iiCar Asia Limited and Controlled Entities
ACN 157 710 846
Annual Report for the financial year ended
31 December 2019
Annual Report Year Ended 31 December 2019
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 Changes in Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor's Report
Shareholder Information
Corporate Directory
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iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 2019.
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)
Hamish Stone (Managing Director and Chief Executive Officer) appointed 20 February 2020
Information on directors
Name:
Title:
Qualifications:
Georg Chmiel
Executive Chairman
Diplom-Informatiker, MBA (INSEAD), CPA (USA), FAICD
Experience and expertise:
Mr Chmiel brings over 26 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
1,298,714
1,000,000
1
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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:
None
None
119,943,310
3,777,777
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 20 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:
None
Member of the Nomination & Remuneration Committee and member of the Audit
& Risk Committee
119,943,310
3,777,777
2
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Name:
Title:
Qualifications:
Experience and expertise:
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:
Name:
Title:
Qualifications:
Experience and expertise:
None
Chairman of the Nomination & Remuneration Committee and member of the
Audit & Risk Committee
2,483,134
None
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), ME Bank Limited
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Zhaopin Limited
Member of the Nomination & Remuneration Committee
196,745
None
3
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Name:
Title:
Qualifications:
Experience and expertise:
Richard Kuo
Independent, non-executive Director
B.com., LL.B, FAICD
Richard is the co-founder and CEO of Pier Capital, a boutique investment banking
firm. He is a director of SCEGGS Darlinghurst Limited, the Chairman of Intrepica
Pty Ltd, the owner of education technology business LiteracyPlanet, and has
been a director of a range of companies in Australia and Asia in the technology,
digital media, 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.
Other current directorships:
None
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
None
Chairman of the Audit and Risk Committee
239,880
None
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (in the
last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Hamish Stone
Managing Director and Group Chief Executive Officer
Bachelor of Commerce (Honours) majoring in Economics and Marketing from The
University of Sydney
Mr Stone joined iCar Asia as Group Chief Executive Officer in June 2016, and
joined the iCar Asia Board in February 2020. In his roles as Group Chief
Executive Officer, Mr Stone provides the business vision, strategy and
leadership to iCar Asia across Malaysia, Thailand and Indonesia. Mr Stone is
an expert in digital marketplaces having worked at eBay for 10 years across 3
key markets and brands. He led the automotive verticals for the eBay classified
businesses of Gumtree.com in the U.K., and Marktplaats.nl in The Netherlands
and was the Head of Marketing for eBay Australia and New Zealand based in
eBay’s Sydney office. Prior to that Mr Stone worked for Charles River
Associates, a leading global consulting firm.
None
None
None
3,488,438 ( held in spouse name Melanie Stone)
None
4
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Company Secretary
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.
5
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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.
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
Classifieds
Auction
Others - warranty, inspection and private seller service, carsentro
New Car
New Car Dealers
Media
Events
Financial Performance
Strong revenue growth of 28% year on year to $14,841,298
In the year ended 31 December 2019 the Group generated $14,841,298 in revenue (2018: $11,555,944), an increase
of 28% over the previous corresponding period (pcp).
Growth was primarily driven by the Group’s core Classified, Media and Event business, with a small but increasing
contributions from auction and new car dealer activities.
As a results of prudent cost management and further optimisation in marketing investment, operating expenses
decreased by 8% in 2019 to $21,028,081 excluding cost of goods sold amounting to $550,382 (2018: $22,867,719)
with reductions mainly in employment related expenses and advertising & marketing expenses and reclassification
of lease rental of $670,370 to depreciation and amortisation expenses following the adoption of new accounting
standard AASB16 Leases. With higher revenue and a lower cost base, pro forma EBITDA losses significantly
reduced by 45% year on year to $5,511,255 (2018: $10,035,451). See below for a description of pro forma EBITDA.
In November 2019, the Group achieved run rate monthly EBITDA breakeven, one month ahead of guidance.
Investment in the business to successfully integrate the acquisition of Carmudi in November 2019, among other
expenses, is expected to return the company to a temporary period of EBITDA loss before the Group returns to
EBITDA profitability later in 2020.
The Group’s cashflow improved in line with revenue growth and EBITDA improvement. Receipts from customers
during the year grew by 28% to $16,074,874 (2018: $12,594,587) while net cash used in operating activities reduced
by 43% to $6,559,039 (2018: $11,469,810). The lower net operating cash outflows was impacted by the
reclassification of lease payment to finance expenses by $161,704.
As at 31 December 2019 the Group had $6,833,304 in cash, cash equivalents and investments. The Group has
access to additional funds of up to $5,000,000 from a debt facility, but is currently not expecting to draw down on this
facility in its current capital and business plans.
6
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 Definition
EBITDA
Earnings before
Eliminates non-cash charges for depreciation and amortisation.
tax, depreciation and amortisation expenses.
interest,
iCar Asia finished the year strongly in all 3 countries
Malaysia:
The Malaysia business achieved an important financial milestone by reporting full year EBITDA and cashflow
positivity in 2019. Full year EBITDA profit was at $1,554,725, compared to an EBITDA loss of $305,780 in 2018. This
result was largely due to a 40% growth in revenue in 2019 compared to the pcp.
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 – Dealers. Both of these new business lines are expected
to contribute more materially in 2020. Two major events were successfully executed in 2019 that contributed to
revenue and profit growth.
Malaysia operational metrics progress in some key core areas, with changes in strategy in some marketing channels
flowing through to improvements in these metrics. Paid accounts for the Q4 of 2019 showed an average increase of
24% compared with the pcp. The strategy to focus on listing quality where low quality or sold listings were removed
from the marketplace was introduced in Q3 2018 resulting in the number of listing for Q4 2019 decreasing by 7% on
a pcp basis but remained at a similar level to Q3 2019. Audience and lead numbers in Q4 2019 decreased on average
by 19% and 20% respectively compared to the pcp, but importantly leads in Q4 2019 increased by 4% versus Q3
2019.
+34%
+12%
7
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Thailand
The Thailand business achieved an important financial milestone in 2019 by becoming EBITDA and cashflow positive
for the full financial year. This was despite a period of disruption from both a general election and the King’s Coronation
ceremony where business activity levels dropped materially. EBITDA for the full year was at $180,404, a significant
improvement from an EBITDA loss of $572,073 in 2018. Revenue generated in the 2019 year grew by 7% compared
to the pcp, despite the slowdown in business activities.
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 - Dealers. Both of these new business lines are expected
to contribute more materially in 2020.
Despite challenges during the year, the Thailand businesses finished the year in a solid position. Number of paid
accounts was up by 1% in Q4 2019 compared to the pcp while listings were flat in Q4 2019 compared to the pcp.
Audience and leads in Q4 2019 were lower compared to the pcp by 20% and 12% respectively, with the continued
focus to grow quality audience and leads, however the decline has stopped with Q4 2019 at similar levels to Q3 2019.
Indonesia
The Indonesian business achieved 69% revenue growth driven by a full year’s results of the monetisation strategies
in Used Car introduced in 2018 and the contribution from the acquired business of Carmudi Indonesia. Revenue in
2019 increased to $1,941,065 million from $1,145,644 million in 2018 and together with prudent cost control, EBITDA
loss for the year was substantially reduced by 60% to $1,387,663 million from $3,438,824 million in 2018.
For the Group’s existing operations, the year also finished well in a number of key metrics. The number of paid
accounts increasing by 53% on average for Q4 2019 compared to the pcp, and leads increasing by 9% respectively
compared to the pcp. This was achieved despite audience in Q4 2019 being 11% lower compared to the pcp.
On 11 November 2019, the Group completed the acquisition of PT Car Classified Indonesia (referred to hereafter as
“PTCCI” or “Carmudi”). Operationally the acquisition of Carmudi contributed to an uplift of 46% in audience in
Indonesia’s combined business to 5,297,193 million unique visitors in the month of December 2019.
The expanded iCar Asia Indonesian business is expected to more than double the Group’s Indonesian revenues,
increasing the overall revenue contribution of Indonesia from approximately 12% to 22%. Realisation of cost and
revenue synergies are expected to result in the combined Indonesian businesses breaking even in 2020.
2020: Achieving Full Year Group EBITDA Breakeven
Following the Group reaching EBITDA breakeven in November 2019, the outlook for 2020 remains promising with
revenue currently expected to grow by at least 50% over the 2020 year. This will be achieved through consistent
growth of the Group’s core businesses, and the contribution from the Carmudi business for a full year. Based on this
current outlook, the Group is expected to become cash flow positive in the second half of 2020 and be EBITDA
positive in aggregate for the 2020 financial year
8
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 2019
(these measures have not been subject to audit or review by the Group’s external auditor):
Year ended 31 December 2019
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
Pro forma results
Sales
EBITDA
NPAT
14,841
-
-
14,841
(6,737)
1,226
-
(5,511)
(10,787)
-
-
(10,787)
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 FY2019.
The following table reconciles the statutory result to pro forma financial results for the year ended 31 December 2018
(these measures have not been subject to audit or review by the Group’s external auditor):
Year ended 31 December 2018
$’000
Statutory results
Employee equity incentive expense
Tax impact from underlying adjustments
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.
(11,312)
1,276
-
(10,036)
(13,606)
-
-
(13,606)
11,556
-
-
11,556
EBITDA
NPAT
Sales
Matters subsequent to the reporting date
There have not been any transactions or events of a material and unusual nature between 31 December 2019 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.
Significant changes in the state of affairs
On 11 November 2019, the Group completed the acquisition of PT Car Classifieds Indonesia, as described above.
There were no other significant changes in the state of affairs of the Group.
Likely developments and expected results of operations
In 2020 the Group expects to continue to grow its core business of used cars and new cars to solidify leadership
positions in all markets that it operates. With the expected full integration of Carmudi, the Group is expected to
achieve run rate breakeven for its Indonesia operation. Malaysia and Thailand operations are expected to continue
delivering higher EBITDA and together with the expected improvement in its Indonesia operation, the Group is
expected to achieve full year positive EBITDA for financial year ending 2020.
9
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 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 2019, 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
Attended
8
7
7
8
8
8
Held
Attended
-
-
4
6
-
6
8
8
8
8
8
8
Held
Attended
-
-
3
3
3
-
-
-
6
6
-
6
Held
-
-
3
3
3
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
10
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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
$
4,517
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 30.
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 reporting date, there were 4,777,777 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 38,372,315 fully paid ordinary shares in
iCar Asia Limited at a weighted average exercise price of $0.20 per share.
During the financial year, employees and executives have exercised options to acquire 10,394,851 fully paid ordinary
shares in iCar Asia Limited at a weighted average exercise price of $0.20 per share.
11
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited)
The remuneration report, which has been audited in accordance with section 300A of the Corporations Act 2001,
outlines the key management personnel remuneration arrangements for the Group.
