iCar Asia Limited
ACN 157 710 746
Appendix 4E
Preliminary Financial Report
For the period ended 31 December 2013
"Results for announcement to the market"
Key information
Period ended 31 December
2013
2012
($' 000)
($' 000)
Change
Revenue from ordinary activities
1,346
306
340%
Loss from ordinary activities after tax attributable to members
(6,902)
(1,757)
(293%)
Net loss for the period
(6,902)
(1,757)
(293%)
Basic (loss)/earnings per share (cents)
Diluted (loss)/earings per share (cents)
NTA per share (cents)
(4.10)
(2.43)
(69%)
(4.10)
(2.43)
(69%)
6.51
5.44
20%
Dividends
No dividends have been paid or decided in 2013. There is no dividend reinvestment plan in
operation.
Basis of this report
This report includes the attached audited financial statements of iCar Asia Limited and its
controlled entities for the period ended 31 December 2013. Together these documents contain
all the information required by Appendix 4E of the Australian Securities Exchange Listing Rules.
It should be read in conjunction with iCar Asia Limited's Annual Report when released and is
lodged with the Australian Securities Exchange under listing rule 4.3A.
For and on behalf of the Board
Patrick Grove
Chairman
26-February-2014
iCar Asia Limited and Controlled Entities
ACN 157 710 846
Annual Financial Report - 31 December 2013
iCar Asia Limited and Controlled Entities
Corporate directory
31 December 2013
Directors
Chief Executive Officer
Patrick Grove (Chairman)
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Cameron McIntyre
Damon Rielly
Damon.Rielly@icarasia.com
Company secretary
Nick Geddes
Registered office
Principal place of business
Share register
Auditor
Level 3
70 Pitt Street
Sydney NSW 2001
Australia
Tel. +61 (2) 9239 0277
Fax. +61 (2) 9233 4477
Level 30, Tower A
Menara UOA Bangsar
No 5 Jalan Bangsar Utama, 59000 Kuala Lumpur
Malaysia
Tel. +60 (3) 2776 6000
Fax. +60 (3) 2776 6020
Computershare
Level 3
60 Carrington Street
Sydney NSW 2000
Australia
www.computershare.com
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
Australia
Stock exchange listing
iCar Asia Limited and Controlled Entities shares are listed on the
Australian Securities Exchange (ASX code: ICQ)
Website
www.icarasia.com
1 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'consolidated entity') consisting of iCar Asia Limited and Controlled Entities (referred to hereafter as
the 'company' or 'parent entity') and the entities it controlled for the year ended 31 December 2013.
Directors
The following persons were directors of iCar Asia Limited and Controlled Entities during the whole of the financial year
and up to the date of this report, unless otherwise stated:
Patrick Grove (Non-Executive Chairman)
Lucas Elliott (Non-Executive Director)
Shaun Di Gregorio (Non-Executive Director)
Mark Britt (Non-Executive Director)
Cameron McIntyre (Non-Executive Director) Appointed 26 April 2013
Nick Geddes (Non-Executive Director) Resigned 5 June 2013
Principal activities
The principal activities of iCar Asia during the financial year were that of developing and operating car classified and
content websites in each of the developing markets the consolidated entity operates in Malaysia, Indonesia and
Thailand.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $6,901,778 (31 December 2012:
$1,756,618).
Group Overview
2013 was iCar Asia’s first full year of operations since listing on the ASX in 2012 and was a year of dynamic growth in
our key metrics of listings, audience and leads.
Our vision to become ASEAN’s largest and most trusted digital automotive market place is well on course, having
established & extended our leadership position in all our three countries of operation – Malaysia, Thailand &
Indonesia.
Our clear strategic focus resulted in an increase in the number of cars for sale on iCar Asia websites by 207% over
the course of the year, with over 460,000 listed for sale at the end of December 2013. The establishment of this clear
leadership position in listing volume & quality, coupled with deployment and improvement in our mobile sites and user
experience on all platforms, allowed us to begin marketing our products. This in turn led to tremendous growth of
283% in monthly unique visitors from approximately 1.19m in December 2012 to a total of approximately 4.58m in
December 2013, cementing our position as ASEAN’s largest network of automotive portals.
This increase in car buyer traffic has translated directly into excellent growth in leads delivered to car sellers.
December saw a total of just under 784,000 leads delivered across our three countries, representing a growth of
approximately 2,500% over the course of the 2013.
Building strong organisational capability was also key to our year. We have structured our business with an aim to
ensuring we maximise our talent and consistency across the entire Group, while ensuring we have the right local
knowledge and relationships in place to ensure products and customer service are deployed and tailored to each local
market.
Also in 2013, we welcomed a strategic shareholder in carsales.com. It has been an exceptional relationship to date
and we feel proud of their support and belief in what we have achieved so far, as well as what we are set to achieve in
the coming years.
2 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Malaysia
Our Malaysia site, Carlist.my is the leading automotive classified site in Malaysia. During 2013 we deployed a best-in-
market mobile-optimized site and desktop design. Our listings finished the year at 151,039, more than double our
nearest competitor. We also took pride in having our listing quality outpace the market, working hard to ensure we
provided the lowest listed prices, more photos, more detailed descriptions and accurate odometer readings for all
vehicles listed for sale.
The result has been tremendous growth in users and leads delivered to people using our site to sell cars.
2013 also saw us acquire of Malaysia’s fastest-growing automotive site, LiveLifeDrive.com. This acquisition was key
in constructing our new car market proposition, focusing on the ‘buy and sell’ funnel, and allowing us to offer an
excellent service to new car buyers, sellers and to automotive brand advertisers.
During December 2013 we commenced our dealer monetization program, well ahead of expectations. Our efforts thus
far have seen us sign over 1,000 dealers on our paid feature subscription plan, representing 30% of the market
already agreeing in a very short time frame to pay for our service. This is a testament to the great work the team has
done in growing the site and its value proposition to all our potential customers.
Indonesia
Our Indonesia site, Mobil123.com has continued to grow its leadership position in market. Our “listings first” strategy
resulted in more than 200,000 cars being listed for sale at the end of 2013, marking us as the clear leader in the key
geographic area of Western Java, which includes the thriving Indonesian capital city, Jakarta. Our drive to have “best-
in-market” quality of our listings was also a large success and is reflected in the exceptional development of our key
metrics.
We also launched our new car content section towards the end of 2013, modelled on the success of our Malaysian
website, LiveLifeDrive.com, opening us to providing excellent value to new car buyers, sellers and car brands across
Indonesia.
Thailand
Our March 2013 acquisition of Thailand’s number two automotive classified site, ThaiCar.com, has certainly turned
out to be a great addition to the iCar Asia network. We again focused on our “listings first” strategy and grew total
listings from approximately 20,000 at the time of acquisition to finish the year with over 100,000 listings, a growth of
500%, giving us more than double the listings of the nearest competitor in market.
We also released our mobile-optimized sites and improved the website design and user experience in general. This,
coupled with the exceptional listings growth, has seen us drive aggressively at a leadership position with our market-
leading product and services.
2013 was a year of very strong growth, especially in the volume and quality of car listings on our sites, resulting in
exciting growth in the number of leads we are delivering to car sellers using our services.
The iCar Asia Team
We currently have 190 full-time employees across Malaysia, Thailand and Indonesia all of whom share our core
values and our vision of becoming ASEAN’s largest and most trusted digital automotive market place. We have
worked hard throughout 2013 to set the foundations for a high-performance culture, capable of moving at a dynamic
pace to change the way people buy and sell cars in our region. We believe we are making a large impact on our
customers and the market, and we look to continue our momentum in 2014.
We believe we have the best sites, the best products, the most traffic, but if we don’t have the best people working at
iCar Asia, our vision will never become a reality. We are committed to finding, developing and retaining the best talent
in ASEAN and building iCar Asia to become the benchmark for media and technology businesses in the region.
3 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
Ongoing political unrest in Thailand is having an impact on the new and used car markets with the Automotive
Industry Club of the Federation of Thai Industries reporting a fall in car sales of 39.86% in December 2013. Although
this reduction is not expected to have a material impact on the Group’s revenues in the immediate future, ongoing
political uncertainty may reduce the Company’s ability to monetise its expanding position in the online car sales
market in Thailand.
No other matter or circumstance has arisen since 31 December 2013 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
Likely developments and expected results of operations
In 2014 we will be focusing on improving our backend technology which allows car dealers to self-service the
management of listings real-time, giving them access to their leads via a centrally-built CRM and offering a holistic
consumer experience as we work to merge new car and used car listings with content.
In addition to our technology and product enhancements in 2014, we intend to increase the marketing of our brands in
all three countries in the hope of gaining absolute brand leadership for car buyers.
In short, our number one priority and commitment across all three countries is to ensure that we are providing the
highest volume of qualified leads to car dealers and private sellers alike. We work every day to become the default
destination for new and used car buyers, and to ensure we provide an exceptional platform that helps all car sellers to
realize our company motto - ‘Sell More Cars’.
Environmental regulation
The company takes a responsible approach in relation to the management of environmental matters. All significant
environmental risks have been reviewed and the consolidated entity has no legal obligation to take corrective action in
respect of any environmental matter. The consolidated entity's operations are not subject to significant environmental
regulations.
4 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Patrick Grove
Non-independent, non-executive director and chairman
Bachelor of Commerce degree with a major in Accounting and Finance from the
University of Sydney.
Board member and Chairman since June 2012. Mr Grove is a co-founder of iCar. Mr
Grove’s experience and expertise include mergers and acquisitions and extraction of
investment value in high growth, media, and technology environments.
Mr Grove has built a number of significant media and internet businesses across
Asia and has taken four businesses from start up to initial public offer. He has been
independently recognised with numerous international awards, including as a Global
Leader of Tomorrow by the World Economic Forum (2001), a New Asian Leader by
the World Economic Forum (2003),
the Australian Chamber of Commerce,
Singapore, Young Entrepreneur of the Year (2004), Business Week’s Best Young
Asian Entrepreneurs (2008) and Top 50 Global Achiever
(2013) by Australia
Unlimited. Mr Grove has a Bachelor of Commerce degree with a major in Accounting
and Finance from the University of Sydney. Mr Grove is the Chief Executive Officer,
Chairman and major shareholder of Catcha Group, one of South East Asia’s most
dynamic investment groups. Mr Grove is also the Chairman of
iProperty Group
Limited, and iBuy Group Limited, both ASX listed companies, and a director of
Catcha Media Berhad, a Malaysia-listed company.
iProperty Group Limited, iBuy Group Limited, Catcha Media Berhad
None
None
70,265,265
None
Lucas Elliott
Non-independent, non-executive director
Bachelor of Commerce degree with a major in Finance from the University of
Sydney.
