iCar Asia Limited
ACN 157 710 846
Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the year ended 31 December 2017
12 months ended
Dec-17
$000
Dec-16
$000
Change
Revenues from ordinary operations
Loss from ordinary activities after tax attributable to members
Loss after tax attributable to members
Loss per Share (basic & diluted)
NTA per Share
9,111
(13,378)
(13,378)
6,663
(14,999)
(14,999)
Cents
(4.12)
5.37
Cents
(5.59)
7.69
37%
11%
11%
26%
(30%)
Dividends
No dividends have been paid or declared in 2017 (2016: nil). There is no dividend reinvestment plan in
operation.
Basis of this report
This report includes the attached audited financial statements of iCar Asia Limited and its controlled entities for
the period ended 31 December 2017. Together these documents contain all the information required by
Appendix 4E of the Australian Securities Exchange Listing Rules. It should be read in conjunction with iCar Asia
Limited’s Annual Report when released and is lodged with the Australian Securities Exchange under listing rule
4.3A.
iCar Asia Limited advises that its Annual General Meeting will be held on or about Friday 25 May 2018. The time
and other details relating to the meeting will be advised in the Notice of Meeting to be sent to all shareholders
and released to ASX immediately after despatch.
In accordance with the ASX Listing Rules, valid nominations for the position of director are required to be lodged
at the registered office of the Company by 5:00pm (AEST) 23 March 2018.
For and on behalf of the Board
Georg Chmiel
Executive Chairman
22 February 2018
iiCar Asia Limited and Controlled Entities
ACN 157 710 846
Annual Report for the financial year ended
31 December 2017
Annual Report Year Ended 31 December 2017
ICAR ASIA LIMITED (ICQ) / ACN 157 710 846
Directors' Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor's Report
Shareholder Information
Corporate Directory
1
33
34
35
36
37
38
87
88
93
96
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
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 2017.
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:
Georg Chmiel (Executive Chairman)
Patrick Grove (Non-executive Director)
Lucas Elliott (Non-executive Director)
Mark Britt (Independent, non-executive Director) resigned 30 June 2017
Syed Khalil Ibrahim (Independent, non-executive Director)
Mark Licciardo (Non-executive Director) resigned 30 September 2017
Christopher Lobb (Non-executive Director) resigned 30 June 2017
Peter Everingham (Independent, non-executive Director) appointed 1 July 2017
Richard Kuo (Independent, non-executive Director) appointed 1 July 2017
James Olsen (Alternate Director to Lucas Elliott) appointed 1 July 2017
Information on directors
Name:
Title:
Qualifications:
Georg Chmiel
Executive Chairman
Diplom-Informatiker, MBA (INSEAD), CPA (USA), FAICD
Experience and expertise:
Mr Chmiel brings over 24 years of experience in the financial services industry,
online media and real estate industry. Mr Chmiel was most recently Managing
Director and CEO of iProperty Group, the owner of Asia’s No. 1 network of
property portal sites and related real estate services. He played a key role in
finalising the sale of iProperty Group to REA Group, Southeast Asia’s largest ever
internet buyout. Prior to iProperty Group, Mr Chmiel was Managing Director and
CEO of LJ Hooker Group with 700 offices across nine countries providing
residential and commercial real estate as well as financial services.
Other current directorships:
Mitula Group, Centrepoint Alliance, Juwai Holdings Ltd
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited, LJ Hooker Group
None
76,930
1,011,312
1
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Name:
Title:
Qualifications:
Experience and expertise:
Patrick Grove
Non-executive Director
Bachelor of Commerce degree with a major in Accounting and Finance from the
University of Sydney.
Board member since June 2012. Mr Grove is a co-founder of the Group. Mr
Grove’s experience and expertise includes mergers and acquisitions and the
technology
extraction of
environments.
in high growth, media and
investment value
Mr Grove has built a number of significant media and internet businesses across
Asia and has taken five 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 a Director of Rev Asia Berhad, a Malaysia-listed
company.
Other current directorships:
Rev Asia Berhad
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited, Ensogo Limited
None
109,076,402
22,185,980
2
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Name:
Title:
Qualifications:
Experience and expertise:
Lucas Elliott
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 18 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 Rev Asia
Berhad, a Malaysia-listed company. He is also the former Director of Ensogo
Limited.
Other current directorships:
Rev Asia Berhad
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited, Ensogo Limited
Member of the Nomination & Remuneration Committee and member of the Audit
& Risk Committee
109,076,402
22,185,980
Name:
Title:
Qualifications:
Experience and expertise:
Mark Britt
Independent, non-executive Director
Diploma in Law from LPAB
Board member since July 2012. Mr Britt is the Chief Executive Officer and co-
founder to iflix, an Asian provider of on-demand internet streaming entertainment.
Prior to founding iflix, Mark served as CEO of Nine Entertainment Co’s digital arm
Mi9, where he was responsible for the company’s SVOD investments and
portfolio of start up ventures. Mark was formerly also General Manager of
Microsoft’s Consumer and Online business for Asia Pacific. During his tenure with
the company, Mark was instrumental in expanding Microsoft’s consumer and
Internet business into Southeast Asia, India, China, Japan and Korea.
Other current directorships:
None
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
Member of the Nomination & Remuneration Committee and member of the
Audit & Risk Committee
755,305
None
3
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Syed Khalil Ibrahim
Independent, non-executive Director
Bachelor of Commerce Majoring in Finance and Bachelor of Engineering
Majoring in Mechanical Engineering (First Class Honours)
Khalil has extensive experience in the Automotive industry and is currently
the Managing Director and controlling shareholder of SISMA Auto (a dealer
group representing Jaguar Land Rover and Volvo in Malaysia). He also is
also a Director of Jaguar Land Rover (Malaysia), the sole importer and
distributor for Jaguar Land Rover in Malaysia. Prior to that, Khalil worked with
CI Holdings Berhad and Boston Consulting Group at their Sydney and New
York offices.
None
None
Chairman of the Nomination & Remuneration Committee and member of the
Audit & Risk Committee
1,888,661
277,744
Name:
Title:
Qualifications:
Mark Licciardo
Non-executive Director
B Bus(Acc), GradDip CSP, FGIA, FAICD
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Current Company Secretary. Former Board member between December
2016 and September 2017. Founder and managing director of Mertons
Corporate Services. A former company secretary of Top 50 ASX listed
companies Transurban Group and Australian Foundation Investment
Company Limited, his expertise includes working with boards of directors in
the areas of corporate governance, administration and company secretarial.
Mark is also the current Chairman of the Academy of Design Australia Limited
and a former Chairman of the Governance Institute of Australia Victoria
Division and Melbourne Fringe Festival. Mark is also a director of a number
of public and private companies. Current ASX listed company directorships
are shown below.
Mobilicom Limited, Frontier Digital Ventures Limited, Ensogo Limited
None
Company secretary
None
None
4
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Name:
Title:
Qualifications:
Christopher Lobb
Non-executive Director
FGIA, CPA, MAIC
Experience and expertise:
Former Board member between December 2016 and June 2017. Chartered
Secretary for over 20 years. First held the role with Gandel Group of
companies, an entity with interest in property (listed and un-listed),
investment and funds management. He continued as a Company Secretary
with Colonial First State, MSF Sugar Limited and GSG Limited in both listed
and non-listed environments. He was a member of the National Board of
Chartered Secretaries Australia (now Governance Institute of Australia)
including serving as Chairman of the Victorian Division. He was also a non-
executive director of Box Hill Institute of TAFE from 2005 to 2010.
Other current directorships:
None
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Ensogo Limited
None
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Peter Everingham
Independent, non-executive Director
MBA from IESE, a Bachelor of Economics from The University of Sydney and is
a GAICD
Peter is an experienced executive and non-executive Director of digital and
technology businesses having worked in the sector for over 19 years. Up until
December 2016, Peter was Managing Director of SEEK Limited's International
Division which includes their online businesses in China, Hong Kong and South
East Asia. He led the merger of JobStreet and JobsDB in Asia, based out of the
Kuala Lumpur Office, and was Chairman of SEEK's China business called
Zhaopin. Prior to SEEK, Peter was Director of Strategy for Yahoo! in Australia
and South East Asia which included investing in Australia's leading online car
classifieds business, carsales.com.au.
Other current directorships:
Super Retail Group
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Zhaopin Limited
Member of the Nomination & Remuneration Committee
None
None
5
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Name:
Title:
Qualifications:
Experience and expertise:
Richard Kuo
Independent, non-executive Director
B.com., LL.B, FAICD
Richard is the co-founder and CEO of Pier Capital, a boutique investment banking
firm operating in Australia. He is an independent non-executive director of Juwai
Holdings Limited and SCEGGS Darlinghurst Limited, and has been a director of
a range of companies in the pharmaceutical, technology and not-for-profit sectors.
Previously, Richard practiced as a lawyer specialising in corporate law before
moving into investment banking and then as a member of the senior management
team of what grew to be one of Australia's largest software companies.
Other current directorships:
Juwai Holdings Ltd
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Probiotec Limited, Animoca Brands Limited
Chairman of the Audit & Risk Committee
None
None
Name:
Title:
Qualifications:
Experience and expertise:
James Olsen
Alternate Director to Lucas Elliott
Bachelor of Commerce (Honors) from The University of Melbourne
James is a seasoned technology corporate advisor and investor. He is the founder
and Managing Director of CMB Capital, an advisor and investor to emerging
technology companies. He has previously held roles in the TMET industry group
at Macquarie Capital and Enterprises Division at Nine Entertainment Co (then
Publishing and Broadcasting Limited) as well as investment banking roles with
Citigroup and Ord Minnett Corporate Finance. James has advised major, blue
chip Australian and international listed and unlisted corporations in emerging
Australian and global technology businesses.
Other current directorships:
None
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
None
572,553
372,553
6
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Company Secretary
Mark Licciardo was appointed as the Group's company secretary effective 1 January 2016. His experience is
outlined under 'Information on directors'.
Belinda Cleminson was appointed as the Group's joint company secretary effective 9 December 2016.
Belinda Cleminson BEd, GIA (Cert) has over 15 years’ experience as an Assistant Company Secretary of
Australian listed companies including ASX 200 clients. Belinda previously managed the Company Secretarial team
for Australian Company Secretaries representing a domestic and global client base. Prior to this Belinda held roles
within the legal and banking industry.
7
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
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 in South East Asia.
Financial Performance
Strong revenue growth of 41% year on year (FOREX-neutral) to $9,111,498
In the year ended 31 December 2017 the Group generated $9,111,498 in revenue (2016: $6,663,394), an increase
of 37% (2016: 6%). On a FOREX-neutral basis this represents year on year revenue growth of 41%.
The growth was primarily driven by the Group’s core Classified and Media businesses. Incremental revenue came
from the introduction of events in Malaysia and Thailand and from new streams including finance, insurance, warranty
and broker services.
With a tight control over costs, operating expenses increased only 2% in the year ended 2017 to $20,937,315 (2016:
$20,476,139). Of the $2,448,104 of additional revenue added in 2017, $1,986,928 (81%) flowed through to EBITDA
with losses decreasing by 14% year on year to $11,825,817 (2016: $13,812,745).
As at 31 December 2017 the Group had $21,477,295 in cash, cash equivalents and investments. Following the
recent capital raising initiatives, the Company has access to up to an additional $15,960,826 in funding net of all fees,
for a total of up to $37,438,121 in conditionally available funds.
Outstanding operational metrics
These financial result were achieved in conjunction with delivering growth in all of the Group’s key operating metrics
for all countries. Highlights for December 2017 include:
48% year on year growth in total audience numbers across the Group to 11.2 million unique visitors
42% year on year growth in total leads across the Group to over 1 million leads
23% year on year growth in total paid accounts across the Group to over 5,900 accounts
52% year on year uplift in the total number of bumps across the Group (note: a ‘bump’ is a paid product
which promotes a listing to the top of a relevant search result) to 247,000 bumps
Total listings growth of 12% year on year to 479,000 live listings
8
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Thailand
The Thailand business had a strong year in the Classified segment with the introduction of bundled subscription
products and increased depth product usage driving sales. The business also commenced a used car broker sales
service assisting private users to sell cars and dealers to acquire inventory. Dealers and consumers increased their
usage of the Group’s Apps and messaging was launched driving lead growth. Media sales increased with car
manufacturers moving spend online and strategic partnerships in insurance and finance.
Audience and leads volumes grew strongly year on year in December 2017 with 61% and 60% increases respectively.
The continued adoption of digital channels by car dealers was evident in 2017 with dealer accounts increasing by
25% year on year and listings growth at December 2017 of 8% year on year.
Revenue grew 39% year on year to $3,818,442 (2016: $2,740,728), along with a 32% improvement in EBITDA loss
to $1,133,116 (2016: $1,669,977) as increases in operating expenses were held to 12%.