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
E Additional information
A Principles used to determine the nature and amount of remuneration
Nomination & Remuneration Committee
The membership, responsibilities, authority and activities of the Nomination & Remuneration Committee are set out
in the Nomination & Remuneration Committee Charter, which has been approved by the Board.
The responsibilities of the Nomination & Remuneration Committee are to:
• Monitor, review and recommend to the Board, as necessary and appropriate:
the remuneration, superannuation and incentive policies and arrangements for the Chief Executive Officer and
key management personnel (i.e. those executives who report directly to the Chief Executive Officer);
the remuneration arrangements for executive and non-executive Directors on the Board;
the recruitment, retention and termination policies and procedures for the Chief Executive Officer and key
management personnel; and
key appointments and executive succession planning.
• Oversee the Group’s general remuneration strategy;
• Review the composition of the Board including:
the criteria for selection of directors, having regard to the need for the breadth and depth of skills and experience
on the Board; and
the process for selecting new Directors.
• Monitor the Group culture and reputation and review behavioural standards on a regular basis, and report and
submit recommendations to the Board.
The Chief Executive Officer and the Chief Financial Officer attend meetings by invitation to assist the Committee in
its deliberations except on matters associated with their own remuneration.
Key management personnel
Key management personnel (‘KMP’) comprises the directors and executives of the Group. For the purposes of the
Remuneration Report, the term ‘Executive’ is defined to mean the Chief Executive Officer (‘CEO’), the Chief Financial
Officer (‘CFO’), Chief Information Officer (‘CIO’) and Chief Marketing Officer (‘CMO’). The CFO, CIO and CMO report
directly to the CEO, who then reports to the Board. The Executives are responsible for the implementation of the
Group’s vision, values, corporate strategies and risk management systems, as well as the day-to-day management
of the business.
12
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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.
Maximum aggregate non-executive directors fee pool
The maximum aggregate amount that may be paid to NEDs for their services is $500,000 during any financial year,
as approved by shareholders at the 2014 AGM held on 28 May 2014. Any remuneration by the issue of shares to
non-executive director which has been approved under listing rules does not count towards the maximum fee pool.
13
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited ) (continued)
The table below summarises the prevailing Board and Committee fees payable to Directors at the close of year 2019:
Position
Board fees
Chair
Non-executive directors
Committee fees
Audit & Risk
: Chair
: Member
Nomination & Remuneration : Chair
: Member
$
120,000
60,000
10,000
N/A
10,000
N/A
The Executive Chairman is paid an additional $127,500 cash in 2019 for the executive component of the role. The
Executive Chairman was also granted a one-off issuance of $10,000 in shares in the Company, which was approved
by shareholders at the Annual General Meeting on 27 May 2019.
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.
14
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Long-term incentive plan (LTI)
The Group has established a long-term incentive plan (referred to hereafter as the ‘Plan’). The Plan is part of the
Group’s remuneration strategy and is designed to align the interests of management and shareholders and assist
the Group in the attraction, motivation and retention of executives. In particular, the Plan is designed to provide
relevant executives with an incentive for future performance and encouraging those executives to remain with the
Group. LTI payments are made to participating key employees depending on the extent to which specific targets set
at the beginning of the plan are met. The targets relate to the earnings of the company, achievement of other KPIs
aligned to the individual’s specific business function and staff remaining in employment 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 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 previous year, options granted to certain key management personnel were replaced by a 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.
During the previous year, additional incentives granted to certain key management personnel were replaced by a
share appreciation rights scheme as detailed below.
Long Term Value Creation (LTVC)
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.
15
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 2019 Annual General Meeting ('AGM')
The company received in excess of 97.12% of ‘for’ votes in relation to its remuneration report for the year ended
31 December 2018. 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 2019:
Name
Position
Term as KMP
Executive Director
Georg Chmiel
Hamish Stone
Non-executive Directors
Patrick Grove
Lucas Elliott
Syed Khalil Ibrahim
Peter Everingham
Richard Kuo
Senior Executives
Hamish Stone
Yee Chin Beng
Pedro Sttau
Kjetil Hellebo Rohde Jakobsen
Jonathan Adams
Executive Chairman
Managing Director
Full financial year
Appointed 20 February 2020
Non-executive Director
Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Full financial year
Full financial year
Full financial year
Full financial year
Full financial year
Group Chief Executive Officer
Group Chief Financial Officer
Group Chief Information Officer
Group Chief Information Officer
Group Chief Marketing Officer
Full financial year
Full financial year
Resigned 27 September 2019
Appointed 17 September 2019
Full financial year
16
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Details of the remuneration of the key management personnel for the Group are set out in the following tables.
Short-term benefits
Salary & fees Other8
$
$
Remuneration1
$
Share-based payments
LTI
shares
$
Additional
incentives7 Options7
$
G Chmiel2
Executive Chairman
P Grove3
Non-executive Director
L Elliott3
Non-executive Director
S Khalil Ibrahim
Non-executive Director
P Everingham
Non-executive Director
R Kuo
Non-executive Director
Total Directors
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
127,500
150,000
30,000
30,000
30,000
30,000
40,000
30,000
30,000
30,000
35,000
35,000
292,500
305,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
130,000
120,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
35,000
35,000
285,000
275,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
17
LTVC7
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Remuneration
$
Performance
related
%
304,165
316,665
60,000
60,000
60,000
60,000
70,000
60,000
60,000
60,000
70,000
70,000
624,165
626,665
-
-
-
-
-
-
-
-
-
-
-
-
$
46,665
46,665
-
-
-
-
-
-
-
-
-
-
46,665
46,665
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Short-term benefits
Share-based payments
H Stone
Chief Executive Officer
J Dische
Chief Financial Officer
Yee Chin Beng
Chief Financial Officer
P Sttau5
Chief Information Officer
K Jakobsen6
Chief Information Officer
J Adams
Chief Marketing Officer
Total Executive
Total Remuneration
Salary & fees Other8
$
$
-
353,026 66,507
392,500 65,776
-
122,341 61,050
199,573 -
-
98,849
179,903 37,361
235,000 49,382
14,475
66,004
-
-
179,413 58,569
177,500 55,548
911,915 162,437
1,026,190 231,755
1,270,419 176,912
1,331,190 231,755
Remuneration1
$
100,000
-
-
-
-
-
-
-
-
-
-
-
100,000
-
385,000
275,000
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Additional
incentives7 Options7
LTI
shares
$
$
363,983 -
136,733 -
-
-
-
-
64,000 -
-
-
-
-
85,010 12,253
-
-
-
-
50,408 -
20,261 -
478,392 -
242,004 12,253
478,392 -
242,004 12,253
LTVC7
$
Total
Remuneration
$
Performance
related
%
313,265 1,196,781
446,145 1,057,223
-
-
-
183,391
10,432 274,005
98,849
-
-
217,264
160,612 542,257
80,479
-
-
-
62,653 351,045
89,229 344,003
386,350 2,039,094
695,986 2,225,724
386,350 2,743,738
695,986 2,852,389
65%
57%
0%
0%
27%
0%
0%
48%
0%
-
32%
32%
$
-
16,069
-
-
-
-
-
-
-
-
-
1,465
-
17,534
46,665
64,199
4 J Dische resigned on 14 June 2018.
5 P Sttau resigned on 27 September 2019 and forfeited his LTI shares and LTVC for 2019.
6 Appointed 17 September 2019. Not eligible for LTI during probation period.
7 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.
8 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.
18
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Shareholdings of KMP1 held in iCar Asia Limited
31 December 2019
Balance at the
beginning of the
period
1 January 2019
Granted as
remuneration
Net change Other2
Balance at the end
of the period
31 December 2019
Executive Director:
G Chmiel
Non-Executive Directors:
P Grove3,4
L Elliott3,4
S Khalil Ibrahim
P Everingham
R Kuo
715,077
583,637
- 1,298,714
109,673,940
109,673,940
2,070,705
62,060
82,747
134,685
134,685
134,685
134,685
157,133
10,134,685
119,943,310
10,134,685
119,943,310
277,744
2,483,134
- 196,745
- 239,880
Other Key Management Personnel:
H Stone
P Sttau5
K Jakobsen
Yee Chin Beng
J Adams
2,326,796
1,044,535
117,107
3,488,438
623,225
368,554
( 991,779 )
-
-
-
-
-
-
87,280
-
87,280
-
-
- 174,560
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 ICQ Holdings Sdn Bhd and Catcha Group Pte
Ltd totalling 119,943,310.
4 Shares allocated to the Director were issued to Catcha Group Pte Ltd.
5 P Sttau resigned on 27 September 2019. Net other change in shares reflects that P Sttau was not a KMP at 31
December 2019 and therefore has a holding of nil. At the date of resignation, P Sttau held 700,000 shares in the
Company.
19
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
C Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
LTI incentives are paid to Key Management Personnel according to the achievement of performance targets which
are set half yearly as follow:
50% on achievement of Group Revenue and EBITDA targets. EBITDA targets are treated as a 'gate' to
achievement and if not met, no reward is made under this category.
30% on 'vibrancy' metrics targets:
o Website audience.
o Volume of consumer leads delivered through the portals.
o Volume of paying accounts (new and used car).
o Volume of used cars listed in the sales markets.
10% on employee engagement targets as assessed by an employee net promoter score derived from an internal
survey.
10% on achievement of function-specific strategic goals.
For the Chief Financial Officer these strategic goals involve delivery of cost control measures, operations team
projects and cross-functional conversion initiatives.
For the Chief Information Officer the goals involve the timely provision of products and technical capabilities for the
Group and efficiencies in the delivery process.
For the Chief Marketing Officer the goals involve delivery of specific marketing strategy projects, brand assessment
and financial performance in the Media division.
The Chief Executive Officer’s goals aggregate those given to the other key management personnel and align to
specific strategic milestones.
The following table outlines the proportion of maximum LTI earned in relation to the financial year ended 2019. There
were no employees in service at 31 December 2019 entitled to the STI incentive.
H Stone (CEO)
Yee Chin Beng (CFO)
J Adams (CMO)
Maximum LTI
opportunity (% of fixed
remuneration)
160%
100%
100%
% of maximum
LTI earned
144%
90%
58%
20
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
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 127,500 per annum.
Base salary adjusted to AUD 150,000 per annum from 1 January 2020.
Long term incentive
Not applicable
Options:
1,000,000 options exercisable at $0.40 per option vesting on 31 December 2019
and expiring on 31 December 2021.
Name:
Title:
Term of agreement:
Details:
Mr Hamish Stone
Chief Executive Officer and Managing Director
6 months termination notice period by executive and company.
Base salary cost is AUD $450,000, of which $350,000 will be paid in cash and
$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 720,000 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 40%, 30%, 30%
respectively.
Please see above for performance criteria. Please see page 24-25 for amount
awarded for 2019 financial year.
Other benefits:
Housing allowance of MYR 16,000 per month (equivalent to approximately
2019: AUD 5,542 (2018: AUD 5,358) 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.
