(cid:3)
iCar(cid:3)Asia(cid:3)Limited(cid:3)
(cid:3)ACN(cid:3)157(cid:3)710(cid:3)846(cid:3)
Appendix(cid:3)4E(cid:3)
RESULTS(cid:3)FOR(cid:3)ANNOUNCEMENT(cid:3)TO(cid:3)THE(cid:3)MARKET(cid:3)
For(cid:3)the(cid:3)year(cid:3)ended(cid:3)31(cid:3)December(cid:3)2014(cid:3)(cid:3)
(cid:3)
12(cid:3)months(cid:3)ended(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)
(cid:3)(cid:3)
Revenues(cid:3)from(cid:3)ordinary(cid:3)operations(cid:3)
Loss(cid:3)from(cid:3)ordinary(cid:3)activities(cid:3)after(cid:3)tax(cid:3)attributable(cid:3)to(cid:3)members(cid:3)
Loss(cid:3)after(cid:3)tax(cid:3)attributable(cid:3)to(cid:3)members(cid:3)
(cid:3)(cid:3)
(cid:3)
Loss(cid:3)per(cid:3)Share(cid:3)(basic(cid:3)&(cid:3)diluted)(cid:3)
NTA(cid:3)per(cid:3)Share(cid:3)
Dec(cid:882)14(cid:3)
Dec(cid:882)13(cid:3)
$000(cid:3)
$000(cid:3)
Change(cid:3)
2,814(cid:3)
(16,700)(cid:3)
(16,700)(cid:3)
(cid:3)
Cents(cid:3)
(8.64)(cid:3)
5.34(cid:3)
1,446(cid:3)
(6,902)(cid:3)
(6,902)(cid:3)
(cid:3)
Cents(cid:3)
(4.10)(cid:3)
5.94(cid:3)
95%(cid:3)
(142%)(cid:3)
(142%)(cid:3)
(cid:3)
(cid:3)
(111%)(cid:3)
(10%)(cid:3)
(cid:3)
Dividends(cid:3)
No(cid:3)dividends(cid:3)have(cid:3)been(cid:3)paid(cid:3)or(cid:3)declared(cid:3)in(cid:3)2014(cid:3)(2013:(cid:3)nil).(cid:3)There(cid:3)is(cid:3)no(cid:3)dividend(cid:3)reinvestment(cid:3)plan(cid:3)in(cid:3)
operation.(cid:3)
(cid:3)
Basis(cid:3)of(cid:3)this(cid:3)report(cid:3)
This(cid:3)report(cid:3)includes(cid:3)the(cid:3)attached(cid:3)audited(cid:3)financial(cid:3)statements(cid:3)of(cid:3)iCar(cid:3)Asia(cid:3)Limited(cid:3)and(cid:3)its(cid:3)controlled(cid:3)entities(cid:3)
for(cid:3)the(cid:3)period(cid:3)ended(cid:3)31(cid:3)December(cid:3)2014.(cid:3)Together(cid:3)these(cid:3)documents(cid:3)contain(cid:3)all(cid:3)the(cid:3)information(cid:3)required(cid:3)by(cid:3)
Appendix(cid:3)4E(cid:3)of(cid:3)the(cid:3)Australian(cid:3)Securities(cid:3)Exchange(cid:3)Listing(cid:3)Rules.(cid:3)It(cid:3)should(cid:3)be(cid:3)read(cid:3)in(cid:3)conjunction(cid:3)with(cid:3)iCar(cid:3)Asia(cid:3)
Limited’s(cid:3)Annual(cid:3)Report(cid:3)when(cid:3)released(cid:3)and(cid:3)is(cid:3)lodged(cid:3)with(cid:3)the(cid:3)Australian(cid:3)Securities(cid:3)Exchange(cid:3)under(cid:3)listing(cid:3)rule(cid:3)
4.3A.(cid:3)
(cid:3)
For(cid:3)and(cid:3)on(cid:3)behalf(cid:3)of(cid:3)the(cid:3)Board(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Patrick(cid:3)Grove(cid:3)
Chairman(cid:3)
25th(cid:3)February(cid:3)2015(cid:3)
For personal use only iiCar Asia Limited and Controlled Entities
ACN 157 710 846
Annual Report for the financial year ending
31 December 2014
For personal use only
Annual Report Year Ending 31 December 2014
ICAR ASIA LIMITED (ICQ) / ACN 157 710 846
Directors’ Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to Financial Statements
Directors’ Declaration
Independent Audit Report
Corporate Governance
Shareholder Information
Corporate Directory
1
19
20
21
22
23
24
60
61
63
75
77
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
The directors present their report, together with the consolidated financial statements, of iCar Asia Limited and
Controlled Entities (referred to hereafter as the 'Group') for the year ended 31 December 2014.
Directors
The following persons were directors of the Group 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)
Ajay Bhatia (Non-Executive Director) Appointed 21 November 2014
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.
Experience and expertise: Board member and Chairman since June 2012. Mr
Grove is a co-founder of the Group. 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 offering. He has
been recognised with numerous international awards, including Global Leader of
Tomorrow by the World Economic Forum (2001), New Asian Leader by the
World Economic Forum (2003), Entrepreneur of the Year by the Australian
Chamber of Commerce (2004), Business Week Asia’s Top Entrepreneur under
40 (2008), one of Asia’s Best young Entrepreneurs by Bloomberg Businessweek
(2008), and Top 50 Global Achiever (2013) by Australia Unlimited. Mr Grove
holds a Bachelor of Commerce degree with majors 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 Ensogo Limited, both ASX-listed companies, and a director
of Rev Asia Berhad, a Malaysia-listed company.
iProperty Group Limited, Ensogo Limited, Rev Asia Berhad
None
None
70,430,300
None
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
1
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
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 the Group. 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 Ensogo Limited, both ASX listed companies, and
Rev Asia Berhad, a Malaysia-listed company.
iProperty Group Limited, Ensogo Limited, Rev Asia Berhad
None
Member of the Remuneration & Nomination Committee and member of the
Audit & Risk Committee
70,430,300
None
Shaun Di Gregorio
Non-independent, non-executive director
Master in Business Administration from the Australian Graduate School of
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 nearly 15 years. He is currently the CEO and Founder of Frontier Digital
Ventures, a company that specialises in investing in and operating online
classifieds businesses in frontier markets across the globe. Until May of 2014 he
was the Chief Executive Officer of iProperty and prior to joining 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
782,800
None
2
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
iflix, an Asian provider of on-demand
Mark Britt
Non-independent, non-executive director
Diploma in Law from LPAB
Board member since July 2012. Mr Britt is the Chief Executive Officer and co-
founder of
internet streaming
entertainment. Prior of this Mr Britt was 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, Mr Britt spent four years with Microsoft, based
in Singapore as General Manager for Consumer and Online. 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.
None
None
Member of the Remuneration & Nomination Committee and chairman of the
Audit & Risk Committee
566,134
None
Cameron McIntyre
Non-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 Operating Officer and 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 the Group in leveraging its strategic
partnership with carsales.com and the talent and resources that come with it.
None
None
Member of the Remuneration & Nomination Committee and Chairman of the
Audit & Risk Committee
Interests in shares:
Interests in options:
None
None
3
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Name:
Title:
Qualifications:
Experience and expertise:
Ajay Bhatia
Non-independent, non-executive director
Bachelor of Engineering (Telecommunications) from University of Technology,
Sydney, Masters of Management from University of Technology, Sydney
Mr Bhatia is currently the Chief Product & Information Officer of carsales.com
Limited. He started at Carsales in 2008. Prior to Carsales, Mr Bhatia was a
Product & Technology Director at Fairfax Digital. During his tenure at FD, he
held commercial and leadership positions including GM of Country Cars,
Product Director of Classifieds (Domain, Drive & MyCareer) and Product
Technology Director of Drive. During his tenure at Drive.com.au, Ajay was also
responsible for championing display revenue for the automotive brand.
Mr Bhatia brings valuable insights to the Group board by leveraging his
experience in Technology and in running of Online classified businesses.
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
None
Interests in shares:
Interests in options:
None
None
Company Secretary
Nick Geddes has been the Company Secretary of the Group since April 2012. 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 (now Governance Institute of Australia). 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.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Principal activities
The principal activities of the Group during the financial year were the development and operation of internet-
based automotive portals and the advertising, publication and distribution of automotive magazines in South
East Asia.
4
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Group Overview
The loss for the Group after providing for income tax amounted to $16,699,930 (2013: $6,901,778).
At the beginning of 2014 the clear objective was to grow our market share and to finish the year as the clear
number one automotive classified site in our three countries of operation – Malaysia, Indonesia and Thailand.
Through strong operational execution the core operating metrics have shown substantial growth, particularly
audience and leads. Coupled with the acquisition of Thailand’s number one automotive classified site,
one2car.com, we have closed 2014 with every objective achieved.
Our 2014 revenue grew by 95% year on year while costs grew by 92%. We continued to invest in marketing to
drive market leadership for our core metrics of audience and leads and our people. The loss at EBITDA was
($13,191,344) with a closing cash and cash equivalent of $15,361,635.
There were a series of one off costs during 2014 which resulted in a total loss after income tax expense for the
year of ($16,699,930) which included:
(cid:120) $167,000 of professional fees as a result of the One2car transaction.
(cid:120) An impairment charge of $3,040,688 in relation to our Indonesian assets due to the early stage of the
market, it will take longer than originally thought to reach monetisation phase with our local website
Mobil123.com. However with the strong engagement we have seen with our customers in 2014, we feel
confident that the Indonesian business will ultimately be very successful and profitable.
(cid:120) $304,000 of additional depreciation in relation to our EVO Licence in Malaysia as its useful life was re-
measured to be in line with its initial expiry date.
The investment during 2014 ensured iCar Asia firmly established itself as the largest online automotive business in
ASEAN with a clear number one positions in each of the three largest automotive markets. On a group level, core
metrics demonstrated strong growth throughout the year:
(cid:120) Listings: Finished the year with 527,784 cars listed for sale, 14% growth on December 2013.
(cid:120) Audience: December 2014 attracted 6,101,874 car buyers to an iCar website, 33% growth from 12
months earlier.
(cid:120) Leads: 264,928 people sent a lead to a seller during the month of December 2014 across Malaysia and
Indonesia, 48% growth from 12 months earlier. (Thailand is not reported due to lead tracking only being
implemented post acquisition of one2car.com. First lead volumes will be available from January 2015.)
One of the Group’s key competitive advantages is how fast we execute our strategy, for this we must invest in
building strong organisational capability which is why almost 50% of our expenses relate to our People. We have
strong industry knowledge and capability at a Group level to build market-leading and changing products, such as
our Response Management System. We have also developed strong local country leadership, ensuring products
are built with local culture wants and needs which drives strong product penetration and engagement.
During 2014, carsales.com Limited increased their interest in iCar Asia by a further 3% on 5 March acquiring a
further 7,179,240 shares at $1.00. This represents a strong endorsement from one of the world’s leading online
automotive classified businesses.
In December, the Group successfully completed the ‘game changing’ acquisition of Thailand’s number one online
automotive classified site, one2car.com. To fund the acquisition iCar Asia raised $21,000,000 with proceeds above
those required for the acquisition providing additional working capital.
5
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Malaysia
Our Malaysia site, Carlist.my had a strong year, achieving many key milestones as it significantly grew its market
leading position. Highlights include:
(cid:120) Listings growth of 14%, finishing the year with 171,649 double on nearest competitor.
(cid:120) Audience was 11% higher with 1,326,419 people visiting the site in December.
(cid:120) Leads demonstrated tremendous year on year growth of 50% resulting in 168,910 people sending leads to
sellers during the month of December.
(cid:120) We began our monetisation program: charging car Dealers to upgrade to ‘Feature Listings’. Carlist started
year with 0 paying Dealers and finished the year with 1,531 Dealers paying to upgrade their listings.
(cid:120) We introduced our first depth product, ‘the bump’ which pushes an individual listing to the top of the search
results. The first month (January 2014) saw 12,063 bumps. By year end 94,948 listings were bumped in
December alone.
(cid:120) We launched our market-leading technology - Response Management System (‘RMS’), helping dealers to
manage their inventory and leads from both mobile and desktop devices. We saw strong adoption and by
year end 1,581 unique dealers were logging into the system performing a minimum of one action. This
resulted in over 80% of all inventory being self-uploaded during the month of December.
Malaysia is well placed to further increase Carlist.my’s strong leadership position and extract greater revenue
growth.
Indonesia
Our Indonesia site, Mobil123.com has continued to concentrate on leading the Greater Jakarta/Western Java
region to great success. The strategy of remaining focussed on that geographic region has resulted in a 3%
increase to 205,589 cars listed for sale, the growth in critical key operating metrics has been very robust. The key
highlights for the year were:
(cid:120) Audience growth of 47% resulting in 1,539,351 car buyers visiting the site during the month of December.
(cid:120) 96,018 people sent a lead to a seller during the month of December, growth of 45% year on year.
(cid:120) We launched our market-leading Response Management System in December with more than 1,321
Dealers logging into the system and applying a minimum of one action during the launch month of
December.
(cid:120)
‘Version 2.0’ of mobil123.com accommodating new car show room and editorial content on both desktop
and mobile went live during the December quarter. It is designed to create further new car market
opportunities.
With a strong leadership position established and market-leading products being adopted rapidly, mobil123.com is
focussed on leading the digital education of the automotive market. As the industry matures in the longer-term,
mobil123.com will be in the leading position to benefit financially.
6
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Thailand
Acquiring Thailand’s number 2 classified website, thaicar.com in March 2013 was a strategic decision to apply
pressure on market-leading one2car.com and force a position for iCar to acquire it. The strategy worked
successfully with the acquisition of Thailand’s number 1 automotive classified site completed during December
2014.
Strong key operating metrics and business momentum puts Thailand in a strong position with key highlights for
2014:
(cid:120) Clear listings leadership with Thaicar listing 116,664 cars for sale, more than any other website.
