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f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 6
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C O R P O R A T E D I R E C T O R Y
Directors
Auditor
Mr Charles Chen – Managing Director
Mr Ivan Teo – Finance Director
Mr Oliver Cairns – Non-Executive Director
Mr Kaijian Chen – Non-Executive Director
Ms Shannon Coates – Non-Executive Director
Bentleys Audit & Corporate (WA) Pty Ltd
Level 3, 216 St Georges Terrace
Perth, Western Australia 6000
Australia
Company Secretary
Ms Shannon Coates
Banker
National Australia Bank
1238 Hay Street
West Perth, Western Australia 6005
Australia
Principal and Registered Office
Solicitors
Suite 5, 62 Ord Street
West Perth, Western Australia 6005
Australia
Telephone: +61 8 9226 3865
Facsimile: +61 8 9322 5230
Allion Legal
863 Hay Street
Perth, Western Australia 6000
Australia
Austin Haworth & Lexon Legal
Level 12, 87-89 Liverpool Street
Sydney, New South Wales 2000
Australia
Share Registry
Securities Exchanges
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, Western Australia 6000
Australia
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth, Western Australia 6000
Australia
Telephone: +61 8 9323 2000
Facsimile: +61 8 9323 2033
Website and Email
Website: www.vmoto.com
Email: info@vmoto.com
ASX Code: VMT
Vmoto Limited is a public company incorporated in
Western Australia and listed on the Australian
Securities Exchange.
Inside Cover
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C O N T E N T S
Corporate Directory
Managing Director’s Letter
Operations Review
Directors’ Report
Remuneration Report
Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Additional Shareholder Information
Page
Inside cover
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M A N A G I N G D I R E C T O R’ S L E T T E R
Dear Shareholders,
I present to you Vmoto Limited’s Annual Report for the 2016 financial year.
FY2016 was a challenging year for Vmoto in which we were faced with continuing consumer nervousness resulting from
some regional governments in several Chinese cities implementing stricter rules on the use of electric two-wheel vehicles.
This impacted on Chinese domestic sales, whilst international sales were lower than anticipated due to delays in receipt
of expected orders and the launch of new models. As a result, the Board took the prudent decision to recognise
impairments, including for inventories, development costs, and other intellectual property, noting that with the exception
of goodwill, this position may be reversed in future periods with improved performance.
Despite this, the Company continued building on its foundations for future growth by investing heavily in product
development and international sales and marketing initiatives and we are encouraged by the reaction from existing and
potential customers (particularly internationally where margins are higher). We will look to consummate as many of these
sales as possible during FY2017 and in future years.
The Shanghai Jiye operation (Vmoto 51%, PowerEagle 49%) became operational at its leased facilities in Shanghai for the
full financial year and Jiye is now strategically placed to target e-commerce companies in China that require electric two-
wheel vehicles for their operations, as well as seeking to increase its distribution base into other cities. Coupled with our
wholly owned manufacturing facility in Nanjing, China, we have a total production capacity of approximately 450,000
two-wheel vehicles per annum, with no additional capex required, and are well positioned to meet demand for electric
two-wheel vehicles as this grows both domestically in China and internationally.
We have identified the scooter sharing and rental market as an excellent source of potential future revenue and, during
the year, Vmoto’s customer, LoopShare Ltd, www.loopscooters.com, commenced trial operations of a shared fleet of
electric scooters in the cities of Beirut, Lebanon and Okinawa, Japan. This is the first fleet of shared electric scooters utilising
the LoopShare technology worldwide and will determine operational parameters for a full scale rollout of the LoopShare
service. LoopShare aims to deploy field trials in other cities worldwide, followed by commercial rollouts planned for 2017.
Vmoto exhibited its current and latest range of high performance electric scooter and motorcycle products at several trade
fairs during the year, including the Intermot trade fair in Germany (www.intermot-cologne.com), one of the world’s largest
exhibitions and events for two-wheel vehicles. The Company received positive sales leads and feedbacks from potential
B2B and B2C distributors and customers across Europe and continues to progress potential orders. Additionally, a number
of existing and new international customers visited the factory to undertake trials and discuss future requirements, orders
for which are expected to flow through during FY2017.
Vmoto currently has distrbutors and customers in over 36 countries, inlcuding Australia, Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Italy, Mexico, Netherlands, Poland, Portugal, Spain, Sweden, Switzerland, the United
Kingdom and Uruguay and is continually adding to its customer base. Our pipeline of new business and opportunties in
the two-wheel electric vehicle space is the strongest it has ever been and I firmly believe that Vmoto has the foundations
and infrastructure in place to support increased demand as the electric vehicle market for both B2B and B2C customers
continues to grow on a global basis. The outlook for growth in 2017 is encouraging and management looks forward to
reporting positive developments throughout the year.
I would like to personally thank my fellow Directors, and express my gratitude to the Company’s management and staff
for their contribution during the 2016 financial year as well as the continued support from all our shareholders. We look
forward to a prosperous year in 2017.
Yours faithfully
Charles Chen
Managing Director
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O P E R A T I O N S R E V I E W
OVERVIEW
Vmoto Limited (ASX: VMT), the global electric vehicle manufacturing and distribution group specialising in “green”
electric powered two-wheel vehicles, provides the following operations review for the year ended 31 December 2016.
FY2016 was operationally a very busy year for Vmoto as the Company invested significant resources into developing new
models and participating in international market exhibitions. This time and investment is considered essential for Vmoto
to stay competitive in the growing electric two-wheel vehicle market and the levels of interest in the Company products
has been as positive as the Company could hope for.
Unfortunately the rewards from this work were not reflected in the FY2016 results but the Company is confident of seeing
them come through in future months and years.
Revenue dropped 24% to $36.3 million (FY15: $47.6 million) largely as a result of lower than anticipated orders from
international customers, Chinese consumer nervousness due to government regulations and the fluctuation of AUD:RMB
exchange rate (average A$1: RMB4.69 for FY2015; average A$1:RMB4.95 for FY2016), which impacted on the translation
of sales from trading currency to reporting currency.
Vmoto continued to attract interest from high quality international customers and successfully secured and supplied
products to a number of renowned international business groups. These include a significant European supermarket
group, LoopShare in North America and a large group focused on renting electric vehicles to fast food chains and postal
companies. Whilst international sales were down in FY2016, reflecting both the delay in orders and the launch of new
models, existing customer relationships continue to be strong, with repeat orders and new customers continuing to come
into the business. The Company has strengthened the international sales and marketing team in Nanjing, with
international sales growth being the primary focus.
In China, the Shanghai Jiye (Jiye) operation became fully established and operational at facilities in Shanghai. Jiye has
experienced lower margins on vehicles manufactured for the Chinese market due to additional marketing spend and price
discounting considered necessary to counter consumer nervousness due to regional governments in several Chinese cities
implementing stricter rules on the use of electric two-wheel vehicles. However, it should be noted that Jiye is strategically
placed to target e-commerce companies in China that require electric two-wheel vehicles for their operations, as well as
seeking to increase its distribution base into other cities.
Over the 12 month period to 31 December 2016, the Consolidated Entity’s net assets decreased 39% to $20.8 million (31
December 2015: $34.1 million). It should be noted that the Company engaged an independent external property valuation
company post 31 December 2016 to value the Company’s Nanjing land and Stage 1 & Stage 2 buildings. These land and
buildings are currently carried at cost on the balance sheet as at 31 December 2016 at $6.1 million pleasingly, the external
property valuation company has valued the Company’s Nanjing land and Stage 1 & Stage 2 buildings at $11.8 million,
which represents a valuation increment of $5.7 million.
As at 31 December 2016, the total operating facility drawn down was RMB5 million (approximately $1 million) and the
total undrawn operating facility available was RMB20 million (approximately $4 million).
As at 31 December 2016, the Company had cash of $4.4 million.
EXISTING MARKETS
During the period, the Company achieved total unit sales of 85,106 units of electric two-wheel vehicles across the Group,
down 4% from FY2015 (FY2015: 88,450) as it continued ramping up production across its domestic and international sales
channel. Of this, the Company sold approximately 77,348 units of electric two-wheel vehicles across China through the JV
and its external distributors.
Internationally, the Company continued its strong relationships with its B2B and B2C customers, with many placing orders
that will flow through in FY2017.
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O P E R A T I O N S R E V I E W
NEW MARKETS
During the period, the Company supplied Vmoto’s electric two-wheel vehicle products to a significant European
supermarket group with approximately 300 stores throughout Europe. The Company continues to supply to this group
and expects to receive further orders in FY2017 and to establish a long term sales channel through these stores.
As announced on 28 September 2015, the Company entered into an international supply agreement with LoopShare Ltd
(LoopShare) (formerly known as Saturna Green Systems Inc), a North American Telematics high-tech company, focused
on developing state-of-the-art wireless shared transportation and communication systems for electric two and three-wheel
vehicles. Following initial trials, testing and financing, LoopShare intends to purchase a minimum of 32,000 units of
Vmoto’s E-Max electric scooters fitted with LoopShare’s technology, platform and software over 5 years for use in
LoopShare’s Electric Scooter Sharing Project in North America and Europe. During the period, LoopShare commenced
trial operations of shared fleet of electric scooters in the cities of Beirut, Lebanon and Okinawa, Japan.
During the period, the Company supplied Vmoto’s electric two-wheel vehicle products to a large European group focused
on renting electric vehicles to fast food chains and postal companies. This group has operated in its industry for many
years and has secured significant rental contracts with a number of significant fast food chains and postal companies. The
Company continues to supply to this group and expect to receive more orders and to establish long term sales channel
through this business model.
During the period, the Company signed an exclusive distribution agreement with a Spanish company to distribute, stock
and market the Company’s Vmoto and E-Max range of electric scooter products for the Spanish market.
In addition to the above, Vmoto continued to receive significant interest in our electric two-wheel vehicle products and
progressed significant new market entries, distribution and customer opportunities in Austria, Australia, Columbia,
Denmark, Finland, France, Germany, Israel, Japan, Korea, Lebanon, Malaysia, Malta, Mexico, Sweden and Uruguay.
CORPORATE
During the year the Company issued a total of 6,206,488 shares, comprising 2,320,067 shares to employees and consultants
of the Company in consideration for service provided, 86,420 shares to a Director in lieu of Director fees, 466,668 shares to
Directors following the vesting of performance rights and 3,333,333 shares to nominees of PowerEagle as tranche one
consideration for the JV.
The Company is continuing its search to identify an experienced Australian based non-executive Chairman to further
strengthen the Board and support the Company through its next phase of growth.
OUTLOOK
Vmoto is committed to executing its strategy of selling high value, high performance electric two-wheel vehicles to the
international B2B sector, including delivery, scooter sharing and scooter renting customers. Vmoto has the ability to
continue to win high quality international customers and the expectation of increased demand from our distributors and
customers, and the Company will remain focussed on increasing sales growth in FY2017.
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D I R E C T O R S ’ R E P O R T
The Directors present their report together with the consolidated financial statements of Vmoto Limited (“Vmoto” or the
“Company”) and its controlled entities (the “Consolidated Entity”) for the financial period 1 January 2016 to 31 December
2016.
Directors
The Directors of the Company at any time during or since the end of the financial year are:
Name
Experience and responsibilities
Charles Chen
Managing Director
Mr Chen was appointed as Executive Director on 5 January 2007 and Managing Director
of the Company on 1 September 2011.
Mr Chen founded Freedomotor Corporation Limited in 2004, through a management
buyout of key assets, which were subsequently acquired by Vmoto. He holds a Bachelor
of Automobile Engineering from Wuhan University of Automobile Technology (China)
and a postgraduate Diploma of Business Administration from South Wales University
(UK).
From 1993 to 2002, Mr Chen held senior executive roles with Hainan Sundiro
Motorcycle Co, Ltd, the largest publicly listed industrial company in Hainan Province.
Hainan Sundiro was acquired by Honda Japan in 2001.
Mr Chen is based in Nanjing, China, and oversees all of the Company’s operations and
activities.
Ivan Teo
Finance Director
Mr Teo was appointed as Finance Director of the Company on 29 January 2013. Prior to
this appointment, Mr Teo was employed as the Company’s Chief Financial Officer from
17 June 2009.
Oliver Cairns
Independent
Non-Executive Director
Mr Teo is a qualified Chartered Accountant and has over 15 years’ experience in
accounting, audit, corporate finance and international business serving private and
public companies in a diverse range of industries including automobile, manufacturing,
mining and retail.
Mr Teo holds a BCom degree from the University of Adelaide and is based in Nanjing,
China.
Mr Cairns was appointed as Non-Executive Director of the Company on 1 September
2011.
Mr Cairns has over 17 years’ experience in the small to mid-cap corporate and capital
markets space. A corporate financier, he was a Nominated Advisor for AIM companies
in London for over eight years before relocating to Perth in 2007 where he established
Pursuit Capital, a corporate and strategic advisory firm. His wide experience covers
international capital raisings, M&A, IPOs, regulatory advice, investor relations and
corporate governance.
Mr Cairns graduated with a degree in Classics from the University of Exeter and is a
member of the Securities Institute (UK).
Mr Cairns will be retiring and seeking re-election by shareholders at the Company’s
2017 Annual General Meeting.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Kaijian Chen
Independent
Non-Executive Director
Mr Chen was appointed as Non-Executive Director of the Company on 1 September
2011.
Mr Chen has extensive experience in the motorcycle manufacturing industry in China.
He was formerly vice president of Hainan Sundiro Motorcycle Co, Ltd, which was the
second largest motorcycle manufacturer in China at the time, and which was
subsequently acquired by Honda in 2001.
Mr Chen also served as vice president for Jiangsu Xinri E-Vehicle Co, Ltd, which is one
of the largest electric vehicle manufacturers in China at present. The annual production
of Xinri in 2010 was over 2 million units of electric two-wheel vehicles for the Chinese
domestic market. Mr Chen is currently serving as vice president of Changzhou Supaiqi
E-Vehicle Co, Ltd.
Mr Chen holds a degree from the Beijing Institute of Technology and is based in
Changzhou, China.
Shannon Coates
Ms Coates was appointed as Non-Executive Director of the Company on 23 May 2014.
Independent
Non-Executive Director
Ms Coates completed a Bachelor of Laws through Murdoch University in 1993 and has
since gained over 20 years in-house experience in corporate law and compliance for
public companies. She is a Chartered Secretary and an Associate Member of both the
Institute of Chartered Secretaries & Administrators and Chartered Secretaries Australia.
Ms Coates is a director of Evolution Corporate Services Pty Ltd, a company providing
corporate advisory services and is also company secretary to a number of listed
companies.
Company Secretary
Shannon Coates
Ms Coates was appointed as Company Secretary on 10 May 2007.
A summary of Ms Coates’ qualifications and experience appears above.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Directorships in other listed entities
Directorships in other listed entities held by Directors of the Company during the last 3 years immediately before 31
December 2016 are as follows:
Period of directorship
Director
Company
Mr Charles Chen
Mr Ivan Teo
Mr Oliver Cairns
Mr Kaijian Chen
Ms Shannon Coates
Directors’ Meetings
-
-
Zeta Petroleum Plc
-
Artemis Resources Limited
Lemur Resources Limited
Metallum Limited
Metallum Limited
From
-
-
2013
-
2011
2014
2011
2015
To
-
-
2016
-
2014
2016
2012
Current
The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company during
the year ended 31 December 2016 are:
Director
Held while Director
Attended
Board Meetings
Mr Charles Chen
Mr Ivan Teo
Mr Oliver Cairns
Mr Kaijian Chen
Ms Shannon Coates
6
6
6
6
6
6
6
6
1
6
There is presently no separate Audit, Nomination or Remuneration Committee, with all committee functions being
addressed by the full Board.
Principal Activity
The principal activity of the Consolidated Entity during the year ended 31 December 2016 was the development and
manufacture, international marketing and distribution of electric powered two-wheel vehicles, petrol two-wheel vehicles
and all-terrain vehicles.
