iCar Asia Limited
ACN 157 710 846
Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the year ended 31 December 2018
Statutory Financial Results
Dec-18
$000
Dec-17
Movement
$000
$000
Change
Revenues from ordinary operations
Loss from ordinary activities after tax
attributable to members
Loss after tax attributable to members
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
11,556
9,111
2,445
(13,606)
(13,606)
(13,378)
(13,378)
(228)
(228)
(11,312)
(11,826)
514
Receipts from customers
Net cash used in operating activities
Net cash used in investing activities
Loss per Share (basic & diluted)
NTA per Share
Pro Forma Financial Results
13,688
(11,470)
(719)
Cents
(3.57)
2.07
Dec-18
$000
4,293
1,922
457
9,395
(13,392)
(1,176)
Cents
(4.12)
5.37
0.55
(3.30)
13%
(61%)
Dec-17
Movement
$000
$000
Change
Revenues from ordinary operations
Loss from ordinary activities after tax
attributable to members
Loss after tax attributable to members
Earnings before interest, tax, depreciation,
amortisation and equity incentives (EBITDAE)
11,556
9,111
2,445
(13,606)
(13,606)
(13,378)
(13,378)
(228)
(228)
(10,036)
(11,027)
991
27%
(2%)
(2%)
9%
Pro forma financial results have been calculated to exclude employee equity incentive expenses for the
current reporting period. Equity incentive expenses have been excluded to more clearly represent the Group’s
underlying earnings given these are a non-cash items whose primary economic impact is issued capital dilution
if and when shares are issued.
27%
(2%)
(2%)
4%
46%
14%
39%
The following table reconciles the statutory result to pro forma financial results for the year ended 31
December 2018 (noting that this financial information has not been audited in accordance with
Australian Auditing Standards):
Year ended 31 December 2018
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
Sales
11,556
-
-
EBITDA
(11,312)
1,276
-
NPAT
(13,606)
-
-
Pro forma results
1 The adjustment removes the portion of directors’ remuneration paid in shares, short term incentive plan (STI),
long term incentive plan (LTI), option plan and long term value creation plan (LTVC) expense incurred during
FY2018.
(10,036)
(13,606)
11,556
Year ended 31 December 2017
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
Sales
9,111
-
-
EBITDA
(11,826)
799
-
NPAT
(13,378)
-
-
Pro forma results
1 The adjustment removes the portion of directors’ remuneration paid in shares, short term incentive plan (STI),
long term incentive plan (LTI), option plan and long term value creation plan (LTVC) expense incurred during
FY2017.
(11,027)
(13,378)
9,111
Dividends
No dividends have been paid or declared in 2018 (2017: 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 2018. 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 24 May 2019. 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) 22 March 2019.
For and on behalf of the Board
Georg Chmiel
Executive Chairman
21 February 2019
iiCar Asia Limited and Controlled Entities
ACN 157 710 846
Annual Report for the financial year ended
31 December 2018
Annual Report Year Ended 31 December 2018
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
34
35
36
37
38
39
90
91
96
99
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 2018.
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)
Syed Khalil Ibrahim (Independent, non-executive Director)
Peter Everingham (Independent, non-executive Director)
Richard Kuo (Independent, non-executive Director)
James Olsen (Alternate Director to Lucas Elliott) resigned 16 November 2018
Information on directors
Name:
Title:
Qualifications:
Georg Chmiel
Executive Chairman
Diplom-Informatiker, MBA (INSEAD), CPA (USA), FAICD
Experience and expertise:
Mr Chmiel brings over 25 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:
Centrepoint Alliance (appointed 7 October 2016)
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited, Mitula Group Limited
None
715,077
1,000,000
1
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 (appointed 6 October 2010)
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
iProperty Group Limited
None
109,673,940
22,185,980
2
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 19 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.
Other current directorships:
Rev Asia Berhad (appointed 1 April 2013)
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
iProperty Group Limited
Member of the Nomination & Remuneration Committee and member of the Audit
& Risk Committee
109,673,940
22,185,980
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.
Other current directorships: None
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
Chairman of the Nomination & Remuneration Committee and member of the
Audit & Risk Committee
2,070,705
277,744
3
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 Limited (appointed 19 December 2017)
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Zhaopin Limited
Member of the Nomination & Remuneration Committee
62,060
None
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. He is a director of SCEGGS Darlinghurst Limited, the Chairman of Intrepica
Pty Limited, the owner of LiteracyPlanet.com, and has been a director of a range
technology, digital media,
of companies
pharmaceutical, 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 Australia's
largest software company. Richard has qualifications in law, accounting, finance
and investment and is a Fellow of the AICD.
in Australia and Asia
the
in
Other current directorships:
None
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
82,747
None
4
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Name:
Title:
Qualifications:
Experience and expertise:
James Olsen (Resigned 16 November 2018)
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 shares1:
Interests in options1:
None
None
702,553
372,553
1 Interests in shares and options are as at date of resignation
5
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Company Secretary
Mark Licciardo was appointed as the Group's company secretary effective 1 January 2016 and resigned on 8 January
2019.
Mark Licciardo was a former board member of the Group between December 2016 and September 2017. Mark is
the 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 a director of a number of public and private companies.
Belinda Cleminson was appointed as the Group's joint company secretary effective 9 December 2016. Belinda
Cleminson resigned as joint company secretary on 8 January 2019.
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.
Hasaka Martin was appointed as iCar Asia Limited Company Secretary on 8 January 2019. Mr Martin is Company
Secretary for a number of ASX listed and unlisted entities. He is a Chartered Secretary with over ten years’
experience, he holds a Graduate Diploma in Applied Corporate Governance and is a Fellow of both the Governance
Institute of Australia and the Institute of Chartered Secretaries and Administrators.
6
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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. There was no significant change in the nature of activities during the financial
year.
In the 2018 year, the Group operated internet based automotive portals in Malaysia, Thailand and Indonesia. The
portals cater to two automotive market segments, being used car buyers and new car buyers. Business activities in
these two segments are the following:
Used Car
(cid:120) Classifieds
(cid:120) Auction
(cid:120) Others - warranty, inspection and private seller service
New Car
(cid:120) New Car Dealers
(cid:120) Media
(cid:120) Events
Financial Performance
1Strong revenue growth of 27% year on year to $11,555,944
In the year ended 31 December 2018 the Group generated $11,555,944 in revenue (2017: $9,111,498), an increase
of 27% over the previous corresponding period (pcp) (2017: 37%).
Growth was primarily driven by the Group’s core Classified and Media businesses, with small but increasing
contributions from new cars dealer activities The Group’s events and auction businesses are expected to contribute
more significantly to growth in 2019.
Operating expenses increased only 9% in the 2018 year to $22,867,719 (2017: $20,937,315) mainly due to higher
employment cost, with continuing investment in staff in order to support the growth of existing and new businesses.
Of the $2,444,446 of additional revenue generated in 2018, $991,090 (41%) flowed through to pro forma EBITDA
with losses decreasing by 9% year on year to $10,035,769 (2017: $11,026,859).
The Group’s cashflow improved in the year and materially more than revenue and EBITDA. Receipts from customers
during the year grew by 46% to $13,688,016 (2017: $9,394,557) with net cash used in operating activities reducing
by 14% to $11,469,810 (2017: $13,392,450). Net cash used in investing activities reduced by 39% to $719,172
(2017: $1,175,885) and therefore there was an overall reduction in the Group’s free cashflow usage (operating
cashflow + investing cashflow) of 17% to $12,188,982 (2017: $14,568,335).
As at 31 December 2018 the Group had $9,531,721 in cash, cash equivalents and investments. Whilst the group
has conditional access to additional funds of up to $16,460,454, consisting of a $5,000,000 debt facility and share
option exercise proceeds of $11,460,454, which option exercise proceeds will be contingent on the prevailing share
price increasing above the $0.20 exercise price of the options on or before the option expiry date, the Group is not
factoring these additional funds into its current capital plans.
1The recognition and measurement of revenue in 2018 was based on a new accounting standard whereas 2017 revenue was based on the
previously applicable accounting standard. As explained in note 2.3(i), the change in accounting standards had not had a material impact on the
amount or timing of revenue recognised.
7
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Non-IFRS measures
The Group uses certain measures to manage and report on its business that are not recognised under Australian
Accounting Standards. These measures are collectively referred to as “non-IFRS financial measures”. Non-IFRS
measures are intended to supplement the measures calculated in accordance with Australian Accounting Standards
and are not a substitute for those measures. Non-IFRS financial measures and pro forma results and measures are
intended to provide shareholders additional information to enhance their understanding of the performance of the
consolidated entity.
Non-IFRS financial measures that are referred to in this report are as follows:
Non-IFRS financial
measure
EBITDA
Definition
Earnings before interest, tax, depreciation and amortisation expenses. Eliminates
non-cash charges for depreciation and amortisation.
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 the 2018 year include:
(cid:120) 34% year on year growth in total audience numbers across the Group to approximately 12 million unique visitors
per month; and
(cid:120) 12% year on year growth in average monthly leads across the Group.
Group Leads
+12%
841
939
Group Audience
+34%
11,824
8,842
000's
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
000's
1,000
900
800
700
600
500
400
300
200
100
-
Dec 17
Dec 18
Dec 17
Dec 18
8
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Malaysia:
The Malaysia business achieved an important financial milestone in 2018 by becoming EBITDA and cashflow positive
in the month of September 2018 and then its first full quarter of positive EBITDA and cashflow in the quarter ending
December 2018. As a result the full year EBITDA loss for Malaysia business decreased substantially by 77% to
$305,780 (2017: $1,310,773). This was achieved on the back of strong growth in revenue that increased 17% year
on year to $5,340,716 (2017: $4,567,506).
The Used Car-Classified and New Car - Media activities continued to be the main contributors, complemented by
new revenue streams in Used Car- Auction and New Car – New Car Dealers, both of which are expected to be
significantly scaled up in 2019.
Average monthly audience grew 49% year on year in 2018 driving leads growth of 41% as car buyers continued to
move online. These strong operational metrics are expected to underpin future growth across all businesses in
Malaysia in 2019.
000's
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Malaysia Audience
000's
Malaysia Leads
3,095
+49%
2,081
310
+41%
220
350
300
250
200
150
100
50
-
Dec 17
Dec 18
Dec 17
Dec 18
9
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Thailand
The Thailand business also achieved an important financial milestone in 2018 by becoming EBITDA and cashflow
positive in December 2018. The EBITDA loss for the full year substantially reduced by 50% to $572,073 from
$1,133,116 in 2017. Revenue for the year increased from $3,818,442 in 2017 to $5,069,584, representing a strong
33% year on year growth.
The Used Car - Classified and New Car - Media segments continued to be the main contributors, complemented by
new revenue streams in Used Car - Auction and New Car - New Car Dealers that are expected to be scaled up in
2019.
Average monthly audience grew strongly by 27% year on year in 2018. The continued adoption of digital channels
by car dealers was evident in 2018 with the number of dealer accounts increasing by 20% year on year and listings
growth by 8% year on year. Lead generation did decrease by 13% compared to the pcp as the Group’s Thailand
marketplace business began optimising towards quality of leads over quantity of leads, a process undertaken in
partnership with our dealers.
Thailand Leads
314
-13%
274
Thailand Audience
5,102
+27%
4,016
000's
6,000
5,000
4,000
3,000
2,000
1,000
-
350
300
250
200
150
100
50
-
Dec 17
Dec 18
Dec 17
Dec 18
10
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 Group’s websites.
Revenue continued to grow strongly by 58% year on year to $1,145,644 (2017: $725,550). 2018 EBITDA loss was
reduced by 10% year on year to $3,438,824 (2017: $3,830,777) with over 100% of the increase in revenue flowing
through to the EBITDA as cost were marginally reduced in 2018 compared to the pcp.
Average monthly audience and lead volumes grew strongly by 32% and 16% year on year in 2018 respectively. This
helped deliver further growth in the number of dealers paying in month to promote their listings, which is up 11%
compared to the prior year.
Indonesia Audience
Indonesia Leads
307
+16%
355
3,627
+32%
2,745
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
400
350
300
250
200
150
100
50
-
Dec 17
Dec 18
Dec 17
Dec 18
11
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
2018: Achieving Significant Financial Milestones for Malaysia and Thailand
In December 2018, iCar Asia’s Thailand operation became EBITDA and cashflow positive. This is forecast to
continue on a quarterly basis through the 2019 year and is in line with iCar Asia’s guidance provided by the Group
during 2018. iCar Asia’s Malaysian business also had its first full quarter of positive EBITDA and cashflow in the
fourth quarter of 2018 following its first breakeven month in September 2018. This is an important step where these
two countries will be the main driver in the Group’s progression towards overall forecasted milestone of being run-
rate EBITDA breakeven by the end of 2019, supplemented by the improvement in the Group’s Indonesia operation.
