Rent.com.au Limited
ABN 25 062 063 692
Financial Report
For the year ended 30 June 2019
Rent.com.au Limited
Contents
30 June 2019
Contents
Corporate Information
Director’s Report
Auditor's Independence Declaration
Independent Auditor’s Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to The Financial Statements
Directors’ Declaration
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4
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18
22
23
24
25
26
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Rent.com.au Limited
Corporate Information
30 June 2019
Corporate Information
This financial report includes the financial statements and notes of Rent.com.au Limited (‘the
Company’) and its controlled entities (‘the Group’). The Group’s functional presentation currency
is AUD ($).
A description of the Group’s operations and of its principal activities is included in the Review of
Operations and Activities in the Directors’ Report on pages 4 to 16. The Directors’ Report is not
part of the financial report.
Directors
Auditors
Dr. Garry Garside
Mr. John Wood
Mr. Sam McDonagh
Mr. Philip Warren
(Non-Executive Chairman)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
Joint Company Secretaries
Bankers
Mr. Jan Ferreira
Mr. Steven Wood
Registered Office
945 Wellington Street
West Perth WA 6005
Commonwealth Bank of Australia
150 St Georges Terrace
Perth WA 6000
Solicitors
GTP Legal
68 Aberdeen Street
Northbridge WA 6003
Principal place of business
Stock Exchange
3 Craig Street
Burswood
WA 6100
Share Registry
Automic Registry Services
267 St Georges Terrace
Perth WA 6000
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX Code:
RNT
Website
http://investors.rent.com.au
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Rent.com.au Limited
Director’s Report
30 June 2019
Directors Report
The directors present their report, together with the financial statements, on the consolidated
entity (referred to hereafter as the 'the Group') consisting of Rent.com.au Limited (referred to
hereafter as the 'Company' or 'parent entity') and the entities it controlled for the year ended 30
June 2019.
Directors
The following persons were directors of Rent.com.au Limited during the whole of the financial year
and up to the date of this report, unless otherwise stated:
Dr. Garry Garside
Mr. John Wood
Mr. Sam McDonagh
Mr. Philip Warren
Principal Activities
(Non-Executive Chairman)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
The Group operates real estate websites focusing on the rental property market. The primary
website operated by the Group is www.rent.com.au.
Review of Operations
The Consolidated Statement of Profit or Loss and Other Comprehensive Income shows a net
operating loss after tax of $2,497,183 for the year ended 30 June 2019 (for year ended 30 June
2018: $2,822,540). The net operating loss for the year ended 30 June 2019 included a non-cash
share-based payments reversal of $107,676 (30 June 2018 share-based payment expense:
$191,759) associated with performance based convertible securities
issued to advisors,
shareholders and employees. Earnings Before Interest, Tax, Depreciation, and Amortisation (and
excluding non-cash share-based payments) (“EBITDA”) for the year ended 30 June 2019 was a loss
of $2,121,568 (30 June 2018: $2,322,710).
The Group’s core proposition of Renter Products recorded 10% revenue growth for the year ended
30 June 2019 compared with the previous year, however a difficult market generally for Advertising
Sales and property listings saw revenue from these lines of business decline, impacting overall
Group revenue which declined by 7% from $2,324,880 to $2,164,192. Following changes being
made, Advertising Sales started recovering in the final quarter of the year and remains a key future
source of revenue.
During the year the Group put in place several initiatives to deliver future growth. The Group
launched its first renter app on the Apple and Android platforms in August 2018 and adoption by
customers has been better than expected. The app features innovative new functionality such as
lifestyle-based search features alongside more traditional suburb-based search functionality and
is highly rated within the various app stores. This has been the key driver for 28% more new Renter
Resumes being created in the year ended 30 June 2019 compared with the previous year. The
Renter Resume is a key means by which the Group introduces its products to renters.
A new long-term agreement was entered into with a finance provider for the Group’s leading
RentBond finance solution, whereby renters can finance a wider range of moving costs and repay
this over a longer period, allowing them to match the repayments to their lease term. The Group
earns commissions from referring customer to the finance provider.
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Rent.com.au Limited
Director’s Report
30 June 2019
Review of Operations (continued)
The Group also continued to pursue development of products and services aimed at renters
during their tenancy rather than merely while searching for property, primarily by focussing on
integration of RentPay which had been acquired in the final quarter of the previous financial year.
This remains a key driver of future growth for the Group and ongoing development of tenancy
products and service will be a feature of future years effort.
RNT EBITDA
FY18
FY19
($2,323k)
($2,122k)
As always, the Group maintained vigilance over its cost base. Marketing efficiency has continued
to improve as awareness of the rent.com.au brand has grown amongst renters, allowing the
Group to reduce marketing costs by 24% while growing site visitor numbers by 8% and Renter
Resume creation by 28%. This helped the Group record a further 9% improvement in its EBITDA
despite a reduction in revenue.
Significant changes in the state of affairs
On 1 May 2019 the Group announced that it would be raising approximately $2 million (before
costs) via a placement (“Placement”) of 13,157,894 shares at $0.038 per share under its ASX Listing
Rule 7.1 capacity to raise $500,000 (before costs) and a fully underwritten non-renounceable pro-
rata rights issue on the basis of 1 new Share for every 6 Shares held at the record date of up to
41,582,878 shares at an issue price of $0.036 per Share (“Rights Issue”) to raise $1,496,984 before
costs.
The Placement shares settled on 7 May 2019 and the Rights Issue shares settled subsequent to
the end of the financial year.
Dividends
No dividend has been paid or recommended by the Directors since the commencement of the
financial period.
Matters Subsequent to the end of the Financial Year
Other than the completion of the Rights Issue noted above, no other matters or circumstances
have arisen since the end of the financial period which significantly affected or may significantly
affect the operations of the Group, the results of those operations or the state of affairs of the
Group in subsequent financial years.
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Rent.com.au Limited
Director’s Report
30 June 2019
Likely Developments and Expected Results
The Group remains focussed on its short-term goal of cashflow break even, however it is also
expanding its product and service offerings deeper into the tenancy period as well as across
adjacent websites.
The Group expects that these additional activities will see it achieve its cashflow break even goal
in the short term while also setting the Group on the course to greater profitability in the future.
Financial Position
The net assets of the Group have decreased from $3,619,688 at 30 June 2018 to $1,415,646 at 30
June 2019. Cash reserves decreased from $2,289,603 at 30 June 2018 to $151,534 at 30 June 2019,
however the Rights Issue settled subsequent to year end, providing the Group with an additional
$1,496,984 of cash (before costs).
Information on Directors
Dr. Garry Garside
– Chairman (Non-Executive), appointed 15 June 2015
Age
Qualifications
Experience
– 62
– MBA (UWA)
– Dr. Garside has extensive corporate experience,
successfully establishing and operated a variety of
significant businesses.
He currently manages an emerging property
development company and chairs a range of unlisted
investment syndicates and companies.
Special responsibilities
– Chairman
Member of the Audit & Risk Committee
Member of the Nomination & Remuneration Committee.
Interest in shares & options held in
Rent.com.au Limited
– 6,889,084 Ordinary shares (indirect)
111,413 Ordinary shares
290,691 Performance shares (indirect)
950,000 Employee options
111,413 Performance rights
Directorships held in other listed entities – None
Mr. Sam McDonagh
Age
Qualifications
Experience
– Director (Non-Executive), appointed 15 June 2015
– 48
– Chartered Accountant
– Mr. McDonagh has over 20 years’ experience in senior
management roles at companies including General
Manager of eBay in Southeast Asia, Chief Sales &
Marketing Officer for iiNet Limited and most recently
Country Manager of Airbnb Australia and New Zealand
Special responsibilities
– Member of the Audit & Risk Committee.
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Rent.com.au Limited
Director’s Report
30 June 2019
Information on Directors (continued)
Interest in shares & options held in
Rent.com.au Limited
– 818,238 Ordinary shares
18,803 Performance shares
1,600,000 Employee options
187,642 Performance rights
Directorships held in other listed entities – None
Mr. Philip Warren
Age
Qualifications
Experience
– Director (Non-Executive), appointed 18 September 2014
– 45
– B. Com, Chartered Accountant
– Mr. Warren is the Managing Director of Grange
Consulting Group Pty Ltd. He has over 20 years of
experience in finance and corporate roles in Australia
and Europe, establishing several ASX listed companies
during that time.
Special responsibilities
– Chair of the Audit & Risk Committee
Member of the Nomination & Remuneration Committee
Interest in shares & options held in
Rent.com.au Limited
– 479,539 Ordinary shares (indirect)
1,012,500 options (indirect)
Directorships held in other listed entities – Non-Executive Director of Cassini Resources Limited,
Jupiter Energy Limited and Family Zone Cyber Safety
Limited
Mr. John Wood
Age
Qualifications
Experience
– Director (Non-Executive) appointed 15 June 2015
– 53
– N/A
– Mr. Wood was most recently the Managing Director of
National Lifestyle Villages (NLV) a company he founded in
1999. He was awarded the prestigious Telstra WA
Business of the Year award in 2007 and the Rothwell’s
Young Entrepreneur Award and the West Australian
Young Achievers Award.
Special responsibilities
– Chair of the Nomination & Remuneration Committee.
Interest in shares & options held in
Rent.com.au Limited
– 1,089,391 Ordinary shares
13,230,305 Ordinary shares (indirect)
3,953,608 Performance shares (indirect)
500,000 Employee options
58,638 Performance rights
Directorships held in other listed entities
– None
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Rent.com.au Limited
Director’s Report
30 June 2019
Directors’ Meetings
The number of directors’ meetings held, and the number of meetings attended by each of the
directors of the Group for the time the director held office for the period ended 30 June 2019:
Board Meetings
Audit & Risk
Management
Committee Meetings
Nomination &
Remuneration
Committee Meetings
Garry Garside
Sam McDonagh
Philip Warren
John Wood
A
13
13
13
13
B
13
11
13
13
A
2
2
2
B
2
1
2
n/a
n/a
A
0
B
0
n/a
n/a
0
0
0
0
A – meetings eligible to attend
B – meetings attended
Company Secretaries
Jan Ferreira was appointed as company secretary from 15 June 2015. Jan is a CPA (Australia) and
has a Certificate in Governance Practice from the Governance Institute of Australia. He has more
than 13 years’ experience within ASX listed businesses, having previously been Chief Financial
Officer and Company Secretary at ThinkSmart Limited and a Financial Controller at Alinta Limited.
