Rent.com.au Limited
ABN 25 062 063 692
Financial Report
for the year ended 30 June 2020
Rent.com.au Limited
Contents
30 June 2020
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
3
4
17
18
22
23
24
25
26
60
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Rent.com.au Limited
Corporate Information
30 June 2020
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 2020
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 2020.
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 $1,665,215 for the year ended 30 June 2020 (for year ended 30 June
2019: $2,497,183). The net operating loss for the year ended 30 June 2020 included a non-cash
share-based payments reversal of $4,372 (30 June 2019 share-based payment reversal: $107,676)
associated with the cancellation of 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 2020 was a loss
of $1,133,541 (30 June 2019: $2,121,568) an improvement of 47%.
The Group achieved overall revenue of $2,452,239, growth of 13% for the year ended 30 June
2020 compared with the previous year. Both of its key revenue streams grew. Renter Products
grew 7% to $1,312,912 (2019: $1,232,767) and Advertising Sales grew by 27% to $985,346 (2019:
$779,907).
During the year the Group continued to balance its goals of achieving profitability in the short
term with industry disruption over the longer term. As rent.com.au achieves better brand
awareness amongst renters, more people visit the website and apps from non-paid means
allowing the Group to reduce marketing expenditure by 55% in the year ended 30 June 2020
compared with the prior year. At the same time overall audience grew 19%, with almost three
quarters of visitors coming from non-paid sources. The Groups renter app on the Apple and
Android platforms continues to perform well and regularly achieves higher customer ratings than
other leading real estate sector apps.
Existing Renter Products were enhanced during the year. RentCheck now also boasting an
Endorsements feature whereby agents can provide a reference which is incorporated into the
RentCheck. A 21-day interest and fee free period for RentBond was introduced in order to
broaden the appeal of the product, and RentConnect has been overhauled, with a compelling
customer offer under an exclusive arrangement with AGL.
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Rent.com.au Limited
Director’s Report
30 June 2020
Review of Operations (continued)
The Group also continued its development of RentPay, its first product aimed at renters during
their tenancy. $185k of labour costs were incurred in this development during the year and the
Novatti Group (ASX:NOV) acquired a 2.5% equity shareholding at a cost of $250,000 in RentPay
Technology Pty Ltd which is the subsidiary within the Group which owns the RentPay system. This
$250,000 will cover the development of RentPay’s core digital wallet functionality and also the first
year’s running costs. Development is almost complete as at the reporting date and a public launch
of RentPay is anticipated during the half year ended 31 December 2020.
RNT EBITDA
FY18
FY19
FY20
($1,134k)
($2,323k)
($2,122k)
Significant changes in the state of affairs
During the year, the Group completed the fully underwritten non-renounceable pro-rata rights
issue that had been announced on 1 May 2019, resulting in the issue of 41,582,864 shares at an
issue price of $0.036 per Share (“Rights Issue”) to raise $1,496,983 before costs.
On 20 March 2020, the Group announced that it had completed the placement under ASX Listing
Rule 7.1 of 11,555,554 shares (Placement Shares) with existing shareholders to raise $520,000
(before costs).
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
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while the impacts on the
Group up to 30 June 2020 have not been as significant as initially anticipated it is not practicable
to estimate the potential impact, positive or negative, after the reporting date. The situation is
rapidly developing and is dependent on measures imposed by State and Federal governments,
such as maintaining social distancing requirements, quarantine, travel restrictions and any
economic stimulus that may be provided.
On 14 August 2020, the Group issued 2,916,668 remuneration performance rights to the
directors in lieu of directors fees following shareholder approval at its General Meeting.
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Rent.com.au Limited
Director’s Report
30 June 2020
Matters Subsequent to the end of the Financial Year (continued)
On 15 September 2020, the Group issued 33,333,333 shares at an issue price of $0.045 per share
to sophisticated, professional and other exempt investors under section 708 of the Corporations
Act 2001 (Cth), to raise $1.5 million (before costs).
Apart from the above, no other matter or circumstance has been arisen since 30 June 2020
that has significantly affected, or maybe significantly affect the Group’s operations, the results of
those operations, or the Group’s state of affairs in future financial years.
Likely Developments and Expected Results
The Group continues to invest in expanding its product and service offerings deeper into the
tenancy period which it believes will yield significant long-term financial and industry benefits. It’s
RentPay rental payments system is the primary product via which the Group seeks to gain market
share within the tenancy period. There are approximately 2.5 million rental households (non-
government) in Australia which, in the director’s opinion, provides ample scope for further
commercialisation of the group’s products.
With strong revenue and EBITDA improvement across its rent.com.au products, the Group expects
that these additional tenancy period 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.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian
Commonwealth or State law.
Financial Position
The net assets of the Group have increased from $1,415,643 at 30 June 2019 to $1,795,125 at 30
June 2020. Cash reserves increased from $151,534 at 30 June 2019 to $631,771 at 30 June 2020.
Information on Directors
Dr. Garry Garside
– Chairman (Non-Executive), appointed 15 June 2015
Age
Qualifications
Experience
– 63
– 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
-
6,889,086 Ordinary shares (indirect)
111,413 Ordinary shares
Directorships held in other listed entities – None
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Director’s Report
30 June 2020
Information on Directors (continued)
Mr. Sam McDonagh
Age
Qualifications
Experience
– Director (Non-Executive), appointed 15 June 2015
– 49
– Chartered Accountant
– Mr. McDonagh has over 20 years’ experience in senior
management roles at companies including eBay in
Southeast Asia, iiNet Limited and most recently Airbnb
Australia and New Zealand
Special responsibilities
– Member of the Audit & Risk Committee.