000's
6,000
5,000
4,000
3,000
2,000
1,000
0
Thailand Audience
000's
Thailand Leads
+61%
5,073
3,142
+60%
413
258
450
400
350
300
250
200
150
100
50
0
Dec-16
Dec-17
Dec-16
Dec-17
9
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Malaysia:
The Malaysian business benefitted from increased promotional product usage which drove Classified revenue growth.
New products such as ‘highlights’ (which raise the profile of a listing and are themed for festive periods) were
enthusiastically adopted. The business ran a number of successful events in the year. These included the new car
focussed ‘Drive -Test & Buy’ in May and a luxury event in November. The business also ran a used car sales carnival
event in November. Towards the end of the year the New Car site was launched – an innovative way for consumers
to research and buy a new car. This will be a driver of growth into 2018.
Audience grew 38% year on year in December 2017 driving leads growth of 55% as car buyers continued to move
online. There was strong customer engagement with our depth products, including a 26% increase year on year in
bumps in December 2017.
Revenue increased 29% year on year to $4,567,506 (2016: $3,535,081), along with a 39% improvement in EBITDA
loss to $1,310,773 (2016: $2,126,449) as increases in operating expenses were held to 4%.
000's
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Malaysia Audience
000's
Malaysia Leads
+38%
2,942
2,134
+55%
286
184
350
300
250
200
150
100
50
0
Dec-16
Dec-17
Dec-16
Dec-17
10
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Indonesia:
The Indonesian business had a transformative year as it moved further through its monetisation strategy with strong
growth in the number of dealers paying for promotional products on the site. The full range of features were introduced
with high adoption of the Hot Deal product where a discounted car is highlighted and placed in a separate search
filter on the site. The Media business also grew solidly with a new team in place.
Audience and lead volumes grew strongly throughout the year and reached 38% and 16% year on year in December
2017 respectively. This helped deliver further growth in the number of dealers paying in month to promote their
listings, which jumped 77% in December 2017 compared to the prior year.
Revenue grew 87% year on year to $725,550 (2016: $387,585) as the Company moved further through its
monetisation strategy. 2017 EBITDA loss remained flat year on year at $3,830,777 (2016: $3,835,250) with
continued investment in Marketing and Employment costs, but showed a 21% improvement in 2H 2017 ($1,732,836)
versus 2H 2016 ($2,204,551).
Indonesia Leads
+16%
329
283
Indonesia Audience
+38%
3,226
2,329
3,500
3,000
2,500
2,000
1,500
1,000
500
0
350
300
250
200
150
100
50
0
Dec-16
Dec-17
Dec-16
Dec-17
11
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
2017: Business transformation year completed
2017 has been exceptional for the Group, making the right choices in product investment, technology, marketing
optimisation and the reshaping of the sales process. These choices have delivered growth in all of all our key
operating metrics and a return to strong revenue growth across all markets while tightly controlling costs. This
demonstrates that iCar Asia can deliver sustainable growth as it heads towards profitability.
Significant changes in the state of affairs
On 12 December 2017 iCar Asia Limited issued 55,554,130 shares in connection with a non-renounceable
entitlement offer to raise $10,000,000. Gross proceeds were $9,999,744. After raising costs, the total net amount
raised was $9,457,558. Eligible Shareholders who subscribed under the Offer also received 1 unlisted option for
every New Share subscribed for, exercisable at $0.20 until an expiry date of 18 months from the date of issue. Gross
proceeds from the options could be a maximum of $11,110,826. Subject to shareholder approval, the Group entered
into a $5,000,000 secured loan facility provided by Catcha Group Pte Ltd to be used for working capital purposes if
and when required and which may be drawn down subject to a related issue of options to Catcha Group Pte Ltd. For
further details see Note 15 Current liabilities - borrowings. There were no other significant changes in the state of
affairs of the Group during the financial year.
Matters subsequent to the reporting date
There have not been any transactions or events of a material and unusual nature between 31 December 2017 and
the date of this report, in the opinion of the Directors of the Group, to affect significantly the operations of the Group,
the results of those operations, or state of affairs of the Group in future years.
Likely developments and expected results of operations
With the transformation of the business completed and a strong end to 2017, the Group is well set-up to benefit in
2018 from the positive economic conditions in the fast growing ASEAN region and the recovery in the automotive
industry across all of the markets iCar operates in.
The company is expected to continue to deliver strong revenue growth in 2018 through:
1. Audience and leads dominance with improved conversion, App and messaging adoption
2. Used car dealer engagement through digital training, App usage and product adoption
3. Uptake of the new car transaction model
4. Expanding online advertising solutions into physical events
5. Expanding into car services including finance, insurance and warranty
In 2018 the Group expects to continue to grow the core business of used cars and advertising solutions, and leverage
it’s market leadership positions to further establish the new car, events and car services operations. As the largest
and most trusted automotive online marketplace across the ASEAN region, iCar Asia is in a great position to capture
the returns as the region continues on its road of digital transformation.
Environmental regulation
The Group's operations are not subject to significant environmental regulations. 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.
12
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
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 2001. 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 Directors.
During or since the financial year, the Group has paid premiums in respect of a contract insuring all the directors of
iCar Asia Limited against legal costs incurred in defending proceedings for conduct other than:
(a) A wilful breach of duty
(b) A contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the
Corporations Act 2001
The Group’s insurer prohibits the disclosure of premiums paid.
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.
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 2017, and the number of meetings attended by each Director were:
Full Board
Audit & Risk
Committee
Nomination &
Remuneration Committee
Georg Chmiel
Patrick Grove
Lucas Elliott
Mark Britt
Syed Khalil Ibrahim
Mark Licciardo
Christopher Lobb
Peter Everingham
Richard Kuo
James Olsen1
Attended
15
12
10
4
14
10
6
7
8
9
Held
15
15
15
6
15
10
6
9
9
9
Attended
4
-
2
-
4
-
-
-
3
3
Held
4
-
5
-
5
-
-
-
3
3
Attended
2
-
2
-
3
-
-
2
-
1
Held
2
-
3
-
3
-
-
2
-
2
1 James Olsen is alternate Director to Lucas Elliott.
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
13
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Auditor independence and non-audit services
There were no non-audit services provided to the Group during the financial year.
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 33.
Auditor
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
14
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited)
The remuneration report, which has been audited in accordance with section 300A of the Corporations Act 2001,
outlines the key management personnel remuneration arrangements for the Group.
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
Nomination & Remuneration Committee
The membership, responsibilities, authority and activities of the Nomination & Remuneration Committee are set out
in the Nomination & Remuneration Committee Charter, which has been approved by the Board.
The responsibilities of the Nomination & Remuneration Committee are to:
• Monitor, review and recommend to the Board, as necessary and appropriate:
the remuneration, superannuation and incentive policies and arrangements for the Chief Executive Officer and
key management personnel (i.e. those executives who report directly to the Chief Executive Officer);
the remuneration arrangements for executive and non-executive Directors on the Board;
the recruitment, retention and termination policies and procedures for the Chief Executive Officer and key
management personnel; and
key appointments and executive succession planning.
• Oversee the Group’s general remuneration strategy;
• Review the composition of the Board including:
the criteria for selection of directors, having regard to the need for the breadth and depth of skills and experience
on the Board; and
the process for selecting new Directors.
• Monitor the Group 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.
Key management personnel
Key management personnel (‘KMP’) comprises the directors and executives of the Group. For the purposes of the
Remuneration Report, the term ‘Executive’ is defined to mean the Chief Executive Officer (‘CEO’), the Chief Financial
Officer (‘CFO’), Chief Information Officer (‘CIO’) and Chief Marketing Officer (‘CMO’). The CFO, CIO and CMO report
directly to the CEO, who then reports to the Board. The Executives are responsible for the implementation of the
Group’s vision, values, corporate strategies and risk management systems, as well as the day-to-day management
of the business.
15
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
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 remuneration to:
• Create an environment that will attract top talent, and where people can be motivated with energy and passion
to deliver superior performance;
• Recognise capabilities and promote opportunities for career and professional development;
• Provide rewards, benefits and conditions that are competitive within the markets in which the Group operates;
and
• Provide fair and consistent rewards across the Group, which support corporate principles.
In accordance with the ASX Corporate Governance Principles and Recommendations (‘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.
Executive Chairman and non-executive directors remuneration
The fees paid to 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 Directors. The appointment letters for the 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 Director
receives a fee for being a Director of the Company. These fees are paid either by the issue of iCar Asia Limited
shares or in cash. The number of shares is determined by the volume weighted average price (‘VWAP’) over the
period.
There were no share options granted to Non-Executive Directors during or since the end of the financial year outside
of options acquired via participation in the non-renounceable entitlement offer during the year. For details of share
options granted to the Executive Chairman, see Section B Details of remuneration.
16
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited ) (continued)
The table below summarises the prevailing Board and Committee fees payable to Directors at the close of year 2017:
Position
Board fees
Chair
Non-executive directors
Committee fees
Audit & Risk
Nomination & Remuneration
: Chair
: Member
: Chair
: Member
$
120,000
60,000
10,000
N/A
10,000
N/A
The Executive Chairman is paid an additional $150,000 per annum in cash for the executive component of the role.
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:
• Reward key management personnel for achievement of pre-determined targets;
• Link reward with the strategic goals and performance of the Group; and
• Ensure total remuneration is competitive by market standards.
The remuneration for key management personnel and staff will include an annual review using a formal performance
appraisal process. The Nomination & Remuneration Committee recommends to the Board the level of remuneration
each year based on the performance of individuals.
The remuneration structure is in two parts:
• Fixed remuneration; and
• Variable remuneration
Fixed remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration that is both appropriate to the
position and is competitive in the market. Fixed remuneration comprises of salary and other benefits such as housing
allowances and school fees. Individuals, however, may choose to sacrifice part of their salary to increase payments
towards other benefits.
Variable Remuneration
Remuneration is linked to performance to retain high calibre executives by motivating them to achieve performance
goals which are aligned to Group interests. The components of variable remuneration are outlined below and are
directly linked to the performance of both the Executive and the Group.
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 employees 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 Key Performance Indicators (‘KPIs’)
aligned to the individual’s specific business function. The percentage and threshold level can differ for each individual
and are reviewed each year. See Section C Service agreements. Payments are made in the form of cash and shares
as determined at the discretion of the Nomination & Remuneration Committee. Shares are issued at the VWAP for
the year. The STI program is closed to new key employees. New key employees now participate only in the long
term incentive plan (LTI). See below under ‘Long term incentive plan’ and under Section C Service agreements.
17
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (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 employees 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. During the year all new key
employees participated in the LTI only. The details of LTI terms and targets can be found under Section C Service
agreements.
Options plan
With the same objective of the LTI Plan, certain recent key employees have been granted iCar Asia Limited share
options. The details can be found in Section C Service agreements.
Additional incentives
With the same objective of the LTI Plan, certain key employees were offered the opportunity to be granted additional
incentives in the form of iCar Asia Limited shares contingent upon successful achievement of specified key financial
and operational metrics. The details can be found in Section C Service agreements.
Voting and comments made at the company's 2017 Annual General Meeting ('AGM')
The company received in excess of 97.90% of ‘for’ votes in relation to its remuneration report for the year ended 31
December 2017. The company did not receive any specific comments at the AGM in regard to its remuneration
practices and report.
18
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
B Details of remuneration
The table below outlines the key management personnel of the Group and their movements during full year 2017:
Name
Position
Term as KMP
Executive Director
Georg Chmiel
Non-executive Directors
Patrick Grove
Lucas Elliott
Mark Britt
Syed Khalil Ibrahim
Mark Licciardo
Christopher Lobb
Peter Everingham
Richard Kuo
James Olsen
Senior Executives
Hamish Stone
Joe Dische
Pedro Sttau
Jonathan Adams
Executive Chairman
Full financial year
Non-executive Director
Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Non-executive Director
Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Alternate Director to Lucas Elliott
Full financial year
Full financial year
Resigned 30 June 2017
Full financial year
Resigned 30 September 2017
Resigned 30 June 2017
Appointed 1 July 2017
Appointed 1 July 2017
Appointed 1 July 2017
Group Chief Executive Officer
Group Chief Financial Officer
Group Chief Information Officer
Group Chief Marketing Officer
Full financial year
Full financial year
Full financial year
Appointed 7 April 2017
19
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Details of the remuneration arrangements of the key management personnel for the Group are set out in the following tables.