21
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Name:
Title:
Term of agreement:
Details:
Yee Chin Beng
Chief Financial Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 192,000 per annum.
Name:
Title:
Term of agreement:
Details:
Long term incentive
Up to AUD 192,000 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 24-25 for amount
awarded for 2019 financial year.
Long term value creation:
LTVC share for Yee Chin Beng is 0.30%. 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.
Mr Pedro Sttau (Resigned 27 September 2019)
Chief Information Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 240,000 per annum.
Long term incentive:
Up to AUD 324,000 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 24-25 for amount
awarded for 2019 financial year.
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
2019: AUD 4,151 (2019: AUD 4,019) per month).
22
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Name:
Title:
Term of agreement:
Details:
Kjetil Hellebo Rohde Jakobsen (Appointed 17 September 2019)
Chief Information Officer
6 months termination notice period by executive and company.
Base salary cost is AUD 235,000 per annum.
Long term incentive:
Up to AUD 188,000 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 above for performance criteria. Please see page 24-25 for amount
awarded for 2019 financial year.
Other benefits:
Housing allowance of MYR 12,000 per month (equivalent to approximately
2019: AUD 4,825 per month).
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 180,000 per annum.
Long term incentive:
Up to AUD 180,000 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 24-25 for amount
awarded for 2019 financial year.
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.
23
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 2019
Number of
shares
vested
during 2019
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
Executive Director:
G Chmiel
2018
Director Fees
583,637
583,637
0.2227
130,000
February 2019 February 2019
June 2019
Non-Executive
Directors:
P Grove
L Elliott
S Khalil Ibrahim
P Everingham
R Kuo
J Olsen
Other Key Management
Personnel:
H Stone
2018
2018
2018
2018
2018
2018
Director Fees1
Director Fees1
Director Fees
Director Fees
Director Fees
Director Fees
134,685
134,685
134,685
134,685
157,133
375,000
134,685
134,685
134,685
134,685
157,133
375,000
0.2227
0.2227
0.2227
0.2227
0.2227
0.2000
30,000
30,000
30,000
30,000
35,000
75,000
February 2019 February 2019
February 2019 February 2019
February 2019 February 2019
February 2019 February 2019
February 2019 February 2019
February 2019 February 2019
June 2019
June 2019
June 2019
June 2019
June 2019
June 2019
2017
2017
2016
2019
LTI
LTI
LTI
Remuneration
459,247
459,247
128,667
456,621
459,247
-
128,667
456,621
24
0.2450
0.2450
0.2000
0.2190
112,516
112,516
25,733
100,000
February 2018 February 2019 February 2019
February 2018 February 2020 February 2020
February 2017 February 2019 February 2019
February 2019 February 2019 February 2019
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Financial
Year
Category
Number of
Shares granted
up to 31
December 2019
Number of
shares
vested
during 2019
Fair
Value per
share $
Fair
value of
shares $
Grant date
Vesting date
Issue date
Other Key Management
Personnel:
P Sttau
J Adams
2016
2017
2017
2017
LTI
LTI
LTI
LTI
116,120
252,434
87,280
87,280
116,120
252,434
87,280
-
0.2000
0.2450
0.2450
0.2450
23,224
61,846
February 2017 February 2019 February 2019
February 2018 February 2019 February 2019
21,384
21,384
February 2018 February 2019 February 2019
February 2018 February 2020 February 2020
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd
Share based payments of $950,932 have been accrued in relation to 2019 in lieu of Directors Fees ($275,000) and executive variable remuneration ($950,932). The number
of shares to be granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2020.
25
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the vesting date
or the options lapse. All options will be settled in shares.
In 2018, options granted to key management personnel, with the exception of Executive Chairman, were replaced by the Long Term Value Creation scheme (LTVC).
The table below discloses the number of share options granted, vested or lapsed during previous financial years that existed at 31 December 2019.
Key management
personnel
Year
Awarded
Options
awarded
during the
year
No.
Award date
Fair value
per option at
award date
($)
Vesting Date
Exercise
price
Expiry date
No.
vested
during
the year
No.
lapsed
during
the year
Value of
options
awarded
FY 2017
$
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 other options granted, vested or lapsed during the 2019 financial year.
26
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Remuneration Report (audited) (continued)
The table below discloses the number of share options outstanding at the end of the year.
Options holdings of KMP
KMP
G Chmiel (Exec. Chairman)
H Stone (CEO)
S Khalil Ibrahim (Director)
P Grove (Director)
L Elliott (Director)
Balance
1 January
2019
1,000,000
117,107
277,744
25,963,757
25,963,757
Granted as
remuneration
-
-
-
-
-
Options
exercised
-
117,107
277,744
10,000,000
10,000,000
Net change
other
Balance
31 December 2019
Exercisable
Not exercisable
-
-
-
12,185,980
12,185,980
1,000,000
-
-
3,777,777
3,777,777
1,000,000
-
-
3,777,777
3,777,777
-
-
-
-
-
There were no options related to remuneration exercised during the year.
The option holdings of Patrick Grove and Lucas Elliott are in connection with the Finance facility from Catcha Group Pte Ltd. For further details see Note 23 Financing facility.
27
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Long term value creation (LTVC)
During the year, there was a new entrant to 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
Expected volatility (new entrants 2019)
Risk-free interest rate
Model used
LTVC
$0.30
$0.18
0%
62%
66%
2.20%
Monte Carlo
The table below discloses the accounting amortisation of LTVC Scheme in financial statements for the year ended
31 December 2019 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. The LTVC Scheme entitlements is based on exceeding a specified share price hurdle in any
of the three observation periods (2018, 2019 and 2020). For the December 2019 observation period, the volume
weighted average price exceeded the specified share price hurdle. The number of shares awarded under the LTVC
scheme for 2019 was 3,415,865 of which 2,049,519 (representing 60%) vested on 31 January 2020. The remaining
40% are due to vest on 31 January 2021 provided the key management personnel remains in service.
Key management personnel Share of value creation Amortisation in 2019
$
Grant date fair value
$
H Stone
Chief Executive Officer
Yee Chin Beng
Chief Financial Officer
P Sttau1
Chief Information Officer
J Adams
Chief Marketing Officer
1 P Sttau resigned on 27 September 2019.
1.25%
313,265 934,926
0.30%
10,432 22,075
0.45%
-
336,573
0.25%
62,653 186,985
28
iCar Asia Limited and Controlled Entities
Directors’ Report
For the year ended 31 December 2019
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 2019 and the previous four years is summarised below:
Revenue
EBITDA
Loss after income tax
2019
14,841,298
(6,737,164)
(10,786,557)
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)
The factors that are considered to affect total shareholders return ("TSR") are summarised below:
Share price at financial year end ($A)
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
2019
0.30
(2.65)
(2.65)
2018
0.14
(3.57)
(3.57)
2017
0.20
(4.12)
(4.12)
2016
0.25
(5.59)
(5.59)
2015
0.96
(5.43)
(5.43)
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 and other conditions. For further details see Note 23 Financing facility.
There were no loans, other transactions and balances with KMP and their related parties during the year other than
those transactions detailed in Note 28 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
26 February 2020
29
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 the financial report of iCar Asia Limited for the financial year ended
31 December 2019, 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
26 February 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
30
iCar Asia Limited and Controlled Entities
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2019
Auditor’s Independence Declaration
Revenue
4
14,841,298
11,555,944
Consolidated
Note
2019
$
20181
$
Expenses
Administration and related expenses
Advertising and marketing expenses
Cost of goods sold
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
(2,425,487)
(6,076,286)
(550,382)
(11,192,098)
(1,310,814)
(23,396)
(3,505,978)
(2,381,552)
(6,942,669)
-
(11,684,153)
(1,771,878)
(87,468)
(2,483,456)
(10,243,143)
(13,795,231)
101,364
(440,971)
284,461
(17,500)
(10,582,750)
(13,528,270)
(203,807)
(78,183)
6
6
5
6
7
Loss after income tax expense for the year attributable to
the owners of iCar Asia Limited and Controlled Entities
21
(10,786,557)
(13,606,453)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Items that may not be reclassified subsequently to profit or loss
Remeasurements of employee defined benefit
1,365,156
2,641,514
82,265
36,472
Other comprehensive income for the year, net of tax
1,447,421
2,677,986
Total comprehensive income for the year attributable to the
owners of iCar Asia Limited and Controlled Entities
(9,339,136)
(10,928,468)
Earnings Per Share
Basic loss per share
Diluted loss per share
Cents
Cents
33
33
(2.65)
(2.65)
(3.57)
(3.57)
1The reported numbers in 2018 is not adjusted for AASB 16.
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
31
iCar Asia Limited and Controlled Entities
Consolidated Statement of Financial Position
For the year ended 31 December 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables and contract assets
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Goodwill
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
31 Dec 2019
$
31 Dec 20181
$
8
9
10
11
12
13
13
14
4
12
15
16
17
12
19
20
21
6,833,304
1,249,544
3,303,142
11,385,990
9,531,721
1,387,490
2,611,232
13,530,443
708,359
1,048,542
9,540,954
25,493,500
83,314
36,874,669
658,976
-
9,449,734
19,656,770
27,491
29,792,971
48,260,659
43,323,414
3,886,286
1,838,120
513,255
1,301,780
2,396,989
9,936,430
2,790,650
1,307,912
-
1,786,672
-
5,885,234
743,149
490,823
1,233,972
416,677
-
416,677
11,170,402
6,301,911
37,090,257
37,021,503
132,051,813
123,656,458
(4,368,880)
(90,592,676)
(6,792,364)
(79,842,591)
37,090,257
37,021,503
1The reported numbers in 2018 is not adjusted for AASB 16.
The above statement of financial position should be read in conjunction with the accompanying notes.
32
iCar Asia Limited and Controlled Entities
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Balance at 1 January 2019
(restated)
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
41,768,763 shares issued during
the period
Transaction costs (net of tax)
Share to be issued in lieu of
directors' remuneration
Executive variable remuneration
Options for loan facility
Balance at 31 December 2019
Issued
capital
Foreign
currency
translation
and Other
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
$
$
$
$
$
$
123,656,458
2,324,146
(10,965,292)
1,848,782
(79,888,384)
36,975,710
-
-
-
-
1,365,156
1,365,156
-
-
-
-
(10,786,557)
(10,786,557)
-
-
82,265
1,447,421
(10,704,292)
(9,339,137)
8,435,065
(39,710)
-
-
-
-
-
-
-
-
-
(760,603)
-
-
-
275,000
-
1,135,931
-
408,000
-
-
-
-
-
7,674,462
(39,710)
275,000
1,135,931
408,000
132,051,813
3,689,302
(10,965,292)
2,907,110
(90,592,676)
37,090,257
Issued
capital
Foreign
currency
translation
reserve
Equity
reserve
Share
based
payment
reserve
Accumulated
losses
Total equity
Balance at 1 January 2018
Loss after income tax expense for
the period
Other comprehensive income for
the period, net of tax
Total comprehensive income for
the period
Transactions with owners in their
capacity as owners
30,145,692 shares issued during
the period
Transaction costs (net of tax)
Share to be issued in lieu of
directors' remuneration
Executive variable remuneration
Balance at 31 December 2018
$
$
$
$
$
$
122,493,347
(317,368)
(10,965,292) 1,478,417
(66,272,610)
46,416,494
-
-
-
2,641,514
-
2,641,514
-
-
-
(13,606,453)
(13,606,453)
36,472
2,677,986
(13,569,981)
(10,928,468)
-
-
-
1,200,741
(37,630)
(905,640)
275,000
123,656,458
1,001,005
2,324,146 (10,965,292) 1,848,782
(79,842,591)
295,101
(37,630)
275,000
1,001,005
37,021,503
The above statement of changes in equity should be read in conjunction with the accompanying notes.