Pro forma financial results
Pro forma financial results have been calculated to exclude employee equity incentive expenses for the current
reporting period. Equity incentive expenses have been excluded to more clearly represent the consolidated entity’s
underlying earnings given this is a non-cash item whose primary economic impact is issued capital dilution if and
when shares are issued.
The following table reconciles the statutory result to pro forma financial results for the year ended 31 December 2018
(noting that this financial information has not been audited in accordance with Australian Auditing Standards):
Year ended 31 December 2018
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
Sales
11,556
-
-
EBITDA
(11,312)
1,276
-
NPAT
(13,606)
-
-
Pro forma results
11,556
(10,036)
(13,606)
1 The adjustment removes the portion of directors’ remuneration paid in shares, short term incentive plan (STI), long
term incentive plan (LTI), option plan and long term value creation plan (LTVC) expense incurred during FY2018.
The following table reconciles the statutory result to pro forma financial results for the year ended 31 December 2017
(noting that this financial information has not been reviewed in accordance with Australian Auditing Standards):
Year ended 31 December 2017
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
Sales
9,111
-
-
EBITDA
(11,826)
799
-
NPAT
(13,378)
-
-
Pro forma results
9,111
(11,027)
(13,378)
1 The adjustment removes the portion of directors’ remuneration paid in shares, short term incentive plan (STI), long
term incentive plan (LTI), option plan and long term value creation plan (LTVC) expense incurred during FY2017.
Matters subsequent to the reporting date
There have not been any transactions or events of a material and unusual nature between 31 December 2018 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
In 2019 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 scale up its auction and new car businesses. 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.
12
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Likely developments and expected results of operations (continued)
With the Group’s two largest markets, Malaysia and Thailand now EBITDA positive and Indonesia well placed to
narrow its EBITDA loss, the Group is on track to achieve run rate EBITDA breakeven by the end of 2019.
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 2018, and the number of meetings attended by each Director were:
Full Board
Audit & Risk
Committee
Remuneration &
Nomination Committee
Georg Chmiel
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
James Olsen1
Attended
Held
Attended
Held
Attended
Held
8
8
8
8
7
8
7
8
8
8
8
8
8
8
-
-
-
-
-
-
-
-
6
6
7
7
-
-
2
3
3
3
3
3
7
6
7
7
-
-
1
3
1 James Olsen was 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 2018
Auditor independence and non-audit services
The following non-audit services were provided by the entity’s auditor, Ernst & Young Australia. The directors are
satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that
auditor independence was not compromised.
Ernst & Young Australia received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
Other tax services
$
13,546
36,524
50,070
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.
Share options
Unissued shares
As at the date of this report and the reporting date, there were 54,078,626 unissued ordinary shares under options
outstanding for shareholders in connection with the rights issue in December 2017.
As at the date of this report and reporting date, there were 1,000,000 unissued ordinary shares under options
outstanding for Key Management Personnel (KMP) remuneration. Refer to the Remuneration Report for further
details of the options outstanding for KMP.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any
related body corporate.
Shares issued as a result of the exercise of options
During the financial year, shareholders have exercised options to acquire 1,475,504 fully paid ordinary shares in iCar
Asia Limited at a weighted average exercise price of $0.20 per share.
Employees and executives have not exercised any options during the financial year.
14
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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:
(cid:190)
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
(cid:190)
(cid:190)
(cid:190) key appointments and executive succession planning.
• Oversee the Group’s general remuneration strategy;
• Review the composition of the Board including:
(cid:190)
the criteria for selection of directors, having regard to the need for the breadth and depth of skills and experience
on the Board; and
the process for selecting new Directors.
(cid:190)
• 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 2018
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
financial year of the director services provided.
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 in 2017. 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 2018
Remuneration Report (audited ) (continued)
The table below summarises the prevailing Board and Committee fees payable to Directors at the close of year 2018:
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.
The Executive Chairman's fee was revised to $127,500 for 2019. The Executive Chairman will also be granted a
one-off issuance of $10,000 in shares in the Company, subject to shareholder approval.
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.
17
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
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 financial year in which the services were provided. The STI program has been closed to new key employees
since 2016. 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.
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 for three years (including the
year to which the LTI relates). 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 were previously awarded iCar Asia Limited
share options. The details can be found in Section C Service agreements in the Remuneration Report.
During the year, options granted to certain key management personnel have been replaced by a new share
appreciation rights scheme as detailed below.
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.
Long Term Value Creation (LTVC)
On 22 February 2018, the Group issued certain key management personnel with share appreciation rights as
replacement awards under the existing executive variable remuneration plan for additional incentives and options.
The existing Long Term Incentive plan is not affected by this new scheme and will run as per respective service
agreements of key management personnel. The purpose of the LTVC scheme is to reward the value creation
developed by the executives in driving growth in the business. The LTVC scheme is based on exceeding a specified
share price hurdle of $0.30 in any of the three observation periods (2018, 2019 and 2020). The entitlement will be
paid in shares in iCar Asia Limited and the number of entitlements will be based on the Volume Weighted Average
Price of the Group’s share price exceeding the baseline share price of $0.18 in the December of the relevant
observation period. Each executive will receive a share of the value created, which is calculated as the excess of the
share price hurdle to the baseline share price multiplied by the number of shares on issue at the end of the relevant
observation period.
The entitlements also contain vesting conditions based on a required service period for each observation period end
and vest 60% in the January following the observation period and 40% in the January twelve months thereafter.
18
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
The key inputs and assumptions, grant date fair value and current year amortisation expense of the LTVC award are
contained in Section D Share-based compensation.
Voting and comments made at the company's 2018 Annual General Meeting ('AGM')
The company received in excess of 95.27% 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.
B Details of remuneration
The table below outlines the key management personnel of the Group and their movements during full year 2018:
Name
Position
Term as KMP
Executive Director
Georg Chmiel
Non-executive Directors
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
James Olsen
Senior Executives
Hamish Stone
Joe Dische
Yee Chin Beng
Pedro Sttau
Jonathan Adams
Executive Chairman
Full financial year
Non-executive Director
Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Alternate Director to Lucas Elliott
Full financial year
Full financial year
Full financial year
Full financial year
Full financial year
Resigned 16 November 2018
Group Chief Executive Officer
Group Chief Financial Officer
Group Chief Financial Officer
Group Chief Information Officer
Group Chief Marketing Officer
Full financial year
Resigned 14 June 2018
Appointed 21 May 2018
Full financial year
Full financial year
19
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
Details of the remuneration of the key management personnel for the Group are set out in the following tables.
Other11 Remuneration1
Share-based payments
Additional
incentives10 Options10
G Chmiel2
Executive Director
P Grove3
Non-executive Director
L Elliott3
Non-executive Director
M Britt4
Non-executive Director
S Khalil Ibrahim
Non-executive Director
M Licciardo5
Non-executive Director
C Lobb4
Non-executive Director
P Everingham
Non-executive Director
R Kuo
Non-executive Director
J Olsen
Non-executive Director
Total Directors
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Short-term benefits
Salary &
fees
$
150,000
50,000
30,000
15,000
30,000
15,000
-
-
30,000
15,000
-
18,068
-
12,045
30,000
15,000
35,000
15,000
-
-
305,000
155,113
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
120,000
108,000
30,000
45,000
30,000
39,000
-
24,000
30,000
44,000
-
-
-
-
30,000
15,000
35,000
20,000
-
-
275,000
295,000
LTI
shares
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
STI
shares
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
46,665
35,670
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46,665
35,670
LTVC10
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Remuneration
$
316,665
193,670
60,000
60,000
60,000
54,000
-
24,000
60,000
59,000
-
18,068
-
12,045
60,000
30,000
70,000
35,000
-
-
626,665
485,783
Performance
related
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Shares to be issued to directors in lieu of fees are to be ratified at the upcoming annual general meeting
2 The Executive Chairman’s Options do not contain any performance conditions therefore are not classified as performance related
3 Shares allocated to the Director will be issued to Catcha Group Pte Ltd
4 Resigned 30 June 2017
5 Resigned 30 September 2017
20
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
H Stone
Chief Executive Officer
J Dische6
Chief Financial Officer
Yee Chin Beng7
Chief Financial Officer
P Sttau
Chief Information
Officer
J Caisse8
Chief Business
Development Officer
J Adams9
Chief Marketing Officer
Total Executive
Total Remuneration
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Other11 Remuneration1
Short-term benefits
Salary &
fees
$
392,500
370,000
122,341
250,000
98,849
-
235,000
$
65,776
60,544
61,050
102,474
-
-
49,382
220,000
-
48,196
-
19,167
177,500
127,500
1,026,190
986,667
1,331,190
1,141,780
12,765
55,548
48,008
231,755
271,987
231,756
271,987
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
275,000
295,000
Share-based payments
LTI
shares
$
136,733
175,020
( 25,631 )
45,567
-
-
85,010
98,812
-
-
20,261
21,250
216,373
340,649
216,373
340,649
STI
shares
$
-
-
-
150,000
-
-
-
-
-
-
-
150,000
-
150,000
Additional
incentives10 Options10 LTVC10
$
-
-
-
98,461
12,253
77,539
-
-
-
-
12,253
176,000
12,253
176,000
$
16,069
97,322
-
-
-
-
-
-
-
$
446,145
-
-
-
-
-
160,612
-
-
-
1,465
7,573
17,534
104,895
64,199
140,565
-
89,229
-
695,986
-
695,986
-
Total
Remuneration
$
1,057,223
702,886
157,760
646,502
98,849
-
542,257
Performance
related
%
57%
39%
0%
45%
0%
-
48%
40%
0%
0%
32%
14%
444,547
-
31,932
344,003
204,331
2,200,093
2,030,198
2,826,757
2,515,981
6 J Dische resigned on 14 June 2018 and forfeited his LTI shares.
7 Appointed 21 May 2018
8 Resigned 31 January 2017
9 Appointed 7 April 2017
10 The LTVC award is a replacement award for Options and Additional Incentives for H Stone and J Adams from the grant date of 22 February 2018. The expense for LTVC from 22 February
2018 for financial year 2018 has been classified in the LTVC column. The expense for Options and Additional Incentives from 1 January 2018 to 22 February 2018 has been classified in the
Options and Additional Incentives columns respectively.
11 Other short-term benefits include housing and school fee allowances
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.
21
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
Shareholdings of KMP1 held in iCar Asia Limited
31 December 2018
Balance at the
beginning of the
period
1 January 2018
Granted as
remuneration
Net change Other2
Balance at the end of
the period
31 December 2018
Executive Director:
G Chmiel
Non-Executive Directors:
P Grove3,4
L Elliott3,4
S Khalil Ibrahim
P Everingham
R Kuo
J Olsen5
Other Key Management
Personnel:
H Stone
J Dische6
Yee Chin Beng
P Sttau
76,930
446,835
191,312
715,077
109,076,402
109,076,402
1,888,661
-
-
572,553
796,333
610,576
-
202,714
186,181
161,357
182,044
62,060
82,747
-
740,996
695,538
-
420,511
411,357
436,181
-
-
-
(572,553)
789,467
(1,306,114)
-
-
109,673,940
109,673,940
2,070,705
62,060
82,747
-
2,326,796
-
-
623,225
87,280
J Adams
-
87,280
-
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 109,673,940.
4 Shares allocated to the Director were issued to Catcha Group Pte Ltd.
5 James Olsen resigned on 16 November 2018. Net other change in shares reflects that James Olsen was not a
KMP at 31 December 2018 and therefore has a holding of nil. At the date of resignation, James Olsen held 702,553
shares in the Company.
6 Joe Dische resigned on 14 June 2018. Net other change in shares reflects that Joe Dische was not a KMP at 31
December 2018 and therefore has a holding of nil. At the date of resignation, Joe Dische held 606,114 shares in the
Company.
22
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
C Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
STI and LTI incentives are paid to Key Management Personnel according to the achievement of performance targets
which are set half yearly as follow
For first half of financial year 2018
(cid:120) 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.
(cid:120) 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.
(cid:120) 10% on employee engagement targets as assessed by an employee net promoter score derived from an internal
survey.
(cid:120) 10% on achievement of function-specific strategic goals.
For second half of financial year 2018
(cid:120) 25% 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.
