriatemeasureforanticipatingpotentiallossesoverthenext12months,comparedtoalessconservativeestimateof0.10%.
This approach aligns with the Group's risk management strategy and ensures a more robust provisioning for expected credit losses.
3) Lifetime ECL’s for loans with a significant increase in credit risk and for loans in default have been calculated based on the
Company’s
expectations for discounted net cash flows from the respective loan receivables over the expected remaining life of the loans.
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.
A number of new standards and amendments to standards and interpretations are issued but not yet effective. None of these are expected to
have a significant effect on the financial statements of the Group.
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.
33
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.2 Impairment analysis of goodwill and other indefinite life intangible assets
NOTE 5: CASH AND CASH EQUIVALENTS AND BANK TERM DEPOSITS
20242023
$$
Bank call deposits
1
15,303,073 12,683,613
Bank term deposits
2
- 1,388,581
15,303,073 14,072,194
Bank term deposits
2
- Current Portion
3
12,714,591 9,937,974
Interest Rates:
1
Bank call deposits: Between 0.00% and 5.70% (March 2023: Between 0.00% and 4.10%).
2
Bank term deposits: N/A (March 2023: 3.35% - 5.15% per annum).
3
Current Portion of Bank term deposits is contractually repayable within 12 months.
NOTE 6: LOAN RECEIVABLES
20242023
$$
First mortgage advances
134,140,905 110,506,174
Less deferred fee income and expenditure
(1,504,680) (957,944)
Less impairment allowance
(472,500) (776,265)
Net carrying value
132,163,725 108,771,965
Current portion
94,940,875 107,648,114
Non-current portion
37,222,850 1,123,851
132,163,725 108,771,965
*CGU - Cash Generating Unit
Impact of high inflation, high interest rates, uncertainty in the property market, financial market uncertainties on loan receivables and
expected credit losses on impairment analysis of goodwill and other indefinite life intangible assets
When conducting the impairment analysis of goodwill and other indefinite-life intangible assets, the Group has considered all reasonably known
and available information.
Expected impact on cash-generating units
1. Finance CGU* - The forecasted cash flows used in the impairment analysis factor in the above-stated events. The results of the model show that
there is still significant headroom in the unit.
2. Research and Advisory CGU* - Due to the impacts of some of the above-stated factors the Group performed an impairment test as at 31 March
24 which has resulted in no impairment to the CGU*.
Thecarryingvalueofgoodwillandindefinitelifeintangibleassets(includinglicencesandBartercardtradedollars)isassessedatleastannuallyto
ensurethatitisnotimpaired.WithregardtoGoodwillandLicences,performingthisanalysisrequiresmanagementtoestimatefuturecashflows
to be generated by the cash-generating unit, which entails making judgements, including the expected rate of growth of revenues and
expenditures, assetsandliabilities, andtheresultingcashflows.Judgements alsoneedtobemadeabouttheappropriatediscount ratetoapply
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.
Managementhaveperformedafair valueless costsof disposalimpairment test in relationto thecarrying valueof theBartercard tradedollars
asset at 31 March 2024.
34
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Primary loan security - first mortgage2024202420232023
$%$%
Residential housing
117,504,757
87.6%
92,916,572
84.1%
Residential bare land
14,911,604
11.1%
12,383,593
11.2%
Residential development land and housing
-
0.0%
2,107,329
1.9%
Commercial property
1
1,724,544
1.3%
3,098,680
2.8%
134,140,905 100.0% 110,506,174 100.0%
Interest rate: Between 9.25% and 11.50% (2023: Between 5.45% and 12.90%).
Effective interest rate: Between 10.25% and 24.11% (2023: Between 5.79% and 22.79%).
For loans that are in default, additional interest of up to 10% is charged.
Borrower payment terms are profiled as follows:
20242023
$$
Principal and interest paid monthly
1,144,796 -
Interest only paid monthly
132,683,098 110,401,835
Interest capitalised
313,011 104,339
Total loan receivables
134,140,905 110,506,174
20242023
$$
Interest income
13,246 236,135
Loan Fees
2,853,522 2,629,760
Total
2,866,768 2,865,895
Sometimesloanrepaymentsdonotoccuronthecontractualmaturitydateandthetermoftheloanisextendedi.e.rolloveroccurs.Beforealoan
isrolledover,theCompany’sstandardcreditcheckingandapprovalprocessesarere-applied. Thecurrent“loantosecurityvalue”positionwillbe
re-assessedandupdatedvaluationsareobtainedwheretheDirectorsconsiderthisappropriate.Loanapplicationfeesarechargedandevidenceis
obtained of the borrower’s agreement to the contractual terms and conditions of the extended loan.
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 36 months of reporting date.
At year end there was $2,052,306 in outstanding loan commitments (loans approved and accepted not yet drawn) including future capitalised
interest (March 2023: $7,510).
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:
Atreportingdate,30.8%(March2023:28.6%)ofloansbynumberand32.6%(March2023:24.8%)byvaluerepresentloansthathavebeenrolled
overandareintotheirsecondorsubsequentcreditperiods.Whereloanshavebeenrolledover,theirclassificationintheseconsolidatedfinancial
statementsascurrentornon-current,oraspastdue,isbasedonpaymentduedatesasperthetermsoftheextendedcontract,andnotasperthe
original or preceding contract.
1
The Group’s lendingpolicy allows for a maximum of 30% of total lendingto besecured over commercial properties.During theyear ended31
March 2024 the Group had 1.3% of commercial lending (2023: 2.8%).
The core lending activity of the Group is providing, through a broker network, short term and bridging finance secured by mortgage over
residentialproperty. Themajorityofloansareenteredintowithamaturitydatewithin12months,withaproposalthatrepaymentwillbefunded
bythesaleofthesecuredpropertyorthroughrefinancingbytheborrower.GeneralFinanceLimitedlendingpolicyallowsforamaximum“loanto
securityvalue”of75%(excludingfeesandcharges)onadvances,unlessapprovedbythefullboardofGeneralFinanceLimited.Therearenoloans
with loan to valuation ratio above 75% at the reporting date (2023: none).
35
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Reconciliation of gross loan receivable balance movements through ECL* stages:
Lifetime ECL* Lifetime ECL*
12 month not creditcredit
ECL*impaired impairedTotal
$$$$
Balance as at 31 March 2022
79,129,017 1,301,738 487,279 80,918,034
New loan advances
95,678,186 - - 95,678,186
Repayments
(64,301,029) (1,301,738) (487,279) (66,090,046)
Transfer to lifetime not credit impaired
(5,415,857) 5,415,857 - -
Transfer to lifetime credit impaired
(4,061,846) - 4,061,846 -
Balance as at 31 March 2023
101,028,471 5,415,857 4,061,846
110,506,174
New loan advances
111,138,453 - - 111,138,453
Repayments
(78,255,053) (5,053,005) (3,832,813) (87,140,871)
Loan balances written off
- (362,852) - (362,852)
Transfer to lifetime not credit impaired
(7,780,334) 7,780,334 - -
Transfer to lifetime credit impaired
(573,671) - 573,671 -
Balance as at 31 March 2024
125,557,867 7,780,334 802,704 134,140,905
Reconciliation of movements in impairment allowance by stage:
Lifetime ECL* Lifetime ECL*
12 month not creditcredit
ECL*impaired impairedTotal
$$$$
Balance as at 31 March 2022
197,536 3,254 1,505 202,295
New loan advances
239,195 - - 239,195
Repayments
(160,466) (3,254) (1,505) (165,225)
Transfer to lifetime not credit impaired
(13,540) 13,540 - -
Transfer to lifetime credit impaired (collectively assessed)
(10,155) - 10,155 -
Transfer to lifetime credit impaired (individually assessed)
- 400,000 100,000 500,000
Balance as at 31 March 2023
252,570 413,540 110,155 776,265
New loan advances
277,846 - - 277,846
Repayments
(195,637) (12,633) (9,582) (217,852)
Loan balances written off (collectively assessed)
- (907) - (907)
Loan balances written off (individually assessed)
- (362,852) - (362,852)
Transfer to lifetime not credit impaired
(19,451) 19,451 - -
Transfer to lifetime credit impaired (collectively assessed)
(1,434) - 1,434 -
Transfer to lifetime credit impaired (individually assessed)
- (37,148) 37,148 -
Balance as at 31 March 2024
313,894 19,451 139,155 472,500
*ECL - Expected Credit Losses
Ininstanceswheretheprobabilityof default hasincreasedsignificantly (a significant increasein creditrisk), or where theloan isin default, the
expectedcreditloss(orlossgivendefault)maynotincreasesignificantlyduetotheGroup’slendingcriteriawhichprohibitslendingwhentheloan
tovaluationratio(LVR)**exceeds75%.ThismeansingeneralthattheGroupexpectsthatthepresentvalueofexpectedcashflowsfromaloanin
defaulttoapproximatethecarryingvalueoftheloanpriortothedefaultevent,exceptincaseswheretheLVR**hasincreasedconsiderablydue
to a reduction in the security property valuation or a significant increase in the loan balance.