(cid:120) One2car.com attracting more than 1,337,053 car buyers during the month of December, 90% come from
un-paid sources, a very powerful market-leading position.
(cid:120)
iCar Asia’s leading automotive content site for motoring enthusiasts autospinn.com had 1,155,848 people
visit the site in December 2014 to read automotive articles. It has firmly established itself as the first choice
for manufacturers in Thailand when looking to advertise online.
iCar Asia now owns the two largest automotive sites in Thailand, ASEAN’s largest automotive advertising market.
This strong leadership position has iCar Asia well placed to be the major benefactor of the online advertising
migration in years to come.
The iCar Asia Team
We had 344 full-time employees at the conclusion of 2014 across Malaysia, Thailand and Indonesia after the
completion of one2car.com.
We strive for a culture of high-performance and operating at a dynamic ‘start-up’ pace. To facilitate this high-
performance culture, every employee has quarterly performance reviews with quarterly KPIs linked to the business
objectives to ensure the successful execution of our business plan.
Our people are our real strength - the reason why our execution produced strong results during 2014. We have the
biggest sites in the biggest car markets in ASEAN. We have launched and continue to build market-leading
products, unique to iCar Asia. But it is the team of dedicated people who work at iCar that make it all possible,
galvanised by the purpose of improving and changing the way people buy and sell cars across ASEAN. It is this
passion and enthusiasm we search for in all new employees as we strive to build the largest and most trusted
automotive marketplace in ASEAN.
Significant changes in the state of affairs
During the year the Group acquired One2Car Co. Ltd, owner of Thailand’s largest automotive classifieds site,
One2car.com. The acquisition was funded by a placement of new fully paid ordinary shares to investors at an
issue price of $1.10 per new share. The placement was completed on 12 November 2014 and the completion of
acquisition was on 11 December 2014.
There were no other significant changes in the state of affairs of the Group during the financial year.
7
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Matters subsequent to the reporting date
On 22 January 2015 the Group announced and performed a restructure of its operations in Thailand in light of
the purchase of One2Car.com. The restructure resulted in a number of employees leaving the business. The
restructure will have an adverse impact on the 2015 Financial Year profit and loss of circa $300,000. The
restructure removed duplicated functions and Management believe this provides the Thai operations with an
appropriate cost base to enhance shareholder value in the long-term.
No other matter or circumstance has arisen since 31 December 2014 that has significantly affected, or may
significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in
future financial years.
Likely developments and expected results of operations
In 2015 all our markets will have our market-leading Response Management System released. The aim to
establish strong usage within the dealership market so that it becomes an essential tool for running a successful
dealership.
Following the December launch of Version 2.0 of Mobil123.com in Indonesia, accommodating new car show room
and editorial content on both desktop and mobile sites, we plan to release similar market versions in both Malaysia
and Thailand during 2015. Version 2.0 provides a one-stop destination for both new and used vehicles creating
further new car market opportunities across the ASEAN region.
With market-leadership established in Malaysia and Thailand and the monetisation of car dealers well underway,
our primary focus will be increasing the rate of revenue growth in 2015.
Environmental regulation
The Group takes a responsible approach in relation to the management of environmental matters. All significant
environmental risks have been reviewed and the Group has no legal obligation to take corrective action in
respect of any environmental matter. The Group's operations are not subject to significant environmental
regulations.
Indemnity and insurance of officers
The Group has indemnified all current and previous directors of the Group, the company secretary and certain
members of senior management against all liabilities or loss (other than to the Group or a related body
corporate) that may arise from their position as officers of the Group, except where the liabilities arise out of
conduct involving a lack of good faith or where indemnification is otherwise not permitted under the
Corporations Act. The indemnity stipulates that the Group 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 Group.
The Group has executed deeds of indemnity with each of the non-executive directors.
Indemnity of auditors
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
8
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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 2014, and the number of meetings attended by each director were:
Full Board
Board Audit & Risk
Committee
Remuneration &
Nomination
Committee
Attended
Held
Attended
Held
Attended
Held
14
14
12
14
12
2
14
14
14
14
14
2
-
4
3
5
5
-
-
5
5
5
5
-
-
2
2
2
2
-
-
2
2
2
2
-
Patrick Grove
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Cameron McIntyre
Ajay Bhatia
Held: represents the number of meetings held during the time the director held office or was a member of
the relevant committee.
Auditor Independence 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 23 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 Directors are of the opinion that the services as disclosed in note 23 to the financial statements do not
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following
reasons:
(cid:120) all non-audit services have been reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor, and
(cid:120) 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 page 19.
Auditor
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
9
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Remuneration report (audited)
The remuneration report, which has been audited, outlines the key management personnel remuneration
arrangements for the Group, 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 Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
E Additional information
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 & Nomination Committee are to:
(cid:120) Monitor, review and recommend to the Board, as necessary and appropriate:
the remuneration, superannuation and incentive policies and arrangements
(cid:190)
for the Chief Executive Officer and key management personnel (i.e. those
executives who report directly to the Chief Executive Officer);
(cid:190)
(cid:190)
the remuneration arrangements for Non-Executive Directors on the Boards;
the recruitment, retention and termination policies and procedures for the Chief Executive
Officer and key management personnel; and
(cid:190) key appointments and executive succession planning.
(cid:120) Oversee the Group’s general remuneration strategy;;
(cid:120) Review the composition of the Board including:
(cid:190)
(cid:190)
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.
(cid:120) 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.
10
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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 used during the current or prior years.
Reward policy
The Group has an established policy for determining the nature and amount of emoluments of Board Members and
key management personnel of the Group 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:
(cid:120) Create an environment that will attract top talent, and where people can be motivated with energy and
passion to deliver superior performance;
(cid:120) Recognise capabilities and promote opportunities for career and professional development;
(cid:120) Provide rewards, benefits and conditions that are competitive within the markets in which the Group
operates; and
(cid:120) Provide fair and consistent rewards across the Group, which support corporate principles.
In accordance with the ASXCGPR, the structure of Non-Executive Directors and key management personnel
remuneration is separate and distinct.
The Group has a policy of ensuring that part of the remuneration of key management personnel is directly linked to
the performance of the Group. Key management personnel are therefore compensated with fixed remuneration and
“at risk” remuneration based on the key performance measures of the Group.
Non-executive directors remuneration
The fees paid to Non-Executive Directors on the Board take 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 Asia Limited 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 Group and:
(cid:120) Reward key management personnel for achievement of pre-determined key performance indicators;
(cid:120) Link reward with the strategic goals and performance of the Group; and
(cid:120) Ensure total remuneration is competitive by market standards.
11
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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:
(cid:120)
(cid:120)
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 and other benefits.
Individuals, however, may choose to sacrifice part of their salary to increase payments towards other benefits.
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 reward staff based on performance on a year by year basis. Rewards are made
to participating key employee depending on the extent to which specific targets set at the beginning of the period
are met. The targets relate to the earnings of the company and achievement of other KPIs aligned to the individual’s
specific business function. The percentage and threshold level can differ for each individual and are reviewed each
year. Payments are made in the form of cash and shares. Shares are issued at the VWAP for the year. Benefits
are pro-rated where employees join during an STI year. It is intended that key employees of the Group will be
eligible to participate in the STI program.
Long term incentive plan (LTI)
The Group has established a long term incentive plan (referred to hereafter as the ‘Plan’). The Plan is part of the
Group’s remuneration strategy and is designed to align the interests of management and shareholders and assist
the Group in the attraction, motivation and retention of executives. In particular, the Plan is designed to provide
relevant executives with an incentive for future performance and encouraging those executives to remain with the
Group. LTI payments are made to participating key employee depending on the extent to which specific targets set
at the beginning of the plan are met. The targets relate to the earnings of the company, achievement of other KPIs
aligned to the individual’s specific business function and staff remaining in employment. Payments are made in the
form of shares in the Group that are issued 2 years and 3 months after the end of the year to which they refer. The
shares are issued at a VWAP for the period that the KPIs are set. For example: for the 2014 reporting period, the
plan is payable in March 2017 based on the VWAP during the 2014 year. Benefits are pro-rated where employees
join during a Plan year. It is intended at this stage that only key executives of the Group will be eligible to participate
in the Plan. No shares have yet been issued under the Plan.
Voting and comments made at the company's 2014 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 2014. The company did not receive any specific comments at the AGM in regard to its remuneration
practices and report.
12
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
B Details of remuneration
Details of the remuneration of the key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following directors of the Group:
●
●
●
●
●
●
Patrick Grove
Lucas Elliott
Mark Britt
Shaun Di Gregorio
Cameron McIntyre
Ajay Bhatia
And the following persons:
●
●
●
Damon Rielly
Joe Dische
Joey Caisse
2014
Name
Non-Executive Directors:
P Grove4
L Elliott4
S Di Gregorio
M Britt
C McIntyre5
A Bhatia1,5
Other Key Management
Personnel:
D Rielly
J Dische3
J Caisse
Short-term benefits
Share-based payments
Total
Performance
Related
Cash
salary
and fees
Other
Non-
monetary
LTI
Remuneration/STI
Shares & units
Shares & units2
$
$
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
280,000
129,603
230,000
96,594
21,386
66,587
639,603
184,567
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
48,000
48,000
48,000
48,000
8,000
60,000
48,000
48,000
48,000
48,000
8,000
54,502
13,417
75,213
143,132
294,753
53,667
173,142
725,849
218,073
544,942
781,562
1,748,864
%
0%
0%
0%
0%
0%
0%
48%
31%
46%
1 Appointed 21 November 2014
2 Shares to be issued to directors in lieu of fees are to be ratified at the upcoming annual general meeting.
3 Appointed 9 June 2014
4 Shares allocated to the Director will be issued to Catcha Media Pte Ltd.
5 Shares allocated to the Director will be issued to carsales.com Limited.
There were no termination benefits, long term benefits or post-employment/superannuation benefits in the current or
prior year, hence the categories have been excluded from the tables above and below.
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.
13
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
2013
Name
Non-Executive Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
C McIntyre1
N Geddes2
Other Key Management
Personnel:
D Rielly
R Brandenburg3
J Caisse
Short-term benefits
Share-based payments
Total
Performance
Related
Cash
salary
and fees
Other
Non-
monetary
LTI
Remuneration/STI
Shares & units
Shares & units
$
$
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
250,000
224,234
215,000
73,926
40,714
61,233
689,234
175,873
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
48,000
48,000
48,000
32,000
20,000
60,000
48,000
48,000
48,000
32,000
20,000
50,000
-
69,000
119,000
187,500
59,800
107,200
561,426
324,748
452,433
610,500
1,594,607
%
0%
0%
0%
0%
0%
0%
42%
18%
39%
1 Appointed 26 April 2013
2 Resigned 5 June 2013
3 Resigned 27 August 2013
Shareholdings of KMP1
Shares held in iCar Asia Limited
31 December 2014
Non-Executive Directors:
P Grove3,4
L Elliott3,4
S Di Gregorio
M Britt
C McIntyre5
A Bhatia
Other Key Management Personnel:
D Rielly
J Dische
J Caisse
Balance at
the
beginning
of the
period
1 January
2014
70,265,265
70,265,265
709,451
492,785
-
-
Granted as
remuneration
Net change
Other2
Balance at
the end of
the period
31
December
2014
91,686
73,349
73,349
73,349
54,258
-
73,349 70,430,300
91,686 70,430,300
-
-
782,800
566,134
(54,258)
-
-
-
-
-
1,061,914
-
713,606
348,308
-
-
586,425
195,245
(306,091)
475,579
1 Includes shares held directly, indirectly and beneficially by KMP.
2 All equity transactions with KMP other than those arising from remuneration by the Group have been entered
into under terms and conditions no more favourable than those the Group would have adopted if dealing at
arm’s length.
14
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
3 P Grove and L Elliott have a relevant interest in securities held by Catcha Media Berhad and Catcha Media
Pte Ltd totalling 70,430,300.
4 Shares allocated to the Director were issued to Catcha Media Pte Ltd.
5 Shares allocated to the Director were issued to carsales.com Limited under Net change Other category.
C Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements.
Performance targets for key management personnel are based upon an entry ‘gate’ of overall company
performance at EBITDA and then individual performance is assessed against KPIs specific to the individual’s
business responsibilities. For the CFO, KPIs include closing cash balance and reporting delivery. For the CIO, KPIs
include delivery of technology improvements and the performance of the internet sites. CEO KPIs include those
allocated to the CFO and CIO.
Details of these agreements are as follows (please refer to Section A for further information on short-term and long-
term incentives):
Name:
Title:
Mr Damon Rielly
Chief Executive Officer
Term of agreement:
Extended from its original expiry from 31 December 2014 to 30 June 2016.
Details:
Base salary cost is AUD 280,000 per annum until 30 June 2015 and AUD
300,000 per annum from 1 July 2015 until 30 June 2016.
Short term incentive
1 January 2014 to 31 December 2014:
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.
1 January 2015 to 30 June 2015:
Up to 200,000 shares in iCar Asia Limited subject to meeting performance
targets as set by the Board.
1 July 2015 to 30 June 2016:
Up to AUD 300,000 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.
AUD 20,000 cash payment subject to satisfactory completion of the period.
Long term incentive 1 January 2014 to 31 December 2014:
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 4,074 per month).
School fee allowance variable with age of child to a maximum of MYR
50,000 per annum per child (equivalent to approximately AUD 16,978 per
annum).
Please see above for performance criteria.
15
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Mr Joe Dische
Chief Financial Officer (appointed 9 June 2014)
Ends 31 December 2016. 6 months termination notice period by
executive and company.
Base salary cost is AUD 230,000 per annum from 9 June 2014 to 31
December 2014. Base salary cost is AUD 250,000 from 1 January 2015.
Short term incentive:
From 9 June 2014 to 31 December 2014: up to AUD 92,000 per annum
pro-rated 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.
From 1 January 2015: up to AUD 100,000 per annum on same basis.
