CAR GROUP LIMITED — Interim / Quarterly Report 2016

Feb 9, 2016

ABN 91 074 444 018

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carsales.com Ltd ABN 91 074 444 018 ASX Half-year information - 31 December 2015

Lodged with the ASX under Listing Rule 4.2A. This information should be read in conjunction with the 30 June 2015 Annual report

Contents

	Page
Results for Announcement to the Market	2
Interim financial report
Consolidated statement of comprehensive income	8
Consolidated statement of financial position	9
Consolidated statement of changes in equity	10
Consolidated statement of cash flows	11
Notes to the consolidated financial statements	12
Directors' declaration	20
Independent auditor's review report to the members	21

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2015 and any public announcements made by carsales.com Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

carsales.com Ltd

For the half-year ended 31 December 2015 (Previous corresponding period: half-year ended 31 December 2014) Results for Announcement to the Market 31 December 2015

			$'000
Revenuefrom ordinary activities	up	11% to	167,336
(Appendix 4D item 2.1)
Profitfrom ordinary activities after tax attributable to members	up	10% to	51,338
(Appendix 4D item 2.2)
Net profitfor the period attributable to members	up	10% to	51,338
(Appendix 4D item 2.3)
	Amount per security	Franked amount per
Dividends / distributions	(cents)	security (cents)
(Appendix 4D item 2.4)
Interim dividend_(Prior year)_	16.2		16.2
Final dividend_(Prior year)_	17.7		17.7
Special dividend_(Prior year)_	1.4		1.4
Interim dividend_(Current year)_	17.8		17.8
Record datefor determining entitlements to the interim dividend		24 March 2016
Latest date for dividend reinvestment plan participation		30 March 2016
Dividend payable		15 April 2016
Net tangible assets
Net tangible asset backing per ordinary share is 24.23 cents (June	2015: 30.64 cents)

Revenue from continuing operations Online Advertising Data and Research International Finance and Related Services Total revenue Operating expenses Cost of sale of goods Sales and marketing expenses Service development and maintenance Operations and administration Other expenses Finance income Finance costs Total expenses Share of net profit from associates accounted for using the equity method Gain on associate dilution 1 Profit before income tax Income tax expense Profit from continuing operations	Half-year 31 December 2015 $'000 31 December 2014 $'000 115,771 105,952 16,397 15,169 1,740 1,355 33,428 28,457
	167,336 150,933
	(15,608) (14,305) (46,804) (42,186) (12,351) (10,911) (11,119) (10,591) (4,099) (2,185) 269 371 (4,486) (4,473)
	(94,198) (84,280)
	2,749 2,546 955 -
	76,842 69,199
	(22,780) (20,646)
	54,062 48,553

2

carsales.com Ltd

For the half-year ended 31 December 2015 (Previous corresponding period: half-year ended 31 December 2014) (continued)

Explanation of Revenue

Revenue from ordinary activities for the 6 months to 31 December 2015 grew 11% to $167.3m (2014: $150.9m). - Online advertising revenue grew 9% to $115.8m (2014: $105.9m) as a result of continued organic growth. - Data and Research revenue grew 8% to $16.4m (2014: $15.2m) driven by organic growth. - International revenue grew 28% to $1.7m (2014:$1.4m).

• Finance and Related Services revenue grew 17% to $33.4m (2014: $28.5m).

Explanation of Net Profit

Consolidated net profit after tax for the 6 months to 31 December 2015 grew 11% to $54.1m (2014: $48.6m).

Dividend Reinvestment Plan (DRP)

The carsales.com Ltd DRP will be maintained for the 2016 interim dividend, offering shareholders the opportunity to acquire further ordinary shares in carsales. The DRP will not be offered at a discount and the price will be calculated using the daily volume weighted average sale price of carsales.com Ltd shares sold in the ordinary course of trading on the ASX during the 5 days after, but not including, the Record Date (24 March 2016). The last date for shareholders to nominate their participation in the DRP is 5:00pm (AEST) on Wednesday 30 March 2016. Shares issued under the DRP will rank equally with carsales.com Ltd existing fully paid ordinary shares. Shareholders eligible to participate in the DRP are currently limited to those whose registered address on the carsales.com Ltd share registry is in Australia and New Zealand.