(cid:120) 12.5% on achievement of New Car revenue
(cid:120) 12.5% on achievement of Auction revenue
(cid:120) 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.
(cid:120) 10% on employee engagement targets as assessed by an employee net promoter score derived from an internal
survey.
(cid:120) 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.
The following table outlines the proportion of maximum LTI earned in relation to the financial year ended 2018. There
were no employees in service at 31 December 2018 entitled to the STI incentive.
H Stone (CEO)
Yee Chin Beng (CFO)
P Sttau (CIO)
J Adams (CMO)
Maximum LTI
opportunity (% of fixed
remuneration)
100%
80%
80%
50%
% of maximum
LTI earned
0%
0%
0%
0%
23
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 Georg Chmiel
Executive Chairman
3 months termination notice period by executive and company.
Base salary cost is AUD 150,000 per annum.
Base salary adjusted to AUD AUD 127,500 from 1 January 2019
Name:
Title:
Term of agreement:
Details:
Long term incentive
Not applicable
Options:
One-off issuance of AUD 10,000 in shares in the Company, subject to
shareholder approval. Grant of 1,000,000 options exercisable at $0.40 per option
vesting on 31 December 2019 and expiring on 31 December 2021.
Mr Hamish Stone
Chief Executive Officer
Employment contract converted to permanent employee from 1 January 2019. 6
months termination notice period by executive and company.
Base salary cost is AUD 370,000 per annum until 31 March 2018 and AUD
400,000 per annum from 1 April 2018 until 31 December 2018. Base salary
increase to AUD AUD 450,000 from 1 January 2019, of which AUD 350,000 will
be paid in cash and AUD 100,000 will be paid in shares in the Company (with
trading lock on shares for 12 months from issue date).
Long term incentive
Up to AUD 392,500 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 financial year
to which the incentive relates. The shares are issued in 3 instalments: 3 months,
15 months and 27 months after the end of the annual performance period to which
the LTI relates, split as 40%, 30%, 30% respectively. From 1 January 2019, up to
AUD 562,500 per annum, subject to same criteria.
Please see above for performance criteria. Please see page 31 for amount
awarded for 2018 financial year.
Other benefits:
Housing allowance of MYR 16,000 per month (equivalent to approximately 2018:
AUD 5,358 (2017: AUD 3,643) per month).
Options:
This options scheme has been replaced by Long Term Value Creation scheme.
See Section D Share-based compensation.
Long term value creation (LTVC)
LTVC share for Hamish is 1.25%. LTVC scheme entitlements is based on
exceeding a specified share price hurdle in any of the three observation periods
(2018, 2019 and 2020). The number of entitlements will be based on the Volume
Weighted Average Price of the Group's share price in the December of the
relevant observation period.
24
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
Name:
Title:
Term of agreement:
Details:
Mr Joe Dische (Resigned 14 June 2018)
Chief Financial Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 250,000 per annum until 31 March 2018 and AUD
290,000 from 1 April 2018 until resignation.
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 financial year
to which the incentive relates. Upon resignation, Joe Dische forfeited his STI for
the financial year ending 31 December 2018.
Long term incentive
Up to AUD 56,000 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 end of the annual performance period to
which the LTI relates. Upon resignation, Joe Dische forfeited his LTI for the
financial year ending 31 December 2018 and the unvested balances for the
years ending 31 December 2016 and 31 December 2017.
Additional incentive
This scheme has terminated as Joe Dische has ceased his employment.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately 2018:
AUD 4,019 (2017: AUD 3,643) per month).
School fee allowance on average MYR 76,500 per child per annum (equivalent to
approximately 2018: AUD 25,619 (2017: AUD 21,810) per annum).
25
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Name:
Title:
Term of agreement:
Details:
Yee Chin Beng (Appointed 21 May 2018)
Chief Financial Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 160,000 per annum from 21 May 2018 to 31 December
2018. 1 January 2019 onwards base salary is AUD 192,000.
Long term incentive
Up to AUD 128,000 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 financial year
to which the incentive relates. The shares are issued in 3 instalments: 3 months,
15 months and 27 months after the end of the annual performance period to which
the LTI relates, split as 33%, 33%, 33% respectively. Please see above for
performance criteria. Please see page 31 for amount awarded for 2018 financial
year.
Long term value creation:
Not entitled in 2018. LTVC scheme entitlements from 2019 onwards.
Name:
Title:
Term of agreement:
Details:
Mr Pedro Sttau
Chief Information Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 230,000 per annum until 31 March 2018 and AUD
240,000 from 1 April 2018 onwards.
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 financial year
to which the incentive relates. The shares are issued in 3 instalments: 3 months,
15 months and 27 months after the end of the annual performance period to which
the LTI relates, split as 33%, 33%, 33% respectively.
Additional incentive
Additional incentive scheme was replaced by Long Term Value Creation
scheme.
Long term value creation:
LTVC share for Pedro is 0.45%. LTVC scheme entitlements is based on
exceeding a specified share price hurdle in any of the three observation periods
(2018, 2019 and 2020). The number of entitlements will be based on the
Volume Weighted Average Price of the Group's share price in the December of
the relevant observation period.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately
2018: AUD 4,019 (2017: AUD 3,643) per month).
26
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 until 31 March 2018 and AUD
180,000 from 1 April 2018 onwards.
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 financial year
to which the incentive relates. The shares are issued in 3 instalments: 3 months,
15 months and 27 months after the end of the annual performance period to which
the LTI relates, split as 33%, 33%, 33% respectively.
Long term value creation:
LTVC share for Jonathan is 0.25%. LTVC scheme entitlements is based on
exceeding a specified share price hurdle in any of the three observation periods
(2018, 2019 and 2020). The number of entitlements will be based on the
Volume Weighted Average Price of the Group's share price in the December of
the relevant observation period.
Other benefits:
School fee allowance of AUD 44,000 per annum.
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 2018
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 2018 are set out below:
Financial
Year
Category
Number of
Shares granted
up to 31
December 2018
Number of
shares vested
during 2018
Fair Value
per share
$
Fair value
of shares $
Grant date
Vesting date
Issue date
Executive Director:
G Chmiel
2017
Director Fees
446,835
446,835
0.2417
108,000
February 2018 February 2018
June 2018
Non-Executive
Directors:
P Grove
L Elliott
Mark Britt
S Khalil Ibrahim
Peter Everingham
Richard Kuo
Other Key
Management
Personnel:
H Stone
2017
2017
2017
2017
2017
2017
Director Fees1
Director Fees1
Director Fees
Director Fees
Director Fees
Director Fees
186,181
161,357
99,297
182,044
62,060
82,747
186,181
161,357
99,297
182,044
62,060
82,747
0.2417
0.2417
0.2417
0.2417
0.2417
0.2417
45,000
39,000
24,000
44,000
15,000
20,000
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
June 2018
June 2018
June 2018
June 2018
June 2018
June 2018
2016
2017
2017
2017
LTI
LTI
LTI
LTI
128,667
612,329
459,247
459,247
128,667
612,329
-
-
0.2000
0.2450
0.2450
0.2450
25,733
150,021
112,516
112,516
February 2018 February 2018
February 2018 February 2018
February 2018 February 2019
February 2018 February 2020
May 2018
May 2018
March 2019
March 2020
28
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
Other Key
Management
Personnel:
J Dische
P Sttau
J Adams
Financial
Year
Category
Number of
Shares granted
up to 31
December 2018
Number of
shares
vested
during 2018
Fair Value
per share
$
Fair value
of shares $
Grant date
Vesting date
Issue date
2015
2016
2017
2015
2016
2017
2017
2017
2017
2017
2017
LTI
LTI
STI
LTI
LTI
LTI
LTI
LTI
LTI
LTI
LTI
81,140
79,172
614,398
51,957
116,120
252,434
252,434
252,434
87,280
87,280
87,280
81,140
-
614,398
51,957
116,120
252,434
-
-
87,280
0.91
0.2
0.245
0.91
0.2
0.2450
0.2450
0.2450
0.2450
0.2450
0.2450
73,837
15,834
150,528
February 2016 February 2018
May 2018
February 2017 February 2019 March 2019
May 2018
February 2016 February 2018
47,281
23,224
61,846
61,846
61,846
21,384
21,384
21,384
May 2018
February 2016 February 2018
May 2018
February 2016 February 2018
February 2018 February 2018
May 2018
February 2018 February 2019 March 2019
February 2018 February 2020 March 2020
May 2018
February 2018 February 2018
February 2018 February 2019 March 2019
February 2018 February 2020 March 2020
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd
Share based payments of $1,259,655 have been accrued in relation to 2018 in lieu of Directors Fees ($275,000) and executive variable remuneration ($984,655). The
number of shares to be granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2019.
29
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the vesting date
or the options lapse. All options will be settled in shares.
During the year, options granted to key management personnel, with the exception of Executive Chairman, have been replaced by Long Term Value Creation scheme (LTVC).
The table below discloses the number of share options granted, vested or lapsed during the previous financial year that existed at 31 December 2018.
Key management
personnel
Financial
year
Options
awarded
during the year
No.
Award date
Fair value per
option at
award date
($)
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)
2017
1,000,000 26 May 2017
$0.129 31 December 2019
$0.40
31 December 2021
- - $129,000
There were no options granted, vested or lapsed during the 2018 financial year.
30
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Remuneration Report (audited) (continued)
The table below discloses the number of share options outstanding at the end of the year.
Key management
personnel
G Chmiel (Exec. Chairman)
H Stone (CEO)1
J Dische (CFO)2
J Adams (CMO)1
P Grove (Director)
L Elliott (Director)
Balance
1 January 2018
1,011,312
2,617,107
89,790
250,000
22,185,980
22,185,980
Options holdings of KMP
Granted as
remuneration
Options
exercised
Net change
other
-
-
-
-
-
-
(11,312)
-
(2,500,000)
(89,790)
(250,000)
-
-
-
- -
- -
Balance
31 December 2018 Exercisable Not exercisable
1,000,000
117,107
-
117,107
- -
- -
22,185,980
22,185,980
22,185,980
22,185,980
1,000,000
-
-
-
-
-
There were no options related to remuneration exercised during the year.
1 Net other change reflects the replacement of the options incentive scheme with the Long Term Value Creation award.
2 Net other change in options reflects that Joe Dische was not a KMP at 31 December 2018 and therefore has a holding of nil. At the date of resignation, Joe Dische held
89,790 options in the Company.
31
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
Long term value creation (LTVC)
The following table list the key inputs and assumptions to the model used to calculate the grant date fair value of the
LTVC award were:
Share price hurdle
Baseline share price
Dividend yield
Expected volatility
Risk-free interest rate
Model used
LTVC
$0.30
$0.18
0%
62%
2.20%
Monte Carlo
The table below discloses the accounting amortisation of LTVC Scheme in financial statements for the year ended
31 December 2018 relating to key management personnel. The table also discloses the total grant date fair value of
the LTVC awarded to each key management personnel. The amortisation value is based on the fair value of LTVC
Scheme at grant date which was on 22 February 2018. The LTVC Scheme entitlements is based on exceeding a
specified share price hurdle in any of the three observation periods (2018, 2019 and 2020). As of 31 December 2018,
the market share price has not exceeded the specified share price hurdle during the observation period and thus no
shares will be awarded to any key management personnel as entitlements under the LTVC Scheme.
Key management personnel
Share of value
creation
Amortisation in 2018
$
Grant date fair value
$
H Stone
Chief Executive Officer
P Sttau
Chief Information Officer
J Adams
Chief Marketing Officer
1.25%
446,145
934,926
0.45%
160,612
336,573
0.25%
89,229
186,985
32
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2018
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 Group. 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 2018 and the previous four years is summarised below:
Revenue
EBITDA
Loss after income tax
2018
11,555,944
(11,311,775)
(13,606,453)
2017
9,111,498
(11,825,817)
(13,377,600)
2016
6,663,394
(13,812,745)
(14,999,485)
2015
6,277,576
(11,455,311)
(12,537,199)
2014
2,814,246
(13,191,344)
(16,699,930)
The factors that are considered to affect total shareholders return ("TSR") are summarised below:
2018
2017
2016
2015
2014
Share price at financial year end ($A)
Basic loss per share (cents per share)
Diluted loss per share (cents per
share)
0.135
(3.57)
(3.57)
0.20
(4.12)
(4.12)
0.25
(5.59)
(5.59)
0.96
(5.43)
(5.43)
1.08
(8.64)
(8.64)
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 20 Financing facility.