TheLVRofloanswithasignificantincreaseincreditriskorindefaultwasinarangeof50.5%-70.6%asat31March2024(March2023:inarange
of34.9%-67.2%),basedonthesecuritypropertyvaluationatorigination.ThelifetimeECLCreditImpairedloansaremadeupoftwoloans.$0.6m
was repaid or extended after the reporting date. Full recovery is expected from all loans.
36
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 7: TERM DEPOSITS
20242023
$$
Gross term deposit liability
135,192,864 109,988,514
Less deferred commission expenditure
(74,317) (102,482)
Net carrying value
135,118,547 109,886,032
Contractual repayment terms:
On call
178,813 104,087
Within 12 months
88,839,334 77,329,770
Greater than 12 months
46,100,400 32,452,175
135,118,547 109,886,032
Repayment Terms:On call up to 5 years
Interest Rate:3.65% - 8.30% and 0.15% on call (March 2023: 3.65% - 7.75% and 0.15% on call)
Effective Interest Rate:3.65% - 8.30% and 0.15% on call (March 2023: 3.65% - 7.75% and 0.15% on call)
Security:
Further analysis of gross deposit funding is as follows:
Concentration of funding
20242023
$$
Northland
4,631,033 4,166,690
Auckland
53,614,586 47,277,149
Waikato
13,529,906 10,186,523
Bay of Plenty
11,861,471 10,314,064
Wellington
18,440,430 14,234,721
Other North Island
8,872,147 6,285,283
South Island
19,715,023 14,536,014
Overseas
4,528,268 2,988,070
Total gross term deposit liability
135,192,864 109,988,514
Contractual maturity of funding
20242023
$$
Maturing in 0 - 6 months40,974,805 45,295,457
Maturing in 6 - 12 months48,060,194 32,176,340
Maturing in 12 - 24 months35,221,462 21,984,844
Maturing after 24 months10,936,40310,531,873
Total gross term deposit liability
135,192,864 109,988,514
Profile of deposit holders
2024202420232023
$$
Deposits over $200,000
178
85,140,202
140
68,792,518
Deposits $100,000 - $200,000
170
23,478,598
117
16,323,173
Deposits $50,000 - $100,000
223
16,598,086
214
15,983,117
Deposits $20,000 - $50,000
236
7,948,537
213
7,034,278
Deposits $10,000 - $20,000
109
1,546,022
98
1,401,109
Deposits under $10,000
87
481,419
71
454,319
Total gross term deposit liability
1003
135,192,864
853
109,988,514
TheGrouphasatotalof1,003depositorsasat31March2024(March2023:853).Asatthereportingdate,thelargestdeposittheGrouphasis
$1,286,221 (March 2023: $1,224,361) which represents 0.95% (March 2023: 1.11%) of total deposits. As at the reporting date the largest
aggregateofdepositsunderasingledepositholdertotals$2,850,000(March2023:$3,000,000)whichrepresents2.11%(March2023:2.73%)of
totaldepositsandhaveaweightedaveragematuritydateof7.99monthsfromreportingdate(March2023:16.02monthsfromreportingdate).
$645,066 of the Term deposits held by related parties has been approved for early withdrawal on 28 April 2023 in compliance with General
Finance Limited ‘early repayment’ terms of offer criteria included in the General Finance Limited Product Disclosure Statement.
First rankingsecurityinterest over theassetsandundertakingsof GeneralFinanceLimitedinfavourof theTrustee
(subject only to any prior security interests permitted by the Trust Deed and preferential claims given priority by
operation of law).
37
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 8: RISK MANAGEMENT
8.1 Credit risk
20242023
$$
Northland
6,146,498 1,412,729
Auckland
93,905,052 82,157,883
Waikato
3,268,816 3,671,767
Bay of Plenty
1,440,507 1,641,255
Wellington
6,172,735 8,403,589
Other North Island
8,082,401 6,000,304
Canterbury
10,931,866 3,622,661
Otago
2,017,465 3,144,922
Marlborough
2,175,565 451,064
Total
134,140,905 110,506,174
The Group is exposed to a variety of financial risks comprising credit risk, liquidity risk, market risk (interest rate risk) and fair value risk.
Creditriskistheriskof financiallosstotheGroupif acounterpartytoa financialinstrument failstomeetitscontractualobligations, andarises
principally from the Group's loan receivables, cash and cash equivalents, bank deposits and accounts receivable.
Asat31March2024theGroup’sloanadvancesaresecuredoverfirstmortgages100%(March2023:100%).Therewerenounsecuredloansasat
31 March 2024 (March 2023: none).
*LVR - Loan to Valuation Ratio
To manage credit on finance receivables the Group performs credit evaluations on all customers requiring advances. The approval process
considersanumberoffactorsincludingthevalueofthesecuritycomparedtothevalueoftheamounttobeborrowed("loantovaluationratio"or
"LVR"*), the creditworthiness of the borrower and their ability to repay.
TheGroupoperatesacreditrisk(lending)policywhichstipulatestheGroup'srequirementsregardingthesecurityandLVR*oftheborrowing,the
creditworthinessofborrowers,geographicalspread,maximumloanexposure sizeandcreditapprovalauthoritylevels.Decisionsonwhetherto
approve or decline loans are made by the credit committee in line with the Group's credit risk policy. Loan receivables are subject to regular
scrutiny,asakeycomponentofcreditriskmanagement. Thisincludesareviewoftheborrower’srepaymenthistoryandanyinterestarrears;any
changesintheborrowerscircumstanceswhichcouldimpactontheir ability to repay either interest or principal amounts on their due dateand
any movement in the security value.
The maximum credit exposure of the Group, assuming a zero value for collateral is $164,215,960 (2023: $134,570,790). This includes loans
receivableof$134,140,905(2023:$110,506,174),undrawnloancommitmentsof$2,052,306(2023:$7,510),bankdepositsof$28,017,664(2023:
$24,010,168), accounts receivable of $4,850 (2023: $46,213) and related party receivables of $235 (2023: $725). Of this exposure, 82.9% is
covered by collateral over properties (2023: 82.1%) and 17.1% is deposited with registered New Zealand banks (2023: 17.8%).
Loanreceivablescreditexposuresareconcentratedintheresidentialproperty sector, particularly inthe North Island andthe AucklandMarket.
Asat31March2024,advances bytheGroupintheNorth Islandresidentialpropertysector represented88.7% (March2023: 93.5%)of itstotal
exposure, with 70.0% (March 2023: 74.3%) being in the Auckland market. The geographical profile of loan receivables is analysed further as
follows:
38
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
20242023
Number of
Exposures
Number of
Exposures
Less than $100,000
- -
Between $100,000 and $250,000
14 8
Between $250,000 and $500,000
19 15
Between $500,000 and $1,000,000
45 38
Between $1,000,000 and $1,500,000
18 16
Between $1,500,000 and $2,000,000
20 10
Between $2,000,000 and $2,500,000
3 10
Between $2,500,000 and $3,000,000
4 3
Between $3000,000 and $3,500,000
- 1
Between $3,500,000 and $4,000,000
- 2
Between $4,000,000 and $4,500,000
1 -
Between $4,500,000 and $5,000,000
2 -
Between $5,000,000 and $5,500,000
- -
Between $5,500,000 and $6,000,000
1 -
Total No. of Exposures
127 103
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:
20242023
$$
Up to 30 Days
1,770,408 5,142,353
31 - 60 Days
7,275,651 5,415,857
61 - 90 Days
504,683 -
91 - 120 Days
- 555,465
120+ Days
802,704 3,506,381
Total
10,353,446 14,620,056
*ECL- Expected Credit Losses
12-month ECL*
Gross loans receivable totalling $1,770,408 (March 2023: $5,142,353) were pastdue andthe Grouphas concludedthere hasnot
been a significant increase in credit risk.