Long term incentive:
From 9 June 2014 to 31 December 2014: up to AUD 69,000 per annum
pro-rated 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. From 1 January 2015: up
to AUD 75,000 per annum on same basis.
Other benefits:
Housing allowance of MYR 9,000 per month (equivalent to approximately
AUD 3,056 per month).
School fee allowance variable with age of child to a maximum of MYR
50,000 per annum per child (equivalent to approximately AUD 16,978 per
annum).
Please see above for performance criteria.
Mr Joey Caisse
Chief Information Officer
Ends 31 December 2015. 6 months termination notice period by
executive and company.
Details:
Base salary cost is AUD 230,000 per annum
Short term incentive:
Up to AUD 92,000 per annum 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 69,000 per annum 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 3,056 per month).
School fee allowance variable with age of child to a maximum of MYR
50,000 per annum per child (equivalent to approximately AUD 16,978 per
annum).
Please see above for performance criteria
16
For personal use only
iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
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.
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 2014 are set out below:
Name
Date
No of shares
$Fair Value3
Patrick Grove1
Lucas Elliott1
Shaun Di Gregorio
Mark Britt
Cameron McIntyre2
Nick Geddes
Damon Rielly
Joey Caisse
10/6/2014
10/6/2014
10/6/2014
10/6/2014
10/6/2014
10/6/2014
11/4/2014
11/4/2014
91,686
73,349
73,349
73,349
54,258
31,349
348,308
195,245
60,000
48,000
48,000
48,000
35,507
20,515
372,690
208,912
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd.
2 Shares allocated to the Director were issued to carsales.com Limited.
3 For Executive KMP, fair value reflects issue price 28 February 2014 when the Group and Executive agree to a
share based payment arrangement.
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 2014.
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 2014.
17
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iCar Asia Limited and Controlled Entities
Directors’ report
31 December 2014
E Additional information
The Group 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 Group for the two years to 31 December 2014 are summarised below:
Revenue
Loss after income tax
STI bonus paid as a % of available
2014
$
2,814,246
(16,699,930)
100%
2013
$
1,445,551
(6,901,778)
100%
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($A)
Basic earnings per share (cents per
share)
Diluted earnings per share (cents per
share)
2014
2013
1.09
0.91
(8.64)
(4.10)
(8.64)
(4.10)
This concludes the remuneration report, which has been audited.
Signed in accordance with a resolution of the directors.
_____________________________
Patrick Grove
Chairman
25 February 2015
Kuala Lumpur
18
For personal use only
Ernst & Young
8 Exhibition Stre et
Melbourn e VIC 3 0 0 0 Australia
GPO Box 6 7 Melbourne VIC 3 0 0 1
Tel: + 6 1 3 9 2 8 8 8 0 0 0
Fax: + 6 1 3 8 6 5 0 7 7 7 7
ey.com /au
A uditor’s Indep endence Declara tion to the Dir ec tors of iC ar A sia Limit ed
In relation to our audit of the financial report of iCar Asia Limited for the financial year ended 3 1
December 2 0 1 4, 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
2 5 February 2 0 1 5
19
For personal use only iCar Asia Limited and Controlled Entities
Statement of comprehensive income
For the year ended 31 December 2014
Revenue
Expenses
Administration and related expenses
Advertising and marketing expenses
Employment related expenses
Premises and infrastructure expenses
Offline production costs
Consolidated
Note
2014
$
2013
$
5
6
2,814,246
1,445,551
(3,205,471)
(5,793,362)
(5,782,766)
(900,175)
(323,816)
(1,427,209)
(1,661,372)
(4,433,507)
(564,389)
(263,994)
Loss before interest, tax, depreciation and amortisation
(EBITDA)
(13,191,344)
(6,904,920)
Depreciation and amortisation expense
Impairment of assets
6
12
(762,753)
(3,040,688)
(312,898)
-
Loss before interest and tax
(16,994,785)
(7,217,818)
Interest income
Interest expense
Loss before tax
Income tax (expense)/benefit
6
7
430,361
(49,853)
407,132
(41,092)
(16,614,277)
(6,851,778)
(85,653)
(50,000)
Loss after income tax expense for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
19
(16,699,930)
(6,901,778)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
226,932
(186,866)
Other comprehensive income for the year, net of tax
226,932
(186,866)
Total comprehensive income for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
(16,472,998)
(7,088,644)
Basic earnings per share
Diluted earnings per share
Cents
Cents
32
32
(8.64)
(8.64)
(4.10)
(4.10)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
20
For personal use only
iCar Asia Limited and Controlled Entities
Statement of Financial Position
As at 31 December 2014
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Goodwill
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Payables
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2014
$
2013
$
8
9
10
11
12
12
13
14
15
16
15,361,635
1,036,441
689,890
17,087,966
533,994
6,106,929
17,034,220
23,675,143
12,481,630
523,652
650,754
13,656,036
667,954
1,972,027
4,701,600
7,341,581
40,763,109
20,997,617
4,482,916
980,040
5,462,956
893,533
629,825
1,523,358
537,065
-
537,065
530,013
1,301,232
1,831,245
6,000,021
3,354,603
34,763,088
17,643,014
17
18
19
70,188,628
(10,067,214)
(25,358,326)
36,854,151
(10,552,741)
(8,658,396)
34,763,088
17,643,014
The above statement of financial position should be read in conjunction with the accompanying notes.
21
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iCar Asia Limited and Controlled Entities
Statement of Changes in Equity
For the year ended 31 December 2014
Issued
capital
Foreign
currency
translation
reserve
Equity
Reserve
Share
based
payment
reserve
Accumulated
losses
Total
Equity
Consolidated
Balance at 1 January 2014
$
$
$
$
$
$
36,854,151
(238,149)
(10,965,292)
650,700
(8,658,396)
17,643,014
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:
-
-
-
Issue of shares
34,419,507
Transaction costs
(1,085,030)
Shares to be issued in lieu of
directors' remuneration
Shares to be issued in lieu of
STI and LTI
Balance at 31 December
2014
-
226,932
226,932
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(16,699,930)
(16,699,930)
-
226,932
(16,699,930)
(16,472,998)
(550,700)
-
260,000
549,295
-
-
-
-
33,868,807
(1,085,030)
260,000
549,295
70,188,628
(11,217)
(10,965,292)
909,295
(25,358,326)
34,763,088
Issued
capital
Foreign
currency
translation
reserve
Equity
Reserve
Share
based
payment
reserve
Accumulated
losses
Total
Equity
Consolidated
Balance at 1 January 2013
$
$
$
$
$
$
21,053,923
(51,283)
(10,965,292)
100,000
(1,756,618)
8,380,730
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:
-
-
-
Issue of shares
15,819,213
Transaction costs
(18,985)
Shares to be issued in lieu of
directors' remuneration
Shares to be issued in lieu of
STI
Balance at 31 December
2013
-
(186,866)
(186,866)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
256,000
294,700
(6,901,778)
(6,901,778)
-
(186,866)
(6,901,778)
(7,088,644)
-
-
-
-
15,819,213
(18,985)
256,000
294,700
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.
22
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iCar Asia Limited and Controlled Entities
Statement of Cash Flows
For the year ended 31 December 2014
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Consolidated
Note
2014
$
2013
$
2,908,602
(14,507,280)
(11,598,678)
535,185
(90,100)
1,061,143
(6,954,658)
(5,893,515)
312,564
(41,092)
Net cash used in operating activities
31
(11,153,593)
(5,622,043)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
(288,437)
(759,264)
(562,750)
(577,574)
Payments for purchase of subsidiaries, net of cash acquired
(14,164,799)
(1,053,695)
Net cash used in investing activities
(15,212,500)
(2,194,019)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of borrowings
30,241,138
(995,040)
-
14,210,858
(18,985)
(167,224)
Net cash provided by financing activities
29,246,098
14,024,649
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
2,880,005
12,481,630
6,208,587
6,273,043
Cash and cash equivalents at the end of the period
8
15,361,635
12,481,630
The above statement of cash flows should be read in conjunction with the accompanying notes.
23
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
1. Corporate information
The consolidated financial statements of iCar Asia Limited and its subsidiaries (collectively, the ‘Group’) for
the year ended 31 December 2014 were authorised for issue in accordance with a resolution of Directors
made on 25 February 2015. The Directors have the power to amend and reissue the financial report.
iCar Asia Limited is a public company incorporated in Australia and is listed on the Australian Securities
Exchange. The Group’s principal place of business is Menara UOA Bangsar, Kuala Lumpur, Malaysia.
The Group principal activities during the year were the development and operation of internet based
automotive portals and the advertising, publication and distribution of automotive magazines in South East
Asia.
2. Summary of significant accounting policies
2.1 Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on
a historical cost basis.
All amounts are presented in Australian dollars and are rounded to the nearest dollar unless otherwise stated.
Clarification of terminology used in our income statement:
Earnings/(Loss) before interest, income tax expense, depreciation and amortisation (EBITDA) reflects the profit
for the year prior to including the effect of net finance costs, income taxes, depreciation, amortisation and
impairment. The Group believe that EBITDA is a relevant and useful financial measure used by management to
measure the Company’s ongoing operating performance.
2.2 Compliance with International Financial Reporting Standards (IFRS)
The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
2.3 Changes in accounting policies, disclosures, standards and interpretations
(i) Changes in accounting policies, new and amended standards and interpretations
The Group applied, for the first time, certain standards and amendments which are effective for annual periods
beginning on or after 1 January 2014.The nature and the impact of each new standard and/or amendment is
described below:
Investment Entities – Amendments to AASB 10, AASB 12 and AASB 127
These amendments provide an exception to the consolidation requirement for entities that meet the definition of
an investment entity under AASB 10 Consolidated Financial Statements and must be applied
retrospectively, subject to certain transition relief. The exception to consolidation requires investment entities to
account for subsidiaries at fair value through profit or loss. These amendments have no impact
on the Group, since none of the entities in the Group qualifies to be an investment entity under AASB 10.
Remove Individual Key Management Personnel Disclosure Requirements – Amendments to AASB 124
This amendment deletes from AASB 124 individual key management personnel disclosure requirements for
disclosing entities that are not companies. It also removes the individual KMP disclosure requirements
for all disclosing entities in relation to equity holdings, loans and other related party transactions. This
amendment has resulted in reduced disclosures in the Group’s financial statements.
Recoverable Amount Disclosures for Non-Financial Assets – Amendments to AASB 136
The amendments include the requirement to disclose additional information about the fair value measurement
when the recoverable amount of impaired assets is based on fair value less costs of disposal. This amendment
has not resulted in increased disclosures in the Group’s financial statements in the current year. Refer note 2 i).
24
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
Offsetting Financial Assets and Financial Liabilities - Amendments to AASB 132
These amendments clarify the meaning of ’currently has a legally enforceable right to set-off’ and the criteria for
non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied
retrospectively. These amendments have no impact on the Group, since none of the entities in the Group have
any offsetting arrangements.
(ii) Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the annual reporting period ended 31 December 2014
are outlined below:
AASB 9/ IFRS 9 Financial Instruments
Application Date of Standard: 1 January 2018, Application Date: 1 January 2018
On 24 July 2014, the IASB issued the final version of IFRS 9 which replaces IAS 39 and includes a logical
model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
The final version of IFRS 9 introduces a new expected-loss impairment model that will require more timely
recognition of expected credit losses. Specifically, the new Standard requires entities to account for expected
credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses
on a timelier basis.
In January 2015 the AASB approved the final version of AASB 9. A revised version of AASB 9 (AASB 2013-9)
was issued in December 2013 which included the new hedge accounting requirements, including changes to
hedge effectiveness testing, treatment of hedging costs, risk components that can be hedged and disclosures.
AASB 9 includes requirements for a simplified approach for classification and measurement of financial assets
compared with the requirements of AASB 139.
AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities
elected to be measured at fair value. This change in accounting means that gains caused by the deterioration of
an entity’s own credit risk on such liabilities are no longer recognised in profit or loss.
The Group does not expect this standard will have significant impact on the Group financial report however it
will continue to assess this.
AASB 2014-1 Part A -Annual Improvements 2010–2012 Cycle Amendments to Australian Accounting
Standards - Part A Annual Improvements to IFRSs 2010–2012 Cycle
Application Date of Standard: 1 July 2014, Application Date: 1 January 2015
AASB 2014-1 Part A: This standard sets out amendments to Australian Accounting Standards arising from the
issuance by the International Accounting Standards Board (IASB) of International Financial Reporting
Standards (IFRSs) Annual Improvements to IFRSs 2010–2012 Cycle and Annual Improvements to IFRSs
2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
AASB 2 - Clarifies the definition of 'vesting conditions' and 'market condition' and introduces the definition of
'performance condition' and 'service condition'.
AASB 3 - Clarifies the classification requirements for contingent consideration in a business combination by
removing all references to AASB 137.
AASB 8 - Requires entities to disclose factors used to identify the entity's reportable segments when operating
segments have been aggregated. An entity is also required to provide a reconciliation of total reportable
segments' asset to the entity's total assets.
AASB 116 & AASB 138 - Clarifies that the determination of accumulated depreciation does not depend on the
selection of the valuation technique and that it is calculated as the difference between the gross and net
carrying amounts.
AASB 124 - Defines a management entity providing KMP services as a related party of the reporting entity. The
amendments added an exemption from the detailed disclosure requirements in paragraph 17 of AASB 124 for
KMP services provided by a management entity. Payments made to a management entity in respect of KMP
services should be separately disclosed.
25
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
The Group does not expect this amendment to have any significant impacts on the Group financial report
however it will continue to assess this.
AASB 2014-1 Part A -Annual Improvements 2011–2013 Cycle Amendments to Australian Accounting
Standards - Part A Annual Improvements to IFRSs 2011–2013 Cycle
Application Date of Standard: 1 July 2014, Application Date: 1 January 2015
Annual Improvements to IFRSs 2011–2013 Cycle addresses the following items:
AASB13 - Clarifies that the portfolio exception in paragraph 52 of AASB 13 applies to all contracts within the
scope of AASB 139 or AASB 9, regardless of whether they meet the definitions of financial assets or financial
liabilities as defined in AASB 132.