Operating and Financial Review
Review of Operations
Vmoto Limited is a global scooter manufacturing and distribution group. The Company specialises in high quality “green”
electric powered two-wheel vehicles and manufactures a range of western designed electric two-wheel vehicles from its
own low cost manufacturing facilities in Nanjing, China and from leased facilities in Shanghai, China. Vmoto combines
low cost Chinese manufacturing capabilities with European design. The Group operates through two primary brands:
Vmoto (aimed at the value market in Asia) and E-Max (targeting Western markets with a premium end product). As well
as operating under its own brands, the Company also sells to a number of customers on an original equipment
manufacturer (“OEM”) basis.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Total consolidated sales of $36.3 million were recorded for the Consolidated Entity for the year ended 31 December 2016
(FY2015: $47.6 million). The revenue of the Consolidated Entity has decreased 24% compared to the year ended 31
December 2015, largely as a result of lower than anticipated orders from international customers, Chinese consumer
nervousness due to government regulations and the fluctuation of AUD:RMB exchange rate, which impacted on the
translation of sales from trading currency to reporting currency. During the year ended 31 December 2016, the
Consolidated Entity recorded a net loss of $14.1 million after income tax (FY2015: $753k), which included one-off/non-
cash costs of $150k of share based expenses, $617k of impairment of inventories in Jiye, $181k of impairment of inventories
due to closure of previous the Spanish operation, $994k of provision for doubtful loan to Kaiyang (the three-wheel and
four-wheel operation), $136k of impairment of investment in Kaiyang, $2.6 million of impairment of Jiye goodwill, $2.3
million of impairment of E-Max goodwill, trademarks and patents, $4.3 million of impairment of development costs and
$1.2 million of impairment in licenses. The underlying net loss for the year ended 31 December 2016 adding back these
one-off non-cash expenses was $1,657,466.
The following table provides a reconciliation between the statutory net loss after tax and underlying net loss after tax for
the year ended 31 December 2016:
Statutory net loss after tax for FY2016
($14,092,903)
Add back one off / non-cash expenses:
Share based expenses
Impairment of inventories in Jiye
Impairment of inventories due to closure of previous Spain
operation
Provision for doubtful loan to Kaiyang (3 & 4 wheel operation)
Impairment of partial investment in Kaiyang (3 & 4 wheel
operation)
Impairment of Jiye goodwill
Impairment of development costs
Impairment of E-Max goodwill, trademarks and patents acquired
and recognised in 2009 and 2010
Impairment of licenses obtained in 2007
Underlying net loss after tax for FY2016
$149,513
$617,201
$181,339
$994,313
$135,515
$2,556,477
$4,270,448
$2,336,628
$1,194,003
($1,657,466)
Directors believe this information is useful to provide investors with transparency on the underlying performance of the
Company.
A more detailed review of operations for the year ended 31 December 2016 is set out in the Operations Review preceding
the Directors’ Report.
Review of Financial Position
The Consolidated Entity’s net assets have decreased by approximately $13.3 million during the year ended 31 December
2016.
Cash balances decreased by $2.3 million during the year ended 31 December 2016 primarily as a result of underlying net
loss after tax incurred during the year and higher prepayments to suppliers for inventories for the international markets.
Trade and other receivables have decreased by $6.5 million mainly due to more timely receipts from customers, fewer
sales on credit to customers and provision for doubtful debts in Jiye during the period.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Inventories have increased by $2.4 million and prepayments have increased by $0.9 million mainly due to higher stock
level requirements of the JV and higher prepayments to suppliers for inventories for the international markets.
Intangible assets decreased by $1.7 million due to acquisition of PowerEagle trademark, recognition of valuation of
customer base as a result of acquisition of 51% interest in Jiye, impairments of goodwill, trademarks, patents, development
costs and licenses.
Trade and other payables increased by $3.5 million during the period mainly due to higher stock level requirements by
Jiye in which Jiye received inventories from suppliers in advance on credit as a result of better payment terms, and higher
level of deposits received from the customers in advance, the revenue for which will be recognised in FY2017.
Issued capital has increased by $1.2 million during the year ended 31 December 2016 primarily due to Tranche 1 shares
issued to nominees of PowerEagle for the acquisition of their trademark and shares issued to key management during the
year ended 31 December 2016.
No dividend has been declared or paid by the Company to the date of this Report in respect of the year ended 31 December
2016.
Reconciliation to Preliminary Results
The following tables reconcile statutory consolidated net profit after tax to preliminary consolidated net profit after tax in
Appendix 4E:
Consolidated statement of profit or loss
Appendix 4E
Adjustments
Statutory Financial
Report
Statutory net loss after tax1-8
$1,765,320
$12,327,583
$14,092,903
1. Due to closure of Vmoto’s previous Spanish operation, the Company has relocated its inventories of $181,339 from
Spain to Germany and then subsequently to Italy for servicing its distributors and customers, and for sales and
marketing purposes in Europe. Due to the aging of these inventories, these inventories were impaired as the Company
continues to develop new models of electric scooter for European markets.
2. Fully paid ordinary shares were issued in December 2016 to employees of the Company and share based expenses of
$184,000 were recognised. As these fully paid ordinary shares are subject to an escrow period of three years, the share
based expenses and increase in equity should be accounted over the three year vesting period. Share based expenses
of $184,000 have been derecognised and share based expenses of $4,568 over December 2016 have been recognised to
comply with the requirements of the accounting standards.
3. The Consolidated Entity provided loans of RMB5 million ($994,313) to Jiangsu Kaiyang in FY2015. The loans are
interest free and repayable in two years. As Jiangsu Kaiyang is still at an early stage of development and continues to
incur loss, the repayment of loans provided are expected to be delayed to future periods when Jiangsu Kaiyang
operations achieve profitability. The Company has recognised a provision for impairment loss of $994,313 on its loans
to Jiangsu Kaiyang, as included in the statutory financial report.
4. The Consolidated Entity holds 15% of the ordinary share capital of Jiangsu Kaiyang. Jiangsu Kaiyang continues to
focus on developing new customers, markets and models of electric three-wheel vehicle and have incurred loss in the
year ended 31 December 2016. The Company has recognised a provision for impairment loss of $135,515 on its interest
in Jiangsu Kaiyang, as included in the statutory financial report.
5. During the period, goodwill of $2,556,477 has been recognised as a result of acquisition of the 51% interest in Jiye. Due
to consumer nervousness resulting from some regional governments in several Chinese cities implementing stricter
rules on the use of electric two-wheel vehicles, and lower sales and margins than expected, the Company has
recognised an impairment of goodwill of $2,556,477, as included in the statutory financial report.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
6. During the period, the salaries and wages costs for December 2016 in Jiye were not been recognised in the Appendix
4E as these were paid in January 2017. The Company has recognised $154,966 of Jiye December 2016 salaries and
wages expenses and included in the statutory financial report. The net effect to the Company of this expense is $79,032
due to an adjustment for non-controlling interest.
7. As at 31 December 2016, $666,137 of Jiye trade receivables were over 90 days past due. The Company has recognised
a provision for doubtful debts of $666,137, as included in the statutory financial report. The net effect of this provision
for doubtful debts to the Company is $339,730 after adjustment of $326,407 to non-controlling interest.
8. During the period, unit numbers and margins on international sales were lower than anticipated., The Company has
taken a prudent approach to recognise impairment of $7,801,079 on its licenses, development costs and E-Max
goodwill, trademarks and patents, and included in the statutory financial report.
The following table reconciles statutory consolidated statement of financial position to preliminary consolidated statement
of financial position in Appendix 4E:
Consolidated statement of financial
position
Appendix 4E
Adjustments
Statutory Financial
Report
Assets
Trade and other receivables1
Inventories2
Intangible assets3, 4, 5, 6
Other financial assets 7, 8
Liabilities
Trade and other payables9
Deferred tax liabilities4
Equity
Issued capital6, 10, 11
Accumulated losses1,2,3,5,7,8,9
Non-controlling interests1,9
$3,543,432
$7,169,167
$14,282,616
$1,352,265
($666,137)
($181,339)
($10,189,843)
($1,129,827)
$5,532,105
$438,291
$154,966
$51,569
$2,877,295
$6,987,828
$4,092,773
$222,438
$5,687,071
$489,860
$71,768,817
($38,733,733)
$1,011,382
($322,099)
($11,649,243)
($402,339)
$71,446,718
($50,382,976)
$609,043
1. As at 31 December 2016, $666,137 of Jiye trade receivables were over 90 days past due. The Company has
recognised a provision for doubtful debts of $666,137, as included in the statutory financial report. The net effect
of this provision for doubtful debts to the Company is $339,730 after an adjustment of $326,407 for non-controlling
interest.
2. Due to closure of Vmoto’s previous Spanish operation, the Company has relocated its inventories of $181,339 from
Spain to Germany and then subsequently to Italy for servicing its distributors and customers, and for sales and
marketing purposes in Europe. Due to the aging of these inventories, these inventories were impaired as the
Company continues to develop new models of electric scooter for European markets.
3.
In the Appendix 4E, goodwill of $2,728,373 has been recognised as a result of the acquisition of 51% interest in
Jiye. An adjustment of $171,896 has been made to the Jiye goodwill to comply with the requirements of the
accounting standards. Due to consumer nervousness resulting from some regional governments in several
Chinese cities implementing stricter rules on the use of electric two-wheel vehicles, and lower sales and margins
than expected, the Company has recognised an impairment of goodwill of $2,556,477, as included in the statutory
financial report.
4.
In the Appendix 4E, a customer base value of $1,753,164 and deferred tax liabilities of $438,291 has been recognised
as a result of acquisition of 51% interest in Jiye. An adjustment of $206,276 has been made to customer base and
$51,569 has been made to deferred tax liabilities to comply with the requirements of the accounting standards.
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D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
5. During the period, international sales and margins were lower than anticipated due to the delay of orders. Due to
lower sales and margins than expected, the Company has taken a prudent approach to recognised impairments
of $7,801,079 on its licenses, development costs and E-Max goodwill, trademarks and patents, as included in the
statutory financial report.
6. During the period, Tranche 1 shares were issued to nominees of PowerEagle for the acquisition of their trademark
at a deemed issue price of $0.30 per share. The share price on the date of shares were issued was $0.34, and as a
result $133,333 has been recognised to intangible assets and issued capital to comply with the requirements of the
accounting standards.
7. The Consolidated Entity provided loans of RMB5 million ($994,313) to Jiangsu Kaiyang in FY2015. The loans are
interest free and repayable in two years. As Jiangsu Kaiyang is still at an early stage of development and continues
to incur loss, the repayment of loans provided are expected to be delayed to future periods when Jiangsu Kaiyang
operations achieve profitability. The Company has recognised a provision for impairment loss of $994,313 on its
loans to Jiangsu Kaiyang, as included in the statutory financial report.
8. The Consolidated Entity holds 15% of the ordinary share capital of Jiangsu Kaiyang. Jiangsu Kaiyang continues
to focus on developing new customers, markets and models of electric three-wheel vehicle and have incurred
losses for the year ended 31 December 2016. The Company has recognised a provision for impairment loss of
$135,515 on its interest in Jiangsu Kaiyang, as included in the statutory financial report.
9. During the period, the salaries and wages costs for December 2016 in Jiye were not recognised in the Appendix
4E as these were paid in January 2017. The Company has recognised $154,966 of salaries and wages payable for
December 2016 and included in the statutory financial report. The net effect to the Company of this expense is
$79,032 after an adjustment for $75,933 to non-controlling interest.
10. Fully paid ordinary shares were issued in December 2016 to employees of the Company and increase in equity of
$184,000 were recognised. As these fully paid ordinary shares are subject to an escrow period of three years, the
share based expenses and increase in equity should be accounted over the three year vesting period. Increase in
equity of $184,000 have been derecognised and increase in equity of $4,568 over December 2016 have been
recognised to comply with the requirements of the accounting standards.
11. During the period, 1 million performance rights lapsed, therefore $276,000 of the option premium reserve has been
adjusted to issued capital in Appendix 4E. The $276,000 has been reclassified from issued capital to accumulated
losses to comply with the requirements of the accounting standards.
Business Strategies and Prospects for Future Financial Years
The Company’s business strategies for future financial years include:
• Collaborate and work closely with companies that have sound business models supporting the demand for
electric two-wheel vehicles including electric scooter sharing and rental companies
• Continue to improve the Company’s electric two-wheel vehicle products to attract high quality international
business group customers
With the success of hi-tech sharing companies such as Uber, Mobike and Zipcar, technological innovation and inner-city
transportation crisis, the sharing economy is booming around the world and the consumers and users of electric two-
wheel vehicles are more accepting of shared fleets. In addition, consumer and business group preferences are shifting from
ownership to shares access. It is anticipated that working together with our customers to rent electric two-wheel vehicles
to these business groups and provide shared fleet solutions will fast track the increase in revenue for the Company.
The Company also expects to continuously improve its existing electric two-wheel vehicle products and develop new
electric two-wheel vehicle products to remain competitive in the electric vehicle markets and win high quality international
business group customers such as the significant European supermarket group with approximately 300 stores in Europe
and LoopShare.
11
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
The Company also expects to increase its global sales by targeting business to business (“B2B”) customers especially in
the delivery and fast food sectors, and appointing more international distributors. The Company is in discussions with a
number of interested parties in countries including Austria, Australia, Columbia, Denmark, Finland, France, Germany,
Israel, Japan, Korea, Lebanon, Malaysia, Malta, Mexico, Sweden and Uruguay.
We are also continually considering ways of reducing the Company’s cost of manufacturing and operating costs by
improving efficiency.
The potential material business risks faced by the Company that are likely to have an effect on the financial prospects of
the Company and how the Company manages these risks include:
•
Technological obsolescence – given the Company operates in an industry involving green and electric vehicle
technology, any technological obsolescence could have an impact on our financial results. We address this risk
through investment in research and development, patent appropriate and necessary research and development
results, recruit competent technicians and constantly monitor the market. We see this risk as minimal as the
Company is constantly developing new technology and functions in its electric two-wheel vehicle products and
has the protection of trademarks and patents.
• Continued reduction in demand from China - given our reliance on the Chinese economy, reduction in demand
from China market for our electric two-wheel vehicle products could have impact on our financial results to
mitigate this risk. The Company is actively developing and distributing its products in Europe and is expanding
sales in the Asian and North America regions. In addition, the Company is investigating the option of expanding
sales into other countries and working with companies that have new, innovative and sound business models to
diversify its sales channel and reduce reliance on the Chinese market.
Impact of legislation and other external requirements
The Consolidated Entity’s operations are not subject to any significant environmental regulations. The Board believes that
the Consolidated Entity has adequate systems in place for the management of its environmental regulations and is not
aware of any breach of those environmental requirements as they apply to the Consolidated Entity.
Clean Energy Legislative Package
The Clean Energy Legislative Package, which included the Clean Energy Act 2011, was passed by the Australian
Government in November 2011. It sets out the way that the government will introduce a carbon price to reduce Australia’s
carbon pollution and move to a clean energy future.
The Consolidated Entity’s manufacturing activities are primarily carried out in China and the Directors believe that the
Group will not be significantly affected by this legislation passed. The Consolidated Entity has not incorporated the effect
of any carbon price implementation in its impairment testing at 31 December 2016.
The Directors’ view is that there were no changes in environmental or other legislative requirements during the year that
have significantly affected the results or operations of the Consolidated Entity.
Events Subsequent to Balance Date
Issue Tranche 2 Shares to Acquire PowerEagle Trademark
On 31 January 2017, the Company issued 11,764,706 fully paid ordinary shares at a deemed issue price of $0.085 per share
to nominees of PowerEagle as Tranche 2 consideration to acquire 100% of the PowerEagle trademark as announced on 23
December 2015.
Other than the above and as noted elsewhere in the financial statements, there has not arisen in the interval between the
end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely,
in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the results of those
operations, or the state of affairs of the Consolidated Entity in future financial years.
12
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Likely Developments
Further information about likely developments in the operations of the Consolidated Entity and the expected results of
those operations in future financial years are discussed in the Operations Review.
Directors’ Interests
The relevant interests of each Director in the shares, options and Performance Rights issued by the Company at the date of
this report are as follows:
Director
Ordinary shares
Options
Performance Rights
Mr Charles Chen1
Mr Ivan Teo2
Mr Oliver William Cairns3
Mr Kaijian Chen4
Ms Shannon Coates5
10,213,040
720,873
2,693,841
817,214
75,000
-
-
400,000
-
-
250,000
250,000
250,000
250,000
-
1.
6,722,964 shares are held indirectly by Pershing Australia Nominees Pty Ltd on behalf of
Mr Charles Chen. 250,000 Performance Rights are held directly by Mr Charles Chen. 3,490,076 shares are held
indirectly by Mr Chen’s spouse, Ms Jierong Zhou.