Eligible shareholders who wish to participate in the DRP can make their elections online at www.computershare.com.au/easyupdate/CAR or complete the DRP form which will be sent to shareholders for completion and submission to Computershare Investor Services Pty Ltd (carsales share registry). Further information can be obtained from Computershare on 1300 850 505.

3

Corporate directory

Directors	Jeffrey Browne (Non-Executive Director - appointed as
	Non-Executive Chairman on 27 August 2015)
	Greg Roebuck (Managing Director)
	Richard Collins (Non-Executive Deputy Chairman)
	Wal Pisciotta (Non-Executive Director - resigned as
	Non-Executive Chairman on 27 August 2015)
	Pat O'Sullivan (Non-Executive Director)
	Kim Anderson (Non-Executive Director)
	Steve Kloss (Alternate Non-Executive Director)
Company secretary	Nicole Birman
Registered office	Level 4, 449 Punt Road
	Richmond Vic 3121
	T: +61 3 9093 8600
	F: +61 3 9093 8697
	W: www.carsales.com.au
Share registry	Computershare Ltd
	452 Johnston Street
	Abbotsford Vic 3067
	T: +61 3 9415 4000
	F: +61 3 9473 2500
	W: www.computershare.com
External auditor	PricewaterhouseCoopers
	Freshwater Place
	2 Southbank Boulevard
	Southbank Vic 3006
Stock exchange	carsales.com Ltd is a public company listed with the
	Australian Stock Exchange Limited
	ASX: CAR
	The previous ASX code was "CRZ".

4

carsales.com Ltd Directors' report 31 December 2015

Directors' report

Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of carsales.com Ltd and the entities it controlled at the end of, or during, the half-year ended 31 December 2015.

Directors

The following persons were directors of carsales.com Ltd during the half-year ended 31 December 2015 and up to the date of this report:

Jeffrey Browne (Non-Executive Director - appointed as Non-Executive Chairman on 27 August 2015) Greg Roebuck (Managing Director)

Richard Collins (Non-Executive Deputy Chairman) Wal Pisciotta (Non-Executive Director - resigned as Non-Executive Chairman on 27 August 2015) Pat O'Sullivan (Non-Executive Director) Kim Anderson (Non-Executive Director) Steve Kloss (Alternate Non-Executive Director)

Principal activities

Review of operations

During the half-year to December 2015 the Group generated gross revenues from continuing operations of $167.3m (2014: $150.9m) representing a 11% increase. This result was mainly driven by:

• Dealer revenue up 9% and private revenue growth of 15%. Automotive dealer used car enquiry growth up 4% year on year.

• Dealer and Data Services has continued growing solidly with revenue up 8% on pcp.

• Mediamotive revenue up 6% on pcp.

• Investments in Webmotors SA (Brazil) and SKENCARSALES (South Korea) performed well with local currency revenue up by 14% and 22% respectively.

• Finance and related services showed strong organic growth with revenue up 17% on pcp.

• Acquisition of 65% of SoloAutos in Mexico completed in the half-year ended 31 December 2015.

This revenue growth delivered consolidated net profit after tax and non-controlling interests of $51.3m (2014: $46.7m) representing a 10% increase compared to the same period in 2014.

Total operating expenses were $94.5m (2014: $84.7m) reflecting a 12% increase, principally due to increased sales and marketing expenses.

EBITDA for the half-year ended 31 December 2015 was $81.5m (2014: $72.9m) up 12% with EBITDA margins at 49% (2014: 48%).

We continue to closely monitor our performance and market conditions. Assuming these are stable, we anticipate revenue and EBITDA to remain solid throughout H2 FY15, while NPAT will grow more moderately.

Subsequent events

No matters or circumstances have occurred subsequent to period end that has significantly affected, or may significantly affect, the operations of the group, the results of those operations or the state of affairs of the group or economic entity in subsequent financial years.

Dividends - carsales.com Ltd

On 9 February 2016, the directors declared a dividend of 17.8 cents fully franked. The dividend will be paid on 15 April 2016.

5

carsales.com Ltd Directors' report 31 December 2015 (continued)

Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7.