Steven Wood was appointed as a company secretary effective 18 September 2014. Steven
specialises in corporate advisory, company secretarial and financial management services. Steven
is a Chartered Accountant and has previously been involved in various private and seed capital
raisings as well as successful ASX listings, whilst also providing company secretarial and financial
management services to both ASX and unlisted public and private companies.
Performance Shares
The terms and conditions of the Performance shares have been previously outlined in the
Company’s prospectus dated 7 April 2015. Please refer to section 6.9 Capital Structure of the
Prospectus dated 7 April 2015 for any additional information that is not outlined in this report.
Upon the achievement of the applicable performance milestone, the Performance Shares convert
into Ordinary Shares at a ratio of 1 Ordinary Share for every 1 Performance Share held. No
payment is necessary to exercise a Performance Share. As at the date of this report, Performance
Shares on issue are as follows:
Class
Date Granted
Expiry Date
C
17 June 2015
14 days after the release of the audited financial reports for
period ended 31 December 2019
Number
8,160,771
The vesting conditions of the two classes of performance shares on issue are outlined below:
•
Class C – will convert on achievement of greater than $3,000,000 EBITDA by the Group in any 12 month period on or
before 31 December 2019.
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Director’s Report
30 June 2019
Performance Rights
Upon the achievement of the applicable performance milestone, the Performance Rights convert
into Ordinary Shares at a ratio of 1 Ordinary Share for every 1 Performance Right held. No
payment is necessary to exercise a Performance Right. As at the date of this report, Performance
Rights on issue are as follows:
Tranche Date Granted
Expiry Date
Number
117,277
584,622
46,666
80,000
17 June 2015
17 June 2015
14 days after the release of the audited financial reports for
the period ended 31 December 2019.
14 days after the release of the audited financial reports for
the period ended 31 December 2019.
13 August 2015
14 days after the release of the audited financial reports for
the period ended 31 December 2019.
22 February 2016
14 days after the release of the audited financial reports for
the period ended 31 December 2019.
3
6
6
6
6
9 September 2016
14 days after the release of the audited financial reports for
the period ended 31 December 2019.
3,283,741
The vesting conditions of the various tranches of performance shares on issue are outlined below:
•
Tranche 3 – will vest upon achievement of greater than $3,000,000 EBITDA by the Group in any 12 month period on
or before 31 December 2019.
Tranche 6 – will vest upon achievement of greater than $3,000,000 EBITDA by the Group in any 12 month period on
or before 31 December 2019.
•
Shares under Option
Unissued ordinary shares of Rent.com.au Limited under option as at 30 June 2019 are as follows:
Date Options Granted
Expiry Date
Tranche
Issue Price of Share Number Under Option
17 June 2015
17 June 2020
Advisor
17 June 2015
17 June 2020
1,2
17 June 2015
17 June 2020
17 June 2015
17 June 2020
17 June 2015
17 June 2020
17 June 2015
17 June 2020
13 August 2015
13 August 2020
13 August 2015
13 August 2020
13 August 2015
13 August 2020
22 February 2016
22 February 2021
22 February 2016
22 February 2021
22 February 2016
22 February 2021
9 September 2016
9 September 2021
9 September 2016
9 September 2021
9 September 2016
9 September 2021
Total
3
4
5
6
4
5
6
4
5
6
7
8
9
$0.30
$0.25
$0.25
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.25
$0.35
$0.50
7,000,0001
14,500,0002
4,500,0003
4,461,6672
4,461,6672
4,461,6663
133,3332
133,3332
133,3343
580,0004
580,0004
580,0004
1,250,0002
1,250,0002
1,250,0002
45,275,000
1. Advisor options have vested and are exercisable.
2. Employee options have vested and are exercisable.
3. Employee options vest upon the VWAP of shares trading at greater than $0.60 over 20 consecutive trading days.
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Rent.com.au Limited
Director’s Report
30 June 2019
Shares under Option (continued)
4. Employee options vest upon:
•
•
•
Tranche 4 – vest upon the VWAP of shares trading at greater than $0.30 over 20 consecutive trading days.
Tranche 5 – vest upon the VWAP of shares trading at greater than $0.40 over 20 consecutive trading days.
Tranche 6 – vest upon the VWAP of shares trading at greater than $0.60 over 20 consecutive trading days.
Shares issued on the exercise of options
There were no ordinary shares of Rent.com.au Limited issued during the year ended 30 June 2019,
and up to the date of this report, on the exercise of options.
Indemnification of officers
During the financial period, the Group entered into a policy to indemnify directors and officers
against certain liabilities incurred as a director or officer, including costs and expenses associated
in successfully defending legal proceedings. The contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium. The Group has not otherwise, during or
since the financial year, indemnified or agreed to indemnify an officer or an auditor of the Group
or of any related body corporate against a liability incurred as such an officer or auditor.
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Group, or to intervene in any proceedings to which the Group
is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those
proceedings.
Officers of the Group who are former partners of RSM Australia Partners
There are no officers of the Group who are former partners of RSM Australia Partners.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act
2001.
Non-Audit Services
Details of the amounts paid or payable to the auditor for non-audit services provided by the
auditor are outlined in Note 17 to the financial statements.
The Board is satisfied that the provision of non-audit services during the financial year, by the
auditor (or by another person or firm on the auditor’s behalf), is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
The Board is of the opinion that the services as disclosed in Note 17 to the financial statements do
not compromise the external auditor’s independence requirements of the Corporations Act 2001
for the following reasons:
●
●
all non-audit services have been reviewed and approved to ensure that they do not impact
the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor's own
work, acting in a management or decision-making capacity for the company, acting as
advocate for the Group or jointly sharing economic risks and rewards.
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Director’s Report
30 June 2019
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 immediately after this directors' report.
Audited Remuneration Report
The remuneration report details the key management personnel remuneration arrangements for
the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including all directors.
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. Share-based compensation
D. Additional information
A. Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The Board has elected to establish a
Nomination and Remuneration Committee in accordance with its Corporate Governance Policy.
The Nomination and Remuneration Committee is responsible for determining and reviewing
remuneration arrangements for its directors and executives and for developing and facilitating a
process for Board and Director evaluation.
The key management personnel of the Group consisted of the following directors:
• Dr. Garry Garside (Non-Executive Chairman)
• Mr. John Wood (Non-Executive Director)
• Mr. Sam McDonagh (Non-Executive Director)
• Mr. Philip Warren (Non-Executive Director)
And the following executives:
• Mr Greg Bader (Chief Executive Officer)
• Mr. Jan Ferreira (Chief Financial Officer and Company Secretary)
In accordance with best practice corporate governance, the structure of non-executive director
and executive remuneration is separate.
Non-Executive Director Remuneration
Fees and payments to non-executive directors reflect the demands which are made on, and the
responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed
annually by the Nomination and Remuneration Committee.
Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which
is periodically recommended for approval by shareholders. The maximum currently stands at
$350,000 per annum and was approved at a previous annual general meeting.
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Director’s Report
30 June 2019
Executive Remuneration
The executive remuneration framework has the following components:
▪
▪
▪
base pay and benefits, including superannuation;
short-term performance incentives; and
long-term incentives provided as share-based payments.
The combination of these comprises the executive’s total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are
reviewed annually by the Nomination and Remuneration Committee based on individual and
business unit performance, the overall performance of the Group and comparable market
remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for
example motor vehicle benefits) where it does not create any additional costs to the Group and
provides additional value to the executive.
The short-term incentives ('STI') program is designed to align the targets of the Group with the
performance hurdles of executives. STI payments are granted to executives based on specific
annual targets and key performance indicators ('KPI's') being achieved.
Long term incentives have been provided to directors and employees through the issue of
performance shares, employee options and performance rights pursuant to the Long-Term
Incentive Plan (‘LTIP’) approved by shareholders at the May 2015 Annual General Meeting.
Voting and comments made at the Group's 2018 Annual General Meeting ('AGM')
At the 2018 AGM, 96.1% of the eligible votes received supported the adoption of the remuneration
report for the year ended 30 June 2018. The Group did not receive any specific feedback at the
AGM regarding its remuneration practices.
B. Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the
following tables.
Details of remuneration for the year ended 30 June 2019
KMP
Garry Garside
Sam McDonagh
Phillip Warren
John Wood
Greg Bader
Jan Ferreira
Total
Base Fee
$
STI Payment
$
Super-
annuation
$
Performance
Rights
$
Options1
$
Total
$
27,500
20,000
20,000
20,000
220,000
215,000
522,500
-
-
-
-
1,250
1,250
2,500
-
-
-
-
21,019
20,544
41,563
72
121
-
38
1,463
68
1,762
-
-
-
-
-
-
-
27,572
20,121
20,000
20,038
243,732
236,862
568,325
1. Options include both share based payments and advisor options.
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Director’s Report
30 June 2019
Details of remuneration for the year ended 30 June 2018
KMP
Garry Garside
Sam McDonagh
Phillip Warren
John Wood
Greg Bader
Jan Ferreira
Total
Base Fee
$
STI Payment
$
Super-
annuation
$
Performance
Rights
$
Options1
$
Total
$
29,792
21,667
21,667
21,667
222,308
215,769
532,870
-
-
-
-
-
-
-
-
-
-
-
21,119
20,498
41,617
126
211
-
66
2,901
119
3,423
1,835
6,523
-
-
31,753
28,401
21,667
21,733
103,029
349,357
3,669
240,055
115,056
692,966
1. Options include both share based payments and advisor options.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
2019
2018
2019
2018
2019
2018
Fixed remuneration
At risk - STI
At risk - LTI
Non-Executive Directors:
Garry Garside
Sam McDonagh
Phillip Warren
John Wood
99.7%
99.4%
100.0%
99.8%
94.0%
76.0%
100.0%
100.0%
-
-
-
-
Other Key Management Personnel:
Greg Bader
Jan Ferreira
98.9%
99.4%
70.0%
98.0%
0.5%
0.5%
-
-
-
-
-
-
0.3%
0.6%
0.0%
0.2%
6.0%
24.0%
0.0%
0.0%
0.6%
0.0%
30.0%
2.0%
Service Agreements
Remuneration and other terms of employment for the Chief Executive Officer and other Key
Management Personnel are formalised in employment contracts. The major provisions of the
agreements relating to remuneration are set out below:
Greg Bader, Chief Executive Officer (commenced 23 August 2016)
• Mr. Bader’s Executive Services Agreement for the position of Chief Executive Officer has no
fixed period and may be terminated by provision of six months’ prior written notice by either
party.