2.
720,873 shares and 250,000 Performance Rights are held directly by Mr Ivan Teo.
3.
121,112 shares are held directly by Mr Oliver Cairns. 2,436,365 shares, 100,000 options exercisable at $0.50 on or
before 21 May 2019, 100,000 options exercisable at $0.75 on or before 21 May 2019, 200,000 options exercisable at
$1.00 on or before 21 May 2019 and 250,000 Performance Rights are held indirectly by Silverlight Holdings Pty
Ltd as trustee for Cairns Investment trust. Mr Cairns is a beneficiary of the Cairns Investment trust. 136,364
shares are held indirectly by Mr OW and CH Cairns as trustee for OCCM Fund. Mr Cairns is a beneficiary of the
OCCM Fund.
4.
817,214 shares and 250,000 Performance Rights are held directly by Mr Kaijian Chen.
5.
75,000 shares are held indirectly by Ms Coates’ spouse, Mr Simon Kimberley Coates as trustee for the Kooyong
Trust. Ms Coates is a beneficiary of the Kooyong Trust.
Options
At the date of this report, options over unissued ordinary shares of the Company are:
Grant Date
Vesting Date
Expiry Date
Exercise Price
Number
23 May 2013
23 May 2013
23 May 2014
23 May 2014
23 May 2014
2 October 2015
23 May 2014
23 May 2014
23 May 2014
23 May 2014
23 May 2014
2 October 2015
23 May 2018
23 May 2018
21 May 2019
21 May 2019
21 May 2019
31 December 2017
40 cents
80 cents
50 cents
75 cents
$1.00
75 cents
500,000
500,000
100,000
100,000
200,000
719,981
These options do not confer the right to participate in any share issue or interest issue of the Company or any other entity.
13
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Performance Rights
On 5 February 2016, the Company issued 100,000 shares to Mr Charles Chen and 100,000 shares to Mr Oliver Cairns as a
result of vesting of 200,000 Class F incentive Performance Rights as approved by shareholders on 31 July 2012.
On 2 December 2016, the Company issued 133,334 shares to Mr Charles Chen and 133,334 shares to Mr Oliver Cairns as a
result of vesting of 266,668 Class I incentive Performance Rights as approved by shareholders on 31 July 2012.
On 31 December 2016, 1,000,000 Class J Performance Rights lapsed.
All Performance Rights convert to fully paid ordinary shares for nil cash consideration, subject to performance based
vesting conditions. At the date of this report, Performance Rights over unissued ordinary shares of the Company are:
Class
Class K
Total
Number
1,000,000
1,000,000
Indemnification and Insurance of Officers and Auditors
Indemnification
The Company has agreed to indemnify the current Directors and Officers of the Company against all liabilities to another
person (other than the Company or a related body corporate) that may arise from their position as Directors and Officers
of the Company, except where the liability arises out of conduct involving a lack of good faith.
The agreement stipulates that the Company will meet, to the maximum extent permitted by law, the full amount of any
such liabilities, including costs and expenses.
The Company has not agreed to indemnify their current auditors, Bentleys Audit & Corporate (WA) Pty Ltd.
Insurance Premiums
As at the date of this report, a Directors and Officers insurance policy has been secured. The insurance premium for this
policy paid during the year ended 31 December 2016 was A$24,500.
Contingent Liabilities
The Company is currently a defendant in a proceeding brought against the Company by a former employee in relation to
the employee’s past employment. Having considered legal advice, the Directors believe that the claim can be successfully
defended, without any losses (including for costs) being incurred by the Company.
Non-audit services
During the year, Bentleys Audit & Corporate (WA) Pty Ltd, the Company’s auditor, did not perform any non-audit services
in addition to their statutory duties.
Auditor’s Independence Declaration
The Auditor’s Independence Declaration is set out on page 68 and forms part of the Directors’ Report for the year ended
31 December 2016.
14
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T
This remuneration report outlines the Director and executive remuneration arrangements of the Company and the
Consolidated Entity.
The Board as a whole is responsible for considering remuneration policies and packages applicable both to Directors and
executives of the Company and the Consolidated Entity.
Key Management Personnel have authority and responsibility for planning, directing and controlling the activities of the
Company and the Consolidated Entity, including Directors of the Company and other executives. Key Management
Personnel comprise the Directors of the Company, key management and executives for the Company and the Consolidated
Entity.
Director and Key Management Personnel details
The following persons acted as Directors of the Company during or since the end of the financial year:
• Mr Charles Chen
• Mr Ivan Teo
• Mr Oliver Cairns
• Mr Kaijian Chen
• Ms Shannon Coates
The term ‘Key Management Personnel’ is used in this remuneration report to refer to the Directors and the following
persons. Except as noted, the named persons held their position during or since the end of the financial year:
• Mr Shuguang Han (General Manager)
• Mr Zhengjie Wu (Vice General Manager, resigned 31 October 2016)
• Mr Leon Wan (Vice General Manager, appointed 31 July 2016)
• Mr Fei Wu (Sales Manager)
• Ms Susan Xie (Sales Manager)
Overview of remuneration policies
Broadly, remuneration levels for Key Management Personnel of the Company and Key Management Personnel of the
Consolidated Entity are competitively set to attract and retain appropriately qualified and experienced Directors and
executives and reward the achievement of strategic objectives. The Board may seek independent advice on the
appropriateness of remuneration packages of both the Company and the Consolidated Entity given trends in comparative
companies both locally and internationally, and the objectives of the Company’s remuneration strategy.
Remuneration packages consist of fixed remuneration including base salary, employer contributions to superannuation
funds and non-cash benefits.
The Company has established a variable remuneration package for Directors, which is known as the Performance Rights
Plan. This plan allows Directors to convert Performance Rights to fully paid ordinary shares for nil cash consideration,
subject to performance based vesting conditions.
Fixed remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges
related to employee benefits including motor vehicle), as well as employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the Board through a process that considers individual, segment and overall
performance of the Consolidated Entity. The Board has regard to remuneration levels external to the Consolidated Entity
to ensure the Directors’ and executives’ remuneration is competitive in the market place.
Executive Directors are employed full time and receive fixed remuneration in the form of salary and statutory
superannuation or consultancy fees, commensurate with their required level of services.
15
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Non-Executive Directors receive a fixed monthly fee for their services. Where Non-Executive Directors provide services
materially outside their usual Board duties, they are remunerated on an agreed retainer or daily rate basis.
Service agreements
It is the Consolidated Entity’s policy that service agreements for Key Management Personnel are unlimited in term but
capable of termination on 3 months’ notice and that the Consolidated Entity retains the right to terminate the service
agreements immediately, by making payment equal to 3 months’ pay in lieu of notice.
The service agreement outlines the components of compensation paid to Key Management Personnel but does not
prescribe how remuneration levels are modified year to year. Remuneration levels are reviewed annually on a date as
close as possible to 31 December of each year to take into account Key Management Personnel’s performance.
Certain Key Management Personnel will be entitled to bonuses as the Board may decide in its absolute discretion from
time to time, to a maximum of 50% of the Key Management Personnel’s annual base salary per annum.
Non-Executive Directors
Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 2012 Annual General Meeting,
is not to exceed A$300,000 per annum and has been set at a level to enable the Company to attract and retain suitably
qualified Directors. The Company does not have any scheme relating to retirement benefits for Non-Executive Directors.
Relationship between the remuneration policy and Company performance
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives.
Two methods have been applied to achieve this aim, the first being a performance-based rights subject to performance
based vesting conditions, and the second being the issue of options or shares to Key Management Personnel to encourage
the alignment of personal and shareholder interests. The Company believes this policy was effective in increasing
shareholder wealth.
The tables below set out summary information about the Consolidated Entity’s earnings and movements in shareholder
wealth for the last five reporting periods:
31 Dec 2016
30 June 2016
31 Dec 2015
30 Jun 2015
31 Dec 2014
12 months
6 months
12 months
6 months
12 months
In AUD
Revenue
Net profit / (loss) before tax
Net profit / (loss) after tax
$’000
36,268
(14,136)
(14,093)
$’000
17,831
(597)
(597)
$’000
47,613
(213)
(755)
$’000
24,891
1,451
1,011
$’000
42,941
257
884
In AUD
31 Dec 2016
30 Jun 2016
31 Dec 2015
30 Jun 2015
31 Dec 2014
12 months
6 months
12 months
6 months
12 months
Share price at start of period
Share price at end of period
Dividend
Basic and diluted earnings /
(loss) per share
$0.33*
$0.10*
-
(8.61 cents)*
$0.33*
$0.14*
-
(0.38 cents)*
$0.04
$0.33*
-
(0.52 cents)*
$0.04
$0.40*
-
0.79 cents*
$0.03
$0.04
-
0.07 cents
* The Company completed the consolidation of its share capital through the conversion of every ten shares in the
capital of the Company into one share (“Share Consolidation”) on 4 June 2015. The share price and EPS post 4 June
2015 are disclosed on a post Share Consolidation basis.
16
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of the remuneration of each Director of the Company and the named officers of the Company and the Consolidated Entity for
the years ended 31 December 2015 and 31 December 2016 are:
SHORT-TERM
POST-
EMPLOYMENT
Salary & fees
$
Superannuation
benefits
$
SHARE BASED
PAYMENTS
Options /
Performance
Rights
$
In AUD
Executive Directors
Mr Charles Chen
Mr Ivan Teo
Non-Executive Directors
Mr Oliver Cairns
Mr Kaijian Chen
Ms Shannon Coates1
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
210,000
259,319
151,278
151,794
97,443
80,000
40,000
40,000
40,000
40,000
19,950
9,975
-
-
-
-
-
-
-
-
Total, all Directors
12 months to Dec 2016
12 months to Dec 2015
538,721
571,113
19,950
9,975
Value of
options/rights
as proportion of
remuneration %
% of
remuneration
based on
performance
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
229,950
269,294
151,278
151,794
97,443
80,000
40,000
40,000
40,000
40,000
558,671
581,088
-
-
-
-
-
-
-
-
-
-
-
-
1. Ms Coates was appointed as Non-Executive Director on 23 May 2014. Ms Coates was appointed Company Secretary to the Company in 2007 and, via an associated company Evolution Corporate
Services Pty Ltd, provides company secretarial, corporate advisory and Australian registered office services to Vmoto for a monthly retainer. For the 2016 financial year, the Company paid
Evolution Corporate Services Pty Ltd $66,000 for these services.
17
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
SHORT-TERM
POST-
EMPLOYMENT
SHARE BASED
PAYMENTS
Salary & fees
$
Superannuation
benefits
$
Shares
$
Total
$
Value of
options / rights
as proportion of
remuneration %
% of
remuneration
based on
performance
-
-
-
-
-
-
-
-
-
-
-
-
15,000
31,000
7,500
9,300
3,750
6,200
-
62,000
7,500
6,200
75,674
94,968
85,267
51,439
25,763
24,091
23,692
92,704
23,635
22,813
33,750
114,700
234,031
286,015
19.8%
32.6%
8.8%
18.1%
14.6%
25.7%
-
66.9%
31.7%
27.2%
14.4%
40.1%
-
-
-
-
-
-
-
-
-
-
-
-
In AUD
Executives
Mr Shuguang Han
(General Manager)
Mr Fei Wu
(Sales Manager)
Ms Susan Xie
(Sales Manager)
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
12 months to Dec 2016
12 months to Dec 2015
Mr Zhengjie Wu (Vice General
Manager, resigned 31 Oct 2016)
12 months to Dec 2016
12 months to Dec 2015
Mr Leon Wan (Vice General
Manager, appointed 31 Jul 2016)
12 months to Dec 2016
12 months to Dec 2015
60,674
63,968
77,767
42,139
22,013
17,891
23,692
30,704
16,135
16,613
Total, all Executives
12 months to Dec 2016
12 months to Dec 2015
200,281
171,315
18
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Share-based payment arrangements
Shares
During the year ended 31 December 2016, 450,000 shares were granted to Key Management Personnel to motivate them
and to recognise their efforts in the year ended 31 December 2016. The shares granted to Key Management Personnel are
subject to a three year escrow period.
Options
The Company operates an Employee Share Option Plan (“ESOP”) for executives and senior employees of the
Consolidated Entity. In accordance with the provisions of the plan, executives and senior employees may be granted
options to purchase ordinary shares at an exercise price to be determined by the Board with regard to the market value
of the shares when it resolves to offer the options. The options may only be granted to eligible persons after the Board
considers the person’s seniority, position, length of service, record of employment, potential contribution and any other
matters which the Board considers relevant.
Each employee share option converts into one ordinary share of Vmoto Limited on exercise. No amounts are paid or
payable to the Company by the recipient on receipt of the option. The options carry neither rights to dividends nor voting
rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The number of options granted is determined by the Board.
To date, options granted under the ESOP expire within thirty six months of their issue, or immediately on the resignation
of the executive or senior employee, whichever is the earlier.
During the year ended 31 December 2016, the following share based payment options arrangements were in existence:
Options
series
Class E
Class F
Class G
Class H
Class I
Class J
Total
Number
Grant date
Grant date
Expiry date
Exercise Price Vesting
500,000
500,000
100,000
100,000
200,000
719,981
2,119,981
23/05/2013
23/05/2013
23/05/2014
23/05/2014
23/05/2014
02/10/2015
fair value
A$0.14
A$0.13
A$0.37
A$0.35
A$0.33
A$0.16
date
23/05/2018
23/05/2018
21/05/2019
21/05/2019
21/05/2019
31/12/2017
A$0.40
A$0.80
A$0.50
A$0.75
A$1.00
A$0.75
23/05/2014
23/05/2014
23/05/2014
23/05/2014
23/05/2014
02/10/2015
There is no further service or performance criteria that need to be met in relation to ESOP options granted before the
beneficial interest vests in the recipient.
During the year ended 31 December 2016, no options were granted to Key Management Personnel under the ESOP.
Performance Rights
On 6 August 2012, following shareholder approval at the Company’s general meeting held on 31 July 2012, the Company
granted a total of 32,000,000 Performance Rights to Directors Charles Chen, Oliver Cairns and former Director, Blair
Sergeant.
The Performance Rights comprised:
a) 2,000,000 Performance Rights issued to Blair Sergeant pursuant to his Non-Executive Director Appointment
Agreement; and
b) 30,000,000 Performance Rights issued under the Company’s Performance Rights Plan (10,000,000 each to Charles
Chen, Blair Sergeant and Oliver Cairns), subject to the following performance conditions:
19
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Number of
Performance Rights
per Director
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,333,333
1,333,333
1,333,334
Class
Performance Conditions
Time of vesting
A
B
C
D
E
F
G
H
I
- The volume weighted average price of
the Shares for 10 consecutive trading
days on ASX (VWAP) exceeds 3 cents at
any time on or before 31 December 2013;
and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
The date the VWAP first
exceeds 3 cents
The date 12 months
after the date the VWAP
first exceeds 3 cents
The date 24 months
after the date the VWAP
first exceeds 3 cents
The date the VWAP first
exceeds 4 cents
The date 12 months
after the date the VWAP
first exceeds 4 cents
The date 24 months
after the date the VWAP
first exceeds 4 cents
The date the VWAP first
exceeds 5 cents
The date 12 months
after the date the VWAP
first exceeds 5 cents
The date 24 months
after the date the VWAP
first exceeds 5 cents
The Company completed the consolidation of its share capital through the conversion of every ten shares in the capital
of the Company into one share (“Share Consolidation”) on 4 June 2015. The Performance Rights above are disclosed on
a pre Share Consolidation basis.
On 23 May 2014, following shareholder approval at the Company’s Annual General Meeting held on 20 May 2014, the
Company granted a total of 20,000,000 additional Performance Rights to Directors Charles Chen, Oliver Cairns, Ivan Teo
and Kaijian Chen, subject to the following performance conditions:
20
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Number of
Performance Rights
per Director
2,500,000
2,500,000
Class
Performance Conditions
Time of vesting
J
K
- The volume weighted average price of
the Shares for 10 consecutive trading
days on ASX (VWAP) exceeds 6.5 cents
at any time on or before 31 December
2016; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 8.5 cents at any time
on or before 31 December 2017; and
the Participating Director remains a
Director at the time of vesting.
-
The date the VWAP first
exceeds 6.5 cents
The date the VWAP first
exceeds 8.5 cents
The Company completed the consolidation of its share capital through the conversion of every ten shares in the capital
of the Company into one share (“Share Consolidation”) on 4 June 2015. The Performance Rights above are disclosed on
a pre Share Consolidation basis.