Lifetime ECL* not credit impaired
Grossloansreceivabletotalling$7,780,334(March2023:$5,415,857)werepastduebybetween30and90daysandtheGrouphas
concluded there has been a significant increase in credit risk.
Lifetime ECL* credit impaired
Gross loans receivable totalling $802,704 (March 2023: $4,061,846) were past due by greater than 90 days and the Group has
concluded there has been a significant increase in credit risk.
Theconcentrationofthecreditexposuretothesixlargestexposuresis18.8%(March2023:17.4%)ofthetotalloanportfolio.TheGrouphas
electedtodisclosethelargestsixexposuresasthisisconsideredtoprovideameaningfulindicationofconcentrationofcreditrisk.Anexposureis
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 6. Gross past due loan
receivables total $10,353,446 (March 2023: $14,620,056) which equates to 7.7% (March 2023: 13.2%) of total loan receivables.
TheGroupisalsoexposedtocreditriskfromdepositsheldwithbanks.Asatreportingdate,theGroupholdsdepositsinNewZealandRegistered
Banksincluding12.9%withBankofNewZealand(2023:40.3%),0.0%withASBBank(2023:1.3%),59.2%withHeartlandBank(2023:58.4%),5.6%
with Westpac New Zealand (2023: 0.0%), 22.3% with ANZ Bank New Zealand, of which 22.3% is held through Forsyth Barr custodial account (2023:
0.1%, no custodial account)
39
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
8.2 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.
2024Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Amortised cost
Cash and cash equivalents
15,303,073 15,303,073 - - -
Bank deposits
13,165,370 5,998,667 7,166,703 - -
Other financial assets
19,985 19,985 - - -
Loan receivables
145,576,153 68,609,818 35,628,786 33,543,389 7,794,160
Totals
174,064,581 89,931,543 42,795,489 33,543,389 7,794,160
Financial liabilities
Amortised cost
Term deposits
145,372,958 43,902,980 50,943,680 38,076,355 12,449,943
Other payables
1,325,542 1,325,542 - - -
Totals
146,698,500 45,228,522 50,943,680 38,076,355 12,449,943
Net cashflow
27,366,081 44,703,021 (8,148,191) (4,532,966) (4,655,783)
2023Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Amortised cost
Cash and cash equivalents
14,085,363 14,085,363 - - -
Bank deposits
10,020,923 10,020,923 - - -
Other financial assets
68,591 68,591 - - -
Loan receivables
115,135,378 70,460,010 43,424,316 1,251,052 -
Totals
139,310,255 94,634,887 43,424,316 1,251,052 -
Financial liabilities
Amortised cost
Term deposits
116,607,943 47,036,067 34,013,191 23,855,967 11,702,718
Other payables
1,943,161 1,943,161 - - -
Totals
118,551,104 48,979,228 34,013,191 23,855,967 11,702,718
Net cashflow
20,759,151 45,655,659 9,411,125 (22,604,915) (11,702,718)
Contractual Cash Flows
The Group operates a liquidity risk policy and endeavours to maintain sufficient funds to meet its commitments based on forecasted cashflow
requirements. Management has internal control processes and contingency plans to actively manage the lending and borrowing portfolios to
ensurethenetexposuretoliquidityriskisminimised.Theexposureisreviewedonanon-goingbasisfromdailyprocedurestomonthlyreporting
as part of the Group's liquidity management policies and processes.
Contractual Cash Flows
Thefollowingtablessetouttheundiscountedcontractualcashflows,andtheundiscountedexpectedcashflows,of theGroup’s financialassets
and liabilities.
40
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2024Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Amortised cost
Cash and cash equivalents
15,686,236 15,686,236 - - -
Bank deposits
13,165,370 5,998,667 7,166,703 - -
Other financial assets
19,985 19,985 - - -
Loan receivables
152,474,660 37,772,535 21,226,360 68,903,951 24,571,814
Totals
181,346,251 59,477,423 28,393,063 68,903,951 24,571,814
Financial liabilities
Amortised cost
Term deposits
154,835,296 19,692,023 22,797,682 45,216,718 67,128,873
Other payables
1,325,542 1,325,542 - - -
Totals
156,160,838 21,017,565 22,797,682 45,216,718 67,128,873
Net cashflow
25,185,413 38,459,858 5,595,381 23,687,233 (42,557,059)
2023Total0 - 6 7 - 1213 - 24
24+
MonthsMonthsMonthsMonths
$$$$$
Financial assets
Amortised cost
Cash and cash equivalents
14,361,602 14,361,602 - - -
Bank deposits
10,020,923 10,020,923 - - -
Other financial assets
68,591 68,591 - - -
Loan receivables
120,857,051 38,221,976 24,451,716 57,557,833 625,526
Totals
145,308,167 62,673,092 24,451,716 57,557,833 625,526
Financial liabilities
Amortised cost
Term deposits
123,586,143 20,987,638 15,510,520 39,981,225 47,106,760
Other payables
1,943,161 1,943,161 - - -
Totals
125,529,304 22,930,799 15,510,520 39,981,225 47,106,760
Net cashflow
19,778,863 39,742,293 8,941,196 17,576,608 (46,481,234)
-60% term deposit reinvestment rate for 31 March 2024 (March 2023: 60%).
-Cash and cash equivalents are expected to earn interest for the first six months at 5.01% pa
-Term deposit reinvestments are made for a weighted average 18-month term at 7.57% pa (March 2023: 18-month term at 6.94% pa).
-
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 post pandemic economic environment, high inflation, high interest rates, uncertainty in the property
market, financial market uncertainties and post natural disaster environment estimated impacts:
Expected Cash Flows
Expected Cash Flows
50% of loans (March 2023: 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.
41
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
8.3 Market risk
The table below summarises the sensitivity of the Group’s financial assets and liabilities to interest rate risk.
2024 Carrying Amount
-1% Profit before
tax
-1% Equity
+1% Profit
before tax
+1% Equity
Financial Assets
$ $ $ $ $
Cash and cash equivalents
15,303,073 (153,031) (110,182) 153,031 110,182
Loan Receivables
134,140,905 (1,341,409) (965,814) 1,341,409 965,814
Bank Deposits
12,714,591 (127,146) (91,545) 127,146 91,545
Financial Liabilities
Term Deposits
135,192,864 1,351,929 973,389 (1,351,929) (973,389)
Total increase / (decrease)
(269,657) (194,152) 269,657 194,152
2023 Carrying Amount
-1% Profit before
tax
-1% Equity
+1% Profit
before tax
+1% Equity
Financial Assets
$ $ $ $ $
Cash and cash equivalents
14,072,194 (140,722) (101,320) 140,722 101,320
Loan Receivables
110,506,174 (1,105,062) (795,645) 1,105,062 795,645
Bank Deposits
9,937,974 (99,380) (71,554) 99,380 71,554
Financial Liabilities
Term Deposits
109,988,514 1,099,885 791,917 (1,099,885) (791,917)
Total increase / (decrease)
(245,279) (176,602) 245,279 176,602
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
interestrateriskinrespectofitsinterestearningassetsandinterestbearingliabilities.ChangestointerestratescanimpacttheGroup'sfinancial
results by affecting the interest spread earned on these assets and liabilities. Interest rates for finance receivables, term deposits, and bank
deposits(otherthanthoseoncall)arefixedforthetermoftheirrespectivecontracts.Interestratesarerepricedoncontractualmaturitydatesof
thefinancialinstruments.Thereisariskthatdifferentfinancialinstruments(suchasloanreceivablesandtermdeposits)arerepricedondifferent
dates, i.e. a repricing risk (refer to contractual cash flows under liquidity risk for repricing dates).