• Mr. Bader receives a base salary of $220,000 per annum, plus statutory superannuation
entitlements.
• Mr. Bader is eligible to participate in the Long-Term Incentive Plan and has been issued
3,750,000 Employee Options and 3,283,741 unexpired Performance Rights.
• Mr. Bader is also eligible to participate in a Short-Term Incentive (“STI”) scheme which the
Group has implemented. The Board determines a percentage of base salary that may be
payable to Mr. Bader on the achievement of key performance indicators to be set having
regard to the financial position and performance of the Group.
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Director’s Report
30 June 2019
Jan Ferreira, Chief Financial Officer and Company Secretary (commenced 28 April 2014)
• Mr. Ferreira’s Executive Services Agreement for the position of Chief Financial Officer and
Company Secretary has no fixed period and may be terminated by provision of six months’
prior written notice by either party.
• Mr. Ferreira receives a base salary of $215,000 per annum, plus statutory superannuation
entitlements.
• Mr. Ferreira is eligible to participate in the Long-Term Incentive Plan and has been issued
900,000 Employee Options and 105,549 unexpired Performance Rights
• Mr. Ferreira is also eligible to participate in a Short-Term Incentive scheme which the Group
has implemented. The Board determines a percentage of base salary that may be payable to
Mr. Ferreira on the achievement of key performance indicators to be set having regard to the
financial position and performance of the Group.
The non-executive directors are subject to service agreements which cover relevant provisions
including term, fees, independence, re-election and the role requirements.
C. Share based compensation
Other than outlined above, Rent.com.au Limited paid no share-based compensation to KMP
during the year and there were no new performance rights or options granted to KMP for the year
ended 30 June 2019.
D. Additional Information
Financial Performance Information
The earnings of the Group for the five years to 30 June 2019 are summarised below:
2019
$
2018
$
2017
$
2016
$
2015**
$
Sales revenue
2,164,192
2,324,880
1,654,395
748,495
171,197
EBITDA*
(2,121,568)
(2,322,710)
(5,822,425)
(7,216,670)
(927,249)
Loss after income tax
(2,497,183)
(2,822,539)
(8,513,631)
(12,820,585)
(3,655,771)
* excluding non-cash share-based payments, R&D income and loss on disposal of asset.
** The 2015 financial year was an abridged, 6-month financial year.
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends declared (cents per share)
2019
0.035
-
2018
0.086
-
2017
0.065
-
2016
0.160
-
2015**
0.180
-
Basic earnings per share (cents per share)
(1.05)
(1.38)
(4.72)
(12.42)
(6.62)
** The 2015 financial year was an abridged, 6-month financial year.
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Director’s Report
30 June 2019
Equity instruments held by Key Management Personnel
1. Ordinary Shares
The number of ordinary shares in Rent.com.au Limited held by each KMP of the Group during the
year ended 30 June 2019 is as follows:
30 June 2019
Garry Garside
Sam McDonagh
Philip Warren
John Wood
Greg Bader
Jan Ferreira
Total
Balance at
beginning of the
year
Granted as
remuneration
during the year
Issued on
exercise of
options during
the year
Other changes
during the year
Balance at
30 June 2019
5,694,408
818,237
222,321
12,743,085
10,168,561
734,527
30,381,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,002
5,714,410
1
-
2
818,238
222,321
12,743,0871
4,701,995
14,870,556
1
734,528
4,722,001
35,103,140
1. On 28 June 2019, Mr Wood acquired 271,887 shares via on-market purchase. These shares settled through the share
registry on 9 July 2019.
2. Options
The number of options over ordinary shares in Rent.com.au Limited held by each KMP of the
Group during the year ended 30 June 2019 is as follows:
30 June 2019
Garry Garside
Sam McDonagh
Philip Warren
John Wood
Greg Bader
Jan Ferreira
Total
Balance at start
of the year
Granted as
remuneration
during the year
Exercised
during the year
Other changes
during the year
Balance at 30
June 2019
950,000
1,600,000
1,012,500
500,000
3,750,000
900,000
8,712,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
950,000
1,600,000
1,012,500
500,000
3,750,000
900,000
8,712,500
3. Performance Rights
The number of performance rights in Rent.com.au Limited held by each KMP of the Group during
the year ended 30 June 2019 is as follows:
30 June 2019
Balance at
start of the
year
Received as
Remuneration
Performance
Rights
Converted
Other
Movements
Balance at
30 June
2019
Vested and
Exercisable
at 30 June
2019
Unvested
at 30 June
2019
Garry Garside
222,826
Sam McDonagh
375,284
John Wood
117,276
Greg Bader
6,567,482
Jan Ferreira
211,098
Total
7,493,966
-
-
-
-
-
-
-
-
-
-
-
-
(111,413)
111,413
(187,642)
187,642
(58,638)
58,638
(3,283,741)
3,283,741
(105,549)
105,549
(3,746,983)
3,746,983
-
-
-
-
-
-
111,413
187,642
58,638
3,283,741
105,549
3,746,983
15
Rent.com.au Limited
Director’s Report
30 June 2019
4. Performance Shares
issued as consideration to the shareholders of Rent.com.au
Performance shares were
(Operations) Pty Ltd who were shareholders prior to the acquisition by Select Exploration Limited
(renamed Rent.com.au Limited). The number of performance shares in Rent.com.au Limited held
by each KMP of the Group during the year ended 30 June 2019 is as follows:
30 June 2019
Balance at
start of
the year
Received as
Remuneration
Performance
Shares
Converted
Other
Movements
Balance at
30 June
2019
Vested and
Exercisable
at 30 June
2019
Unvested at
30 June 2019
Garry Garside
581,382
Sam McDonagh
37,606
John Wood
6,068,082
Jan Ferreira
9,077
Total
6,696,147
Other KMP Transactions
-
-
-
-
-
-
-
-
-
-
(290,691)
290,691
(18,803)
18,803
(2,114,474)
3,953,608
(4,539)
4,538
(2,428,507)
4,267,640
-
-
-
-
-
290,691
18,803
3,953,608
4,538
4,267,640
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated. The following
transactions occurred with related parties:
Transactions:
Office rent and outgoings – Watersun Property Pty Ltd[1]
Cleaning expenses – Servco Pty Ltd[1]
Advisory and capital issue costs – Grange Consulting Group(2)
[1] Garry Garside is a director and shareholder of both Watersun Property Pty Ltd & Servco Pty Ltd
(2) Philip Warren is a director of Grange Consulting Group
2019
$
115,562
7,200
15,000
As at 30 June 2019, there was an outstanding balance of $86,101 owing to Watersun Property Pty
Ltd and $600 to Servco Pty Ltd. All transactions were made on normal commercial terms and
conditions and at market rates.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of
the Corporations Act 2001.
On behalf of the directors
_________________________
Dr. Garry Garside
Non-executive Chairman
Perth, 28 August 2019
16
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Rent.com.au Limited for the year ended 30 June 2019, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2019
TUTU PHONG
Partner
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
RENT.COM.AU LIMITED
Opinion
We have audited the financial report of Rent.com.au Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Revenue Recognition
Refer to Note 1 and 3 in the financial statements
The Group earns revenue through its role as an
operator of a real estate website focusing on the rental
property market. The major revenue streams are:
• Fees from agents and landlords;
• Rental products revenue; and
• Advertising sales.
Revenue was considered a key audit matter because
it is the most significant account balance in the
consolidated statement of profit or loss and other
comprehensive income and the process of revenue
recognition is complex due to multiple revenue
streams
rendered.
for services or products
transactions are high
Furthermore,
volume and of low value. The revenue recognition of
each revenue stream is subject to management
judgements. These include:
the revenue
• Determination of the accounting policy in relation
to each revenue stream; and
• Determining the revenue recognised is for an
amount that reflects the consideration to which
the Group is expected to be entitled in exchange
for transferring goods or services to a customer.
Our audit procedures included:
•
•
•
•
•
•
Obtained a detailed understanding of each of the
revenue streams and the process for calculating
and recording revenue;
the revenue recognition
Assessing whether
policies comply with Australian Accounting
Standards;
Performing substantive testing on each revenue
stream on a sample basis;
Reviewing the deferred revenue calculation for
revenue received in advance;
Reviewing revenue transactions before and after
year-end to ensure that revenue is recognised in
the correct financial period; and
Reviewing the appropriateness of disclosure in
the financial statements.
Impact on adoption of AASB 15 - Revenue from Contracts with Customers
Refer to Note 1 in the financial statements
The Group has adopted AASB 15 that is mandatory
for the current reporting period.
Our audit procedures included:
The impact on adoption of AASB 15 was considered a
key audit matter because the process of revenue
recognition is complex due to multiple revenue
streams for services or products rendered. The
revenue recognition of each revenue stream is also
subject to management judgements.