AASB40 - Clarifies that judgment is needed to determine whether an acquisition of investment property is solely
the acquisition of an investment property or whether it is the acquisition of a group of assets or a business
combination in the scope of AASB 3 that includes an investment property. That judgment is based on guidance
in AASB 3.
The Group does not expect these amendments to have any significant impacts on the Group financial report
however it will continue to assess this.
AASB 2014-4 Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to
AASB 116 and AASB 138)
Application Date of Standard: 1 January 2016, Application Date: 1 January 2016
AASB 116 and AASB 138 both establish the principle for the basis of depreciation and amortisation as being
the expected pattern of consumption of the future economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not
appropriate because revenue generated by an activity that includes the use of an asset generally reflects
factors other than the consumption of the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed to be an inappropriate basis for measuring
the consumption of the economic benefits embodied in an intangible asset. This presumption, however, can be
rebutted in certain limited circumstances.
The Group does not expect this amendment to have any significant impacts on the Group financial report
however it will continue to assess this.
IFRS 15 Revenue from Contracts with Customers
Application Date of Standard: 1 January 2017, Application Date: 1 January 2017
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which replaces IAS 11
Construction Contracts, IAS 18 Revenue and related Interpretations (IFRIC 13 Customer Loyalty Programmes,
IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and
SIC-31 Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. An entity recognises revenue in accordance with that core principle by
applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
This standard was adopted by the AASB on 12 December 2014.
The Group is currently evaluating the impact of this new standard.
26
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies
a) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of the Group at 31 December 2014
and the results for the year then ended.
Subsidiaries are all those entities over which the Group 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 Group. They are de-consolidated from the date
that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group 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 Group.
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 Group 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 Group 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.
b) 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 consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
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.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the
Group's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group re-measures 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 re-measured and its subsequent settlement
is accounted for within equity.
27
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
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.
c) Foreign currency translation
The financial report is presented in Australian dollars, which is the Group’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 Group’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of 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.
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 Group’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 Group's translation reserve. Such exchange differences are
recognised in profit or loss in the period in which the foreign operation is disposed.
d) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue
is recognised:
28
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
Rendering of services
Revenue is recognised where the contract outcome can be estimated reliably and control of the right 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. Where customers prepay for services and it is not
possible to allocate those prepayments to the services provided the revenue is amortised over the expiry period
of the credit.
Barter transactions
The group periodically enters into barter transactions and revenue is recognised based on the requirements of
SIC 31. No barter revenue has been recognised in the current year.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
e) Taxes
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.
29
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition
at that date, are recognised subsequently if new information about facts and circumstances change. The
adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred
during the measurement period or recognised in profit and loss.
Other taxes
Revenues, expenses and assets are recognised net of the amount of associated VAT/GST, unless the
VAT/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 VAT/GST receivable or payable. The net
amount of VAT/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 VAT/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 VAT/GST recoverable from, or payable to,
the tax authority.
f) Property, plant and equipment
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost 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.
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
The useful lives are unchanged from the prior reporting period.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Group. 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.
g) Leases
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.
30
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
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.
h) 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
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and
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.
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.
31
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
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. If at any point the
software is no longer is in use or contributing to add value it will be written down to zero.
i) 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 (‘CGUs’) 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.
The recoverable amount of a CGU is the higher of its fair value less costs of disposal and its value in use. The
Group bases its impairment calculations on detailed budget and forecast calculations which are prepared
separately for each CGU covering a period of five years. The first year of the period becomes the Annual Budget
for the Group for the following year. A further four years are extrapolated at projected growth rates for both
revenue and costs which management consider are appropriate for the business cycle and the markets the CGUs
operate in. The five year cashflows are discounted using a weighted average cost of capital (‘WACC’). WACC
calculations are made for each CGU based upon prevailing long-term bond rates and market risk premiums. CGU-
specific terminal multiples (‘TMs’) are applied to discounted fifth year cashflows. The TM is derived from WACC
rates and long-term growth rates using Gordon’s Growth Formula.
Given the sensitivity of growth rates for both revenue and expenses due to stage of where the Group and the
markets for which it operates are at, a range of possible scenarios are modelled to assess the carrying value of
goodwill for impairment. These scenarios include: uplifts and downgrades of revenue assumptions and WACC and
TM values above and below those calculated.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
j) 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.
k) 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.
32
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
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 Group 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.
l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
m) 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.
n) 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
o) 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.
33
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
p) 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 Group in respect of
services provided by employees up to reporting.
Defined contribution pension expense
Contributions to defined benefit contribution pension plans are expensed when incurred.
Share-based payments
The Group 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 Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Group 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.
q) 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.
34
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
2. Summary of significant accounting policies (continued)
r) 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.
3. 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, contingent 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.
Share-based payment transactions
The Group 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.
Estimation of useful lives of assets
The Group 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.
35
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
3. Critical accounting judgements, estimates and assumptions (continued)
Goodwill and other indefinite life intangible assets
The Group 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 2. 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 2, 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 Group 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.
4. Operating segments
Identification of reportable operating segments
The Group identifies the chief operating decision maker (‘CODM’) as the executive management team. Information
reported to the executive management team 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 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 Group does not have a major customer that contributes 10% or
more to the Group's revenue.
36
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
4. Operating segments (continued)
Operating segment information
-
-
-
-
-
-
-
-
-
-
2,814,246
2,814,246
-
430,361
3,244,607
3,244,607
(762,753)
(3,040,688)
(49,853)
(16,005,590)
Malaysia
$
Indonesia
$
Thailand
$
Corporate
$
Intersegment
eliminations/
unallocated
$
Total
$
Consolidated - 2014
Revenue
Sales
Total sales revenue
Other revenue
Interest Revenue
Total revenue
2,126,078
105,268
2,126,078
-
1,561
105,268
-
-
582,900
582,900
-
3,950
2,127,639
105,268
586,850
-
-
-
424,850
424,850
Total revenue
Depreciation and amortisation
Impairment of assets
Finance costs
Other expenses
2,127,639
(434,442)
-
(49,853)
(4,727,711)
105,268
(91,346)
(3,040,688)
-
(2,590,363)
586,850
(106,819)
-
-
(3,042,941)
424,850
(130,146)
-
-
(5,644,575)
Loss before income tax
expense
Income tax expense
Loss after income tax
expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
(3,084,367)
(5,617,129)
(2,562,910)
(5,349,871)
-
(16,614,277)
(85,653)
(16,699,930)
5,672,377
398,695
20,783,764
13,908,273
-
40,763,109
2,340,496
835,111
813,725
2,010,689
-
40,763,109
6,000,021
6,000,021
37
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
4. Operating segments (continued)
-
-
-
-
-
-
-
-
-
1,346,407
1,346,407
99,144
407,132
1,852,683
1,852,683
(312,898)
(41,092)
(8,350,471)
Malaysia
$
Indonesia
$
Thailand
$
Corporate
$
Intersegment
eliminations/
unallocated
$
Total
$
Consolidated - 2013
Revenue
Sales
Total sales revenue
Other revenue
Interest Revenue
Total revenue
1,102,483
1,102,483
99,144
-
16,544
16,544
-
-
227,380
227,380
-
-
1,201,627
16,544
227,380
-
-
-
407,132
407,132
Total revenue
1,201,627
16,544
227,380
407,132
Depreciation and amortisation
(173,180)
(65,230)
(74,488)
Finance costs
(41,092)
-
-
-
-
Other expenses
(3,473,506)
(1,124,149)
(1,137,829)
(2,614,987)
Loss before income tax
expense
Income tax expense
Loss after income tax
expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
5. Revenue
Sales revenue
Rendering of services
Other revenue
Other revenue
Interest
Revenue
(2,486,151)
(1,172,835)
(984,937)
(2,207,855)
-
(6,851,778)
(50,000)
(6,901,778)
3,900,025
3,083,307
1,531,800
12,482,485
-
20,997,617
20,997,617
2,539,906
160,759
259,580
394,358
-
3,354,603
3,354,603
Consolidated
2014
$
2013
$
2,814,246
1,346,407
-
430,361
-
430,361
99,144
407,132
506,276
- 3,244,607
1,852,683
-
-
38
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
6. Expenses
Loss before income tax includes the following
specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Fixtures and fittings
Consolidated
2014
$
2013
$
33,909
177,230
15,267
25,455
100,700
8,710
Total depreciation
-
-
226,406
134,865
Amortisation
Websites, domain names, trademarks and other
intangibles
Impairment of assets
536,347
178,033
3,040,688
-
Total depreciation, amortisation and impairment
-
-
3,803,441
312,898
Finance costs
Interest and finance charges paid/payable
Employment and related expenses
Salaries and wages
Super and pension related
Commissions
Other employment benefits
Share based payments - equity settled
Incentives/Bonus
Compensated leave
49,853
41,092
3,533,370
122,344
91,100
231,589
924,694
852,692
26,977
2,818,266
167,060
26,810
234,844
729,500
451,638
5,389
Total employment and related expenses
-
-
5,782,766
4,433,507
There are currently 344 full-time employees (2013: 190).
39
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
7. Income tax expense
Income tax recognised in profit or loss
Current tax
Current tax expense/(benefit) in respect of the current year
Under/(Over) provision of prior year tax
Deferred tax
Deferred tax expense recognised in the current year
Total income tax expense/(benefit) recognised in the current year
The income tax expense for the year can be reconciled to the accounting loss as follows:-
Loss before tax from operations
Income tax expense calculated at 30% (2010: 30%)
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
Tax losses of a revenue nature
Deductible transaction costs arising on shares issued
Consolidated
2014
$
2013
$
85,653
50,000
-
-
85,653
50,000
-
-
-
-
-
-
(16,614,277)
(6,851,778)
(4,984,283)
(2,055,533)
482,003
336,003
197,682
298,451
(285,777)
(67,632)
4,676,028
1,538,711
85,653
50,000
6,567,530
375,953
6,943,483
1,891,502
90,176
1,981,678
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 sources of taxable income to utilise the
losses and/or future deductions.
8. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit
Consolidated
2014
$
2013
$
7,976,510
7,385,125
315,596
12,166,034
-
- 15,361,635
12,481,630
40
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
9. Current assets - trade and other receivables
Trade receivables
Consolidated
2014
$
2013
$
1,036,441
523,652
The average credit period on rendering of services is 30 days for direct client billings and 90 days for
agency billings. The Group 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 Group has recognised a loss of $31,395 (2013: $nil) in profit or loss in respect of impairment of
receivables for the year ended 31 December 2014.
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $376,033
as at 31 December 2014 ($55,299 as at 31 December 2013).
The Group 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
Doubtful debts reconciliation
As at 1 January 2013
Charge for the year
Utilised
Unused amounts reversed
At 31 December 2013
Charge for the year
Utilised
Unused amounts reversed
At 31 December 2014
Consolidated
2014
$
136,672
113,912
116,381
10,068
2013
$
48,082
7,217
-
-
-
-
377,033
55,299
$
-
-
-
-
31,395
-
-
31,395
41
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
10. Current assets - other
Prepayments
Other deposits
Accrued interest and GST receivable
11. 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
2014
$
2013
$
292,330
202,770
194,790
216,484
184,625
249,645
-
- 689,890
650,754
Consolidated
2014
$
296,524
(174,550)
-
-
121,974
2013
$
158,537
(27,598)
130,939
1,255,480
(898,856)
612,397
(125,661)
-
-
356,624
486,736
156,063
(100,667)
-
55,396
64,878
(14,599)
50,279
-
533,994
667,954
-
-
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 1 January 2013
Additions
Exchange differences
Depreciation expense
Balance at 31 December 2013
Additions
Movement to Other Intangibles*
Additions from business combinations
Impairment
Exchange differences
Depreciation expense
Balance at 31 December 2014
*Transfer of website costs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42
Leasehold
improvements
$
Plant and Furniture and
equipment
$
fittings
$
109,007
39,445
7,942
(25,455)
102,593
496,107
(11,264)
(100,700)
130,939
24,017
-
21,319
(40,946)
20,554
(33,909)
486,736
284,414
(151,100)
61,845
(127,503)
(20,538)
(177,230)
33,676
27,198
(1,885)
(8,710)
50,279
18,712
-
10,890
(10,405)
1,187
(15,267)
Total
$
245,276
562,750
(5,207)
(134,865)
667,954
327,143
(151,100)
94,054
(178,854)
1,203
(226,406)
121,974
356,624
55,396
533,994
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
12. Non-current assets- Intangibles and Goodwill
Goodwill - at cost
Other intangible assets - at cost
Less: Accumulated amortisation
Consolidated
2014
$
2013
$
-
-
17,034,220
17,034,220
4,701,600
4,701,600
-
-
-
-
7,137,423
(1,030,494)
6,106,929
2,150,297
(178,270)
1,972,027
23,141,149
6,673,627
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 1 January 2013
Additions
Additions through business
combinations (note 28)
Exchange differences
Amortisation expense
Balance at 31 December 2013
Additions
Additions through business
combinations (note 28)
Impairment
Exchange differences
Amortisation expense
Goodwill
$
Other
intangibles
$
Total
$
-
-
-
2,600,000
400,000
1,847,109
377,573
4,447,109
777,573
-
-
-
1,737,812
-
1,737,812
-
-
-
-
-
-
-
-
-
-
-
-
(36,212)
-
(74,623)
(178,032)
(110,835)
(178,032)
4,701,600
-
1,972,027
1,349,612
6,673,627
1,349,612
-
-
-
-
14,632,640
3,492,100
18,124,740
(2,545,710)
245,690
-
-
-
(316,124)
145,661
(536,347)
(2,861,834)
391,351
(536,347)
Balance at 31 December 2014
-
-
- 17,034,220
6,106,929
23,141,149
Goodwill is allocated for impairment testing purposes to the Indonesia cash generating unit with a carrying value
of $nil (2013: $2,380,784) as a result of annual impairment testing.