During the year, the Group recommend to the Board that 375,000 shares at $0.20 per share be issued to James
Olsen as remuneration for his project work over the last 18 months. It is subject to Shareholder approval at the 2019
Annual General Meeting.
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
21 February 2019
33
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 2018, 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
21 February 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
34
iCar Asia Limited and Controlled Entities
Statement of Comprehensive Income
For the year ended 31 December 2018
Auditor’s Independence Declaration
Revenue
4
11,555,944
9,111,498
Consolidated
Note
2018
$
2017
$
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
(2,381,551)
(6,942,669)
(11,684,153)
(1,771,878)
(87,468)
(2,483,456)
(2,068,968)
(7,027,970)
(9,882,594)
(1,752,111)
(205,672)
(1,799,953)
(13,795,231)
(13,625,770)
284,461
(17,500)
371,806
(9,448)
(13,528,270)
(13,263,412)
(78,183)
(114,188)
6
6
5
6
7
Loss after income tax expense for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
18
(13,606,453)
(13,377,600)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Remeasurements of employee defined benefit
2,641,514
36,472
258,611
-
Other comprehensive income for the year, net of tax
2,677,986
258,611
Total comprehensive income for the year attributable to the
owners of iCar Asia Limited and Controlled Entities
(10,928,467)
(13,118.989)
Earnings Per Share
Basic loss per share
Diluted loss per share
Cents
Cents
31
31
(3.57)
(3.57)
(4.12)
(4.12)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
35
iCar Asia Limited and Controlled Entities
Statement of Financial Position
For the year ended 31 December 2018
Assets
Current assets
Cash and cash equivalents
Investments (term deposits)
Trade and other receivables and contract assets
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
Contract liabilities
Provisions
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
31 Dec 2018
$
31 Dec 2017
$
8
8
9
10
11
12
12
13
4
14
15
9,531,721
-
1,387,490
2,611,232
13,530,443
658,976
9,449,734
19,656,770
27,491
29,792,971
16,477,295
5,000,000
1,035,590
1,431,203
23,944,088
675,986
8,459,922
17,675,289
26,619
26,837,816
43,323,414
50,781,904
2,790,650
1,307,912
1,786,672
5,885,234
1,752,039
914,974
1,389,725
4,056,738
416,677
416,677
308,672
308,672
6,301,911
4,365,410
37,021,503
46,416,494
16
17
18
123,656,458
(6,792,364)
(79,842,591)
122,493,347
(9,804,243)
(66,272,610)
37,021,503
46,416,494
The above statement of financial position should be read in conjunction with the accompanying notes.
36
iCar Asia Limited and Controlled Entities
Statement of Changes in Equity
For the year ended 31 December 2018
Issued
capital
Foreign
currency
translation
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
Balance at 1 January 2018
122,493,347
(317,368)
(10,965,292) 1,478,417
(66,272,610)
46,416,494
$
$
$
$
$
$
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
4,884,919 shares issued during
the period
-
-
-
-
2,641,514
2,641,514
1,200,741
Transaction costs (net of tax)
(37,630)
Share to be issued in lieu of
directors' remuneration
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,606,453)
(13,606,453)
36,472
2,677,986
(13,569,981)
(10,928,467)
(905,640)
-
275,000
-
-
-
295,101
(37,630)
275,000
Executive variable remuneration
Balance at 31 December 2018
-
123,656,458
-
2,324,146
- 1,001,005
(10,965,292) 1,848,782
-
(79,842,591)
1,001,005
37,021,503
Issued
capital
Foreign
currency
translation
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
Balance at 1 January 2017
112,553,083
(575,979)
(10,965,292) 1,191,254
(52,895,010)
49,308,056
$
$
$
$
$
$
-
-
-
258,611
-
-
-
-
(13,377,600)
(13,377,600)
-
258,611
258,611
-
-
-
(13,377,600)
(13,118,989)
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
10,511,539
Transaction costs (net of tax)
(571,275)
Share to be issued in lieu of
directors' remuneration
-
-
-
-
-
-
-
(511,795)
-
295,000
-
-
-
9,999,744
(571,275)
295,000
Executive variable remuneration
Balance at 31 December 2017
-
122,493,347
-
(317,368)
503,958
-
(10,965,292) 1,478,417
-
(66,272,610)
503,958
46,416,494
The above statement of changes in equity should be read in conjunction with the accompanying notes.
37
Auditor’s Independence Declaration
iCar Asia Limited and Controlled Entities
Statement of Changes in Cash Flows
For the year ended 31 December 2018
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Income tax paid
Interest received
Interest paid
Consolidated
Note
2018
$
2017
$
13,688,016
(25,408,005)
(83,120)
(11,803,109)
333,299
-
9,394,557
(23,066,884)
(119,408)
(13,791,735)
436,712
(37,427)
Net cash used in operating activities
30
(11,469,810)
(13,392,450)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
(262,971)
(456,201)
(177,818)
(998,067)
Net cash used in investing activities
(719,172)
(1,175,885)
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from options exercised
Share issue transaction costs
Repayment of borrowings
295,101
-
(51,693)
-
9,999,743
-
(564,077)
(467,844)
Net cash provided by financing activities
243,408
8,967,822
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the
period
(11,945,574)
(5,600,513)
21,477,295
27,077,808
Cash, cash equivalents and investments at the end of the
year
8
9,531,721
21,477,295
The above statement of changes in cash flows should be read in conjunction with the accompanying notes.
38
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
1. Corporate information
The consolidated financial statements of iCar Asia Limited and its subsidiaries (collectively, the ‘Group’) for the year
ended 31 December 2018 were authorised for issue in accordance with a resolution of Directors made on 21 February
2019. 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.
Going concern basis of accounting
The consolidated financial statements have been prepared on a going concern basis. The Group has incurred a loss
after tax of $13,606,453 in the current financial year (2017: $13,377,600 loss). The Group has an available cash
balance of $9,531,721 (2017: $ 16,477,295) and net assets of $37,021,503 (2017: $46,416,494) at 31 December
2018. Management and the Directors believe there are reasonable grounds to consider the Group will continue as a
going concern based on the Group’s trading and cash flow forecasts.
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.
39
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
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 2018.The nature and the impact of each new standard and/or amendment is
described below:
Adoption of AASB 15 Revenue from Contracts with Customers (‘AASB 15’)
The Group has applied AASB 15 Revenue from Contracts with Customers (‘AASB 15’) from 1 January 2018 in
accordance with the modified retrospective transitional approach using the practical expedients for completed
contracts. That is, contracts that are still on-going as at 1 January 2018 have been accounted for as if they had been
recognised in accordance with AASB 15 at the commencement of the contract.
The Group assessed the impact of the new standard by analysing its customer contracts in each of the Group’s
revenue streams described in Note 4, having regard to the requirements of AASB 15 comparing the Group’s
accounting policies and practices for accounting for the rights and obligations identified in those contracts and identify
potential differences. Some of the key issues considered were the timing and amount of the recognition of revenue
for prepaid bump credits (a 'bump' is a product which promotes a listing); the estimates and judgements involved in
allocating the transaction price for bundled products comprising listings and bump credits based on their relative
stand-alone selling prices; and identifying whether iCar is principal or agent in the sale of third party warranty, finance
and insurance products.
Based on this analysis, there is no material impact on the recognition and measurement of revenue and contract
costs on the adoption of AASB 15 at 1 January 2018.
AASB 15 does however require the Group to include in the financial statements certain additional information in
respect of the Group’s revenue streams. These disclosures are included in Note 4. Further, AASB 15 uses the terms
‘contract asset’ and ‘contract liability’ to describe the balances historically termed ‘accrued revenue’ and ‘deferred
revenue’ by the Group. The Group has adopted the terminology used in AASB 15 to describe such balances.
Adoption of AASB 9 Financial Instruments (‘AASB 9’)
The Group has applied AASB 9 from 1 January 2018. The impact of the new standard on the Group relates to
application of the forward-looking ‘expected credit loss’ model for assessing the impairment of the Group’s trade
receivables as well as the new requirements in AASB 9 for the classification of financial assets as being measured
at amortised cost, fair value through other comprehensive income (‘FVOCI’) or fair value through profit or loss
(‘FVTPL’).
Under AASB 9, debt instruments are subsequently measured at fair value through profit or loss, amortised cost, or
fair value through OCI. The classification is based on two criteria: the Group's business model for managing the
assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on
the principal amount outstanding.
40
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
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)
Adoption of AASB 9 Financial Instruments (‘AASB 9’) (continued)
The assessment of the Group's business model was made as of the date of initial application, 1 January 2018. The
assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was
made based on the facts and circumstances as at the initial recognition of the assets.
The classification and measurement requirements of AASB 9 did not have a significant impact to the Group. The
Group continued measuring at fair value through profit or loss all financial assets previously held at fair value under
AASB 139.
Trade receivables classified as Loans and receivables as at 31 December 2017 are held to collect contractual cash
flows and give rise to cash flows representing solely payments of principal and interest. These are classified and
measured as Debt instruments at amortised cost beginning 1 January 2018.
The Group does not currently undertake any hedging activities and does not have any financial liabilities designated
as measured at FVTPL. Therefore the new AASB 9 requirements relating to these areas do not impact the Group.
The adoption of AASB 9 has changed the Group's accounting for impairment losses for financial assets by replacing
AASB 139's incurred loss approach with a forward-looking expected credit loss approach. AASB 9 requires the Group
to recognise an allowance for expected credit loss for all debt instruments not held at fair value through profit or loss
and contract assets.
Based on past performance and future expectations of continued minimal bad debts due to the tight monitoring by
management, there was no material impact from the adoption of the expected credit loss model at 1 January 2018.
Adoption of 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of
Share-based Payment
The Group has applied 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement
of Share-based Payment from 1 January 2018. This standard amends AASB 2 Share-based Payment, clarifying how
to account for certain types of share-based payment transactions. The Group has not undertaken the types of share-
based payment transactions to which the new requirements apply and therefore this is no impact on the financial
position or performance of the Group in the current period.
41
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations (continued)
(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 2018 are outlined below:
AASB 16 Leases (‘AASB 16’)
AASB 16 was issued in January 2016 and it replaces AASB 117 ‘Leases’, AASB Interpretation 4 ‘Determining
whether an Arrangement contains a Lease’, AASB Interpretation 115 ‘Operating Leases-Incentives’ and AASB
Interpretation 127 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’. AASB 16 sets out
the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to
account for all leases under a single on-balance sheet model similar to the accounting for finance leases under AASB
117. 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 and an
asset representing the right to use the underlying asset during the lease term. 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 also required to remeasure the lease liability upon the occurrence of certain events. The lessee will
generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
AASB 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees to make more
extensive disclosures than under AASB 117.
The most significant impact identified based on an initial assessment is that the Group will recognise new right of use
assets and financial liabilities for its operating lease commitments for office buildings and office equipment. The
current accounting treatment of recognising operating lease expenses in Premises and infrastructure expenses in
the Statement of Comprehensive Income will also change on adoption of AASB 16, with amortisation of the lease
expense recognised in both Depreciation and amortisation expense and Interest expense.
As lessee, the Group can either apply the standard using a:
a) Retrospective approach; or
b) Modified retrospective approach with optional practical expedients.
The lessee applies the transition election consistently to all of its leases.
The Group plans to apply AASB 16 using the modified retrospective approach. The Group intends to elect to apply
the standard to contracts that were previously identified as a lease applying AASB 117 and AASB Interpretation 4.
The Group intends to elect to use the exemptions proposed by the standard on lease contracts for which the lease
terms ends within 12 months as of the date of initial application, and lease contracts for which the underlying asset
is of low value. The Group has leases of certain office equipment that are considered of low value.
The Group has completed an initial assessment of the potential impact on its consolidated financial statements. The
actual impact of applying AASB 16 on the financial statements from 1 January 2019 is still being determined and is
dependent on the Group’s borrowing rate, the composition of the Group’s lease portfolio, the Group’s assessment of
whether it will exercise any renewal options and the extent to which the Group chooses to use practical expedients
and recognition exemptions. The cumulative effect of adopting AASB 16 will be recognised as an adjustment to the
opening balance of retained earnings, with no restatement of comparative information.
42
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations (continued)
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects
the application of AASB 112 and does not apply to taxes or levies outside the scope of AASB 112, nor does it
specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The
Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments separately
• The assumptions an entity makes about the examination of tax treatments by taxation authorities
• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
• How an entity considers changes in facts and circumstances
This interpretation is effective for annual reporting periods on or after 1 January 2019, and certain transition reliefs
are available. The Group is assessing the impact of this interpretation.