• Assessing the appropriateness of the new
recognition policy developed by
revenue
management upon adoption of AASB 15;
• Reviewing the impact on adoption of AASB 15
prepared by management on 1 July 2018;
• Discussing with management on their rational
and basis on the revenue recognition criteria
adopted for each of the revenue streams; and
• Reviewing
the disclosure
financial
statements in relation to the adoption of AASB
15.
the
in
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2019, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, 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 ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2019.
In our opinion, the Remuneration Report of Rent.com.au Limited, for the year ended 30 June 2019, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2019
TUTU PHONG
Partner
Rent.com.au Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2019
Note
Consolidated
Revenue
Other income
Total Income
3
4
Administration charges
Consulting & business development costs
Depreciation and amortisation expense
8,9
2019
$
2,164,192
81,520
2,245,712
(526,949)
(81,775)
(566,750)
2018
$
2,324,880
146,936
2,471,816
(450,899)
(17,355)
(441,818)
Employee benefit expenses
Finance costs
Information technology costs
Share based payment expenses
Sales and marketing expenses
Others
(1,955,014)
(2,303,135)
(455)
(416,953)
107,676
(887,044)
(415,631)
(3,288)
(345,920)
(191,760)
(1,165,984)
(374,197)
15
Loss before income tax expense
(2,497,183)
(2,822,540)
Income tax expense
5
-
-
Loss after income tax expense for the year
(2,497,183)
(2,822,540)
Other comprehensive income
-
-
Total comprehensive loss for the year attributable
to the owners of Rent.com.au Limited
(2,497,183)
(2,822,540)
Earnings Per Share
Cents
Cents
Basic and diluted (loss) per share
18
(1.05)
(1.38)
The above consolidated statement of profit or loss and other comprehensive income should be
read in conjunction with the accompanying notes.
22
Rent.com.au Limited
Consolidated Statement of Financial Position
As at 30 June 2019
Note
Consolidated
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Employee benefits
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
2019
$
151,534
313,905
465,439
36,254
1,707,567
1,743,821
2018
$
2,289,603
434,935
2,724,538
22,149
1,656,648
1,678,797
2,209,260
4,403,335
593,177
8,602
177,503
779,282
14,335
14,335
517,845
21,606
244,196
783,647
-
-
793,617
783,647
1,415,643
3,619,688
35,313,752
6,319,226
34,912,935
6,426,905
(40,217,335)
(37,720,152)
1,415,643
3,619,688
6
7
8
9
10
11
12
11
13
14
16
The above consolidated statement of financial position should be read in conjunction with the
accompanying notes.
23
Rent.com.au Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2019
Consolidated
Issued
capital
$
Share based
payment
reserves
$
Accumulated
loss
Total
equity
$
$
Balance at 1 July 2018
34,912,935
6,426,905
(37,720,152)
3,619,688
Loss after income tax expense for
the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Shares issued
Share issue costs
Share based payments
-
-
-
-
(2,497,183)
(2,497,183)
(2,497,183)
(2,497,183)
500,003
(99,186)
-
-
-
(107,679)
-
-
-
500,003
(99,186)
(107,679)
Balance at 30 June 2019
35,313,752
6,319,226
(40,217,335)
1,415,643
Consolidated
Issued
capital
$
Share based
payment
reserves
$
Accumulated
loss
Total
Equity
$
$
Balance at 1 July 2017
32,239,412
6,250,779
(34,897,613)
3,592,578
Loss after income tax expense for
the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Share issues
Share issue costs
Share based payments
-
-
-
-
(2,822,539)
(2,822,539)
(2,822,539)
(2,822,539)
2,808,130
(150,240)
15,633
-
-
176,126
-
-
-
2,808,130
(150,240)
191,759
Balance at 30 June 2018
34,912,935
6,426,905
(37,720,152)
3,619,688
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
24
Rent.com.au Limited
Consolidated Statement of Cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Note
Consolidated
2019
$
2018
$
Receipts from customers (inclusive of GST)
2,436,335
2,389,851
Payments to suppliers and employees (inclusive of GST)
(4,428,233)
(5,042,640)
Other income
Interest received
Interest and other finance costs paid
(1,991,898)
(2,652,789)
71,283
10,237
(455)
124,361
12,575
(3,288)
Net cash used in operating activities
24
(1,910,833)
(2,519,141)
Cash flows from investing activities
Payments for plant and equipment
Payments for intangible assets (net)
Proceeds from disposal of plant and equipment
Proceeds from disposal of investment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Share issue costs
Repayment of borrowings
Net cash provided by financing activities
(13,724)
(12,169)
(594,639)
(1,043,231)
4,785
-
-
100
(603,578)
(1,055,300)
500,000
(99,186)
(24,472)
376,342
2,808,130
(150,240)
(48,226)
2,609,664
Net decrease in cash and cash equivalents
(2,138,069)
(964,777)
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial
year
2,289,603
3,254,380
151,534
2,289,603
The above consolidated statement of cash flows should be read in conjunction with the
accompanying notes.
25
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
This financial report of Rent.com.au Limited (‘the Company’) and its controlled entities (‘the Group’)
for the year ended 30 June 2019 was authorised for issue in accordance with a resolution of the
Directors on 28 August 2019.
Rent.com.au Limited is a company limited by shares incorporated in Australia whose shares are
publicly traded on the Australian Securities Exchange.
Note 1. Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial statements are set
out below. These policies have been consistently applied to all the years presented, unless
otherwise stated.
Going concern
These financial statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and discharge of liabilities in
the normal course of business.
As disclosed in the financial statements, the Group incurred a loss of $2,497,183 and had net cash
outflows from operating activities of $1,910,833 for the year ended 30 June 2019. As at that date
the Group had net current liabilities of $313,843.
The Directors believe that it is reasonably foreseeable that the Group will continue as a going
concern and that it is appropriate to adopt the going concern basis in the preparation of the
financial report after consideration of the following factors:
• The ability to issue additional shares under the Corporations Act 2001 to raise further working
capital;
• As disclosed at Note 22, the Group issued 41,582,864 shares to raise approximately $1.5
million (before costs); and
• The Group has the ability to scale down its operations in order to curtail expenditure, in the
event insufficient cash is available to meet projected expenditure.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory
for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 9 Financial Instruments
The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and
measurement models for financial assets. A financial asset shall be measured at amortised cost if
it is held within a business model whose objective is to hold assets in order to collect contractual
cash flows which arise on specified dates and that are solely principal and interest. A debt
investment shall be measured at fair value through other comprehensive income if it is held within
a business model whose objective is to both hold assets in order to collect contractual cash flows
which arise on specified dates that are solely principal and interest as well as selling the asset on
26
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
New or amended Accounting Standards and Interpretations adopted (continued)
the basis of its fair value. All other financial assets are classified and measured at fair value through
profit or loss unless the entity makes an irrevocable election on initial recognition to present gains
and losses on equity instruments (that are not held-for-trading or contingent consideration
recognised in a business combination) in other comprehensive income ('OCI'). Despite these
requirements, a financial asset may be irrevocably designated as measured at fair value through
profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities
designated at fair value through profit or loss, the standard requires the portion of the change in
fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create
an accounting mismatch). New simpler hedge accounting requirements are intended to more
closely align the accounting treatment with the risk management activities of the entity. New
impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment is measured using a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime ECL
method is adopted. For receivables, a simplified approach to measuring expected credit losses
using a lifetime expected loss allowance is available.
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive
model for revenue recognition. The core principle of the standard is that an entity shall recognise
revenue to depict the transfer of promised goods or services to customers at an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services. The standard introduced a new contract-based revenue recognition model with a
measurement approach that is based on an allocation of the transaction price. This is described
further in the accounting policies below. Credit risk is presented separately as an expense rather
than adjusted against revenue. Contracts with customers are presented in an entity's statement
of financial position as a contract liability, a contract asset, or a receivable, depending on the
relationship between the entity's performance and the customer's payment. Customer acquisition
costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and
amortised over the contract period.
Impact of adoption
There was no impact on adoption of AASB 9 and 15 on opening retained profits as at 1 July 2018
and as such the comparatives have not been restated.
Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These
financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for,
where applicable, the revaluation of available-for-sale financial assets, financial assets and
liabilities at fair value through profit or loss, investment properties, certain classes of property,
27
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Basis of Preparation (continued)
plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the
Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of
the Group only. Supplementary information about the parent entity is disclosed within these
financial statements.
The presentation currency is Australian dollars.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Rent.com.au Limited as at 30 June 2019 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power to direct the activities of the
entity. 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. 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.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the
statement of profit or loss and other comprehensive income, statement of financial position and
statement of changes in equity of the Group. Losses incurred by the Group are attributed to the
non-controlling interest in full, even if that results in a deficit balance.
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.
28
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Operating segments
Operating segments are presented using the 'management approach', where the information
presented is on the same basis as the internal reports provided to the Board (the Chief Operating
Decision Makers ('CODM') of the business). The Board is responsible for the allocation of resources
to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Rent.com.au Limited's
functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Revenue Recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract with
a customer, the Group identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into account estimates of
variable consideration and the time value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone selling price of each distinct good
or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the
customer such as discounts, rebates and refunds, any potential bonuses receivable from the
customer and any other contingent events. Such estimates are determined using either the
'expected value' or 'most likely amount' method. The measurement of variable consideration is
subject to a constraining principle whereby revenue will only be recognised to the extent that it is
highly probable that a significant reversal in the amount of cumulative revenue recognised will not
occur. The measurement constraint continues until the uncertainty associated with the variable
consideration is subsequently resolved. Amounts received that are subject to the constraining
principle are initially recognised as deferred revenue in the form of a separate refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains
control of the goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered
based on either a fixed price or an hourly rate.
29
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is
established.
Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by the 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 be applied 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 interests in subsidiaries,
associates or joint ventures, and the timing of the reversal can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at 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 entities which intend to settle simultaneously.
Rent.com.au Limited and its wholly-owned Australian subsidiaries have formed an income tax
group under the tax consolidation regime. The head entity and each subsidiary in the tax group
continue to account for their own current and deferred tax amounts. The tax group has applied
the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to
allocate to members of the tax group.