Board member since April 2012. Mr Elliott is a co-founder of iCar. He has over 15
years of Asian online experience, with a focus on developing fast moving online
business models and monetising online assets. Mr Elliott is also a co-founder of
Catcha Group, where he is responsible for all aspects of Catcha Group’s corporate
finance activities, including mergers and acquisitions, capital raisings and public
listings. Mr Elliott has a Bachelor of Commerce degree with a major in Finance from
the University of Sydney. Mr Elliott is a director of iProperty Group Limited and iBuy
Group Limited, both ASX listed companies, and Catcha Media Berhad, a Malaysia-
listed company.
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited, iBuy Group Limited, Catcha Media Berhad
None
Member of the Remuneration & Nomination Committee and member of the Audit &
Risk Committee
70,265,265
None
5 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Shaun Di Gregorio
Non-independent, non-executive director
in Business Administration from the Australian Graduate School of
Master
Management (University of New South Wales) and is a member of the Australian
Institute of Company Directors.
Board member since July 2012. Mr Di Gregorio has worked in online classifieds for
iProperty. Prior to joining
nearly 15 years and is the Chief Executive Officer of
iProperty, Mr Di Gregorio spent almost 8 years with the ASX listed REA Group
Limited, in which time he was General Manager of Australian operations from 2005
to 2008, and then as General Manager of the REA Group Limited’s international
businesses.
Mr Di Gregorio has also held senior roles at Trader.com and the interactive division
of TMP Worldwide.
None
None
Chairman of the Remuneration & Nomination Committee and member of the Audit &
Risk Committee
709,451
None
Mark Britt
Independent non-executive director
Diploma in Law from LPAB.
Board member since July 2012. Mr Britt is the Chief Executive Officer of the Mi9
group of companies, which include businesses across Australia and New Zealand
such as ninemsn, The Daily Mail Australia, Bing, Outlook.com and MSN NZ. Mr Britt
has significant executive and commercial experience in the online, advertising and
consumer technology fields in Australia, Europe and the Asia Pacific. Prior to joining
Mi9 as Chief Executive Officer, Mr Britt spent four years with Microsoft, based in
Singapore as General Manager for Consumer and Online. As part of that role, Mr
Britt was responsible for expansion strategies into India, China, Japan and Korea.
Mr Britt was also previously the Director of Corporate Strategy and Chief Financial
Officer of ninemsn, and has worked at Pricewaterhouse Coopers, NASDAQ-listed
ISP, People PC and Vizzavi in the United Kingdom.
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
None
Member of the Remuneration & Nomination Committee and chairman of the Audit &
Risk Committee
492,785
None
6 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Cameron McIntyre
Independent non-executive director
Bachelor of Economics from La Trobe University, Certified Practising Accountant
(CPA), Graduate of Harvard Business School General Management Program
Mr McIntyre has been the Chief Financial Officer of carsales.com Limited since 2007
and was previously the Finance Director at Sensis. He has over 18 years of finance
and administration experience. Cameron brings a wealth of knowledge and insight
into operating leading automotive portals as well as assisting iCar Asia in leveraging
it's strategic partnership with carsales.com and the talent and resources that come
with it.
None
None
Member of the Remuneration & Nomination Committee and member of the Audit &
Risk Committee
None
None
Nick Geddes
Chartered Accountant
Nick Geddes (FCA, FCIS) was appointed director and Company Secretary in April
2012 and subsequently resigned as director on 5 June 2013. Mr Geddes is the
principal of Australian Company Secretaries Pty Ltd, a company secretarial practice
that he formed in 1993. Mr Geddes is a past President of Chartered Secretaries
Australia and a former Chairman of the NSW Council of that Institute. His previous
experience, as a Chartered Accountant and Company Secretary, includes investment
banking and development and venture capital in Europe, Africa, the Middle East and
Asia.
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
None
Company secretary
76,118
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only
and excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Nick Geddes
7 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each board committee held during
the year ended 31 December 2013, and the number of meetings attended by each director were:
Full Board
Board Audit & Risk
Committee
Remuneration &
Nomination Committee
Attended
2
3
3
3
1
2
Held
2
3
3
3
1
2
Attended
1
3
3
2
1
2
Held
2
3
3
3
1
2
Patrick Grove*
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Nick Geddes (resigned 5 June
2013)
Cameron McIntyre (appointed
26 April 2013)
Attended
15
14
15
15
7
10
Strategy Meeting
Patrick Grove*
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Nick Geddes (resigned 5 June
2013)
Cameron McIntyre (appointed
26 April 2013)
Attended
2
2
2
2
1
2
Held
15
15
15
15
7
10
Held
2
2
2
2
1
2
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
*
Patrick Grove resigned from Board Audit & Risk Committee and Remuneration & Nomination Committee on 2
September 2013
Remuneration report (audited)
The remuneration report, which has been audited, outlines the key management personnel
remuneration
arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its
Regulations.
The remuneration report is set out under the following main headings:
A
B
C
D
E
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
8 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
A Principles used to determine the nature and amount of remuneration
The membership, responsibilities, authority and activities of the Remuneration & Nomination Committee are set out in
the Remuneration & Nomination Committee Charter, which has been approved by the Board.
The responsibilities of the Remuneration Committee are to:
●
●
●
●
monitor, review and recommend to the Board, as necessary and appropriate:
- the remuneration, superannuation and incentive policies and arrangements for the Chief Executive Officer
and key management personnel (i.e. those executives who report directly to the Chief Executive Officer);
- the remuneration arrangements for Non-Executive Directors on the Board;
- the recruitment, retention and termination policies and procedures for the Chief Executive Officer and key
management personnel; and
- key appointments and executive succession planning.
oversee the Group’s general remuneration strategy;
review the composition of the Board including:
- the criteria for selection of directors, having regard to the need for the breadth and depth of skills and
experience on the Board; and
- the process for selecting new directors.
monitor the Group’s culture and reputation and review behavioural standards on a regular basis, and report
and submit recommendations to the Board.
The Chief Executive Officer and the Chief Financial Officer attend meetings by invitation to assist the Committee in its
deliberations except on matters associated with their own remuneration.
Advisers
External specialist remuneration advice is sought on an as-needs basis in respect of remuneration arrangements for
Non-Executive Directors of the Board and key management personnel of the Group. General reward advice is sought
on an ad hoc basis. No external advisors were issued during the current or prior years.
Reward policy
The Company has an established policy for determining the nature and amount of emoluments of Board Members
and key management personnel of the Company to align remuneration with the creation of shareholder value. The
remuneration structure for the key management personnel seeks to emphasise payment for results.
Reward philosophy
The Company’s overall philosophy is to manage the remuneration to:
●
●
●
●
create an environment that will attract top talent, and where people can be motivated with energy and
passion to deliver superior performance;
recognise capabilities and promote opportunities for career and professional development;
provide rewards, benefits and conditions that are competitive within the markets in which the Group
operates; and
provide fair and consistent rewards across the Group, which support corporate principles.
9 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
In accordance with the ASXCGPR,
remuneration is separate and distinct.
the structure of Non-Executive Directors and key management personnel
The company has a policy of ensuring that part of the remuneration of key management personnel is directly linked to
the performance of the company. Key management personnel are therefore compensated with fixed remuneration
and “at risk” remuneration based on the key performance measures of the company.
Non-executive directors remuneration
The fees paid to Non-Executive Directors on the Board are based on advice and data from the Group’s external
remuneration advisers. This advice takes into consideration the level of fees paid to Board members of other
Australian corporations, the size and complexity of the Group’s operations, the activities of the Group and the
responsibilities and workload requirements of Board members.
Fees are established from time to time for the Chairman and Non-Executive Directors. The appointment letters for the
Non-Executive Directors set out the terms and conditions of their appointments. These terms and conditions are in
conjunction with, and subject to, the Company’s Constitution and the charters and policies approved by the Board
from time to time. Each Non-Executive Director receives a fee for being a Director of the Company. These fees are
paid by the issue of iCar shares.
There were no share options granted to directors during or since the end of the financial period.
Executive remuneration
The Company aims to reward key management personnel with a level and mix of remuneration commensurate with
their position and responsibilities within the Company and:
●
●
●
Reward key management personnel for achievement of pre-determined key performance indicators;
Link reward with the strategic goals and performance of the Company; and
Ensure total remuneration is competitive by market standards.
The Remuneration for key management personnel and staff will include an annual review using a formal performance
appraisal process. The Remuneration Committee recommends to the Board the level of fixed remuneration each
year based on the performance of individuals.
The remuneration structure is in two parts:
• Fixed remuneration; and
• Variable remuneration.
Fixed remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration that is both appropriate to the
position and is competitive in the market. Fixed remuneration comprises of payroll salary, superannuation and other
their salary to increase payments towards
benefits.
superannuation or other benefits.
Individuals, however, may choose to sacrifice part of
10 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Variable Remuneration
Comprises of a short-term incentive plan and a long-term incentive plan.
• Short term incentive plan (STI)
Short-term incentives are used to differentiate rewards based on performance on a year by year basis. The principal
performance indicator of the short term incentive plan is based on the Company’s financial performance and individual
achievement of specified goals, for example achieving progress with growth initiatives. The percentage and threshold
level can differ for each individual and are reviewed each year. The Company has approved predetermined
performance targets that must be met in order to trigger payments under the STI. Payments are made in the form of
cash and shares. It is intended that key employees of iCar will be eligible to participate in the STI program.
• Long term incentive plan (LTIP)
iCar has established a long term incentive plan called the iCar Asia Ltd Rights Plan (“Plan”). The Plan is part of the
Company’s remuneration strategy and is designed to align the interests of management and shareholders and assist
iCar in the attraction, motivation and retention of executives.