During the year ended 31 December 2016, the following Performance Rights arrangements were in existence, on a post
Share Consolidation basis:
Performance Rights
series
Number
Grant date
Grant date
fair value
Class F
Class I
Class J
Class K
200,000
266,668
1,000,000
1,000,000
06/08/2012
06/08/2012
23/05/2014
23/05/2014
A$0.015
A$0.005
A$0.276
A$0.069
All Performance Rights convert to fully paid ordinary shares for nil cash consideration, subject to the above performance
based vesting conditions. During the year ended 31 December 2016, the following Performance Rights to Key
Management Personnel vested and were converted to Shares:
Name
Performance
Rights series
During the year ended 31 Dec 2016
No. granted
No. vested
% of grant
vested
% of grant
forfeited
Charles Chen
Oliver Cairns
Class F
Class I
Class F
Class I
-
-
-
-
100,000
133,334
100,000
133,334
100%
100%
100%
100%
n/a
n/a
n/a
n/a
21
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Share holdings and transactions of Key Management Personnel
The movement during the year ended 31 December 2016 in the number of ordinary shares held, directly, indirectly or
beneficially by each key management person, including their personally-related entities, is as follows:
Held at
1 Jan 2016
Held at
date of
appointment
Net change1
Granted as
remuneration
Received on
vest of
performance
rights
Held at
date of
resignation
Held at
31 Dec 2016
Directors
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Ms S Coates
Executives
Mr S Han
Mr F Wu
Mr Z Wu
Mr L Wan
Ms S Xie
5,621,474
720,873
2,460,507
730,794
75,000
300,000
80,000
300,000
N/A
40,000
N/A
N/A
N/A
N/A
N/A
4,358,232
-
-
-
-
-
-
-
86,420
-
233,334
-
233,334
-
-
N/A
N/A
N/A
N/A
N/A
10,213,040
720,873
2,693,841
817,214
75,000
N/A
N/A
N/A
60,000
N/A
(200,000)
(20,000)
-
-
-
200,000
100,000
-
100,000
50,000
-
-
-
-
N/A
N/A
300,000
N/A
N/A
300,000
160,000
N/A
160,000
90,000
1. Net change represents the acquisition and disposal of shares on market and exercise of options by the Key
Management Personnel.
Option holdings of Key Management Personnel
The movement during the year ended 31 December 2016 in the number of options over ordinary shares held, directly,
indirectly or beneficially by each key management person, including their personally-related entities, is as follows:
Held at
1 Jan 2016
Held at
date of
appointment
Additions
Granted as
remuneration
Exercised/
Expired
Held at
date of
resignation
Held at
31 Dec 2016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
N/A
-
-
400,000
-
-
-
-
N/A
-
-
Directors
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Ms S Coates
Executives
Mr S Han
Mr F Wu
Mr Z Wu
Mr L Wan
Ms S Xie
-
-
400,000
-
-
-
-
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
All options are vested and exercisable.
-
-
-
-
-
-
-
-
-
-
22
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Performance Right holdings of Key Management Personnel
The movement during the year ended 31 December 2016 in the number of Performance Rights held, directly, indirectly
or beneficially by each Key Management Personnel, including their personally-related entities, is as follows:
Held at
1 Jan 2016
Held at
date of
appointment
Granted as
remuneration
Vested as
Shares
Expired
Held at
date of
resignation
Held at
31 Dec 2016
Directors
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Ms S Coates
Executives
Mr S Han
Mr J Wu
Mr Z Wu
Mr L Wan
Ms S Xie
733,334
500,000
733,334
500,000
-
-
-
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
-
-
-
-
-
-
-
-
-
-
(233,334)
-
(233,334)
-
-
(250,000)
(250,000)
(250,000)
(250,000)
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
N/A
250,000
250,000
250,000
250,000
-
-
-
N/A
-
-
Other Key Management Personnel Transactions
During the year ended 31 December 2016, Evolution Corporate Services Pty Ltd, an entity associated with Ms Shannon
Coates, provided company secretarial, administration and registered office services to the Group pursuant to
consultancy agreement and received total fees of A$66,000 for the year ended 31 December 2016.
Other than the above, there have been no related party transactions involving any of the Key Management Personnel
identified in the table above during the year or the previous year.
This report is made with a resolution of the Directors pursuant to s298(2) of the Corporations Act 2001:
Charles Chen
Managing Director
Dated at Western Australia, this 31st day of March 2017.
23
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S
A N D O T H E R C O M P R E H E N S I V E I N C O M E
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 01 6
Continuing Operations
Revenue from sale of goods
Cost of sales
Gross Profit
Notes
Year ended
31 December 2016
$
Year ended
31 December 2015
$
36,267,923
47,613,013
(31,525,151)
(39,660,519)
4,742,772
7,952,494
Other income
2
599,397
Share of losses of associates
Gain recognised on disposal of interest in former
associate
-
-
295,501
(141,908)
143,443
Operational expenses
(3,913,663)
(1,576,793)
Marketing and distribution expenses
(570,268)
(491,926)
Corporate and administrative expenses
(1,493,030)
(1,929,631)
Occupancy expenses
Other expenses
Finance costs
Impairment of inventories
Impairment of intangibles
Impairment of other financial assets
Profit/(Loss) from continuing operations before tax
Income tax revenue/(expense)
2
10
11
4
(443,924)
(693,831)
(77,333)
(798,540)
(10,357,556)
(1,129,827)
(14,135,803)
42,900
(103,486)
-
(270,812)
-
-
-
3,876,882
(869,144)
Profit /(Loss) after tax from continuing operations
(14,092,903)
3,007,738
Discontinued Operations
Profit/(Loss) from discontinued operations
-
(3,761,051)
PROFIT/(LOSS) FOR THE YEAR
(14,092,903)
(753,313)
24
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S
A N D O T H E R C O M P R E H E N S I V E I N C O M E ( c o n t ’ d )
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 16
Other comprehensive income
Foreign currency translation differences
(1,438,823)
1,004,201
Notes
Year ended
31 December 2016
$
Year ended
31 December 2015
$
Other comprehensive income for the year, net of
income tax
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
(1,438,823)
1,004,201
(15,531,726)
250,888
Profit/(Loss) for the year attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income for the year
attributable to:
Owners of the Company
Non-controlling interest
Earnings per share
22
From continuing and discontinued operations:
Basic earnings/(loss) per share
From continuing operations:
Basic earnings per share
(13,606,636)
(486,267)
(14,092,903)
(15,045,459)
(486,267)
(15,531,726)
(753,313)
-
(753,313)
250,888
-
250,888
(8.61 cents)
(0.52 cents)
(8.61 cents)
2.09 cents
The consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
25
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L
P O S I T I O N
A S A T 3 1 D E C E M B E R 2 0 1 6
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Intangible Assets
Other financial assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Current tax liabilities
Deferred tax liabilities
Other liabilities
Total Current Liabilities
Note
31 December 2016
$
31 December 2015
$
5
6
7
8
9
10
11
12
13
4
4
14
4,361,855
2,877,295
6,987,827
3,955,928
6,657,529
9,413,278
4,548,057
3,044,107
18,182,905
23,662,971
7,626,947
4,092,773
222,438
11,942,158
7,846,195
5,801,541
1,370,094
15,017,830
30,125,063
38,680,801
5,687,070
2,107,943
11,529
489,860
1,000,000
9,296,402
2,233,642
2,107,837
242,302
-
-
4,583,781
TOTAL LIABILITIES
9,296,402
4,583,781
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Non-controlling interests
TOTAL EQUITY
20,828,661
34,097,020
15
15
18
16
71,446,718
(844,124)
(50,382,976)
609,043
20,828,661
70,276,494
872,866
(37,052,340)
-
34,097,020
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
26
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E NT O F C A S H F L O W S
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 6
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Other cash receipts
Note
Year ended
31 December 2016
$
Year ended
31 December 2015
$
48,603,490
(48,648,949)
166,963
(77,333)
2,910
50,062,921
(49,819,966)
41,971
(270,811)
1,768
Net cash used in operating activities
26
47,081
15,883
Cash flows from investing activities
Payments for property, plant & equipment
Proceeds from disposal of plant & equipment
Payments for research and developments
Payments for intangible assets
Loan to other entity
Payments for equity investments
Proceeds from disposal of equity investments
Net cash inflow on acquisition of subsidiary
Net cash inflow on disposal of subsidiary
(524,405)
-
(2,420,298)
(8,985)
-
(60,798)
-
690,471
-
(858,044)
16,613
(1,504,908)
(12,960)
(1,043,275)
-
106,494
-
425,193
25
Net cash used in investing activities
(2,324,015)
(2,870,887)
Cash flows from financing activities
Proceeds from issue of equity shares
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash generated by financing activities
-
-
2,949,733
(2,828,512)
121,221
9,018,000
(592,333)
4,898,724
(7,880,556)
5,443,835
Net (decrease)/increase in cash and cash equivalents
(2,155,713)
2,588,831
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
6,657,529
(139,961)
3,850,142
218,556
Cash and cash equivalents at the end of the year
4,361,855
6,657,529
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
27
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T S O F C H A N G E S I N E Q U I T Y
F O R T H E Y E A R D E N D E D 3 1 D E C E M B E R 2 0 1 6
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Non-controlling
Interests
Total
$
Balance as at 1 January 2015
61,293,967
(140,519)
(36,325,978)
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of ordinary shares
Share issue costs
Issue of options
Transfer expired options reserve to
accumulated losses
Transfer exercised options and vested
performance rights reserves to capital
-
-
-
9,529,572
(624,978)
-
77,933
-
1,004,201
1,004,201
-
-
114,068
(26,951)
(77,933)
(753,313)
-
(753,313)
-
-
-
26,951
-
Balance as at 31 December 2015
70,276,494
872,866
(37,052,340)
Balance as at 1 January 2016
70,276,494
872,866
(37,052,340)
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of ordinary shares
Transfer expired options reserve to
accumulated losses
Transfer vested performance rights
reserves to capital
Acquisition of subsidiaries
-
-
-
1,168,057
-
2,167
-
-
(1,438,823)
(1,438,823)
-
(276,000)
(2,167)
-
(13,606,636)
-
(13,606,636)
-
276,000
-
-
-
-
-
-
-
-
-
-
-
-
-
(486,267)
-
(486,267)
-
-
-
24,827,470
(753,313)
1,004,201
250,888
9,529,572
(624,978)
114,068
-
-
34,097,020
34,097,020
(14,092,903)
(1,438,823)
(15,531,726)
1,168,057
-
-
1,095,310
1,095,310
Balance as at 31 December 2016
71,446,718
(844,124)
(50,382,976)
609,043
20,828,661
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
28
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Vmoto Limited (“Vmoto” or “the Company”) is a limited company incorporated in Australia. The consolidated financial
report of the Company as at and for the year ended 31 December 2016 comprises the Company and its subsidiaries
(together referred to as the “Consolidated Entity”).
(a) Basis of preparation
(i)
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Consolidated Entity
complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International
Accounting Standards Board (IASB).
The financial statements were approved by the Board of Directors on 31 March 2017.
(ii)
Basis of measurement
The consolidated financial statements of the Consolidated Entity are prepared on an accruals basis and are based on
historical costs except where otherwise stated.
(iii)
Functional and presentation currency
The consolidated financial statements of the Consolidated Entity are presented in Australian dollars, which is
different from its functional currency, determined to be Renminbi. A different presentation currency has been
adopted as the Board of Directors believe that financial statements presented in Australian dollar (which is the
functional currency of parent company) are more useful to the users and shareholders of the Company who are
predominantly in Australia.
(iv)
Standards and interpretations affecting amounts reported in current period (and/or prior periods)
New, revised or amending 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. The adoption
of these Accounting Standards and Interpretations did not have any significant impact on the financial performance
or position of the group during the financial year.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
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 31 December 2016. The
group's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
to the group, are set out below:
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces
all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset
shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to
collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial
instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an
irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-
trading) in other comprehensive income ('OCI').
29
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own
credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting
requirements are intended to more closely align the accounting treatment with the risk management activities of the
entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has
increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard
introduces additional new disclosures. The group is currently continuing to assess the impact of this changes.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides
a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either
written, verbal or implied) to be identified, together with the separate performance obligations within the contract;
determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the
transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each
distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue
when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than
adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of
the goods. For services, the performance obligation is satisfied when the service has been provided, typically for
promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an
appropriate measure of progress to determine how much revenue should be recognised as the performance
obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a
contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance
and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgements made in applying the guidance to those
contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The group is
currently continuing to assess the impact of this changes.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces
AASB 117 ‘Leases’ and for lessees will eliminate the classifications of operating leases and finance leases. Subject to
exceptions, a ‘right-of-use’ asset will be capitalised in the statement of financial position, measured as the present
value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term
leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture)
where an accounting policy choice exists whereby either a ‘right-of-use’ asset is recognised or lease payments are
expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised,
adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a
depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease
liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under
AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before
Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by
interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash
flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating
or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases. The group is currently continuing to assess the impact of this changes.
30
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(v)
Going concern basis
The Consolidated Entity has recorded a loss after tax for the year ended 31 December 2016 of $14,092,903 (profit after
tax for the year ended 31 December 2015: $753,313). At 31 December 2016, the Consolidated Entity had a working
capital surplus of $8,886,503 (31 December 2015: $19,079,190).
•
The Directors have prepared the financial statements on a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The Directors believe this to be appropriate for the following reasons:
•
the Consolidated Entity has a significant working capital surplus;
•
the Consolidated Entity has long term supply agreements and demand for its electric powered scooter products
is increasing. As the units increase, this will further reduce the cost of goods manufactured due to achieving
higher levels of economies of scale, which will further improve the gross profit margins;
the Consolidated Entity will further reduce corporate and other non-sales resources without materially affecting
revenue activities;
the Consolidated Entity’s Stage 1 and 2 of the Nanjing Facility have been completed and have been used as
security for its existing operating facility. As at the date of this report, RMB20 million (approximately $4 million)
of the operating facility is still available for draw down if required; and
the Directors have prepared cash flow forecasts that indicate the Consolidated Entity will be cash flow positive
for the year ending 31 December 2017 and will enable the Consolidated Entity to pay its debts as and when they
fall due.
•
•
At the date of this report and having considered the above factors, the Directors are confident that the Consolidated
Entity and the Company will be able to continue operations into the foreseeable future.
The accounting policies set out below have been applied consistently to all periods presented in the consolidated
financial statements, and have been applied consistently by all entities in the Consolidated Entity.
(b) Principles of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies
adopted by the Consolidated Entity.
Non-controlling interests in equity and results of the entities that are controlled by the Company are shown as a
separate item in the consolidated financial statements.
In Note 23, investments in subsidiaries are carried at cost and recoverable amount. Refer to Note (o).
Transactions eliminated on consolidation
Unrealised gains and losses and inter-entity balances resulting from transactions with or between subsidiaries are
eliminated in full on consolidation.
(c) Foreign currency translation
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
which is the parent entity’s functional currency.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate
of exchange ruling at the reporting date.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
All differences in the consolidated financial report are taken to the profit & loss with the exception of differences on
foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken
directly to equity until the disposal of the net investment, at which time they are recognised in the profit & loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation
currency of Vmoto at the rate of exchange ruling at the reporting date and the income statements are translated at
the weighted average exchange rates for the period where this rate approximates the rate at the date of the
transaction.
The exchange differences arising on the retranslation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular
foreign operation is recognised in the profit & loss.
(d) Revenue recognition
Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST)
payable to the taxation authority. Exchange of goods or services of the same nature without any cash consideration
are not recognised as revenue.
Sale of goods
Revenue from the sale of goods is recognised upon delivery of goods to customers as this corresponds to the transfer
of significant risks and benefits of ownership of the goods and the cessation of all involvement in those goods.
Interest income
Interest income is recognised using the effective interest method.
(e) Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold in the ordinary course of business.
Receivables expected to be collected within 12 months of the end of the reporting period are classified as current
assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment.
(f) Acquisition of assets
All assets acquired including plant and equipment and intangibles other than goodwill are initially recorded at their
cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs
directly attributable to the acquisition.
When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value.
Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the extent of
proceeds received, otherwise expensed.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(g) Business Combination
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets
transferred by the Group, liabilities incurred by the Group to the former owners of the acquire and the equity
instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in
profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value,
except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised
and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119 ‘Employee Benefits’ respectively;
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to replace share-based payment arrangements of the acquire
are measured in accordance with AASB 2 ‘Share-based Payment’ at the acquisition date; and
•
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held
for Sale and Discontinued Operations’ are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the
fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in
profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling
interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of
measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are
measured at fair value or, when applicable, on the basis specified in another Standard.
Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair
value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed
one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement
is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at
subsequent reporting dates in accordance with AASB 139, or AASB 137 ‘Provisions, Contingent Liabilities and
Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the acquire is
remeasured to its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in
other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that
interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities
are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised as of that date.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(h) Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum
of:
•
the consideration transferred;
• any non-controlling interest; and
•
over the acquisition date fair value of net identifiable assets acquired.
the acquisition date fair value of any previously held equity interest;
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date
fair value of any previously held equity interest shall form the cost of the investment in the separate financial
statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of profit or loss and other
comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other
comprehensive income, such amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100%
interest will depend on the method adopted in measuring the non-controlling interest. The Group can elect in most
circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at
the non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate interest
method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated
in the respective notes to these financial statements disclosing the business combination.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-
generating units, representing the lowest level at which goodwill is monitored not larger than an operating segment.
Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed
of.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the
carrying amounts of goodwill.
(i) Property, Plant and Equipment
• Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of assets may include the
cost of materials and direct labour, and any other costs directly attributable to bringing the assets to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which
they are located.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised net within “other
income” in profit or loss.
• Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Consolidated Entity
and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are
recognised in the profit & loss as incurred.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
• Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each of property,
plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it
is reasonably certain that the Consolidated Entity will obtain ownership by the end of the lease term. Land is not
depreciated. Assets will be depreciated once the asset is in the condition necessary for it to be capable of operating in
the manner intended by management.
The estimated useful lives for the current and comparative periods are as follows:
Plant and equipment
Motor vehicles
Office furniture & equipment
Building
Leasehold improvements
3 – 10 years
10 years
5 years
20 years
5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
•
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amount.
The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(j) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(k) Payables
Payables, including goods received and services incurred but not yet invoiced, are recognised at the nominal amount
when the Consolidated Entity becomes obliged to make future payments as a result of a purchase of assets or receipt
of services.
(l) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the tax office is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the tax office are classified as
operating cash flows.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(m) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes expenditure
incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to
their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
(n) Operating Leases
Operating leases and the leased assets are not recognised on the Consolidated Entity’s statement of financial position.
Payments made under operating leases are recognised as an expense in the profit and loss.
(o) Recoverable amount of assets
At each reporting date, the Consolidated Entity assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Consolidated Entity makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written
down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual
asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not
generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(p) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs
associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or
premium on settlement.
Gains and losses are recognised in the profit & loss when the liabilities are derecognised as well as through the
amortisation process.
(q) Share-based payment transactions
The Consolidated Entity provides benefits to employees (including Directors) of the Consolidated Entity in the form
of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares
(‘equity-settled transactions’).
The Company operates an incentive scheme to provide these benefits, known as the Vmoto Employee Share Option
Plan (the “ESOP”).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted. The fair value is determined using a Black Scholes Option Valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Vmoto Limited (“market conditions”).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (“vesting date”).
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors
of the Consolidated Entity, will ultimately vest. This opinion is formed based on the best available information at
balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of
these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon
a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of
the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding weighted average number of options as at the reporting date is considered
not material and accordingly the basic loss per share is the same as the diluted loss per share.
(r) Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over those
policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing
control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial
statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as
held for sale, in which case it is accounted for in accordance with AASB 5. Under the equity method, an investment in
an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and
adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate
or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in
that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net
investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the
investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture,
any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment.
Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the
investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is
acquired.
The requirements of AASB 139 are applied to determine whether it is necessary to recognise any impairment loss with
respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of
the investment (including goodwill) is tested for impairment in accordance with AASB 136 ‘Impairment of Assets’ as
a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with
its carrying amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount
of the investment subsequently increases.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or
a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former
associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair
value at that date and the fair value is regarded as its fair value on initial recognition in accordance with AASB 139.
The difference between the carrying amount of the associate or joint venture at the date the equity method was
discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the
associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint
venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in
relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had
directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other
comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the
related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification
adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint
venture or an investment in a joint venture becomes an investment in an associate. There is no re-measurement to fair
value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the
equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been
recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would
be reclassified to profit or loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the
transactions with the associate or joint venture are recognised in the Group's consolidated financial statements only
to the extent of interests in the associate or joint venture that are not related to the Group.
(s) Available-for-sale financial assets
The Group has investments in unlisted shares that are not traded on an active market but that are classified as
available-for-sale financial assets and stated at fair value (because the directors consider that fair value can be reliably
measured). Fair value is determined in the manner described in note aa. Gains and losses arising from changes in fair
value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with
the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains
and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is
determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve
is reclassified to profit or loss.
The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that
are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign
exchange gains and losses are recognised in other comprehensive income.
(t) Employee benefits
Liabilities for employee benefits for wages, salaries and annual leave represent present obligations resulting from
employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration, wage
and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as
workers compensation insurance and payroll tax.
(u) Income tax
Income tax expense recognised in the statement of profit or loss and other comprehensive income relates to current
tax and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences:
i.
the initial recognition of assets or liabilities in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
ii. differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on a different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company and its subsidiaries have unused tax losses as at the reporting date. However, no deferred tax balances
have been recognised, as it is considered that asset recognition criteria have not been met at this time.
(v)
Intangibles
Trademarks, licenses and production rights
Trademarks, licenses and production rights are recognised at cost of acquisition. They have an indefinite life and are
carried at cost less any accumulated impairment losses.
Patents
Patents acquired in a business combination and recognised separately from goodwill are initially recognised at their
fair value at the acquisition date (which is regarded as their costs). Subsequent to initial recognition, patents acquired
in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses,
on the same basis as patents that are acquired separately. The patents acquired in a business combination are deemed
to have useful lives of 5 years.
Customer contracts
Customer contracts acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date (which is regarded as their costs). Subsequent to initial
recognition, customer contracts acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as patents that are acquired separately. The
customer contracts acquired in a business combination are deemed to have useful lives of 10 years.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(w) Development Costs
Development costs are capitalised only when technical feasibility studies identify that the project is expected to
deliver future economic benefits and these benefits can be measured reliably. Capitalised development costs have a
finite useful life and are amortised on a systematic basis based on the future economic benefits over the useful life of
the project.
The estimated useful lives of development costs for the current and comparative periods are 3 years. Amortisation
methods, useful lives and residual values are reviewed at each reporting date.
(x) Provisions
Provisions are recognised when the Consolidated Entity has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
(y) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-term
highly liquid investments with maturities of 3 months or less.
(z) Comparative figures
This report relates to the year ended 31 December 2016. Comparatives are for the year ended 31 December 2015.
(aa) Fair value of assets and liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(ie unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using
one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie
the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market,
the most advantageous market available to the entity at the end of the reporting period (ie the market that maximises
the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into
account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
40
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability, The Group selects a valuation technique that is
appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of
sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured.
The valuation techniques selected by the Group are consistent with one or more of the following valuation
approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing
the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives
priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs.
Inputs that are developed using market data (such as publicly available information on actual transactions) and
reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered
observable, whereas inputs for which market data is not available and therefore are developed using the best
information available about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If
one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
41
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.
(ab) Critical judgements in applying accounting policies and key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
Contingent liabilities
The Company is currently a defendant in one proceeding brought against it by a former employee in relation to the
employee’s past employment. Having considered legal advice, the Directors believe that the claims can be
successfully defended, without any losses (including for costs) being incurred by the Company.
Impairment of goodwill and other indefinite intangible assets
Determining whether goodwill is impaired required an estimation of the value in use of the cash-generating units to
which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash
flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.
Where the actual future cash flows are less than expected, a material impairment loss may arise.
The carrying amount of goodwill at 31 December 2016 was nil (31 December 2015: A$1,414,951).
Useful lives of property, plant and equipment and patents
The Group reviews the estimated useful lives of property, plant and equipment and patents at the end of each
reporting period. During the current year, the directors determined that the useful lives of property, plant and
equipment and patents are deemed to be no changed.
Fair value measurements and valuation processes in relation to business combination acquisition
As part of business combination, assets and liabilities are measured at fair value for reporting purposes. The Directors
have determined the appropriate valuation techniques and inputs for fair value measurements.
In estimating the fair value of plant and equipments, the Group uses Level 3 inputs to perform the valuation.
In estimating the fair value of customer base, the Group uses Level 3 inputs to perform the valuation.
Fair value measurements and valuation processes in relation to investments available-for-sale
In estimating the fair value of the available-for-sale investments, the Group uses Level 3 fair value hierarchy to
perform the valuation.
42
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
2. REVENUES AND EXPENSES
(a) Other income
Interest income
Contributions from customers
Government subsidies
Gain from disposal of fixed assets
Net foreign exchange gain
Other income
(b) Other expenses
Doubtful debts
(c) Employee benefits expense
Wages and salaries costs
(d) Depreciation and amortisation
Depreciation of property, plant and equipment
Amortisation of intangibles
Year ended
31 December 2016
$
Year ended
31 December 2015
$
166,962
380,437
5,137
-
23,233
23,628
599,397
693,831
693,831
41,847
79,560
5,602
16,613
143,922
7,957
295,501
-
-
3,587,570
3,587,570
1,624,331
1,624,331
719,814
446,421
702,835
63,118
1,166,235
765,953
3. AUDITOR’S REMUNERATION
Audit services:
- audit of financial reports by Bentleys Audit & Corporate
(WA) Pty Ltd
77,000
77,000
84,000
84,000
43
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
4. INCOME TAX
(a) Income tax credit / (expense)
Current tax
Deferred tax
Year ended
31 December 2016
$
Year ended
31 December 2015
$
(11,529)
54,429
42,900
(242,302)
(626,842)
(869,144)
(b) Numerical reconciliation between tax benefit/(expense) and pre-
tax net profit/(loss)
Profit/(Loss) before income tax benefit
(14,092,903)
3,876,882
Income tax credit/(expense) calculated at 30%
4,227,871
(1,163,065)
Effect on amounts which are not tax deductible:
Deductible amount from sale of subsidiary
Losses of foreign subsidiaries/operations not regarded as
deductible
Non-deductible items
Recognition of tax losses of China operations previously not
recognised
Effect of different tax rates of subsidiaries operating in other
jurisdictions
Deferred tax liabilities in relation to amortisation of customer base
Deferred tax not brought to account
Income tax credit / (expense)
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised (as recovery is currently not probable)
-
(3,045,303)
(3,337)
-
51,751
54,429
(1,242,511)
42,900
421,567
-
(10,486)
-
456,428
-
(573,588)
(869,144)
Potential at 30% (31 December 2015: 30%)
6,652,940
6,355,688
All tax losses relate to Australian based entities.
(d) Unrecognised temporary differences
Temporary differences for which deferred tax assets have not
been recognised:
Provision for doubtful receivables
Provision for loan to other entity
Provision for impairment loss on investments
Accrued expenses
Unrecognised deferred tax assets relating to the above temporary
differences
239,367
248,578
33,878
16,500
538,323
88,329
-
-
16,500
104,829
44
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(e) Current tax liabilities
Income tax payable
(f) Deferred tax balances
31 December 2016
$
31 December 2015
$
11,529
242,302
Deferred tax balances are presented in the consolidated statement of financial position as follows:
Deferred tax liabilities
(g) Tax Rates
489,860
489,860
-
-
The potential tax benefit at 31 December 2016 in respect of tax losses not brought into account has been calculated at
30% for Australian entities. This same rate applied for the year ended 31 December 2015. The tax benefit and expense
at 31 December 2016 in respect of tax effect brought into account in relation to China operations has been calculated
at 25% for China entities.
5. CASH AND CASH EQUIVALENTS
Cash and bank balances
6. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: Provision for impairment loss
Other receivables
Less: Provision for impairment loss
Impaired Trade Receivables
31 December 2016
$
31 December 2015
$
4,361,855
6,657,529
2,792,427
(666,137)
2,126,290
1,042,338
(291,333)
2,877,295
9,142,030
-
9,142,030
562,581
(291,333)
9,413,278
Trade receivables are non-interest bearing and are generally on 30-60 days terms. A provision for impairment loss is
recognised when there is objective evidence that an individual trade receivable is impaired.
45
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Movements in the provision for impairment of trade and other receivables were as follows:
31 December 2016
$
31 December 2015
$
At beginning of the period
Provision for impairment during the period
Write off
At end of the period
291,333
666,137
-
957,470
At 31 December 2016, the ageing analysis of trade and other receivables is as follows:
0 – 30 Days
31 – 60 Days
61 – 90 Days past due not impaired
+90 Days past due not impaired
+90 Days considered impaired
1,227,138
851,946
293,732
504,479
957,470
3,834,765
294,633
-
(3,300)
291,333
4,232,557
3,968,221
412,418
800,082
291,333
9,704,611
As of 31 December 2016, trade and other receivables of $798,211 (31 December 2015: $1,212,500) were past due but not
impaired. These relate to a number of independent customers for whom there is no recent history of default. The past
due not impaired balance also includes VAT refundable from the China operations, which can be claimed/used to
offset against future VAT payables.
7. INVENTORIES
Raw materials
Semi-finished goods
Finished goods
8. OTHER ASSETS
Prepayments
3,481,493
1,443,280
2,063,054
6,987,827
1,836,545
674,906
2,036,606
4,548,057
3,955,928
3,955,928
3,044,107
3,044,107
The prepayments are payments in advance to suppliers for the supply of electric two-wheel vehicle inventories for the
Consolidated Entity’s electric two-wheel vehicle operations.
46
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
9. PROPERTY, PLANT & EQUIPMENT
Year ended 31 December 2015
At 1 January 2015, net of accumulated depreciation
Additions
Disposals
Depreciation for the period
Exchange differences
At 31 December 2015, net of accumulated depreciation
At 31 December 2015
Cost
Accumulated depreciation
Net carrying amount
Plant &
equipment
Motor
vehicles
Office
furniture &
equipment
Land
Building
1,601,002
870,279
(881,226)
(402,084)
130,998
1,318,969
139,999
-
(1,346)
(33,587)
8,026
113,092
-
-
-
-
-
-
1,000,269
-
-
-
72,043
1,072,312
4,864,918
394,995
-
(267,164)
349,073
5,341,822
Leasehold
improvement
Total
7,606,188
1,265,274
(882,572)
(702,835)
560,140
7,846,195
-
-
-
-
-
-
2,697,863
(1,378,894)
150,078
(36,986)
82,886
(82,886)
1,072,312
-
6,105,388
(763,566)
278,041
(278,041)
10,386,568
(2,540,373)
1,318,969
113,092
-
1,072,312
5,341,822
Year ended 31 December 2016
At 1 January 2016, net of accumulated depreciation
Additions
Acquisition through business combinations
Depreciation for the period
Exchange differences
At 31 December 2016, net of accumulated depreciation
1,318,969
86,224
406,704
(382,702)
(64,742)
1,364,453
113,092
19,280
100,252
(76,114)
(13,250)
143,260
-
-
-
-
-
-
1,072,312
-
-
-
(60,646)
1,011,666
5,341,822
378,700
-
(260,998)
(351,956)
5,107,568
-
-
-
-
-
-
-
7,846,195
7,846,195
484,204
506,956
(719,814)
(490,594)
7,626,947
At 31 December 2016
Cost
Accumulated depreciation
Net carrying amount
3,285,905
(1,921,452)
317,847
(174,587)
82,886
(82,886)
1,011,666
-
6,084,848
(977,280)
278,041
(278,041)
11,061,193
(3,434,246)
1,364,453
143,260
-
1,011,666
5,107,5681
-
7,626,947
1. Post the period, an independent external property valuation company has valued the Company’s Nanjing land and Stage 1 & Stage 2 buildings at $11.8 million AUD.
An impairment test has been performed in conjunction with intangible assets and the details of assumptions used are in Note 10.