This report is made in accordance with a resolution of directors.

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Greg Roebuck Managing Director and CEO

Sydney, New South Wales 9th February 2016

6

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Auditor’s Independence Declaration

As lead auditor for the review of carsales.com Ltd for the half-year ended 31 December 2015, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of carsales.com Ltd and the entities it controlled during the period.

Anton Linschoten Partner PricewaterhouseCoopers

Melbourne 9 February 2016

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

7

carsales.com Ltd Consolidated statement of comprehensive income For the year ended 31 December 2015

Revenue from continuing operations Sale of goods and services Revenue from continuing operations Expenses Cost of sale of goods Sales and marketing expenses Service development and maintenance Operations and administration Earnings before interest, taxes, depreciation and amortisation Depreciation and amortisation expense Finance income Finance costs Share of profit/(loss) from associates accounted for using the equity method Gain on associate dilution Profit before income tax Income tax expense Profit from continuing operations Other comprehensive Income Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations Total comprehensive income for the period Profit is attributable to: Owners of carsales.com Ltd Non-controlling interests Total comprehensive income for the half-year is attributable to: Owners of carsales.com Ltd Non-controlling interests Earnings per share based on profit from continuing operations, attributable to the ordinary equity holders of the parent entity: Basic earnings per share Diluted earnings per share	31 December 2015 $'000 31 December 2014 $'000 167,336 150,933
	167,336 150,933 (15,608) (14,305) (46,804) (42,186) (12,351) (10,911) (11,119) (10,591)
	81,454 72,940
	(4,099) (2,185) 269 371 (4,486) (4,473) 2,749 2,546 955 -
	76,842 69,199
	(22,780) (20,646)
	54,062 48,553
	(14,299) 4,584
	39,763 53,137
	51,338 46,729 2,724 1,824
	54,062 48,553
	37,241 51,313 2,522 1,824
	39,763 53,137
	Cents Cents 21.4 19.6 21.3 19.5

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

8

carsales.com Ltd Consolidated statement of financial position As at 31 December 2015

		31 December	30 June
		2015	2015
	Notes	$'000	$'000
ASSETS
Current assets
Cash and cash equivalents		31,854	26,823
Trade and other receivables		43,093	39,176
Inventories		1,542	1,870
Total current assets		76,489	67,869
Non-current assets
Investments accounted for using the equity method	4	251,190	257,251
Property, plant and equipment		6,364	5,949
Deferred tax assets		4,746	5,171
Intangible assets		171,765	155,948
Total non-current assets		434,065	424,319
Total assets		510,554	492,188
LIABILITIES
Current liabilities
Payables		30,514	33,552
Borrowings		1,920	1,876
Current tax liabilities		1,463	2,237
Provisions		5,376	5,412
Deferred revenue		5,951	5,940
Total current liabilities		45,224	49,017
Non-current liabilities
Borrowings		230,005	212,493
Deferred tax liabilities		3,990	-
Provisions		1,210	1,165
Total non-current liabilities		235,205	213,658
Total liabilities		280,429	262,675
Net assets		230,125	229,513
EQUITY
Contributed equity	3	96,321	91,905
Reserves		9,198	21,471
Retained profits		119,269	113,829
Non-controlling interests		5,337	2,308
Total equity		230,125	229,513

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

9

carsales.com Ltd Consolidated statement of changes in equity For the half-year ended 31 December 2015