In particular, the Plan is designed to provide relevant
executives with an incentive for future performance, with conditions of vesting and exercise of performance rights
under the Plan, encouraging those executives to remain with the Company and contribute to the future performance
of the Company.
LTI payments granted to each participating key employee depends on the extent to which specific targets set at the
beginning of the plan are met. The targets relate to earnings of the company and staff remaining in employment.
Payments are made in the form of rights to the Company’s shares that generally vest to the employee and become
convertible 2 – 3 years after they are granted based on the most recent years earnings performance.
It is intended at
this stage that only key executives of iCar will be eligible to participate in the Plan. There have been no rights issued
to date under the plan.
There were no rights granted, exercised, lapsed or forfeited during the period.
Voting and comments made at the company's 2012 Annual General Meeting ('AGM')
The company received in excess of 75% of 'for' votes in relation to its remuneration report for the year ended 31
December 2012. The company did not receive any specific comments at the AGM in regard to its remuneration
practices and report.
B Details of remuneration
Amounts of remuneration
Details of the remuneration of the key management personnel of consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of iCar Asia Limited and
Controlled Entities:
●
●
●
●
●
●
Patrick Grove
Lucas Elliott
Mark Britt
Shaun Di Gregorio
Cameron McIntyre (Appointed 26 April 2013)
Nick Geddes (Resigned as director 5 June 2013)
And the following persons:
●
●
●
Damon Rielly
Rod Brandenburg (Resigned 27 August 2013)
Joey Caisse
11 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
2013
Name
Non-Executive
Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
C McIntyre
N Geddes
Other Key
Management
Personnel:
D Rielly
R Brandenburg*
J Caisse
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Other
$
Non-
monetary
$
Super-
annuation
$
Shares &
units **
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
250,000
224,234
215,000
689,234
59,756
40,714
48,339
148,809
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
48,000
48,000
48,000
32,000
20,000
187,500
59,800
107,200
610,500
-
-
-
-
-
-
-
-
-
-
60,000
48,000
48,000
48,000
32,000
20,000
497,256
324,748
370,539
1,448,543
*
**
Resigned 27 August 2013
Shares to be issued to directors in lieu of fees are to be ratified at the upcoming annual general meeting
No material contracts involving Directors’ interests were entered into since the end of the previous financial year, or
existed at the end of the year, other than those transactions detailed in related parties note to the financial statements.
2012
Name
Non-Executive
Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
N Geddes
Other Key
Management
Personnel:
D Rielly
R Brandenburg
J Caisse
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Other
$
Non-
monetary
$
Super-
annuation
$
Shares &
units
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
145,833
32,400
16,667
194,900
30,883
3,091
2,839
36,813
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
16,000
82,667
49,333
16,000
150,000
-
-
334,000
-
-
-
-
-
-
-
-
-
20,000
16,000
82,667
49,333
16,000
326,716
35,491
19,506
565,713
12 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
C McIntyre
N Geddes
Other Key Management
Personnel:
D Rielly
R Brandenburg *
J Caisse
*
Resigned 27 August 2013
Fixed remuneration
2013
2012
At risk - STI
At risk - LTI
2013
2012
2013
2012
100%
100%
100%
100%
100%
100%
100%
82%
100%
100%
100%
100%
100%
100%
100%
54%
100%
- %
- %
- %
- %
- %
- %
- %
- %
18%
- %
- %
- %
- %
- %
- %
- %
46%
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
- %
In addition to remuneration benefits in the above table, the company paid a premium for a contract insuring all
directors of the company and specified executives of the consolidated entity as officers. It is not possible to allocate
the benefit of this premium between individual directors or specified executives. In accordance with usual commercial
practice, the insurance contract prohibits disclosure of details of the premium paid under the contract.
C Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Term of agreement:
Details:
Mr D Rielly
Chief Executive Officer
End 31 December 2014. 6 months termination notice period by executive and
company.
Base salary cost is AUD 250,000 p.a.
Short term incentive:
Up to AUD 150,000 subject to meeting performance targets as set by the Board.
Payment is to be made via shares in the Company at an issue price calculated based
on the VWAP of the shares for the corresponding period.
Long term incentive:
Up to AUD 50,000 subject to meeting performance targets as set by the Board.
Payment is to be made via shares in the Company at an issue price calculated based
on the VWAP of the shares for the corresponding period and issued 2 years and 3
months after the period.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately AUD
4,100 per month).
School fee allowance of up to MYR 50,000 per annum (equivalent to approximately
AUD 17,100 per annum).
13
iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Mr R Brandenburg
Chief Financial Officer (resigned 27 August 2013)
End 31 December 2015. 6 months termination notice period by executive and
company.
Base salary cost is AUD 230,000 p.a.
Short term incentive:
Up to AUD 92,000 subject to meeting performance targets as set by the Board.
Payment is to be made via shares in the Company at an issue price calculated based
on the VWAP of the shares for the corresponding period.
Long term incentive:
Up to AUD 69,000 subject to meeting performance targets as set by the Board.
Payment is to be made via shares in the Company at an issue price calculated based
on the VWAP of the shares for the corresponding period and issued 2 years and 3
months after the period.
Other benefits:
Housing allowance of MYR 8,000 per month (equivalent to approximately AUD 2,800
per month).
School fee allowance of up to MYR 35,000 per annum (equivalent to approximately
AUD 12,100 per annum).
Mr J Caisse
Chief Information Officer
End 31 December 2015. 6 months termination notice period by executive and
company.
Base salary cost is AUD 230,000 p.a.
Short term incentive:
Up to AUD 80,000 with payment to be made via shares in the Company at an issue
price calculated based on the VWAP of the shares for the corresponding period.
Long term incentive:
Up to AUD 60,000 subject to meeting performance targets as set by the Board.
Payment is to be made via shares in the Company at an issue price calculated based
on the VWAP of the shares for the corresponding period and issued 2 years and 3
months after the period.
Other benefits:
Housing allowance of MYR 9,000 per month (equivalent to approximately AUD 3,100
per month).
School fee allowance of up to MYR 35,000 per annum (equivalent to approximately
AUD 12,100 per annum).
The Remuneration Committee of the Board will recommend each year, reasonable performance measures and
targets for use in assessing each Executive’s performance. After the end of each financial year, the Remuneration
Committee of the Board will review each Executive’s performance in comparison to these measures and targets. STI
targets (as a percentage of Total Executive Compensation (“TEC”)) are to be determined annually by the Board,
based on the recommendation of the Remuneration Committee for the coming year. TEC is base remuneration
inclusive of superannuation and benefits but excludes leave accrued not taken.
14 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
D Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 31 December 2013 are set out below:
Name
Rod Brandenburg
Patrick Grove
Lucas Elliott
Shaun Di Gregorio
Nick Geddes
Mark Britt
Damon Rielly
Date
09/10/2013
29/04/2013
29/04/2013
29/04/2013
29/04/2013
29/04/2013
08/03/2013
No of shares
Issue price
$
140,945
95,147
76,118
76,118
76,118
76,118
713,606
59,800
20,000
16,000
16,000
16,000
16,000
150,000
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 31 December 2013.
There were no options over ordinary shares granted to or vested by directors and other key management personnel
as part of compensation during the year ended 31 December 2013.
E Additional information
The Company has a policy of ensuring that at least part of the remuneration of key management personnel is based
on the performance of the Company. Key management personnel are compensated with fixed remuneration and "at
risk" remuneration based on revenue and earnings targets.
The earnings of the consolidated entity for the two years to 31 December 2013 are summarised below:
2013
$
2012
$
Sales revenue
Loss after income tax
STI cash bonus paid as a % of available
1,346,407
(6,884,922)
100%
306,292
(1,756,618)
100%
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2013
2012
Share price at financial year end ($A)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
0.91
(4.10)
(4.10)
0.20
(2.43)
(2.43)
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of iCar Asia Limited and Controlled Entities under option outstanding at the
date of this report.
Shares issued on the exercise of options
There were no shares of iCar Asia Limited and Controlled Entities issued on the exercise of options during the year
ended 31 December 2013 and up to the date of this report.
15 iCar Asia Limited and Controlled Entities
Directors' report
31 December 2013
Indemnity and insurance of officers
The company has indemnified all current and previous directors of the consolidated entity, the company secretary and
certain members of senior management against all liabilities or loss (other than to the company or a related body
corporate) that may arise from their position as officers of the company and its controlled entities, except where the
liabilities arise out of conduct involving a lack of good faith or indemnification is otherwise not permitted under the
Corporations Act. The indemnity stipulates that the company will meet the full amount of any such liabilities, including
costs and expenses, and covers a period of seven years after ceasing to be an officer of the company.
The company has executed deeds of indemnity with each of the non-executive directors.
Indemnity and insurance of auditor
The company's insurance contract does not provide cover for the independent auditors of the company or of a related
body corporate of the company.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 22 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
●
the opinion that the services as disclosed in note 22 to the financial statements do not
The directors are of
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-
making capacity for the company, acting as advocate for the company or jointly sharing economic risks and
rewards.
Officers of the company who are former audit partners of Ernst & Young
There are no officers of the company who are former audit partners of Ernst & Young.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out on the following page.
Auditor
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
________________________________
Patrick Grove
Chairman
26 February 2014
Kuala Lumpur
16
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Auditor’s Independence Declaration to the Directors of iCar Asia
Limited
In relation to our audit of the financial report of iCar Asia Limited for the financial year ended 31
December 2013, to the best of my knowledge and belief; there have been no contraventions of the
auditor independence requirements of the Corporations Act 2001 or any applicable code of
professional conduct.
Ernst & Young
D. R. McGregor
Partner
26 February 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
17
iCar Asia Limited and Controlled Entities
Financial report
31 December 2013
Contents
Financial report
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of iCar Asia Limited and Controlled
Entities
Page
19
20
21
22
23
58
59
General information
The financial report covers iCar Asia Limited and Controlled Entities as a consolidated entity consisting of iCar Asia
Limited and Controlled Entities and the entities it controlled. The financial report is presented in Australian dollars,
which is iCar Asia Limited and Controlled Entities's functional and presentation currency.