Interest in shares & options held in
Rent.com.au Limited
- 818,239 Ordinary shares
Directorships held in other listed entities – None
Mr. Philip Warren
Age
Qualifications
Experience
– Director (Non-Executive), appointed 18 September 2014
– 46
– B. Com, Chartered Accountant
– Mr. Warren is a 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)
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
– 54
– 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
14,140,305 Ordinary shares (indirect)
Directorships held in other listed entities – None
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Rent.com.au Limited
Director’s Report
30 June 2020
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 2020:
Board Meetings
Audit & Risk
Management
Committee Meetings
Nomination &
Remuneration
Committee Meetings
Garry Garside
Sam McDonagh
Philip Warren
John Wood
A
12
12
12
12
B
12
12
12
12
A
3
3
3
B
3
3
3
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 15 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 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 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
7
8
01 May 2020
14 August 2020
30 November 2020
30 November 2020
Number
3,863,337
2,916,668
The vesting conditions of the various tranches of performance shares on issue are outlined below:
•
Tranche 7 – will vest upon continuous employment with the Group until 31 October 2020
•
Tranche 8 – will vest upon continuous employment with the Group until 30 November 2020
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Rent.com.au Limited
Director’s Report
30 June 2020
Shares under Option
Unissued ordinary shares of Rent.com.au Limited under option at the date of this report are as
follows:
Date Options Granted
Expiry Date
Tranche
Issue Price of Share Number Under Option
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
4
5
6
7
8
9
Total
$0.30
$0.30
$0.30
$0.25
$0.35
$0.50
580,0002
580,0002
580,0002
1,250,0001
1,250,0001
1,250,0001
5,490,000
1. Employee options have vested and are exercisable.
2. 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 2020,
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.
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Director’s Report
30 June 2020
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 20 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 20 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.
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)
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Rent.com.au Limited
Director’s Report
30 June 2020
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.
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 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 88.6% of the eligible votes received supported the adoption of the remuneration
report for the year ended 30 June 2019. The Group did not receive any specific feedback at the
AGM regarding its remuneration practices.
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Director’s Report
30 June 2020
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 2020
KMP
Garry Garside
Sam McDonagh
Phillip Warren
John Wood
Greg Bader
Jan Ferreira
Total
Base Fee
$
STI Payment
$
Super-
annuation
$
Performance
Rights
$
Options1
$
Total
$
32,083
23,333
23,333
23,333
220,000
215,000
537,082
-
-
-
-
1,250
2,500
3,750
-
-
-
-
21,019
20,741
41,760
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32,083
23,333
23,333
23,333
242,269
238,241
582,592
1. Options include both share based payments and advisor options.
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.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
2020
2019
2020
2019
2020
2019
Fixed remuneration
At risk - STI
At risk - LTI
Non-Executive Directors:
Garry Garside
Sam McDonagh
Phillip Warren
John Wood
100.0%
100.0%
100.0%
100.0%
99.7%
99.4%
100.0%
99.8%
-
-
-
-
-
-
-
-
Other Key Management Personnel:
Greg Bader
Jan Ferreira
99.5%
99.0%
98.9%
99.4%
0.5%
1.0%
0.5%
0.5%
0%
0%
0%
0%
0.0%
0.0%
0.3%
0.6%
0.0%
0.2%
0.6%
0.0%
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Director’s Report
30 June 2020
B. Details of remuneration – continued
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 1,600,001 unexpired Performance Rights issued in lieu of
salaries reduced for 6 months.
• 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.
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
883,334 unexpired Performance Rights in lieu of salaries reduced for 6 months.
• 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 2020.
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Director’s Report
30 June 2020
D. Additional Information
Financial Performance Information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Sales revenue
EBITDA*
2,452,239
2,164,192
2,324,880
1,654,395
748,495
(1,133,540)
(2,121,568)
(2,322,710)
(5,822,425)
(7,216,670)
Loss after income tax
(1,665,215)
(2,497,183)
(2,822,539)
(8,513,631)
(12,820,585)
* excluding non-cash share-based payments, R&D income, government grant and loss on disposal of asset.
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)
2020
0.033
-
2019
0.035
-
2018
0.086
-
2017
0.065
-
2016
0.160
-
Basic loss per share (cents per share)
(0.57)
(1.05)
(1.38)
(4.72)
(12.42)
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 2020 is as follows:
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 2020
5,714,410
818,238
222,321
12,743,087
14,870,556
734,528
35,103,140
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,286,089
7,000,499
1
257,218
2,486,609
1,530,155
818,239
479,539
15,229,696
16,400,711
265,552
1,000,080
5,825,624
40,928,764
30 June 2020
Garry Garside
Sam McDonagh
Philip Warren
John Wood
Greg Bader
Jan Ferreira
Total
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 2020 is as follows:
30 June 2020
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 2020
950,000
1,600,000
1,012,500
500,000
3,750,000
900,000
8,712,500
-
-
-
-
-
-
-
14
-
-
-
-
-
-
-
(950,000)
(1,600,000)
(1,012,500)
(500,000)
-
-
-
-
-
3,750,000
(900,000)
-
(4,962,500)
3,750,000
Rent.com.au Limited
Director’s Report
30 June 2020
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 2020 is as follows:
30 June 2020
Balance at
start of the
year
Received as
Remuneration
Performance
Rights
Converted
Other
Movements
Balance at
30 June
2020
Vested and
Exercisable
at 30 June
2020
Unvested
at 30 June
2020
Garry Garside
111,413
Sam McDonagh
187,642
John Wood
58,638
-
-
-
Greg Bader
3,283,741
1,600,001
Jan Ferreira
105,549
883,334
Total
3,746,983
2,483,335
-
-
-
-
-
-
(111,413)
(187,642)
(58,638)
-
-
-
(3,283,741)
1,600,001
(105,549)
883,334
(3,746,983)
2,483,335
-
-
-
-
-
-
-
-
-
1,600,001
883,334
2,483,335
4. Performance Shares
Performance shares were
issued as consideration to the shareholders of Rent.com.au
(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 2020 is as follows:
30 June 2020
Balance at
start of
the year
Received as
Remuneration
Performance
Shares
Converted
Other
Movements
Balance at
30 June
2020
Vested and
Exercisable
at 30 June
2020
Unvested at
30 June 2020
Garry Garside
290,691
Sam McDonagh
18,803
John Wood
3,953,608
Jan Ferreira
4,538
Total
4,267,640
Other KMP Transactions
-
-
-
-
-
-
-
-
-
-
(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 outgoings and others – Watersun Property Pty Ltd[1]
Cleaning expenses – Servco Pty Ltd[1]
Interest expense[1]
Amortisation of right of use asset[1]
2020
$
126,049
5,912
10,593
77,576
15
Rent.com.au Limited
Director’s Report
30 June 2020
Other KMP Transactions (continued)
Balances:
Amount owing to Watersun Property Pty Ltd[1]
Amount owing to Servco Pty Ltd[1]
Right of use asset[1]
Lease liability[1]
Directors fee accrual[2]
2020
$
109,170
1,102
96,970
102,354
29,168
[1] Garry Garside is a director and shareholder of both Watersun Property Pty Ltd & Servco Pty Ltd.