In addition to its own current and deferred tax amounts, the head entity also recognises the
current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and
unused tax credits assumed from each subsidiary in the tax group.
30
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the tax consolidated group.
The tax funding arrangement ensures that the intercompany charge equals the current tax liability
or benefit of each tax group member, resulting in neither a contribution by the head entity to the
subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and
non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Group's normal operating cycle; it is held primarily for the purpose of trading; it
is expected to be realised within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period. All other liabilities are classified as non-
current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value. For the statement of cash flows presentation purposes, cash and cash
equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities
on the statement of financial position.
Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Plant and equipment
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and
equipment over their expected useful lives as follows:
• Computer equipment
•
Furniture and fittings
2-4 years
4 years
31
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated
useful life of the assets, whichever is shorter.
An item of 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.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of
the arrangement and requires an assessment of whether the fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to use the
asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the
lessee substantially all the risks and benefits incidental to the ownership of leased assets, and
operating leases, under which the lessor effectively retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the
leased assets, or if lower, the present value of minimum lease payments. Lease payments are
allocated between the principal component of the lease liability and the finance costs, so as to
achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over
the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the
Group will obtain ownership at the end of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or
loss on a straight-line basis over the term of the lease.
Intangible assets
IT development and software
Costs incurred in developing products or systems and costs incurred in acquiring software and
licenses that will contribute to future period financial benefits through revenue generation and/or
cost reduction are capitalised to software and systems.
These intangible assets have finite lives and are subject to amortisation on a straight-line basis.
The useful lives for these assets are as follows:
• Software
4 years
Research and development
Research expenditure is recognised as an expense as incurred. Costs incurred on development
projects (relating to the design and testing of new or improved services) are recognised as
intangible assets when it is probable that the project will, after considering its commercial and
technical feasibility, be completed and generate future economic benefits and its costs can be
measured reliably. The expenditure capitalised comprises all directly attributable costs, including
32
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Intangible assets (continued)
costs of materials, services, direct labour and an appropriate proportion of direct overheads. Other
development expenditures that do not meet these criteria are recognised as an expense as
incurred.
Development costs previously recognised as an expense are not recognised as an asset in a
subsequent period. Capitalised development costs are recorded as an intangible asset and
amortised from the point at which the asset is ready for use on a straight-line basis over its useful
life of 4 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other non-financial assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use.
The value-in-use is the present value of the estimated future cash flows relating to the asset using
a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped together to form a cash-generating
unit.
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end
of the financial year and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured and are usually paid within
30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net
of transaction costs. They are subsequently measured at amortised cost using the effective
interest method.
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.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a
result of a past event, it is probable the Group 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 the reporting
date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability.
The increase in the provision resulting from the passage of time is recognised as a finance cost.
33
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months of the reporting date are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of
the reporting date are measured as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields
at the reporting date on corporate bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which
they are incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to
employees in exchange for the rendering of services. Cash-settled transactions are awards of cash
for the exchange of services, where the amount of cash is determined by reference to the share
price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is
independently determined using either the Binomial or Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the impact of dilution, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive
payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase
in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the
grant date fair value of the award, the best estimate of the number of awards that are likely to vest
and the expired portion of the vesting period. The amount recognised in profit or loss for the
period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined
by applying either the Binomial or Black-Scholes option pricing model, taking into consideration
the terms and conditions on which the award was granted. The cumulative charge to profit or loss
until settlement of the liability is calculated as follows:
• during the vesting period, the liability at each reporting date is the fair value of the award
at that date multiplied by the expired portion of the vesting period.
34
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Employee benefits (continued)
•
from the end of the vesting period until settlement of the award, the liability is the full fair
value of the liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled
transactions is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards
subject to market conditions are considered to vest irrespective of whether 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the
measurement date; and assumes that the transaction will take place either: in the principal market;
or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best interests. For non-financial assets, the
fair value measurement is based on its highest and best use. Valuation techniques that are
appropriate in the circumstances and for which sufficient data are available to measure fair value,
are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value
hierarchy that reflects the significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers between levels are determined
based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when
internal expertise is either not available or when the valuation is deemed to be significant. External
valuers are selected based on market knowledge and reputation. Where there is a significant
change in fair value of an asset or liability from one period to another, an analysis is undertaken,
35
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Fair value measurement (continued)
which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
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.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion
of the Group.
Business Combinations
The acquisition method of accounting is used to account for business combinations regardless of
whether equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets
transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of
the acquiree and the amount of any non-controlling interest in the acquiree.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the Group's operating or accounting policies and other pertinent conditions
in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held
equity interest in the acquiree at the acquisition-date fair value and the difference between the
fair value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date
fair value. Subsequent changes in the fair value of the contingent consideration classified as an
asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and
any non-controlling interest in the acquiree and the fair value of the consideration transferred and
the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the
consideration transferred and the pre-existing fair value is less than the fair value of the
identifiable net assets acquired being a bargain purchase to the acquirer, the difference is
recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after
a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are
initially accounted for on a provisional basis. The acquirer
retrospectively adjusts the provisional amounts recognised and also recognises additional assets
or liabilities during the measurement period, based on new information obtained about the facts
and circumstances that existed at the acquisition-date. The measurement period ends on either
36
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Business Combinations (continued)
the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all
the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Group,
excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per
share to take into account the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST. The
net amount of GST recoverable from, or payable to, the tax authority is included in other
receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the tax authority, are
presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the tax authority.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. They are subsequently measured at either amortised cost or fair value depending on their
classification. Classification is determined based on the purpose of the acquisition and subsequent
reclassification to other categories is restricted.
Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the consolidated entity has transferred substantially
all the risks and rewards of ownership. When there is no reasonable expectation of recovering part
or all of a financial asset, it’s carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such financial
assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the
37
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
Investments and other financial assets (continued)
short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon
initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments
which the Group intends to hold for the foreseeable future and has irrevocably elected to classify
them as such upon initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the Group's assessment at the end of each
reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available,
without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition,
a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's
lifetime expected credit losses that is attributable to a default event that is possible within the next
12 months. Where a financial asset has become credit impaired or where it is determined that
credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the
probability weighted present value of anticipated cash shortfalls over the life of the instrument
discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss
allowance is recognised within other comprehensive income. In all other cases, the loss allowance
is recognised in profit or loss.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the Group for the annual reporting
period ended 30 June 2019. The Group's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the Group, are set out below.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The
standard replaces AASB 117 'Leases' and, for lessees will eliminate the classifications of operating
leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the
statement of financial position, measured as the present value of the unavoidable future lease
payments to be made over the lease term. The exceptions relate to short-term leases of 12 months
or less and leases of low-value assets where an accounting policy choice exists whereby either a
'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A
liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be
38
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 1. Significant Accounting Policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
(continued)
replaced with a depreciation charge for the leased asset (included in operating costs) and an
interest expense on the recognised lease liability (included in finance costs). In the earlier periods
of the lease, the expenses associated with the lease under AASB 16 will be higher when compared
to lease expenses under AASB 117.
For classification within the statement of cash flows, the lease payments will be separated into
both a principal (financing activities) and interest (either operating or financing activities)
component. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases. The Group will adopt this standard from 1 July 2019. This is not expected to
have a material impact to the Group.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on
various other factors, including expectations of future events which management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using either the Binomial or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions
relating to equity-settled share- based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact statement of profit
or loss and other comprehensive income and equity.
Revenue from contracts with customers involving sale of products
When recognising revenue in relation to the sale of products to customers, the key performance
obligation of the Group is considered to be the point of delivery of the products to the customer,
as this is deemed to be the time that the customer obtains control of the promised products and
therefore the benefits of the unimpeded access.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience and historical collection rates.
39
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 3. Revenue
AASB 15 was adopted using the modified retrospective approach and as such comparatives have
not been provided in the table below for the disaggregation of the timing of revenue recognition.
Consolidated 30 June 2019
Consolidated
Timing of revenue recognition 30 June 2019 30 June 2018
Goods
transferred at
a point in time
Services
transferred over
a period of time
Total
Total
$
$
$
$
Fees from agents and landlords
28,933
122,585
151,518
227,484
Renter Products Revenue
958,915
273,852
1,232,767
1,118,957
Advertising Sales
190,121
589,786
779,907
957,984
Other Revenue
Total
-
-
-
20,455
1,177,969
986,223
2,164,192
2,324,880
Consolidated 30 June 2019
Geographical regions
Australia
Consolidated
2019
$
2018
$
2,164,192
2,324,880
Note 4. Other Income
Consolidated
R&D Incentive recognised in income
Interest income
Sundry income
Note 5. Income Tax
a)
The components of tax expense comprise:
Current tax
Deferred tax
Total income tax expense
40
2019
$
71,283
10,237
-
81,520
2018
$
124,361
12,575
10,000
146,936
Consolidated
2019
$
2018
$
-
-
-
-
-
-
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 5. Income Tax (continued)
b)
The prima facie tax on loss from ordinary activities before income tax is reconciled to the
income tax as follows:
Consolidated
2019
$
2018
$
Prima facie tax payable on loss from ordinary
activities before income tax at 27.5% (30 June 2018:
27.5%)
(686,725)
(776,198)
Tax effect of:
Share based payments
Tax losses not recognised
Timing differences not recognised
Other
Total income tax expense
(29,611)
819,389
(78,488)
(24,565)
-
52,734
831,648
(69,574)
(38,610)
-
The applicable weighted average effective
tax rates were:
0%
0%
c) Deferred tax assets at 30 June 2019 not brought to account are:
Carried forward tax losses
Other
Total Deferred tax asset not recognised
5,316,186
110,099
5,426,285
4,577,672
252,481
4,830,153
The benefit for tax losses will only be obtained if:
•
•
•
the Group derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised; and
the losses are transferred to an eligible entity in the Group; and
the Group continues to comply with the conditions for deductibility imposed by tax
legislation; and
• no changes in tax legislation adversely affect the consolidated in realising the benefit from
the deduction for the losses.