The financial report consists of the financial statements, notes to the financial statements and the directors'
declaration.
iCar Asia Limited and Controlled Entities is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business are:
Registered office
Level 3
70 Pitt Street
Sydney NSW 2001
Australia
Principal place of business
Level 30, Tower A
Menara UOA Bangsar
No 5 Jalan Bangsar Utama,
59000 Kuala Lumpur
Malaysia
A description of the nature of the consolidated entity's operations and its principal activities are included in the
directors' report, which is not part of the financial report.
The financial report was authorised for issue, in accordance with a resolution of directors, on 27 February 2014.
18
iCar Asia Limited and Controlled Entities
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2013
Revenue
Expenses
Administration and related expenses
Advertising and marketing expenses
Employment related expenses
Premises and infrastructure expenses
Offline production costs
Loss before interest, tax, depreciation and amortisation
(EBITDA)
Depreciation and amortisation expense
Loss before interest and tax (EBIT)
Interest income
Interest expense
Loss before tax
Income tax (expense)/benefit
Consolidated
Note
2013
$
2012
$
4
5
5
5
6
1,753,539
306,292
(486,192)
(1,661,372)
(5,374,524)
(564,389)
(263,994)
(365,708)
(110,229)
(1,435,015)
(112,564)
(48,905)
(6,596,932)
(1,766,129)
(312,898)
(12,348)
(6,909,830)
(1,778,477)
99,144
(41,092)
21,859
-
(6,851,778)
(1,756,618)
(50,000)
-
Loss after income tax expense for the year attributable to the
owners of iCar Asia Limited and Controlled Entities
18
(6,901,778)
(1,756,618)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(186,866)
(51,283)
Other comprehensive income for the year, net of tax
(186,866)
(51,283)
Total comprehensive income for the year attributable to the
owners of iCar Asia Limited and Controlled Entities
(7,088,644)
(1,807,901)
Basic earnings per share
Diluted earnings per share
Cents
Cents
31
31
(4.10)
(4.10)
(2.43)
(2.43)
19
iCar Asia Limited and Controlled Entities
Statement of financial position
As at 31 December 2013
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Payables
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2013
$
2012
$
7
8
9
10
11
12
13
14
15
12,481,630
523,652
650,754
13,656,036
6,273,043
238,388
156,274
6,667,705
667,954
6,673,627
7,341,581
245,276
4,447,109
4,692,385
20,997,617
11,360,090
893,533
629,825
1,523,358
1,988,029
337,950
2,325,979
1,301,232
530,013
1,831,245
-
653,381
653,381
3,354,603
2,979,360
17,643,014
8,380,730
16
17
18
36,854,151
(10,552,741)
(8,658,396)
21,053,923
(10,916,575)
(1,756,618)
17,643,014
8,380,730
The above statement of financial position should be read in conjunction with the accompanying notes
20 iCar Asia Limited and Controlled Entities
Statement of changes in equity
For the year ended 31 December 2013
Issued
capital
$
-
Foreign
currency
translation
reserve
$
-
-
-
(51,283)
-
(51,283)
22,181,115
(1,127,192)
-
-
-
-
-
-
Consolidated
Balance at 10 April 2012
Loss after income tax
expense for the period
Other comprehensive income
for the period, net of tax
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Contributions of equity
Transaction costs
Equity reserve from
acquisition
Share-based payments
Equity
reserve
$
Share based
payment
reserve
$
Accumulated
losses
$
Total
equity
$
-
-
-
-
(1,756,618)
(1,756,618)
-
-
(51,283)
-
(1,756,618)
(1,807,901)
-
-
-
-
-
-
22,181,115
(1,127,192)
(10,965,292)
100,000
(10,965,292)
-
-
100,000
-
-
-
-
-
-
Balance at 31 December 2012
21,053,923
(51,283)
(10,965,292)
100,000
(1,756,618)
8,380,730
Foreign
currency
translation
reserve
$
Issued
capital
$
Equity
reserve
$
Share based
payment
reserve
$
Accumulated
losses
$
Total
equity
$
21,053,923
(51,283)
(10,965,292)
100,000
(1,756,618)
8,380,730
-
-
-
(186,866)
-
(186,866)
15,819,213
(18,985)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,901,778)
(6,901,778)
-
-
(186,866)
-
(6,901,778)
(7,088,644)
-
-
256,000
294,700
-
-
-
-
15,819,213
(18,985)
256,000
294,700
Consolidated
Balance at 1 January 2013
Loss after income tax
expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Issue of shares
Transaction costs
Shares to be issued in lieu of
directors' remuneration
Shares to be issued in lieu of
STI
Balance at 31 December 2013
36,854,151
(238,149)
(10,965,292)
650,700
(8,658,396)
17,643,014
The above statement of changes in equity should be read in conjunction with the accompanying notes
21 iCar Asia Limited and Controlled Entities
Statement of cash flows
For the year ended 31 December 2013
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Note
Consolidated
2013
$
2012
$
1,061,143
(6,954,658)
188,861
(1,732,969)
(5,893,515)
312,564
(41,092)
(1,544,108)
21,859
-
Net cash used in operating activities
30
(5,622,043)
(1,522,249)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Payment for purchase of subsidiary, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(562,750)
(577,574)
(1,053,695)
(99,636)
(494,880)
(633,000)
(2,194,019)
(1,227,516)
14,210,858
(18,985)
(167,224)
10,150,000
(1,127,192)
-
14,024,649
9,022,808
6,208,587
6,273,043
6,273,043
-
Cash and cash equivalents at the end of the financial year
7
12,481,630
6,273,043
The above statement of cash flows should be read in conjunction with the accompanying notes
22 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted the following new and amended Australian Accounting Standards in these financial
statements. Their adoption has not had any significant impact on the amounts reported in these financial statements.
• AASB 10 Consolidated Financial Statements
• AASB 11 Joint Arrangements
• AASB 12 Disclosure of Interests in Other Entities
• AASB 13 Fair Value Measurement
• AASB 119 Employee Benefits
In adopting AASB 10 Consolidated Financial Statements, the consolidated entity reviewed all of the entities in which it
has, or had, an equity interest and applied the new guidance to each of these investments. The consolidated entity
was not required to consolidate any additional entities in applying the requirements of the new standard.
AASB 10 Consolidated Financial Statements
The consolidated entity has applied AASB 10 from 1 January 2013, which has a new definition of 'control'. Control
exists when the reporting entity is exposed, or has the rights, to variable returns (e.g. dividends, remuneration, returns
that are not available to other interest holders including losses) from its involvement with another entity and has the
ability to affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights
(e.g. voting rights, potential voting rights, rights to appoint key management, decision making rights, kick out rights)
that give it the current ability to direct the activities that significantly affect the investee’s returns (e.g. operating
policies, capital decisions, appointment of key management). The consolidated entity has considered its holdings and
rights and the holdings and rights of other shareholders in order to determine whether it has the necessary power for
consolidation purposes.
AASB 11 Joint Arrangements
The consolidated entity has applied AASB 11 from 1 January 2013. The standard defines which entities qualify as
joint arrangements and removes the option to account for joint ventures using proportional consolidation. Joint
ventures, where the parties to the agreement have the rights to the net assets will use equity accounting. Joint
operations, where the parties to the agreements have the rights to the assets and obligations for the liabilities will
account for the assets, liabilities, revenues and expenses separately, using proportionate consolidation.
AASB 12 Disclosure of Interests in Other Entities
The consolidated entity has applied AASB 12 from 1 January 2013. The standard contains the entire disclosure
requirement associated with other entities, being subsidiaries, associates and joint ventures. The disclosure
requirements have been significantly enhanced when compared to the disclosures previously located in AASB 127
'Consolidated and Separate Financial Statements', AASB 128 'Investments in Associates', AASB 131 'Interests in
Joint Ventures' and Interpretation 112 'Consolidation - Special Purpose Entities'.
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from
AASB 13
The consolidated entity has applied AASB 13 and its consequential amendments from 1 January 2013. The standard
does not prescribe when to use fair value. Instead it provides a single robust measurement framework, with clear
measurement objectives, for measuring fair value using the 'exit price' and it provides guidance on measuring fair
value when a market becomes less active. The 'highest and best use' approach is be used to measure assets
whereas liabilities would be based on transfer value.
23
iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting
Standards arising from AASB 119 (September 2011)
The consolidated entity has applied AASB 119 and its consequential amendments from 1 January 2013. The
standard eliminates the corridor approach for the deferral of gains and losses; streamlines the presentation of
including requiring remeasurements to be
changes in assets and liabilities arising from defined benefit plans,
presented in other comprehensive income; and enhances the disclosure requirements for defined benefit plans. The
standard also changed the definition of short-term employee benefits, from 'due to' to 'expected to' be settled within
12 months. Annual leave that is not expected to be wholly settled within 12 months is now discounted allowing for
expected salary levels in the future period when the leave is expected to be taken.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in note 2.
Comparative Amounts
The comparatives included in these financial statements are for the period 10 April 2012 up to and including 31
December 2012.
Measurement of Company Operating Performance
Earnings before interest, income tax expense, depreciation and amortisation (EBITDA) reflects the net profit for the
income taxes, depreciation and amortisation. Depreciation and
year prior to including the effect of
amortisation are calculated in accordance with AASB 116 Property, Plant and Equipment, AASB 138 Intangible
Assets and Interest is calculated in accordance with AASB 139 Financial Instruments: Recognition and Measurement
respectively.
interest,
Management used EBITDA and earnings before interest and income tax expense (EBIT), in combination with other
financial measures, primarily to evaluate the Company's operating performance before financing costs, income tax
and non cash capital related expenses. Additionaly, the company believes EBITDA is useful to investors because
analysts and other members of the investment community largely view EBITDA as a key measure of operating
performance.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 26.
24 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of iCar Asia Limited and
Controlled Entities ('company' or 'parent entity') as at 31 December 2013 and the results of all subsidiaries for the
year then ended. iCar Asia Limited and Controlled Entities and its subsidiaries together are referred to in these
financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The effects of
potential exercisable voting rights are considered when assessing whether control exists. Subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. Refer to the 'business
combinations' accounting policy for further details. A change in ownership interest, without the loss of control, is
accounted for as an equity transaction, where the difference between the consideration transferred and the book
value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
25 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Foreign currency translation
The financial report is presented in Australian dollars, which is iCar Asia Limited and Controlled Entities's functional
and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Foreign operations
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at
the
transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the
rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated.
the rates of exchange prevailing on the dates of
Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences
on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to
occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency
translation reserve and recognised in profit or loss on disposal of the net investment.