[2] Directors fees will be repaid via the issue of performance rights in lieu of fees. The issue of performance
rights were approved by shareholders on 14 August 2020.
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, 25 September 2020
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 2020, 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: 25 September 2020
ALASDAIR WHYTE
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 2020, 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 2020 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 generates 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:
•
•
•
•
•
•
Obtaining 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.
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 2020, 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: https://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 2020.
In our opinion, the Remuneration Report of Rent.com.au Limited, for the year ended 30 June 2020, 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: 25 September 2020
ALASDAIR WHYTE
Partner
Rent.com.au Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Note
Consolidated
Revenue
Other income
Total Income
Administration charges
Consulting & business development costs
3
4
2020
$
2,452,239
357,390
2,809,629
(404,657)
(22,595)
Depreciation and amortisation expense
8,9,10
(882,943)
2019
$
2,164,192
81,520
2,245,712
(526,949)
(81,775)
(566,750)
Employee benefit expenses
Finance costs
Information technology costs
Share based payment expenses
Sales and marketing expenses
Others
(1,859,402)
(1,955,014)
(10,593)
(385,610)
4,372
(398,092)
(515,324)
(455)
(416,953)
107,676
(887,044)
(415,631)
17
Loss before income tax expense
(1,665,215)
(2,497,183)
Income tax expense
5
-
-
Loss after income tax expense for the year
(1,665,215)
(2,497,183)
Other comprehensive income
-
-
Total comprehensive loss for the year
(1,665,215)
(2,497,183)
Total comprehensive income for the year is
attributable to:
Non-controlling interest
Owners of Rent.com.au Limited
(230)
-
(1,664,985)
(2,497,183)
Total comprehensive loss for the year
(1,665,215)
(2,497,183)
Earnings Per Share
Cents
Cents
Basic and diluted (loss) per share
21
(0.57)
(1.05)
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 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Borrowings
Lease Liabilities
Total non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Share based payments reserve
Other reserve
Accumulated losses
Equity attributable to the owners of Rent.com.au Ltd
Non-controlling interest
Total equity
Note
Consolidated
2020
$
631,771
381,542
1,013,313
19,400
96,970
1,523,357
1,639,727
2019
$
151,534
313,905
465,439
36,254
-
1,707,567
1,743,821
2,653,040
2,209,260
556,823
8,602
80,988
184,403
830,816
5,734
21,365
27,099
593,177
8,602
-
177,503
779,282
14,335
-
14,335
857,915
793,617
1,795,125
1,415,643
37,114,067
6,314,856
243,726
35,313,752
6,319,226
-
(41,883,534)
(40,217,335)
1,789,115
1,415,643
6,010
-
1,795,125
1,415,643
6
7
8
9
10
11
12
13
14
12
13
15
16
16
18
19
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 2020
Issued
capital
Consolidated
$
Share
based
payment
reserves
$
Other
Reserve
Accumulated
loss
Non
Controlling
Interest
Total
equity
$
$
$
$
Balance at 1 July 2019
Adjustment for Impact
of AASB 16 [note 1]
Restated Balance
Loss after income tax
expense for the year
Total comprehensive
loss for the year
Transactions with
owners in their capacity
as owners:
Shares issued
Changes in ownership
Share based payments
Share issue costs
Balance at 30 June
2020
35,313,752
6,319,226
-
-
35,313,752
6,319,226
-
-
2,016,984
-
-
(216,669)
-
-
-
-
(4,370)
-
-
-
-
-
-
-
243,726
-
-
(40,217,335)
(1,214)
(40,218,549)
-
-
-
1,415,643
(1,214)
1,414,429
(1,664,985)
(230)
(1,665,215)
(1,664,985)
(230)
(1,665,215)
-
-
-
-
-
2,016,984
6,240
-
-
249,966
(4,370)
(216,669)
37,114,067
6,314,856
243,726
(41,883,534)
6,010
1,795,125
Issued
capital
Consolidated
$
Share
based
payment
reserves
$
Other
Reserve
Accumulated
loss
Non
Controlling
Interest
Total
Equity
$
$
$
$
Balance at 1 July 2018
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
Balance at 30
June 2019
34,912,935
6,426,905
-
-
500,003
(99,186)
-
-
-
-
-
(107,679)
35,313,752
6,319,226
-
-
-
-
-
-
-
(37,720,152)
(2,497,183)
(2,497,183)
-
-
-
(40,217,335)
-
-
-
-
-
-
-
3,619,688
(2,497,183)
(2,497,183)
500,003
(99,186)
(107,679)
1,415,643
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 2020
Cash flows from operating activities
Note
Consolidated
2020
$
2019
$
Receipts from customers (inclusive of GST)
2,704,473
2,436,335
Payments to suppliers and employees (inclusive of GST)
(3,810,099)
(4,428,233)
Other income
Interest received
Interest and other finance costs paid
(1,105,626)
(1,991,898)
355,437
1,952
(10,593)
71,283
10,237
(455)
Net cash used in operating activities
27
(758,830)
(1,910,833)
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
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
(3,354)
(477,163)
100
-
(13,724)
(594,639)
4,785
-
(480,417)
(603,578)
2,016,981
(216,703)
2,850
(83,644)
1,719,484
500,000
(99,186)
-
(24,472)
376,342
Net decrease in cash and cash equivalents
480,237
(2,138,069)
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial
year
151,534
2,289,603
631,771
151,534
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 2020
This financial report of Rent.com.au Limited (‘the Company’) and its controlled entities (‘the Group’)
for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the
Directors on 25 September 2020.