2.4 Significant accounting policies
a) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of the Group at 31 December 2018 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.
43
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
b) Current versus non-current classification (continued)
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.
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.
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.
44
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
c) Business combinations (continued)
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing
investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value
is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the 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.
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 closing spot rate at the reporting date.
45
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
e) Revenue from contracts with customers
The Group is in the business of operating internet based automotive portals. The portals cater to two automotive
market segments, being used car buyers and new car buyers.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts
collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service
to a customer.
The Group assesses each arrangement to determine whether the Group acts as principal or agent based on whether
the Group controls the product or service before transferring it to the end customer. Where the Group acts as principal,
revenue is recorded on a gross basis versus on a net basis where the Group acts as agent.
Used Car
Classifieds revenue
(a) Subscription revenue – Customers (car sellers) pay a subscription fee to have access to iCar’s websites to
advertise cars for sale. Subscription periods are typically for 6 or 12 months and are paid upfront by the customer.
(b) Depth credits revenue – Depth credits allow a customer to enhance the visibility of their car sale listing on iCar’s
websites by ‘bumping’ their advertisement higher up the search listing on the site. Depth credits are paid for upfront
and are able to be used by the customer for a specified period of time before expiry. The expiry period ranges from
4 to 24 weeks.
Auction Commissions
Customers (car sellers) list cars for sale by way of buyer auction facilitated by iCar’s websites. For facilitating the
auction on our websites, iCar earns an auction commission from the car seller based on a percentage of the sale
price of the car, when the car is sold.
Other Commissions
Commissions are earned by iCar in relation to the sale of warranty, inspection and private seller service. In these
arrangements, iCar acts as agent not principal, as iCar does not control the services before they are transferred to
the customer.
New Car
New Car Dealers
(a) Subscription revenue – Dealers pay a subscription fee to have access to iCar’s websites to advertise cars for
sale. Subscription periods are for 6 or 12 months and are paid upfront by the dealers.
(b) Lead Revenue – Dealers pay for lead packets generated by iCar’s websites that they may use to pursue and
close out a new car sale transaction. Prepaid lead credits are paid for upfront and are able to be used by the dealer
for a specified period of time before expiry. The expiry period ranges from 3 months to 6 months.
Media
Automotive and non-automotive customers promote their companies using on-site banner, video placement,
electronic direct mail or via the use of ‘advertorial’ written or video content. Payment is generally due within 30 to 90
days of delivery. Revenue is recognised:
(cid:120) on a straight line basis according to the proportion of the period of the campaign that has elapsed. Invoices paid
prior to the completion of the project will be initially recognised as a contract liability in the statement of
financial position and recognised on a straight line basis as the services are delivered;
(cid:120)
(cid:120) on the delivery or mailing of such a product where there are no remaining obligations to maintain or host content.
Where the Group provides media advertising services to a customer and in exchange receives non-cash
consideration in the form of products or services, the Group applies the requirements of AASB 13 Fair Value
Measurement in measuring the value of the products or services received, If the fair value of the services or products
received cannot be reasonably estimated, the consideration is measured indirectly by reference to the stand-alone
selling price of the media advertising services provided.
46
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
e) Revenue from contracts with customers (continued)
Events
iCar holds physical automotive events for one manufacturer or a multi-brand event including parts, accessories and
ancillary services.
For the purposes of allocating event consideration between performance obligations, the standalone selling price of
the floor space / services at the event (‘booth space’) is estimated on a cost plus standard margin basis whereby the
larger the booth space, the cheaper the per square metre price. Booth space revenue is recognised when the event
takes place.
Allocation of the transaction price for bundled services
Where services are sold as a bundled offering, the Group allocates the consideration to each service based on the
relative standalone selling prices for each service. The standalone selling prices are observable as the Group
regularly sells each service on a standalone basis.
Significant financing component
Due to the short-term nature of advances from customers, the Group’s customer contracts do not contain a significant
financing component.
Contract balances
Trade receivables
A receivable represents the Group’s right to an amount of consideration that is unconditional. Refer to accounting
policies of financial assets in section l) Financial instruments – initial recognition and subsequent measurement.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the
Group performs by transferring goods or services to a customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned consideration that is conditional.
Contract liabilities
A contract liability is the obligation to transfer goods or services to customer for which the Group has received
consideration from the customer. If a customer pays consideration before the Group transfers goods or services to
the customer, a contract liability is recognised when the payment is made or the payment is due. Contract liabilities
are recognised as revenue when the Group performs the service under the contract.
Rendering of services
For the comparative year, 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.
Costs to obtain a contract
Sales employees are set targets based on total revenue and specific activities within their allocated client base and
are rewarded tiered percentages of their contracted commission pools. In the circumstances where the
commissions are incremental to obtain the customer contract, the Group has elected to apply the optional practical
expedient for costs to obtain a contract which allows the Group to immediately expense sales commissions
because the amortisation period of the asset that the Group otherwise would have used is one year or less.
47
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
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.
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.
48
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
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.
h) Leases
The determination of whether an arrangement is a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the
use of a specific asset and the arrangement conveys a right to use the asset, even if that asset is not explicitly in an
arrangement.
Group as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially
all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Finance lease are capitalised at the commencement of the lease at the inception date fair value of the leased property
or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance
charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of
the liability. Finance charges are recognised in finance costs in the statement of profit or loss.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the
Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated
useful life of the asset and the lease term.
An operating lease is a lease other than a finance lease. Operating lease payments are recognised as an operating
expense in the statement of profit or loss on a straight-line basis over the lease term.
49
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
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 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.
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and
amortisation method is reviewed at the end of each annual reporting period, with any changes in these accounting
estimates being accounted for on a prospective basis.
Internally-generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no
internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in
the period as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if,
and only if, all of the following have been demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
•
•
•
• how the intangible asset will generate probable future economic benefits;
•
the availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset;
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. Internally generated intangible assets are generally amortised over 3 - 5 years.
50
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
i) Intangible assets (continued)
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.
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. The Group holds no bank overdraft.
51
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
l) Financial instruments - initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
i) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends oin the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient, the Group
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under AASB 15. Refer
to the accounting policies in section 2.4 (e).
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(cid:120)
(cid:120)
(cid:120)
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
Financial assets at fair value through profit or loss
(cid:120)
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
(cid:120)
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows, and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding
(cid:120)
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired.
The Group's financial assets at amortised cost are trade receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
(cid:120)
(cid:120)
The rights to receive cash flows from the asset have expired, or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement.
52
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
l) Financial instruments - initial recognition and subsequent measurement (continued)
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
For trade receivables and contract assets, the Group applies a simplified approach in calculating expected credit
losses (ECLs). Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. The Group has assessed the risk from a provision matrix that is based
on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
The Group considers a financial asset in default when contractual payments are 365 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables and loans and borrowings.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
53
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
l) Financial instruments - initial recognition and subsequent measurement (continued)
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
m) 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.
n) 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.
o) 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.
54
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2.4 Significant accounting policies (continued)
o) Employee benefits (continued)
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.
p) 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.
q) 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.
55
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
q) Earnings per share
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.
Revenue from contracts with customers
The Group applied the following judgements that significantly affect the determination of the amount and timing of
revenue from contracts with customers:
The Group provides media services that are either sold separately or bundled together as part of a customer
campaign. The media services are a promise to transfer services in the future and are part of the negotiated exchange
between the Group and the customer. The Group determined that the performance obligations (on-site banner, video
placement, electronic direct mail or via the use of ‘advertorial’ written or video content) are capable of being distinct.
The fact that the Group regularly sells these services on a stand-alone basis indicates that the customer can benefit
from both products on their own. Consequently, the Group allocated a portion of the transaction price to each of the
services in the customer contract based on relative stand-alone selling prices.
The Group engages in partnership agreements with entities in the online media, finance and automotive sectors to
cross-promote goods and services. The Group is required to estimate the fair value of the cash and non-cash
consideration received or promised from the customer for goods or services received, and where this is not possible,
estimate the fair value of the goods or services provided.
Provision for expected credit losses of trade receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates
are based on days past due for groupings of various customer segments that have similar loss patterns.
The provision matrix is initially based on the Group’s historical observed default rates. The Group has calibrated the
matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the
historical observed default rates are updated and changes in the forward-looking estimates are analysed. The Group
has historically experienced low levels of non-collection as the customers to which credit has been extended are
large, credit-worthy institutions. Smaller customers, in particular the dealers that advertise on iCar’s wesbites, are
required to pay in advance.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs
is a significant estimate. The amount of ECLs may be sensitive to changes in circumstances and of forecast economic
conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be
representative of customer’s actual default in the future.
56
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
3. Critical accounting judgements, estimates and assumptions
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.
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.
Development costs
The Group capitalises costs for product development projects, related to Customer Relationship Management
platforms, websites and mobile applications. Initial capitalisation of costs is based on management’s judgement that
technological and economic feasibility is demonstrated. In determining the amounts to be capitalised, management
makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and
the expected period of benefits.
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.
57
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
4. Revenue
A. Disaggregation of revenue
In the following table, revenue is disaggregated by major products/services and primary geographical market.
Segments
Type of service
Used Cars
New Cars
Total revenue from contracts with customers
Geographical markets
Malaysia
Thailand
Indonesia
Total revenue from contracts with customers
Timing of revenue recognition
Services transferred at a point in time:
Used Cars
New Cars
Services transferred over time:
Used Cars
New Cars
Total revenue from contracts with customers
Consolidated
2018
$
20171
$
6,745,414
4,810,530
11,555,944
5,247,492
3,864,006
9,111,498
5,340,716
5,069,584
1,145,644
11,555,944
4,567,506
3,818,442
725,550
9,111,498
4,838,807
617,078
3,621,732
519,990
1,906,607
4,193,452
11,555,944
1,625,760
3,344,016
9,111,498
1 As described in Note 2.3, the Group applied AASB 15 from 1 January 2018 using the modified retrospective
approach. As there was no material impact resulting from the adoption of this new standard, comparative information
on disaggregation of revenue has been presented to provide a like-for-like and comparable view. In the 2017 financial
statements, all revenue was classified as ‘Rendering of services’ and recognised according to that accounting policy.
B. Contract balances
The following table provides information about receivables, contract assets and contract liabilities with customers.
Trade receivables (Note 9)
Contract assets2
Contract liabilities2
Consolidated
2018
2017
$
$
1,063,499
363,694
1,307,912
861,429
162,730
914,974
2 As described in Note 2.3, the Group applied AASB 15 from 1 January 2018 using the modified retrospective
approach. In the 2017 financial statements, contract assets was classified as accrued revenue (as a sub-part of
Trade and other receivables) and contract liabilities was classified as deferred revenue (as a sub-part of Trade and
other payables). Comparative information has been presented to provide a like-for-like view.
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
58
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
4. Revenue (continued)
Contract assets are initially recognised for revenue earned from media services as receipt of consideration is
conditional on successful completion of the services. Upon completion of the services, and invoice to the customer,
the amounts recognised as contract assets are reclassified to trade receivables.
Contract liabilities are upfront payments from customer for subscriptions and depth credits, both in the used car and
new car market segments. The outstanding balances of these accounts increased in 2018 due to the continuous
increase in the Group’s customer base, growth in the New Car segment and price increases for both subscriptions
and depth credits. Contract liabilities recorded as at 1 January 2018 (being the date of initial application of AASB 15)
has been recognised as revenue in full in the current year ($914,974).
As the Group’s customer contracts have an original expected duration of one year or less, the Group has elected not
to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied
as of the end of the reporting period. There is no variable consideration in iCar’s contracts with customers, therefore
there is no consideration from contracts with customers that is not included in the transaction price.
C. Performance obligations
Information about the Group’s performance obligations are summarised below:
Used Car
Classifieds
(a) Subscription revenue - the performance obligation is satisfied on a straight line basis over time on the term
of the subscription agreement contract.
(b) Depth credits revenue - performance obligation is satisfied upon the usage of depth credits.
Auction Commissions
Performance obligation is satisfied upon notification of 'car delivery' to the buyer by the seller.
Other Commissions
(a) Warranty - performance obligation is satisfied upon acquisition of the customer contract for the principal.
(b) Inspection - performance obligation is satisfied upon acquisition of the customer contract for the principal.
(c) Private seller service - performance obligation is satisfied upon acquisition of the customer contract for the
principal.
New Car
New Car Dealers
(a) Subscription revenue - the performance obligation is satisfied on a straight line basis over time on the term
of the subscription agreement contract.