On consolidation, the assets and liabilities of the consilidated entity’s foreign operations are translated into Australian
dollars at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the
average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case
the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as
equity and transferred to the consolidated entity's translation reserve. Such exchange differences are recognised in
profit or loss in the period in which the foreign operation is disposed.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the consolidated entity
and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue
is recognised:
Rendering of services
Revenue is recognised where the contract outcome can be estimated reliably and control of
to be
compensated for their service and the stage of completion can be reliably measured. Advance billings are deferred
and released in the appropriate period when the service is delivered. Prepayments are capitalised and released in the
appropriate period when service is delivered.
the right
Interest
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
26 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets is reviewed each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent
that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same
taxable authority on either the same taxable entity or different taxable entity's which intend to settle simultaneously.
Where current and deferred tax arises from the initial accounting for a business combination, it is taken into account
in the determination of goodwill or excess.
Cash and cash equivalents
Cash comprises cash on hand and on demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within
30 days for direct client billings and 90 days for agency billings.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when
there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation and default or delinquency in payments are considered indicators that the trade
receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash
flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
27 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Property, plant and equipment
Plant and equipment,
less
accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of
the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by
discounting the amounts payable in the future to their present value as at the date of acquisition.
leasehold improvements and equipment under
finance lease are stated at cost
Depreciation is provided on property, plant and equipment. Depreciation is calculated using either straight line or
diminishing value based on the assess appropriateness of each method for each entity within the company.
Leasehold improvements are depreciated over the period of the lease or estimated useful
life, whichever is the
shorter. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual
reporting period, with the effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of depreciation:
Plant and equipment
Office equipment
Furniture and fittings
Leased plant and equipment
2-5 years
3-5 years
3-5 years
3-5 years
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards
incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. Assets
held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value
of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the
lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between
finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset. Operating
lease payments are recognised as an expense on a straight-line basis over the lease term, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which
they are incurred.
Lease incentives
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a
liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis,
except where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.
28 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Intangible assets
Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control
is acquired (the
acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities
assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum
of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the
acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss
as a bargain purchase gain.
Intangible assets acquired separately
less accumulated amortisation and impairment.
Intangible assets acquired separately are recorded at cost
life and
Amortisation is charged on a straight-line basis over their estimated useful
amortisation method is reviewed at the end of each annual reporting period, with any changes in these accounting
estimates being accounted for on a prospective basis.
lives. The estimated useful
Internally-generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no
internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the
period as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if,
and only if, all of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or
• sell the intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Subsequent to initial recognition,
internally-generated intangible assets are reported at cost
less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible assets acquired separately.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill where
they satisfy the definition of an intangible asset and their fair values can be measured reliably. Subsequent to initial
recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation
and accumulated impairment losses, on the same basis as intangible assets acquired separately.
Acquired software
Software is not considered to have an indefinite life and is generally amortised over 3 - 5 years.
software is no longer is in use or contributing to add value it will be written down to zero.
If at any point the
29 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Impairment of non-financial assets
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing,
goodwill
is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings
are measured at amortised cost with any difference between the initial recognised amount and the redemption value
being recognised in income over the period of the borrowing using the effective interest rate method. All borrowing
costs are recognised in profit or loss in the period in which they are incurred.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date,
the loans or borrowings are classified as non-current.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred, including:
- interest on short-term and long-term borrowings
Provisions
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
30 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Employee benefits
Wages and salaries, annual leave and long service leave
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual
leave, long
service leave and sick leave when it is probable that settlement will be required and they are capable of being
measured reliably. Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are
measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities
recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as
the present value of the estimated future cash outflows to be made by the comsilidated entity in respect of services
provided by employees up to reporting.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed when incurred.
Share-based payments
The consolidated entity measures the cost of equity settled transactions with employees and other parties based on
the fair value of the equity provided at the time of exchange. Where this is with an external party this is generally
based on an appropriate time framed Volume Weighted Average Price (VWAP) of iCar Asia shares traded on the
ASX at the time of settlement.
Where it is with employees in relation to performance payments in the future, the fair value is estimated based on an
estimation of the probability of all performance criteria being met. This value is then used to discount the current value
of the equity to determine an appropriate amount to be expensed each period until the vesting date. The estimate will
have no impact on the carrying amount of the assets or liabilities of the company but may impact the value of
expenses and equity in the current and future periods. Any variance in the possible amounts is not considered by the
board to be material.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
31 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
the assets transferred, equity
The consideration transferred is the sum of
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-
controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is
measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition
costs are expensed as incurred to profit or loss.
the acquisition-date fair values of
the consolidated entity assesses the financial assets acquired and liabilities
On the acquisition of a business,
assumed for appropriate classification and designation in accordance with the contractual
terms, economic
conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the
acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity
interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous
carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing
investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is
less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference
is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment
of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any,
the consideration transferred and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period,
based on new information obtained about the facts and circumstances that existed at the acquisition-date. The
measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the
acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of iCar Asia Limited and
Controlled Entities, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
32 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 1. Significant accounting policies (continued)
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 31
December 2013. The consolidated entity has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets,
liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of
future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
liabilities, contingent
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
time framed VWAP of iCar Asia shares traded on the ASX at the time of settlement taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-
settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical
collection rates and specific knowledge of the individual debtors financial position.
The fair value of financial
instruments classified as level 3 is determined by the use of valuation models. These
include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
33 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for
its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a
result of technical innovations or some other event. The depreciation and amortisation charge will increase where the
useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the
accounting policy stated in note 1. The recoverable amounts of cash-generating units have been determined based
on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates
based on the current cost of capital and growth rates of the estimated future cash flows.
Business combinations
As discussed in note 1, business combinations are initially accounted for on a provisional basis. The fair value of
assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity taking
into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable, to the period the combination occurred and may
have an impact on the assets and liabilities, depreciation and amortisation reported.
Note 3. Operating segments
Identification of reportable operating segments
Information reported to the company's executive management team (the chief operating decision makers) for the
purposes of resource allocation and assessment of performance is more specifically focused on the geographic
location of services provided. The company operates in only one business segment which is the online advertising
segment.
The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
The company's reportable segments are as follows:
Malaysia
Indonesia
Thailand
Corporate
Intersegment transactions
Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.
Allocation of resources between segments
All assets are allocated to reportable segments other than any interests in associates, other financial assets, and
current and deferred tax assets. Assets used by reportable segments are allocated on the basis of the revenues
earned by individual reportable segments.
All liabilities are allocated to reportable segments other than borrowings, other financial liabilities, current and deferred
tax liabilities. Liabilities for which reportable segments are jointly liable are allocated in proportion to segment assets.
Major customers
Revenue is generated from external customers. The consolidated entity does not have a major customer that
contributes 10% or more to the consilidated entity's revenue.
34 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 3. Operating segments (continued)
Operating segment information
Consolidated - 2013
Revenue
Sales
Total sales revenue
Other revenue
Interest Revenue
Total revenue
Total revenue
Depreciation and amortisation
Finance costs
Other non-cash expenses
Loss before income tax
expense
Income tax expense
Loss after income tax
expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Malaysia
$
Indonesia
$
Thailand
$
Corporate
$
Intersegment
eliminations/
unallocated
$
Total
$
1,102,483
1,102,483
-
-
1,102,483
16,544
16,544
-
-
16,544
227,380
227,380
-
-
227,380
-
-
99,144
407,132
506,276
1,102,484
(173,180)
(41,092)
(3,374,362)
16,545
(65,230)
-
(1,124,149)
227,378
(74,488)
-
(1,137,829)
407,132
-
-
(2,614,987)
(2,486,150)
(1,172,834)
(984,939)
(2,207,855)
3,900,025
3,083,307
1,531,800
12,482,485
-
-
-
-
-
-
-
-
-
1,346,407
1,346,407
99,144
407,132
1,852,683
1,753,539
(312,898)
(41,092)
(8,251,327)
(6,851,778)
(50,000)
(6,901,778)
-
20,997,617
20,997,617
2,539,906
160,759
259,580
394,358
-
3,354,603
3,354,603
35 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 3. Operating segments (continued)
Consolidated - 2012
Revenue
Sales to external customers
Total sales revenue
Interest Revenue
Total revenue
Total revenue
Total expenses
Loss before income tax
expense
Income tax expense
Loss after income tax
expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Note 4. Revenue
Sales revenue
Rendering of services
Other revenue
Interest
Other revenue
Revenue
Malaysia
$
Indonesia
$
Thailand
$
Corporate
$
Intersegment
eliminations/
unallocated
$
Total
$
261,335
261,335
-
261,335
3,606
3,606
-
3,606
41,351
41,351
-
41,351
-
21,859
21,859
261,335
(968,717)
3,606
(264,121)
41,351
(89,219)
21,859
(762,712)
(707,382)
(260,515)
(47,868)
(740,853)
1,503,978
711,258
831,009
8,313,845
-
-
-
-
-
-
-
306,292
306,292
21,859
328,151
328,151
(2,084,769)
(1,756,618)
-
(1,756,618)
-
11,360,090
11,360,090
890,658
39,936
19,179
2,029,587
-
2,979,360
2,979,360
Consolidated
2013
$
2012
$
1,346,407
306,292
-
-
-
-
407,132
99,144
506,276
21,859
-
21,859
1,852,683
328,151
36 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 5. Expenses
Loss before income tax includes the following specific
expenses:
Depreciation
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total depreciation
Amortisation
Websites, domain names, trademarks and other
intangibles
Consolidated
2013
$
2012
$
25,455
100,700
8,710
2,128
5,978
4,004
-
-
134,865
12,110
178,033
238
Total depreciation and amortisation
-
-
312,898
12,348
Finance costs
Interest and finance charges paid/payable
Employment and related expenses
Salaries and wages
Super and pension related
Commissions
Other employment benefits
Other employment related
Share base payments - equity setted
Incentives/Bonus
Compensated leave
41,092
-
3,102,649
234,844
17,296
409,680
475,097
610,500
519,841
4,617
767,279
35,154
273,566
74,614
184,402
100,000
-
-
Total employment and related expenses
-
-
5,374,524
1,435,015
There are currently 190 full-time employees.