Note 6. Cash and Cash Equivalents
Cash at bank and in hand
Term Deposits
Total cash and cash equivalents
Consolidated
2019
$
131,534
20,000
151,534
2018
$
1,289,603
1,000,000
2,289,603
41
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 6. Cash and Cash Equivalents (continued)
Cash at bank and in hand earns interest at floating rates based on daily bank rates. The effective
interest rate on short-term bank deposits was 0.84% (2018: 1.14%).
Reconciliation to cash and cash equivalents at the end of the financial year
Balances as above
Consolidated
2019
$
2018
$
151,534
2,289,603
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of
each class of cash and cash equivalents mentioned above.
Note 7. Trade and Other Receivables
Trade debtors
Less: Allowance for expected credit losses
(2018: Provision for impairment of receivables)
Prepayments
GST receivable
Total trade and other receivables
Consolidated
2019
$
221,965
(7,549)
214,416
95,465
4,024
313,905
2018
$
337,991
(13,706)
324,285
68,658
41,992
434,935
Allowance for expected credit losses
The Group has recognised a loss of $17,884 (2018: $29,784) in profit or loss in respect of the
expected credit losses for the year ended 30 June 2019.
The ageing of the expected credit losses provided for above are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Consolidated
2019
$
-
3,000
4,549
7,549
2018
$
-
7,106
6,600
13,706
42
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 7. Trade and Other Receivables (continued)
Movement in the allowance for expected credit losses (2018: provision for impairment of
receivables) are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing Balance
Consolidated
2019
$
13,706
17,884
(24,041)
7,549
2018
$
5,000
13,706
(5,000)
13,706
As at 30 June 2019 there were no customers with balances past due but without provision for
impairment.
Credit Risk – Trade and Other Receivables
The Group has no significant concentration of credit risk with respect to any single counter party
other than Australian Taxation Office. The class of assets described as trade and other receivables
is considered to be the main source of credit risk related to the Group.
Other than as noted above, all trade and other receivables are within initial trade terms and
considered to be of high credit quality.
Note 8. Plant and Equipment
Plant and equipment at cost
Less: accumulated depreciation
Consolidated
2019
$
204,390
(168,136)
36,254
2018
$
244,375
(222,226)
22,149
Reconciliations of the written down values at the beginning and end of the current and previous
financial year are set out below:
Consolidated
2019
$
22,149
37,430
(23,031)
(294)
36,254
2018
$
72,028
12,169
(62,048)
-
22,149
Balance at the beginning of the year
Additions
Depreciation
Disposals
Written down balance at end of year
43
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 9. Intangible Assets
Consolidated
2019
$
2018
$
Software and website development at cost
4,882,467
4,287,828
Less: accumulated amortisation
(3,174,900)
(2,631,180)
1,707,567
1,656,648
Reconciliations of the written down values at the beginning and end of the current and previous
financial year are set out below:
Balance at the beginning of the year
Additions
Amortisation
Disposals
Consolidated
2019
$
1,656,648
594,638
(543,719)
-
2018
$
993,185
1,043,233
(379,770)
-
Written down balance at end of year
1,707,567
1,656,648
Note 10. Trade and Other Payables
Trade creditors
Other payables
Total Trade and Other Payables
Consolidated
2019
$
314,801
278,376
593,177
2018
$
350,004
167,841
517,845
Trade payables are non-interest bearing and are normally settled on 30 to 60-day terms.
Note 11. Borrowings
Finance lease liability – current
Finance lease liability – non-current
Total Borrowings
Consolidated
2019
$
8,602
14,335
22,937
2018
$
21,606
-
21,606
These are finance leases for computer equipment with an average remaining term of 32 months.
The interest rates and repayments are fixed.
44
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 12. Employee Benefits
Annual leave
Long service leave
Total Employee Benefits
Consolidated
2019
$
135,793
41,708
177,501
2018
$
182,195
62,001
244,196
Expected to be settled within 12 months
177,501
244,196
Expected to be settled after 12 months
-
-
The Group encourages employees to take leave when due and accordingly expects that the leave
accruals above will be utilised during the next 12 months.
Note 13. Issued Capital
Consolidated
2019
$
2018
$
Ordinary shares fully paid
35,313,752
34,912,935
Ordinary shares fully paid
Movements in ordinary share capital
Shares
Shares
249,497,272
236,339,309
Details
Shares
Issue price
$
Opening Balance – 1 July 2017
199,783,430
32,239,412
Issue of shares – placement 1 May 2018
29,975,714
$0.077
2,308,130
Issue of shares – share purchase plan 22 May 2018
6,493,498
$0.077
Conversion of performance rights during year
86,667
$0.180
Share issue transaction costs
-
500,000
15,633
(150,240)
Closing Balance – 30 June 2018
236,339,309
34,912,935
Details
Shares
Issue price
$
Opening Balance – 1 July 2018
236,339,309
34,912,935
Issue of shares – performance shares 31 Jan 2019
69
$0.048
3
Issue of shares – share purchase plan 7 May 2019
13,157,894
$0.038
500,000
Share issue transaction costs
-
Closing Balance – 30 June 2019
249,497,272
(99,186)
35,313,752
45
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 13. Issued Capital (continued)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up
of the Group in proportion to the number of and amounts paid on the shares held. The fully paid
ordinary shares have no par value and the Group does not have a limited amount of authorised
capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital management
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and
to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net
debt. Net debt is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was
seen as value adding relative to the current company's share price at the time of the investment.
The Group is not actively pursuing additional investments in the short term as it continues to
integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the
financing arrangements during the financial year.
The capital risk management policy remains unchanged from the prior financial year.
Note 14. Reserves
Consolidated
2019
$
2018
$
Share based payment reserve
6,319,226
6,426,905
Share Based Payment Reserve
The share-based payment reserve recognises options, performance rights and performance
shares that have been issued as share based payments.
46
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 15. Share Based Payments
The Rent.com.au Limited Long-Term Incentive Plan (“LTIP”) was established following approval by
shareholders on 20 May 2015. All employees, directors and consultants are eligible to participate
in the LTIP.
The LTIP provides for the issue of:
• Performance Rights which, upon a determination by the Board that the performance
conditions attached to the Performance Rights have been met, will result in the issue of
one ordinary Share in the Group for each Performance Right; and
• Plan Options which, upon a determination by the Board that the vesting conditions
attached to the Plan Options have been met, will result in the Plan Options vesting and
being able to be exercised into Shares by payment of the exercise price.
The key features of the Plan are as follows:
• The Board will determine the number of Performance Rights and Plan Options (Plan
Securities) to be granted to Eligible Employees (or their Affiliates) and the vesting
conditions, expiry date of the Plan Securities and the exercise price of the Plan Options in
its sole discretion.
• The Plan Securities are not transferable unless the Board determines otherwise or the
transfer is required by law and provided that the transfer complies with the Corporations
Act.
• Subject to the Corporations Act and the Listing Rules and restrictions on reducing the rights
of a holder of Plan Securities, the Board will have the power to amend the Plan as it sees
fit.
a) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were
as follows:
Performance rights issued/(reversed) under LTIP
Performance shares issued to shareholders
Options issued under LTIP
Consolidated
2019
$
(114,313)
3
6,634
Total share-based payments (reversal)/expense
(107,676)
2018
$
21,809
-
169,950
191,759
47
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 15. Share Based Payments (continued)
b) Options
All options granted to key employees, consultants and advisors of the Group are for ordinary
shares in Rent.com.au Limited which confer a right of one ordinary share for every option held.
Grant Date Expiry Date Exercise
Price
Balance at
start of
year
Granted
during the
year
Exercised
during the
year
Expired/
forfeited/
other
Balance at
end of the
year
Vested &
exercisable
at end of
the year
Number
Number
Number
Number
Number
Number
2019
17 Jun 2015 17 Jun 2020
$0.25 19,000,000
17 Jun 2015 17 Jun 2020
$0.30 14,185,000
23 Jun 2015 22 Jun 2020
$0.30
7,000,000
13 Aug 2015 13 Aug 2020
$0.30
400,000
22 Feb 2016 22 Feb 2021
$0.30
1,830,000
09 Sep 2016 09 Sep 2021
$0.25
1,250,000
09 Sep 2016 09 Sep 2021
$0.35
1,250,000
09 Sep 2016 09 Sep 2021
$0.50
1,250,000
46,165,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 19,000,000
14,500,000
(800,000) 13,385,000
8,923,334
-
-
7,000,000
7,000,000
400,000
266,666
(90,000)
1,740,000
-
-
-
-
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
(890,000) 45,275,000
34,440,000
Weighted average exercise price
$0.28
n/a
n/a
n/a
$0.28
$0.29
There were no new options granted during the financial year ending on 30 June 2019.
Grant Date
Expiry Date Exercise
Price
Balance at
start of
year
Granted
during the
year
Exercised
during the
year
Expired/
forfeited/
other
Balance at
end of the
year
Vested &
exercisable
at end of
the year
Number
Number
Number
Number
Number
Number
2018
17 Jun 2015 17 Jun 2020
$0.25 19,000,000
17 Jun 2015 17 Jun 2020
$0.30 14,185,000
23 Jun 2015 22 Jun 2020
$0.30
7,000,000
13 Aug 2015 13 Aug 2020
$0.30
400,000
22 Feb 2016 22 Feb 2021
$0.30
1,830,000
09 Sep 2016 09 Sep 2021
$0.25
1,250,000
09 Sep 2016 09 Sep 2021
$0.35
1,250,000
09 Sep 2016 09 Sep 2021
$0.50
1,250,000
46,165,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 19,000,000
14,500,000
- 14,185,000
9,456,668
-
-
-
-
-
-
7,000,000
7,000,000
400,000
266,666
1,830,000
-
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
- 46,165,000
34,973,334
Weighted average exercise price
$0.28
n/a
n/a
n/a
$0.28
$0.29
c) Performance Shares/Rights
Performance shares and performance rights do not have an exercise price. Upon satisfaction of
the relevant performance vesting condition they convert to ordinary shares in the ratio of one
ordinary share for every one performance share / performance right.