(b) Depth credits revenue - performance obligation is satisfied upon the credit is used by dealers to purchase
lead packets.
Media
Performance obligation is satisfied over time on a straight line basis according to the proportion of the period of the
campaign that has elapsed.
Events
Performance obligation is satisfied upon the event takes place. Where an event also includes media services, the
performance obligation is satisfied upon services delivered to customers.
59
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
5. Segment information
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. Consistent with information presented
for internal executive management reporting purposes, the result of each segment is measured based on earnings
before interest, tax, depreciation and amortisation (‘EBITDA’).
The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
The company's reportable segments comprise Malaysia, Thailand and Indonesia. No operating segments have
been aggregated to form the below reportable segments.
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.
60
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
5. Segment information (continued)
Operating segment information
Consolidated - 2018
Revenue
Revenues from external
customers
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
Malaysia
$
Indonesia
$
Thailand
$
Unallocated
$
Total
$
5,340,716
1,145,644
5,069,584
-
11,555,944
(5,646,496)
(4,584,468)
(5,641,657)
(6,995,098)
(22,867,719)
(305,780)
(3,438,824)
(572,073)
(6,995,098)
(11,311,775)
(107,169)
7,608
-
(57,657)
314
-
(408,269)
150
-
(1,910,361)
276,389
(17,500)
(2,483,456)
284,461
(17,500)
(405,341)
(3,496,167)
-
-
(980,192)
-
(8,646,570)
(78,183)
(13,528,270)
(78,183)
3,770,054
2,329,103
23,063,212
14,161,045
(13,606,453)
43,323,414
43,323,414
Non-current assets1
2,077,074
21,516,464
130,384
6,069,049
29,792,971
Liabilities
Segment liabilities
Total liabilities
1,692,954
1,808,963
1,776,843
1,023,151
6,301,911
6,301,911
1 Carrying amount of non-current assets excludes financial instrument assets, deferred tax assets and defined benefit
assets, of which the Group has none.
61
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
5. Segment information (continued)
Consolidated - 2017
Revenue
Revenues from external
customers
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
Malaysia
$
Indonesia
$
Thailand
$
Unallocated
$
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)
(114,188)
(13,263,412)
(114,188)
3,098,583
1,038,464
20,642,529
26,002,328
(13,377,600)
50,781,904
50,781,904
Non-current assets1
1,954,086
19,642,241
100,653
5,140,846
26,837,816
Liabilities
Segment liabilities
Total liabilities
1,326,947
990,212
1,192,143
856,108
4,365,410
4,365,410
1 Carrying amount of non-current assets excludes financial instrument assets, deferred tax assets and defined benefit
assets, of which the Group has none.
62
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
6. Expenses
Loss before income tax includes the
following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total depreciation
Amortisation
Websites, domain names, trademarks
and other intangibles
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
Consolidated
2018
$
2017
$
71,221
221,821
16,106
60,419
230,698
20,603
-
-
309,148
311,720
2,174,308
1,488,233
-
-
2,483,456
1,799,953
17,500
9,448
7,131,687
820,967
1,286,179
675,326
1,276,005
493,989
6,126,572
830,068
1,107,600
540,152
798,958
479,244
Total employment and related expenses
-
-
11,684,153
9,882,594
There are currently 403 full-time equivalent employees (2017: 390).
63
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
7. Income tax expense
Income tax recognised in profit or loss
Current tax
Current tax expense in respect of the current year
Under/(Over) provision of prior year tax
Deferred tax
Deferred tax expense recognised in the current year
Consolidated
2018
$
2017
$
83,640
(5,456)
78,184
59,357
54,831
114,188
-
-
Total income tax expense/(benefit) recognised in the current year
78,184
114,188
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss before tax
Income tax expense calculated at 30% (2017: 30%)
(13,528,270)
(13,263,412)
(4,058,481)
(3,979,024)
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
654,299
(195,673)
633,434
(194,554)
3,678,039
3,654,332
78,184
114,188
Unrecognised deferred tax asset
11,569,674
9,848,731
Deferred tax assets have not been recognised in respect of these losses as in the opinion of the directors the
recovery of this benefit is uncertain as the subsidiaries to which the losses relate have been loss-making for some
time, and there is no other evidence of recoverability in the near future. The tax losses are available for use subject
to compliance with relevant tax rules, for offsetting against future taxable profits.
8. Current assets - cash, cash equivalents and investments
Cash at bank
Cash on deposit
Cash and cash equivalents
Investments
Investments in 2017 relate to term deposits which matured in March 2018.
Consolidated
2018
$
2,426,351
7,105,370
9,531,721
-
2017
$
1,881,208
14,596,087
16,477,295
5,000,000
9,531,721
21,477,295
64
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
9. Current assets - trade and other receivables and contract assets
Trade receivables
Contract assets
Accrued interest
Allowance for expected credit losses
Consolidated
2018
$
2017
$
1,063,499
363,694
16,556
1,443,759
(56,259)
861,429
162,730
67,690
1,091,849
(56,259)
1,387,490
1,035,590
The carrying amounts of trade receivable are assumed to approximate their fair value due to their short term nature.
Trade receivables are non-interest bearing and are generally on 30 to 90 days credit terms.
As at 31 December 2018, the Group has trade receivables of $1,063,499 (2017: $861,429) which is net of an
allowance for expected credit losses of $56,259 (2017: $56,259).
Set out below is the movement in the allowance for expected credit losses of trade receivables:
As at 1 January 2017
Provision for expected credit losses
Write-off
At 31 December 2017
Provision for expected credit losses
Write-off
At 31 December 2018
As at 31 December, the ageing analysis of trade receivables is, as follows:
Days past due
$
19,350
36,909
-
56,259
-
-
56,259
Contract assets
At 31 December 2018
At 31 December 2017
Current
250,518
83,590
Credit risk management practice
<30 days 30-60 days 61-90 days
24,325
5,098 222 3,196
- 4,974 83,878
70,624
> 91 days
Total
363,694
162,730
Customer credit risk is managed according to the Group's established policy, procedures and control relating to
customer credit risk management. Credit quality of a customer is assessed based on past payment trend.
Outstanding customer receivables are regularly monitored.
65
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
10. Current assets – other
Prepayments
Other deposits
Other receivables
Consolidated
2018
$
699,894
247,537
1,663,801
2017
$
510,570
192,868
727,765
-
-
2,611,232
1,431,203
Other receivables relates to GST, VAT, withholding tax and other receivables.
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
2018
$
2017
$
585,529
(392,340)
193,189
533,432
(294,527)
238,905
2,158,952
(1,737,067)
421,885
1,842,334
(1,445,512)
396,822
141,084
(97,182)
43,902
115,162
(74,903)
40,259
658,976
675,986
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 January 2017
Additions
Exchange differences
Depreciation expense
Balance at 31 December 2017
Additions
Exchange differences
Depreciation expense
Leasehold
Plant and
improvements
$
equipment
$
Furniture
and
fittings
$
Total
$
118,606
180,272
446
(60,419)
465,717
163,361
(1,558)
(230,698)
52,457
7,289
1,116
(20,603)
636,780
350,922
4
(311,720)
238,905
4,049
396,822
242,099
4,785
(221,821)
40,259
16,823
2,926
(16,106)
675,986
262,971
29,167
(309,148)
21,456
(71,221)
Balance at 31 December 2018
193,189
421,885
43,902
658,976
66
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
12. Non-current assets- Intangibles and Goodwill
Goodwill - at cost
Other intangible assets - at cost
Less: Accumulated amortisation
Consolidated
2018
$
2017
$
19,656,770
17,675,289
17,492,302
(8,042,568)
9,449,734
13,311,320
(4,851,398)
8,459,922
29,106,504
26,135,211
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 January 2017
Additions
Exchange differences
Amortisation expense
Goodwill
Other
intangibles
acquired
$
$
Other
intangibles
Internally
generated
$
Total
$
17,367,939
-
307,350
-
3,651,546
-
55,570
(307,862)
3,596,517
2,536,197
108,325
(1,180,371)
24,616,002
2,536,197
471,245
(1,488,233)
Balance at 31 December 2017
Additions
Exchange differences
Amortisation expense
17,675,289
-
1,981,481
-
3,399,254
-
359,105
(318,881)
5,060,668
2,165,661
639,354
(1,855,427)
26,135,211
2,165,661
2,979,940
(2,174,308)
Balance at 31 December 2018
19,656,770
3,439,478
6,010,256
29,106,504
Goodwill of $17,753,928 (2017: $15,921,288) and intangible assets with indefinite useful lives of $2,559,918 (2017:
$2,295,672) are allocated to the Thailand cash generating unit ('CGU') after adjusting for foreign exchange rates at
the balance sheet date.
Goodwill of $1,902,842 (2017: $1,754,001) is allocated to the Malaysian CGU after adjusting for foreign exchange
rates at the balance sheet date.
67
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
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
2018
$
2017
$
354,929
2,559,918
524,632
2,478,679
3,437,191
94,385
9,449,734
397,865
2,295,672
705,716
2,481,121
2,474,842
104,706
8,459,922
Autospinn.com carrying value is amortised over 10 years. 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. 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. Amortisation rates
are unchanged from the financial year ended 31 December 2017.
Impairment testing of goodwill and indefinite life intangibles
The Group performed its annual impairment test at 31 December 2018. The Group considers the relationship
between its market capitalisation and its book value, among other factors, when assessing for indicators of
impairment. As at 31 December 2018, the market capitalisation of the Group was higher than the book value of its
equity.
The Group’s impairment test for goodwill and intangible assets with indefinite useful lives is determined based on a
value-in-use valuation. The value-in-use valuations use cash flow projections based on financial budgets approved
by the Board covering a 5 year forecast period, and a terminal value based upon an extrapolation of cash flows
beyond the 5 year period using a constant growth rate of 3% per annum. The discount rate applied reflects the current
market assessment of the time value of money adjusted for a risk premium to reflect the risk of the specific cash
generating units (‘CGU’).
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 to from offline to online and a strong
ASEAN automotive advertising market. Long term growth rates are 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% (2017: 14.2%)
13.2% (2017: 13.2%)
Long term growth rates
3% (2017: 3%)
3% (2017: 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.
68
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
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%
(2017: 14.2%) was applied. A long term growth rate of 3% (2017: 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
growth rates.
The recoverable amount of the Malaysian CGU is greater than the carrying value as at 31 December 2018. Variations
to the key assumptions used to determine the recoverable amount would result in a change in the assessed
recoverable amount. If the variation in assumptions has a negative impact on recoverable amount it could indicate a
requirement for an impairment expense.
The recoverable amount of the Malaysian CGU was tested for sensitivity using reasonably possible changes in key
assumptions. If in isolation the revenue growth rate decreased by 42% per annum over the 5 year forecast period
then the recoverable amount would be equal to the carrying amount of the Malaysian CGU at 31 December 2018.
No other reasonable possible changes in assumptions that would result in an impairment were identified by
management.
Thailand CGU
The Group used the CGU’s value-in-use valuation 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% (2017: 13.2%) was applied. A long term growth rate of 3% (2017: 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 recoverable amount of the Thailand CGU is greater than the carrying value as at 31 December 2018. Variations
to the key assumptions used to determine the recoverable amount would result in a change in the assessed
recoverable amount. If the variation in assumptions has a negative impact on recoverable amount it could indicate a
requirement for an impairment expense.
The recoverable amount of the Thailand CGU was tested for sensitivity using reasonably possible changes in key
assumptions. If in isolation the revenue growth rate decreased by 20% per annum over the 5 year forecast period
then the recoverable amount would be equal to the carrying amount of the Thailand CGU at 31 December 2018. No
other reasonable possible changes in assumptions that would result in an impairment were identified by management.
69
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
13. Current liabilities - trade and other payables
Consolidated
2018
$
2017
$
Trade payables and accruals
2,790,650
1,752,039
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.
14. Current liabilities – provisions
Employee benefits
Staff incentives and bonuses
Other
Consolidated
2018
$
2017
$
157,107
1,357,670
271,895
171,116
919,003
299,606
-
1,786,672
1,389,725
The employee benefits category is composed of the compensated annual leave provision for the year. The 2018
carried forward balance is expected to be utilised by March 2019 in line with company leave policies.
The staff incentives and bonuses provision is expected to be paid to employees by the end of March 2019.
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 - 2018
Carrying amount at the start of the year
Additional provisions recognised / foreign exchange differences
Amounts used
171,116
545,001
(559,010)
919,003
1,706,934
(1,268,267)
299,606
83,582
(111,293)
Carrying amount at the end of the year
157,107
1,357,670
271,895
70
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
15. 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.