Goodwill of $15,087,427 (2013: $418,827) is allocated to the Thailand cash generating unit after adjusting for
foreign exchange rates at the balance sheet date.
Goodwill of $1,946,793 (2013: $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. Software is amortised over 3-5 years.
During the year the useful life of EVO license was re-measured and decreased from 10 years to 3 years in line
with the initial expiry of the EVO license contract. Total amount amortisation charged during the year was
$304,508.
43
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
12. Non-current assets- Intangibles and Goodwill (continued)
Evo license (Malaysia)
Autospinn.com website (Thailand)
Mobil123.com website (Indonesia)
One2Car.com brand (Thailand)
One2Car.com customer base (Thailand)
Other Intangibles- Internal
Consolidated
2014
$
2013
$
359,891
602,587
-
2,162,528
1,329,572
1,652,351
6,106,929
663,636
625,029
329,723
-
-
353,639
1,972,027
The Group performed its annual impaired test at 31 December 2014. The Group considers the relationship between
its market capitalisation and its book value, among other factors, when reviewing for indicators of impairment. As at
31 December 2014, the market capitalisation of the group was above the book value of its equity and therefore not
an indicator of impairment.
Following accounting policy 2 i) the recoverable amount of the cash generating units was determined based on a
value in use calculation.
The 5 year Group cashflows assume that revenues rise significantly year on year due to increased penetration of
car dealers and private sellers, the continued migration of advertising monies from offline to online and a strong
ASEAN automotive market with 10% per annum growth in marketing spend. Long term growth rates were set at
5% reflecting longer-term growth in ASEAN economies.
Management have determined the appropriate WACC discount rate, terminal multiple (‘TM’) and long-term growth
rates as follows:
Malaysia
Thailand
Indonesia
WACC rate
14.9%
15.4%
20.4%
Terminal Multiple
10.66
10.10
6.84
Long term growth rates
5%
5%
5%
Thailand and Malaysia CGUs
For the Malaysia and Thailand CGUs the WACC and TM rates did not indicate impairment. Scenarios of 10%
revenue upgrade and downgrade were analysed. WACC and TM scenarios of 8% to 20% and 4 to 14
respectively were analysed (varying by market). The scenarios did not indicate impairment.
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.
44
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
12. Non-current assets- Intangibles and Goodwill (continued)
Indonesia CGU
Recently a strategic review was undertaken of the Indonesian CGU with the result that the estimated timing of the
revenue streams would be later than first modelled due to the immaturity of the market. Consequently there was a
decrease in medium-term revenues and a delay to the CGU attaining positive cashflows. These new assumptions
were integrated into the annual impairment process.
A WACC rate of 20.4% was used with a terminal value multiple of 6.8. The WACC rate utilised was higher than
that used in the 2013 impairment review due to the higher risk free rate and market risk premium now being
attributed to Indonesia. As a consequence the TM dropped year on year.
The result of the assessment was that there was a negative value in use and hence the assets of the Indonesian
CGU were fully impaired.
Sensitivities were undertaken at 10% revenue upgrade and downgrade and across a range of terminal value
multiples (4x – 14x). The analysis supported a full impairment of Indonesian CGU assets as below:
Goodwill
Intangibles
Fixed assets
$
2,545,710
316,124
178,854
3,040,688
13. Current liabilities - trade and other payables
Trade payables and accruals
Billings in advance
Deferred consideration
Consolidated
2014
$
2013
$
2,093,072
707,690
1,682,154
756,705
136,828
-
-
- 4,482,916
893,533
Refer to note 21 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
group has financial risk management in place to ensure that all payables are paid within the credit time frame.
The deferred consideration includes $706,544 in relation to the acquisition of DQBP Sdn Bhd which was completed
on 8 March 2013, to be paid in cash and shares upon meeting of performance criteria in the first quarter of 2015.
The remainder ($975,610) is in relation to the One2Car transaction on 11 December 2014, this amount was paid in
22 January 2015.
45
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
14. Current liabilities – provisions
Employee benefits
Staff incentives and bonuses
Other
Consolidated
2014
$
169,714
633,862
176,464
2013
$
35,842
512,187
81,796
-
-
980,040
629,825
The employee benefits category is composed of the compensated leave provision for the year which has grown
year on year with the increase in staff numbers. The balance will be utilised by March 2015 in line with company
leave policies.
The staff incentives and bonuses provision is expected to be paid to employees by the end of March 2015.
The other provision category are provisions for taxes in Indonesia.
Movements in provisions
Movements in each class of provision during the current financial year are set out below:
Consolidated - 2014
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
\
Employee
Benefits
Staff incentives
& bonuses
$
Other
$
35,842
175,063
(41,191)
512,187
702,115
(580,440)
81,796
94,668
-
Carrying amount at the end of the year
-
-
169,714
633,862
176,464
15. Non-current liabilities - borrowings
Bank loans
Shareholder loans
Consolidated
2014
$
2013
$
11,321
525,744
16,369
513,644
-
-
537,065
530,013
Refer to note 21 for further information on financial instruments.
In 2012 a loan of RM 1,500,000 equivalent to $525,744 as at 31 December 2014 was advanced to the group from
a shareholder of Auto Discounts Sdn Bhd. Interest is charged at a rate of 8% per annum ($49,853) interest
expense in 2014 Financial Year – see note 6 Expenses). Interest is payable annually by 31 May. The loan
(principal) is repayable in financial year 2017.
Bank loans are generated from the financing of company cars for the Group.
46
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
16. Non-current liabilities - payables
Deferred consideration
Refer to note 21 for further information on financial instruments.
Consolidated
2014
$
2013
$
-
1,301,232
In the prior year, the deferred consideration was in relation to the acquisition of DQBP Sdn Bhd completed on 8
March 2013, to be paid in cash and shares upon meeting of performance criteria. This has been transferred to
current liabilities in the current reporting period.
17. Equity - issued capital
Consolidated
Consolidated
2014
Shares
2013
Shares
2014
$
2013
$
Ordinary shares - fully paid
217,769,656
184,667,041
70,188,628
36,854,151
Movements in ordinary share capital
Details
Date
No of shares
$
Balance
Issue of shares - carsales.com Ltd
Issue of shares - STI to employees
Issue of shares - directors remuneration
Issue of shares - carsales.com Ltd
Issue of shares - employees
Issue of shares - business purchase
One2car.com
Issue of shares - Vendor of
One2car.com
Issue of shares – Share Purchase Plan
Share issue costs
31 December 2013
5 March 2014
30 April 2014
10 June 2014
27 June 2014
14 August 2014
184,667,041
7,179,240
543,553
397,340
215,000
186,672
36,854,151
7,179,240
581,602
260,023
140,698
300,000
20 November 2014
19,100,000
21,000,000
12 December 2014
12 December 2014
3,374,382
2,106,428
3,036,944
1,921,000
(1,085,030)
Balance
31 December 2014
217,769,656
70,188,628
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.
47
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
17. Equity - issued capital (continued)
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 group 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 group's capital risk management policy remains unchanged from the 31 December 2013 Annual Report. The
capital structure of the group includes equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings. The group operates in various countries, primarily through subsidiary companies
established in the markets in which the group operates.
The group 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 group is not subject to any
externally imposed capital requirements.
18. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Equity reserves
Consolidated
Balance at 1 January 2013
Foreign currency translation
Shares to be issued in lieu of directors
remuneration
Shares to be issued in lieu of STI
-
Balance at 31 December 2013
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of directors
remuneration
Shares to be issued in lieu of LTI*
Shares to be issued in lieu of STI
Consolidated
2014
$
2013
$
(11,217)
909,295
(10,965,292)
(238,149)
650,700
(10,965,292)
-
-
(10,067,214)
(10,552,741)
Foreign
currency
reserve
$
Share-based
payments
reserve
$
Equity
reserves
$
Total
$
(51,283)
(186,866)
-
-
-
(238,149)
226,932
-
-
-
-
100,000
-
256,000
294,700
650,700
-
(550,700)
260,000
253,628
295,667
(10,965,292)
-
(10,916,575)
(186,866)
256,000
294,700
(10,552,741)
226,932
(550,700)
260,000
253,628
295,667
(10,965,292)
-
-
-
-
-
Balance at 31 December 2014
-
(11,217)
909,295
(10,965,292)
(10,067,214)
* For financial year 2013 and 2014
48
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
19. Equity - accumulated losses
Consolidated
2014
$
2013
$
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
-
-
(8,658,396)
(1,756,618)
(16,699,930)
(6,901,778)
-
-
(25,358,326)
(8,658,396)
20. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
21. Financial instruments
Financial risk management objectives
The group'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 group does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
Market risk
Foreign currency risk
The group 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 group'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
2014
2013
Weighted
average
interest
rate
Balance
Weighted
average
interest
rate
Balance
%
$
%
$
2.92
15,361,635
3.27
12,481,630
Net exposure to cash flow interest rate risk
15,361,635
12,481,630
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
49
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
21. Financial instruments (continued)
Basis points increase
Basis points decrease
Consolidated - 2014
Basis points
change
Effect
on
profit
before
tax
Effect
on
equity
Basis points
change
Effect
on
profit
before
tax
Effect
on
equity
Cash at bank
50
72,898
-
50
(72,898)
-
Basis points increase
Basis points decrease
Consolidated - 2013
Basis points
change
Effect
on
profit
before
tax
Effect
on
equity
Basis points
change
Effect
on
profit
before
tax
Effect
on
equity
Cash at bank
50
62,408
-
50
(62,408)
-
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the group. The group 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 group 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 group'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 group's short, medium and long- term funding and
liquidity management requirements. The group 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 group'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 - 2014
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
$
-
-
1,256,502
1,682,154
2,938,656
-
0
0
-
-
0
-
-
0
1,256,502
1,682,154
2,938,656
50
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
21. Financial instruments (continued)
Consolidated - 2013
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
$
-
-
468,595
-
-
1,301,232
468,595
1,301,232
-
-
-
-
-
-
468,595
1,301,232
1,769,827
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.
22. Key management personnel disclosures
Directors
The following persons were directors of the Group during the financial year:
Patrick Grove
Chairman
Lucas Elliott
Non Executive
Shaun Di Gregorio
Non Executive
Mark Britt
Non Executive
Cameron McIntyre
Non Executive
Ajay Bhatia (Appointed 21 November 2014) 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 Group, directly or indirectly, during the financial year:
Damon Rielly
Joe Dische (appointed 9 June 2014)
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 the Group is
set out below and are the amounts recognised as an expense in the reporting period.
51
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
22. Key management personnel disclosures (continued)
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Consolidated
2014
$
824,170
-
-
-
924,694
2013
$
865,107
-
-
-
729,500
There were no share options or tax deferred shares granted during the year. Other long-term benefits refer to key
management personnel long term incentive plan accrued liabilities. Share-based payments refer to short-term
incentives for key management personnel and director remuneration. See the Remuneration Report for further
information.
-
-
1,748,864
1,594,607
23. 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
Consolidated
2014
$
2013
$
189,200
101,500
6,600
-
195,800
101,500
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.
24. Contingent liabilities
There are various claims that arise in the ordinary course of business against the Group and its subsidiaries. The
amounts of any liability (if any) at 31 December 2014 cannot be ascertained and the Group believes that any
resulting liability would not materially affect the position of the group.
25. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
52
Consolidated
2014
$
2013
$
351,160
222,310
573,470
153,243
36,630
189,873
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
25. Commitments (continued)
Operating lease commitments relate to premises occupied by the group with lease terms currently still available of
less than 5 years. The group does not have an option to purchase the premises at the expiry of the lease period.
The premises office leases terminate: Malaysia - November 2015 to May 2017, Thailand - October 2015 to
December 2015 and Indonesia - November 2019.
The lease payments recognised in the profit and loss in 2014 were $193,345 (2013: $168,251).
26. Related party transactions
Parent entity
iCar Asia Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in the remuneration report in the directors' report.
Transactions with related parties
During the year Group purchased the following services from carsales.com Ltd (a major shareholder in iCar Asia
Limited):
(cid:120) $7,800 of services from Redbook (Automated Data Services Pty Ltd, an 100% subsidiary of carsales.com
Limited)
(cid:120) $10,836 reimbursement of travelling expense incurred by a Director of the Group who is also an employee
of carsales.com Limited
During the year the Group purchased company secretarial services to a value of $50,344 from Australian Company
Secretaries Pty Ltd, the principal of which is Nick Geddes who is company secretary of the Group and a director in
prior year.
During the year the Group entered into periodic transactions with iProperty Group Limited where each company
provided the other with reciprocal online advertising space on their Malaysian websites. The management believes
that these transactions did not qualify as Barter Transactions under IAS 18 / SIC 31 so have not been recognised
as revenue in this or the prior reporting period.
Director and director-related entities hold directly, indirectly or beneficially interests of 116,105,387 (2013:
108,292,360) in the ordinary shares of the company as at the reporting date.
Receivable from and payable to related parties
There was a payable to Redbook (Automated Data Services Pty Ltd, an 100% subsidiary of carsales.com Ltd)
for $1,300 in relation to services at the end of the current reporting period. The transaction is on normal commercial
terms. There were no trade receivables from or trade payables to related parties at the previous reporting date.
Loans to/from related parties
There were no balances outstanding at the current or previous reporting date in relation to loans with related
parties.
53
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
27. 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
(2,398,246)
(721,400)
Total comprehensive income
(2,398,246)
(721,400)
Parent
2014
$
2013
$
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note
2, 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.
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
54
Parent
2014
$
2013
$
14,103,672
12,457,004
67,973,567
36,242,811
1,136,651
727,088
1,578,695
1,464,588
66,394,872
34,778,223
70,188,628
66,744
(3,860,500)
36,854,151
(613,674)
(1,462,254)
66,394,872
34,778,223
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
28. Business combinations
Livelifedrive.com
On 7 January 2013, the group 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 1.8 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) was payable subject to meeting certain
performance targets and warranty periods. During the year MYR 1.8 million (approximately AUD 0.6 million) was
paid in cash and shares. A further MYR 2.0 million (approximately AUD 0.7 million) is due to be paid in 2015.