48
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 15. Share Based Payments (continued)
c) Performance Shares/Rights (continued)
Grant Date
Expiry Date Balance at
start of
year
Granted
during the
year
Exercised
during the
year
Expired/
forfeited/
other
Balance at
end of the
year
Vested &
exercisable
at end of the
year
Number
Number
Number
Number
Number
Number
2019
Performance Shares
17 Jun 20152 31 Dec 2018
8,160,771
17 Jun 20153 31 Dec 2019
8,160,771
Performance Rights
17 Jun 20152 31 Dec 2018
17 Jun 20153 31 Dec 2019
13 Aug 20152 31 Dec 2018
13 Aug 20153 31 Dec 2019
22 Feb 20162 31 Dec 2018
22 Feb 20163 31 Dec 2019
795,720
795,720
46,667
46,666
80,000
80,000
09 Sep 20162 31 Dec 2018
3,283,741
09 Sep 20163 31 Dec 2019
3,283,741
24,733,797
2018
Performance Shares
17 Jun 20152 31 Dec 2018
8,160,771
17 Jun 20153 31 Dec 2019
8,160,771
Performance Rights
17 Jun 20152 31 Dec 2018
17 Jun 20153 31 Dec 2019
13 Aug 20151 31 Dec 2018
13 Aug 20152 31 Dec 2018
13 Aug 20153 31 Dec 2019
22 Feb 20161 31 Dec 2018
22 Feb 20162 31 Dec 2018
22 Feb 20163 31 Dec 2019
795,720
795,720
46,667
46,667
46,666
40,000
80,000
80,000
09 Sep 20162 31 Dec 2018
3,283,741
09 Sep 20163 31 Dec 2019
3,283,741
24,820,464
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(69)
(8,160,702)
-
-
-
-
-
-
-
-
-
-
-
8,160,771
(795,720)
-
(93,821)
701,899
(46,667)
-
-
46,666
(80,000)
-
-
80,000
(3,283,741)
-
-
3,183,741
(69)
(12,460,651)
12,273,077
-
-
-
-
(46,667)
-
-
(40,000)
-
-
-
-
(86,667)
-
-
-
-
-
-
-
-
-
-
-
-
-
8,160,771
8,160,771
795,720
795,720
-
46,667
46,666
-
80,000
80,000
3,283,741
3,283,741
24,733,797
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Class A Performance Shares/rights – these performance shares will vest on the achievement of greater than 500,000
unique visitors to the website, Rent.com.au in each of 3 consecutive months on or before 31 December 2018. Expire 31
January 2019.
2 Class B Performance Shares/rights – these performance shares will vest on the achievement of greater than $10,000,000
in revenue by the Group in any 12 month period on or before 31 December 2018. Expire 14 days after the release of the
audited financial report for the period ended 31 December 2018.
3 Class C Performance Shares/rights – these performance shares will vest upon the achievement of greater than $3,000,000
in EBITDA by the Group in any 12 month period on or before 31 December 2019. Expire 14 days after the release of the
audited financial report for the period ended 31 December 2019.
49
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 15. Share Based Payments (continued)
c) Performance Shares/Rights (continued)
For the performance rights granted during the prior financial year, the valuation model inputs used
to determine the fair value at the grant date, are as follows:
Grant date
Number of performance
rights
Share price at
grant date
Fair value
at grant date
9 September 2016
3,283,741
$0.103
$338,225
Type
Class C
Rights
Underlying share price
Probability %*
Value ($)
3,283,741
6,567,482
$0.103
$0.103
2%
-
6,765
6,765
* The probability estimated by the management is over the expiry date of the performance shares/rights.
Note 16. Accumulated Losses
Accumulated losses at the beginning of the financial year
(37,720,152)
(34,897,613)
Loss after income tax for the year
(2,497,183)
(2,822,539)
Accumulated losses at the end of the financial year
(40,217,335)
(37,720,152)
Consolidated
2019
$
2018
$
Note 17. Auditor’s Remuneration
The Group’s sole auditor is RSM Australia Partners. The following amounts were paid or payable
to RSM Australia Partners for the services set out below:
Auditing or reviewing the financial reports
Taxation and corporate services
Research & Development Grant services
Total auditor’s remuneration
Consolidated
2019
$
48,000
8,100
23,788
79,888
2018
$
46,000
8,250
24,545
78,795
50
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 18. Earnings per Share
Loss after income tax attributable to the Group’s
owners
Weighted average number of ordinary shares
used in calculating basic loss per share
Basic and diluted (loss) per share
Consolidated
2019
$
2018
$
(2,497,183)
(2,822,539)
Number
Number
238,285,985
204,967,270
Cents
(1.05)
Cents
(1.38)
Options have not been included in the calculation of dilutive loss per share as the options are anti-
dilutive.
Note 19. Dividends Paid or Proposed
The directors do not recommend the payment of a dividend and no amount has been paid or
declared by way of a dividend to the date of this report.
Note 20. Operating Segments
Identification of reportable operating segments
The Group operates as a single operating segment with different revenue streams. The Board (the
Chief Operating Decision Makers ('CODM') of the business) reviews performance of the Group as
a whole.
The Board evaluates Group performance by reference to revenue and profit and loss which are
measured consistently with these consolidated financial statements. In addition, the Board
evaluates EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting
policies adopted for internal reporting to the Board are consistent with those adopted in the
financial statements.
The information is reported to the Board monthly.
Note 21. Commitments
Operating lease commitments
Future minimum rentals payable under non-cancellable office leases are as follows:
Consolidated
2019
$
156,300
195,375
351,675
2018
$
46,600
-
46,600
Within one year
After one year but not more than five years
Total operating lease commitments
There are no non-cancellable office leases as at 30 June 2019.
51
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 21. Commitments (continued)
Finance lease commitments
Future minimum payments payable under non-cancellable finance leases are as follows:
Consolidated
Within one year
After one year but not more than five years
Total finance lease commitments
Total commitment
Less: future finance charges
Net commitment recognised as Borrowings
2019
$
8,602
14,335
22,937
22,937
-
22,937
2018
$
22,061
-
22,061
22,061
(455)
21,606
Finance lease commitments includes contracted amounts for various plant and equipment with a
written down value of $22,362 (2018: $8,805) secured under finance leases expiring within one to
five years. Under the terms of the leases, the Group has the option to acquire the leased assets
for predetermined residual values on the expiry of the leases.
Note 22. Events After the Reporting Period
On 16 July 2019 the Group issued 2,838,818 shares to existing, eligible shareholders who had
applied for shares under a fully underwritten non-renounceable pro-rata rights issue on the basis
of 1 new Share for every 6 Shares (‘Rights Issue’) at a price of $0.036 per share. On 22 July 2019 the
Group placed 34,170,171 shortfall shares at the instruction of the Underwriter of the Rights Issue,
with a further 4,573,875 shortfall shares placed at the instruction of the Underwriter on 23 August
2019.
Note 23. Controlled Entities
All controlled entities are included in the consolidated financial statements. The Group does not
guarantee to pay the deficiency of its controlled entities in the event of a winding up of any
controlled entity. The financial year ends of the controlled entities are the same as that of the
Company, being 30 June.
Country of
Incorporation
Principal Activity
Percentage
Owned
2019
2018
Parent Entity
Rent.com.au Limited
Australia
Investment/Parent
Name of controlled entity
Rent.com.au (Operations) Pty Ltd
Australia
Information Technology
100%
Lease.com.au Pty Ltd
Australia
Information Technology
100%
100%
100%
52
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 24. Cashflow Information
a) Reconciliation of Cash Flow from Operations with Loss after Income Tax
(Loss) after income tax
- Share based payments
- Depreciation and amortisation
- Provision for doubtful debts
Changes in assets and liabilities:
- trade and other receivables
- trade payables and accruals
- employee benefits
Consolidated
2019
$
2018
$
(2,497,183)
(2,822,539)
(107,676)
566,750
6,157
114,873
72,941
(66,695)
191,759
441,818
29,784
(218,670)
(157,941)
16,648
Cash flows used in operations
(1,910,833)
(2,519,141)
Note 25. Non-cash investing and financing activities
Acquisition of plant and equipment by means of finance
leases
Total non-cash investing and financing activities
Note 26. Changes in liabilities arising from financing activities
Finance lease liability
Balance at the beginning of the year
Net cash used in financing activities
Acquisition of plant and equipment by means of finance
leases
Balance at the end of the year
Consolidated
2019
$
25,803
25,803
2018
$
-
-
Consolidated
2019
$
21,606
(24,472)
25,803
22,937
2018
$
69,832
(48,226)
-
21,606
53
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 27. Related Party Transactions
The Group’s main related parties are as follows:
(i)
Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is Rent.com.au Limited, which
is incorporated in Australia.
(ii) Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 28.
(iii) Entities subject to significant influence by the Group:
An entity that has the power to participate in the financial and operating policy decisions of
an entity, but does not have control over those policies, is an entity which holds significant
influence. Significant influence may be gained by share ownership, statute or agreement.
(iv) Other related parties:
Other related parties include entities controlled by the ultimate parent entity and entities over
which key management personnel have joint control.
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Consolidated
Transactions:
Advisory and capital issue costs - Grange Consulting1
Rent and Outgoings – Watersun Property Pty Ltd2
Cleaning – Servco Pty Ltd2
Total Related Party Transactions
Balances owing to related parties at 30 June 2019:
Watersun Property Pty Ltd2
Servco Pty Ltd2
1
2
Philip Warren is a director and shareholder of Grange Consulting Group Pty Ltd.
Garry Garside is a director of Watersun Property Pty Ltd and Servco Pty Ltd.