Short-term benefits
Share-based payments
Salary & fees Cash bonus
$
$
Other
$
Remuneration1
$
LTI
shares
$
STI
shares
$
Additional
incentives Options
$
$
Total
Remuneration
$
Performance
related
%
G Chmiel
Executive Director
P Grove2
Non-executive Director
L Elliott2
Non-executive Director
M Britt3
Non-executive Director
S Khalil Ibrahim
Non-executive Director
M Licciardo4
Non-executive Director
C Lobb3
Non-executive Director
P Everingham5
Non-executive Director
R Kuo5
Non-executive Director
J Olsen5
Non-executive Director
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
50,000
-
- -
15,000 -
- -
15,000 -
- -
- -
- -
15,000 -
- -
18,068 -
-
1,489
12,045 -
-
1,489
15,000 -
- -
15,000 -
- -
- -
- -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
108,000
8,000
-
-
-
-
-
-
45,000
60,000
-
-
-
-
-
-
39,000
48,000
-
-
-
-
-
-
24,000
48,000
44,000
24,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000
-
-
-
-
-
-
-
20,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,670
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
193,670
8,000
-
-
60,000
60,000
-
-
54,000
48,000
-
-
24,000
48,000
59,000
24,000
18,068
1,489
-
-
-
-
-
-
12,045
1,489
-
-
30,000
-
-
-
35,000
-
-
-
-
-
-
-
1 Shares to be issued to directors in lieu of fees are to be ratified at the upcoming annual general meeting
2 Shares allocated to the Director will be issued to Catcha Group Pte Ltd
3 Resigned 30 June 2017
4 Resigned 30 September 2017
5 Appointed 1 July 2017
20
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Short-term benefits
Share-based payments
Additional
incentives Options
STI
shares
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
96,798
150,000
150,000
-
-
-
-
98,461
24,615
77,539
19,693
Total
Remuneration
$
-
24,000
Performance
related
%
-
-
-
44,000
-
-
-
44,000
702,886
363,513
-
391,716
646,502
576,251
444,547
381,079
-
-
39%
24%
-
31%
45%
39%
40%
29%
$
-
-
-
-
-
-
97,322
-
-
-
-
-
-
-
S Di Gregorio6
Non-executive Director
C McIntyre7
Non-executive Director
A Bhatia7
Non-executive Director
H Stone
Chief Executive Officer
D Rielly8
Chief Executive Officer
J Dische
Chief Financial Officer
P Sttau
Chief Information Officer
Salary & fees Cash bonus
$
-
-
$
-
-
-
-
-
-
-
-
370,000
241,621
-
170,000
250,000
250,000
220,000
220,000
-
-
-
-
-
-
-
-
-
-
Other
$
-
-
-
-
-
-
60,544
35,559
-
99,575
102,474
101,996
48,196
51,199
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Remuneration1
$
-
24,000
LTI
shares
$
-
-
44,000
-
-
-
44,000
-
-
-
-
-
-
-
-
-
-
175,020
86,333
-
25,343
45,567
49,640
98,812
90,187
6 Resigned 29 June 2016
7 Shares allocated to the Director were issued to carsales.com Limited. Resigned 9 December 2016
8 Resigned 30 June 2016
21
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Short-term benefits
Share-based payments
Salary & fees Cash bonus
$
$
Other
$
Remuneration1
$
LTI
shares
$
STI
shares
$
Additional
incentives Options
$
$
Total
Remuneration
$
Performance
related
%
2017
19,167
-
12,765
-
-
-
-
-
31,932
-
2016
230,000
-
129,286
-
53,132
92,000
-
-
504,418
29%
J Caisse9
Chief Business
Development Officer
J Adams10
Chief Marketing Officer
2017
2016
127,500
-
-
-
48,008
-
-
-
21,250
-
-
-
-
-
7,573
-
204,331
-
14%
-
Total Remuneration
2017
1,141,780
-
271,987
295,000
340,649
150,000
176,000
140,565
2,515,981
2016
1,114,599
-
417,615
300,000
304,635
338,798
44,308
-
2,519,955
9 Resigned 31 January 2017
10 Appointed 7 April 2017
There were no non-monetary, termination benefits, long term benefits (except LTI) or post-employment/superannuation benefits in the current or prior year, hence the
categories have been excluded from the tables above.
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 Note 26 Related party transactions in the financial statements.
22
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Shareholdings of KMP1 held in iCar Asia Limited
31 December 2017
Balance at the
beginning of the
period
1 January 2017
Granted as
remuneration
Net change Other2
Balance at the end
of the period
31 December 2017
Executive Director:
G Chmiel
Non-Executive Directors:
P Grove3,4
L Elliott3,4
M Britt
S Khalil Ibrahim
M Licciardo
C Lobb
P Everingham
R Kuo
J Olsen
50,000
15,618
11,312
76,930
86,676,645
86,676,645
660,293
1,562,500
118,765
22,280,992
109,076,402
95,012
95,012
48,417
22,304,745
-
277,744
109,076,402
755,305
1,888,661
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
572,553
572,553
Other Key Management Personnel:
H Stone
J Dische
P Sttau
J Adams
312,500
255,888
86,595
171,556
312,277
264,898
89,790
796,333
610,576
116,119
-
202,714
-
-
-
-
-
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.
3 P Grove and L Elliott have a relevant interest in securities held by Catcha Media Berhad and Catcha Group
Pte Ltd totalling 109,076,402.
4 Shares allocated to the Director were issued to Catcha Group Pte Ltd.
23
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
C Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Incentives are paid to Key Management Personnel according to the achievement of performance targets which are
set half yearly and based:
50% on achievement of Group Revenue and EBITDA targets. EBITDA targets are treated as a 'gate' to
achievement and if not met, no reward is made under this category.
30% on 'vibrancy' metrics targets:
o Website audience.
o Volume of consumer leads delivered through the portals.
o Volume of paying accounts (new and used car).
o Volume of used cars listed in the sales markets.
10% on employee engagement targets as assessed by an employee net promoter score derived from an internal
survey.
10% on achievement of function-specific strategic goals.
For the Chief Financial Officer these strategic goals involve delivery of cost control measures, operations team
projects and cross-functional conversion initiatives.
For the Chief Information Officer the goals involve the timely provision of products and technical capabilities for the
Group and efficiencies in the delivery process.
For the Chief Marketing Officer the goals involve delivery of specific marketing strategy projects, brand assessment
and financial performance in the Media division.
The Chief Executive Officer’s goals aggregate those given to the other key management personnel and align to
specific strategic milestones.
Details of these agreements are as follows (please refer to Section A for further information on short-term and long-
term incentives):
Name:
Title:
Term of agreement:
Details:
Mr Hamish Stone
Chief Executive Officer
Ends 19 June 2019. 6 months termination notice period by executive and company.
Base salary cost is AUD 370,000 per annum.
Payment on commencement of employment of AUD 37,000.
Long term incentive
Up to AUD 370,000 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. The
shares are issued in 3 instalments: 3 months, 15 months and 27 months after the
period, split as 40%, 30%, 30% respectively.
Please see above for performance criteria.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately 2017:
AUD 3,643 (2016: AUD 3,901) per month).
Options:
See Section D Share-based compensation.
24
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Name:
Title:
Term of agreement:
Details:
Mr Joe Dische
Chief Financial Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 250,000 per annum.
Short term incentive
Up to AUD 150,000 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.
Long term incentive
Up to AUD 50,000 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.
Additional incentive
1,000,000 shares in iCar Asia Limited if the Group's EBITDA is positive in 2
consecutive quarters prior to the end of calendar 2020. The last (2nd) quarter
must demonstrate clear market leadership on traffic, listings and leads.
Please see above for performance criteria.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately 2017:
AUD 3,643 (2016: AUD 3,901) per month).
School fee allowance on average MYR 71,843 per child per annum (equivalent to
approximately 2017: AUD 21,810 (2016: AUD 23,352) per annum).
25
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Name:
Title:
Term of agreement:
Details:
Mr Pedro Sttau
Chief Information Office
6 months termination notice period by executive and company.
Base salary cost is AUD 230,000 per annum.
Long term incentive:
Up to AUD 184,000 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. The
shares are issued in 3 instalments: 3 months, 15 months and 27 months after the
period, split as 33%, 33%, 33% respectively.
Additional incentive
800,000 shares in iCar Asia Limited if the Group's EBITDA is positive in 2
consecutive quarters prior to the end of calendar 2020. The last (2nd) quarter
must demonstrate clear market leadership on traffic, listings and leads.
Please see above for performance criteria.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately 2017:
AUD 3,643 (2016: AUD 3,901) per month).
26
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Name:
Title:
Term of agreement:
Details:
Mr Jonathan Joseph Adams
Chief Marketing Officer
3 months termination notice period by executive and company.
Base salary cost is AUD 170,000 per annum.
Long term incentive:
Up to AUD 85,000 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. The
shares are issued in 3 instalments: 3 months, 15 months and 27 months after the
period, split as 33%, 33%, 33% respectively.
Please see above for performance criteria.
Other benefits:
School fee allowance of AUD 44,000 per annum.
Options:
See Section D Share-based compensation.
The Nomination & 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
Nomination & Remuneration Committee of the Board will review each Executive’s performance in comparison to
these measures and targets. Incentive targets (as a percentage of Total Executive Compensation ('TEC')) are to be
determined annually by the Board, based on the recommendation of the Nomination & Remuneration Committee for
the coming year. TEC is base remuneration inclusive of benefits.
27
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
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 2017 are set out below:
Executive Director:
G Chmiel
Non-Executive Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
C McIntyre
A Bhatia
S Khalil Ibrahim
Other Key Management
Personnel:
H Stone
Financial
Year
Category
Number of
Shares granted
up to 31
December 2017
Number of
shares
vested
during 2017
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
2016
Director Fees
15,618
15,618
0.505
7,890
February 2017 February 2017
June 2017
2016
2016
2016
2016
2016
2016
2016
2016
2016
2016
Director Fees1
Director Fees1
Director Fees2
Director Fees2
Director Fees2
Director Fees2
Director Fees2
118,765
95,012
47,115
95,012
89,545
89,545
48,417
118,765
95,012
47,115
95,012
89,545
89,545
48,417
0.505
0.505
0.505
0.505
0.505
0.505
0.505
60,000
48,000
23,802
48,000
45,238
45,238
24,460
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
June 2017
June 2017
June 2017
June 2017
June 2017
June 2017
June 2017
LTI
LTI
LTI
171,556
128,667
128,667
171,556
-
-
0.200
0.200
0.200
34,311
25,733
25,733
February 2017 February 2017 May 2017
February 2017 February 2018 March 2018
February 2017 February 2019 March 2019
28
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Other Key Management
Personnel:
J Dische
J Caisse
P Sttau
Financial
Year
Category
Number of
Shares granted
up to 31
December 2017
Number of
shares
vested
during 2017
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
2014
2015
2016
2016
2014
2015
2016
2016
2016
LTI
LTI
LTI
STI
LTI
LTI
LTI
LTI
LTI
27,381
81,140
79,172
237,517
55,686
49,451
116,120
116,120
116,120
27,381
-
-
237,517
55,686
-
116,120
-
-
1.110
0.910
0.200
0.200
1.110
0.910
0.200
0.200
0.200
30,393
73,837
15,834
47,503
61,811
47,287
23,224
23,224
23,224
February 2015 February 2017 May 2017
February 2016 February 2018 March 2018
February 2017 February 2019 March 2019
February 2017 February 2017 May 2017
February 2015 February 2017 May 2017
February 2016 February 2018 March 2018
February 2017 February 2017 May 2017
February 2017 February 2018 March 2018
February 2017 February 2019 March 2019
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
Share based payments of $1,102,214 have been accrued in relation to 2017 in lieu of Directors Fees ($295,000) and executive variable remuneration ($807,214). The number
of shares granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2018.
29
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the vesting date
or the options lapse. All options will be settled in shares. The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at
the date of grant, taking into account the terms and conditions upon which the options were granted. The fair value of options granted during the year ended 31 December 2017
was estimated on the date of grant using the following assumptions:
Dividend yield
Expected votality
Risk-free interest rate
0%
76%
1.8%
The table below discloses the number of share options granted, vested or lapsed during the year.
Key management
personnel
Financial
year
Options
awarded during
the year
No.
Award date
Fair value per
option at
award date
($)
Vesting Date
Exercise
price
Expiry date
No.
vested
during
the year
No.
lapsed
during
the year
Value of options
granted during
the year
G Chmiel
(Executive
Chairman)
H Stone (CEO)
Option 1
Option 2
Option 3
2017
1,000,000
26 May 2017
$0.129
31 December 2019
$0.40
31 December 2021
2017
2017
2017
750,000
750,000
1,000,000
26 May 2017
26 May 2017
26 May 2017
$0.127
$0.100
$0.082
26 May 2019
26 May 2019
26 May 2019
$0.40
$0.60
$0.80
26 May 2022
26 May 2022
26 May 2022
J Adams (CMO)
2017
250,000
3 April 2017
$0.111
31 December 2019
$0.40
31 December 2022
-
-
-
-
-
-
-
-
-
-
129,000
95,250
75,000
82,000
27,750
30
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
Remuneration Report (audited) (continued)
The weighted average fair value of the options granted during the six month period was $0.11.