The accounting for this acquisition has been finalised and the MYR 5.5 million (AUD 1.8 million) estimated
consideration has been 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.
The acquisition of livelifedrive.com, the fastest growing automotive site in Malaysia, enabled the Group to access
content and vehicle specification data in Malaysia to grow both new car and used car markets, plus in-depth market
information to further increase leads as the number 1 digital automotive market place in Malaysia.
The accounting for this acquisition was finalised in the current year.
Thaicar.com
On 4 February 2013, the group entered into an agreement to acquire 100% of Thaicar.com and the deal was
completed on 8 March 2013. The 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 accounting for this acquisition has been finalised and the consideration of $400,000 has been accounted for as
goodwill. As at the balance sheet date, the goodwill has been revalued for changes in foreign exchange rates.
The acquisition of Thailand's number 2 automotive classified sites was a critical step to enter the automotive
classified market in Thailand. Coupled with the Group’s leading automotive content site, autospinn.com, it places the
Group as the leading digital automotive market place in Thailand.
The accounting for this acquisition was finalised in the current year.
One2car.com
On the 10 November 2014 the group entered into agreements to acquire 100% of One2Car Co Ltd, the owner of the
website One2car.com and the transaction was completed on 11th December 2014. 30% of the shares were acquired
directly and 70% via two holding companies: O2C Holdings (Thailand) Co. Ltd and Perfect Scenery Ventures
Limited. One2Car is the dominant digital classified site in Thailand delivering more than 80% of leads to used car
dealers. The acquisition of One2car.com allows the Group to develop a market-leading position in the online
automotive space in Thailand alongside its other local assets: Austospinn.com and Thaicar.com.
The total consideration was Thai Baht 500 million, equivalent to AUD 18,097,925 in a mixture of cash and shares.
Equivalent AUD 14,085,371 was paid in cash and equivalent AUD 3,036,944 in iCar Asia shares in December 2015.
Thai Baht 26,000,000, equivalent to AUD 975,610 was deferred to after the year end and was paid on January 22
2015. The latter payment was made directly to staff of One2car.com as mandated under the Share Sale Agreement.
The fair value of the shares at completion was $0.90 and this amount has been used to calculate the consideration
transferred.
The acquisition was funded by a placement to existing investors of new fully paid ordinary shares in iCar Asia Limited
at an issue price of $1.10 per new share. The placement was completed on 12 November 2014 and raised
$21,000,000, before costs of $1,039,122.
55
For personal use only
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
28. Business combinations (continued)
The performance of One2Car is consolidated into the results of the group from 12 December 2014.
The goodwill on the acquisition arises from the value that can be extracted from the assets from:
(cid:120)
(cid:120)
(cid:120)
synergies with the Group’s existing Thai assets
sharing the skills and experience of the Group
through increased investment in technology and sales capability with the Group’s superior access to capital
A purchase price allocation process has been undertaken allocating the consideration as follows:
Brand
Customer base
Net assets
Goodwill
Total
$
2,162,528
1,329,572
59,993
14,545,832
18,097,925
Representing
Cash paid to vendor
Deferred consideration
iCar Asia Limited shares issued to vendor
Total
$
14,085,371
975,610
3,036,944
18,097,925
The life of the Brand Intangible assets is indefinite as it is the intention of the Group to always operate the
One2car.com brand due its market reputation and high levels of unpaid online traffic.
The Customer base Intangible asset has a life of 6 years reflecting the historical customer churn.
One2car.com will be integrated with the existing Group Thailand assets (Autospinn.com and Thaicar.com) and will
not generate separate cashflows. The goodwill and intangible assets have been allocated to the Thailand CGU.
The net assets acquired are as follows and are at fair value:
Assets
Cash
Trade Receivable and other receivable
Fixed Asset
Non-current assets
Liabilities
Trade and other payables
Non-current liabilities
Net Assets
$
224,894
223,660
97,559
16,036
562,149
399,224
102,932
502,156
59,993
One2Car.com generated $90,159 of revenue and $1,540 of net loss in the period from acquisition (11
December 2014) to the end of the 2014 financial period. If One2Car.com had been a consolidated entity for the
full year the revenue generated would have been $1,517,571 and net profit for the period would have been
$59,610.
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
28. Business combinations (continued)
Payments for purchase of subsidiaries net of cash acquired
The total cash flows in relation to the purchased of subsidiaries is outlined below:
Deferred Consideration in relation to Livelifedrive.com
Payment in relation to acquisition of One2Car.com
Cash in One2Car.com business in acquisition
$
304,322
14,085,371
(224,894)
14,164,799
The gross and fair value of the trade receivables acquired amounted to $223,600. None of the trade receivables
were subsequently impaired.
Acquisition-related costs of $167,000 have been included in the administration expense in the Statement of
Comprehensive Income and in operating cash flows in the Statement of Cash Flows.
The accounting goodwill is provisional and the initial accounting is not complete due to proximity of completion to
reporting date and the accounting is expected to be finalised by June 2015.
29. 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
iCar Asia Pte Ltd
Netyield Sdn Bhd
iCar Asia Sdn Bhd
PT Mobil Satu Asia
iCar Asia (Thailand) Limited *
DQBP Sdn Bhd
O2C Holdings (Thailand) Co. Ltd
Perfect Scenery Ventures Limited
One2Car Co., Ltd
Country of
incorporation
Singapore
Malaysia
Malaysia
Indonesia
Thailand
Malaysia
Thailand
British Virgin
Islands
Thailand
Equity holding
2014
%
2013
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
*Group holds an economic interest of 100% with a nominee Thai shareholder holding an interest in the company on
behalf of the Group.
30. Events after the reporting period
On 22 January 2015 the Group announced and performed a restructure of its operations in Thailand in light of the
purchase of One2Car.com. The restructure resulted in a number of employees leaving the business. The restructure
will have an adverse impact on the 2015 Financial Year profit and loss of circa $300,000. The restructure removed
duplicated functions and Management believe this provides the Thai operations with an appropriate cost base to
enhance shareholder value in the long-term. Please refer to note 28.
No other matter or circumstance has arisen since 31 December 2014 that has significantly affected, or may
significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future
financial years.
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
31. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2014
$
2013
$
Loss after income tax expense for the year
(16,699,930)
(6,901,778)
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
3,803,441
924,694
(512,789)
(39,136)
809,416
560,711
312,898
729,500
(285,264)
(495,677)
611,404
406,874
Net cash used in operating activities
(11,153,593)
(5,622,043)
32. Earnings per share
Consolidated
2014
$
2013
$
Loss after income tax attributable to the owners of iCar Asia Limited
and Controlled Entities
(16,699,930)
(6,901,778)
Weighted average number of ordinary shares used in calculating basic
earnings per share
193,284,054
168,417,797
Weighted average number of ordinary shares used in calculating diluted
earnings per share
193,284,054
168,417,797
Number
Number
Basic earnings per share
Diluted earnings per share
33. Share-based payments
Short-term and Long-term incentives
Short term incentive plan (STI)
Cents
Cents
(8.64)
(8.64)
(4.10)
(4.10)
Short-term incentives are used to reward staff based on performance on a year by year basis. Rewards are made
to participating key employee depending on the extent to which specific targets set at the beginning of the period
are met. The targets relate to the earnings of the company and achievement of other KPIs aligned to the
individual’s specific business function. The percentage and threshold level can differ for each individual and are
reviewed each year. Payments are made in the form of cash and shares. Shares are issued at the VWAP for the
year. Benefits are pro-rated where employees join during an STI year. It is intended that key employees of the
Group will be eligible to participate in the STI program.
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iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2014
33. Share-based payments (continued)
Long term incentive plan (LTI)
The Group has established a long term incentive plan (referred to hereafter as the ‘Plan’). The Plan is part of the
Group’s remuneration strategy and is designed to align the interests of management and shareholders and assist
the Group in the attraction, motivation and retention of executives. In particular, the Plan is designed to provide
relevant executives with an incentive for future performance and encouraging those executives to remain with the
Group. LTI payments are made to participating key employee depending on the extent to which specific targets set
at the beginning of the plan are met. The targets relate to the earnings of the company, achievement of other KPIs
aligned to the individual’s specific business function and staff remaining in employment. Payments are made in the
form of shares in the Group that are issued 2 years and 3 months after the end of the year to which they refer. The
shares are issued at a VWAP for the period that the KPIs are set. For example: for the 2014 reporting period, the
plan is payable in March 2017 based on the VWAP during the 2014 year. Benefits are pro-rated where employees
join during a Plan year. It is intended at this stage that only key executives of the Group will be eligible to participate
in the Plan. No shares have yet been issued under the Plan.
Performance targets
Performance targets for key management personnel are based upon an entry ‘gate’ of overall company
performance at EBITDA and then individual performance is assessed against KPIs specific to the individual’s
business responsibilities. For the CFO, KPIs include closing cash balance and reporting delivery. For the CIO, KPIs
include delivery of technology improvements and the performance of the internet sites. CEO KPIs include those
allocated to the CFO and CIO.
Employee share rights plan
There is no share rights plan in existence. There were no options issued or exercised during the period ended 31
December 2014. There are no outstanding options in iCar Asia shares.
Directors Remuneration
The Directors are remunerated in shares with no vesting requirements. The fair value of the share is deemed to be
the value outlined on their Director contracts with the Group and is expensed in the profit and loss on an accrual
basis. See the Remuneration Report within the Directors’ Report.
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 31 December 2014 are set out below:
Name
Patrick Grove1
Lucas Elliott1
Shaun Di Gregorio
Mark Britt
Cameron McIntyre2
Nick Geddes
Damon Rielly
Joey Caisse
Date
10/6/2014
10/6/2014
10/6/2014
10/6/2014
10/6/2014
10/6/2014
11/4/2014
11/4/2014
No of shares
$Fair Value3
91,686
73,349
73,349
73,349
54,258
31,349
348,308
195,245
60,000
48,000
48,000
48,000
35,507
20,515
372,690
208,912
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd.
2 Shares allocated to the Director were issued to carsales.com Limited.
3 For Executive KMP, fair value reflects issue price 28 February 2014 when the Group and Executive agree to a
share based payment arrangement.
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iCar Asia Limited and Controlled Entities
Directors’ declaration
In the directors' opinion:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 2014 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
25 February 2015
Kuala Lumpur
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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 repor t to the m embers of iC ar A sia Limit ed
R epor t on the financial r epor t
We have audited the accompanying financial report of iCar Asia Limited, which comprises the
consolidat ed sta tement of financial position as a t 3 1 December 2 01 4, the consolida ted st at ement of
comprehensive income, the consolida ted st at ement of changes in equity and the consolidat ed sta tement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory informa tion, and the directors' declaration of the consolida ted 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 Aust ralian Accounting St anda rds and the Corporations Act 2001 and for
such internal controls as the directors de termine 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 St andards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
re asonable assurance about whe ther the financial report is free from mat erial missta tement.
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 mat erial misst at ement of the financial report, whe ther due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's prepara tion 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 entit y's
internal controls. An audit also includes evalua ting the appropriat eness 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.
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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
2 0 1 4 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.
Repor t on t he re munera tion repor t
We have audited the Remuneration Report included in pages 1 0 to 1 8 of the directors' report for the year
ended 3 1 December 2 0 1 4. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 3 0 0 A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Aust ralian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of iCar Asia Limited for the year ended 3 1 December 2 0 1 4
complies with section 3 00 A of the Corporations Act 2001.
Ernst & Young
D. R. McGregor
Partner
Melbourne
2 5 February 2 0 15
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Corporate Governance Statement
31 December 2014
Corporate governance statement
The following statement sets out the governance framework adopted by the iCar Board.
Approach to Governance
In relation to Corporate Governance, the Board seeks to embrace those principles and practices that are relevant
and appropriate to the size and stage of development of the Company.
.
Compliance with Corporate Governance Codes
As the Company is listed on ASX, it is required by ASX Listing Rule 4.10.3 to disclose the extent to which it has
followed the recommendations set by the ASX Corporate Governance Council during the reporting period.
The ASX Corporate Governance Council recommendations are contained in the 2nd edition of the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations (ASX CGP). These principles were
last updated in June 2010; however the latest (3rd edition) was published during 2014 and will apply to the
Company with effect from 1 January 2015.
With the following exceptions the Company has adhered to the ASX Corporate Governance Principles and
Recommendations:
there is not presently a majority of independent directors on Board (Recommendation 2.1)
the Chairperson of iCar is not independent (Recommendation 2.2)
(cid:120)
(cid:120)
(cid:120) There
is not presently a majority of
independent directors on
the Audit & Risk Committee,
(cid:120)
(Recommendation 4.2) AND on the Remuneration & Nomination Committee (Recommendation 8.2)
the Chairs of the Audit & Risk and of the Remuneration & Nomination Committee are not independent
Directors (Recommendation 8.2)
Other than these instances, the Company has adopted the recommendations of the ASX Corporate Governance
Council.
1. Board of Directors- Role and Responsibilities
The Board is responsible for the overall corporate governance of iCar. The Board monitors the operational and
financial position and performance of iCar and oversees its business strategy including approving the strategic
goals of iCar. The Board is committed to maximising performance, generating appropriate levels of Shareholder
value and financial return, and sustaining the growth and success of iCar. In conducting business with these
objectives, the Board is concerned to ensure that iCar is properly managed to protect and enhance Shareholder
interests, and that iCar, its Directors, officers and employees operate in an appropriate environment of corporate
governance. Accordingly, the Board has created a framework for managing iCar including adopting relevant internal
controls, risk management processes and corporate governance policies and practices which it believes are
appropriate for iCar’s business and which are designed to promote the responsible management and conduct of
iCar.