Marketriskistheriskthatchangesinmarketprices,suchasinterestrateswillaffecttheGroup'sincomeorthevalueofitsholdingsoffinancial
instruments.
42
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 9: SEGMENT REPORTING
$$$$$$
13,399,355 16,118 266,945 13,682,418 (3,276) 13,679,142
3,327,444 - - 3,327,444 - 3,327,444
- 135,695 - 135,695 2,361 138,056
- 409 - 409 - 409
3,190 4,000 681,468 688,658 (662,268) 26,390
- - - - - -
16,729,989 156,222 948,413 17,834,624 (663,183) 17,171,441
(8,096,442) - (3,276) (8,099,718) 3,276 (8,096,442)
(862,307) - - (862,307) - (862,307)
- (20,354) - (20,354) 2,929 (17,425)
7,771,240 135,868 945,137 8,852,245 (656,978) 8,195,267
(59,087) - - (59,087) - (59,087)
(1,530,721) (21,956) (238,883) (1,791,560) - (1,791,560)
(23,825) - (8,823) (32,648) - (32,648)
- - - - - -
(2,336,156) (54,373) (983,536) (3,374,065) 662,268 (2,711,797)
(938,360) - (12,600) (950,960) (1,481) (952,441)
2,883,091 59,539 (298,705) 2,643,925 3,809 2,647,734
156,967,691 955,791 5,940,759 163,864,241 (533,609) 163,330,631
136,525,549 3,796 482,404 137,011,749 (492,534) 136,519,214
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
219,219 - 3,593 222,812 - 222,812
219,219 - 3,593 222,812 - 222,812
Year ended 31 Mar 2024
Dividend income
Eliminations
Total SegmentsFinance
Cost of sales
Personnel expenses
Impairment Expense -
intangible assets
Revenue - interest income
Revenue - fee income (loan
receivables)
Research and Advisory
Depreciation and
amortisation
Income Tax Expense
Management has determined the operating segments based on the components of the Group that engage in business activities, which have
discrete financial information available and whose operating results are regularly reviewed by the Group's chief operating decision maker. The
chief operating decision maker has been identified as the Board of Directors. The chief operating decision maker has been identified as the
executive directors.
Three reportable segments have been identified as follows:
- Finance: Deposit taking and short term property mortgage lending.
- Research and Advisory: Provides investment advisory services and produces and sells investment research and publications.
- Corporate and Other: Corporate function and investment activities.
Fee and commission
expense (finance
Net revenue
Increase in allowance for
expected credit losses
Year ended 31 Mar 2024
Corporate and
OtherFinance
Other
- Advisory fee revenue
- Yearbook and research
sales
Other expenses
Net profit / (loss) after tax
Total Assets
Consolidated
Total Segments
Interest expense
Consolidated
Eliminations
Corporate and
Other
Revenue from contracts
with customers
Total revenue
Other income
Total Liabilities
Research and Advisory
43
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
$$$$$$
10,580,049 6,573 37,757 10,624,379 (5,956) 10,618,423
2,980,148 - - 2,980,148 - 2,980,148
- 134,256 - 134,256 (69,266) 64,990
- 636 - 636 - 636
23,456 - 502,506 525,962 (480,906) 45,056
- - 2,474,234 2,474,234 (2,474,234) -
13,583,653 141,465 3,014,497 16,739,615 (3,030,362) 13,709,253
(5,224,192) - (5,563) (5,229,755) 5,956 (5,223,799)
(781,120) - - (781,120) - (781,120)
- (10,932) - (10,932) 6,926 (4,006)
7,578,341 130,533 3,008,934 10,717,808 (3,017,480) 7,700,328
(573,970) - - (573,970) - (573,970)
(1,032,028) - (186,334) (1,218,362) - (1,218,362)
(93,683) - (32,752) (126,435) - (126,435)
- (537,141) - (537,141) - (537,141)
(1,526,579) (67,019) (681,626) (2,275,224) 374,895 (1,900,329)
(1,106,760) - 1,293 (1,105,467) 19,619 (1,085,848)
3,245,321 (473,627) 2,109,515 4,881,209 (2,622,966) 2,258,243
129,256,532 854,324 6,097,813 136,208,669 (120,810) 136,087,859
111,697,481 19,105 203,208 111,919,794 (84,705) 111,835,089
Acquisition of property, plant and equipment, intangible assets, and other non-current assets (excluding non-current finance receivables):
$$$$$$
- - 10,476 10,476 - 10,476
- - 10,476 10,476 - 10,476
Year ended 31 Mar 2023Eliminations
Income tax (expense) /
benefit
Cost of sales
Depreciation and
amortisation
- Advisory fee revenue
Increase in allowance for
expected credit losses
Revenue - fee income (loan
receivables)
Total Assets
Revenue - interest income
Total Liabilities
Eliminations
Consolidated
Interest expense
Total revenue
Research and Advisory
Corporate and
Other
Year ended 31 Mar 2023
Dividend income
Impairment Expense -
intangible assets
Personnel expenses
Net profit / (loss) after tax
Finance
ConsolidatedResearch and Advisory
Other expenses
Net revenue
Corporate and
OtherFinanceTotal Segments
Other
Total Segments
Revenue from contracts
with customers
- Yearbook and research
sales
Other income
Fee and commission
expense (finance
44
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 10: INTANGIBLE ASSETS
Bartercard
Trade
GoodwillLicencesDollars SoftwareTotal
$$$$$
Year ended 31 March 2023
Opening net book amount
2,350,730 277,000 290,348 638
2,918,716
Additions
- -
283
-
283
Disposals
- - (31,815) -
(31,815)
Amortisation charge
(537,141) - - (638)
(537,779)
Closing net book amount
1,813,589 277,000 258,816 - 2,349,405
At 31 March 2023
Cost
2,350,730 277,000 258,816 70,293 2,956,839
(537,141) - - (70,293) (607,434)
Net book amount
1,813,589 277,000 258,816 - 2,349,405
Bartercard
Trade Customer
GoodwillLicencesDollars RelationshipTotal
$$$$$
Year ended 31 March 2024
Opening net book amount
1,813,589 277,000 258,816 -
2,349,405
Additions
- - - 213,346
213,346
Disposals
- - (72,792) -
(72,792)
Amortisation and impairment charge
- - - (21,334)
(21,334)
Closing net book amount
1,813,589 277,000 186,024 192,012 2,468,625
At 31 March 2024
Cost
1,813,589 277,000 186,024 283,639 2,560,252
- - - (91,627) (91,627)
Net book amount
1,813,589 277,000 186,024 192,012 2,468,625
Impairment testing for cash-generating units (CGU)* containing brands and licences
20242023
Goodwill
$$
Allocated to the finance CGU*
1,323,729 1,323,729
Allocated to the research and advisory CGU*
489,860 489,860
1,813,589 1,813,589
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
Accumulated amortisation and impairment
Accumulated amortisation and impairment
*CGU - Cash Generating Unit
45
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
20242023
Impairment
$$
Impairment expense - Goodwill
- 537,141
Finance CGU*
Key assumptions used in value-in-use calculations
The key "base" assumptions used in the calculation of value-in-use for Finance CGU* are:
1) Loan receivables through the forecast period
2) Term Deposits through the forecast period
3) Loan weighted average interest rate growth through the forecast period
4) Term Deposit weighted average growth through the forecast period
5) Discount rates
6) Growth rates used to extrapolate cash flows beyond the forecast period
*CGU - Cash Generating Unit **FCFE - Free Cash flows to Equity Holders
The Group's indefinite useful life intangible assets have been tested for impairment at least annually. Research and Advisory & Finance CGU* was
last tested on 31 March 2024 with no impairment required. Impairment of $537,141 pertaining to the Research and Advisory CGU was recognised
in the year ended 31 March 2023.