Options holdings of KMP
Key
management
personnel
G Chmiel
(Chairman)
H Stone (CEO)
Option 1
Option 2
Option 3
J Dische (CFO)
J Adams (CMO)
Balance 1
January 2017
Granted as
remuneration
Options
exercised
Net
change
other
Balance 31
December 2017
Exercisable
Not
exercisable
-
-
-
-
-
-
-
1,000,000
-
11,312
1,011,312
-
-
117,107
117,107
750,000
750,000
1,000,000
-
250,000
-
-
-
-
-
-
-
-
750,000
750,000
1,000,000
89,790
89,790
-
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There were no options exercised during the year.
The following table outlines the proportion of maximum STI and LTI earned in relation to the financial year ended
2017.
Maximum STI opportunity
(% of fixed remuneration)
% of maximum STI
earned
Maximum LTI opportunity
(% of fixed remuneration)
% of maximum
LTI earned
H Stone (CEO)
J Dische (CFO)
P Sttau (CIO)
J Adams (CMO)
N/A
60%
N/A
N/A
N/A
100%
N/A
N/A
100%
20%
80%
50%
100%
100%
100%
100%
31
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2017
E Additional Information
The Group has a policy of ensuring that at least part of the remuneration of key management personnel is based on
the performance of the Company. Key management personnel are compensated with fixed remuneration and ‘at risk’
remuneration based on the key performance measures of the Group.
The performance of the Group for the year to 31 December 2017 and the previous four years is summarised below:
Revenue
Loss after income tax
2017
9,111,498
(13,377,600)
2016
6,663,394
(14,999,485)
2015
6,277,576
(12,537,199)
2014
2,814,246
(16,699,930)
2013
1,445,551
(6,901,778)
The factors that are considered to affect total shareholders return ("TSR") are summarised below:
2017
2016
2015
2014
2013
Share price at financial year end ($A)
Basic loss per share (cents per share)
Diluted loss per share (cents per
share)
0.20
(4.12)
(4.12)
0.25
(5.59)
(5.59)
0.96
(5.43)
(5.43)
1.08
(8.64)
(8.64)
0.90
(4.10)
(4.10)
There were no loans, other transactions and balances with KMP and their related parties during the year other than
those transactions detailed in Note 26 Related party transactions in the financial statements.
This concludes the remuneration report, which has been audited.
Signed in accordance with a resolution of the directors.
Georg Chmiel
Executive Chairman
Kuala Lumpur
22 February 2018
32
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Auditor’s Independence Declaration to the Directors of iCar Asia Limited
As lead auditor for the audit of iCar Asia Limited for the financial year ended 31 December 2017, I declare
to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of iCar Asia Limited and the entities it controlled during the financial year.
Ernst & Young
BJ Pollock
Partner
22 February 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
-33-
iCar Asia Limited and Controlled Entities
Statement of Comprehensive Income
For the year ended 31 December 2017
Revenue
Expenses
Administration and related expenses
Advertising and marketing expenses
Employment related expenses
Premises and infrastructure expenses
Offline production costs
Depreciation and amortisation expense
Operating loss
Interest income
Interest expense
Loss before tax
Income tax (expense)/benefit
Consolidated
Note
2017
$
2016
$
5
6
6
5
6
7
9,111,498
6,663,394
(2,068,968)
(7,027,970)
(9,882,594)
(1,752,111)
(205,672)
(1,799,953)
(2,212,109)
(6,929,580)
(9,476,252)
(1,669,106)
(189,092)
(1,319,429)
(13,625,770)
(15,132,174)
371,806
(9,448)
393,164
(39,048)
(13,263,412)
(14,778,058)
(114,188)
(221,427)
Loss after income tax expense for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
19
(13,377,600)
(14,999,485)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
258,611
(363,780)
258,611
(363,780)
Total comprehensive income for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
(13,118,989)
(15,363,265)
Earnings Per Share
Basic loss per share
Diluted loss per share
Cents
Cents
31
31
(4.12)
(4.12)
(5.59)
(5.59)
The above statement of comprehensive income should be read in conjunction with the accompanying notes
34
iCar Asia Limited and Controlled Entities
Statement of Financial Position
For the year ended 31 December 2017
Assets
Current assets
Cash and cash equivalents
Investments (term deposits)
Trade and other receivables
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Goodwill
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2017
$
2016
$
8
8
9
10
11
12
12
13
14
15
16
17
18
19
16,477,295
5,000,000
1,035,590
1,431,203
23,944,088
22,077,808
5,000,000
1,068,452
1,274,226
29,420,486
675,986
8,459,922
17,675,289
26,619
26,837,816
636,780
7,248,063
17,367,939
26,270
25,279,052
50,781,904
54,699,538
2,667,013
1,389,725
-
4,056,738
3,350,320
1,329,244
464,809
5,144,373
308,672
308,672
247,109
247,109
4,365,410
5,391,482
46,416,494
49,308,056
122,493,347
(9,804,243)
(66,272,610)
112,553,083
(10,350,017)
(52,895,010)
46,416,494
49,308,056
The above statement of financial position should be read in conjunction with the accompanying notes.
35
iCar Asia Limited and Controlled Entities
Statement of Changes in Equity
For the year ended 31 December 2017
Issued
capital
Foreign
currency
translation
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
$
$
$
$
$
$
112,553,083
-
(575,979)
-
(10,965,292) 1,191,254
-
-
(52,895,010)
(13,377,600)
49,308,056
(13,377,600)
-
258,611
-
-
-
258,611
-
258,611
-
-
(13,377,600)
(13,118,989)
10,511,539
(571,275)
-
-
-
-
-
-
-
-
-
-
(511,795)
-
295,000
503,958
-
-
-
-
9,999,744
(571,275)
295,000
503,958
Balance at 1 January 2017
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
56,821,045 shares issued during
the period
Transaction costs (net of tax)
Share to be issued in lieu of
directors' remuneration
Executive variable remuneration
Balance at 31 December 2017
122,493,347
(317,368)
(10,965,292) 1,478,417
(66,272,610)
46,416,494
Issued
capital
Foreign
currency
translation
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
$
$
$
$
$
$
89,328,100
(212,199)
(10,965,292) 1,078,144
(37,895,525)
41,333,228
-
-
-
(363,780)
(363,780)
-
-
-
-
-
(14,999,485)
(14,999,485)
-
(363,780)
-
-
(14,999,485)
(15,363,265)
24,022,098
(797,115)
-
-
-
-
-
-
-
-
-
-
(866,018)
-
300,000
679,128
-
-
-
-
23,156,080
(797,115)
300,000
679,128
Balance at 1 January 2016
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
30,145,692 shares issued during
the period
Transaction costs (net of tax)
Share to be issued in lieu of
directors' remuneration
Executive variable remuneration
Balance at 31 December 2016
112,553,083
(575,979)
(10,965,292) 1,191,254
(52,895,010)
49,308,056
The above statement of changes in equity should be read in conjunction with the accompanying notes.
36
iCar Asia Limited and Controlled Entities
Statement of Changes in Cash Flows
For the year ended 31 December 2017
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Income tax paid
Interest received
Interest paid
Consolidated
Note
2017
$
2016
$
9,394,557
(23,066,884)
(119,408)
(13,791,735)
436,712
(37,427)
7,447,754
(20,381,341)
-
(12,933,587)
398,633
(40,659)
Net cash used in operating activities
30
(13,392,450)
(12,575,613)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
(177,818)
(998,067)
(455,085)
(619,160)
Net cash used in investing activities
(1,175,885)
(1,074,245)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of borrowings
9,999,743
(564,077)
(467,844)
23,000,000
(781,716)
-
Net cash provided by financing activities
8,967,822
22,218,284
Net (decrease)/ increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
period
(5,600,513)
8,568,426
27,077,808
18,509,382
Cash, cash equivalents and investments at the end of the period
8
21,477,295
27,077,808
The above statement of changes in cash flows should be read in conjunction with the accompanying notes.
37
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
1. Corporate information
The consolidated financial statements of iCar Asia Limited and its subsidiaries (collectively, the ‘Group’) for the year
ended 31 December 2017 were authorised for issue in accordance with a resolution of Directors made on 22 February
2018. The Directors have the power to amend and reissue the financial report.
iCar Asia Limited is a for profit public company incorporated in Australia and is listed on the Australian Securities
Exchange. The Group’s principal place of business is Centerpoint North Tower, Mid Valley City Lingkaran Syed Putra,
Kuala Lumpur, Malaysia.
The Group’s principal activities during the year were the development and operation of internet based automotive
portals 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
the Corporations Act 2001, Australian Accounting Standards and other authoritative
requirements of
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 Annual Report:
Earnings/(Loss) before interest, income tax expense, depreciation and amortisation (EBITDA) reflects the loss for
the period prior to including the effect of net finance costs, income taxes, depreciation, amortisation and impairment.
Depreciation and amortisation are calculated in accordance with AASB 116: "Property, plant and equipment" and
AASB 138: "Intangible Assets" respectively. Impairment is calculated in accordance with AASB 136: "Impairment of
Assets". The Group believe that EBITDA is a relevant and useful financial measure used by management to measure
the Group’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 2017. The nature and the impact of each new standard and/or amendment is
described below:
2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for
Unrealised Losses [AASB 112]
Application Date of Standard: 1 January 2017, Application Date: 1 January 2017
This Standard amends AASB 112 Income Taxes (July 2004) and AASB 112 Income Taxes (August 2015) to clarify
the requirements on recognition of deferred tax assets for unrealised losses on debt instruments measured at fair
value.
The adoption of these amendments had no material impact on the financial position or performance of the Group.
38
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations (continued)
(i) Changes in accounting policies, new and amended standards and interpretations (continued)
2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
Application Date of Standard: 1 January 2017, Application Date: 1 January 2017
This Standard amends AASB 107 Statement of Cash Flows (August 2015) to require entities preparing financial
statements in accordance with Tier 1 reporting requirements to provide disclosures that enable users of financial
statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash
flows and non-cash changes.
The adoption of these amendments had no material impact on the financial position or performance of the Group.
(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 year ended 31 December 2017 are outlined below:
2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based
Payment
Application Date of Standard: 1 January 2018, Application Date: 1 January 2018
This standard amends AASB 2 Share-based Payment, clarifying how to account for certain types of share-based
payment transactions. The amendments provide requirements on the accounting for:
• The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments
• A modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity-settled
The Group does not expect this standard will have a significant impact on the Group financial report however it will
continue to assess this.
AASB 9 Financial Instruments
Application Date of Standard: 1 January 2018, Application Date: 1 January 2018
AASB 9 (December 2014) is a new standard which replaces AASB 139. This new version supersedes AASB 9 issued
in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification
and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed
approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018. However, the Standard is available for
early adoption. The own credit changes can be early adopted in isolation without otherwise changing the accounting
for financial instruments.
Classification and measurement
AASB 9 includes requirements for a simpler approach for classification and measurement of financial assets
compared with the requirements of AASB 139. There are also some changes made in relation to financial liabilities.
39
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations
(ii) Accounting Standards and Interpretations issued but not yet effective (continued)
AASB 9 Financial Instruments (continued)
The main changes are described below.
Financial assets
• Financial assets that are debt instruments will be classified based on (1) the objective of the entity's business
model for managing the financial assets; (2) the characteristics of the contractual cash flows.
• Allows an irrevocable election on initial recognition to present gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income. Dividends in respect of these
investments that are a return on investment can be recognised in profit or loss and there is no impairment or
recycling on disposal of the instrument.
• Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from
measuring assets or liabilities, or recognising the gains and losses on them, on different bases.
Financial liabilities
Changes introduced by AASB 9 in respect of financial liabilities are limited to the measurement of liabilities designated
at fair value through profit or loss (FVPL) using the fair value option.
Where the fair value option is used for financial liabilities, the change in fair value is to be accounted for as follows:
• The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
• The remaining change is presented in profit or loss
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 or losses attributable to changes in the
entity’s own credit risk would be recognised in OCI. These amounts recognised in OCI are not recycled to profit or
loss if the liability is ever repurchased at a discount.
Impairment
The final version of AASB 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 more
timely basis. The Group will apply the simplified approach and record life time expected losses on all trade receivables.
The Group does not expect this standard will have significant impact on the Group financial report.
Hedge accounting
Amendments to AASB 9 (December 2009 & 2010 editions and AASB 2013-9) issued in December 2013 included the
new hedge accounting requirements, including changes to hedge effectiveness testing, treatment of hedging costs,
risk components that can be hedged and disclosures.
Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11
and superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E.
40
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations
(ii) Accounting Standards and Interpretations issued but not yet effective (continued)
Hedge accounting (continued)
AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9 in Dec 2014.
AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9
(December 2010)) from 1 February 2015 and applies to annual reporting periods beginning on after 1 January 2015.
The Group does not expect this standard will have a significant impact on the Group financial report however it will
continue to assess this.
AASB 15 Revenue from Contracts with Customers
Application Date of Standard 1 January 2018, Application Date: 1 January 2018
AASB 15 Revenue from contracts with customers (‘AASB 15’) and the related subsequent amendments replaces all
existing requirements (AASB 111 Construction Contracts, AASB 118 Revenue and related interpretations) and
applies to all revenue from contracts with customers.