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 $1,665,215 and had net cash
outflows from operating and investing activities of $758,830 and $480,417 respectively for the
year ended 30 June 2020. As at that date the Group had net current assets of $182,497.
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 25, subsequent to year end the Group issued 33,333,333 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 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 ‘Leases’ and
for lessees eliminates the classifications of operating leases and finance leases. Except for short-
term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities
are recognised in the statement of financial position. Straight-line operating lease expense
recognition is replaced with a depreciation charge for the right-of-use assets (included in operating
costs) and an interest expense on the recognised lease liabilities (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. However, EBITDA (Earnings before Interest,
Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced.
26
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
New or amended Accounting Standards and Interpretations adopted (continued)
by interest expense and depreciation in profit or loss. For classification within the statement of
cash flows, the interest portion is disclosed in operating activities and the principal portion of the
lease payments are separately disclosed in financing activities. For lessor accounting, the standard
does not substantially change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives
have not been restated. The impact of adoption on opening accumulated losses as at 1 July 2019
was as follows:
Operating lease commitments as at 1 July 2019 (AASB 117)
Finance lease commitments as at 1 July 2019 (AASB 117)
Low-value assets leases not recognised as a right-of-use asset (AASB 16)
Accumulated depreciation as at 1 July 2019 (AASB 16)
Right-of-use assets (AASB 16)
Lease Liabilities – current (AASB 16)
Lease Liabilities – non-current (AASB 16)
Reduction in opening accumulated losses as at 1 July 2019
1 July 2019
$
187,475
22,936
(22,936)
(12,929)
174,546
(73,407)
(102,353)
(1,214)
When adopting AASB 16 from 1 July 2019, the Group has applied the following practical expedients:
-
-
-
-
-
applying a single discount rate to the portfolio of leases with reasonably similar
characteristics;
accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-
term leases;
excluding any initial direct costs from the measurement of right-of-use assets;
using hindsight in determining the lease term when the contract contains options to
extend or terminate the lease; and
not apply AASB 16 to contracts that were not previously identified as containing a lease.
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 financial assets and liabilities at fair value through profit or
27
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Basis of Preparation (continued)
loss, financial assets at fair value through other comprehensive income, investment properties,
certain classes of property, plant and equipment and derivatives 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 2020 and the results of all subsidiaries for the year then ended.
Rent.com.au Limited and its subsidiaries together are referred to in these financial statements as
the “Group”.
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 2020
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 recognised as a 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.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
29
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Revenue Recognition (continued)
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is
established.
Government Grants
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
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 2020
Note 1. Significant Accounting Policies (continued)
Income Tax (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 2020
Note 1. Significant Accounting Policies (continued)
Plant and equipment (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.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as
applicable, any lease payments made at or before the commencement date net of any lease
incentives received, any initial direct costs incurred, and, except where included in the cost of
inventories, an estimate of costs expected to be incurred or dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease
or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity
expects to obtain ownership of the lease asset at the end of the lease term, the depreciation is
over its estimated useful life. Right-of use assets are subjected to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right-of use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments
on these assets are expensed to profit or loss as incurred.
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
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.
32
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Intangible assets (continued)
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.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined,
the consolidated entity’s incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in
the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from
a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option
and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
33
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
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.
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 at 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
34
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Employee benefits (continued)
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.
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 or not that market
condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the
modification has not been made. An additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of the share-based compensation
benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the Group or
employee and is not satisfied during the vesting period, any remaining expense for the award is
recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation,
and any remaining expense is recognised immediately. If a new replacement award is substituted
for the cancelled award, the cancelled and new award is treated as if they were a modification.
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.
35
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Fair value measurement (continued)
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,
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. For each business
combination, the non-controlling interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree’s identifiable net assets. All acquisition costs are expensed as
incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the Group's operating or accounting policies and other pertinent conditions
in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group 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
36
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Business Combinations (continued)
the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the
consideration transferred and the pre-existing fair value is less than the fair value of the
identifiable net assets acquired being a bargain purchase to the acquirer, the difference is
recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after
a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are
initially accounted for on a provisional basis. The acquirer
retrospectively adjusts the provisional amounts recognised and also recognises additional assets
or liabilities during the measurement period, based on new information obtained about the facts
and circumstances that existed at the acquisition-date. The measurement period ends on either
the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all
the information possible to determine fair value.
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
37
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
Investments and other financial assets (continued)
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 Group 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
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 2020. 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.
38
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 1. Significant Accounting Policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
(continued)
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after
1 January 2020 and early adoption is permitted. The Conceptual Framework contains new
definition and recognition criteria as well as new guidance on measurement that affects several
Accounting Standards. Where the Group has relied on the existing framework in determining its
accounting policies for transactions, events or conditions that are not otherwise dealt with under
the Australian Accounting Standards, the Group may need to review such policies under the
revised framework. At this time, the applications of the Conceptual Framework is not expected
to have a material impact on the Group’s financial statements.
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
in relation to assets,
liabilities, contingent liabilities, revenue and expenses.
judgements and estimates
its
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19)
pandemic has had, or may have, on the Group based on known information. This consideration
extends to the nature of the products and services offered, customers, supply chain, staffing and
geographic regions in which the Group operates. Other than as addressed in specific notes, there
does not appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the consolidated entity
unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19)
pandemic.