The recoverable amount of the CGUs* has been determined based on value in use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are
extrapolatedusingtheestimatedlongtermgrowthratesstatedbelow.Thegrowthratedoesnotexceedthelongtermaveragefortheproducts,
industriesorcountryinwhichtheCGUs*operate.ForeachoftheCGU'swithgoodwillandindefinitelifelicences,thekeyassumptions,longterm
growth rate and discount rate used in the value in use calculations are as follows.
Theaggregatecarryingamountsofgoodwillandindefinitelifelicencesareoutlinedabove.Goodwillprimarilyrelatestogrowthexpectations,
expectedfutureprofitabilityandtheworkforceoftheCGU's*.TheGrouphasassessedthatthereisnoforeseeablelimittotheperiodoftimeover
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.
Pre-tax free cash flows to equity holders (FCFE)** have been forecasted based on growth in the non-bank deposit taking / residential lending
businesswithinthecurrentconstraintsofthelicence/trustdeedwhichprohibitstheCapitalRatiotogobelow8%.Theforecastedgrowthinnet
cash flows is driven primarily by the net interest and fee margin from forecasted growth in deposit funding and the loan book. Significant
expenditurehasbeenincurredsincethebusinesswaspurchasedbytheGrouptoensurethatthebusinesshasthecapacityandresourcestoallow
for the growth.
46
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Total Loan Receivables
Total Term
Deposits
Loan weighted
average interest
rate
Term Deposit
weighted average
interest rate
Year one growth 31.2%31.1%0.9%1.9%
Year two growth13.2%14.8%0.0%0.0%
Year three growth11.7%12.9%0.0%0.0%
Year four growth10.5%11.4%0.0%0.0%
Year five growth9.5%10.3%0.0%0.0%
Terminal growth beyond year 5
2.0%
Pre-tax discount rate 19.7%
Total Loan Receivables
Total Term
Deposits
Loan weighted
average interest
rate
Term Deposit
weighted average
interest rate
Year one growth39.4%38.5%-1.3%32.8%
Year two growth19.3%18.2%-0.3%4.4%
Year three growth16.2%15.4%0.0%0.0%
Year four growth13.9%13.3%0.0%0.0%
Year five growth12.2%11.8%0.0%0.0%
Terminal growth beyond year 5
2.1%
Pre-tax discount rate 21.3%
Loan Receivable and Term Deposits
Lending and Term Deposit Interest rates
Terminal growth beyond year five
The table below sets out the key assumptions for the Finance CGU* for testing done as at 31 March 2024:
31 March 2023 Assumptions
Cashflowsbeyondthefiveyearperiodareextrapolatedusingtheestimatedlongtermgrowthrateof2.1%whichisWestpacforecastrate.Thisis
alsoconsistentwiththemidpointoftheReserveBankofNewZealandmediumtermConsumerPriceIndexPolicyTargetrange(1%to3%),witha
focusonkeepingfutureaverageinflationnearthe2%targetmidpoint.Thegrowthratedoesnotexceedthelongtermaveragefortheproducts,
industries or country in which the CGUs* operate.
31 March 2024 Assumptions
Themostrecenthistoricdataontermdepositwithdrawals,top-ups,andnewdepositswasreviewedtoestimatetrendsintermdepositinflows,
whichinturnfundedthegrowthinloanreceivables.Fortheyearended31March2024,theactualgrowthinloanreceivableswas22%,andterm
deposits grew by 23%.This islower thanlast year'sforecast, primarilydue to lower demandfor new loans throughout the year.Consequently,
management controlled the growth of term deposits to match the lending demand and the required cash and cash equivalent reserves.
Theforecastedgrowthof 31.2%inloanreceivablesand31.1% interm depositsfor theyear ending31March2025 isconservativecomparedto
theaverageannualgrowthof35.5%forloanreceivablesand33.3%fortermdepositsoverthemostrecentthreeyearsending31March2024.For
the remaining forecast periods, the most recent increase in total loan receivables and the corresponding increase in total term deposits, as a
percentage of the total loan receivable increase, were used as primary assumptions.
*CGU - Cash Generating Unit
Weighted average interest on loans was assumed based on the interest rates and maturities of the existing loans with an incremental monthly
review for new loans during the first forecast period to 31 March 2025. The weighted average lending rate as at 31 March 2025 was then carried
forward for the remainder of the forecast period as a proxy.
Group is anticipating an increase in weighted average rate on term deposits given the existing competitive nature of the industry and higher levels
of inflation rates. The rate is expected to plateau at the end of the first forecast period to 31 March 2025. The rate from 31 March 2025 was
carried forward for the remainder for the forecast period as a proxy.
47
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Pre-tax discount rate
Sensitivity to change in key assumptions
Headroom/(Impairment)
$ '000
Base assumption65,514
Loan Receivable Growth57.0%
Term Deposit Growth-42.0%
Term Deposit interest rate Growth6.0%
Loan interest rate Growth-6.0%
Terminal growth beyond year 5
No material sensitivity
Pre-tax discount rate
No material sensitivity
Headroom/(Impairment)
$ '000
Base assumption65,514
Loan Receivable Growth + 10% above base51,812
Loan Receivable Growth - 10% below base74,066
Term Deposit Growth + 10% above base75,560
Term Deposit Growth - 10% below base50,322
Term Deposit interest rate Growth + 1% above base25,332
Term Deposit interest rate Growth - 1% below base45,908
Loan interest Growth + 1% above base46,220
Loan interest Growth - 1% below base25,020
The uncertainty in the cash flows for future periods has been built into discount rate.
The discount rates represent the current market assessment of the risks specific to the finance CGU*. The discount rate calculation is based on the
industry segment the CGU* is engaged in, and is derived from its weighted average cost of capital. The weighted average cost of capital takes into
account both the cost of debt and equity, however for the purposes of 31 March 2024 testing we put target Equity to Capital of 100%. The cost of
equity is derived from the expected return on investment by the Group’s investors using the capital asset pricing model allowing for unsystemic
risk adjustments. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated based on publicly
available market data at the time of testing. Adjustments to the discount rate are made in order to reflect a pre-tax discount rate.
*CGU - Cash Generating Unit
The following summarises the impairment or headroom that would have resulted had the noted changes to the "base" assumptions been made,
with all other assumptions remaining constant:
The most sensitive assumptions in the calculation of value-in-use are term deposits growth, loan receivable growth, weighted average loan
interest rate growth and weighted average term deposit interest rate growth. The following summarises the amount by which the key
assumptions would need to change, with all other assumptions remaining constant, for the recoverable amount to equal the carrying amount:
The specific risk premium includes adjustments to the basic Capital Asset Pricing Model inputs to arrive at a risk adjusted cost of equity. These
adjustments include current market factors (other than systemic risks) and asset specific risks. In arriving at specific risk premium management
have considered factors such as:
1) Small Size Risk
2) Key Personnel Dependency Risk
3) Limited Product Line Risk
4) Geographical/Concentration Risk
5) Forecast Risk
48
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Research and advisory CGU*
Key assumptions used in value-in-use calculations
31 March 2024 AssumptionsNet Revenue Expenditure
Working Capital
Movements
Pre-tax FCFF***
Actual 31 March 2024 year
119,750 (77,281) 4,359 46,828
Forecast 2025
124,417 (77,000) (1,048) 46,369
Forecast 2026
127,397 (78,844) (558) 47,995
Forecast 2027
234,559 (98,051) (586) 135,921
Forecast 2028
239,051 (99,929) (616) 138,506
Forecast 2029
243,605 (101,833) (646) 141,126
Terminal growth beyond year five
2.0%
Pre-tax discount rate22.1%
31 March 2023 AssumptionsNet Revenue Expenditure
Working Capital
Movements
Pre-tax FCFF***
Actual 31 March 2023 year
123,960 (67,019) (11,117) 45,824
Forecast 2024
151,590 (85,909) (1,815) 63,866
Forecast 2025
159,168 (92,705) (429) 66,034
Forecast 2026
164,340 (95,718) (451) 68,171
Forecast 2027
255,979 (118,192) (473) 137,314
Forecast 2028
262,378 (121,146) (407) 140,825
Terminal growth beyond year five
2.1%
Pre-tax discount rate21.5%
Net Revenue
Expenditure
The table below sets out the key assumptions for Research and Advisory CGU*:
*CGU - Cash Generating Unit
The key "base" assumptions used in the calculation of value-in-use for Research and Advisory CGU* are:
1) Net Revenue Expectations through the forecast period
2) Expenditure Expectations through the forecast period
3) Pre-tax Discount rates
4) Terminal Growth rates used to extrapolate cash flows beyond the forecast period
The Group is expecting expenditure to stay in line with historic trends, normalised for unusual/one off events. Most of these form part of the
Group recharges based on resources allocated. Salaries and Wages are driven by the project revenue and labour allocations required, these will
increase for the year ended 31 March 2027 and 31 March 2028, based on the normalised historic levels when Capital Raising/Listing Revenue has
been derived. Inflationary factor has been allocated to expenditures at 5% for the Forecast 2025; 3.25% for Forecast 2026; 2.75% for the Forecast
2027 and 2.5% for the Forecast 2028 and 2029.