Assets pledged as security
Land and buildings with a carrying amount of approximately $6.1 million have been pledged to secure borrowings of the Group (see Note 13). The freehold land and buildings
have been pledged as security for the bank operating facility under a mortgage. The Group is not allowed to pledge these assets as security for other borrowings or to sell them to
another entity.
47
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
10. INTANGIBLES
Year ended 31 December 2015
Balance at 1 January 2015
Additions
Additions from internal development
Disposals
Amortisation for the period
Exchange differences
Balance at 31 December 2015
At 31 December 2015
Cost
Accumulated amortisation and impairment
Net carrying amount
Year ended 31 December 2016
Balance at 1 January 2016
Additions
Additions from internal development
Acquisition through business combinations
Amortisation for the period
Impairment for the period
Exchange differences
Balance at 31 December 2016
At 31 December 2016
Cost
Accumulated amortisation and impairment
Net carrying amount
Goodwill
4,207,107
-
-
(2,792,156)
-
-
1,414,951
1,414,951
-
1,414,951
1,414,951
-
-
2,556,477
-
(3,971,428)
-
-
3,971,428
(3,971,428)
-
Licences,
trademarks and
production
rights
Patents
Development
Costs
Customer
base
Total
1,310,760
-
-
(1,310,760)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
869,508
-
1,537,226
(204,548)
(29,155)
-
2,173,031
2,578,377
(405,346)
2,173,031
2,173,031
-
2,420,298
-
(194,742)
(4,270,447)
(128,140)
-
-
-
-
-
-
-
-
-
-
-
8,536,781
13,146
1,537,226
(4,307,464)
(63,118)
84,970
5,801,541
6,240,850
(439,309)
5,801,541
-
-
-
2,177,156
(217,716)
-
1,959,440
5,801,541
6,784
2,420,298
6,866,966
(446,421)
(10,357,556)
(198,839)
4,092,773
4,836,105
(4,836,105)
-
2,177,156
(217,716)
1,959,440
15,301,629
(11,208,856)
4,092,773
2,149,406
13,146
-
-
(33,963)
84,970
2,213,559
2,247,522
(33,963)
2,213,559
2,213,559
6,784
-
2,133,333
(33,963)
(2,115,681)
(70,699)
2,133,333
4,316,940
(2,183,607)
2,133,333
48
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
The goodwill arising on acquisition, licenses, trademarks, patents and production rights are allocated to two cash
generating units being manufacture of two-wheel vehicle within the Chinese geographical location segment as the
Company’s manufacturing facility and main operations are located in China.
Nanjing
The recoverable amount of these intangible assets have been determined using value in use method based on the net
present value of projected earnings before interest, tax and depreciation using cash flow projections based on financial
budgets approved by senior management covering a one-year period. A growth rate of 6% was used to extrapolate
managements cash flow forecast for further 4 years and a growth rate of 0% was applied for another 9 years. The pre-
tax discount rate applied to cash flow projections is 8.4% (31 December 2015: 15%). The cash flow projections were
prepared based on past experience and contracts that are in place.
The calculated recoverable amount for the Nanjing segment is less than the carrying amount of the goodwill,
trademarks, patents and development costs and impairment losses of $7,801,079 have been recognised and included
in the profit and loss statement.
Shanghai
The recoverable amount of these intangible assets have been determined using value in use method based on the net
present value of projected earnings before interest, tax and depreciation using cash flow projections based on financial
budgets approved by senior management covering a one-year period. An average growth rate of 6% was used to
extrapolate managements cash flow forecast for further 4 years and a growth rate of 0% was applied for another 9
years. The pre-tax discount rate applied to cash flow projections is 8.4%. The cash flow projections were prepared
based on past experience and contracts that are in place.
The calculated recoverable amount for Shanghai Jiye segment is less than the carrying amount of the goodwill on
acquisition of 51% interest in Jiye and an impairment loss of $2,556,477 has been recognised and included in the profit
and loss statement. Sensitivity analysis was performed by varying the discount rate applied to the cash flow projections
by 2%. This would result in the aggregate carrying amount of the cash generating unit exceeding the recoverable
amount of the cash generating unit by approximately $756,000. The director estimate that a decrease in growth rate by
2% would result in the aggregate carrying amount of the cash generating unit exceeding the recoverable amount of the
cash generating unit by approximately $324,000. The directors believe that any reasonably possible change in other
key assumptions on which recoverable amount is based would not cause the Shanghai’s carrying amount to exceed its
recoverable amount.
11. OTHER FINANCIAL ASSETS
Available-for-sale investments carried at fair value
Unquoted shares (i)
Provision for impairment loss
Loans carried at amortised cost
Loans to related parties (ii)
Provision for impairment loss
Total other financial assets
31 December 2016
$
31 December 2015
$
357,952
(135,514)
222,438
994,313
(994,313)
-
222,438
316,176
-
316,176
1,053,918
-
1,053,918
1,370,094
(i) The Consolidated Entity holds 15% of the ordinary share capital of Jiangsu Kaiyang, a company focused on
designing, manufacturing and distributing three-wheel and four-wheel electric vehicles. The Directors of the
Company do not consider that the Consolidated Entity is able to exercise significant influence over Jiangsu
Kaiyang as the other 85% of the ordinary share capital is held by other shareholders, who also manage the day-
to-day operations of that company. Jiangsu Kaiyang continue to focus on developing new customers, markets
and models of electric three-wheel vehicle and have incurred loss in the year ended 31 December 2016. The fair
value was determined by the directors based on the latest financial position of Kaiyang (Level 3 fair value
hierarchy). The Company have recognised a provision for impairment loss of $135,514 on its interest in Jiangsu
Kaiyang and included in the profit and loss statement.
49
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(ii) The Consolidated Entity provided loans of RMB5 million ($994,313) to Jiangsu Kaiyang in FY2015. The loans
are interest free and repayable in two years. As Jiangsu Kaiyang is still at an early stage of development and
continues to incur losses, the repayment of loans provided are expected to be delayed to future periods when
Jiangsu Kaiyang operations achieve profitability. The Company has recognised a provision for impairment loss
of $994,313 on its loans to Jiangsu Kaiyang, as included in the profit and loss statement.
12. TRADE AND OTHER PAYABLES
Current – unsecured
Trade creditors
Advance and deposits from customers
Other creditors and accruals
13. LOANS AND BORROWINGS
Current
Unsecured
Loans from non-related party
Secured – Interest bearing
Bank operating facility
The carrying amounts of non-current assets
pledged as security are:
Land and buildings
Financing arrangements
The Consolidated Entity has access to the following facilities:
Total facilities available:
Bank operating facility
Facilities utilised at end of the period:
Bank operating facility
Facilities not utilised at end of the period:
Bank operating facility
Loan from non-related party
2,318,741
2,957,371
410,958
5,687,070
1,179,346
763,659
290,637
2,233,642
1,113,630
1,113,630
994,313
994,313
2,107,943
-
-
2,107,837
2,107,837
2,107,837
6,119,234
6,119,234
6,414,134
6,414,134
4,971,563
4,971,563
994,313
994,313
3,977,250
3,977,250
7,166,646
7,166,646
2,107,837
2,107,837
5,058,809
5,058,809
Loan from non-controlling interest shareholder of Jiye include a RMB5.6 million (A$1,113,630) unsecured interest
free loan advanced to the Company during the period with no fixed repayment terms.
50
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Bank operating facility
The bank operating facility is secured by the Company’s Nanjing Facility, including the land, Stage 1 and Stage 2
of the manufacturing facility. This bank operating facility is a revolving line of credit facility and the undrawn
facility is available for draw down throughout the period. The loan facility does not have any bank covenant
conditions.
The average interest rate for the bank operating facility is 5.08% per annum, payable quarterly.
14. OTHER LIABILITIES
Other (Consideration)
31 December 2016
$
31 December 2015
$
1,000,000
1,000,000
-
-
The other liabilities of $1,000,000 represented the Tranche 2 shares consideration recognised as part of the
Company’s acquisition of trademark of Powereagle.
15. ISSUED CAPITAL AND RESERVES
Issued capital
31 December 2016
$
31 December 2015
$
160,769,006 (31 December 2015: 154,562,518) fully paid ordinary
shares
71,446,718
70,276,494
The following movements in issued capital occurred during the period:
Balance at beginning of period
Issue of Shares at 3.5 cents each
Issue of Shares at 4.6 cents each
Issue of Shares at 3.0 cents each
Issue of Shares at nil consideration
Issue of Shares at 3.0 cents each
10 for 1 share consolidation
Issue of Shares at 30 cents each
Issue of Shares at 45 cents each
Issue of Shares at nil consideration
Issue of Shares at 35 cents each
Issue of Shares at 36 cents each
Issue of Shares at 39.5 cents each
Issue of Shares at 31 cents each
Issue of Shares at 31 cents each
Issue of Shares at nil consideration
Issue of Shares at 34 cents each
Issue of Shares at nil consideration
Issue of Shares at 34 cents each
Issue of Shares at 27 cents each
Issue of Shares at nil consideration
Issue of Shares at nil consideration
Transfer options reserve to issued
capital
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
q)
r)
s)
t)
u)
Number of
Shares
31 Dec 2015
1,321,527,860
86,114
1,089,555
1,000,000
2,000,000
2,550,000
(1,195,427,859)
35,000
19,780,000
266,668
38,095
42,633
42,194
32,258
1,300,000
200,000
-
-
-
-
-
-
-
Number of
Shares
31 Dec 2016
154,562,518
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,333,333
200,000
20,067
86,420
2,300,000
266,668
-
51
Year
ended
31 Dec 2016
$
Year
ended
3 Dec 2015
$
70,276,494
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,133,333
-
6,823
23,333
-
-
2,167
61,293,967
3,014
50,120
30,000
-
76,500
-
10,500
8,901,000
-
13,333
15,438
16,667
10,000
403,000
-
-
-
-
-
-
-
77,933
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
15. ISSUED CAPITAL AND RESERVES (cont’d)
Number of
Shares
31 Dec 2016
Number of
Shares
31 Dec 2015
Year
ended
31 Dec 2016
$
Year
ended
3 Dec 2015
$
Vesting of share based expenses
Share issue costs
-
-
-
-
4,568
-
-
(624,978)
Balance at end of period
160,769,006
154,562,518
71,446,718
70,276,494
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
q)
r)
s)
t)
u)
26 February 2015 – Issue 86,114 shares at $0.035 for corporate advisory services provided to the Company.
15 April 2015 – Issue 1,089,555 shares at $0.046 for investor relation services provided to the Company.
15 April 2015 – Issue 1,000,000 shares at $0.03 each on exercise of ESOP options.
15 April 2015 – Issue 2,000,000 shares at nil consideration on vesting of 2,000,000 Performance Rights.
11 May 2015 – Issue 2,550,000 shares at $0.03 each on exercise of ESOP options.
4 June 2015 – The Company completed the consolidation of its share capital through the conversion of every
ten shares in the capital of the Company into one share (“Share Consolidation”).
17 June 2015 – Issue 35,000 shares at $0.30 each on exercise of ESOP options.
17 June 2015 – Issue 19,780,000 shares at $0.45 each as a result of completion of $8.9 million capital raising.
17 June 2015 – Issue 266,668 shares at nil consideration on vesting of 266,668 Performance Rights.
17 June 2015 – Issue 38,095 shares to a director in lieu of unpaid director fees.
10 July 2015 – Issue 42,633 shares at $0.036 for corporate advisory services provided to the Company.
2 October 2015 – Issue 42,194 shares to a director in lieu of unpaid director fees.
2 October 2015 – Issue 32,258 shares at $0.31 for investor relation services provided to the Company.
2 October 2015 – Issue 1,300,000 shares at a deemed price of $0.031 each to employees of the Company in
recognition of their efforts and contribution to the Company.
17 December 2015 – Issue 200,000 shares at nil consideration on vesting of 200,000 Performance Rights.
5 February 2016 – Issue 3,333,333 shares at $0.34 as Tranche 1 shares consideration to acquire trademark of
Powereagle.
5 February 2016 – Issue 200,000 shares at nil consideration on vesting of 200,000 Performance Rights.
17 May 2016 – Issue 20,067 shares at $0.34 for corporate finance services provided to the Company.
24 May 2016 – Issue 86,420 shares to a director in lieu of unpaid director fees.
2 December 2016 – Issue 2,300,000 shares at a deemed price of $0.075 each to employees of the Company in
recognition of their efforts and contribution to the Company. These share based expenses will be recognised
over a three year vesting period.
2 December 2016 – Issue 266,668 shares at nil consideration on vesting of 266,668 Performance Rights.
Options
The movements of options over unissued ordinary shares of the Company for the year ended 31 December 2016 were:
Expiry Date
Exercise
Price
Balance at
1 Jan 2016
Granted/
Issued
Exercised/
Forfeited
Consolidated
Held at
31 Dec 2016
Class E options 23 May 2018
Class F options 23 May 2018
Class G options 21 May 2019
Class H options 21 May 2019
21 May 2019
Class I options
Class J options
31 December 2017
Total
40 cents
80 cents
50 cents
75 cents
$1.00
75 cents
500,000
500,000
100,000
100,000
200,000
719,981
2,119,981
52
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
100,000
100,000
200,000
719,981
2,119,981
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
15. ISSUED CAPITAL AND RESERVES (cont’d)
Performance Rights
All Performance Rights convert to fully paid ordinary shares for nil cash consideration, subject to performance based
vesting conditions.
The movements of Performance Rights over unissued ordinary shares of the Company during the year ended 31
December 2016 were:
Performance
Rights series
Balance at
1 Jan 2016
Granted
Vested/Expired
Held at
31 Dec 2016
Class F
Class I
Class J
Class K
Total
200,000
266,668
1,000,000
1,000,000
2,466,668
-
-
-
-
-
(200,000)
(266,668)
(1,000,000)
-
(1,466,668)
-
-
-
1,000,000
1,000,000
The above Performance Rights issued under the Company’s Performance Rights Plan were subject to the following
performance conditions:
Class
Performance Conditions
Time of vesting
Status
Number of
Performance
Rights
200,000
266,668
1,000,000
F
I
J
1,000,000
K
-
-
- The VWAP exceeds 40 cents at any
time on or before 31 December
2014; and
the Participating Director remains
a Director at the time of vesting.
- The VWAP exceeds 50 cents at any
time on or before 31 December
2015; and
the Participating Director remains
a Director at the time of vesting.
- The volume weighted average
for 10
the Shares
price of
consecutive trading days on ASX
(VWAP) exceeds 65 cents at any
time on or before 31 December
2016; and
the Participating Director remains
a Director at the time of vesting.
- The VWAP exceeds 85 cents at any
time on or before 31 December
2017; and
the Participating Director remains
a Director at the time of vesting.
-
-
The date 24 months
after the date the
VWAP first exceeds
40 cents
The date 24 months
after the date the
VWAP first exceeds
50 cents
Vested
Vested
The date the VWAP
first exceeds 65 cents
Expired
The date the VWAP
first exceeds 85 cents
Unvested
53
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
15. ISSUED CAPITAL AND RESERVES (cont’d)
Reserves
Reserves at the beginning of the period
Movements in share-based payment reserve
Transfer expired options reserve to accumulated losses
Transfer exercised options and vested performance rights reserves
to issued capital
Movements in foreign currency translation reserve
Reserves at the end of the period
Comprises of:
Share-based payment reserve
Foreign currency translation reserve
Reserves at the end of the period
31 December 2016
$
31 December 2015
$
872,866
(276,000)
(2,167)
(1,438,823)
(844,124)
328,206
(1,172,330)
(844,124)
(140,519)
114,068
(26,951)
(77,933)
1,004,201
872,866
606,373
266,493
872,866
The share-based payments reserve is used to recognise the fair value of options issued but not exercised and
Performance Rights issued.
The foreign currency translation reserve is used to recognise exchange differences arising from the translation of the
financial statements of foreign operations.
16. NON-CONTROLLING INTERESTS
Balance at the beginning of the period
Share of loss for the year
Non-controlling interests arising on acquisition of Jiye
Balance at the end of the period
-
(486,267)
1,095,310
609,043
-
-
-
-
31 December 2016
$
31 December 2015
$
54
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
17. CAPITAL RISK MANAGEMENT
The Consolidated Entity manages its capital to ensure their ability to continue as a going concern and to achieve
returns to the shareholders and benefits for other stakeholders through the optimisation of debt and equity balance.