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.
39
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 2. Critical accounting judgements, estimates and assumptions - continued
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, historical collection rates, the impact of Coronavirus
(COVID-19) pandemic and forward-looking information that is available. The allowance for
expected credit losses, as disclosed in note 10, is calculated based on the information available at
the time of preparation. The actual credit losses in future years may be higher or lower.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and
lease liability, Judgement is exercised in determining whether there is reasonable certainty that
an option to extend the lease or purchase the underlying asset will be exercised, or an option to
terminate the lease will not be exercised, when ascertaining the periods to be included in the lease
term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered
at the lease commencement date. Factors considered maybe include the importance of the asset
to the Group’s operations, comparison of terms and conditions to prevailing market rates;
Incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or
significant change in circumstances.
Note 3. Revenue
Consolidated 30 June 2020
Consolidated
Timing of revenue recognition 30 June 2020
Goods
transferred at
a point in time
Services
transferred over
a period of time
Total
$
$
$
Fees from agents and landlords
28,996
124,986
153,982
Renter Products Revenue
1,110,884
202,027
1,312,911
Advertising Sales
228,707
756,639
985,346
Other Revenue
Total
-
-
-
1,368,587
1,083,652
2,452,239
40
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 3. Revenue (Continued)
Consolidated 30 June 2019
Consolidated
Timing of revenue recognition 30 June 2019
Goods
transferred at
a point in time
Services
transferred over
a period of time
Total
$
$
$
Fees from agents and landlords
28,933
122,585
151,518
Renter Products Revenue
958,915
273,852
1,232,767
Advertising Sales
190,121
589,786
779,907
Other Revenue
Total
-
-
-
1,177,969
986,223
2,164,192
Consolidated 30 June 2020
Geographical regions
Australia
Note 4. Other Income
R&D Incentive recognised in income
Interest income
Government grants
Note 5. Income Tax
a)
The components of tax expense comprise:
Current tax
Deferred tax
Total income tax expense
Consolidated
2020
$
2019
$
2,452,239
2,164,192
Consolidated
2020
$
193,438
1,952
162,000
357,390
2019
$
71,283
10,237
-
81,520
Consolidated
2020
$
2019
$
-
-
-
-
-
-
b)
The prima facie tax on loss from ordinary activities before income tax is reconciled to the
income tax as follows:
41
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 5. Income Tax (continued)
Consolidated
2020
$
2019
$
Prima facie tax payable on loss from ordinary
activities before income tax at 27.5%
(457,934)
(686,725)
Tax effect of:
Share based payments
Tax losses not recognised
Timing differences not recognised
Other
Total income tax expense
(1,202)
480,258
49,857
(70,979)
-
(29,611)
819,389
(78,488)
(24,565)
-
c)
Deferred tax assets at 30 June 2020 not brought to account are:
Revenue tax losses
Other
Total Deferred tax asset not recognised
5,742,422
24,382
5,766,804
5,316,186
110,099
5,426,285
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
Reconciliation to cash and cash equivalents at the end
of the financial year
Consolidated
2020
$
611,506
20,265
631,771
2019
$
131,534
20,000
151,534
Balance as per statement of cash flows
631,771
151,534
42
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
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% (2019: 0.84%).
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
Prepayments
GST receivable
Total trade and other receivables
Consolidated
2020
$
332,397
(2,815)
329,582
51,960
-
381,542
2019
$
221,965
(7,549)
214,416
95,465
4,024
313,905
Allowance for expected credit losses
The Group has recognised a loss of $10,274 (2019: $17,884) in profit or loss in respect of the
expected credit losses for the year ended 30 June 2020.
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
2020
$
-
2,815
-
2,815
Movement in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing Balance
Consolidated
2020
$
7,549
10,274
(15,008)
2,815
2019
$
-
3,000
4,549
7,549
2019
$
13,706
17,884
(24,041)
7,549
As at 30 June 2020 there were no customers with balances past due but without provision for
impairment.
43
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 7. Trade and Other Receivables (continued)
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
2020
$
207,744
(188,344)
19,400
2019
$
204,390
(168,136)
36,254
Reconciliations of the written down values at the beginning and end of the current and previous
financial year are set out below:
Consolidated
2020
$
36,254
3,354
(20,208)
-
19,400
Consolidated
2020
$
174,546
(77,576)
96,970
2019
$
22,149
37,430
(23,031)
(294)
36,254
2019
$
-
-
-
Balance at the beginning of the year
Additions
Depreciation
Disposals
Written down balance at end of year
Note 9. Right-of-use asset
Building – right of use
Less: accumulated depreciation
Additions to assets during the year was $174,546.
44
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 10. Intangible Assets
Consolidated
2020
$
2019
$
Software and website development at cost
5,483,416
4,882,467
Less: accumulated amortisation
(3,960,059)
(3,174,900)
1,523,357
1,707,567
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
Written down balance at end of year
Note 11. Trade and Other Payables
Trade creditors
Other payables
GST Payable
Total Trade and Other Payables
Consolidated
2020
$
1,707,567
600,949
(785,159)
1,523,356
2019
$
1,656,648
594,638
(543,719)
1,707,567
Consolidated
2020
$
257,832
293,882
5,109
556,823
2019
$
314,801
278,376
-
593,177
Trade payables are non-interest bearing and are normally settled on 30 to 60-day terms.
Note 12. Borrowings
Finance lease liability – current
Finance lease liability – non-current
Total Borrowings
Consolidated
2020
$
8,602
5,734
14,336
2019
$
8,602
14,335
22,937
These are finance leases for computer equipment with an average remaining term of 20 months.
The interest rates and repayments are fixed.