The Board of Directors of iCar Asia has taken into account its size and activities in the development of the
framework.
2. Board of Directors - Compositions, Structure and Process
The Board has an appropriate blend of skills and experience and is of an appropriate size to adequately discharge
its responsibilities and duties given the current size, scale and nature of the Company's activities. Details of the
Directors are included in the Directors’ Report.
2.1 Skills, knowledge and experience
Directors are appointed based on the specific corporate, technical and governance skills and experience
required by the Company. The Board includes Directors with a relevant blend of experience in accounting and
finance, law, financial and investment markets, financial management and public company administration, and
director-level business or corporate experience.
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Corporate Governance Statement
31 December 2014
2.2 Non-Executive Directors
All Directors are Non-Executive Directors.
2.3 Chairman and Chief Executive Officer
The Chairman leads the Board and has responsibility for ensuring the Board receives accurate, timely and
clear information to enable Directors to perform their duties as a Board.
The Chief Executive Officer of the Company was appointed on 1 June 2012 and is responsible for and
accountable to the Board for the Company's management.
2.4 Company Secretary
The Company Secretary is appointed by the Board and is responsible for developing and maintaining the
appropriate governance systems and processes for the Board to fulfil its role and is responsible to the Board
for ensuring compliance with Board procedures and governance matters. The Company Secretary is also
responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating
with the ASX. The Company Secretary is Nick Geddes FCA FCIS.
2.5 Committees of the Board
To assist in the execution of its corporate governance responsibilities, the Board has two committees: the
Audit & Risk Committee and the Remuneration & Nomination Committee. When appropriate, special board
committees may be appointed to address specific issues. Requirements for Board committees are reviewed
regularly by the Board. All committees operate principally in a review or advisory capacity, except in cases
where powers are expressly conferred on or delegated to a committee by the Board.
2.5.1 Audit & Risk Committee
The Board has established an Audit & Risk Committee that operates under a charter approved by the
Board. It is the Board’s responsibility to ensure that an appropriate and effective internal control
framework exists within the entity.
The system of internal control is designed to safeguard assets, ensure the maintenance of proper
accounting records, monitoring of risks and the reliability of financial information as well as non-
financial considerations such as the benchmarking of operational key performance indicators. The
Board has delegated the responsibility for the establishment and maintenance of a framework of
internal control and ethical standards for the management of the economic entity to the Audit & Risk
Committee. That Committee also provides the Board with additional assurance regarding the reliability
of financial information for inclusion in the financial statements.
The members of the Audit & Risk Committee are Cameron McIntyre (Chair), Shaun Di Gregorio, Lucas
Elliott and Mark Britt. Full details and qualifications of the members are contained in the Directors’
Report.
The members are experienced in executive management, public company management and finance.
The Chair of the Audit & Risk Committee is not the Chairman of the Board. The external auditors, the
CEO and CFO are invited to Audit & Risk Committee meetings at the discretion of the Committee. The
number of meetings of the Committee during the year and Committee members’ attendance is set out
in the Directors’ Report.
The Audit & Risk Committee is also responsible for directing and monitoring the internal audit function
(if appointed), nomination of the external auditor, monitoring the independence of the external auditor
and reviewing the adequacy of the scope and quality of the annual statutory audit or review. In the
absence of an internal; auditor, the Audit & Risk Committee relies on the systems of internal check
control and on the work of the external auditor. Given the relatively small size of the Company it is not
considered appropriate that an internal auditor be appointed at present. The Committee reviews the
performance of the external auditors on an annual basis.
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Corporate Governance Statement
31 December 2014
2.5.2 Remuneration & Nomination Committee
The Remuneration & Nomination Committee is responsible for reviewing the remuneration of Directors
and senior management and evaluation of senior management, making recommendations to the Board
on these matters. This role also includes responsibility for recommendations to the Board on share and
option schemes, incentive performance packages, superannuation entitlements, composition of the
Board and the process and criteria for selection of new directors. The Committee also has the
responsibility to oversee the Company’s general remuneration strategy.
Remuneration levels are competitively set to attract the best qualified and experienced Directors
and key management personnel appropriate to the size and stage of development of the Company.
The Committee is authorised to obtain independent advice on the appropriateness of remuneration
packages.
Details of the amount of remuneration, and all monetary and non-monetary components, for each
of the 3 highest -paid (non-Director) key management personnel and all Directors during
for key
remuneration report
management personnel, if any, are also contained in the report.
the Directors’ Report. Termination entitlements
included
in
The Remuneration & Nomination Committee is responsible for identifying qualified individuals for
appointment to the Board. In identifying candidates, the Remuneration & Nomination Committee
will have regard to the selection criteria set out in the board appointment process, which will
include:
(cid:120)
skills, expertise and background that add to and complement the range of skills,
expertise and background of the existing directors;
(cid:120) diversity; and
(cid:120)
the extent to which the candidate would fill a present need on the Board
Whilst skills such as leadership and previous experience as a chief executive, chair or board
member of a large organisation with international operations have traditionally been prerequisites
to appointment as a director, the Board recognises that other skills gained from experience in the
following areas are key skills and experience which the Board as a whole should comprise:
(cid:120) marketing and sales;
(cid:120) policy and regulatory development and reform
(cid:120) health, safety and environment and social responsibility and
(cid:120) human resources
Remuneration levels are competitively set to attract the best qualified and experienced Directors
and key management personnel appropriate to the size and stage of development of the Company.
The Committee is authorised to obtain independent advice on the appropriateness of remuneration
packages. Non-Executive Directors are remunerated by way of fees and shares, and are not
provided with retirement benefits.
2.6
Independence
An independent Director, in the view of the Company, is a Non-Executive Director who:
(cid:120)
is not a substantial shareholder of the Company or an employee of, or otherwise associated directly
with, a substantial shareholder of the Company;
(cid:120) has not previously been employed in an Executive capacity by the Company, or been a Director after
ceasing to hold any such employment;
(cid:120) within the last three years has not been a principal of a professional adviser or a consultant to the
(cid:120)
Company to a material extent, or an employee of a significant service provider;
Is not a material supplier or customer of the Company, or an officer of or otherwise associated directly
or indirectly with a material supplier or customer;
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Corporate Governance Statement
31 December 2014
(cid:120) Has no material contractual relationship with the Company other than as a Director of the Company;
(cid:120) Has not served on the Board for a period which could, or could reasonably be perceived to, materially
(cid:120)
interfere with the Director's ability to act in the best interests of the Company; and
Is free from any interest and any business or other relationship that could, or could reasonably be
perceived to, materially interfere with the Director's ability to act in the best interests of the Company.
The size of the Board will be reviewed periodically and if the Company's activities increase in size, nature and
scope the composition and size of the board will be reviewed.
2.7 Conflicts of Interest
To ensure that Directors are at all times acting in the interests of the Company, Directors must:
(cid:120) Disclose to the Board actual or potential conflicts of interest that may or might reasonably be perceived
to exist between the interests of the Director and the interests of any other parties in carrying out the
activities of the Company; and
If requested by the Board, within seven days or such further period as may be determined by the Board,
takes such necessary and reasonable steps to remove any conflict of interest.
(cid:120)
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as required by the
Corporations Act, absent himself or herself from the room when the conflicted matter is being discussed
and/or when voting occurs, save with the approval of the remaining Directors and subject to the Corporations
Act.
2.8 Related Party Transactions
Related party transactions include any financial transaction between a Director and the Company as defined
in the Corporations Act or the ASX Listing Rules. Unless there is an exemption under the Corporations Act
from the requirement to obtain shareholder approval for the related party transaction, the Board cannot
approve the transaction. The Company also discloses related party transactions in its financial report as
required under relevant Accounting Standards.
2.9 Share Dealings & Disclosures
The Company's Share Trading Policy, which was reviewed by the Board during 2014, regarding Directors,
Executives and employees dealing in its securities, is set by the Board and complies with ASX Listing Rules
Chapter 12. The Board restricts Directors, Executives and employees from trading in Company securities
except during trading windows and in any event when in possession of price sensitive information until it has
been released to the market and adequate time has been given for this to be reflected in the security's prices.
Executives, employees and Directors are required to obtain approval from either the CEO/Managing Director
or Chairman prior to dealing in securities in the Company or other companies in which the Company has a
relationship. The policy outlines the exceptional circumstances during which trading may take place during a
blackout period and sets rules for “passive trading”.
Dealings are not permitted at any time whilst in the possession of price sensitive information not already
available to the market. In addition, the Corporations Act prohibits the purchase or sale of securities whilst a
person is in possession of inside information.
2.10 Board Nominations
The Board will consider nominations for appointment or election of Directors that may arise from time to time
having regard to the skills required by the Company and procedures outlined in the Constitution and the
Corporations Act.
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Corporate Governance Statement
31 December 2014
2.11 Terms of Appointment as a Director
The current Directors of the Company have been appointed until they are either removed (which will include
the circumstances where the Director is not re-elected) or when they resign. The Constitution of the Company
provides that a Director may not retain office for more than three calendar years or beyond the third annual
general meeting following his or her election, whichever is longer, without submitting himself or herself for re-
election by shareholders. One third of the Directors must retire each year and are eligible for re-election. The
Directors who retire by rotation at each annual general meeting are those with the longest length of time in
office since their appointment or last election.
2.12 Performance Review and Evaluation
iCar has adopted a performance evaluation process in relation to the Board and its committees. Each year,
Directors will provide written feedback in relation to the performance of the Board and its Committees against
a set of agreed criteria. Each Committee of the Board will also be required to provide feedback in terms of a
review of its own performance. Feedback will be collected by the chair of the Board, or an external facilitator,
and discussed by the Board, with consideration being given as to whether any steps should be taken to
improve performance of the Board or its Committees. The Chief Executive Officer will also provide feedback
from senior management in connection with any issues that may be relevant in the context of the Board
performance review. Where appropriate to facilitate the review process, assistance may be obtained from
third party advisers. A review was undertaken in accordance with this process in the first quarter of 2015.
2.13 Meetings of the Board
The Board meets regularly and whenever necessary to deal with specific matters requiring attention between
scheduled meetings. Circular Resolutions are also utilised when appropriate. Board meetings are held
predominantly by telephone conference as Directors are resident in several countries. However, the Board
convenes face to face meetings from time to time as appropriate, based on the items of business for
consideration. Each member of the Board is committed to spending sufficient time to enable them to carry out
their duties as a Director of the Company. It is recognised and accepted that Board members may also
concurrently serve on other boards, either in an executive or non-executive capacity.
2.14
Independent Professional Advice
Subject to prior consultation with the Chairman, each Director has the right to seek independent legal and
other professional advice at the Company's expense concerning any aspect of the Company's operations or
undertakings in order to fulfil their duties and responsibilities as Directors.
2.15 Access to Company Information and Confidentiality
All Directors have the right of access to all relevant Company books and to the Company's Executive
Management. In accordance with legal requirements and agreed ethical standards, Directors and Executives
of the Company are required to keep confidential, information obtained in the course of the exercise of their
duties and will not disclose non-public information except where disclosure is authorised or legally mandated.
2.16 Nomination of new Directorships
The primary vehicle for the effective management of director nominations is the Remuneration & Nomination
Committee appointed by the Board.
The responsibilities assumed by the Remuneration & Nomination Committee include:
(cid:120)
(cid:120)
review and recommend arrangements for the executive directors (if any) and the executives reporting
to the Chief Executive Officer, including contract terms, annual remuneration and participation in the
Company’s short and long term incentive plans;;
review major changes and developments in the Company’s remuneration, recruitment, retention and
termination policies and procedures for senior management;
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Corporate Governance Statement
31 December 2014
(cid:120)
(cid:120)
(cid:120)
review major changes and developments in the remuneration policies, superannuation arrangements,
personnel practices and industrial relations strategies for the Company;
review the senior management performance assessment processes and results as they reflect the
capability of management to realise the business strategy; and
review and approve short term incentive strategy, performance targets and bonus payments.
The Board acknowledges the ASX Recommendation that a majority of the members of the Remuneration &
Nomination Committee be independent. From the final quarter of the year none of the members of the
Remuneration & Nomination Committee could be considered to be independent since changes to Mark Britt’s
employment resulted in him no longer being independent. Lucas Elliott, Shaun Di Gregorio and Cameron
McIntyre are currently considered by the Board not to be independent. However, as with the Audit & Risk
Committee, the Board believes that it is appropriate that each of Lucas Elliott, Shaun Di Gregorio, Cameron
McIntyre and Mark Britt be appointed members of this Committee due to their skill set, experience and
seniority, and that each brings objective and independent judgement to the Committee’s deliberations.
2.17 Director's deeds
The Company has also entered into a Deed of Indemnity, Insurance and Access with each of the Directors
and senior officers to regulate certain matters between the Company and each Director, both during the time
the Directors hold office and after the Director ceases to be an officer of the Company (or wholly owned
subsidiaries).
3. Remuneration Policy
The fees and emoluments paid to Directors are approved in advance by Shareholders. The salary and emoluments
to be paid to officers will need prior approval by the Remuneration & Nomination Committee. Consultants will be
engaged as required pursuant to Consultancy Service Agreements. The Company will ensure that fees, salaries and
emoluments will be in line with general standards for publicly listed companies of the size and type of the Company
and that they will not be excessive. All salaries of Directors and senior executives will be disclosed in the
Remuneration Report of the Company each year.
4. Diversity
The 2010 amendments to the ASX Corporate Governance Guidelines Principles and Recommendations included
amendments that seek to address diversity concerns, in particular, the under-representation of women on boards
and in senior management.
The Company recognises that people are its most important asset and is committed to the maintenance and
promotion of workplace diversity.
Diversity drives the Company’s ability to attract, retain and develop the best talent, create an engaged workforce,
deliver the highest quality services to its customers and continue to grow the business.