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.
Net Revenue is calculated as gross revenue less forecast 15% direct commission.
Forecast Revenue consists of :
1)Debtstructuring/BrokerageRevenue:theGroupisanticipatingthatCapitalMarketswillneedmoreprofessionaladviceonthestructure,thisis
backed up by an increasing demand for the service. Group is expecting to perform 4 projects per annum in the forecast period based on the
number of projects performed for the year ended 31 March 2024.
2)CapitalRaising/ListingRevenue:NoCapitalRaisingrevenueisforecastforthe2yearsended31March2026duetotheunpredictablestateof
the economy & anticipated Group commitments. Capital Raising projects are forecast to start in the year ended 31 March 2027 and 31 March
2028aseconomyisassumedtostartpickingup.CapitalRaisingprojectsareassumedtorunona2yearbasisandprobabilityofsecuringprojects
is assumed at 70% per year. Value of the projects is set at historic average.
3) Other Income/Commissions Revenue - incidental ad hoc income based on historic trends.
It is assumed that all projects will be in the form of cash.
**FCFF - Free Cash flows to the Firm
49
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Pre-tax discount rate
Terminal growth beyond year five
Sensitivity to changes in key assumptions
Headroom/(Impairment)
$
Net Revenue Growth + 10% above base
102,151
Net Revenue Growth - 10% below base
(102,151)
Expenditure Growth + 10% above base
(43,366)
Expenditure Growth - 10% below base
50,352
Pre-tax Discount rate Growth + 1% above base
(28,751)
Pre-tax Discount rate Growth - 1% below base
31,886
Terminal Growth rate Growth + 1% above base
16,478
Terminal Growth rate Growth - 1% below base
(14,918)
The discount rates represent the current market assessment of the risks specific to the Research and Advisory CGU*. The discount rate calculation
is based on the industry segment the CGU* is engaged in, and is derived from its weighted average cost of capital. The weighted average cost of
capital takes into account both the cost of debt and equity. The cost of equity is derived from the expected return on investment by the Group’s
investors using the capital asset pricing model allowing for unsystemic risk adjustments. The cost of debt is derived from weighted average
interest rate paid by the finance segment to deposit holders as at 31 March 2024. Segment-specific risk is incorporated by applying individual beta
factors. The beta factors are evaluated based on publicly available market data at the time of testing. Adjustments to the discount rate are made
in order to reflect a pre-tax discount rate.
Cashflowsbeyondthefiveyearperiodareextrapolatedusingtheestimatedlongtermgrowthrateof2.1%whichisWestpacforecastrate.Thisis
alsoconsistentwiththemidpointoftheReserveBankofNewZealandmediumtermConsumerPriceIndexPolicyTargetrange(1%to3%),witha
focusonkeepingfutureaverageinflationnearthe2%targetmidpoint.Thegrowthratedoesnotexceedthelongtermaveragefortheproducts,
industries or country in which the CGUs* operate.
The most sensitive assumptions in the calculation of value-in-use for the Research and Advisory CGU* is Revenue Growth; Expenses Growth;
Discountrateandlongtermgrowthrate.Thesensitivitytest oftheamountbywhichthekeyassumptionswouldneedtochange,withallother
assumptions remaining constant, for the recoverable amount to equal the carrying amount is not relevant, given that the base assumption is
break even position. The following summarises the impairment or headroom that would have resulted had the noted changes to the "base"
assumptions been made, with all other assumptions remaining constant:
The uncertainty in the cash flows for future periods has been built into the discount rate.
The specific risk premium includes adjustments to the basic Capital Asset Pricing Model inputs to arrive at a risk adjusted cost of equity. These
adjustments include current market factors (other than systemic risks) and asset specific risks. In arriving at specific risk premium management
have considered factors such as:
1) Small Size Risk
2) Key Personnel Dependency Risk
3) Limited product line Risk
4) Geographical/Concentration Risk
5) Forecast Risk
*CGU - Cash Generating Unit
50
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 11: INVESTMENT IN SUBSIDIARIES
Subsidiary
20242023
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.
NOTE 12: INVESTMENTS
20242023
$$
Investment in unlisted entities
126,624 214,730
NOTE 13: EQUITY
Number$Number$
(a) Ordinary shares
363,574,975 21,561,120 363,574,975 21,561,120
(b) Reserves
Financial Assets Share-basedTotal
at FVOCI*paymentsReserves
$$$
Balance at 1 April 2022
(280,314) 34,516 (245,798)
(73,713) - (73,713)
Balance at 31 March 2023
(354,027) 34,516 (319,511)
- (16,908) (16,908)
(31,240) - (31,240)
236,891 - 236,891
Balance at 31 March 2024
(148,376) 17,608 (130,768)
All ordinary shares rank equally and entitle the holder to participate in dividends and to share in the proceeds of winding up the Company in
proportion to the number of and amounts paid on the shares held. One vote is attached to each fully-paid ordinary share. Shares have no par
value.
2023
*FVOCI - Fair Value through Other Comprehensive Income
Revaluation of financial assets at FVOCI*
2024
Revaluation of financial assets at FVOCI*
Disposed financial assets transferred to retained earnings net of tax
Expired warrants converted to retained earnings
Ownership Interest Held
51
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 14: EARNINGS PER SHARE
20242023
CentsCents
0.72 0.98
0.72 0.98
20242023
Basic earnings per share
$$
2,633,161
2,258,243
2,633,161
2,258,243
20242023
NumberNumber
363,574,975
230,023,343
363,574,975
230,023,343
NOTE 15: SHARE BASED PAYMENTS
Warrants issued to directors and senior managers
Number $
Balance at 1 April 2022
8,500,000 34,516
Balance at 31 March 2023
8,500,000 34,516
(4,250,000) (16,908)
Balance at 31 March 2024
4,250,000 17,608
NOTE 16: OTHER EXPENSES
Included in other expenses are the following amounts:
20242023
$$
Directors fees
463,642 420,790
Auditors Remuneration
- Audit and other assurance services
- Audit of financial statements (Grant Thornton New Zealand Audit Limited)
232,534 228,900
- Review of quarterly trustee certificates (Grant Thornton New Zealand Audit Limited)
3,000 3,000
Total remuneration paid to auditors
235,534 231,900
Directors' and Senior Managers'
Warrants
1
Warrants issued on 27 September 2021 lapsed on non satisfaction of
the terms of the warrant (note 13)
During the year ended 31 March 2024, 4,250,000 of warrants lapsed due to non-saftisfaction of the terms of the warrant. (31 March 2023: nil)
The Senior Management warrants comprise 4,250,000 2024 warrants which entitled the holder to subscribe for one ordinary share for each
warrant exercisable prior to 30 June 2024, at 9.0 cents per share.
The Senior Management warrants are not transferable and require the relevant senior manager to remain employed by or to be a contractor to
the Company at the date of the exercise. The warrants are not quoted on NZX.