37 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 6. Income tax expense
Income tax expense
Current tax
Consolidated
2013
$
2012
$
50,000
Aggregate income tax expense
-
-
50,000
-
-
Numerical reconciliation of income tax expense and tax at
the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in
calculating taxable income:
Effect of different tax rates of subsidiaries operating in
other jurisdictions
Temporary differences - accruals and provisions
Deductible costs relating to share issue expenses
Effect of unused tax losses and tax offsets not
recognised as deferred tax assets
(6,851,778)
(1,756,618)
(2,055,533)
(526,985)
336,003
298,451
(67,632)
53,182
143,556
(22,544)
1,538,711
352,791
Income tax expense
-
-
50,000
-
Consolidated
2013
$
2012
$
Deferred tax assets not recognised
Tax losses of revenue nature
Deductible transaction costs arising on shares issued
2,053,477
-
352,791
22,544
Total deferred tax assets not recognised
-
-
2,053,477
375,335
The above potential tax benefit has not been recognised in the statement of financial position as in the opinion of the
directors the recovery of this benefit is uncertain due to insufficient Australia sources taxable income generation to
utilise the losses and/or future deductions.
Note 7. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit
Consolidated
2013
$
2012
$
315,596
12,166,034
1,773,043
4,500,000
-
-
12,481,630
6,273,043
38 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 8. Current assets - trade and other receivables
Trade receivables
Consolidated
2013
$
2012
$
523,652
238,388
The average credit period on rendering of services is 30 days for direct client billings and 90 days for agency billings.
The consolidated entity does not charge interest on trade receivables for amounts owing past due date neither does it
hold collateral over these balances. A provision for doubtful debts has been provided for estimated irrecoverable trade
receivables past credit period determined by reference to past default experience and the change in quality of trade
receivables.
The carrying amounts of trade receivable are assumed to approximate their fair value due to their short term nature.
Impairment of receivables
The consolidated entity has recognised a loss of $nil (2012: $nil) in profit or loss in respect of impairment of
receivables for the year ended 31 December 2013.
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $523,652 as at 31
December 2013 ($192,880 as at 31 December 2012).
The consolidated entity did not consider a credit risk on the aggregate balances after reviewing credit terms of
customers based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0-30 days
31-60 days
61-90 days
90 plus days
Note 9. Current assets - other
Prepayments
Other deposits
Accrued interest and GST receivable
Consolidated
2013
$
2012
$
190,119
259,093
19,142
55,298
40,018
106,059
46,803
-
-
-
523,652
192,880
Consolidated
2013
$
2012
$
216,484
184,625
249,645
114,433
41,841
-
-
-
650,754
156,274
39 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 10. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Furniture and fittings - at cost
Less: Accumulated depreciation
Consolidated
2013
$
2012
$
158,537
(27,598)
130,939
612,397
(125,661)
486,736
64,878
(14,599)
50,279
119,092
(10,085)
109,007
116,290
(13,697)
102,593
37,680
(4,004)
33,676
667,954
245,276
-
-
-
-
-
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 10 April 2012
Additions
Additions through business
combinations (note 27)
Depreciation expense
Balance at 31 December 2012
Additions
Exchange differences
Depreciation expense
Balance at 31 December 2013
$
$
Leasehold
improvements
$
Plant and
equipment
$
Furniture and
fittings
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,030
91,105
(2,128)
109,007
39,445
7,942
(25,455)
-
41,926
66,645
(5,978)
102,593
496,107
(11,264)
(100,700)
-
37,680
-
(4,004)
33,676
27,198
(1,885)
(8,710)
-
99,636
157,750
(12,110)
245,276
562,750
(5,207)
(134,865)
130,939
486,736
50,279
667,954
Note 11. Non-current assets - intangibles
Goodwill - at cost
Other intangible assets - at cost
Less: Accumulated amortisation
Consolidated
2013
$
2012
$
4,701,600
4,701,600
2,600,000
2,600,000
2,150,297
(178,270)
1,972,027
1,847,347
(238)
1,847,109
6,673,627
4,447,109
-
-
-
-
-
-
40
iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 11. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
$
$
$
Consolidated
Balance at 10 April 2012
Additions through business
combinations (note 27)
Amortisation expense
Balance at 31 December 2012
Additions
Additions through business
combinations (note 27)
Exchange differences
Amortisation expense
Balance at 31 December 2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Goodwill
$
Other
intangibles
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
2,600,000
-
1,847,347
(238)
4,447,347
(238)
2,600,000
400,000
1,847,109
377,573
4,447,109
777,573
1,737,812
(36,212)
-
-
(74,623)
(178,032)
1,737,812
(110,835)
(178,032)
4,701,600
1,972,027
6,673,627
Goodwill is allocated for impairment testing purposes to the Indonesia cash generating unit with a carrying value of
$2,380,784 (2012: $2,600,000) after adjusting for foreign exchange rates at the balance sheet date.
Goodwill of $418,827 is allocated to the Thailand cash generating unit after adjusting for foreign exchange rates at the
balance sheet date.
Goodwill of $1,901,989 is allocated to the Malaysian cash generating unit after adjusting for foreign exchange rates at
the balance sheet date.
Domain names and websites are amortised over 10 years. Indefinite life intangibles are allocated to the cash-
generating units for which they relate. No impairment was considered necessary. Software is amortised over 3-5
years.
Evo licence (Malaysia)
Autospinn.com website (Thailand)
Mobil 123.com website (Indonesia)
Website development (external)
Consolidated
2013
$
2012
$
663,636
625,029
329,723
353,639
640,000
785,117
400,000
21,992
1,972,027
1,847,109
41
iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 11. Non-current assets - intangibles (continued)
The consolidated entity performed its annual impaired test at 30 June 2013. The consolidated entity considers the
relationship between its market capitalisation and its book value, among other factors, when reviewing for indicators
of impairment. As at 31 December 2013, the market capitalisation of the group was above the book value of its
equity and therefore not an indicator of impairment.
The recoverable amount of the cash-generating units are determined based on a value in use calculation which uses
cash flow projections based on the financial budgets approved by management for the 2014 financial year. The
budget is then extrapolated for a further four years at project growth rates for both revenue and costs which
management consider are appropriate for the markets the CGU’s operate, to which a discount rate is applied. Given
the sensitivity of growth rates for both revenue and expenses due to the stage of where the consolidated entity and
the markets for which the it operates are at, a range of possible scenarios are modelled to assess the carrying value
of goodwill for impairment.
Management have determined the appropriate terminal value growth rate and discount rate applies based on the risk
free rate plus a risk margin appropriate for the market the GCU operates in. This is as follows:
Discount rate Terminal Growth rate Revenue Growth Rates
Malaysia 11.5% 3% 203%
Thailand 13.5% 4% 376%
Indonesia 16.0% 6% 4,766%
Other scenarios have been modelled at possible higher discount rates and none of
these scenarios indicate
impairment. Similarly a range of terminal value growths rates (from 3% - 6% depending on the market) have been
used in these calculations, with none of these inputs indicating impairment in any CGU.
Management believes that any reasonably possible change in the key assumptions on which the recoverable amount
is based would not cause the aggregated carrying amount to exceed the aggregate recoverable amount of the cash
generating unit.
The discount cash flow method of measurement was used to estimate the recoverability of those assets. The
recoverable amount using the stated method of calculation was greater than the carrying value of the stated assets
and accordingly there was no impairment.
42 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 12. Current liabilities - trade and other payables
Trade payables
Billings in advance
Deferred consideration
Consolidated
2013
$
2012
$
756,705
136,828
-
273,301
83,613
1,631,115
-
-
893,533
1,988,029
Refer to note 20 for further information on financial instruments.
The average credit period on purchases is normally 30 to 60 days. No interest is payable on trade payables. The
consolidated entity has financial risk management in place to ensure that all payables are paid within the credit time
frame.
The deferred consideration in the prior period relates to future earn out provisions in relation to the acquisition of the
second 50% of Auto Discounts Sdn Bhd owner of Carlist.my (A$ 1,475,000 in cash) and the domain Autospinn.com
(THB 5,000,000 (A$ 156,115) in cash) as outlined in the company prospectus. These amounts were all paid during to
the current year.
Note 13. Current liabilities - provisions
Employee benefits
Staff incentives and bonuses
Other
Consolidated
2013
$
2012
$
148,487
79,946
401,392
28,497
231,487
77,966
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out
below:
-
-
629,825
337,950
Consolidated - 2013
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
\
Staff
incentives
& bonuses
$
Other
$
231,487
243,159
(394,700)
77,966
323,426
-
Carrying amount at the end of the year
-
-
-
79,946
401,392
43 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 14. Non-current liabilities - payables
Deferred consideration
Refer to note 20 for further information on financial instruments.
Consolidated
2013
$
2012
$
1,301,232
-
The deferred consideration is in relation to the acquisition of DQBP Snd Bhd completed on 8 March 2013, to be paid
in cash and shares upon meeting of performance criteria.
Note 15. Non-current liabilities - borrowings
Other loans
Shareholder loans
Consolidated
2013
$
2012
$
16,369
513,644
22,467
630,914
-
-
530,013
653,381
Refer to note 20 for further information on financial instruments.
In the prior year, loans of $473,186 (RM 1,500,000) and $157,728 (RM 500,000) were advanced to the consolidated
entity from a shareholder of Auto Discounts Sdn Bhd and from Catcha Group Pte Ltd respectively. During the year,
the loan from Catcha Group Pte Ltd was repaid in full. Interest is charged at a rate of 8% payable per annum on the
shareholder loan of $513,644 (RM 1,500,000) which is repayable in financial year 2017.