The capital structure of the Consolidated Entity is adjusted to achieve its goals whilst ensuring the lowest cost of the
capital.
Management monitors capital on the basis of the gearing ratio (debt/total capital). During the year ended 31
December 2016, the Consolidated Entity’s strategy is to utilise lowest cost of the capital from the capital markets and
continuously negotiating lower interest cost with provider of its operating facility to achieve its expansion program.
The gearing ratios at 31 December 2016 and 31 December 2015 were as follows:
Total borrowings
Total equity
Total capital
Gearing ratio
31 December 2016
$
31 December 2015
$
2,107,943
20,828,661
22,936,604
2,107,837
34,097,020
36,204,857
9.2%
5.8%
The gearing ratio of the Company has increased from 5.8% to 9.2% during the year ended 31 December 2016.
18. ACCUMULATED LOSSES
Accumulated losses at the beginning of the period
Profit/(Loss) for the period
Transfer from share-based payment reserve
Accumulated losses at the end of the period
19. SEGMENT REPORTING
Year ended
31 December 2016
$
Year ended
31 December 2015
$
(37,052,340)
(13,606,636)
276,000
(50,382,976)
(36,325,978)
(753,313)
26,951
(37,052,340)
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and
to assess their performance.
The continuing operations of the Consolidated Entity are predominantly in the electric two-wheel vehicles
manufacture and distribution industry.
Reported segments were based on the geographical segments of the Consolidated Entity, being Australia and China.
The management accounts and forecasts submitted to the chief operating decision maker for the purpose of resource
allocation and assessment of segment performance are split into these components.
The electric two-wheel vehicles segment is managed on a worldwide basis, but operates in two principal geographical
areas: Australia and China. In China, manufacturing facilities are operated in Nanjing and Shanghai. The following
table presents revenue and profit or loss in relation to geographical segments for the twelve month periods ended 31
December 2016 and 31 December 2015:
55
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
19. SEGMENT REPORTING (cont’d)
Continuing Operations
Australia
$A
Nanjing, China
$A
Shanghai, China
$A
Intersegment
elimination $A
Consolidated
$A
Year
ended
31/12/2016
Year
ended
31/12/2015
Year
ended
31/12/2016
Year
ended
31/12/2015
Year
ended
31/12/2016
Year
ended
31/12/2015
Year
ended
31/12/2016
Year
ended
31/12/2015
Year
ended
31/12/2016
Year
ended
31/12/2015
62,518
27,483
17,208,227
47,585,530
18,997,178
(1,130,964)
(1,948,919)
(9,395,891)
4,956,657
(3,566,048)
-
-
-
-
-
36,267,923
47,613,013
-
(14,092,903)
3,007,738
1,872,185
2,954,009
43,629,806
57,411,878
6,516,069
-
(21,892,997) (21,685,086)
30,125,063
38,680,801
Revenue
Segment revenue
Result
Segment profit/(loss)
Assets
Segment assets
Liabilities
Segment liabilities
(1,129,134)
(207,924)
(25,308,271)
(26,060,943)
(4,751,994)
Depreciation of fixed assets
(6,425)
(4,867)
(600,789)
(697,968)
(112,600)
Impairment of intangible assets
(78,314)
Amortisation of intangible assets
-
-
-
(7,722,765)
-
(2,556,477)
(228,705)
(63,118)
(217,716)
-
-
-
-
21,892,997
21,685,086
(9,296,402)
(4,583,781)
-
-
-
-
(719,814)
(702,835)
-
(10,357,556)
-
-
(446,421)
(63,118)
The principal activity of the continuing Consolidated Entity is the design, manufacture, marketing and distribution of electric two-wheel vehicles.
56
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Consolidated Entity’s principal financial instruments comprise bank and other loans, cash and short-term deposits.
The main purpose of these financial instruments is to raise finance for the Consolidated Entity’s operations.
The Consolidated Entity has various other financial instruments such as trade debtors and trade creditors, which arise
directly from its operations.
It is, and has been throughout the period under review, the Consolidated Entity’s policy that no trading in derivative
instruments shall be undertaken.
Fair values
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial
statements approximates their fair values.
The following table details the fair value of financial assets and liabilities of the Consolidated Entity:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Current tax liabilities
Other liabilities
Total financial liabilities
31 December 2016
31 December 2015
Carrying
amount
$
4,361,855
2,877,295
222,438
7,461,588
5,687,070
2,107,943
11,529
1,000,000
8,806,542
Fair
Value
$
4,361,855
2,877,295
222,438
7,461,588
5,687,070
2,107,943
11,529
1,000,000
8,806,542
Carrying
amount
$
6,657,529
9,413,278
1,370,094
Fair
Value
$
6,657,529
9,413,278
1,370,094
17,440,901
17,440,901
2,233,642
2,107,837
242,302
-
4,583,781
2,233,642
2,107,837
242,302
-
4,583,781
Net financial assets / (liabilities)
(1,344,954)
(1,344,954)
12,857,120
12,857,120
The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, liquidity risk, foreign
currency risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are
summarised below.
Sensitivity analysis
In managing interest rate and currency risks, the Company endeavours to reduce the impact of short-term fluctuations
on the Company’s earnings. Over the longer term, however, permanent changes in foreign exchange and interest rates
will have an impact on consolidated earnings, although the extent of that impact will depend on the level of cash
resources held by the Consolidated Entity. A general increase of one percentage point in interest rates would not be
expected to materially impact earnings.
57
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
Interest rate risk
The Consolidated Entity’s exposure to market risk for changes in interest rates relates primarily to the Consolidated
Entity’s short term debt obligations.
Cash includes funds held in term deposits and cheque accounts during the year, which earned interest at rates ranging
between 0% and 2.1%, depending on account balances.
The following annual interest rates apply to the Consolidated Entity’s credit facilities:
Bank operating facility
5.08% variable
All other financial assets and liabilities are non-interest bearing.
At balance date, the Consolidated Entity had the following mix of financial assets and liabilities exposed to variable
interest rate risk that are not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Financial liabilities
Bank operating facility
Net exposure
31 December 2016
$
31 December 2015
$
4,361,855
6,657,529
(994,313)
3,367,542
(2,107,837)
4,549,692
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
At 31 December, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
pre-tax profit and equity would have been affected as follows:
Judgements of reasonable possible movements:
31 December 2016
$
31 December 2015
$
+1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
-1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
Foreign currency risk
33,675
33,675
(33,675)
(33,675)
45,497
45,497
(45,497)
(45,497)
The Consolidated Entity is exposed to foreign currency on sales, purchases and borrowings that are denominated in a
currency other than Australian Dollars. The currency giving rise to this risk is primarily US dollars and Chinese RMB.
58
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
At balance date, the Consolidated Entity had the following exposure to US dollars and Chinese RMB foreign currency
that is not designated in cash flow hedges:
Financial assets
Cash and cash equivalents (USD)
Cash and cash equivalents (RMB)
Trade and other receivables (USD)
Trade and other receivables (RMB)
Financial liabilities
Trade and other payables (USD)
Trade and other payables (GBP)
Trade and other payables (RMB)
Borrowings (RMB)
Net exposure
31 December 2016
$AUD
31 December 2015
$AUD
1,434,581
1,330,232
2,764,813
280,126
2,553,843
2,833,969
(363,065)
-
(5,206,400)
(5,569,465)
(2,107,943)
(2,078,626)
1,823,031
2,304,103
4,127,134
283,975
10,322,112
10,606,087
(554,023)
(16,143)
(1,713,997)
(2,284,163)
(2,107,837)
10,341,221
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 31 December 2016, had the Australian Dollar moved, as illustrated in the table below, with all other variables held
constant, equity would have been affected as follows:
Judgements of reasonable possible movements:
31 December 2016
$
31 December 2015
$
AUD/USD and AUD/RMB +20%
Equity increase/(decrease)
AUD/USD and AUD/RMB -20%
Equity increase/(decrease)
346,438
(1,723,537)
(415,725)
2,068,244
At this stage, the Consolidated Entity does not seek to hedge this exposure.
Credit risk
The credit risk on financial assets of the Consolidated Entity which have been recognised on the statement of financial
position is generally the carrying amount, net of any provision for impairment losses.
The Consolidated Entity continuously monitors credit risks arising from its trade receivables which are principally
with significant and reputable companies. It is the Consolidated Entity’s policy that credit verification procedures,
including assessment of credit ratings, financial position, past experience and industry reputation, are performed on
new customers that request credit terms. Risk limits are set for each customer and regularly monitored. Receivable
balances are monitored on an ongoing basis with the result that the Consolidated Entity’s exposure to bad debts is not
significant.
59
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
The total credit risk exposure of the Consolidated Entity could be considered to include the difference between the
carrying amount of the receivable and the realisable amount. At balance sheet date there were no significant
concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each
financial asset in the balance sheet. Details with respect to credit risk of trade and other receivables are provided in
Note 6.
Liquidity risk
Liquidity risk arises from the possibility that the Consolidated Entity might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Consolidated Entity manages this risk through the
following mechanisms:
1.
2.
3.
4.
5.
preparing forward-looking cash flow analyses in relation to its operational, investing and financing activities;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile; and
managing credit risk related to financial assets.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 Years
Over 5 Years
Total
31/12/2016 31/12/2015 31/12/2016 31/12/2015 31/12/2016 31/12/2015 31/12/2016 31/12/2015
Consolidated Group
$000
$000
$000
$000
$000
$000
$000
$000
Financial liabilities due for
payment
Bank operating facility and
loans
2,108
2,108
Trade and other payables
5,687
2,234
Current tax liabilities
Other liabilities
Total contractual outflows
Total expected outflows
12
-
7,807
7,807
242
-
4,584
4,584
Financial assets – cash flows
realisable
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
4,362
2,877
7,239
6,658
9,413
16,071
Net (outflow)/ inflow on
financial instruments
(568)
11,487
Financial assets pledged as collateral
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,108
2,108
5,687
2,234
12
-
7,807
7,807
242
-
4,584
4,584
4,362
2,877
7,239
6,658
9,413
16,071
(568)
11,487
There are no financial assets that have been pledged as security for debt and their realisation into cash is not restricted.
60
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
21. COMMITMENTS AND CONTINGENT LIABILITES
31 December 2016
$
31 December 2015
$
Operating lease commitments
Future operating lease rentals not provided for in the financial
statements and payable:
Not later than one year
Later than one year but not later than five years
Other commitments
Other commitment not provided for in the financial statements
and payable:
Not later than one year
Later than one year but not later than five years
244,796
734,390
979,186
-
-
-
-
-
-
1,438,430
1,000,000
2,438,430
Contingent liabilities
The Company is currently a defendant in a proceeding brought against the Company by a former employee in relation
to the employee’s past employment. Having considered legal advice, the Directors believe that the claim can be
successfully defended, without any losses (including for costs) being incurred by the Company.
22. EARNINGS PER SHARE
Basic earnings per share
From continuing operations
From discontinued operations
Total earnings/(loss) per share
Year ended
31 Dec 2016
Cents per share
Year ended
31 Dec 2015
Cents per share
(8.61)
-
(8.61)
2.09
(2.61)
(0.52)
The Company’s potential ordinary shares are not considered dilutive and accordingly the basic loss per share is the
same as the diluted loss per share.
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are
as follows:
61
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Year ended
31 Dec 2016
$
Year ended
31 Dec 2015
$
Profit/(Loss) for the year attributable to owners of the Consolidated
Entity
Earnings used in the calculation of basic earnings per share
(13,606,636)
(13,606,636)
(753,313)
(753,313)
(Profit)/Loss for the year from discontinued operations used in the
calculation of basic earnings/loss per share from discontinued
operations
Earnings used in the calculation of basic earnings/loss per share
from continuing operations
-
(13,606,636)
3,761,051
3,007,738
Weighted average number of ordinary shares for the purposes of
basic earnings/loss per share
158,042,830
143,902,299
The Company completed the consolidation of its share capital through the conversion of every ten shares in the capital
of the Company into one share (“Share Consolidation”) on 4 June 2015. The weighted average number of ordinary
shares for the purposes of basic earnings per share are disclosed on a post Share Consolidation basis.
23. CONTROLLED ENTITIES
Parent entity
Vmoto Limited
Controlled entities
Country of
Incorporation
Entity interest
31 December
2016
Entity interest
31 December
2015
Australia
Vmoto Australia Pty Ltd
Vmoto International Limited
Nanjing Vmoto Co, Ltd
Nanjing Vmoto Manufacturing Co, Ltd
Nanjing Vmoto E-Max Electric Vehicles Development Co, Ltd
Shanghai Jiye Electric Vehicle Co, Ltd
Australia
Hong Kong
China
China
China
China
100%
100%
100%
100%
100%
51%
100%
100%
100%
100%
100%
-
24. KEY MANAGEMENT PERSONNEL DISCLOSURES
Details of Key Management Personnel
(i) Directors
Mr Charles Chen
Mr Ivan Teo
Managing Director (Executive) – appointed Executive Director 5 January 2007
and Managing Director 1 September 2011
Finance Director (Executive) – appointed Chief Financial Officer 17 June 2009
and Finance Director 29 January 2013
Mr Oliver Cairns
Director (Non-Executive) – appointed 1 September 2011
Mr Kaijian Chen
Director (Non-Executive) – appointed 1 September 2011
Ms Shannon Coates
Director (Non-Executive) – appointed 23 May 2014
62
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
24. KEY MANAGEMENT PERSONNEL DISCLOSURES (cont’d)
(ii) Executives
Mr Shuguang Han
General Manager - appointed 1 May 2014
Mr Fei Wu
Sales Manager - appointed 1 May 2014
Mr Zhengjie Wu
Vice General Manager - appointed 5 October 2009, resigned 31 October 2016
Mr Leon Wan
Vice General Manager - appointed 31 July 2016
Ms Susan Xie
Sales Manager - appointed 1 March 2010
The total remuneration paid to Key Management Personnel of the Company and the Consolidated Entity during the
period ended 31 December 2016 was as follows:
Year
ended
31 Dec 2016
$
Year
ended
31 Dec 2015
$
Short-term employee benefits
Share-based payments
Total KMP compensation
758,952
33,750
792,702
761,207
127,100
888,307
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to
each member of the Consolidated Entity’s Key Management Personnel for the year ended 31 December 2016.
25. BUSINESS COMBINATIONS
Subsidiary acquired
2016
Shanghai Jiye Electric
Vehicle Co, Ltd
Principal activity
Manufacture and
distribute electric
two-wheel
vehicles
Date of
acquisition
Proportion of
shares
acquired
Consideration
1 January 2016
51%
$5,327,987
$5,327,987
The controlling interests in Shanghai Jiye Electric Vehicle Co, Ltd (“Jiye”) was acquired so as to secure and expand the
Group’s electric two-wheel vehicle operations in China.
Consideration
Cash
Stocks
Debt forgiveness (a)
Jiye
$442,712
$4,467,761
$417,514
$5,327,987
a) Prior to the acquisition of controlling interests in Jiye, Jiye had a debt of $417,514 payable to the Group. As part of
the acquisition, this debt has been forgiven.
63
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
25. BUSINESS COMBINATIONS (cont’d)
Assets acquired and liabilities assumed at the date of acquisition
Current assets
Cash and cash equivalents
Trade and other receivables
Stocks
Non-current assets
Fixed assets
Customer base
Current liabilities
Trade and other payables
Deposits/advance from customers
Non-current liabilities
Deferred tax liabilities
Fair value of identifiable net assets acquired
Jiye
$1,133,183
$79,025
$4,690,851
$506,957
$2,177,155
($2,517,924)
($1,659,456)
($544,289)
$3,865,502
The fair value of plant and equipment acquired is determined based on vendors’ best estimate of the likely fair value.
The fair value of customer base intangible asset acquired are calculated based on ten year cash flow projections using
the pre-tax, risk free discount rate of 8.4%.
Goodwill arising on acquisition
Consideration
Less: Fair value of identifiable net assets acquired
Add: Non-controlling interests
Goodwill arising on acquisition
Jiye
$5,327,987
($3,865,502)
$1,093,992
$2,556,477
Goodwill arose in the acquisition of controlling interest in Jiye because the cost of the combination included a control
premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit
of expected synergies, revenue growth and future market development in EV markets. The benefits are not recognised
separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.