The new requirements provide a single, contract-based revenue recognition model. AASB 15 established principles
for reporting the nature, amount and timing and uncertainty of revenue and cash flows arising from an entity’s
contracts with customers. The core principle of AASB 15 is that an entity recognises revenue when a customer
obtains control or promised goods or services and is recognised in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. The new standard requires new and
expanded disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from
contracts with customers and the key judgements made.
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
AASB 2015-8 amended the AASB 15 effective date so it is now effective for annual reporting periods commencing
on or after 1 January 2018. Early application is permitted.
AASB 2014-5 incorporates the consequential amendments to a number Australian Accounting Standards (including
Interpretations) arising from the issuance of AASB 15.
AASB 2016-3 Amendments to Australian Accounting Standards – Clarifications to AASB 15 amends AASB 15 to
clarify the requirements on identifying performance obligations, principal versus agent considerations and the timing
of recognising revenue from granting a licence and provides further practical expedients on transition to AASB 15.
41
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations
(ii) Accounting Standards and Interpretations issued but not yet effective (continued)
AASB 15 Revenue from Contracts with Customers (continued)
In assessing the impact of AASB 15, iCar segregated the Group’s revenue into three major components to
understand the nature of the contractual arrangements with the customers in each revenue stream. The revenue
streams identified were:
(a) Media revenues – comprising the provision of online banner, social media, advertorial and electronic mailing
services to customers or the provision of physical booth space at new and used car events operated by the
Group.
(b) Classifieds (New and Used Cars) – comprises revenue from listing fees and ongoing subscriptions from
customers listing and promoting cars for sale on iCar’s websites. Includes broking fees (where commissions
are paid on a successful transaction) as well as from online promotional products that are purchased by
customers using prepaid ‘bump credits’ that can be used to increase the profile of car’s listing.
(c) Other revenues – comprising commission from sale of third party warranty, finance and insurance products.
In these arrangements iCar acts as agent not principal as the Group does not control the services before
they are transferred to the customer.
iCar assessed the impact of the new standard by analysing a representative sample of the customer contracts in
each of the above revenue streams in light of the requirements of AASB 15, comparing the iCar’s current accounting
policies and practices, and identifying potential differences.
Some of the key issues considered were the timing and amount of the recognition of revenue for prepaid bump
credits; the estimates and judgements involved in accounting for bundled products comprising listings and bump
credits based on their stand-alone selling price; and identifying the principal versus agent relationship where iCar
arranges the sale of third party warranty, finance and insurance products.
Based on this assessment the impact on the recognition and measurement of revenue will not be material. However,
the new standard will require iCar to provide new and expanded disclosures related to the nature, amount, timing
and uncertainty of revenue and cash flows arising from contracts with customers and the key judgements made.
42
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations
(ii) Accounting Standards and Interpretations issued but not yet effective (continued)
AASB 16 Leases
Application Date of Standard: 1 January 2019, Application Date: 1 January 2019
Lessee accounting
AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes two recognition exemptions for lessees – leases of ’low-
value’ assets and short-term leases. At the commencement date of a lease, a lessee will recognise a liability to make
lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the
lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the
lease term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting
Lessor accounting is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to
classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases:
operating and finance leases.
The new standard will be effective for annual periods beginning on or after 1 January 2019. Early application is
permitted, provided the new revenue standard, AASB 15 Revenue from Contracts with Customers, has been applied,
or is applied at the same date as AASB 16.
The Group has made a preliminary assessment and does not expect this standard to have a significant impact on
the financial performance of the Group, however will impact the statement of financial position. The operating lease
rental expense associated with these leases will no longer be recognised in the income statement, instead being
replaced by depreciation of the lease asset and interest charges. This is not expected to materially change the profit
after tax, but is expected to change the EBITDA.
43
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
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 2017 and
the results for the year then ended.
Subsidiaries are all those entities over which the Group has control. Control is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee)
• Exposure, or rights, to variable returns from its involvement with the investee
• The ability to use its power over the investee to affect its returns
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) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current
classification. An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period
Or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
44
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
b) Current versus non-current classification (continued)
A liability is current when:
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period
•
•
•
Or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period
The Group classifies all other liabilities as non-current. Where applicable, comparative balances in the Statement of
Financial Position are reclassified to ensure comparability between the current and prior reporting period.
c) 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 Group 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 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 Group 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.
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 group, the difference
is recognised as a gain directly in profit or loss by the group 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 Group's previously held equity interest in the Group.
Business combinations are initially accounted for on a provisional basis. The Group 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 Group
receives all the information possible to determine fair value.
45
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
d) Foreign currency translation
The financial report is presented in Australian dollars, which is the functional currency of the parent entity and the
presentation currency of the Group.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the 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,
being the Group's presentation currency, 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.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts
of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and
translated at the spot rate of exchange at the reporting date.
e) 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:
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.
Barter transactions
The Group periodically enters into barter transactions and revenue is recognised based on the market selling price
of the same services it provides in non-barter transactions.
46
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
e) Revenue recognition (continued)
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.
f) 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.
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.
47
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
f) Taxes (continued)
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.
g) 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 assessed 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.
48
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
h) 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.
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.
i) 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 Group’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
Group’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.
49
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
i) Intangible assets (continued)
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;
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. Employee costs included in
internally generated intangible assets are included in operating activities under payments to supplier and employees
in the cash flow statement. Subsequent to initial recognition, internally-generated intangible assets are reported at
cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
acquired separately.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill where
they satisfy the definition of an intangible asset and their fair values can be measured reliably. Subsequent to initial
recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation
and accumulated impairment losses, on the same basis as intangible assets acquired separately.
Acquired software
Software is not considered to have an indefinite life and is generally amortised over 3 - 5 years. If at any point the
software is no longer in use or continuing to generate future economic benefits it will be written down to zero.
Intangible Assets with indefinite useful life
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made
on a prospective basis.
j) 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 and these CGU’s are not larger than an
operating segment. 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.
50
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
j) Impairment of non-financial assets (continued)
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
(‘LTGR’) 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 LTGR rates
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.
k) 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.
l) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within
30 days for direct client billings and 90 days for agency billings.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when
there is objective evidence that the 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.
m) 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.
51
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
n) 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.
o) 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.
p) 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.
q) 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 superannuation expense
Contributions to defined contribution superannuation plans are expensed when incurred.
52
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
q) Employee benefits
Defined benefit pension plan
In Indonesia, the Group provides a defined benefit pension plan to its employees in conformity with the requirements
of Indonesia Labour Law No. 13/2003. The cost of providing benefits under the defined benefit pension plan is
determined using the projected unit credit method.
The Group applies the policy for recognising actuarial gains or losses, which are directly recognised in other
comprehensive income.
All past service costs are recognised at the earlier of when the amendment/curtailment occurs and when the related
restructuring or termination costs are recognized. As a result, unvested past service costs can no longer be deferred
and recognised over the future vesting period.
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 grant date.
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.
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.
53
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
r) 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.
s) 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 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.
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.
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.
54
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
3. Critical accounting judgements, estimates and assumptions
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 12. 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 2.4 c), 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.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation
model, which depends on the terms and conditions of the grant. The estimate also requires determination of the most
appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility
and dividend yield and making assumptions about them. See note 32 Share-based payments for further details.
Defined benefit pension plan
The present value of pension obligations are determined using the projected unit credit method. Actuarial valuation
includes making various assumptions which consist of, among other things, discount rates, rates of compensation
increases, disability rate and mortality rates. Actual results that differ from the Group’s assumptions are recognised
as actuarial gain/loss in other comprehensive income. Due to the complexity of the valuation, the underlying
assumptions and the long-term nature of the obligation, a defined benefit obligation is highly sensitive to changes in
assumptions.
While the Group believes that its assumptions are reasonable and appropriate, significant differences in the Group’s
actual experience or significant changes in its assumptions may materially affect the costs and obligations of pension
and other long-term employee benefits. All assumptions are reviewed at each reporting date.
55
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
4. Operating segments
Identification of reportable 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: (No operating segments have been aggregated to form the
reportable segments.)
Malaysia
Indonesia
Thailand
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 except deferred tax assets as these are not recognised.
All liabilities are allocated to reportable segments except deferred tax liabilities.
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.
56
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
4. Operating segments (continued)
Operating segment information
Consolidated -
2017
Revenue
Sales
Operating expenses
Loss before
Interest, tax,
depreciation and
amortisation
Depreciation and
amortisation
Interest income
Interest expense
Loss before
income tax
expense
Income tax expense
Loss after income
tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Malaysia
Indonesia
Thailand
Unallocated
Intersegment
eliminations
$
$
$
$
$
Total
$
4,567,506
725,550
3,818,442
-
-
9,111,498
(5,878,279)
(4,556,327)
(4,951,558)
(5,551,151)
- (20,937,315)
(1,310,773)
(3,830,777)
(1,133,116)
(5,551,151)
-
(11,825,817)
(115,393)
9,518
(9,448)
(49,187)
119
-
(395,019)
76
-
(1,240,354)
362,093
-
-
(1,799,953)
371,806
-
- (9,448)
(1,426,096)
(3,879,845)
(1,528,059)
(6,429,412)
-
(13,263,412)
-
-
-
(114,188)
-
(114,188)
(13,377,600)
3,098,583
1,038,464 20,642,529 26,002,328
-
50,781,904
50,781,904
1,326,947
990,212
1,192,143
856,108
-
4,365,410
4,365,410
57
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
4. Operating segments (continued)
Operating segment information (continued)
Consolidated - 2016
Malaysia
$
Indonesia
$
Thailand
$
Unallocated
$
Intersegment
eliminations
$
Total
$
Revenue
Sales
Operating expenses
Loss before Interest,
tax, depreciation
and amortisation
Depreciation and
amortisation
Interest income
Interest expense
Loss before income
tax expense
Income tax expense
Loss after income
tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
3,535,081
387,585
2,740,728
-
(5,661,530)
(4,222,835)
(4,410,705)
(6,181,069)
(2,126,449)
(3,835,250)
(1,669,977)
(6,181,069)
(125,858)
3,790
(39,048)
(369,590)
(32,755)
-
518
- - -
(791,226)
388,856
(2,287,565)
(3,868,005)
(2,039,049)
(6,583,439)
-
-
-
-
-
-
-
6,663,394
(20,476,139)
(13,812,745)
(1,319,429)
393,164
(39,048)
(14,778,058)
-
(128,630)
-
(92,797)
-
(221,427)
3,568,364
958,212
20,527,286
29,645,676
(14,999,485)
-
54,699,538
54,699,538
1,890,646
1,351,578
1,141,427
1,007,831
-
5,391,482
5,391,482
58
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
5. Revenue
Rendering of services
Interest Revenue
Consolidated
2017
$
2016
$
9,111,498
371,806
6,663,394
393,164
9,483,304
7,056,558
-
-
-
-
Within rendering of services, there is a total of $828,149 (2016: $347,850) in relation to goods exchange services.
There are no amounts outstanding at the balance date (2016: nil).
6. Expenses
Loss before income tax includes the
following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Fixtures and fittings
Consolidated
2017
$
2016
$
60,419
230,698
20,603
53,788
195,358
18,480
Total depreciation
-
-
311,720
267,626
Amortisation
Websites, domain names, trademarks
and other intangibles
Total depreciation, amortisation and
impairment
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
1,488,233
1,051,803
-
-
1,799,953
1,319,429
9,448
39,048
6,051,572
830,068
1,107,600
503,058
911,052
479,244
5,633,800
776,148
880,683
584,300
1,023,202
578,119
Total employment and related expenses
-
-
9,882,594
9,476,252
There are currently 390 full-time equivalent employees (2016: 424).
59
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
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:
Consolidated
2017
$
2016
$
59,357
54,831
114,188
106,669
114,758
221,427
-
-
114,188
221,427
Loss before tax from operations
(13,263,412)
(14,778,058)
Income tax expense calculated at 30% (2016: 30%)
(3,979,024)
(4,433,417)
Effect of different tax rates of subsidiaries operating in other jurisdictions
Deductible costs relating to share issue expenses
Effect of unused tax losses and tax offsets not recognised as deferred tax
assets
Unrecognised deferred tax asset
633,434
(194,554)
786,113
(227,909)
3,654,332
4,096,639
114,188
221,427
9,848,731
14,739,290
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. The tax losses are available subject to compliance with relevant tax rules, for offsetting
against future taxable profits.
60
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
8. Current assets - cash, cash equivalents and investments
Cash at bank
Cash on deposit
Cash and cash equivalents
Investments
Consolidated
2017
$
1,881,208
14,596,087
16,477,295
5,000,000
2016
$
4,485,188
17,592,620
22,077,808
5,000,000
21,477,295
27,077,808
Investments are term deposits which mature in March 2018 (2016: September 2017).