Diluted earnings per share attributable to the ordinary equity holders
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
Basic earnings per share attributable to the ordinary equity holders
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating basic earnings per share:
Profit / (loss) attributable to the ordinary equity holders of the Company used in
calculating diluted earnings per share:
Weighted average number of ordinary shares used as the denominator in calculating
diluted earnings per share
52
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 17: TAXATION
17.1 Income tax
20242023
$$
Net operating profit before taxation
3,585,602 3,344,091
Income tax expense at prevailing rates (2024: 28%; 2023: 28%)
(1,003,969) (936,345)
Tax impact of expenses not deductible for tax purposes
(12,070) (159,619)
Tax impact of OCI deductible loss
78,446 -
Over-provision of tax in prior year
(14,848) 10,116
Taxation expense per the statement of comprehensive income
(952,441) (1,085,848)
Comprising:
- Current tax
(864,434) (1,264,253)
- Deferred tax
(88,007) 178,405
(952,441) (1,085,848)
17.2 Deferred tax asset
20242023
$$
Balance at beginning of year
313,454 135,049
(Charged) / credited to profit or loss
Increase / (decrease) in impairment loss provision
(85,054) 160,711
Increase / (decrease) in accrued expenses
(7,268) 13,767
Increase / (decrease) in lease liability
- (48,822)
Increase / (decrease) in unearned income
4,315 11,659
Increase / (decrease) in right of use asset
- 41,090
(88,007) 178,405
(Charged) / credited to other comprehensive income
Changes in the fair value of equity investments at fair value through other comprehensive income
(43,273) -
182,173 313,454
Deferred tax attributed to:
20242023
$$
Deferred tax assets:
Impairment loss provision
132,300 217,354
Accrued expenses
33,899 41,168
Fair value of equity investments at fair value through other comprehensive income
- 43,273
Unearned income
15,974 11,659
182,173 313,454
17.3 Imputation credit account
20242023
$$
Balance at beginning of year
966,368 204,395
Tax paid
1,460,165 770,418
Tax refund received
(15,149) (8,445)
2,411,384 966,368
53
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NOTE 18: RECONCILIATION OF NET SURPLUS WITH CASH FLOWS FROM OPERATING ACTIVITIES
Note20242023
$$
Net profit after tax
2,633,161 2,258,243
Adjustment for non-cash and other items
Movement in allowance for expected credit losses
59,087 573,970
Impairment of Goodwill
10 - 537,141
Deferred tax movement
17 131,281 (178,405)
Depreciation and amortisation
9 32,647 126,435
Interest on lease liability
- 5,008
Adjustment for movements in working capital
(Increase) / decrease in loan receivables (net advances)
(23,144,389) (28,665,673)
Increase / (decrease) in term deposits (net receipts)
24,485,708 22,534,412
(Increase) / decrease in accrued interest on loans receivable
62,278 (369,482)
(Increase) / decrease in capitalised loan fees
(982,490) (880,116)
(Increase) / decrease in capitalised interest
23,908 398,461
(Increase) / decrease in accounts receivable
41,363 (28,863)
(Increase) / decrease in related party receivable
490 (725)
(Increase) / decrease in prepayments and other current assets
50,463 (126,730)
(Increase) / decrease in prepaid commission
28,164 (15,123)
(Increase) / decrease in Bartercard trade dollars
72,792 31,532
Increase / (decrease) in income tax payable
(654,274) 491,424
Increase / (decrease) in deferred income
621,151 207,523
Increase / (decrease) in interest payable
718,642 (679,435)
Increase / (decrease) in related party payable
(111,044) 104,219
Increase / (decrease) in accounts and other payables
111,018 230,569
Net cash (outflow) / inflow from operating activities
4,179,956 (3,445,615)
NOTE 19: RELATED PARTY BALANCES AND TRANSACTIONS
Related party receivables:
20242023
$$
Key Management Personnel
235 725
Related party payables:
20242023
$$
Key Management Personnel
6,366 117,410
The above amounts payable to related parties are unsecured, interest-free and repayable on demand.
Key Management Personnel (KMP) includes the Company’s Directors, subsidiary company Directors, Legal Counsel, and Chief Financial Officer.
54
GENERAL CAPITAL LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Other related party balances:
20242023
$$
Term deposits held by related parties
1
1,300,724 2,342,793
Loans receivable from related parties
2
312,288 -
Transactions with related parties
20242023
Related PartyType Transaction
$$
Expense
1,181,431 986,963
Expense
101,682 224,778
Expense Recharge of expenses
284,130 356,582
Intangible Assets
Client Relationship
200,000 -
Contra Expense Recharge of expenses
20,238 30,310
NOTE 20: EVENTS SUBSEQUENT TO REPORTING DATE
-the operations, in financial years subsequent to reporting date, of the Group, or
-the results of those operations, or
-the state of affairs, in financial years subsequent to reporting date, of the Group.
Short term Remuneration
There has been no matters or circumstance, which has arisen since reporting date that has significantly affected or may significantly affect:
1
Key Management Personnel (KMP) includes the Company’s Directors, subsidiary company Directors, Corporate Counsel, and Chief Financial
Officer.
Key Management Personnel
(KMP)
1
Interest paid or capitalised on term deposits held by KMP or
their family members
1
Includes term deposits held by Key Management Personnel, Directors, their families and their controlled entities. During the year ended 31
March 2024 $645,066 of the Term deposits held by related parties has been approved for early withdrawal on 28 April 2023 in compliance with
the Company’s ‘early repayment’ terms of offer criteria included in the Company’s Product Disclosure Statement. ($3,677,705 approved for early
withdrwal during the year ended 31 March 2023).
2
On 24 January 2024, a capitalised interest loan of up to $359,092 was approved for a related party. The loan is an arms length transaction
conducted on normal commercial terms. (Year ended 31 March 2023: nil)
55
Ordinary shares
LARGEST HOLDERS OF QUOTED FINANCIAL PRODUCTS (as at 27 May 2024)
Ordinary Shares
Rank Registered Holder
Ordinary Shares
Held
%
1
Borneo Capital Limited
1
127,010,424
34.93%
2 API No 1 Limited Partnership
86,956,522
23.92%
3 Lynn Landmark Michel & Mat Floyd Trustee Co (No 1) Limited
34,782,609
9.57%
4 Brent Douglas King
22,115,317
6.08%
5 Snowdon Peak Investments Limited
14,882,720
4.09%
6 Owen Arvind Daji
7,030,463
1.93%
7 Olivia Ling
6,667,775
1.83%
8 Montezemolo Holdings Limited
6,511,945
1.79%
9 John Tomson
6,289,722
1.73%
10 Stephen John Sinclair & Jacqueline Margaret Sinclair & Roger Frederick Wallis 5,667,424 1.56%
11 Syed Hizam Alsagoff
4,000,000
1.10%
12Citibank Nominees (New Zealand) Ltd
3,297,873
0.91%
13
New Zealand Depository Nominee Limited
1
3,140,268
0.86%
14 Liyun Chen
2,000,000
0.55%
15 Garth William Ward
1,839,122
0.51%
16 Lik Sean Chang
1,494,305
0.41%
17 Sii Yih Ting
1,480,000
0.41%
18 CFS NBDT Interest Limited
1,387,280
0.38%
19 Saje Limited
1,333,333
0.37%
20 Koon Weng Lee
1,291,325
0.36%
339,178,427
93.29%
1
Borneo Capital Limited's share holding has been adjusted for 88,510 shares purchased through Sharesies. These shares are held by New Zealand
Depository Nominee Limited on behalf of Sharesies Nominee Limited, therefore these were adjusted for Borneo Capital Limited shares.
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
Allordinarysharesrankequallywithonevoteattachedtoeachordinaryshare.Ordinarysharesentitletheholdertoparticipateindividendsand
the proceeds on the winding up of the Company in proportion to the number of shares held.
The Company had one class of quoted financial products on issue during the year ended 31 March 2024.
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).