Note 16. Equity - issued capital
Ordinary shares - fully paid
184,667,041
139,405,573
36,854,151
21,053,923
Consolidated
Consolidated
2013
Shares
2012
Shares
2013
$
2012
$
44 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 16. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Date
No of shares
$
Balance
Issue of shares
Share issue costs
Balance
Issue of shares - business purchase
Issue of shares - asset purchase
Issue of shares - STI to employees
Issue of shares - business purchase
Issue of shares - directors remuneration
Issue of shares - carsales.com Ltd
Issue of shares - employees
Issue of shares - business purchase
Issue of shares - STI to employees
Issue of shares - carsales.com Ltd
Share issue costs
10 April 2012
31 December 2012
8 March 2013
8 March 2013
8 March 2013
18 March 2013
29 April 2013
29 April 2013
29 April 2013
11 September 2013
11 September 2013
11 September 2013
-
139,405,573
139,405,573
147,500
690,741
713,606
1,196,816
399,619
35,797,604
1,536,000
3,687,500
140,945
951,137
-
22,181,115
(1,127,192)
21,053,923
29,500
200,000
150,000
347,555
84,000
13,424,102
430,080
737,500
59,800
356,676
(18,985)
Balance
31 December 2013
184,667,041
36,854,151
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value
and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Rights to ordinary shares granted to employees carry no rights to dividends and no voting rights. Further details of the
employee share option plan are contained below and in the directors' report.
Capital risk management
The consolidated entity manages its capital to ensure that entities in the group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of debt and equity balance.
The consolidated entity's capital risk management policy remains unchanged from the 31 December 2012 Annual
Report. The capital structure of the consolidated entity includes equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings. The consolidated entity operates in various countries,
primarily through subsidiary companies established in the markets in which the consolidated entity operates.
The consolidated entity has sufficient cash to fund operating cash flows to maintain its current
level of operations as
well as to make the routine outflows of tax and the payment of any earn outs under contract. The consolidated entity
is not subject to any externally imposed capital requirements.
45 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 17. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Equity reserves
Consolidated
Balance at 10 April 2012
Foreign currency translation
Share-based payments
Amounts arising from the
acquisition of interest in
controlled entity
Balance at 31 December 2012
Foreign currency translation
Shares to be issued in lieu of
directors remuneration
Shares to be issued in lieu of
Consolidated
2013
$
2012
$
(238,149)
650,700
(10,965,292)
(51,283)
100,000
(10,965,292)
-
-
(10,552,741)
(10,916,575)
Foreign
currency
reserve
$
Share-based
payments
reserve
$
Equity
reserves
$
Total
$
-
(51,283)
-
-
-
100,000
-
-
-
-
(51,283)
100,000
-
-
(10,965,292)
(10,965,292)
-
-
(51,283)
(186,866)
100,000
-
(10,965,292)
-
(10,916,575)
(186,866)
-
-
256,000
294,700
-
-
256,000
294,700
Balance at 31 December 2013
-
-
(238,149)
650,700
(10,965,292)
(10,552,741)
Note 18. Equity - accumulated losses
Consolidated
2013
$
2012
$
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Accumulated losses at the end of the financial year
-
-
-
(1,756,618)
(6,901,778)
-
(1,756,618)
-
(8,658,396)
(1,756,618)
Note 19. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
46 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 20. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk
and interest rate risk), credit risk and liquidity risk. The consolidated entity does not enter into or trade financial
instruments, including derivative financial instruments, for speculative purposes.
Market risk
Foreign currency risk
The consolidated entity is mainly exposed to Malaysian Ringgit (MYR), Indonesian Rupiah (IDR) and Thai Baht (THB)
as a result of the operation of its subsidiaries in those markets. Foreign currency risk arises when future commercial
transactions and recognised financial assets and liabilities are denominated in a currency that is not the entity's
functional currency. As there is no material exposure to foreign currency risk within the financial assets and financial
liabilities outside of each operating entity's functional currency, no sensitivity analysis has been prepared.
Interest rate risk
The consolidated entity's exposure to interest rate risk is limited to the movement in interest rate in terms of its cash
held at bank.
Consolidated
Cash at bank
2013
2012
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
3.27
12,481,630
0.92
6,273,043
Net exposure to cash flow interest rate risk
12,481,630
6,273,043
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
Consolidated - 2013
Basis points increase
Effect on
profit
before tax
Basis
points
change
Effect on
equity
Basis points decrease
Effect on
profit
before tax
Basis
points
change
Effect on
equity
Cash at bank
50
62,408
-
50
(62,408)
-
Consolidated - 2012
Basis points increase
Effect on
profit
before tax
Basis
points
change
Effect on
equity
Basis points decrease
Effect on
profit
before tax
Basis
points
change
Effect on
equity
Cash at bank
50
11,930
-
50
(11,930)
-
47 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 20. Financial instruments (continued)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the consolidated entity. The consolidated entity adopted a policy of generally dealing with reputable counterparties as
a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers and ongoing credit evaluation is performed on the accounts
regularly. The consolidated entity does not have any significant credit risk exposure to any single counterparty or any
group of counterparties. The carrying amount of financial assets recorded in the financial statements, net of any
allowance for losses, represents the consolidated entity's maximum exposure to credit risk.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with board of directors, who have built an appropriate
liquidity risk management framework for the management of the consolidated entity's short, medium and long- term
funding and liquidity management requirements. The consolidated entity manages liquidity by maintaining adequate
reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets with financial liabilities.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities.
The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows
disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the
statement of financial position.
Consolidated - 2013
Non-derivatives
Non-interest bearing
Trade payables
Deferred consideration
Total non-derivatives
Consolidated - 2012
Non-derivatives
Non-interest bearing
Trade payables
Deferred consideration
Total non-derivatives
Weighted
average
interest rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
-
-
893,533
-
893,533
-
1,301,232
1,301,232
-
-
-
-
-
-
893,533
1,301,232
2,194,765
Weighted
average
interest rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
-
-
356,914
1,631,115
1,988,029
-
-
-
-
-
-
-
-
-
356,914
1,631,115
1,988,029
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of
trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The
fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial instruments.
48 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 21. Key management personnel disclosures
Directors
The following persons were directors of iCar Asia Limited and Controlled Entities during the financial year:
Patrick Grove
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Nick Geddes (resigned as a director 5 June 2013)
Cameron McIntyre (appointed 26 April 2013)
Chairman
Non Executive
Non Executive
Non Executive
Non Executive / Company Secretary
Non Executive
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the consolidated entity, directly or indirectly, during the financial year:
Damon Rielly
Rod Brandenburg (resigned 27 August 2013)
Joey Caisse
Chief Executive Officer
Chief Financial Officer
Chief Information Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of
consolidated entity is set out below:
the
Short-term employee benefits
Share-based payments
Consolidated
2013
$
2012
$
897,843
550,700
465,713
100,000
-
-
1,448,543
565,713
There were no share options or tax deferred shares granted during the year. Only payments already settled in shares
are dislcosed as share-based payments above.
Shareholding
The number of shares in the parent entity held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
2013
Ordinary shares
Patrick Grove
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Nick Geddes**
Rod Brandenburg***
Balance at
the start of
the year
80,094,000
80,094,000
833,333
416,667
-
500,000
161,938,000
Received
as part of
remuneration* Additions
171,265
171,265
76,118
76,118
76,118
-
570,884
-
-
-
-
-
1,140,945
1,140,945
Disposals/
other
(10,000,000)
(10,000,000)
(200,000)
-
(76,118)
(1,640,945)
(21,917,063)
Balance at
the end of
the year
70,265,265
70,265,265
709,451
492,785
-
-
141,732,766
*
**
***
Issue of securities for the year ended 31 December 2012, as approved at AGM held on 26 April 2013
Held 76,118 shares at date of resignation
Held 1,640,945 shares at date of resignation
49 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 21. Key management personnel disclosures (continued)
2012
Ordinary shares
Patrick Grove
Lucas Elliott
Shaun Di Gregorio **
Mark Britt **
Rod Brandenburg
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Other *
-
-
-
-
-
-
-
-
-
-
-
-
-
-
833,333
416,667
500,000
1,750,000
80,094,000
80,094,000
-
-
-
160,188,000
Balance at
the end of
the year
80,094,000
80,094,000
833,333
416,667
500,000
161,938,000
*
**
Both Patrick Grove and Lucas Elliott have a relevant interest in securities held by Catcha Group Pte Ltd,Catcha
Media Berhad and iProperty Group Asia Pte Ltd which amounts to 80,094,000 shares as at 31 December 2012.
Shares issued to Shaun Di Gregorio and Mark Britt were at an issue price of 12 cents per share, fair value was
20 cents and the discount has been recorded as remuneration. The total discount was $100,000, Shaun Di
Gregorio $66,667 and Mark Britt $33,333.
As at 31 December 2012, there were shares granted but not yet issued to directors and key management personnel
given they were subject to shareholder approval at the next annual general meeting. The cost of these shares has
been included in non-executive directors remuneration. The number of shares granted are as follows: Patrick Grove
95,147, Lucas Elliott 76,118, Shaun Di Gregorio 76,118, Mark Britt 76,118 and Nick Geddes 76,118.
As at 31 December 2013, there were shares granted but not yet issued to directors given they were subject to
shareholder approval at the next annual general meeting. The cost of these shares has been included in non-
executive directors remuneration. The number of shares to be granted has not yet been determined.
There were no share options issued during the period. There were no share rights issued to key management
personnel during the period.
Related party transactions
Related party transactions are set out in note 25.
Note 22. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor
of the company:
Audit services - Ernst & Young
Audit or review of the financial statements
Other services - Ernst & Young
Investigative accountant services during the IPO
Consolidated
2013
$
2012
$
101,500
65,000
-
135,000
The fees paid to Ernst & Young for the group audit are inclusive of auditing the financial accounts of the subsidiaries
and their respective local annual reports. The fees are not allocated.
-
-
101,500
200,000
50 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 23. Contingent liabilities
There are various claims that arise in the ordinary course of business against iCar Asia Limited and its subsidiaries.
The amounts of any liability (if any) at 31 December 2013 cannot be ascertained and iCar Asia Limited believes that
any resulting liability would not materially affect the position of the consolidated entity.