Net employee defined benefit liabilities
Indonesian pension plan
Consolidated
2018
$
2017
$
416,677
308,672
Net employee defined benefit liabilities
-
416,677
308,672
The following table summarises the components of the net benefit expense recognised in the statement of profit or
loss 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
Changes in the present value of the defined benefit obligation
Defined benefit obligation at 1 January 2017
Interest cost
Current service cost
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2017
Interest cost
Current service cost
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2018
Consolidated
2018
$
2017
$
109,665
20,907
93,474
19,335
130,572
112,809
$
247,109
19,648
93,474
(28,714)
(22,845)
308,672
21,193
109,665
(36,472)
13,619
416,677
* Includes experience adjustments and actuarial changes arising from changes in financial assumptions.
71
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
15. Non-current liabilities – Provisions (continued)
Principal assumptions in determining pension obligations
The principal assumptions used in determining pension obligations for the Group’s plans are shown below:
Discount rate (%)
Future salary increase (%)
Pension age (years)
Mortality rate
Disability rate
2018
2017
8.77%
10.00%
55 years
TMI (2011)
10% from
mortality
rate
7.17%
8.00%
55 years
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
Impact on defined present
value of benefit obligation
2018
$
2017
$
363,206
492,136
254,671
347,850
492,498
361,699
348,804
253,117
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 15.29 years.
The Group recognises remeasurement gains and losses arising on defined benefit pension plans in OCI in
accordance with AASB 119 Employee Benefits. As they will never be reclassified into profit or loss, they are
immediately recorded in retained earnings, amounting to $36,472.
72
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
16. Equity - issued capital
Consolidated
Consolidated
2018
Shares
2017
Shares
2018
$
2017
$
Ordinary shares - fully paid
382,661,158
377,776,239
123,656,458
122,493,347
Movements in ordinary share capital
Details
Date
No of
shares
$
Balance
Issue of shares - STI/LTI to employees
Issue of shares - Directors remuneration 2016 year
Issue of shares - Share placement1
Share issue costs
31 December 2016
12 May 2017
23 June 2017
12 December 2017
320,955,194 112,553,083
209,167
302,629
9,999,744
(571,275)
667,886
599,029
55,554,130
Balance
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - STI/LTI to employees
Issue of shares - Directors remuneration 2018 year
Issue of shares - Staff pool
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Share issue costs
31 December 2017
12 January 2018
23 January 2018
29 January 2018
12 February 2018
13 March 2018
14 March 2018
20 March 2018
10 April 2018
16 April 2018
18 April 2018
21 May 2018
25 June 2018
25 June 2018
18 August 2018
28 August 2018
30 August 2018
377,776,239
197
17,241
1,724
14,724
143,103
1,223,101
5,862
948
8,620
2,692
2,158,894
1,220,521
30,000
51,724
1,379
4,189
122,493,348
39
3,448
345
2,945
28,621
244,620
1,172
190
1,724
538
603,740
295,000
6,900
10,344
276
838
(37,630)
31 December 2018
382,661,158
123,656,458
1Each 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.
73
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
16. 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.
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 2017 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.
17. Equity – reserves
Foreign currency translation reserve
Share-based payments reserve
Equity reserves
Consolidated
2018
$
2017
$
2,324,146
1,848,782
(10,965,292)
(317,368)
1,478,417
(10,965,292)
-
(6,792,364)
(9,804,243)
74
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
17. Equity – reserves (continued)
Consolidated
Balance at 1 January 2017
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of
directors remuneration
Executive variable remuneration
Balance at 31 December 2017
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of
directors remuneration
Executive variable remuneration
Foreign currency
translation
reserve
$
Share-based
payments
Reserve1
$
Equity
Reserves2
$
Total
$
(575,979)
258,611
-
1,191,254
-
(511,795)
(10,965,292)
-
-
(10,350,017)
258,611
(511,795)
-
-
295,000
503,958
-
-
295,000
503,958
(317,368)
2,641,514
-
1,478,417
-
(905,640)
(10,965,292)
-
-
(9,804,243)
2,641,514
(905,640)
-
-
275,000
1,001,005
-
-
275,000
1,001,005
Balance at 31 December 2018
2,324,146
1,848,782
(10,965,292)
(6,792,364)
1The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided
to employees, including key management personnel, as part of their remuneration. Refer to Note 32 for further details
of these plans.
2Represents 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.
18. Equity - accumulated losses
Consolidated
2018
$
2017
$
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
-
(66,236,138)
(13,606,453)
(52,895,010)
(13,377,600)
Accumulated losses at the end of the financial year
-
(79,842,591)
(66,272,610)
19. Equity – dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
No franking credits are available for use in the subsequent financial year as no income tax has been paid in Australia
in the current or previous financial years.
75
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
20. Financing facility
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. During the current financial year, the Group has recognised interest charges of $17,500 for the commitment
fee. The accrued commitment fee remains unpaid at 31 December 2018.
• Draw down subject to shareholder approval (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.
The Facility is subject to shareholder approval which was granted at the Company’s 2018 Annual General Meeting
on 25 May 2018. At 31 December 2018, the Facility remains undrawn.
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.
2018
2017
Weighted
average
interest rate
Balance
Weighted
average
interest rate
Balance
%
1.81
$
%
$
9,531,721
9,531,721
1.93%
21,477,295
21,477,295
Consolidated
Cash at bank
Net exposure to cash flow interest rate
risk
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
76
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
21. Financial instruments (continued)
Consolidated - 2018
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
73,945
-
50
(73,945)
-
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)
-
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
expected credit losses, represents the group's maximum exposure to credit risk. Generally, trade receivables are
written-off if past due for more than one year and are not subject to enforcement activity.
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.
Consolidated - 2018
Non-derivatives
Non-interest bearing
Trade payables and
accruals
Weighted
average
interest
rate
%
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
$
$
$
$
$
2,790,650
-
-
2,790,650
-
Total non-derivatives
2,790,650
-
-
-
2,790,650
77
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
21. Financial instruments (continued)
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade payables and
accruals
Weighted
average
interest
rate
%
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
$
$
$
$
$
Total non-derivatives
1,752,039
1,752,039
-
-
-
-
1,752,039
-
-
1,752,039
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts
of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current
market interest rate that is available for similar financial instruments.
22. Key management personnel disclosures
Directors
The following persons were directors of the Group during the financial year:
Georg Chmiel
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
James Olsen
Executive
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive (Resigned 16 November 2018)
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
Yee Chin Beng
Joe Dische
Pedro Sttau
Jonathan Adams
Chief Executive Officer
Chief Financial Officer (Appointed 21 May 2018)
Chief Financial Officer (Resigned 14 June 2018)
Chief Information Officer
Chief Marketing Officer
78
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
22. Key management personnel disclosures
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.
Consolidated
2018
$
2017
$
Short-term employee benefits
Share-based payments
1,562,946
1,413,767
1,102,214
1,234,024
Share-based payments refer to short-term, long term incentives, share appreciation rights under the Long Term
Value Creation award and share options for key management personnel and director remuneration. See the
Remuneration Report for further information.
-
-
2,796,970
2,515,981
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 or review of the financial statements
Tax compliance services
Other tax services
Consolidated
2018
$
2017
$
242,600
13,546
36,524
215,000
-
-
292,670
215,000
The fees paid to Ernst & Young for the group audit are inclusive of auditing the financial accounts of the subsidiaries
and their respective statutory 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 2018 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
79
Consolidated
2018
$
2017
$
611,609
499,611
1,111,220
526,324
654,478
1,180,802
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
25. Commitments (continued)
Operating lease commitments relate to premises occupied by the group with lease terms currently still available of
less than 5 years. The group does not have an option to purchase the premises at the expiry of the lease period.
The date that the premises leases terminate are as follows: Malaysia - May 2018 to November 2020, Thailand –
March 2018 to January 2020 and Indonesia - May 2018 to December 2018.
The lease payments recognised in the profit and loss in 2018 were $584,667 (2017: $480,151).
26. Related party transactions
Parent entity
iCar Asia Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in the Remuneration Report in the Directors' Report.
Transactions with related parties
During the year the Group purchased the following services from Catcha Group Pte Ltd (a major shareholder in iCar
Asia Limited):
(cid:120) $29,926 of public relation and communication services from Catcha Group Pte Ltd.
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:
• $12,928 of sponsorship for Wild Digital SEA Event 2018
During the year the Group entered into partnership arrangement with Rev Asia Berhad and iflix, companies controlled
by Patrick Grove and Lucas Elliot who are the Directors of iCar Asia Limited:
(cid:120) $221,150 of partnership advertising services with Rev Asia Berhad
(cid:120) $621,953 of partnership advertising services with iflix
During the year, the Group has recognised interest charges of $17,500 for the commitment fee related to the Finance
facility from Catcha Group Pte Ltd (a major shareholder in iCar Asia Limited). Refer to Note 15 Financing facility for
further details. The accrued commitment fee remains unpaid at 31 December 2018.
Director and director-related entities hold directly, indirectly or beneficially interests of 113,307,082 (2017:
111,614,546) in the ordinary shares of the company as at the reporting date. They also held 23,836,277 options
(2017: 23,847,589).
During the year, the Group recommend to the Board that 375,000 shares at $0.20 per share be issued to James
Olsen as remuneration for his project work over the last 18 months. It is subject to Shareholder approval at the 2019
Annual General Meeting.
Receivable from and payable to related parties
There was a payable to Catcha Group Sdn Bhd for $1,032 in relation to services at the end of the current reporting
period.
At 31 December 2018, 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.
There were no other trade receivables from or trade payables to related parties at the current or previous reporting
date.
80
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
26. Related party transactions (continued)
Loans to/from related parties
The Group has entered into a $5,000,000 loan facility with Catch Group Pte Ltd. Refer to Note 20 Financing facility
for more information.
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
2018
$
2017
$
(59,880,142)
(22,808,748)
(59,880,142)
(22,808,748)
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note
2, except for the following:
(cid:120)
(cid:120)
(cid:120) 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
2018
$
2017
$
7,529,124
58,959,293
20,333,468
95,636,763
822,687
1,544,833
822,687
1,544,833
58,136,606
94,091,930
124,066,313
1,483,320
(67,413,027)
122,903,201
374,240
(29,185,511)
58,136,606
94,091,930
The parent entity has no contingent liabilities or contractual commitments for the acquisition of property, plant &
equipment. The parent entity has not entered into any guarantees in relation to the debts of its subsidiaries.
81
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
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
2018
%
100
100
100
100
100
100
100
100
100
2017
%
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 2018 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.
30. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2018
$
2017
$
Loss after income tax expense for the year
(13,606,453)
(13,377,600)
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
2,483,456
1,276,005
-
(1,172,875)
(559,515)
(351,900)
(1,180,029)
1,431,549
209,952
1,799,953
798,958
36,909
(1,383,626)
(211,666)
32,862
(156,978)
(683,306)
(247,956)
Net cash used in operating activities
(11,469,810)
(13,392,450)
82
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
31. Earnings per share
Consolidated
2018
$
2017
$
Loss after income tax attributable to the owners of iCar Asia Limited and
Controlled Entities
(13,606,453)
(13,377,600)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
380,921,356
324,586,866
Weighted average number of ordinary shares used in calculating diluted
earnings per share
380,921,356
324,586,866
Basic loss per share
Diluted loss per share
Cents
(3.57)
(3.57)
Cents
(4.12)
(4.12)
Options and contingently issuable shares in relation to KMP remuneration would have adjusted the weighted average
number of ordinary shares used in the calculation of diluted loss per share, however they have not been used in the
calculation because they are anti-dilutive to the periods presented. Details of the options and contingently issuable
shares are contained in Note 32 Share-based payments.
32. Share-based payments
Executive variable remuneration
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 exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The
Group does not have a past practice of cash settlement for these awards. 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 awarded iCar Asia Limited share
options. The details can be found in Section C Service agreements in the Remuneration Report.
During the year, options granted to certain key management personnel have been replaced by a new share
appreciation scheme as detailed later in this report.
83
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
32. Share-based payments (continued)
Executive variable remuneration (continued)
Long Term Value Creation (LTVC)
On 22 February 2018, the Group issued certain key management personnel with share appreciation rights as
replacement awards under the existing executive variable remuneration plan for additional incentives and options.