9. Current assets - trade and other receivables
Trade receivables
Accrued interest
Consolidated
2017
$
2016
$
967,900
67,690
941,664
126,788
1,035,590
1,068,452
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 $36,909 (2016: $60,389) in profit or loss in respect of impairment of receivables
for the year ended 31 December 2017.
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $113,704 as at 31
December 2017 ($132,855 as at 31 December 2016).
The Group did not consider a credit risk on the aggregate balances after reviewing credit terms of customers based
on recent collection practices.
61
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
9. Current assets - trade and other receivables (continued)
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 2016
Charge for the year
Utilised
Unused amounts reversed
At 31 December 2016
Charge for the year
Utilised
Unused amounts reversed
At 31 December 2017
10. Current assets – other
Prepayments
Other deposits
Other receivables
Consolidated
2017
$
8,635
23,478
1,312
80,279
2016
$
62,594
35,852
20,304
14,105
-
-
113,704
132,855
$
22,137
60,389
(63,176)
-
19,350
36,909
-
-
56,259
Consolidated
2017
$
510,570
192,868
727,765
2016
$
477,406
185,908
610,912
Other receivables relates to GST, VAT, withholding tax and other receivables.
-
-
1,431,203
1,274,226
62
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
11. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation and impairment
Plant and equipment - at cost
Less: Accumulated depreciation and impairment
Furniture and fittings - at cost
Less: Accumulated depreciation and impairment
Consolidated
2017
$
2016
$
533,432
(294,527)
238,905
1,842,334
(1,445,512)
396,822
115,162
(74,903)
40,259
447,219
(328,613)
118,606
1,757,698
(1,291,981)
465,717
198,599
(146,142)
52,457
675,986
636,780
-
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Leasehold
Plant and
Furniture and
improvements
equipment
Fittings
$
$
$
Total
$
Consolidated
Balance at 1 January 2016
172,686
263,779
44,335
480,800
Additions
Exchange differences
Depreciation expense
2,468
391,357
26,746
420,571
(2,760)
5,939
(144)
3,035
(53,788)
(195,358)
(18,480)
(267,626)
Balance at 31 December 2016
118,606
465,717
52,457
636,780
Additions
Exchange differences
Depreciation expense
180,272
163,361
7,289
350,922
446
(1,558)
1,116
4
(60,419)
(230,698)
(20,603)
(311,720)
Balance at 31 December 2017
238,905
396,822
40,259
675,986
63
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
12. Non-current assets- Intangibles and Goodwill
Goodwill - at cost
Other intangible assets - at cost
Less: Accumulated amortisation
Reconciliations
Consolidated
2017
$
2016
$
17,675,289
17,675,289
17,367,939
17,367,939
13,311,320
(4,851,398)
8,459,922
10,264,188
(3,016,125)
7,248,063
26,135,211
24,616,002
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 2016
Additions
Exchange differences
Amortisation expense
Balance at 31 December 2016
Additions
Exchange differences
Amortisation expense
Goodwill
Other
intangibles
acquired
$
$
Other
intangibles
Internally
generated
$
17,192,743
-
175,196
-
3,907,665
-
52,585
(308,704)
2,660,022
1,790,742
(111,148)
(743,099)
17,367,939
-
307,350
-
3,651,546
-
55,570
(307,862)
3,596,517
2,536,197
108,325
(1,180,371)
Total
$
23,760,430
1,790,742
116,633
(1,051,803)
24,616,002
2,536,197
471,245
(1,488,233)
Balance at 31 December 2017
17,675,289
3,399,254
5,060,668
26,135,211
Goodwill of $15,921,288 (2016: $15,653,090) is allocated to the Thailand cash generating unit (‘CGU’) after adjusting
for foreign exchange rates at the balance sheet date.
Goodwill of $1,754,001 (2016: $1,714,849) is allocated to the Malaysian CGU after adjusting for foreign exchange
rates at the balance sheet date.
64
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
12. Non-current assets- Intangibles and Goodwill (continued)
Other intangible assets:
Autospinn.com website (Thailand)
One2Car.com brand (Thailand)
One2Car.com customer base (Thailand)
Intangibles- Customer Relationship Management Platform
Intangibles-Websites and App development
Intangibles-Other
Consolidated
2017
$
2016
$
397,865
2,295,672
705,716
2,481,121
2,474,842
104,706
8,459,922
469,395
2,257,001
925,150
2,184,915
1,281,952
129,650
7,248,063
The life of the One2car.com 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. Autospinn.com is amortised
over 10 years. The One2car.com customer base intangible asset has a life of 6 years reflecting historical customer
churn. Internally-generated intangible assets are amortised over 3-5 years.
The Group performed its annual impairment test at 31 December 2017. 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 2017, the market capitalisation of the Group was above the book value of its equity and therefore
not an indicator of impairment. In line with accounting policy 2.4(j) the recoverable amount of CGU was determined
using a value in use calculation.
The 5 year Group cash flows assume that revenues rise significantly year on year due to increased penetration of
the used and new car market, the continued migration of advertising monies from offline to online and a strong
ASEAN automotive advertising market. Long term growth rates were set by country reflecting relative long-term GDP
growth, consequent rise in car ownership and iCar’s market leading positions.
Management have determined the appropriate WACC discount rate and long term growth rates (‘LTGR’) for each of
the CGUs as follows:
Malaysia
Thailand
WACC rate
14.2% (2016: 15.2%)
13.2% (2016: 13.9%)
Long term growth rates
3% (2016: 3%)
3% (2016: 3%)
The CGU’s are equivalent to the reportable segments.
The Malaysian CGU includes the exploitation of Carlist.my and Live Life Drive assets. The Thailand CGU includes
the exploitation of the One2Car, Thaicar and Autospinn assets.
65
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
12. Non-current assets- Intangibles and Goodwill (continued)
Malaysia CGU
The Group used the CGU’s value in use to determine the recoverable amount, which exceeded the carrying amount.
The projected cash flows were updated to reflect the 5 year plan assumptions and a pre-tax discount rate of 14.2%
(2016: 15.2%) was applied. A long term growth rate of 3% (2016: 3%) was used to extrapolate year 5 cash flows.
Management have prepared scenarios to consider the effect of changes in growth rates, discount rate and terminal
multiples.
The amount by which the recoverable amount exceeds the carrying amount for the Malaysia CGU is $29.0m.
However if in isolation revenue decreases 28% over the 5 year cash flow then the recoverable amount would be
equal to the carrying amount of the Malaysia CGU. No other reasonable possible changes in assumptions that would
result in an impairment were identified by management.
Due to the adequate head room in the base scenario, the expected future macro-economic and consumer confidence
in Malaysia, the current year performance of the CGU versus Budget and the business plans in place, it is not
considered that an impairment exists as at 31 December 2017.
Thailand CGU
The Group used the CGU’s value in use to determine the recoverable amount, which exceeded the carrying amount.
The projected cash flows were updated to reflect the 5 year plan assumptions and a pre-tax discount rate of 13.2%
(2016: 13.9%) was applied. A long term growth rate of 3% (2016: 3%) was used to extrapolate year 5 cash flows.
Management have prepared scenarios to consider the effect of changes in growth rates, discount rate and terminal
multiples.
The amount by which the recoverable amount exceeds the carrying amount for the Thailand CGU is $18.1m.
However if in isolation revenue decreases 16% over the 5 year cash flow then the recoverable amount would be
equal to the carrying amount of the Thailand CGU. No other reasonable possible changes in assumptions that would
result in an impairment were identified by management.
Due to the adequate head room in the base scenario, the expected future macro-economic and consumer confidence
in Thailand, the current year performance of the CGU versus Budget and the business plans in place, it is not
considered that an impairment exists as at 31 December 2017.
13. Current liabilities - trade and other payables
Trade payables and accruals
Deferred revenue
Consolidated
2017
$
2016
$
1,752,039
914,974
2,538,969
811,351
2,667,013
3,350,320
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
consolidated entity has financial risk management in place to ensure that all payables are paid within the credit time
frame.
66
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
14. Current liabilities – provisions
Employee benefits
Staff incentives and bonuses
Other
Consolidated
2017
$
171,116
919,003
299,606
2016
$
82,040
867,534
379,670
-
1,389,725
1,329,244
The employee benefits category is composed of the compensated annual leave provision for the year. The 2017
carried forward balance is expected to be utilised by March 2018 in line with company leave policies.
The staff incentives and bonuses provision is expected to be paid to employees by the end of March 2018.
The other provision category are provisions for corporate, withholding and VAT taxes.
Movements in provisions
Movements in each class of provision during the current financial year are set out below:
Employee
Benefits
$
Staff
incentives
& bonuses
$
Other
$
Consolidated - 2017
Carrying amount at the start of the year
Additional provisions recognised / foreign exchange differences
Amounts used
82,040
573,743
(484,667)
867,534
1,623,250
(1,571,781)
379,670
-
(80,064)
Carrying amount at the end of the year
171,116
919,003
299,606
15. Current liabilities – borrowings
Current liabilities – borrowings
Hire purchase
Shareholder loans
Consolidated
2017
$
-
-
-
2016
$
1,703
463,106
464,809
-
In 2012 an unsecured loan of RM 1,500,000 equivalent to $463,106 as at 31 December 2016 was advanced to the
group from a shareholder of Auto Discounts Sdn Bhd. Interest is charged at a rate of 8% per annum for the 5 years
term of the loan generating an interest expense of $9,448 in 2017 Financial Year – see Note 6 Expenses. Interest is
payable annually by 31 May. On 31 May 2017, the Group repaid the loan in full, which was equivalent to $467,844
at time of repayment.
Hire purchase are loans generated from the financing of company cars for the Group. The hire purchase loan is
unsecured and was repaid during the year.
67
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
15. Current liabilities – borrowings (continued)
The Group entered into a $5.0 million loan facility (‘Facility’) with Catcha Group Pte Ltd in November 2017. The
Facility is secured by a first ranking security over all the assets of the Company in favour of Catcha Group Pte Ltd
under a General Security Agreement. Key terms of the Facility include:
An interest rate of 12% per annum.
A maturity date of 3 years.
A commitment fee of 3% on the $5.0 million loan amount, payable upon commencement and a commitment
fee of 2% per annum on the undrawn balance of the loan, which starts accruing once the Company draws
on the loan.
Draw down subject to shareholder approval (to be obtained at the Company’s 2018 annual general meeting)
of the issue of unlisted options over shares to be granted to Catcha Group Pte Ltd.
Customary financial and operational undertakings by the Company, including relating to reporting and
maintenance of assets
The General Security Agreement provides that in the event the security is exercised, neither Catcha Group Pte Ltd
or any of its associates are entitled to acquire the assets of the Group without the Group first complying with any
applicable ASX Listing Rules, including ASX Listing Rule 10.1.
16. Non-current liabilities – Provisions
In Indonesia, the Group provides for its employees who reach the retirement age of 55 years based on the
requirements of Indonesia Labour Law No. 13/2003. The benefits are unfunded.
Consolidated
2017
$
2016
$
Indonesian pension plan
308,672
247,109
Net employee defined benefit liabilities
-
308,672
247,109
The following table summarises the components of the net benefit expense recognised in the statement of profit or
loss and the funded status and amounts recognised in the statement of financial position for the respective years.
Net benefit expense (recognised in profit or loss)
Current service cost
Interest cost on net benefit obligation
Net benefit expense
Consolidated
2017
$
2016
$
93,474
19,335
85,377
12,624
112,809
98,001
68
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
16. Non-current liabilities – Provisions (continued)
Changes in the present value of the defined benefit obligation
Defined benefit obligation at 1 January 2016
Interest cost
Current service cost
Benefits paid
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2016
Interest cost
Current service cost
Benefits paid
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2017
$
136,904
12,695
85,377
-
5,730
6,403
247,109
19,648
93,474
-
(28,714)
(22,845)
308,672
* Includes experience adjustments and actuarial changes arising from changes in financial assumptions.
Principal assumptions in determining pension obligations
The principal assumptions used in determining pension obligations for the Group’s plans are shown below:
Discount rate per annum
Annual salary increase
Pension age
Mortality rate
Disability rate
2017
2016
7.17%
8.00%
55 years
Indonesian
Mortality Table
2011 (TMI 2011)
10% from
mortality rate
8.37%
10.00%
55 years
Indonesian
Mortality Table
2011 (TMI 2011
10% from
mortality rate
A quantitative sensitivity analysis for significant assumptions as at 31 December is, as shown below:
Discount rate
1% increase
1% decrease
Future salary cost increase
1% increase
1% decrease
69
Impact on defined present
value of benefit obligation
2017
$
2016
$
254,671
347,850
209,967
292,415
348,804
253,117
292,544
209,112
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
16. Non-current liabilities – Provisions (continued)
The sensitivity analysis has been determined based on a method that extrapolates the impact on the defined benefit
obligation as a relist of reasonable changes in key assumptions occurring at the end of the reporting period. The
sensitivity analysis are based on a change in significant assumptions, keeping all other assumptions constant. The
sensitivity analysis may not be a representation of an actual change in the defined benefit obligations as it is unlikely
that changes in assumptions would occur in isolation from one another.