2019
$
15,000
115,562
7,200
137,762
86,101
600
86,701
2018
$
-
68,786
5,438
74,224
8,135
660
8,795
54
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 28. Interests of Key Management Personnel
Compensation of Key Management Personnel (KMP)
Refer to the remuneration report contained in the directors’ report for details of the remuneration
paid or payable to each member of the Group’s key management personnel for the period ended
30 June 2019.
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Total KMP remuneration
Note 29. Financial Risk Management
Consolidated
2019
$
525,000
41,563
1,762
568,325
2018
$
532,870
41,617
118,479
692,966
The Group’s financial instruments consist mainly of deposits with banks and accounts payable.
The totals for each category of financial instruments, measured in accordance with AASB 139 as
detailed in the accounting policies to these financial statements, are as follows:
Consolidated
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Trade and other payables
Borrowings
Total Financial Liabilities
Note
6
7
10
11
2019
$
151,534
214,416
365,950
593,177
22,937
616,114
2018
$
2,289,603
324,285
2,613,888
517,845
21,606
539,451
Financial Risk Management Policies
The Board of Directors are responsible for monitoring and managing financial risk exposures of
the Group. The Board monitors the Group’s financial risk management policies and approves
financial transactions. It also reviews the effectiveness of internal controls relating to counterparty
credit risk, financing risk and interest rate risk.
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Its functions include
the review of the credit risk policies and future cash flow requirements.
55
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 29. Financial Risk Management (continued)
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity
risk and market risk consisting of interest rate risk and foreign currency risk.
a) Credit Risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the
utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of
exposures against such limits and monitoring of the financial stability of significant customers and
counterparties), ensuring to the extent possible, that customers and counterparties to
transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for
impairment. Credit terms are generally 30 days from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high
credit rating.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at reporting date is
equivalent to the carrying value and classification of those financial assets (net of any provisions)
as presented in the statement of financial position.
The Group has no significant concentration of credit risk with any single counterparty or group of
counterparties, except the Australian Taxation Office.
Trade and other receivables that are neither past due nor impaired are considered to be of high
credit quality.
Credit risk related to balances with banks and other financial institutions is managed by the board
in accordance with approved board policy. The following table provides information regarding the
credit risk relating to cash and money market securities based on Standard & Poor’s counterparty
credit ratings.
Cash and cash equivalents
Note
AA- Rated
A+ Rated
Unrated
Consolidated
2019
$
2018
$
151,534
2,289,603
-
-
-
-
6
151,534
2,289,603
56
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 29. Financial Risk Management (continued)
b) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The Group manages this
risk through the following mechanisms:
•
preparing forward looking cash flow analysis in relation to its operational, investing and
financing activities;
obtaining funding from a variety of sources;
•
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
•
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial
assets.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflects the earliest contractual settlement dates
and does not reflect management’s expectations that banking facilities will be rolled forward.
Within 1 year
1 to 5 Years
Total
2019
2018
2019
2018
2019
2018
Weighted
average
effective
interest
rate
%
$
$
$
-
593,177
517,845
8,602
21,606
14,335
Financial liabilities due for payment
Trade and other
payables
Borrowings
-
-
Financial assets realisable cash flows
Cash and cash
equivalents
Trade and other
receivables
c) Market Risk
1.2%
151,534
2,289,603
-
214,416
324,285
-
-
$
$
$
-
-
-
-
593,177
517,845
22,937
21,606
151,534
2,289,603
214,416
324,285
Interest rate risk
(i)
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the
end of the reporting period whereby a future change in interest rates will affect future cash flows
or the fair value of fixed rate financial instruments. The Group does not have material exposure to
interest rate risk at reporting date.
57
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 29. Financial Risk Management (continued)
c) Market Risk (continued)
(ii) Price risk
The Group currently has no exposure to equity securities price risk arising from investments held
by the Group and classified in the statement of financial position as fair value through profit or
loss.
(iii) Foreign Currency Risk
Foreign exchange risk arises from future commercial transactions and recognised assets and
liabilities denominated in a currency that is not the entity’s functional currency and net
investments in foreign operations.
The Group does not have any foreign currency exposure.
(iv) Fair value measurement
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 30. Contingent Liabilities
There are no contingent liabilities for the year ended 30 June 2019 (30 June 2018: nil).
Note 31. Parent Information
The following information has been extracted from the accounting records of the parent entity
and has been prepared in accordance with the Australian Accounting Standards.
Statement of profit or loss and other comprehensive
income
(Loss) for the year
Total comprehensive (loss) for the year
(2,497,183)
(2,497,183)
(2,822,540)
(2,822,540)
2019
$
2018
$
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total equity
1,018
1,451,826
1,452,844
95
3,648,485
3,648,580
(37,201)
(37,201)
(28,892)
(28,892)
73,317,991
9,706,064
(81,608,412)
1,415,643
72,917,175
9,813,742
(79,111,229)
3,619,688
58
Rent.com.au Limited
Notes to the Financial Statements
30 June 2019
Note 31. Parent Information (continued)
Contingent Liabilities and Capital expenditure
There are no contingent liabilities for the parent entity for both financial periods ended 30 June
2019 and 30 June 2018.
The parent entity did not have capital expenditure commitments for the acquisition of property,
plant and equipment contracted but not provided for.
Guarantees
During the reporting period, Rent.com.au Limited had not entered into any guarantees in relation
to the debts of its subsidiaries.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in
note 1, except for the following:
•
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent
entity;
Investments in associates are accounted for at cost, less any impairment, in the parent entity;
and
• Dividends received from subsidiaries are recognised as other income by the parent entity
and its receipt may be an indicator of an impairment of the investment.
59
Rent.com.au Limited
Directors’ Declaration
30 June 2019
In the directors' opinion:
•
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the
Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
the attached financial statements and notes 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 give a true and fair view of the Group's financial
position as at 30 June 2019 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable; and
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
_________________________
Dr. Garry Garside
Non-executive Chairman
Perth, 28 August 2019
60
Rent.com.au Limited
Additional ASX Information
30 June 2019
ASX Additional Information
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this
Annual Report is set out below.
1. Holdings
The issued capital of the Company as at 21 October 2019 includes the following securities:
Equity Class
Fully paid ordinary shares
Unlisted Options ($0.30, 23 June 2020)
Performance Shares
Performance Rights
Employee Options
Number of holders
Total on issue
997
291,080,136
20
69
12
21
7,000,000
8,160,771
4,112,306
38,275,000
All issued fully paid ordinary shares carry one vote per share.
2. Distribution of Ordinary Shares as at 21 October 2019
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-and over
Total
Holders
146
30
128
435
258
997
Units
7,067
95,363
1,101,010
17,484,594
272,392,102
291,080,136
%
0.00
0.03
0.38
6.01
93.58
100.00
There were 395 holders of less than a marketable parcel of ordinary share, and 30 holders from
overseas holding 6,131,515 shares.
3. Substantial shareholder notices lodged with the Company
Name
Mr Jason Alan Carroll
Pinnacle Corporate Finance Pty Ltd
Mr Greg Bader
Mr John Wood
Number*
28,085,081
17,310,400
15,637,761
15,079,696
%
9.65%
5.95%
5.37%
5.18%
* Number of shares held at 21 October 2019 where known, otherwise number of shares is at date of substantial
shareholder notice lodged with the Company
4. Voting Rights
See note 13 of the financial statements.
5. Restricted securities subject to escrow period
There are currently no securities that are subject to escrow periods.
61
Rent.com.au Limited
Additional ASX Information
30 June 2019
6. On-market buy back
There is currently no on-market buyback program for any of Rent.com.au Limited’s listed
securities.
7. Top 20 Largest Holders of Ordinary Shares as at 21 October 2019
Name
CS Third Nominees Pty Limited
Ajava Holdings Pty Ltd
Austcorp No 214 Pty Ltd
Tefig Pty Ltd
1 Mr Jason Alan Carroll
2 HSBC Custody Nominees (Australia) Limited
3
4 Bader SMSF Pty Ltd
5 Mr Mark Woschnak
6
7 Mr Mark Daniel Needham & Mrs Piengjai Needham
8
9
10 Kerimi Investments Pty Ltd
11 Dr Garry Desmond Garside & Mrs Francis Sambrailo Garside
12 Reefbay Holdings Pty Ltd
13 Treasure Island Hire Boat Company Pty Ltd
14 Markit Systems Pty Ltd
15 Mr Anthony Brendon Cope & Mrs Amanda Gay Cope
16 Cornela Pty Ltd
17 Parkerville Children and Youth Care Incorporated
18 Reefbay Holdings Pty Ltd
19 RLS Super Investments Pty Ltd
20 Riverview Corporation Pty Ltd
Total Top 20
Others
Total Ordinary Shares on Issue
8. Unquoted Securities
Number
27,826,613
25,501,310
16,053,071
15,187,761
10,105,698
8,751,367
8,000,000
6,531,036
5,779,545
4,581,120
4,163,636
4,017,805
3,706,662
3,283,741
3,259,452
3,240,195
2,777,778
2,648,049
2,400,000
2,359,889
%
9.56
8.76
5.52
5.22
3.47
3.01
2.75
2.24
1.99
1.57
1.43
1.38
1.27
1.13
1.12
1.11
0.95
0.91
0.82
0.81
160,174,728
130,905,408
55.03
44.97
291,080,136 100.00
The names of the security holders holding more than 20% of an unlisted class of security are listed
below:
Unlisted Options
$0.30 23 June 2020
Performance
Shares
Performance
Rights
Employee
Options
GMP Securities Australia
Mr Greg Bader
Rent Investment Pty Ltd
Markit Systems Pty Ltd
Total other holders
Total
Total holdings over 20%
Other holders
2,000,000
-
-
-
5,000,000
7,000,000
1
19
62
-
-
3,857,017
-
4,303,754
8,160,771
1
68
-
3,283,741
-
-
828,565
4,112,306
1
12
-
-
-
28,000,000
10,275,000
38,275,000
1
20