Net cash inflow/outflow on acquisition of subsidiary
Consideration paid in cash
Less: Cash and cash equivalents balances acquired
Net cash (inflow)/outflow on acquisition of subsidiary
Impact of acquisitions on the results of the Group
Year ended
31 Dec 2016
$442,712
($1,133,183)
($690,471)
Included in the loss for the year ended 31 December 2016 is $908,454 attributable to the operation of Jiye. Revenue for
year ended 31 December 2016 includes $19 million in respect of Jiye.
64
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
26. RECONCILIATION OF CASH FLOWS USED IN OPERATING
ACTIVITIES
Year ended
31 December 2016
$
Year ended
31 December 2015
$
Cash flows from operating activities
Profit/(Loss) for the year
Adjustments for:
- Depreciation and amortisation
- Discontinued operations
- Impairments
- Share based payment expenses
- Expenses recognised in profit or loss
- Income tax (benefit)/expenses
Operating loss before changes in working capital and provisions
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in other assets
(Decrease)/ increase in payables
Net cash (used in) operating activities
27. NON-DIRECTOR RELATED PARTIES
(14,092,903)
(753,313)
1,166,235
-
12,952,060
154,082
244,892
(42,900)
381,466
5,869,845
(2,439,771)
(911,821)
(2,852,638)
47,081
765,953
3,577,493
-
593,503
-
299,152
4,482,788
(4,322,407)
1,397,131
474,925
(2,016,554)
15,883
Non-director related parties are the Company’s controlled entities. Details of the Company’s interest in controlled
entities are set out in Note 23. Details of dealings with these entities are set out below.
Transactions
The loans to controlled entities are unsecured, interest-free and of no fixed term. The loans are provided primarily for
capital purchases and working capital purposes.
Receivables
Aggregate amounts receivable from non-director related parties:
Non-current
Unsecured loans to controlled entities
Provision for non-recovery
28. SUBSEQUENT EVENTS
Issue Tranche 2 Shares to Acquire PowerEagle Trademark
Company
Year ended
31 Dec 2016
$
Year ended
31 Dec 2015
$
22,173,416
(22,173,416)
26,601,046
(26,601,046)
-
-
On 31 January 2017, the Company issued 11,764,706 fully paid ordinary shares at an issue price of $0.085 per share to
nominees of PowerEagle as Tranche 2 consideration to acquire 100% of PowerEagle trademark as announced on 23
December 2015.
Other than the above and as noted elsewhere in the financial statements, there has not arisen in the interval between
the end of the financial period and the date of this report any item, transaction or event of a material and unusual
nature likely, in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the results
of those operations, or the state of affairs of the Consolidated Entity in future financial years.
65
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
29. PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
Share based payment premium reserve
Total equity
Financial performance
Loss for the period
Other comprehensive income
Total comprehensive income
31 Dec 2016
31 Dec 2015
$
$
1,623,141
16,302,109
17,925,250
1,125,755
-
1,125,755
2,628,201
14,503,848
17,132,049
143,322
-
143,322
16,799,495
16,988,727
71,446,718
(54,975,429)
70,276,494
(53,894,138)
328,206
16,799,495
606,373
16,988,727
Year ended
31 Dec 2016
$
1,081,290
-
1,081,290
Year ended
31 Dec 2015
$
2,123,927
-
2,123,927
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has not entered into any guarantees in relation to the debts of its subsidiaries during the year ended
31 December 2016.
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity has no commitments for any acquisition of property, plant and equipment.
30. Fair Value Measurement
In accordance with AASB 13, Fair Value Measurement, the group is required to disclose for each class of assets and
liabilities measured at fair value, the level of the fair value hierarchy within which the fair value method is
categorised. The group view that no assets or liabilities are measured at fair value, other than cash, trade and other
receivables, trade and other payables and borrowings with carrying amounts assumed to approximate their fair value.
Refer Note 11, for details of fair value measurement on investments.
66
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ D E C L A R A T I O N
In the opinion of the Directors of Vmoto Limited:
(a) the financial statements and notes, set out on pages 24 to 66, are in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the financial position of the Consolidated Entity as at 31 December 2016
and their performance, as represented by the results of their operations and their cash flows, for the year
ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the attached financial statements also comply with International Financial Reporting Standards, as stated in Note 1 to
the financial statements; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing
Director and the Finance Director for the year ended 31 December 2016.
Signed in accordance with a resolution of the Directors:
Yiting (Charles) Chen
Managing Director
Dated at Western Australia, this 31st day of March 2017.
67
To The Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit director for the audit of the financial statements of Vmoto Limited for the
financial year ended 31 December 2016, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
DATED at PERTH this 31st day of March 2017
Independent Auditor's Report
To the Members of Vmoto Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Vmoto Limited (“the Company”) and its subsidiaries
(“the Group”), which comprises the consolidated statement of financial position as at 31
December 2016, 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:
a.
the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31
December 2016 and of its financial performance for the year then ended;
and
(ii)
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance
with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of
the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independent Auditor’s Report
To the Members of Vmoto Limited (Continued)
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 the key audit matter
Impairment assessment of Cash Generating Units inclusive of goodwill, other intangible assets and
property, plant and equipment.
As disclosed in note 10 of the consolidated financial
Our procedures amongst others included:
statements, the Group has goodwill and other
intangible assets and property plant and equipment
Obtaining an understanding of the value in use
of $11.7m after impairment charges of $10.3m, which
model and assumptions used;
is included in the following Cash Generating Units
Critically
evaluating
management’s
(CGU); Shanghai and Nanjing.
methodologies and their documented basis for
key assumptions utilised in the valuation models
Impairment of intangible assets is considered to be a
which are described in Note 10;
key audit matter due to the significance of the assets
We compared growth rates against observable
to the Group’s consolidated financial position, the
external market data;
Group’s current year’s performance and due to the
We checked the mathematical accuracy of the
judgement
involved
in determining
the key
cash flow models and assessed the historical
assumptions used in the recoverable amount.
accuracy of forecasting by the Group;
We performed sensitivity analyses around the
An impairment loss is recognised for the amount by
key drivers of growth rates used in the cash flow
which the asset's carrying amount exceeds its
forecasts and the discount rate used; and
recoverable amount. The recoverable amount of
We assessed
the appropriateness of
the
each CGU is based on certain key assumptions, such
disclosures included in Notes 1(ab), 9 and 10 to
as cash flow projections covering a five-year period
the financial report.
and a further 9 year period based on a zero
percentage growth rate and discount rate.
Accounting for Business Combination
The acquisition of Shanghai Jiye as disclosed in note
Our procedures amongst others included:
25 of the consolidated financial statements is a key
audit matter due to the size of the acquisition
Reviewing
the acquisition agreement
to
(purchase consideration of $5.3m) and complexities
understand the key terms and conditions, and
inherent in a business acquisition.
confirming our understanding of the transaction
with management;
Management has completed a process to allocate the
Assessed the deemed consideration with the
purchase consideration to tangible assets, goodwill
terms of the acquisition agreement;
and separately identifiable intangible assets including
Reviewed acquisition date balance sheet to
a customer base. This process involved estimation
acquisition agreement and underlying supporting
and judgement of future performance of the business
documentation;
and discount rates applied to future cash flows
Assessed the fair value of assets and liabilities
forecasted.
acquired to the fair value assessment conducted
Independent Auditor’s Report
To the Members of Vmoto Limited (Continued)
Key Audit Matter
How our audit addressed the key audit matter
by management, which included a discounted
cash
flow model calculating
the value of
customer relationship intangible assets recorded
at the date of acquisition.
For the customer relationship intangible assets
we performed the following:
o Assessed
the
underlying
assumptions used in the models
including customer attrition rate
and discount rate;
o Assess whether the cash
flow
inputs used in the model were
reasonable compared to actual
results; and
o Recalculated
the mathematical
accuracy of the models.
We assessed
the appropriateness of
the
disclosures included in Notes 1(ab), 10, 25 to the
financial report.
Existence and recoverability of Inventory
The Group’s core operations are located in China,
Our procedures amongst others included:
(Nanjing and Shanghai). At year end
the
Attending stock takes conducted at year end
Consolidated Entity had $6.99m of inventory on hand.
and performing sample counts;
Existence and valuation of inventory were considered
Observing for damaged or obsolete stock on
key audit matters due to:
hand whilst on site;
The quantum of inventory on hand
Reviewing gross margins on inventory sales
The location of the inventory
during the year on a monthly basis;
Risk of stock obsolescence from changing
Reviewing unit cost of inventory items and
technology
related sales of that item to supporting
The importance of inventory in relation to
documentation on a sample basis to assess
generating positive operating cashflows.
assumption of inventory being held at the
lower of cost or net realisable value;
Review of inventory line items on a sample
basis to identify slow moving or obsolete
stock items on hand;
Reviewing margins and inventory turnover
via analytical procedures;
Accounting for capitalised development costs
The capitalised development costs of $4.3m (pre
Our procedures amongst others included:
impairment) as disclosed
in Note 10 of
the
consolidated financial statements is considered to be
Assessing the recognition criteria for internally
a key audit matter due to the significance to the
generated intangible assets;
consolidated statement of financial position and the
Evaluating
the key assumptions used
for
Independent Auditor’s Report
To the Members of Vmoto Limited (Continued)
Key Audit Matter
How our audit addressed the key audit matter
specific criteria that are required to be met for
estimates made in capitalising development
capitalisation. This involves management judgement
costs,
including assessment of whether
such as with respect to technical feasibility, intention
capitalised costs related to the development
and ability to complete the intangible asset, ability to
phase of the project, the generation of probable
use or sell the asset, generation of future benefits and
future economic benefits and
the useful
the ability to measure the costs reliably. In addition,
economic life attributed to the asset.
management judgement is also required in estimation
We performed audit procedures over
the
of useful lives of the completed projects.
recognition and accuracy of
the amounts
capitalised in the period.
As part of the impairment assessment of the Nanjing
We considered whether any impairment was
CGU, all capitalised development costs were
required.
impaired.
We assessed the adequacy of the disclosures in
Note 1 (ab) and 10.
Recoverability of Loan to Jiangsu Kaiyang
The Consolidated Entity provided loans of RMB5
Our procedures amongst others included:
million ($994,313) to Jiangsu Kaiyang in FY2015
Review of terms and conditions to the loan
which was interest free and repayable in two years.
agreement;
Due to the quantum of the loan, the recoverability of
recoverability of the loan;
the loan was considered a key audit matter.
Assessment of
the Jiangsu Kaiyang’s
Discussions held with management over
financial statements for its capacity to repay
The consolidated Entity provided for the loan in full.
the loan;
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 31 December 2016, but does not include the financial report and
our 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.
Independent Auditor’s Report
To the Members of Vmoto Limited (Continued)
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 Note 1, the directors also
state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain
reasonable assurance about whether the financial report as a whole is free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Independent Auditor’s Report
To the Members of Vmoto Limited (Continued)
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31 December
2016. The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of Vmoto Limited, for the year ended 31 December 2016, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 31st day of March 2017
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
A D D I T I O N A L S H A R E H O L D E R I N F O R M A T I O N
The following information is current as at 17 March 2017:
Voting Rights
The voting rights attaching to ordinary shares are that on a show of hands every member present in person or by proxy
shall have one vote and upon a poll each share shall have one vote.
Options and Performance Rights do not carry any voting rights.
Substantial Shareholders
The number of shares and options held by substantial shareholders and their associates who have provided the Company
with substantial shareholder notices are set out below:
Name of Substantial Shareholder
Mr Yiting (Charles) Chen
Date Notice provided to the Company
20 August 2012
Number of Shares
6,049,372
On-Market Buy Back
There is no current on-market buy back.
Distribution Schedules
Distribution schedules for each class of security as at 17 March 2017 are set out below. Where a person holds 20% or more
of the securities in an unquoted class, the name of that holder and number of securities is also provided.
Fully paid ordinary shares
Range
1
1,001
5,001
10,001
100,001
Total
Holders
Units
%
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
391
1,362
652
1,267
238,483
3,873,141
5,362,060
43,939,309
207 119,120,719
0.14
2.24
3.11
25.47
69.04
3,879 172,533,712 100.00
Class E unlisted options exercisable at $0.40 each, expiring 23 May 2018
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
1
-
-
-
-
-
-
-
-
500,000 100.00
500,000 100.00
¹ Newcove International Inc holds 500,000 options comprising 100.0% of this class.
75
A D D I T I O N A L S H A R E H O L D E R I N F O R M A T I O N ( c o n t ’ d )
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Class F unlisted options exercisable at $0.80 each, expiring 23 May 2018
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
1
-
-
-
-
-
-
-
-
500,000 100.00
500,000 100.00
¹ Newcove International Inc holds 500,000 options comprising 100.0% of this class.
Class G unlisted options exercisable at $0.50 each, expiring 21 May 2019
Range
1
1,001
5,001
10,001
100,001
Total
-
1,000
-
5,000
10,000
-
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
1
-
-
-
-
-
-
-
-
100,000 100.00
100,000 100.00
¹ Silverlight Holdings Pty Ltd holds 100,000 options comprising 100.0% of this class.
Class H unlisted options exercisable at $0.75 each, expiring 21 May 2019
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
10,000
-
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
1
-
-
-
-
-
-
-
-
100,000 100.00
100,000 100.00
¹ Silverlight Holdings Pty Ltd holds 100,000 options comprising 100.0% of this class.
Class I unlisted options exercisable at $1.00 each, expiring 21 May 2019
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
1
-
-
-
-
-
-
-
-
200,000 100.00
200,000 100.00
¹ Silverlight Holdings Pty Ltd holds 200,000 options comprising 100.0% of this class.
76
A D D I T I O N A L S H A R E H O L D E R I N F O R M A T I O N ( c o n t ’ d )
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Class J unlisted options exercisable at $0.75 each, expiring 31 December 2017
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
2
11
3
-
-
-
88,888
631,093
-
-
-
12.35
87.65
719,981 100.00
¹ Pershing Australia Nominees Pty Ltd holds 613,093 options comprising 87.65% of this class.
Class K Incentive Performance Rights, subject to vesting criteria
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
4
4
-
-
-
-
-
-
-
-
1,000,000 100.00
1,000,000 100.00
¹ 250,000 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, Mr Yin How (Ivan) Teo and Mr Kaijian (Jacky) Chen comprising 25.00% each.
Unmarketable Parcels
Holdings of less than a marketable parcel of ordinary shares (being 6,757 as at 17 March 2017):
Holders
Units
1,947
5,259,238
77
A D D I T I O N A L S H A R E H O L D E R I N F O R M A T I O N ( c o n t ’ d )
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Top Holders
The 20 largest registered holders of quoted securities as at 17 March 2017 were:
Fully paid ordinary shares
Name
1
2
3
4
5
6
7
8
9
PERSHING AUSTRALIA NOMINEES PTY LTD
XIAORUI DING
XIAONA ZHAO
TRESDAM PTY LTD
MR RAYMOND EDWARD MUNRO & MRS SUSAN ROBERTA MUNRO
CITICORP NOMINEES PTY LIMITED
MR BRENDAN DAVID GORE
XIAONA ZHAO
MR ANDREW STEWART CARNEGIE HARRISON & MRS LINDEN
MARGARET HARRISON
VANFULL INVESTMENTS LIMITED
10
11 MR THOMAS JOSEPH FALVEY
12
13
14 MR STEPHEN COLBECK
15
16
17
18 MR JAMES MICHAEL SCOTT
19 MR YAO TIEMING
SILVERLIGHT HOLDINGS PTY LTD
BNP PARIBAS NOMS PTY LTD
OUTRIGHT INTERNATIONAL BUSINESS GROUP LIMITED
YANG PTY LTD
BEAUFORT NOMINEES LIMITED
20
PROF ANTHONY CRAIG WATSON & MRS STEPHANIE GAIL WATSON
No. Shares
10,213,040
8,823,529
6,374,510
4,276,003
3,880,000
3,667,222
3,245,000
2,977,439
2,925,001
2,588,866
2,437,540
2,436,365
2,121,360
2,000,000
2,000,000
1,920,500
1,597,000
1,500,000
1,492,000
1,300,000
%
5.92
5.11
3.69
2.48
2.25
2.13
1.88
1.73
1.70
1.50
1.41
1.41
1.23
1.16
1.16
1.11
0.93
0.87
0.86
0.75
67,775,374
39.82
Corporate Governance
The Company’s Corporate Governance Statement for the 2016 financial year can be accessed at
www.vmoto.com/investors.
78