No payments are expected to be made for the next annual reporting period.
The weighted average duration of the defined benefit obligation at the end of the reporting period is 15.7 years.
17. Equity - issued capital
Consolidated
2017
Shares
2016
Shares
Consolidated
2017
$
2016
$
Ordinary shares - fully paid
377,776,239
320,955,194
122,493,347
112,553,083
Movements in ordinary share capital
Details
Balance
Issue of shares - STI/LTI to employees
Issue of shares - Directors remuneration 2015
year
Issue of shares - STI to employee
Issue of shares - Share placement
Issue of shares - Share placement
Share issue costs
Balance
Issue of shares - STI/LTI to employees
Issue of shares - Directors remuneration 2016
year
Issue of shares - Share placement1
Share issue costs
Date
31 December 2015
No of shares
247,915,348
4 March 2016
468,792
17 June 2016
30 August 2016
7 September 2016
10 November 2016
346,381
349,673
54,687,500
17,187,500
$
89,328,100
454,596
300,001
267,502
17,500,000
5,500,000
(797,116)
31 December 2016
12 May 2017
320,955,194
667,886
112,553,083
209,166
23 June 2017
12 December 2017
599,029
55,554,130
302,629
9,999,744
(571,275)
31 December 2017
377,776,239
122,493,347
1 Each share issued had one unlisted option attached to it exercisable at $0.20 with an expiry date of 18 months from
the date of issue.
70
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
17. Equity - issued capital (continued)
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.
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 2016 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.
Unlisted options
On 12 December 2017 the Group issued 55,554,130 ordinary shares as part of a non-renounceable rights issue.
Each share had one unlisted option attached to it exercisable at $0.20 with an expiry date of 18 months from the date
of issue. This totals 55,554,130 of available options at a potential value of $11,110,826,
During the year, the Group issued 3,750,000 options to Key Management Personnel (see Section D Share-based
compensation in the Remuneration Report). The value of the options was $409,000.
18. Equity – reserves
Foreign currency reserve
Share-based payments reserve
Equity reserves
Consolidated
2017
$
2016
$
(317,368)
1,478,417
(10,965,292)
(575,979)
1,191,254
(10,965,292)
-
(9,804,243)
(10,350,017)
71
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
18. Equity – reserves (continued)
Consolidated
Balance at 1 January 2016
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
Balance at 31 December 2016
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of directors
remuneration
Executive variable remuneration
Foreign
currency
reserve
$
Share-
based
payments
reserve
$
Equity
reserves1
$
Total
$
(212,199)
(363,780)
-
1,078,144
-
(866,018)
(10,965,292)
-
-
-
-
-
(575,979)
258,611
-
300,000
437,127
242,001
1,191,254
-
(511,795)
-
-
-
(10,965,292)
-
-
(10,099,347)
(363,780)
(866,018)
300,000
437,127
242,001
(10,350,017)
258,611
(511,795)
-
-
295,000
503,958
-
-
295,000
503,958
Balance at 31 December 2017
(317,368)
1,478,417
(10,965,292)
(9,804,243)
1Represents the excess paid for the acquisition of Auto Discounts Sdn Bhd (now iCar Asia Sdn Bhd) as a common
control transaction using the pooling of interest method. This balance is not revalued and will not reverse in the future.
19. Equity - accumulated losses
Consolidated
2017
$
2016
$
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
-
(52,895,010)
(13,377,600)
(37,895,525)
(14,999,485)
Accumulated losses at the end of the financial year
-
(66,272,610)
(52,895,010)
72
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
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 rates in terms of its cash held at bank.
2017
2016
Weighted
average
interest rate
Balance
Weighted
average
interest rate
Balance
%
$
%
$
1.93%
21,477,295
2.09%
27,077,808
21,477,295
27,077,808
Consolidated
Cash at bank
Net exposure to cash flow interest rate
risk
73
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
21. Financial instruments (continued)
Market risk (continued)
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
Consolidated - 2017
Basis points increase
Basis points decrease
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
96,216
-
50
(96,216)
Consolidated - 2016
Basis points increase
Effect on
profit
before tax
Basis
points
change
Effect on
equity
Basis points decrease
Basis
points
change
Effect on
profit
before tax
Effect on
equity
Cash at bank
50
94,267
-
50
(94,267)
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 has 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 the 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.
74
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
21. Financial instruments (continued)
Liquidity risk (continued)
Consolidated -
2017
Non-derivatives
Non-interest
bearing
Trade payables
and accruals
Interest bearing
Shareholder Loan
Hire Purchase
Loan
Total non-
derivatives
Consolidated -
2016
Non-derivatives
Non-interest
bearing
Trade payables
and accruals
Interest bearing
Shareholder Loan
Hire Purchase
Loan
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
$
$
$
$
$
1,752,039
-
-
-
1,752,039
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
1,752,039
-
-
-
1,752,039
Remaining
contractual
maturities
$
$
$
$
$
Weighted
average
interest
rate
%
2,538,969
8%
463,106
1,703
3,003,778
-
-
-
-
-
-
2,538,969
-
-
-
-
-
463,106
1,703
-
3,003,778
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.
75
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
22. Key management personnel disclosures
Directors
The following persons were directors of the Group during the financial year:
Georg Chmiel
Patrick Grove
Lucas Elliott
Mark Britt
Syed Khalil Ibrahim
Mark Licciardo
Christopher Lobb
Peter Everingham
Richard Kuo
James Olsen
Executive
Non-executive
Non-executive
Non-executive (resigned 30 June 2017)
Non-executive
Non-executive (resigned 30 September 2017)
Non-executive (resigned 30 June 2017)
Non-executive (appointed 1 July 2017)
Non-executive (appointed 1 July 2017)
Non-executive (appointed 1 July 2017)
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:
Hamish Stone
Joe Dische
Pedro Sttau
Jonathan Adams
Chief Executive Officer
Chief Financial Officer
Chief Information Officer
Chief Marketing Officer (appointed 7 April 2017)
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.
Short-term employee benefits
Share-based payments
Consolidated
2017
$
2016
$
1,413,767
1,102,214
1,532,214
987,741
2,515,981
2,519,955
There were no tax deferred shares granted during the year. Share-based payments refer to short-term, long term
incentives, additional incentives and share options for key management personnel and director remuneration. See
the Remuneration Report for further information.
76
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
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
Consolidated
2017
$
2016
$
215,000
214,560
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.
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 2017 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
Consolidated
2017
$
2016
$
526,324
654,478
1,180,802
473,881
423,829
897,710
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 date that the premises leases terminate are as follows: Malaysia - May 2018 to November 2020, Thailand –
March 2017 to January 2020 and Indonesia - May 2018 to December 2018.
The lease payments recognised in the profit and loss in 2017 were $480,151 (2016: $439,060).
77
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
26. Related party transactions
Parent entity
iCar Asia Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 28.
Key management personnel
Disclosures relating to key management personnel are set out in the Remuneration Report in the Directors' Report.
Transactions with related parties
During the year the Group purchased the following services from Catcha Group Pte Ltd (a major shareholder in iCar
Asia Limited):
$7,044 of public relation and communication services from Catcha Group Pte Ltd.
$7,500 reimbursement of legal costs to Catcha Group Pte Ltd in relation to Loan Facility Agreement.
During the year the Group purchased the following services from Wild Digital Sdn Bhd, a company controlled by
Patrick Grove and Lucas Elliot who are the Directors of iCar Asia Limited:
$32,751 of sponsorship for Wild Digital SEA Event 2017
During the year the Group purchased company secretarial services to a value of $64,918 from Mertons Corporate
Services Pty Ltd, the principal of which is Mark Licciardo who acted as Company Secretary throughout the year.
Director and director-related entities hold directly, indirectly or beneficially interests of 111,614,546 (2016: 88,949,438)
in the ordinary shares of the company as at the reporting date. They also held 23,847,589 options (2016: nil).
Receivable from and payable to related parties
There was a payable to Catcha Group Pte Ltd for $7,044 in relation to services at the end of the current reporting
period. There was also a payable to Mertons Corporate Services Pty Ltd for $5,410 in relation to the company
secretarial services at the end of current reporting period.
At 31 December 2016, there was a payable to Redbook (Automated Data Services Pty Ltd, an 100% subsidiary of
carsales.com Ltd- a major shareholder in iCar Asia Limited at that time) for $1,300 in relation to services. The
transaction was on normal commercial terms.
Receivable from and payable to related parties (continued)
There were no other trade receivables from or trade payables to related parties at the current or previous reporting
date
Loans to/from related parties
The Group has entered into a $5,000,000 loan facility with Catch Group Pte Ltd subject to shareholder approval.
Refer to Note 15 Current liabilities - borrowings for more information.
78
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
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
Total comprehensive income
Significant accounting policies
Parent
2017
$
2016
$
(22,808,748)
(27,655,021)
(22,808,748)
(27,655,021)
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note
2, except for the following:
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be
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
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
Parent
2017
$
2016
$
20,333,468
25,235,294
95,636,763
81,883,924
1,544,833
272,045
1,544,833
272,045
94,091,930
81,611,879
122,903,201 112,957,088
1,267,037
374,240
(32,612,246)
(29,185,511)
94,091,930
81,611,879
79
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
28. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name of entity
iCar Asia Pte Ltd
iCar Asia Management Services Sdn Bhd
Netyield Sdn Bhd
iCar Asia Sdn Bhd
PT Mobil Satu Asia
iCar Asia (Thailand) Limited *
O2C Holdings (Thailand) Co. Ltd
Perfect Scenery Ventures Limited
One2Car Co., Ltd
Equity holding
Country of
incorporation
Singapore
Malaysia
Malaysia
Malaysia
Indonesia
Thailand
Thailand
British Virgin Islands
Thailand
2017
%
100
100
100
100
100
100
100
100
100
2016
%
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.
29. Events after the reporting period
No matter or circumstance has arisen since 31 December 2017 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.
80
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
30. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(13,377,600)
(14,999,485)
Consolidated
2017
$
2016
$
Adjustments for:
Depreciation, amortisation and impairment
Equity settled employee benefit
Doubtful debts expense
Employment costs capitalised
Exchange differences on translation of FX
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
1,799,953
911,052
36,909
(1,383,626)
(323,760)
1,319,429
1,023,202
60,389
(1,249,664)
(348,752)
32,862
(156,978)
(683,306)
(247,956)
40,594
(45,421)
1,174,134
449,961
Net cash used in operating activities
(13,392,450)
(12,575,613)
31. Earnings per share
Loss after income tax attributable to the owners of iCar Asia Limited and
Controlled Entities
Consolidated
2017
$
2016
$
(13,377,600)
(14,999,485)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
324,586,866
268,239,860
Weighted average number of ordinary shares used in calculating diluted
earnings per share
324,586,866
268,239,860
Basic loss per share
Diluted loss per share
Cents
(4.12)
(4.12)
Cents
(5.59)
(5.59)
Options and contingently issuable shares in relation to KMP remuneration would have adjusted the weighted average
number of ordinary shares and this would have impacted the value of the diluted earnings per share. The details can
be found in Note 32.
81
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
32. Share-based payments
Executive variable remuneration
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 employees 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 Key Performance Indicators (‘KPIs’)
aligned to the individual’s specific business function. The percentage and threshold level can differ for each individual
and are reviewed each year. See Section C Service agreements. Payments are made in the form of cash and shares
as determined at the discretion of the Nomination & Remuneration Committee. Shares are issued at the volume
weighted average price (‘VWAP’) for the year. The STI program is closed to new key employees. New key employees
now participate only in the long term incentive plan (LTI). See below under ‘Long term incentive plan’ and under
Section C Service agreements in the Remuneration Report.
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 employees 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. During the year all new key
employees participated in the LTI only. The details of LTI terms and targets can be found under Section C Service
agreements in Remuneration Report.
Options plan
With the same objective of the LTI Plan, certain recent key employees have been given iCar Asia Limited share
options. The details can be found in Section C Service agreements in Remuneration Report.
Additional incentives
With the same objective of the LTI Plan, certain key employees were offered the opportunity to be granted additional
incentives in the form of iCar Asia Limited shares contingent of successful achievement of specified key financial and
operational metrics. The details can be found in Section C Service agreements in Remuneration Report.
Performance targets
Incentives are paid to Key Management Personnel according to the achievement of performance targets which are
set half yearly and are based on a combination of Group level financial and non-financial performance measures, in
addition to function-specific strategic goals. Refer to Section C Service agreements in Remuneration Report for
further details on performance targets.
Directors Remuneration
The Directors are remunerated in shares with no vesting requirements. The number of shares issued to Directors is
determined by the VWAP over the financial year of the directorship. Refer to Remuneration Report for further details
on Directors Remuneration.