33
iCar Asia Limited and Controlled Entities
Consolidated Statement of Changes in Cash Flows
For the year ended 31 December 2019
Auditor’s Independence Declaration
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Income tax paid
Interest received
Interest paid
Consolidated
Note
2019
$
2018
$
16,074,874
(22,463,624)
(130,404)
12,594,587
(24,314,576)
(83,120)
(6,519,154)
(11,803,109)
107,810
333,299
( 147,695 )
-
Net cash used in operating activities
32
(6,559,039)
(11,469,810)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
(104,811)
(857,395)
Payments for purchase of subsidiaries, net of cash acquired
18
(2,165,597)
(262,971)
( 456,201 )
-
Net cash used in investing activities
(3,127,803)
(719,172)
Cash flows from financing activities
Proceeds from options exercised
Share issue transaction costs
Payment of principal portion of lease liabilities
7,675,275
(33,320)
(653,530)
295,101
(51,693)
-
Net cash provided by financing activities
6,988,425
243,408
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
(2,698,417)
9,531,721
(11,945,574)
21,477,295
Cash, cash equivalents and investments at the end of the year
8
6,833,304
9,531,721
The above statement of changes in cash flows should be read in conjunction with the accompanying notes.
34
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
1. Corporate information
The consolidated financial statements of iCar Asia Limited and its subsidiaries (collectively, the ‘Group’) for the year
ended 31 December 2019 were authorised for issue in accordance with a resolution of Directors made on 24 February
2020. 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
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a
historical cost basis.
All amounts are presented in Australian dollars and are rounded to the nearest dollar unless otherwise stated.
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 $10,786,557 in the current financial year (2018: $13,606,453 loss). The Group has an available cash
balance of $6,833,304 (2018: $9,531,721) and net assets of $37,164,418 (2018: $37,021,503) at 31 December 2019.
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.
35
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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 2019.The nature and the impact of each new standard and/or amendment is
described below:
Adoption of AASB 16 Leases (‘AASB 16’)
AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes two recognition exemptions for lessees – leases of ’low-
value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less).
At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease
liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use
asset).
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the
lease term and a change in future lease payments resulting from a change in an index or rate used to determine
those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from lease accounting under AASB 117 other than in respect of
subleases, for which lease classification is performed by reference to the head lease right-of-use asset rather than
for underlying asset. Lessors will continue to classify all leases using the same classification principle as in AASB
117 and distinguish between two types of leases: operating and finance leases.
The Group’s leasing activities and how these are accounted for:
The Group leases offices, warehouse and office equipment. Rental contracts are typically for period of 1 to 4 years.
From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which
the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter
of the asset’s useful life and the lease term on a straight-line basis.
Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
fixed payments, and
•
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
•
Following transition lease payments are discounted using the lessee’s incremental borrowing rate if the interest rate
implicit in the lease cannot be readily determined, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and
conditions.
Right-of-use assets are measured at cost comprising the following:
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct cost
36
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations (continued)
Adoption of AASB 16 Leases (‘AASB 16’) (continued)
•
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in the statement of comprehensive income. Short-term leases are leases with a lease term of 12
months or less. Low-value assets comprise office equipment.
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, it if is reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the assets for additional terms of two to five years. The
Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew the rental.
That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the
commencement date, the Group reassesses the lease term if there is a significant event or change in management
decision that is within its control and affects its ability to exercise the option to renew.
The Group has recognised lease liabilities in relation to leases which had previously been classified as ‘operating
leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the
remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 January 2019. The rate
applied to the lease liabilities on 1 January 2019 for Malaysia, Thailand and Indonesia was 12%. The associated
right-of-use assets for property leases were measured on a modified retrospective basis as if AASB 16 had always
been applied. The Group applied the practical expedient to rely on its assessment that there were no onerous lease
contracts that would have required an adjustment to the right-of-use assets at the date of initial application and not
to separate lease and non-lease components.
The Group also applied the available practical expedients wherein it:
• Used a single discount rate to a portfolio of leases with reasonably similar characteristics
• Relied on its assessment of whether leases are onerous immediately before the date of initial application
• Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date
of initial application
• Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial
application
• Used hindsight in determining the lease term where the contract contained options to extend or terminate
the lease
37
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations (continued)
Adoption of AASB 16 Leases (‘AASB 16’) (continued)
The Group leases offices, warehouse and office equipment. Rental contracts are typically for period of 1 to 4 years.
The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitments as of 31 December
2018 as follows:
Operating lease commitments as at 1 January 2019
Weighted average incremental borrowing rate as at 1 January 2019
Operating lease commitments as at 1 January 2019
Less:
Commitments relating to short-term leases
Add:
Optional extension periods not included in lease commitments as at 31 December 2018
Operating lease commitments as at 1 January 2019
Impact on the statement of financial position as at 1 January 2019:
Right-of-use assets
Accumulated losses
Lease liabilities
$
1,111,220
12%
962,151
(20,879)
436,910
1,378,182
$
1,297,629
80,553
(1,378,182)
Adoption of 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 12 Income Taxes ('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
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more
other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be
followed.
The Group applies significant judgement in identifying uncertainties over income tax treatments. Since the Group
operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its
consolidated financial statements.
Upon adoption of the Interpretation, the Group considered whether it has any uncertain tax positions, particularly
those relating to transfer pricing. The Group determined, based on its tax compliance and transfer pricing study that
it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities.
The interpretation did not have an impact on the consolidated financial statements of the Group.
38
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.3 Changes in accounting policies, disclosures, standards and interpretations
(ii) Changes in accounting policies, new and amended standards and interpretations but not yet effective
AASB 2019-1 Conceptual Framework
The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition
criteria for assets and liabilities and clarifies some important concepts. It is arranged in eight chapters, as follows:
► Chapter 1 – The objective of financial reporting
► Chapter 2 – Qualitative characteristics of useful financial information
► Chapter 3 – Financial statements and the reporting entity
► Chapter 4 – The elements of financial statements
► Chapter 5 – Recognition and derecognition
► Chapter 6 – Measurement
► Chapter 7 – Presentation and disclosure
► Chapter 8 – Concepts of capital and capital maintenance
AASB 2019-1 has also been issued, which sets out the amendments to Australian Accounting Standards,
Interpretations and other pronouncements in order to update references to the revised Conceptual Framework. The
changes to the Conceptual Framework may affect the application of accounting standards in situations where no
standard applies to a particular transaction or event. In addition, relief has been provided in applying AASB 3 and
developing accounting policies for regulatory account balances using AASB 108, such that entities must continue to
apply the definitions of an asset and a liability (and supporting concepts) in the Framework for the Preparation and
Presentation of Financial Statements (July 2004), and not the definitions in the revised Conceptual Framework
The Group does not expect this standard will have a significant impact on the Group financial report however it will
continue to assess this.
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
The Standard amends the definition of a business in AASB 3 Business Combinations. The amendments clarify the
minimum requirements for a business, remove the assessment of whether market participants are capable of
replacing missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow
the definitions of a business and of outputs, and introduce an optional fair value concentration test.
The Group does not expect this standard will have a significant impact on the Group financial report however it will
continue to assess this.
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
This Standard amends AASB 101 Presentation of Financial Statements and AAS 108 Accounting Policies,
Changes in Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify
certain aspects of the definition. The amendments clarify that materiality will depend on the nature or magnitude of
information. An entity will need to assess whether the information, either individually or in combination with other
information, is material in the context of the financial statements. A misstatement of information is material if it could
reasonably be expected to influence decisions made by the primary users.
The Group does not expect this standard will have an impact on the Group financial report however it will continue
to assess this.
39
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies
a) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of the Group at 31 December 2019 and
the results for the year then ended.
Subsidiaries are all those entities over which the Group has control. Control is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee)
• Exposure, or rights, to variable returns from its involvement with the investee
• The ability to use its power over the investee to affect its returns
The effects of potential exercisable voting rights are considered when assessing whether control exists. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the
date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. Refer to the 'business
combinations' accounting policy for further details. A change in ownership interest, without the loss of control, is
accounted for as an equity transaction, where the difference between the consideration transferred and the book
value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
b) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current
classification. An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period
Or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
40
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
b) Current versus non-current classification (continued)
A liability is current when:
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period
•
•
•
Or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period
The Group classifies all other liabilities as non-current.
c) Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the Group to former owners of the acquiree and the amount of any non-
controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is
measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition
costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating
or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group re-measures its previously held equity interest in
the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying
amount is recognised in profit or loss.
Contingent consideration to be transferred by the Group is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not re-measured and its subsequent settlement is accounted for
within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing
investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value
is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the group, the difference
is recognised as a gain directly in profit or loss by the group on the acquisition-date, but only after a reassessment
of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any,
the consideration transferred and the Group's previously held equity interest in the Group.
Business combinations are initially accounted for on a provisional basis. The Group retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period,
based on new information obtained about the facts and circumstances that existed at the acquisition-date. The
measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the Group
receives all the information possible to determine fair value.
41
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
d) Foreign currency translation
The financial report is presented in Australian dollars, which is the functional currency of the parent entity and the
presentation currency of the Group.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the
rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences
on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely
to occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency
translation reserve and recognised in profit or loss on disposal of the net investment.
On consolidation, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars,
being the Group's presentation currency, at exchange rates prevailing on the balance sheet date. Income and
expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange
differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such exchange
differences are recognised in profit or loss in the period in which the foreign operation is disposed.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts
of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and
translated at the closing spot rate at the reporting date.
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. Refer to Note 4 for details
on the pattern of revenue recognition.
42
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
e) Revenue from contracts with customers (continued)
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. The commissions are included in receipts from customers in the statement of
changes in cash flows and therefore excludes the the gross amount paid / received [as the case may be] for the
vehicle.
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.
Trading revenue
Customers (car sellers) sells the cars to iCar’s directly and iCar will in turn sell to dealers. iCar holds the cars for a
short period and makes a profit/loss on the difference between the purchase price from car sellers and selling price
to dealers.
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:
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;
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.
43
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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.
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.