45
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 13. Lease liability
Lease liability – current
Lease liability – non-current
Total Lease liability
Note 14. Employee Benefits
Annual leave
Long service leave
Total Employee Benefits
Consolidated
2020
$
80,988
21,365
102,353
Consolidated
2020
$
153,226
31,177
184,403
2019
$
-
-
-
2019
$
135,795
41,708
177,503
Expected to be settled within 12 months
184,403
177,501
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 15. Issued Capital
Consolidated
2020
$
2019
$
Ordinary shares fully paid
37,114,067
35,313,752
Ordinary shares fully paid
Movements in ordinary share capital
Shares
Shares
302,635,759
249,497,272
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
Conversion of performance rights during year
Share issue transaction costs
-
Closing Balance – 30 June 2019
249,497,272
(99,186)
35,313,752
46
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 15. Issued Capital (continued)
Details
Shares
Issue price
$
Opening Balance – 1 July 2019
249,497,272
35,313,752
Issue of shares – July and August 2019
41,582,864
$0.036
1,496,983
Issue of shares – March 2020
11,555,554
$0.045
519,999
Issue of shares – performance shares 31 Jan 2019
69
$0.048
3
Share issue transaction costs
-
Closing Balance – 30 June 2020
302,635,759
(216,670)
37,114,067
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.
47
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 16. Reserves
Consolidated
2020
$
2019
$
Share based payment reserve
6,314,856
6,319,226
Other reserve
243,726
-
Share Based Payment Reserve
The share-based payment reserve recognises options, performance rights and performance
shares that have been issued as share based payments.
Other reserve
This reserve is used to recognise the change in the share of the non-controlling interest.
Note 17. 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.
48
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 17. Share Based Payments (continued)
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
2020
$
(4,373)
3
-
2019
$
(114,313)
3
6,634
Total share-based payments (reversal)/expense
(4,370)
(107,676)
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
2020
17 Jun 2015 17 Jun 2020
$0.25 19,000,000
17 Jun 2015 17 Jun 2020
$0.30 13,385,000
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
1,740,000
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
45,275,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(19,000,000)
(13,385,000)
(7,000,000)
-
-
-
-
-
-
-
-
-
-
-
400,000
266,666
1,740,000
-
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
1,250,000
(39,385,000)
5,890,000
4,016,666
Weighted average exercise price
$0.28
n/a
n/a
n/a
$0.34
$0.25
There were no new options granted during the financial year ending on 30 June 2020.
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
49
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 17. Share Based Payments (continued)
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.
Grant Date
Expiry Date
Balance at
start of year
Granted
during the
year
Exercise
d 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
2020
Performance Shares
17 Jun 20152 31 Dec 2019
8,160,771
Performance Rights
17 Jun 20152 31 Dec 2019
701,899
13 Aug 20152 31 Dec 2019
22 Feb 20162 31 Dec 2019
46,666
80,000
09 Sep 20162 31 Dec 2019
3,183,741
-
-
-
-
-
01 May 20203 30 Nov 2020
-
3,863,337
12,173,077
3,863,337
-
-
-
-
-
-
-
(8,160,771)
(701,899)
(46,666)
(80,000)
(3,183,741)
-
-
-
-
-
-
3,863,337
(12,173,077)
3,863,337
2019
Performance Shares
17 Jun 20151 31 Dec 2018
17 Jun 20152 31 Dec 2019
8,160,771
8,160,771
Performance Rights
17 Jun 20151 31 Dec 2018
17 Jun 20152 31 Dec 2019
13 Aug 20151 31 Dec 2018
13 Aug 20152 31 Dec 2019
22 Feb 20161 31 Dec 2018
22 Feb 20162 31 Dec 2019
09 Sep 20161 31 Dec 2018
09 Sep 20162 31 Dec 2019
795,720
795,720
46,667
46,666
80,000
80,000
3,283,741
3,283,741
24,733,797
-
-
-
-
-
-
-
-
-
-
-
(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)
12,173,077
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 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.
2 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.
3 Tranche 7 performance rights- these performance rights will vest upon continuous employment with the Group until 31
October 2020.
50
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 17. Share Based Payments (continued)
For the performance rights granted during the financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date
1 May 2020
Number of performance
rights
Share price at
grant date
Total fair value
at grant date
3,863,337
$0.03
$115,900
Type
Rights
Underlying share price
Probability %*
Value ($)
Performance
Rights
3,863,337
3,863,337
$0.03
$0.03
100%
115,900
-
115,900
* The probability estimated by the management is over the expiry date of the performance shares/rights.
Note 18. Accumulated Losses
Consolidated
2020
$
2019
$
Accumulated losses at the beginning of the financial year
(40,217,335)
(37,720,152)
Adjustment for change in accounting
Loss after income tax for the year
(1,214)
-
(40,218,549)
(37,720,152)
(1,664,985)
(2,497,183)
Accumulated losses at the end of the financial year
(41,883,534)
(40,217,335)
Note 19. Non-controlling interest
Issued Capital
Accumulated losses
Consolidated
2020
$
6,240
(230)
6,010
2019
$
-
-
-
The non-controlling interest relates to Novatti Group holding a 2.5% equity holding in RentPay Technology Pty Ltd.
Note 20. 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 services
Research & Development Grant services
Total auditor’s remuneration
51
Consolidated
2020
$
48,000
9,870
26,217
84,087
2019
$
48,000
8,100
23,788
79,888
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 21. Earnings per Share
Loss after income tax
Non-controlling interest
Loss after income tax attributable to the owners
of Rent.com.au Limited
Weighted average number of ordinary shares
used in calculating basic loss per share
Adjustments for calculation of diluted earnings
per share:
Options over ordinary shares
Basic and diluted (loss) per share
Consolidated
2020
$
2019
$
(1,665,215)
(2,497,183)
230
-
(1,664,985)
(2,497,183)
Number
Number
291,564,581
238,285,985
-
-
291,564,581
238,285,985
Cents
(0.57)
Cents
(1.05)
Options have not been included in the calculation of dilutive loss per share as the options are anti-
dilutive.