56
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
SPREAD OF FINANCIAL PRODUCT HOLDERS (as at 27 May 2024)
Ordinary Shares
Size of Holding
Number of
Shareholders
%
Number of
Ordinary Shares
%
1 - 1,999
485
66.5%
31,972
0.0%
2,000 - 4,999
25
3.4%
71,282
0.0%
5,000 - 9,999
59
8.1%
440,403
0.1%
10,000 - 49,999
63
8.6%
1,443,444
0.4%
50,000 - 99,999
19
2.5%
1,289,546
0.4%
100,000 - 999,999
44
6.0%
9,627,060
2.6%
1,000,000 - 9,999,999
10
1.4%
7,106,297
2.1%
10,000,000 and over
24
3.3%
343,564,971
94.5%
729
100%
363,574,975
100%
Geographic Spread
New Zealand
620
85.0%
350,641,077
96.4%
Malaysia
66
9.1%
8,144,593
2.2%
Rest of World
43
5.9%
4,789,305
1.3%
729
100%
363,574,975
100%
SUBSTANTIAL PRODUCT HOLDERS (as at 31 March 2024)
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
127,010,424
34.93%
API No 1 Limited Partnership
86,956,522
23.92%
Brent Douglas King
1
36,998,037
10.18%
Lynn Landmark Michel & Mat Floyd Trustee Co (No 1) Limited
34,782,609
9.57%
285,747,592
Total Ordinary Shares on issue as at 31 March 2024
363,574,975
1
Includes holding by Brent Douglas King personally and as a sole director and shareholder of Snowdon Peak Investments Limited.
As at 31 March 2024 the Company had the following shareholders that 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.
57
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS' REMUNERATION AND OTHER BENEFITS FOR THE PERIOD ENDED 31 MARCH 2024
Directors Fees
2
Other Remuneration
$$
Rewi Hamid Bugo
1
56,000 60,000
Brent Douglas King
3
35,000 386,410
Huei Min Lim (ceased 31 May 2023)
5,333 -
Gregory Stephen James
32,000 -
Paul William Zingel
32,000 -
Megan Dominique Glen
32,000 -
Simon John McArley (ceased 17 July 2023)
14,933 -
Donald Frederick Hattaway (director of subsidiary)
54,200 -
Robert Garry Hart (director of subsidiary) (ceased 31 October 2023)
20,417 -
Anton Steven Ian Douglas (director of subsidiary, ceased 8 Nov 2023)
17,500 -
Gregory John Pearce (director of subsidiary)
5
41,400 109,158
Anita Maria Killeen
5,333 -
346,116 555,568
$
Base salary
310,000
FY24 Bonus
25,000
Other benefits
4
51,410
386,410
Other Remuneration of the Managing Director:
The employment contract between the Company and Brent Douglas King is deemed to be a Material Transaction as defined by the NZX Listing
Rules (the Rules) and is subject to the exception under 5.2.2(e) of the Rules.
5
Other remuneration paid to Gregory John Pearce comprises of commission for credit control/recovery and loan administration.
2
The above fees are recorded exclusive of GST, if any.
4
OtherbenefitscompriseofKiwisaver,vehicleallowance,anda10%commissiononallconsultingrevenuechargedbyInvestmentResearch
Group Ltd.
3
Other remuneration paid to Brent Douglas King comprises salaries and other benefits paid to Brent Douglas King in his capacity as Managing
Director of General Capital Limited and its subsidiaries. Brent Douglas King's other remuneration is broken down below.
1
Other remuneration paid to Rewi Hamid Bugo comprises of travel allowance.
58
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS INTEREST REGISTER
DIRECTORS DEALINGS IN QUOTED FINANCIAL PRODUCTS DURING THE YEAR ENDED 31 MARCH 2024
Date of
Transaction
Financial
Product
Number of
Financial
Products
Acquired /
(disposed)
Consideration
(received) / paid $
Rewi Hamid Bugo
1
14 & 15 June 2023
Ordinary Shares
237,181
19,561
Rewi Hamid Bugo
1
7, 13, 20 July 2023
Ordinary Shares
(237,181)
(16,802)
Gregory Stephen James
02 & 12 June 2023
Ordinary Shares
100,242
7,200
Relevant Interests
DIRECTORS QUOTED FINANCIAL PRODUCT HOLDINGS AT 31 MARCH 2024
Ordinary Shares
Management
Warrants
NumberNumber
Rewi Hamid Bugo
1
127,010,424 -
Paul William Zingel
2
34,782,609 -
Brent Douglas King
6
22,115,317 4,250,000
Brent Douglas King
3
14,882,720 -
Gregory Stephen James
440,925 -
86,956,522 -
Donald Frederick Hattaway (director of subsidiary)
5
892,890 -
Gregory John Pearce (director of subsidiary)
50,000 -
287,131,407 4,250,000
Relevant Interests
Other Notes
1
DeemedrelevantinterestbyvirtueofRewiHamidBugoowningmorethan20%ofthevotingproductsofBorneoCapitalLimited(theregistered
holder). Shares were acquired during June 2023 and disposed of in July 2023.
Megan Dominique Glen
4
1
DeemedrelevantinterestbyvirtueofRewiHamidBugoowningmorethan20%ofthevotingproductsofBorneoCapitalLimited(theregistered
holder).
2
Deemed relevant interest by virtue of Paul William Zingel being an associate of the trustees of Bedford Trust (the registered holders).
6
On 27 September 2021, Brent Douglas King in his capacity as a senior manager of General Capital Limited was issued4,250,000 warrantsthat
entitletheholderofeachwarranttosubscribeforcashforoneordinaryshareintheCompanyatanexercisepriceof9.0centspershareatany
time prior to 30 June 2024.
5
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
Deemedrelevant interestbyvirtueof BrentDouglasKingowningmorethan20%ofthevotingproductsof SnowdenPeakInvestmentsLimited
(the registered holder).
4
Deemed relevant interest by virtue of Megan Dominique Glen owning more than 20% of the voting products of Minatoku Consulting Limited
holding 0.5% interest in the total partnership interest on issue of API No 1 Limited Partnership (the registered holder).
59
GENERAL CAPITAL LIMITED
SHAREHOLDER AND STATUTORY INFORMATION
DIRECTORS INTEREST REGISTER (CONTINUED)
During the year ended 31 March 2024, pursuant to section 140 of the Companies Act 1993 the directors disclosed the following interests:
Brent Douglas King
Equity Investment Advisers Limited
Moneyonline Limited
Snowdon Peak Investments Limited
Paul William Zingel
Bedford Trust
Rewi Hamid Bugo
Borneo Capital Limited
Megan Dominique Glen
API No1 Limited PartnershipMinatoku Consulting Limited
Donald Frederick Hattaway (director of subsidiary)
Casrom Trustee Company LimitedRomana Benevolent Trust
Anton Steven Ian Douglas (director of subsidiary) (ceased 8 November 2023)
API No 1 Limited PartnershipGrey River Capital Advisors Limited
Robert Garry Hart (director of subsidiary) (ceased 31 October 2023)
Ellice Tanner Hart Limited
INDEMNITY AND INSURANCE
EMPLOYEE REMUNERATION
Remuneration Range20242023
$100,000 - $109,9991-
$110,000 - $119,999--
$120,000 - $129,9991-
$130,000 - $139,99912
$140,000 - $149,999--
$150,000 - $159,0001-
$160,000 - $169,999--
$170,000 - $179,999--
$180,000 - $189,999--
$190,000 - $199,999--
$200,000 - $209,999-1
$210,000 - $219,999--
$220,000 - $229,999--
$230,000 - $239,999--
$240,000 - $249,999 2-
DONATIONS MADE
During the year ended 31 March 2024 the Group made total donations of $6,417.
Duringtheyearended31March2024,thenumberofemployeesorformeremployeesoftheGroupnotbeingdirectorsofGeneralCapitalLimited
orsubsidiaries,whoreceivedremunerationandotherbenefitsintheircapacityasemployees,thevalueofwhichexceeded$100,000fortheyear
was as follows:
Number of Employees
In accordance with section 162 of the Companies Act 1993, the Group has provided insurance for and indemnities to, directors and employees of
the Group for losses from actions undertaken in the course of their duties. The insurance includes indemnity costs and expenses incurred to
defend an action that falls outside the scope of the indemnity.
60
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:Grant Thornton New Zealand Audit Limited
Level 4, Grant Thornton House
152 Fanshawe 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
61
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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