44
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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 except when the
deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss including the initial recognition of lease.
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.
45
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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(comparative year)
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.
Group as lessee AASB 16 (Applicable 1 January 2019)
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use
assets representing the right to use the underlying assets.
46
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
h) Leases (continued)
At the commencement date of a lease, the Group recognises a liability to make lease payments (i.e., the lease liability)
and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset).
The Group separately recognises the interest expense on the lease liability and the depreciation expense on the
right-of-use asset. The Group will remeasure the lease liability upon the occurrence of certain events (e.g., a change
in the lease term and a change in future lease payments resulting from a change in an index or rate used to determine
those payments). The Group will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
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.
•
47
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
2. Summary of significant accounting policies (continued)
2.4 Significant accounting policies (continued)
i) Intangible assets (continued)
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.
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.
48
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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:
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
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
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
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:
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.
49
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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 any time 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.
50
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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.
51
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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.
52
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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.
r) Comparative amounts
Certain comparatives have been updated to ensure consistency with the presentation in the current period.
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.
53
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
3. Critical accounting judgements, estimates and assumptions (continued)
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 13. 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.
The Group measures defined benefit obligation on a basis that reflects estimated future salary increase that affect
the benefits payable. Generally, the future salary incremental rate is determined based on the followin inflation
ranging from 9%- 10%. Discount rate is used to determine the present value of defined benefit obligation at valuation
date. The discount rate is determined based on the Indonesian Government Bond Spot Rate at the end of reporting
period in accordance with the estimated maturity of post-employment benefits obligations for the remaining of the
working period of each employee.
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.
54
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
3. Critical accounting judgements, estimates and assumptions (continued)
Determining the lease term of contracts with renewal and termination options – Group as lessee
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered The Group has
several lease contracts that include extension and termination options.
The Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to
renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if
there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not
to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant
customisation to the leased asset).by an option to terminate the lease, if it is reasonably certain not to be exercised.
Refer to Note 12 for information on potential future rental payments relating to periods following the
exercise date of extension and termination options that are not included in the lease term.
Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over
a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-
use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which
requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing
transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when
leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs when
available and is required to make certain entity-specific estimates.
55
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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
B. Contract balances
2019
2018
$
$
9,029,350
5,811,948
6,745,414
4,810,530
14,841,298
11,555,944
7,473,635
5,426,598
1,941,065
5,340,716
5,069,584
1,145,644
14,841,298
11,555,944
6,518,039
650,038
4,838,807
617,078
2,511,312
5,161,909
1,906,607
4,193,452
14,841,298
11,555,944
The following table provides information about receivables, contract assets and contract liabilities with customers.
Trade and receivables (Note 9)
Contract assets
Contract liabilities
Consolidated
2019
2018
$
1,069,878
197,808
1,838,120
$
1,063,499
363,694
1,307,912
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
56
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
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 2019 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 31 December 2018 has been recognised as revenue in full in
the current year ($1,307,912).
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.
Trading revenue
Customers (car sellers) sells the cars to iCar’s directly and iCar will in turn sell to dealers. iCar holds the cars for a
short period and makes a profit/loss on the difference between the purchase price from car sellers and selling price
to dealers.
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.
Carsentro
(a) Registration Fee - Used Car Dealers pay a Registration Fee annually per lot they rent as their commitment
to join Carsentro.
(b) Maintenance Fee - Used Car Dealers pay for monthly Maintenance Fee, based on how many lots they rent
in Carsentro. The maintenance fee is to cover operational (ie. electricity, security etc) and marketing activities
(ie. banner, name card, etc)
(c) Rental Fee – Used Car Dealers pay a monthly rental fee, based on how many lots they rent in Carsentro.
(d) Dealer Penalty - Used Car Dealers have a monthly target to give loan application to Carsentro leasing partner.
They will need to pay penalty if they don’t achieve the target.
(e) Leasing Partner Sponsorship – Carsentro Leasing Partner pay sponsorship upfront on every new period as
their commitment. The sponsorship is divided into:
Fixed – The Fixed amount leasing partner pay in order to support marketing activities (not returnable)
Variable – The amount that leasing partner pay based on target given to Carsentro. At the end of period,
the achievement will be calculated and if the target is not achieved, the sponsorship will need to return
proportionally.
(f) Leasing Partner Loan Commission – The commission that Leasing Partner pay to Carsentro monthly based
on the achievement of target given to Carsentro.
57
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
4. Revenue (continued)
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.
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.
58
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
5. Segment information (continued)
Consolidated - 2019
Revenue
Revenues from external customers
Cost of Sales
Operating expenses
Profit/ (loss) before Interest, tax, depreciation and
amortisation
Depreciation and amortisation
Interest income
Interest expense
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss after income tax expense
Assets
Segment assets
Total assets
Non-current assets1
Liabilities
Segment liabilities
Total liabilities
Malaysia
$
Indonesia
$
Thailand
$
Unallocated
$
Total
$
7,473,635
(550,382)
(5,368,528)
1,941,065
5,426,598
-
(3,328,728)
(5,246,194)
(7,084,631)
14,841,298
(550,382)
(21,028,081)
1,554,725
(1,387,663)
180,404
(7,084,631)
(6,737,165)
(240,303)
(175,613)
(596,297)
(2,493,765)
15,875
(23,782)
1,306,515
-
452
149
84,888
(40,322)
(1,603,146)
-
(78,520)
(494,264)
-
(298,347)
(9,791,855)
(203,807)
5,134,184
8,169,876
24,875,284
10,081,315
(3,505,978)
101,364
(440,971)
(10,582,750)
(203,807)
(10,786,557)
48,260,659
48,260,659
2,316,031
4,884,955
23,405,064
6,268,619
36,874,669
2,001,523
4,455,789
2,109,450
2,603,640
11,170,402
11,170,402
1 Carrying amount of non-current assets excludes financial instrument assets, deferred tax assets and defined benefit assets, of which the Group has none.
59
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
5. Segment information (continued)
Consolidated - 2018
Revenue
Revenues from external customers
Malaysia
$
Indonesia
$
Thailand
$
Unallocated
$
Total
$
5,340,716
1,145,644
5,069,584
-
11,555,944
Operating expenses
Loss before Interest, tax, depreciation and
amortisation
(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)
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
Non-current assets1
Liabilities
Segment liabilities
Total liabilities
(107,169)
7,608
-
(57,657)
314
-
(408,269)
150
-
(405,341)
-
(3,496,167)
-
(980,192)
-
(1,910,361)
276,389
(17,500)
(8,646,570)
(78,183)
3,770,054
2,329,103
23,063,212
14,161,045
(2,483,456)
284,461
(17,500)
(13,528,270)
(78,183)
(13,606,453)
43,323,413
43,323,413
2,077,073
130,384
21,516,464
6,069,049
29,792,970
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.
The non-current assets are not restated for AASB 16.
60
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Fixtures and fittings
Right of use assets
Total depreciation
Consolidated
2019
$
2018
$
90,626
233,720
19,503
607,370
71,221
221,821
16,106
-
-
-
951,219
309,148
Amortisation
Websites, domain names, trademarks and other intangibles
2,554,759
2,174,308
Total depreciation, amortisation and impairment
-
-
3,505,978
2,483,456
Finance costs
Interest - amortisation of options
Interest - commitment fee
Interest expense on lease liabilities
Total finance costs
Employment and related expenses
Salaries and wages
Super and pension related
Commissions
Other employment benefits
Share based payments - equity settled
Incentives/Bonus
217,600
61,667
161,704
-
17,500
-
440,971
17,500
7,593,905
909,246
567,030
756,067
1,225,911
139,939
7,131,687
820,967
1,286,179
675,326
1,276,005
493,989
Total employment and related expenses
-
- 11,192,098
11,684,153
There are currently 413 full-time equivalent employees (2018: 403).
61
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
7. Income tax expense
Income tax recognised in profit or loss
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
Consolidated
2019
$
2018
$
4,285,476
2,547,828
6,833,304
2,426,352
7,105,369
9,531,721
62
20192018$$ 145,794 83,640 58,013 (5,456) 203,807 78,184 - - 203,807 78,184 (10,582,750) (13,528,270) (3,174,825) (4,058,481) 539,473 654,299 (132,954) (195,673) 2,972,113 3,678,039 203,807 78,184 13,704,959 11,569,674 Deductible costs relating to share issue expensesLoss before tax from operationsIncome tax expense calculated at 30% (2018: 30%)Effect of different tax rates of subsidiaries operating in other jurisdictionsUnrecognised deferred tax assetEffect of unused tax losses and tax offsets not recognised as deferred tax assetsTotal income tax expense/(benefit) recognised in the current year The income tax expense for the year can be reconciled to the accounting loss as follows:Current taxCurrent tax expense in respect of the current yearUnder/(Over) provision of prior year taxDeferred tax expense recognised in the current yearDeferred taxConsolidated
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
9. Current assets - trade and other receivables and contract assets
Trade receivables
Contract assets
Accrued interest
Allowance for expected credit losses
Consolidated
2019
$
2018
$
1,069,878
197,808
992
1,268,678
(19,134)
1,063,499
363,694
16,556
1,443,750
(56,259)
1,249,544
1,387,490
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 2019, the Group has trade receivables of $1,069,878 (2018: $1,063,499) which is net of an
allowance for expected credit losses of $19,134 after writtng off bad debt amounting to $43,604 (2018: $56,259).
Set out below is the movement in the allowance for expected credit losses of trade receivables:
As at 1 January 2018
Provision for expected credit losses
Write-off
At 31 December 2018
Provision for expected credit losses-fx movement
Write-off
At 31 December 2019
$
56,259
-
-
56,259
6,479
(43,604)
19,134
As at 31 December, the ageing analysis of trade receivables is, as follows:
Trade Receivables
At 31 December 2019
At 31 December 2018
<30 days
613,593
720,660
30-60 days
250,133
164,337
61-90 days
62,085
50,638
> 91 cays
144,067
127,865
Total
1,069,878
1,063,499
Days past due
As at 31 December, the ageing analysis of contract assets is, as follows:
Days past due
Contract assets
At 31 December 2019
At 31 December 2018
Current
<30 days
136,277
17,936
250,518 24,325
30-60 days
4,403
-
61-90 days
1,288
4,974
> 91 days
37,904
83,878
Total
197,808
363,694
Credit risk management practice
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.
63
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
10. Current assets – other
Prepayments
Other deposits
Other receivables
Deferred Expense for Catcha Options
Consolidated
2019
$
2018
$
972,816
219,448
1,974,878
136,000
699,894
247,537
1,663,801
-
Other receivables relates to GST, VAT, deferred expense, withholding tax and other receivables.