Note 24. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as
liabilities, payable:
Within one year
One to five years
Consolidated
2013
$
2012
$
153,243
36,630
118,887
110,935
-
-
189,873
229,822
Operating lease commitments relate to premises occupied by the conolidated entity with lease terms currently still
available of less than 2 years. The consolidated entity does not have an option to purchase the premises at the expiry
of the lease period.
Note 25. Related party transactions
Parent entity
iCar Asia Limited and Controlled Entities is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 28.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the remuneration report in the directors'
report.
Transactions with related parties
Administrative services, facilities, accountancy and occupancy fees of $8,595 (2012: $889,543) were charged by PT
Web Marketing, a company in the iProperty Group associated with Patrick Grove and Lucas Elliott. The amount
includes expenses paid on behalf of the consolidated entity prior to it opening a bank account as well as an amount
retained by PT Web Marketing for services performed. The outstanding unpaid balance at the end of the period was
$0(2012:$31,501).
Company secretarial fees and expenses incurred on behalf of the consolidated entity of $79,487 (2012: $73,081)
were charged by Australian Company Secretaries Pty Ltd, a company associated with Nick Geddes. The outstanding
unpaid balance was $4,979 (2012: $5,009).
Director and director-related entities hold directly, indirectly or beneficially interests of 71,467,501 (2012: 81,344,000)
in the ordinary shares of the company as at the reporting date.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
51 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 25. Related party transactions (continued)
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
2013
$
2012
$
-
157,729
Current borrowings:
Loan from entity with significant influence
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 26. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Equity reserves
Accumulated losses
Total equity
Parent
2013
$
2012
$
(721,400)
(740,854)
(721,400)
(740,854)
Parent
2013
$
2012
$
15,132,411
5,893,420
25,687,611
11,887,458
176,388
2,029,589
176,388
2,029,589
36,854,151
650,700
(10,531,374)
(1,462,254)
21,053,923
100,000
(10,555,200)
(740,854)
25,511,223
9,857,869
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
●
●
52 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 27. Business combinations
Livelifedrive.com
On 7 January 2013, the consolidated entity entered into an agreement to acquire 100% of DQBP Sdn Bhd, owner of
the website and magazine "Live Life Drive", and the deal was completed on 8 March 2013. The total potential
consideration was MYR 6.5 million being MYR 3 million in cash and MYR 3.5 million is shares. The directors consider
that MYR 1 million performance based consideration is unlikely to be achieved and paid. Out of the balance of MYR
5.5 million, approximately AUD 1.7 million, MYR 1.7 million, approximately AUD 0.5 million, was paid in cash and
shares on completion and MYR 3.8 million, approximately AUD 1.3 million (2012: AUD 1.2 million) are payable
subject to meeting certain performance targets and warranty periods.
The accounting for this acquistion has not been finalised and the MYR 5.5 million (AUD 1.7 million) estimated
consideration has been previously accounted for as goodwill. Goodwill is attributable to revenue growth and increased
customer engagement. As at the balance sheet date, goodwill had been revalued for changes in foreign exchange
rates. Refer to note 11 non-current assets - intangibles for further information.
The acquisition of livelifedrive.com, the fastest growing automotive site in Malaysia, was primarily a content and
vehicle specification data build out of iCar Asia's proposition in Malaysia to grow both new car and used car markets,
plus indepth market information to further increase leads as the number 1 digital automotive market place in
Malaysia.
The Directors do not consider it practical to estimate what consolidated revenue and profit for the year ended 31
December 2013 would have been if the acquistion had occurred on 1 January 2013 as the revenues are yet to be
established during the development phase of the business.
Details of the acquisition are as follows:
Website
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
iCar Asia Limited and Controlled Entities shares issued to vendor
Contingent consideration
Acquiree's
carrying
amount
$
Fair value
$
1,737,812
1,737,812
1,737,812
1,737,812
-
1,737,812
189,580
347,562
1,200,670
1,737,812
53 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 27. Business combinations (continued)
Thaicar.com
On 4 February 2013, the consolidated entity entered into an agreement to acquire 100% of Thaicar.com and the deal
was completed on 8 March 2013. Thte total consideration was $400,000, 100% payable on completion of the sale and
purchase agreement, comprised of $200,000 in cash and $200,000 in iCar Asia shares.
The acquisition of Thailand's number 2 automotive classified site was a critical step to enter the automotive classified
market in Thailand. Coupled with iCar Asia's leading automotive content site, autospinn.com, it places iCar as the
leading digital automotive market place in Thailand.
The Directors do not consider it practical to estimate what consolidated revenue and profit for the year ended 31
December 2013 would have been if the acquistion has occurred on 1 January 2013 as the revenues are yet to be
established during the development phase of the business.
The accounting for this acquisition has not yet been completed and the consideration has been provisionally
accounted for as goodwill. As at the balance sheet date, the goodwill has been revalued for changes in foreign
exchange rates.
Details of the acquisition are as follows:
Website
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
iCar Asia Limited and Controlled Entities shares issued to vendor
Acquiree's
carrying
amount
$
Fair value
$
1
1
1
1
399,999
400,000
200,000
200,000
400,000
In the prior year, on 5 September 2012, iCar Asia Pte Ltd acquired 100% of the ordinary shares of PT Mobil Satu Asia
for the total consideration transferred of $3,000,000. The goodwill of $2,600,000 arose due to the cost of combination
included a control premium and expected synergies, revenue growth, and future market development of PT Mobil
Satu Asia. The initial accounting for the acquisition was only provisionally determined at the end of the 2012 reporting
period, hence, the fair value of goodwill, intangibles and other assets and liabilities were provisional as at 31
December 2012.
The acquisition accounting treatment has been finalised in the current financial year with goodwill of $2,600,000 and
website costs of $400,000. No additional assets or liabilities were recognised during the measurement period based
on new information obtained about the facts and cicrumstances that existed at the acquisition date.
54 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 27. Business combinations (continued)
Details of the acquisition are as follows:
Website
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
iCar Asia Limited and Controlled Entities shares issued to vendor
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration
transferred
Less: contingent consideration
Less: shares issued by parent entity as part of
consideration
Acquiree's
carrying
amount
$
Fair value
$
400,000
400,000
400,000
400,000
2,600,000
3,000,000
1,000,000
2,000,000
3,000,000
18,205
Consolidated
2013
$
2012
$
2,137,812
(1,200,670)
3,000,000
-
(547,562)
(2,000,000)
Net cash used
-
-
389,580
1,000,000
55 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 28. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Name of entity
Country of
incorporation
Equity holding
2013
%
2012
%
Subsidiaries of iCar Asia
Limited
iCar Asia Pte Ltd
Subsidiaries of iCar Asia
Pte Ltd
Netyield Sdn Bhd
Auto Discounts Sdn Bhd
PT Mobil Satu Asia
iCar Asia (Thailand) Limited *
DQBP Sdn Bhd
Singapore
100.00
100.00
Malaysia
Malaysia
Indonesia
Thailand
Malaysia
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
*
Group holds an economic interest of 100% with a nominee Thai shareholder holding an interest in the company
on behalf of the Group.
Note 29. Events after the reporting period
Ongoing political unrest in Thailand is having an impact on the new and used car markets with the Automotive
Industry Club of the Federation of Thai Industries reporting a fall in car sales of 39.86% in December 2013. Although
this reduction is not expected to have a material impact on the Group’s revenues in the immediate future, ongoing
political uncertainty may reduce the Company’s ability to monetise its expanding position in the online car sales
market in Thailand.
No other matter or circumstance has arisen since 31 December 2013 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
Note 30. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2013
$
2012
$
Loss after income tax expense for the year
-
-
(6,901,778)
(1,756,618)
Adjustments for:
Depreciation and amortisation
Equity settled employee benefit
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in other operating assets
Increase in trade and other payables
Increase in employee benefits
312,897
610,500
12,348
100,000
(285,264)
(495,677)
611,404
525,875
(238,388)
(156,274)
178,732
337,951
Net cash used in operating activities
-
-
(5,622,043)
(1,522,249)
56 iCar Asia Limited and Controlled Entities
Notes to the financial statements
31 December 2013
Note 31. Earnings per share
Loss after income tax attributable to the owners of iCar Asia Limited and Controlled
Entities
Consolidated
2013
$
2012
$
(6,901,778)
(1,756,618)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per
share
168,417,797
72,289,442
Weighted average number of ordinary shares used in calculating diluted earnings per
share
168,417,797
72,289,442
Basic earnings per share
Diluted earnings per share
Note 32. Share-based payments
Cents
Cents
(4.10)
(4.10)
(2.43)
(2.43)
Employee share rights plan
There were no executive share-based payment arrangements in existence during the current reporting period. There
were no options issued or exercised during the period ended 31 December 2013. There are no outstanding options in
iCar Asia shares.
Amounts included under employee benefits expense in statement of comprehensive income
There were no amounts included under employee benefits expense that relates, in full, to amortisation of equity
settled share-based payments.
57 iCar Asia Limited and Controlled Entities
Directors' declaration
In the directors' opinion:
●
●
●
●
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1 to the financial
statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's
financial position as at 31 December 2013 and of its performance for the financial year ended on that date;
and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Patrick Grove
Chairman
26 February 2014
Kuala Lumpur
58
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor's report to the members of iCar Asia Limited
Report on the financial report
We have audited the accompanying financial report of iCar Asia Limited, which comprises the
consolidated statement of financial position as at 31 December 2013, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors' declaration of the
consolidated entity comprising the company and the entities it controlled at the year's end or from
time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal controls as the directors determine are necessary to enable the
preparation of the financial report that is free from material misstatement, whether due to fraud or
error.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal controls relevant
to the entity's preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations
Act 2001. We have given to the directors of the company a written Auditor’s Independence
Declaration, a copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
59
Opinion
In our opinion:
a.
the financial report of iCar Asia Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the consolidated entity's financial position as at 31
December 2013 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
b.
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 2.
Report on the remuneration report
We have audited the Remuneration Report included in pages 8 to 15 of the directors' report for the
year ended 31 December 2013. The directors of the company are responsible for the preparation
and presentation of the Remuneration Report in accordance with section 300A of the Corporations
Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of iCar Asia Limited for the year ended 31 December 2013
complies with section 300A of the Corporations Act 2001.
Ernst & Young
D. R. McGregor
Partner
Melbourne
26 February 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
60