82
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year ended 31 December 2017 are set out below:
Executive Director:
G Chmiel
Non-Executive Directors:
P Grove
L Elliott
S Di Gregorio
M Britt
C McIntyre
A Bhatia
S Khalil Ibrahim
Other Key Management
Personnel:
H Stone
Financial
Year
Category
Number of
Shares granted
up to 31
December 2017
Number of
shares
vested
during 2017
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
2016
Director Fees
15,618
15,618
0.505
7,890
February 2017 February 2017
June 2017
2016
2016
2016
2016
2016
2016
2016
2016
2016
2016
Director Fees1
Director Fees1
Director Fees2
Director Fees2
Director Fees2
Director Fees2
Director Fees2
118,765
95,012
47,115
95,012
89,545
89,545
48,417
118,765
95,012
47,115
95,012
89,545
89,545
48,417
0.505
0.505
0.505
0.505
0.505
0.505
0.505
60,000
48,000
23,802
48,000
45,238
45,238
24,460
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
February 2017 February 2017
June 2017
June 2017
June 2017
June 2017
June 2017
June 2017
June 2017
LTI
LTI
LTI
171,556
128,667
128,667
171,556
-
-
0.200
0.200
0.200
34,311
25,733
25,733
February 2017 February 2017 May 2017
February 2017 February 2018 March 2018
February 2017 February 2019 March 2019
83
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
Other Key Management
Personnel:
J Dische
J Caisse
P Sttau
Financial
Year
Category
Number of
Shares granted
up to 31
December 2017
Number of
shares
vested
during 2017
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
2014
2015
2016
2016
2014
2015
2016
2016
2016
LTI
LTI
LTI
STI
LTI
LTI
LTI
LTI
LTI
27,381
81,140
79,172
237,517
55,686
49,451
116,120
116,120
116,120
27,381
-
-
237,517
55,686
-
116,120
-
-
1.110
0.910
0.200
0.200
1.110
0.910
0.200
0.200
0.200
30,393
73,837
15,834
47,503
61,811
47,287
23,224
23,224
23,224
May 2017
February 2015 February 2017
February 2016 February 2018 March 2018
February 2017 February 2019 March 2019
May 2017
February 2017 February 2017
May 2017
February 2015 February 2017
February 2016 February 2018 March 2018
February 2017 February 2017
May 2017
February 2017 February 2018 March 2018
February 2017 February 2019 March 2019
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
Share based payments of $1,179,960 have been accrued in relation to 2017 in lieu of Directors Fees ($295,000), executive variable remuneration ($807,214) and
employee remuneration ($77,746). The number of shares granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2018.
84
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the
vesting date or the options lapse. All options will be settled in shares. The Company uses the Black-Scholes option valuation model to calculate the fair value of share
purchase options at the date of grant, taking into account the terms and conditions upon which the options were granted. The fair value of options granted during the
year ended 31 December 2017 was estimated on the date of grant using the following assumptions:
Dividend yield
Expected votality
Risk-free interest rate
0%
76%
1.8%
The table below discloses the number of share options granted, vested or lapsed during the year.
Key management
personnel
Financial
year
Options
awarded during
the year
No.
Awarded date
Fair value per
option at
award date
($)
Vesting Date
Exercise
price
Expiry date
G Chmiel
(Chairman)
H Stone (CEO)
Option 1
Option 2
Option 3
2017
1,000,000
26 May 2017
$0.129
31 December 2019
$0.40
31 December 2021
2017
2017
2017
750,000
750,000
1,000,000
26 May 2017
26 May 2017
26 May 2017
$0.127
$0.100
$0.082
26 May 2019
26 May 2019
26 May 2019
$0.40
$0.60
$0.80
26 May 2022
26 May 2022
26 May 2022
J Adams (CMO)
2017
250,000
3 April 2017
$0.111
31 December 2019
$0.40
31 December 2022
No.
vested
during
the year
No.
lapsed
during
the year
Value of
options
granted
during the
year
-
-
-
-
-
-
-
-
-
-
129,000
95,250
75,000
82,000
27,750
85
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2017
The weighted average fair value of the options granted during the six month period was $0.11.
Options holdings of KMP
Key
management
personnel
G Chmiel
(Chairman)
H Stone (CEO)
Option 1
Option 2
Option 3
J Dische (CFO)
J Adams (CMO)
Balance 1
January 2017
Granted as
remuneration
Options
exercised
Net
change
other
Balance 31
December 2017
Exercisable
Not
exercisable
-
-
-
-
-
-
-
1,000,000
-
11,312
1,011,312
-
-
117,107
117,107
750,000
750,000
1,000,000
-
250,000
-
-
-
-
-
-
-
-
750,000
750,000
1,000,000
89,790
89,790
-
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There were no options exercised during the year.
86
iCar Asia Limited and Controlled Entities
Directors’ declaration
In the directors' opinion:
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial
position as at 31 December 2017 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
Georg Chmiel
Executive Chairman
Kuala Lumpur
22 February 2018
87
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Auditor’s Report to the Members of iCar Asia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of iCar Asia Limited (the Company), including its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
31 December 2017, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its
consolidated financial performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For the matter below, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial statements. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
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Impairment testing of goodwill and intangible assets
Why significant
How our audit addressed the key audit matter
At 31 December 2017, goodwill of $17.7 million
and other intangibles of $8.5 million was recorded
in the consolidated statement of financial position.
Testing the carrying value of goodwill and other
intangibles for impairment was a key audit matter
due to:
(cid:127)
(cid:127)
The inherent complexity in auditing the
forward-looking assumptions applied to the
Group’s value in use (“VIU”) models for each
cash generating unit (“CGU”) given the
significant judgement from the Group
involved. The key assumptions in the cash flow
models included forecast revenue and expense
growth rates and terminal growth rate which
differ in each CGU due to the maturity of the
respective regions of operation.
The significant judgements incorporated in the
Group’s determination of discount rates used
for each CGU and the challenges associated
with auditing these discount rates to assess
whether they reflected the specific risks of the
primary regions the Group operates in.
The Group’s disclosures in relation to goodwill are
included in Note 12, which specifically explain the
sensitivity of changes in the key assumptions
which could give rise to an impairment of the non-
current assets (including goodwill) balance in the
future.
We performed the following procedures, amongst
others:
(cid:127)
Evaluated whether the determination of CGUs
was in accordance with Australian Accounting
Standards.
(cid:127) Assessed the application of the VIU valuation
methodology applied.
(cid:127) Assessed the key inputs and assumptions
including board approved cash flow forecasts,
discount rates and growth rates adopted in the
valuation.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Compared the cash flows used in the VIU
valuation to the actual and budgeted financial
performance of the underlying CGUs and
considered the historical reliability of the
Group’s cash flow forecasting.
Performed sensitivity analysis on the key
assumptions to determine whether any
reasonable possible changes would result in an
impairment charge.
Compared revenue and earnings multiples
derived from the Group’s VIU model to those
observable from external market data of
comparable listed entities, where available.
Compared certain key assumptions used by the
Group to external market data such as
passenger car sales, GDP per capita, and
internet and mobile phone penetration, where
applicable.
(cid:127) Assessed the adequacy of the related
disclosures made in the financial report.
Our valuation experts were involved in the
performance of the procedures, where considered
appropriate.
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Revenue recognition
Why significant
How our audit addressed the key audit matter
The Group earns revenue from media advertising,
classifieds subscriptions, depth products,
commissions and exhibition fees. The Group
regularly develops new product offerings to
generate revenue growth.
The nature of the risk associated with recording
revenue in accordance with accounting standards
varies by source and there is an increased risk for
new product offerings where the pattern of revenue
recognition may require increased consideration
and judgement by the Group.
We recognise that revenue is a key metric upon
which the Group’s performance is measured, that
the Group has annual internal targets, and
employee incentive schemes that are impacted by
revenue dollar growth.
At each of the Group’s operations with significant
revenue streams, we performed the following
procedures, amongst others:
(cid:127) Assessed the Group’s revenue recognition
policies adopted and the processes to record
revenue for each material revenue stream.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Evaluated the appropriateness of journal
entries impacting revenue, as well as other
adjustments made in the preparation of the
financial statements.
Considered any significant unusual or one-off
journal entries identified and evaluated
management’s controls over such
adjustments.
Inspected a sample of customer agreements
to determine whether revenue recognised
was in accordance with the contract terms
and the Group’s revenue recognition policies.
For revenue streams which have judgemental
elements, evaluated the appropriateness of
management’s assumptions.
Information Other than the Financial Statements and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information in the Group’s Annual Report for the year ended 31 December 2017, but does not include
the financial report and the auditor’s report thereon. We obtained the Directors report (including the
remuneration report) that is to be included in the Annual Report, prior to the date of our auditor’s
report, and we expect to obtain the remaining sections of the Annual Report after the date of this
auditor’s report.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon, with the exception of the Remuneration Report and our related
assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
A member firm of Ernst & Young Global Limited
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Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting in
the preparation of the financial report. We also conclude, based on the audit evidence obtained,
whether a material uncertainty exists related to events and conditions that may cast significant
doubt on the entity’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in the auditor’s report to the disclosures in
the financial report about the material uncertainty or, if such disclosures are inadequate, to
modify the opinion on the financial report. However, future events or conditions may cause an
entity to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
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• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 32 of the Directors' Report for the
year ended 31 December 2017. In our opinion, the Remuneration Report of iCar Asia Limited for the
year ended 31 December 2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
BJ Pollock
Partner
Melbourne
22 February 2018
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-92-
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2017
The shareholder information set out below was applicable as at 31 January 2018.
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
Total holders
of ordinary
shares
320
844
531
1,323
219
3,237
Units
167,937
2,507,953
4,109,930
44,334,451
326,655,968
377,776,239
Holding less than a marketable parcel
515
442,267
93
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2017
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity
securities are:
Ordinary shares
Number held
% of total
shares issued
ICQ HOLDINGS SDN BHD
CARSALES COM LIMITED
CATCHA GROUP PTE LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
BNP PARIBAS NOMINEES PTY LTD
MIRRABOOKA INVESTMENTS LIMITED
TARGET RANGE PTY LTD
TIMSIM HOLDINGS PTY LTD
HOLDEX NOMINEES PTY LTD
MR JOHN DAVID WHEELER + MR GLEN ROBERT WHEELER
ALCOCK SUPERANNUATION FUND PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR MICHAEL STEWART BUNKER
EMINENT HOLDINGS PTY LTD
MRS SUSAN HADDEN + MRS ABBY FALLA
52,500,000
50,373,365
35,452,484
29,221,287
25,977,178
22,309,979
12,512,631
11,063,538
9,092,677
5,451,267
4,509,320
3,142,068
2,872,413
2,000,000
1,750,000
1,687,920
1,500,176
1,500,000
1,465,517
1,250,000
13.90
13.33
9.38
7.74
6.88
5.91
3.31
2.93
2.41
1.44
1.19
0.83
0.76
0.53
0.46
0.45
0.40
0.40
0.39
0.33
275,631,820
72.97
Unquoted equity securities
There are no shares held in escrow
94
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2017
Substantial holders
The names of substantial shareholders of the Company (holding
not less than 5%) who have notified the Company in accordance
with Section 671B of the Corporations Act 2001 are set out
below:
Ordinary shares
Number held
% of total shares
issued
Catcha Group Pte Ltd
carsales.com Ltd
PM Capital Limited
Australian Foundation Investment Company Limited
109,076,402
50,083,433
29,221,288
20,156,215
208,537,338
28.87
13.30
7.74
5.34
55.25
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.
95
iCar Asia Limited and Controlled Entities
Corporate Directory
31 December 2017
Directors
Georg Chmiel (Executive Chairman)
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
James Olsen
Hamish Stone
Hamish.Stone@icarasia.com
Joe Dische
Joe.Dische@icarasia.com
Mark Licciardo
markl@mertons.com.au
Belinda Cleminson
belindac@mertons.com.au
Level 7
330 Collins Street
Melbourne VIC 3000
Group Chief Executive Officer
Group Chief Financial Officer
Joint Company Secretary
Registered office
Australia
Tel. +61 (3) 8689 9997 Fax. +61 (3) 9620 4709
Principal place of business
Suite 18.01- 3, Level 18,
Centerpoint North Tower,
Mid Valley City Lingkaran Syed Putra,
59200 Kuala Lumpur
Malaysia
Tel. +60 (3) 2776 6000 Fax. +60 (3) 2776 6010
Share register
Auditor
Computershare Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Australia
Tel. +61 (3) 9415 5000
www.computershare.com
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
Australia
Stock exchange listing
iCar Asia Limited and Controlled Entities shares are listed on the
Australian Securities Exchange (ASX code: ICQ)
Website
www.icarasia.com
Corporate Governance Statement
http://www.icarasia.com/investor-relations/corporate-governance/
96