Note 22. 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 23. 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.
52
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 24. Commitments
Operating lease commitments
Future minimum rentals payable under non-cancellable office leases are as follows:
Within one year
After one year but not more than five years
Total operating lease commitments
Consolidated
2020
$
-
-
-
2019
$
156,300
195,375
351,675
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
Note 25. Events After the Reporting Period
2020
$
8,602
5,734
14,336
14,336
-
14,336
2019
$
8,602
14,335
22,937
22,937
-
22,937
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while the impacts on the
Group up to 30 June 2020 have not been as significant as initially anticipated it is not practicable
to estimate the potential impact, positive or negative, after the reporting date. The situation is
rapidly developing and is dependent on measures imposed by State and Federal governments,
such as maintaining social distancing requirements, quarantine, travel restrictions and any
economic stimulus that may be provided.
On 14 August 2020, the Group issued 2,916,668 remuneration performance rights to the
directors in lieu of directors fees following shareholder approval at its General Meeting.
On 15 September 2020, the Group issued 33,333,333 shares at an issue price of $0.045 per share
to sophisticated, professional and other exempt investors under section 708 of the Corporations
Act 2001 (Cth), to raise $1.5 million (before costs).
Apart from the above, no other matter or circumstance has been arisen since 30 June 2020
that has significantly affected, or maybe significantly affect the Group’s operations, the results of
those operations, or the Group’s state of affairs in future financial years.
53
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 26. 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.
Parent Entity
Rent.com.au Limited
Name of controlled entity
Rent.com.au (Operations) Pty Ltd
Lease.com.au Pty Ltd
RentPay Technology Pty Ltd*
Country of
Incorporation
Principal Activity
Percentage Owned
2020
2019
Australia
Investment/Parent
Australia
Australia
Australia
Information Technology
Information Technology
Information Technology
100%
100%
97.5%
100%
100%
-
*incorporated by the Group on 17 September 2019.
The Group financial statements incorporate the assets, liabilities and result of the following
subsidiary with non-controlling interests in accordance with the accounting policy described in
note 1:
Country of
Incorporation
Parent
Non-controlling interest
Ownership
interest
2020
%
Ownership
interest
2019
%
Ownership
interest
2020
%
Ownership
interest
2019
%
Name
RentPay Technology Pty Ltd*
Australia
97.5%
-
2.5%
-
* the non-controlling interests hold 2.5% of the voting rights of RentPay Technology Pty Ltd
Summarised financial information
Summarised financial information of the subsidiary with non-controlling interests that are material
to the consolidated entity are set out below:
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
54
RentPay Technology Pty Ltd
2020
$
2019
$
103,677
455,275
558,952
1,513
317,017
318,530
240,422
-
-
-
-
-
-
-
-
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 26. Controlled Entities (Continued)
Summarised statement of profit or loss and other comprehensive
income
Revenue
Expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Total comprehensive income
Statement of cash flows
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Other financial information
Loss attributable to non-controlling interests
Accumulated non-controlling interests at the end of reporting period
Note 27. Cashflow Information
RentPay Technology Pty Ltd
2020
$
2019
$
63,368
(72,571)
(9,203)
-
(9,203)
-
(9,203)
39,277
(63,750)
32,725
8,252
(230)
6,010
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
Interest expense
Changes in assets and liabilities:
- trade and other receivables
- trade payables and accruals
- employee benefits
Consolidated
2020
$
2019
$
(1,665,215)
(2,497,183)
(4,372)
882,943
15,008
12,878
29,384
(36,358)
6,902
(107,676)
566,750
6,157
-
114,873
72,941
(66,695)
Cash flows used in operations
(758,830)
(1,910,833)
55
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 28. Non-cash investing and financing activities
Acquisition of plant and equipment by means of finance
leases
Total non-cash investing and financing activities
Note 29. 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
Lease liability
Balance at the beginning of the year
Lease liability recognised
Net cash used in financing activities
Balance at the end of the year
Note 30. Related Party Transactions
The Group’s main related parties are as follows:
Consolidated
2020
$
2,850
2,850
Consolidated
2020
$
22,937
(11,451)
2,850
14,336
-
175,761
(73,408)
102,353
2019
$
25,803
25,803
2019
$
21,606
(24,472)
25,803
22,937
-
-
-
-
(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 29.
(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.
56
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 30. Related Party Transactions (continued)
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
Outgoings and others – Watersun Property Pty Ltd2
Cleaning – Servco Pty Ltd2
Interest expense2
Amortisation of right of use asset2
Total Related Party Transactions
Balances owing to related parties at 30 June 2020:
Watersun Property Pty Ltd2
Servco Pty Ltd2
Directors’ fees3
Right of use asset2
Lease liability2
2020
$
-
126,049
5,912
10,593
77,576
2019
$
15,000
115,562
7,200
-
-
220,130
137,762
Consolidated
2020
$
109,170
1,102
29,168
96,970
102,353
338,763
2019
$
86,101
600
-
-
-
86,701
1
2
3
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.
Directors’ fees will be repaid with performance rights in lieu of fees. The issue of performance rights to the
directors was approved by the shareholders on 14 August 2020.
Note 31. Interests of Key Management Personnel
Compensation of Key Management Personnel (KMP)
The aggregate compensation made to key management personnel of the Group is set out below:
Consolidated
2020
$
540,833
41,760
-
582,593
2019
$
525,000
41,563
1,762
568,325
Short-term employee benefits
Post-employment benefits
Share-based payments
Total KMP remuneration
57
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 32. Financial Risk Management
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:
Note
6
7
11
12
13
Consolidated
2020
$
631,771
329,582
961,353
Consolidated
2020
$
551,714
14,336
102,353
668,403
2019
$
151,534
214,416
365,950
2019
$
593,177
22,937
-
616,114
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Trade and other payables*
Borrowings
Lease liability
Total Financial Liabilities
* Excluding GST and prepayment.