The existing Long Term Incentive plan is not affected by this new scheme and will run as per respective service
agreements of key management personnel. The purpose of the LTVC scheme is to reward the value creation
developed by the executives in driving growth in the business. The LTVC scheme is based on exceeding a specified
share price hurdle of $0.30 in any of the three observation periods (2018, 2019 and 2020). The entitlement will be
paid in shares in iCar Asia Limited and the number of entitlements will be based on the Volume Weighted Average
Price of the Group’s share price exceeding the baseline share price of $0.18 in the December of the relevant
observation period. Each executive will receive a share of the value created, which is calculated as the excess of the
share price hurdle to the baseline share price multiplied by the number of shares on issue at the end of the relevant
observation period.
The entitlements also contain vesting conditions based on a required service period for each observation period end
and vest 60% in the January following the observation period and 40% in the January twelve months thereafter.
Details of the entitlement for each key management personnel entitled to the LTVC scheme is outlined in Section C
of the Remuneration Report.
The following table list the key inputs and assumptions to the model used to calculate the grant date fair value of the
LTVC award were:
Share price hurdle
Baseline share price
Dividend yield
Expected volatility
Risk-free interest rate
Model used
LTVC
$0.30
$0.18
0%
62%
2.20%
Monte Carlo
The table below discloses the accounting amortisation of LTVC Scheme in financial statements for the year ended
31 December 2018 relating to key management personnel. The table also discloses the total grant date fair value of
the LTVC awarded to each key management personnel. The amortisation value is based on the fair value of LTVC
Scheme at grant date which was on 22 February 2018. The LTVC Scheme entitlements is based on exceeding a
specified share price hurdle in any of the three observation periods (2018, 2019 and 2020). As of 31 December 2018,
the market share price has not exceeded the specified share price hurdle during the observation period and thus no
shares will be awarded to any key management personnel as entitlements under the LTVC Scheme.
Key management personnel
Share of value
creation
Amortisation in 2018
$
Grant date fair value
$
H Stone
Chief Executive Officer
P Sttau
Chief Information Officer
J Adams
Chief Marketing Officer
1.25%
446,145
934,926
0.45%
160,612
336,573
0.25%
89,229
186,985
84
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
32. Share-based payments (continued)
Executive variable remuneration (continued)
The table below discloses the incremental value of the LTVC to the additional incentives and options replacement:
Key management
personnel
H Stone
P Sttau
J Adams
LTVC
$
934,926
336,573
186,985
Options
$
252,250
-
27,750
Additional
incentives
$
-
272,000
-
Incremental
value
$
682,676
64,573
159,235
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 the 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.
85
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year ended 31 December 2018 are set out below:
Financial
Year
Category
Number of
Shares granted
up to 31
December 2018
Number of
shares vested
during 2018
Fair Value
per share
$
Fair value
of shares $
Grant date
Vesting date
Issue date
Executive Director:
G Chmiel
2017
Director Fees
446,835
446,835
0.2417
108,000
February 2018 February 2018
June 2018
Non-Executive
Directors:
P Grove
L Elliott
Mark Britt
S Khalil Ibrahim
Peter Everingham
Richard Kuo
Other Key
Management
Personnel:
H Stone
2017
2017
2017
2017
2017
2017
2016
2017
2017
2017
Director Fees1
Director Fees1
Director Fees
Director Fees
Director Fees
Director Fees
186,181
161,357
99,297
182,044
62,060
82,747
186,181
161,357
99,297
182,044
62,060
82,747
0.2417
0.2417
0.2417
0.2417
0.2417
0.2417
45,000
39,000
24,000
44,000
15,000
20,000
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
February 2018 February 2018
June 2018
June 2018
June 2018
June 2018
June 2018
June 2018
LTI
LTI
LTI
LTI
128,667
612,329
459,247
459,247
128,667
612,329
-
-
0.2000
0.2450
0.2450
0.2450
25,733
150,021
112,516
112,516
May 2018
February 2018 February 2018
February 2018 February 2018
May 2018
February 2018 February 2019 March 2019
February 2018 February 2020 March 2020
86
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
Other Key
Management
Personnel:
J Dische
P Sttau
J Adams
Financial
Year
Category
Number of
Shares granted
up to 31
December 2018
Number of
shares
vested
during 2018
Fair Value
per share
$
Fair value
of shares $
Grant date
Vesting date
Issue date
2015
2016
2017
2015
2016
2017
2017
2017
2017
2017
2017
LTI
LTI
STI
LTI
LTI
LTI
LTI
LTI
LTI
LTI
LTI
81,140
79,172
614,398
51,957
116,120
252,434
252,434
252,434
87,280
87,280
87,280
81,140
-
614,398
51,957
116,120
252,434
-
-
87,280
0.91
0.2
0.245
0.91
0.2
0.2450
0.2450
0.2450
0.2450
0.2450
0.2450
73,837
15,834
150,528
May 2018
February 2016 February 2018
February 2017 February 2019 March 2019
May 2018
February 2016 February 2018
47,287
23,224
61,846
61,846
61,846
21,384
21,384
21,384
May 2018
February 2016 February 2018
May 2018
February 2016 February 2018
February 2018 February 2018
May 2018
February 2018 February 2019 March 2019
February 2018 February 2020 March 2020
February 2018 February 2018
May 2018
February 2018 February 2019 March 2019
February 2018 February 2020 March 2020
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd
Share based payments of $1,259,655 have been accrued in relation to 2018 in lieu of Directors Fees ($275,000) and executive variable remuneration ($984,655). The
number of shares to be granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2019.
87
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the vesting date
or the options lapse. All options will be settled in shares.
During the year, options granted to key management personnel, with the exception of Executive Chairman, have been replaced by Long Term Value Creation scheme (LTVC).
The table below discloses the number of share options outstanding at the end of the year.
Key management
personnel
Financial
year
Options
awarded
during the year
No.
Award date
Fair value per
option at
award date
($)
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)
2017
1,000,000 26 May 2017
$0.129 31 December 2019
$0.40
31 December 2021
- - $129,000
88
iCar Asia Limited and Controlled Entities
Notes to the financial statements
For the year ended 31 December 2018
The table below discloses the number of share options outstanding at the end of the year.
KMP
G Chmiel (Exec. Chairman)
H Stone (CEO)1
J Dische (CFO)2
J Adams (CMO)1
P Grove (Director)
L Elliott (Director)
Balance
1 January 2018
1,011,312
2,617,107
89,790
250,000
22,185,980
22,185,980
Options holdings of KMP
Granted as
remuneration
Options
exercised
Net change
other
-
-
-
-
-
-
(11,312)
-
(2,500,000)
(89,790)
(250,000)
-
-
-
- -
- -
Balance
31 December 2018 Exercisable Not exercisable
1,000,000
117,107
-
117,107
- -
- -
22,185,980
22,185,980
22,185,980
22,185,980
1,000,000
-
-
-
-
-
There were no options related to remuneration exercised during the year.
1 Net other change reflects the replacement of the options incentive scheme with the Long Term Value Creation award.
2 Net other change in options reflects that Joe Dische was not a KMP at 31 December 2018 and therefore has a holding of nil. At the date of resignation, Joe Dische held
89,790 options in the Company.
89
iCar Asia Limited and Controlled Entities
Directors’ declaration
In the directors' opinion:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial
position as at 31 December 2018 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
21 February 2019
90
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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 2018, 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 2018 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 judgment, 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 2018, goodwill of $19.6 million and
other intangibles of $9.4 million were recorded in
the consolidated statement of financial position.
As required by Australian Accounting Standards, the
Group assesses at the end of each reporting period
whether there is any indication that an asset may be
impaired. In addition, goodwill and indefinite life
intangible are tested for impairment at least
annually.
Impairment assessments are complex and
judgmental as they include the modelling of a range
of assumptions and estimates that will be impacted
by future performance and market conditions.
The Group’s disclosures in relation to goodwill and
other intangibles are included in Note 12.
Our audit procedures included an evaluation of the
assumptions and methodologies utilised in the assessments,
with an emphasis on those relating to the determination of
cash generating units, forecast cash flows, growth rates,
discount rates, comparative industry valuation multiples and
other market evidence.
We involved our valuation specialists to evaluate the
appropriateness of key inputs, where relevant to the
impairment tests, including:
• Discount rates
• Terminal growth rates
• Market evidence of industry valuation multiples
•
Long-term inflation and growth rate assumptions
• Performing sensitivity analysis on the model forecasts
and key assumptions.
We also considered the adequacy of the financial report
disclosures regarding the impairment testing approach, key
assumptions and sensitivity analysis as disclosed in Note 12.
Revenue recognition
Why significant
How our audit addressed the key audit matter
As disclosed in Note 4 the Group earns revenue from on-
line classifieds subscriptions, media advertising, on-line
depth products, commissions and exhibition fees.
AASB 15 Revenue from Contracts with Customers (AASB
15) applies to the Group from 1 January 2018. The
adoption of the new standard is inherently complex due to
the need to apply the requirements of the new standard
to the range of products and services offered by the
Group. The impact of the adoption of this new standard is
disclosed in Note 2.3.
Revenue is a key metric upon which the Group’s
performance is measured. The Group has employee
incentive schemes that are impacted by revenue growth.
Our audit procedures included the following:
• We evaluated the Group’s assessment of the
financial impact of the new revenue standard and
the Group’s accounting policies, estimates and
judgements made in respect of the products and
services of the Group.
• We inspected a sample of customer contracts in
each significant revenue stream to assess whether
revenue recognised was in accordance with AASB
15 and the terms and conditions in the underlying
contract.
• We evaluated the appropriateness of accounting
entries impacting revenue, as well as any
significant or unusual one-off accounting entries
impacting revenue.
• We evaluated the adequacy of disclosures included
in Note 2.3 and Note 4 of the financial report.
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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 2018, 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.
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
judgment 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.
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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.
• 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 33 of the Directors' Report for the
year ended 31 December 2018. In our opinion, the Remuneration Report of iCar Asia Limited for the
year ended 31 December 2018, complies with section 300A of the Corporations Act 2001.
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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
21 February 2019
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95
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2018
The shareholder information set out below was applicable as at 31 December 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
337
889
539
1,250
239
3,254
Units
176,204
2,685,181
4,241,647
43,377,534
332,180,593
382,661,159
96
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2018
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity
securities are:
ICQ HOLDINGS SDN BHD
CARSALES COM LIMITED
CATCHA GROUP PTE LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES
MARENSA PTY LTD
MIRRABOOKA INVESTMENTS LIMITED
TARGET RANGE PTY LTD
MR MICHAEL STEWART BUNKER
TIMSIM HOLDINGS PTY LTD
ALCOCK SUPERANNUATION FUND PTY LTD
MR JOHN DAVID WHEELER & MR GLEN ROBERT WHEELER
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
EMINENT HOLDINGS PTY LTD
MELANIE JANE STONE
Ordinary shares
Number
held
% of total
shares
issued
52,500,000
50,373,365
35,800,022
30,954,329
23,186,570
20,301,508
9,987,311
9,092,677
7,432,726
7,027,300
3,500,000
3,433,093
3,232,671
3,000,000
2,372,413
1,779,908
13.72
13.16
9.36
8.09
6.06
5.31
2.61
2.38
1.94
1.84
0.91
0.90
0.84
0.78
0.62
0.47
1,750,000
0.46
1,500,176
1,465,517
1,308,510
0.39
0.38
0.34
269,998,096
70.56
Unquoted equity securities
There are no shares held in escrow
97
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2018
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:
Catcha Group Pte Ltd
carsales.com Ltd
PM Capital Limited
Australian Foundation Investment Company Limited
Ordinary shares
Number held
109,673,940
50,373,365
30,954,329
19,079,988
210,081,622
% of total
shares
issued
28.66
13.16
8.09
4.99
54.90
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.
98
iCar Asia Limited and Controlled Entities
Corporate Directory
31 December 2018
Directors
Georg Chmiel (Executive Chairman)
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
Group Chief Executive Officer
Group Chief Financial Officer
Hamish Stone
Hamish.Stone@icarasia.com
Yee Chin Beng
chinbeng.yee@icarasia.com
Company Secretary
Registered office
Principal place of business
Share register
Auditor
Hasaka Martin
Hasaka.Martin@boardroomlimited.com.au
C/O Boardroom Pty Limited
Level 12, 225 George Street,
Sydney, NSW 2000,
Australia
Tel. +61 (2) 9290 9600
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
Boardroom Pty Limited
Level 12, 225 George Street,
Sydney, NSW, Australia, 2000
Tel. +61 (2) 9290 9600
boardroomlimited.com.au
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/
99