In addition to business policies, practices and behaviours that promote diversity and equal opportunity and create an
environment where individual differences are valued the Board adopted a Diversity policy in July 2012. This policy
set out minimum expectations to be met by the Group on workforce diversity. A copy of the Policy is available on the
Investor Relations – Corporate Governance section of the Group’s website: www.icarasia.com. The strategies
outlined below aim to achieve the objectives of this Policy by:
(cid:120)
setting measurable objectives relating to gender at all senior management and leadership levels;
(cid:120) broadening the field of potential candidates for senior management and board appointments; and
(cid:120)
increasing the transparency of the board appointment process.
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Corporate Governance Statement
31 December 2014
The Remuneration & Nomination Committee is responsible for the development and succession planning process
for the Chief Executive Officer (CEO) and the CEO’s direct reports. In discharging this responsibility, the
Remuneration & Nomination Committee will have regard to diversity criteria.
The breakdown of directors and employees by gender is as follows:
2014
Proportion of female to male employees at iCar as at 31 December 2014
iCar Asia
Female
Male
Senior Executive
0%
100%
Board
0%
100%
Manager
42%
58%
Employee
32%
68%
The Board has set a number of objectives under the Policy, namely to:
(cid:120) address the lack of gender diversity on the Board. There is a 2017 target of 15% of the board being female
directors
continue to work to develop a balanced ratio of female management
(cid:120)
(cid:120) optimise local talent in senior management and the workforce in established international markets; and
(cid:120) establish an effective measurement and reporting framework. The Policy objectives, and the Group’s
progress in achieving them, will be assessed on an annual basis.
5. Code of Conduct and Ethical Standards
The Company has adopted a formal Code of Conduct that guides compliance with all levels of legal and other
obligations to stakeholders. The Code is focused on ensuring that all Directors, Executives, and employees act with
the utmost integrity and objectivity in carrying out their duties and responsibilities, striving at all times to enhance the
reputation and performance of the Company.
6. Internal Control and Risk Management
The Board is responsible for the identification, monitoring and management of significant business risks and the
implementation of appropriate levels of internal control, recognising however that no cost effective internal control
system will preclude all errors and irregularities. The Board regularly reviews and monitors areas of significant
business risk and has established a separate Audit & Risk Committee which is governed by a separate Board
Charter.
The Board receives regular reports from management about the financial condition and operational results of the
Company. The Board has also received written assurances from the Chief Executive Officer and Chief Financial
Officer that to the best of their knowledge and belief:
(cid:120) The Company’s financial statements present a true and fair view of the Company’s financial condition and
operational results and comply with relevant accounting standards; and
(cid:120) The risk management and internal compliance and control systems are sound, appropriate and operating
effectively and implement the policies adopted by the Board.
The Board and management undertake annual reviews on the Company’s strategic and operational risks as part of
its annual strategic and budget process. Divisional heads are encouraged to provide their inputs at such annual
reviews. This process allows the Board to have a better understanding of the overall industry risks and opportunities
in which the Company operates.
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iCar Asia Limited and Controlled Entities
Corporate Governance Statement
31 December 2014
The Company has identified the following possible business risks which the Company believes to be inherent in the
industry in which the Company operates:
Interest rate risk
(cid:120) Fluctuations in exchange rates
(cid:120) Political stability risk in some of the countries of operation
(cid:120)
(cid:120) Stability of internet infrastructure
(cid:120) Risk of penetration of internal systems by unauthorised persons
(cid:120) Changes in local government regulations
(cid:120)
(cid:120) Retention of key employees
(cid:120) Fluctuations in traffic
(cid:120) Cyclical car market due to general market outlook for economic growth and interest rates
(cid:120) Force majeure event
Increased cost of operation including employment costs
The above risks are provided to assist investors to better understand the nature of the risks faced by the Company
and the industry in which the Company operates. They are not necessarily an exhaustive list.
Management regularly undertakes reviews of its risk management procedures which include implementation of a
system of internal sign-offs to ensure not only that the Company complies with its legal obligations but that the
Board, and ultimately shareholders, can take comfort that an appropriate system of checks and balances is in place
regarding those areas of the business which present financial or operating risks.
7. Communications to Market and Shareholders
The Board recognises its duty to ensure that its shareholders are informed of all major developments affecting the
Company's state of affairs and has adopted a Shareholder Communication Policy. The Policy provides that
information will be communicated to shareholders and the market through:
(cid:120) The Annual Report which is distributed to shareholders;
(cid:120) The Annual General Meeting and other general meetings called to obtain shareholder approvals as appropriate;
(cid:120) The Half-Yearly Directors' and Financial Reports;
(cid:120) Quarterly Report for Entities admitted on the basis of commitments;
(cid:120) Other announcements released to ASX as required under the continuous disclosure requirements of the ASX
Listing Rules and other information that may be mailed to Shareholders.
The Company will actively promote communication with shareholders through a variety of measures, including the
use of the Company's website. The Company's reports and ASX announcements will be available for viewing and
downloading from its website: www.icarasia.com or the ASX website: www.asx.com.au under ASX code "ICQ".
8. Continuous Disclosure to ASX
The Board has adopted a Continuous Disclosure Policy and has designated the CEO, CFO or Company Secretary
as the persons responsible for overseeing and coordinating disclosure of information to the ASX as well as
communicating with the ASX.
In accordance with the ASX Listing Rules, the Company will notify the ASX promptly of information:
Concerning the Company that a reasonable person would expect to have a material effect on the price or value of
the Company's securities; and
That would, or would be likely to, influence persons who commonly invest in securities in deciding whether to
acquire or dispose of the Company's securities.
Compliance with The ASX Corporate Governance Principles and Recommendations
The extent to which iCar has followed the ASXCGPR is as follows:
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Corporate Governance Statement
31 December 2014
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR
MANAGEMENT AND OVERSIGHT
Compliance
Corporate Governance Statement
(CGS) References/Comments
1.1 Formalise and disclose the functions reserved to the
Board and those delegated to management.
Yes
1,2
1.2 Formalise and disclose the process for evaluating the
performance of management.
Yes
2.12
1.3 Provide the information indicated in the Guide to
reporting on Principle 1.
Yes
Annual Report
Website
CGS
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD
VALUE
2.1 A majority of the Board should be independent
directors.
2.2 The Chairperson should be an independent director
No
No
The current members of the Board
have the relevant and appropriate mix
of skills and experience to perform the
Board’s functions and responsibilities.
The Chairman is not independent as a
a
consequence
substantial
the
shareholder
company. This has not impeded his
ability to effectively chair the board.
being
in
his
of
2.3 The roles of Chairperson and chief executive officer
should not be exercised by the same individual
Yes
2.3
2.4 The Board should establish a nomination committee
Yes
2.5.2
2.5 Formalise and disclose the process for evaluating the
its committees and
the Board,
performance of
individual directors
Yes
2.12
2.6 Provide
the
reporting on Principle 2.
information
indicated
in Guide
to
Yes
Annual Report
Website
CGS
PRINCIPLE 3: PROMOTE ETHICAL AND
RESPONSIBLE DECISION-MAKING
3.1
Establish a Code of Conduct to guide the directors,
the chief executive officer (or equivalent), the chief
financial officer (or equivalent) and any other key
executives as to:
Yes
5
3.1.1 The practices necessary to maintain confidence
in the Company’s integrity.
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iCar Asia Limited and Controlled Entities
Corporate Governance Statement
31 December 2014
3.1.2 The practices necessary to take into account
their legal obligations and the reasonable
expectations of their stakeholders
3.1.3 The responsibility and accountability of
individuals for reporting and investigating
reports of unethical practices.
3.2 Establish a policy concerning diversity and disclose
that policy or a summary
.
Yes
4
Website
3.2a Disclose the policy concerning trading in Company
Securities by Directors, officers and employees
Yes
2.9
Website
3.3 Disclose in each annual report the measurable
for achieving gender diversity and
objectives
progress towards achieving them.
Yes
4
3.4 Disclosure in each annual report the proportion of
women in the whole organisation, women in senior
executive positions and women on the board.
Yes
4
3.5 Provide the information indicated in Guide to
reporting on Principle 3.
Yes
Annual Report
Website
CGS
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL
REPORTING
4.1 The Board should establish an audit committee
Yes
2.5.1,6
4.2 Structure the audit committee so that it consists of:
4.2.1 Only non-executive directors.
4.2.2 A majority of independent directors.
4.2.3 An independent chairperson, who is not
chairperson of the board.
4.2.4 At least three members
Yes
No
No
Yes
2.5.1,
4.3 The audit committee should have a formal charter.
Yes
2.5.1
4.4 Provide the information indicated in the Guide to
reporting on Principle 4.
Yes
Annual Report
Website
CGS
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iCar Asia Limited and Controlled Entities
Corporate Governance Statement
31 December 2014
PRINCIPLE 5: MAKE TIMELY AND BALANCED
DISCLOSURE
5.1
Establish written policies and procedures designed
to ensure compliance with ASX Listing Rule
disclosure requirements and ensure accountability
at a senior management level for that compliance.
Yes
CGS
5.2 Provide the information indicated in the Guide to
reporting on Principle 5.
Yes
Annual Report
Website
CGS
PRINCIPLE 6: RESPECT THE RIGHTS OF
SHAREHOLDERS
6.1 Design and disclose a communications strategy
for promoting effective communication with
shareholders and encouraging participation at
general meetings.
Yes
7
6.2 Provide information indicated in the Guide to
reporting on Principle 6.
Yes
Annual Report
Website
CGS
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
7.1 The Board or appropriate Board committee should
establish and disclose policies on risk oversight
and management.
Yes
2.5.1,6
7.2
internal control system
Management to design and implement a risk
management and
to
manage the Company’s material business risks.
The Board to disclose that management has
reported to the Board in writing that:
(cid:120)
The Company’s
risk management and
internal compliance and control system is
operating efficiently and effectively in all
material respects.
7.3 The Board to disclose that the chief executive
officer (or equivalent) and the chief financial
officers (or equivalent) have provided to the board
in writing that:
(cid:120) The declaration provided in accordance with
Section 295A of the Corporations Act is
founded on a sound system of risk
management and internal control and that
the system is operating effectively in all
material respects in relation to financial
reporting risks.
73
Yes
6
Yes
Annual Report
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iCar Asia Limited and Controlled Entities
Corporate Governance Statement
31 December 2014
7.4 Provide the information indicated in Guide to
reporting on Principle 7.
Yes
Annual Report
Website
CGS
PRINCIPLE
RESPONSIBLY
8: REMUNERATE
FAIRLY AND
8.1 The Board should establish a
remuneration
committee.
Yes
2.5.2
8.2
It should consist of a majority of independent
directors
Be chaired by an independent director
Have at least 3 members
No
No
Yes
CGS
8.3 Clearly distinguish the structure of non-executive
that of executive
directors’ remuneration
from
directors and senior executives.
Yes
Annual Report
8.4 Provide the information indicated in Guide to
reporting on Principle 8.
Yes
Annual Report
Website
CGS
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iCar Asia Limited and Controlled Entities
Shareholder information
31 December 2014
The shareholder information set out below was applicable as at 31 December 2014.
ASX Listing Rule 4.10.19
iCar Asia Limited has used the cash and assets in a form readily convertible to cash it had at the time of admission in a
way consistent with its business objectives.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,000 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are:
CATCHA MEDIA BERHAD
CARSALES COM LIMITED
CATCHA GROUP PTE LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
MR TEERAWAT PHONGADULYASOOK
MIRRABOOKA INVESTMENTS LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUS) LIMITED
MR MICHAEL STEWART BUNKER
UBS NOMINEES PTY LTD
MR ROD BRANDENBURG
BNP PARIBAS NOMS PTY LTD
BRISPOT NOMINEES PTY LTD
MEDER PTY LTD
MR DAMON SHAY RIELLY
MR SHAUN ANTONY DI GREGORIO
75
Total
holders of
ordinary
shares
308
932
579
898
90
Units
197,110
2,853,953
4,703,069
25,884,478
184,131,046
2,807
217,769,656
73
13,386
Ordinary shares
Number
held
52,500,000
44,197,239
17,759,219
8,637,412
8,406,116
7,365,649
6,580,779
4,154,649
2,847,580
2,600,000
1,666,960
1,623,057
1,250,000
1,203,143
1,148,100
1,130,459
1,118,246
1,110,000
1,061,914
782,800
% of total
shares
issued
24.11
20.30
8.16
3.97
3.86
3.38
3.02
1.91
1.31
1.19
0.77
0.75
0.57
0.55
0.53
0.52
0.51
0.51
0.49
0.36
167,143,322
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iCar Asia Limited and Controlled Entities
Shareholder information
31 December 2014
Unquoted equity securities
There are no unquoted shares held in escrow.
Substantial holders
The names of the security holders holding greater than 20% of quoted equity
securities are:
CARSALES COM LIMITED
CATCHA GROUP PTE LTD
Ordinary shares
Number held
% of total
shares
issued
44,197,239
70,430,300
20.30
33.18
114,627,539
53.48
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
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.
There are no other classes of equity securities.
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iCar Asia Limited and Controlled Entities
Corporate Directory
31 December 2014
Directors
Patrick Grove (Chairman)
Lucas Elliott
Shaun Di Gregorio
Mark Britt
Cameron McIntyre
Ajay Bhatia
Group Chief Executive Officer
Damon Rielly
Damon.Rielly@icarasia.com
Group Chief Financial Officer
Registered office
Principal place of business
Share register
Auditor
Joe Dische
Joe.Dische@icarasia.com
Suite 806
Level 8
70 Pitt Street
Sydney NSW 2000
Australia
Tel. +61 (2) 9239 0277
Fax. +61 (2) 9233 4477
A-30-13 Tower A
Level 30 Menara UOA Bangsar
No. 5 Jalan Bangsar Utama
Bangsar 59000
Kuala Lumpur, Malaysia
Tel. +60 (3) 2776 6000
Fax. +60 (3) 2776 6010
Computershare Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Australia
www.computershare.com
Ernst & Young
8 Exhibition Street
Melbourne VIC 2000
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
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