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.
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
58
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 32. Financial Risk Management (continued)
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
Consolidated
2020
$
2019
$
631,771
151,534
-
-
-
-
6
631,771
151,534
AA- Rated
A+ Rated
Unrated
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
59
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 32. Financial Risk Management (continued)
b) Liquidity Risk (continued)
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.
Financial liabilities due for payment
Within 1 year
1 to 5 Years
Total
Weighted
average
effective
interest rate
%
-
-
Trade and other
payables
Borrowings
2020
2019
2020
2019
2020
2019
$
$
551,714
593,177
$
-
$
-
$
$
551,714
593,177
8,602
8,602
5,734
14,335
14,336
22,937
Lease liability
7.43
80,989
-
21,364
-
102,353
-
Financial assets realisable cash flows
Within 1 year
1 to 5 Years
Total
Weighted
average
effective
interest rate
2020
2019
2020
2019
2020
2019
%
$
$
0.50%
631,771
151,534
-
329,582
214,416
$
-
-
$
-
-
$
$
631,771
151,534
329,582
214,416
Cash and cash
equivalents
Trade and other
receivables
c) Market Risk
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.
(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.
60
Rent.com.au Limited
Notes to the Financial Statements
30 June 2020
Note 33. Contingent Liabilities
There are no contingent liabilities for the year ended 30 June 2020 (30 June 2019: nil).
Note 34. 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
(1,423,786)
(2,497,183)
(1,423,786)
(2,497,183)
2020
$
2019
$
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
1,134
1,858,301
1,018
1,451,826
1,859,435
1,452,844
(70,319)
(70,319)
(37,201)
(37,201)
75,119,623
9,701,691
(83,032,198)
73,317,991
9,706,064
(81,608,412)
1,789,116
1,415,643
Contingent Liabilities and Capital expenditure
There are no contingent liabilities for the parent entity for both financial periods ended 30 June
2020 and 30 June 2019.
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 indicate the need to adjust the carrying value of the investment.
61
Rent.com.au Limited
Directors’ Declaration
30 June 2020
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 2020 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company 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, 25 September 2020
62
Rent.com.au Limited
Additional ASX Information
30 June 2020
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 17 September 2020 includes the following securities:
Equity Class
Fully paid ordinary shares
Performance Rights
Unlisted options (exp 6 Feb 2022, ex $0.042)
Employee Options
Number of holders
Total on issue
989
12
1
11
335,969,092
6,780,005
5,982,028
5,310,000
All issued fully paid ordinary shares carry one vote per share.
2. Distribution of Ordinary Shares as at 17 September 2020
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-and over
Total
Holders
154
29
118
416
272
989
Units
8,220
91,208
1,024,490
16,506,112
%
0.00%
0.03%
0.30%
4.91%
318,339,062
94.75%
335,969,092
100.00%
There were 251 holders of less than a marketable parcel of ordinary share, and 30 holders from
overseas holding 5,800,053 shares.
3. Substantial shareholder notices lodged with the Company
Name
S G Hiscock and Company
Number*
28,981,683
%
8.63%
Mr Jason Alan Carroll
8.52%
* Number of shares held at 17 September 2020 where known, otherwise number of shares is at date of substantial
shareholder notice lodged with the Company
28,638,023
4. Voting Rights
See note 15 of the financial statements.
5. Restricted securities subject to escrow period
There are currently no securities that are subject to escrow periods.
6. On-market buy back
There is currently no on-market buyback program for any of Rent.com.au Limited’s listed
securities.
63
Rent.com.au Limited
Additional ASX Information
30 June 2020
7. Top 20 Largest Holders of Ordinary Shares as at 17 September 2020
Name
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2 MR JASON ALAN CARROLL
3 BADER SMSF PTY LTD
4 CS THIRD NOMINEES PTY LIMITED
5 AJAVA HOLDINGS PTY LTD
6 MR MARK WOSCHNAK
7 MR MARK DANIEL NEEDHAM & MRS PIENGJAI NEEDHAM
8 AUSTCORP NO 214 PTY LTD
9 TEFIG PTY LTD
10 CITICORP NOMINEES PTY LIMITED
11 MR ANTHONY BRENDON COPE & MRS AMANDA GAY COPE
12 POTTER SUPER PTY LTD
13 DR GARRY DESMOND & MRS FRANCES SAMBRAILO GARSIDE
14 REEFBAY HOLDINGS PTY LTD
15 BFB HOLDINGS PTY LTD
16 MR BENJAMIN PATRICK SANDEMAN
17 TREASURE ISLAND HIRE BOAT
18 ALTOR CAPITAL MANAGEMENT
19 RIVERVIEW CORPORATION PTY LTD
20 CORNELA PTY LTD
Total Top 20
Others
Number
43,382,568
28,379,555
16,050,711
12,300,000
10,850,657
10,025,000
7,400,000
6,411,036
5,779,546
5,668,242
4,792,785
4,733,333
4,163,636
4,017,805
3,977,814
3,863,358
3,706,662
3,385,792
3,359,889
3,240,195
185,488,584
150,480,508
%
12.91%
8.45%
4.78%
3.66%
3.23%
2.98%
2.20%
1.91%
1.72%
1.69%
1.43%
1.41%
1.24%
1.20%
1.18%
1.15%
1.10%
1.01%
1.00%
0.96%
55.21
44.79
Total Ordinary Shares on Issue
335,969,092
100.00
8. Unquoted Securities
The names of the security holders holding more than 20% of an unlisted class of security are listed
below:
Novatti Pty Ltd
Mr Greg Bader
Total other holders
Total
Total holdings over 20%
Other holders
Unlisted Options
$0.042
6 Feb 2022
Performance
Rights
Employee
Options
5,982,028
-
-
5,982,028
1
0
-
1,600,001
5,180,004
6,780,005
1
11
-
3,750,000
1,560,000
5,310,000
1
10
64