-
-
3,303,142
2,611,232
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
2019
$
2018
$
816,315
(429,620)
386,695
585,529
(392,340)
193,189
2,378,657
(2,087,247)
291,410
2,158,952
(1,737,067)
421,885
166,766
(136,512)
30,254
141,084
(97,182)
43,902
708,359
658,976
-
-
-
64
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
11. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Consolidated
Balance at 1 January 2018
Leasehold
Plant and
improvements
$
equipment
$
Furniture
and
fittings
$
Total
$
238,905
396,822
40,259
675,986
Additions
4,049
242,099
16,823
262,971
Exchange differences
Depreciation expense
21,456
4,785
2,926
29,167
(71,221)
(221,821)
(16,106)
(309,148)
Balance at 31 December 2018
193,189
421,885
43,902
658,976
Additions
5,953
79,805
3,678
89,436
Acquired from PT Car Classifieds
Indonesia
Exchange differences
Depreciation expense
Depreciation expense- PT Car
Classifieds Indonesia
Balance at 31 December 2019
251,193
-
-
251,193
26,986
23,440
2,177
52,603
(74,832)
(230,562)
(17,577)
(322,971)
(15,794)
(3,158)
(1,926)
(20,878)
386,695
291,410
30,254
708,359
65
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
12. Leases
Amount recognised in the statement of financial position and statement of comprehensive income
Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movements
during the period:
Right of Use
As at 1 January 2019
Addition during the year
Addition due to acquisition
Depreciation expense
Foreign currency translation difference
As at 31 December 2019
Lease Liabilities
As at 1 January 2019
Addition due to acquisition
Interest expense on lease liabilities
Payments
Foreign currency translation difference
As at 31 December 2019
Current Liabilities
Non Current Liabilities
Total
$
1,436,167
65,385
149,758
(607,370)
4,602
1,048,542
Total
1,111,219
147,695
161,704
(653,530)
236,990
1,004,078
513,255
490,823
In addition to the depreciation expense and interest expense disclosed above, the Group recognised rent expense
from short-term leases of $24,308 and leases of low-value assets of $28,943 for the year ended 31 December 2019.
The total amount recognised in profit or loss is $822,325.
The Group had total cash outflows for leases of $706,681 in 2019.
The Group has several lease contracts that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the
Group’s business needs. Management exercises significant judgement in determining whether these extension
and termination options are reasonably certain to be exercised.
Set out below are the undiscounted potential future rental payments relating to periods following the exercise
date of extension and termination options that are not included in the lease term:
Extension options not reasonably certain to be
exercised
Within 3 years
Between 3 to 6
years
436,910
Total
436,910
There are no leases not yet commenced to which the Group is committed.
66
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
13. Non-current assets- Intangibles and Goodwill
Consolidated
2019
$
2018
$
Goodwill - at cost
25,493,500
19,656,770
Other intangible assets - at cost
Less: Accumulated amortisation
24,016,564
(14,475,610)
9,540,954
17,492,302
(8,042,568)
9,449,734
35,034,455
29,106,504
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Goodwill
Other
intangibles
acquired
$
$
Other
intangibles
Internally
generated
$
Total
$
17,675,289
3,399,254
5,060,668
-
-
2,165,661
1,981,481
359,105
639,354
26,135,211
2,165,661
2,979,940
-
(318,881)
(1,855,427)
(2,174,308)
19,656,770
3,439,478
6,010,256
29,106,504
-
2,255,428
4,268,834
2,255,428
4,268,834
1,567,897
226,851
163,700
1,958,448
-
(310,501)
(2,244,257)
(2,554,759)
25,493,501
3,355,828
6,185,127
35,034,455
Consolidated
Balance at 1
January 2018
Additions
Exchange
differences
Amortisation
expense
Balance at 31
December 2018
Additions
Additions from
business
combinations
Exchange
differences
Amortisation
expense
Balance at 31
December 2019
Goodwill of $19,291,063 (2018: $17,753,928) and intangible assets with indefinite useful lives of $2,781,556 (2018:
$2,559,918) are allocated to the Thailand cash generating unit ('CGU') after adjusting for foreign exchange rates at
the balance sheet date.
Goodwill of $1,933,604 (2018: $1,902,842) is allocated to the Malaysian CGU after adjusting for foreign exchange
rates at the balance sheet date.
Goodwill of $4,268,834 is allocated to the PT Car Classifieds Indonesia CGU after adjusting for foreign exchange
rates at the balance sheet date. The acquisition date fair value is provisional.
67
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
13. 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
2019
$
2018
$
289,244
2,781,556
285,028
2,090,658
3,998,412
96,056
9,540,954
354,929
2,559,918
524,632
2,478,679
3,437,191
94,385
9,449,734
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 2018.
Impairment testing of goodwill and indefinite life intangibles
The Group performed its annual impairment test at 31 December 2019. 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 2019, 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% -5%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
PT Car Classifieds Indonesia
WACC rate
14.2% (2018: 14.2%)
13.2% (2018: 13.2%)
16.8%
Long term growth rates
3% (2018: 3%)
3% (2018: 3%)
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. The PT Car Classifieds Indonesia CGU includes
Carmudi assets.
68
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
13. 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%
(2018: 14.2%) was applied. A long term growth rate of 3% (2018: 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 2019. 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.
No 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% (2018: 13.2%) was applied. A long term growth rate of 3% (2018: 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 2019 by
$32,669,000. 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 8% 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 2019. No other
reasonable possible changes in assumptions that would result in an impairment were identified by management.
PT CCI (Carmudi) 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 16.8% was applied. A long term growth rate of 5% 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 PTCCI CGU is greater than the carrying value as at 31 December 2019. 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.
No 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 Consolidated Financial Statements
For the year ended 31 December 2019
14. Current liabilities - trade and other payables
Consolidated
2019
$
2018
$
Trade payables and accruals
3,886,286
2,790,650
Refer to note 24 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.
15. Current liabilities – provisions
Employee benefits
Staff incentives and bonuses
Other
Consolidated
2019
$
2018
$
127,338
762,763
411,679
157,107
1,357,670
271,895
1,301,780
1,786,672
The employee benefits category is composed of the compensated annual leave provision for the year. The 2019
carried forward balance is expected to be utilised by March 2020 in line with company leave policies.
The staff incentives and bonuses provision is expected to be paid to employees by the end of March 2020.
The other provision category are provisions for 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 - 2019
Carrying amount at the start of the year
Additional provisions recognised / foreign exchange
differences
Amounts (used) / reversed
157,107
1,357,670
271,895
104,595
576,521
(134,364)
(1,171,428)
92,750
47,034
Carrying amount at the end of the year
127,338
762,763
411,679
70
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
16. Other Current liabilities
Indirect Taxes
Deferred Consideration PT Car Classifieds Indonesia
Consolidated
2019
$
832,401
1,564,588
2018
$
-
-
2,396,989
-
The deferred consideration relates to the acquisition of PT Car Classifieds Indonesia (Carmudi). The amount is due
within 12 months of balance sheet date.
17. 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 below provision includes PT Car Classifieds Indonesia. The
benefits are unfunded.
Net employee defined benefit liabilities
Indonesian pension plan- PT Mobil Satu Asia
Indonesian pension plan- PT Car Classifieds Indonesia
Consolidated
2019
$
511,488
231,661
2018
$
416,677
-
Net employee defined benefit liabilities
-
743,149
416,677
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
Consolidated
2019
$
2018
$
348,659
37,762
109,665
20,907
386,421
130,572
71
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
17. Non-current liabilities – Provisions (continued)
Changes in the present value of the defined benefit obligation
Defined benefit obligation at 1 January 2018
Interest cost
Current service cost
Benefits paid
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2018
Interest cost
Current service cost
Benefits paid
Remeasurement gains/(losses)*
Exchange differences
Defined benefit obligation at 31 December 2019
$
308,672
21,193
109,665
-
( 36,472 )
13,619
416,677
38,511
348,659
-
( 82,265 )
21,567
743,149
* Includes experience adjustments and actuarial changes arising from changes in financial assumptions.
Principal assumptions in determining pension obligations
The principal assumptions used in determining pension obligations for the Group’s plans are shown below:
Discount rate (%)
Future salary increase (%)
Pension age (years)
Mortality rate
Disability rate
2019
2018
8.19%
9.00- 9.25%
55 years
TMI (2011)
10% from
mortality
rate
8.77%
10.00%
55 ydars
TMI (2011)
10% from
mortality
rate
A quantitative sensitivity analysis for significant assumptions as at 31 December is, as shown below:
72
20192018$$Discount rate1% increase 641,064 363,206 1% decrease 877,685 492,136 Future salary cost increase1% increase 877,558 492,498 1% decrease 638,976 361,699 Impact on defined present value of benefit obligation
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
17. Non-current liabilities – Provisions (continued)
The sensitivity analysis has been determined based on a method that extrapolates the impact on the defined
benefit obligation as a relist of reasonable changes in key assumptions occurring at the end of the reporting period.
The sensitivity analysis are based on a change in significant assumptions, keeping all other assumptions constant.
The sensitivity analysis may not be a representation of an actual change in the defined benefit obligations as it is
unlikely that changes in assumptions would occur in isolation from one another. No payments are expected to be
made for the next annual reporting period.
The 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 $82,625.
18. Business combinations
Acquisition of Carmudi Indonesia
On 11 November 2019, the Group acquired 100% of the ordinary shares of Carmudi, a non-listed company based in
Indonesia and a well-established advertising and lead generation business servicing leading car manufacturers in
Indonesia. With this combined audience and iCar Asia’s existing New Car businesses, this is expected to create an
even more powerful advertising platform for the Indonesian Automotive Industry. The acquisition has been accounted
for using the acquisition method which is provisional.
The net identifiable assets acquired are still provisional in light of the timing of the transaction. The acquisition
accounting will be finalised within 12 months of the acquisition date, in line with accounting standards.
Assets
Property, plant and equipment
Rights of Use Assets
Cash and cash equivalents
Trade and other receivables and contract assets
Other assets
Liabilities
Trade and other payables
Contract liabilities
Other current liabilities
Non Current Liabilities
Non Current Lease Liabilities
Other Non Current Liabilities
Total identifiable net assets at fair value
Goodwill arising on acquisition
FX movement
Purchase consideration transferred
73
Fair value recognised
on acquisition
$
273,812
149,758
121,020
632,616
522,752
1,699,958
824,118
239,820
844,664
1,908,602
139,331
215,351
( 563,326 )
4,268,834
57,298
3,762,806
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
18. Business combinations (continued)
The fair value of the trade receivables amounts to $478,210. The gross amount of trade receivables is $478,210 and
it is expected that the full contractual amounts can be collected. The acquisition related costs amount to $87,693 and
are included in administration and related expenses in the Statement of Comprehensive Income.
The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the
date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities and adjusted
to reflect the favourable terms of the lease relative to market terms.
The goodwill acquired is attributable to Carmudi’s strong position in its market and the high growth potential of that
market. Goodwill is not deductible for tax purposes.
The goodwill of $4,268,834 arising from the acquisition consists largely of the synergies and economies of scale
expected from combining the business operations. None of the goodwill recognised is expected to be deductible for
income tax purpose.
From the date of acquisition, Carmudi contributed $217,966 of revenue and incurred $62,577 loss before tax from
continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from
continuing operations would have been $16,733,861 and loss before tax from continuing operations for the Group
would have been $13,092,386.
Purchase consideration
Cash paid
Deferred cash payment
Total purchase consideration
$
2,286,617
1,476,189
3,762,806
Analysis of cash flows on acquisitions:
Net cash acquired with the subsidiary (included in cash flows from investing activities)
Cash paid
Net cash outflow on acquisition
121,020
(2,286,617)
(2,165,597)
Reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period is presented below:
Gross carrying amount
At 1 January 2019
Acquisition of a PT Car Classifieds Indonesia
Foreign currency translation
At 31 December 2019
Goodwill
$
4,326,132
( 57,298 )
4,268,834
74
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
19. Equity - issued capital
Consolidated
Consolidated
2019
Shares
2018
Shares
2019
$
2018
$
Ordinary shares - fully paid
424,429,921
382,661,15
8
132,051,81
3
123,656,45
8
Movements in ordinary share capital
Details
Date
No of shares
$
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
2017 year
Issue of shares - Staff pool
Issue of shares - Share options
Issue of shares - Share options
Issue of shares - Share options
Share issue costs
Balance
Issue of shares - STI/LTI to employees
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 - 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
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
31 December 2018
26 February 2019
3 May 2019
7 May 2019
8 May 2019
9 May 2019
13 May 2019
14 May 2019
15 May 2019
16 May 2019
17 May 2019
20 May 2019
21 May 2019
22 May 2019
23 May 2019
24 May 2019
27 May 2019
28 May 2019
29 May 2019
75
377,776,239 122,493,348
39
3,448
345
2,945
28,621
244,620
1,172
190
1,724
538
603,740
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
295,000
6,900
10,345
276
838
(37,630)
382,661,158
1,714,938
1,206
2,518
2,068
25,090
14,500
39,064
87,437
222,138
126,821
118,778
853,071
34,626
43,899
781,825
160,203
160,279
421,593
123,656,458
394,589
241
504
414
5,018
2,900
7,813
17,487
44,428
25,364
23,756
170,614
6,925
8,780
156,365
32,041
32,056
84,319
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
19. Equity - issued capital (continued)
Details
Date
No of shares
$
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 - Directors remuneration 2018
year
Issue of shares - Staff pool
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
Share issue costs
Ordinary shares
30 May 2019
31 May 2019
3 June 2019
4 June 2019
5 June 2019
5 June 2019
5 June 2019
6 June 2019
7 June 2019
11 June 2019
12 June 2019
13 June 2019
58,216
366,380
104,311
153,791
32,288
1,654,510
27,000
4,482
14,260,301
8,901,722
10,195,191
1,200,517
-
11,643
73,276
20,862
30,758
6,458
360,000
6,014
896
2,852,060
1,780,344
2,039,038
240,103
(39,710)
31 December 2019
424,429,921
132,052,503
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 2018 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.
20. Equity – reserves
Foreign currency translation reserve
Share-based payments reserve
Equity reserves
Consolidated
2019
$
2018
$
3,689,302
2,907,110
(10,965,292)
2,324,146
1,848,782
(10,965,292)
-
(4,368,880)
(6,792,364)
76
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
20. Equity – reserves (continued)
Foreign currency
translation
reserve
$
Share-
based
payments
reserve1
$
Equity
reserves2
$
Total
$
(317,368)
2,641,514
-
1,478,417
-
(905,640)
-
-
275,000
1,001,005
(10,965,292)
-
-
-
(9,804,243)
2,641,514
(905,640)
275,000
1,001,005
2,324,146
1,365,156
-
1,848,782
-
(760,604)
(10,965,292)
-
-
(6,792,364)
1,365,156
(760,604)
-
275,000
-
275,000
-
1,543,932
-
1,543,932
Consolidated
Balance at 1 January 2018
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of
directors remuneration
Executive variable
remuneration
Balance at 31 December 2018
Foreign currency translation
Shares issued during the year
Shares to be issued in lieu of
directors remuneration
Executive variable
remuneration
Balance at 31 December 2019
3,689,302
2,907,110
(10,965,292)
(4,368,880)
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 34 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.
21. Equity - accumulated losses
Consolidated
2019
$
2018
$
Accumulated
Loss after income tax expense for the year
-
(79,806,118)
(10,786,557)
(66,236,138)
(13,606,453)
Accumulated losses at the end of the financial year
-
(90,592,676)
(79,842,591)
77
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
22. 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.
23. 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 Group in favour of Catcha Group Pte Ltd under
a General Security Agreement. Key terms of the Facility include:
• An interest rate of 12% per annum.
• A maturity date of 3 years.
• A commitment fee of 3% on the $5.0 million loan amount, payable upon commencement, and a commitment fee
of 2% per annum on the undrawn balance of the loan which starts accruing once the Company draws on the
loan.
• Draw down subject to shareholder approval (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 (at exercise price of $0.20 per option).
• Draw down subject to the Group meeting certain cash flow and EBITDA thresholds.
• 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.
Shareholder approval was granted at the Company’s 2018 Annual General Meeting on 25 May 2018. At 31 December
2019, the Facility remains undrawn.
During the current financial year, the Group has recognised interest charges of $61,666 for the commitment fee
related to the Finance facility and options amortisation of $217,600. The accrued commitment fee remains unpaid at
31 December 2019.
24. 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.
78
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
24. Financial instruments (continued)
2019
2018
Weighted
average
interest rate
Balance
Weighted
average
interest rate
%
$
1.16
6,833,304
6,833,304
%
1.81
Balance
$
9,531,721
9,531,721
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.
Consolidated - 2019
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
43,623
-
50
(43,623)
-
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)
-
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.
79
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
24. Financial instruments (continued)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above. Changes in liabilities arising from financing activities:
Current Lease Liabilities
Non Current Lease Liabilities
991,505 (650,350)
386,677 -
1,378,182 (650,350)
138,680 33,420
59,865 44,281
198,545 77,701
1-Jan-19
Cash Flow
$
$
Foreign
Exchange
Movement
$
New Lease 31-Dec-19
$
$
513,255
490,823
1,004,078
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.
25. 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
Executive Chairman
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
80
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
25. Key management personnel disclosures (continued)
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
Kjetil Hellebo Rohde Jakobsen
Pedro Sttau
Jonathan Adams
Chief Executive Officer
Chief Financial Officer
Chief Information Officer (Appointed 17 September 2019)
Chief Information Officer (Resigned 27 September 2019)
Chief Marketing Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below and are the amounts recognised as an expense in the reporting period.
Short-term employee benefits
Share-based payments
Consolidated
2019
$
2018
$
1,437,331
1,191,740
1,562,946
1,234,024
-
-
2,629,071
2,796,970
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.
26. 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:
Category 1
Fees to the group auditor for:
(i) auditing the statutory financial report of the parent covering the group;
(ii) auditing the statutory financial reports of any controlled entities;
Category 4
Fees for other services- tax compliance
Consolidated
2019
$
2018
$
174,700
90,500
162,100
80,500
4,517
49,980
269,717
292,580
27. 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 2019 cannot be ascertained and the Group believes that any resulting
liability would not materially affect the position of the group.
81
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
28. 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 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:
$38,953 of partnership advertising services with Rev Asia Berhad
$31,824 of partnership advertising services with iflix
During the year, the Group has recognised interest charges of $61,666 for the commitment fee related to the Finance
facility from Catcha Group Pte Ltd (a major shareholder in iCar Asia Limited) and options amortisation of $217,600
Refer to Note 23 Financing facility for further details. The accrued commitment fee remains unpaid at 31 December
2019.
Director and director-related entities hold directly, indirectly or beneficially interests of 119,943,310 (2018:
113,307,082) in the ordinary shares of the company as at the reporting date. They also held 3,777,777 options
(2018: 23,836,277).
Receivable from and payable to related parties
At 31 December 2019, 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.
Loans to/from related parties
The Group has entered into a $5,000,000 loan facility with Catch Group Pte Ltd. Refer to Note 23 Financing facility
for more information.
82
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2019
$
2018
$
Loss after income tax
(2,543,341)
(59,880,142)
Total comprehensive income
(2,542,341)
(59,880,142)
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note
2, except for the following:
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
Parent
2019
$
2018
$
Total current assets
2,738,207
7,529,124
Total assets
66,223,155
58,959,293
Total current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
1,955,889
1,955,889
822,687
822,687
64,267,266
58,136,606
132,462,357
1,761,276
(69,956,367)
124,066,313
1,483,320
(67,413,027)
Total equity
64,267,266
58,136,606
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.
83
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
30. 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
PT Car Classifieds Indonesia
Equity holding
Country of
incorporation
Singapore
Malaysia
Malaysia
Malaysia
Indonesia
Thailand
Thailand
British Virgin Islands
Thailand
Indonesia
2019
%
100
100
100
100
100
100
100
100
100
100
2018
%
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.
31. Events after the reporting period
No matter or circumstance has arisen since 31 December 2019 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.
32. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2019
$
2018
$
Loss after income tax expense for the year
(10,786,557)
(13,606,453)
Adjustments for:
Depreciation, amortisation and impairment
Equity settled employee benefit
Doubtful debts expense
Employment costs capitalised
Exchange differences on translation of FX
3,505,978
1,225,911
6,479
(1,263,545)
(65,597)
2,483,456
1,276,005
-
(1,172,875)
(559,515)
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
137,946
(691,909)
2,317,163
(944,908)
(351,900)
(1,180,029)
1,431,549
209,952
Net cash used in operating activities
(6,559,039)
(11,469,810)
84
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
33. Earnings per share
Consolidated
2019
$
2018
$
Loss after income tax attributable to the owners of iCar Asia Limited and
Controlled Entities
(10,786,557)
(13,606,453)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
406,827,498
380,921,356
Weighted average number of ordinary shares used in calculating diluted
earnings per share
406,827,498
380,921,356
Basic loss per share
Diluted loss per share
Cents
(2.65)
(2.65)
Cents
(3.57)
(3.57)
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 34 Share-based payments.
34. 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.
85
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
34. Share-based payments (continued)
Executive variable remuneration (continued)
Long Term Value Creation (LTVC)
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
Expected volatility (new entrants)
Risk-free interest rate
Model used
LTVC
$0.30
$0.18
0%
62%
66%
2.20%
Monte Carlo
86
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
34. Share-based payments (continued)
Executive variable remuneration (continued)
The table below discloses the accounting amortisation of LTVC Scheme in financial statements for the year ended
31 December 2019 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). For the December 2019
observation period, the volume weighted average price exceeded the specified share price hurdle. The number of
shares awarded under the LTVC scheme for 2019 was 3,415,865 of which 2,049,519 (representing 60%) vested on
31 January 2020. The remaining 40% are due to vest on 31 January 2021 provided the key management personnel
remains in service.
Key management personnel
Share of value
creation
Amortisation in 2019
$
Grant date fair value
$
H Stone
Chief Executive Officer
Yee Chin Beng
Chief Financial Officer
P Sttau1
Chief Information Officer
J Adams
Chief Marketing Officer
1 P Sttau resigned on 27 September 2019.
Performance targets
1.25%
313,265
934,926
0.30%
10,432
22,075
0.45%
336,573
0.25%
62,653
186,985
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.
87
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year ended 31 December 2019 are set out below:
Financial
Year
Category
Number of Shares
granted up to 31
December 2019
Number of
shares vested
during 2019
Fair Value
per share $
Fair value of
shares $
Grant date
Vesting date
Issue date
Executive Director:
G Chmiel
2018
Director Fees
583,637
583,637
0.2227
130,000
February 2019 February 2019
June 2019
Non-Executive Directors:
P Grove
L Elliott
S Khalil Ibrahim
P Everingham
R Kuo
J Olsen
Other Key Management
Personnel:
H Stone
2018
2018
2018
2018
2018
2018
2017
2017
2016
2019
Director Fees1
Director Fees1
Director Fees
Director Fees
Director Fees
Director Fees
LTI
LTI
LTI
Remuneration
134,685
134,685
134,685
134,685
157,133
375,000
459,247
459,247
128,667
456,621
134,685
134,685
134,685
134,685
157,133
375,000
0.2227
0.2227
0.2227
0.2227
0.2227
0.2000
30,000
30,000
30,000
30,000
35,000
75,000
February 2019 February 2019
February 2019 February 2019
June 2019
June 2019
February 2019 February 2019
June 2019
February 2019 February 2019
June 2019
February 2019 February 2019
February 2019 February 2019
June 2019
June 2019
459,247
-
128,667
456,621
0.2450
0.2450
0.2000
0.2190
112,516
112,516
February 2018 February 2019 February 2019
February 2018 February 2020 February 2020
25,733
February 2017 February 2019 February 2019
100,000
February 2019 February 2019 February 2019
88
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Financial
Year
Category
Number of Shares
granted up to 31
December 2019
Number of
shares vested
during 2019
Fair Value
per share $
Fair value of
shares $
Grant date
Vesting date
Issue date
Other Key Management
Personnel:
P Sttau
J Adams
2016
2017
2017
2017
LTI
LTI
LTI
LTI
116,120
252,434
87,280
87,280
1 Shares allocated to the Director were issued to Catcha Media Pte Ltd
116,120
252,434
0.2000
0.2450
23,224
61,846
February 2017 February 2019 February 2019
February 2018 February 2019 February 2019
87,280
-
0.2450
0.2450
21,384
21,384
February 2018 February 2019 February 2019
February 2018 February 2020 February 2020
Share based payments of $1,259,655 have been accrued in relation to 2019 in lieu of Directors Fees ($275,000) and executive variable remuneration ($950,932). The
number of shares to be granted will be agreed at the meeting of the Nomination & Remuneration Committee in February 2020.
89
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Options
In April 2017 and May 2017 3,750,000 share options were granted to certain senior executives. The senior executives must be employed by the company on the vesting date
or the options lapse. All options will be settled in shares.
During the year, options granted to key management personnel, with the exception of Executive Chairman, have been replaced by Long Term Value Creation scheme (LTVC).
The table below discloses the number of share options granted, vested or lapsed during the previous financial year that existed at 31 December 2019.
Key
management
personnel
Financial year
Options
awarded during
the year
No.
Award date
Fair value
per option
at award
date
($)
Vesting Date
Exercise
price
Expiry date
No.
vested
during
the year
No.
lapsed
during
the year
Value of
options
awarded
FY 2017
$
G Chmiel
(Executive
Chairman)
2017
1,000,000 26 May 2017
$0.129 31 December 2019
$0.40 31 December 2021
- - $129,000
90
iCar Asia Limited and Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
The table below discloses the number of share options outstanding at the end of the year.
Options holdings of KMP
KMP
G Chmiel (Exec. Chairman)
H Stone (CEO)
S Khalil Ibrahim (Director)
P Grove (Director)
L Elliott (Director)
Balance
1 January
2019
1,000,000
117,107
277,744
25,963,757
25,963,757
Granted as
remuneration
-
-
-
-
-
Options
exercised
-
117,107
277,744
10,000,000
10,000,000
Net change
other
Balance
31 December 2019
-
-
-
12,185,980
12,185,980
1,000,000
-
-
3,777,777
3,777,777
Exercisable
Not exercisable
1,000,000
-
-
3,777,777
3,777,777
-
-
-
-
-
There were no options related to remuneration exercised during the year.
91
iCar Asia Limited and Controlled Entities
Directors’ declaration
In the directors' opinion:
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial
position as at 31 December 2019 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
26 February 2020
92
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Auditor's Report to the Members of iCar Asia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of iCar Asia Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 31 December 2019,
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:
(a) giving a true and fair view of the consolidated financial position of the Group as at 31 December 2019
and of its consolidated financial performance for the year ended on that date; and
(b) 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 auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 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 each 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 report. The results of our audit procedures, including the procedures
performed to address the matters 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
The carrying value of goodwill of $25.5 million
and other intangible assets of $9.5 million as
disclosed in Note 13 represent 72% of the total
assets of the Group.
As required by Australian Accounting Standards,
the Group assesses at the end of each reporting
period whether there is any indication that non-
current assets may be impaired. In addition,
goodwill and indefinite life intangibles are tested
for impairment at least annually.
The impairment of non-current assets, including
goodwill and other intangibles was a key audit
matter due to the significance of these balances
and the complex judgements in the impairment
assessment process such as forecasting revenue
growth and operating costs that will be impacted
by future performance and market conditions.
The Group’s disclosures in relation to impairment
testing of goodwill and other intangibles are
included in Note 13 of the financial report.
Our audit procedures included assessing the
appropriateness of the cash generating units
(“CGUs”) where impairment testing was performed,
taking into consideration the levels at which
management monitors business performance and the
interdependency of cash flows.
In respect of the Group’s CGUs, where indicators of
impairment were present or in CGUs that contained
significant goodwill balances as at
31 December 2019, we performed the following
procedures:
► Assessed the appropriateness of the valuation
methodologies applied.
► Tested the mathematical accuracy of the
discounted cash flow model.
► Assessed key assumptions such as forecast
revenue growth and operating costs in
comparison to external independent data, where
relevant.
► Assessed the Group’s results in comparison to
historical forecasts to assess forecast accuracy.
► Compared future cash flows to board approved
budgets.
► Compared revenue multiples derived from the
Group’s value in use model to those observable
from external market data of comparable listed
entities, where available.
We performed sensitivity analysis in respect of the
assumptions noted above, which were considered to
have the most significant impact on carrying values,
to ascertain the extent of changes in those
assumptions which either individually or collectively
would be required for there to be an impairment. We
assessed the likelihood of these changes in
assumptions arising.
We also considered the adequacy of the financial
report disclosures regarding the impairment testing
approach, key assumptions and sensitivity analysis as
disclosed in Note 13 of the financial report.
Our valuation specialists were involved in the
performance of these procedures where appropriate.
94
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Revenue recognition
Why significant
How our audit addressed the key audit matter
As disclosed in Note 4 of the financial report, the
Group earns revenue from on-line classifieds
subscriptions, media advertising, on-line depth
products, commissions and exhibition fees.
We assessed the effectiveness of relevant controls
over the capture, recording and recognition of
revenue transactions for revenue from on-line
classifieds subscriptions and on-line depth products.
The recognition of revenue from on-line classifieds
subscriptions and on-line depth products in
accordance with AASB 15 Revenue from Contracts
with Customers (“AASB 15”) is complex given the
management judgement involved in determining
the timing of when the Group’s performance
obligations are satisfied for these revenue
streams.
The recognition of revenue was considered a key
audit matter due to the complexity of the
management judgements referred to above and
the significance of revenue to the financial report,
being a key metric upon which the Group’s
performance is measured.
We tested the Group’s controls over IT systems
relevant to revenue transaction processing and
revenue recognition for on-line classifieds
subscriptions and on-line depth products.
We examined a sample of customer contracts for
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 assessed the Group’s revenue accounting
policies, estimates and judgements made for
compliance with the revenue recognition
requirements of AASB 15.
We evaluated the adequacy of disclosures included in
Note 4 of the financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2019 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date
of this 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 and will 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.
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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 relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the 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 the 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 the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
·
·
·
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
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·
·
·
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group 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 financial report represents 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 Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 29 of the directors' report for the year
ended 31 December 2019.
In our opinion, the Remuneration Report of iCar Asia Limited for the year ended 31 December 2019,
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
26 February 2020
A member firm of Ernst & Young Global Limited
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98
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2019
The shareholder information set out below was applicable as at 31 December 2019.
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
395
912
512
1,287
310
3,416
Units
200,869
2,700,823
4,067,067
46,471,062
370,990,101
424,429,922
98
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2019
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities
are:
Ordinary shares
Number
held
% of total
shares
issued
ICQ HOLDINGS SDN BHD
CARSALES COM LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
CATCHA GROUP PTE LTD
J P MORGAN NOMINEES AUSTRALIA
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
DCM BLUELAKE PARTNERS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
RUBI HOLDINGS PTY LTD
CITICORP NOMINEES PTY LIMITED
MARENSA PTY LTD
TARGET RANGE PTY LTD
MR MICHAEL STEWART BUNKER
TIMSIM HOLDINGS PTY LTD
MRS MELANIE JANE STONE
ALCOCK SUPERANNUATION FUND PTY LTD
ABSOLUTE INVESTMENTS AUSTRALIA PTY LTD
MR JOHN DAVID WHEELER & MR GLEN ROBERT WHEELER
EMINENT HOLDINGS PTY LTD
52,500,000
50,373,365
46,980,310
46,319,392
30,131,581
11,867,031
7,887,000
6,000,000
5,888,314
5,000,000
4,105,607
4,000,000
3,694,739
3,000,000
2,372,413
2,062,821
2,028,131
1,889,888
1,750,000
1,481,034
12.37%
11.87%
11.07%
10.91%
7.10%
2.80%
1.86%
1.41%
1.39%
1.18%
0.97%
0.94%
0.87%
0.71%
0.56%
0.49%
0.48%
0.45%
0.41%
0.35%
289,331,626
68.17%
Unquoted equity securities
There are no shares held in escrow
99
iCar Asia Limited and Controlled Entities
Shareholder Information
31 December 2019
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
Voting rights
Ordinary shares
Number held
119,943,310
50,373,365
40,914,597
% of total
shares
issued
28.26
11.87
9.64
211,231,272
49.77
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.
100
iCar Asia Limited and Controlled Entities
Corporate Directory
31 December 2019
Directors
Georg Chmiel (Executive Chairman)
Hamish Stone (Managing Director and Group Chief Executive Officer)
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/
101