Notes Balance at 1 July 2015 Profit for the half-year to 31 December 2015 Exchange differences on translation of foreign operations Total comprehensive income for the period Transactions with owners in their capacity as owners: Contributions of equity upon exercise of employee share options Increase in share-based payment reserve inclusive of tax 6 Dividends paid to members of the parent 5 Dividends paid to non-controlling interest Non-controlling interest on acquisition of subsidiary Balance at 31 December 2015 Notes Balance at 1 July 2014 Profit for the half year to 31 December 2014 Exchange differences on translation of foreign operations Total comprehensive income for the period Transactions with owners in their capacity as owners: Contributions of equity upon exercise of employee share options Increase in share-based payment reserve inclusive of tax 6 Dividends paid to members of the parent 5 Dividends paid to non-controlling interest Non-controlling interest on acquisition of subsidiary Balance at 31 December 2014	Attributable to owners of carsales.com Ltd
	Contributed equity $'000 Reserves $'000 Retained earnings $'000 Non-con- trolling interests $'000 Total equity $'000 91,905 21,471 113,829 2,308 229,513
	- - 51,338 2,724 54,062 - (14,097) - (202) (14,299)
	- (14,097) 51,338 2,522 39,763
	1,518 - - - 1,518 - 1,824 - - 1,824 2,898 - (45,898) - (43,000) - - - (2,700) (2,700) - - - 3,207 3,207
	4,416 1,824 (45,898) 507 (39,151)
	96,321 9,198 119,269 5,337 230,125
	Attributable to owners of carsales.com Ltd
	Contributed equity $'000 Reserves $'000 Retained earnings $'000 Non-con- trolling interests $'000 Total equity $'000 77,603 17,695 90,946 1,132 187,376
	- - 46,730 1,824 48,554 - 4,584 - - 4,584
	- 4,584 46,730 1,824 53,138
	2,265 - - - 2,265 - 2,054 - - 2,054 4,363 - (41,480) - (37,117) - - - (927) (927) - - - (1,010) (1,010)
	6,628 2,054 (41,480) (1,937) (34,735)
	84,231 24,333 96,196 1,019 205,779

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

10

carsales.com Ltd Consolidated statement of cash flows For the half-year ended 31 December 2015

		**Half-year **	ended
		31 December	31 December
		2015	2014
	Notes	$'000	$'000
Cash flows from operating activities
Receipts from customers (incl GST)		180,721	166,051
Payments to suppliers and employees (incl GST)		(108,271)	(97,855)
Income taxes paid		(22,111)	(23,643)
Net cash inflow from operating activities		50,339	44,553
Cash flows from investing activities
Investment in subsidiaries, net of cash acquired	6	(9,030)	(55,126)
Investment in associates		(3,797)	-
Payments for property, plant and equipment		(1,258)	(210)
Payment for domain names		(97)	(35)
Payments for computer software		(406)	(466)
Interest received		269	371
Net cash (outflow) from investing activities		(14,319)	(55,466)
Cash flows from financing activities
Proceeds from issues of shares and other equity securities		1,518	2,265
Proceeds from borrowings		38,497	59,118
Repayment of borrowings		(21,070)	(175)
Dividends paid to non-controlling interests		(2,700)	(927)
Dividends paid to members of the parent	5	(43,000)	(37,117)
Interest paid		(4,234)	(4,335)
Net cash (outflow) inflow from financing activities		(30,989)	18,829
Net increase in cash and cash equivalents		5,031	7,916
Cash and cash equivalents at the beginning of the financial year		26,823	26,042
Cash and cash equivalents at end of the half-year		31,854	33,958

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

11

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015

1 Summary of significant accounting policies

(a) Basis of preparation

This condensed consolidated interim financial report for the half-year reporting period ended 31 December 2015 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for year ended 30 June 2015 and any public announcements made by carsales.com Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period except as set out in b) below.

The financial statements have been prepared on a going concern basis.

(b) New accounting standards and interpretations

The Group has applied the following standards in the current reporting period commencing 1 July 2015:

• AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities (effective 1 January 2015).

The following standards will be applicable in future reporting periods and the Group will adopt the standards upon the operative date. The Group is assessing the impact of these standards however they are not expected to have significant impact:

• AASB 9 Financial Instruments (effective 1 January 2018).

• Clarification of acceptable methods of depreciation and amortisation (AASB 2014-4) (effective 1 January 2016).

• Accounting for acquisitions of interests in joint operations (AASB 2014-3) (effective 1 January 2016).

The following standards are not applicable to carsales.com Ltd and therefore there is no impact on the Group:

• Superannuation Entities (AASB 1056) (effective 1 January 2016).

12

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

2 Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Managing Director.

Management has determined the operating segments based on the reports reviewed by the Key Management Personnel that are used to make strategic decisions.

(a) Description of segments

The Group principally operates in four business segments: namely Online Advertising Services, Data and Research Services, International and Finance and Related Services.

Online Advertising Services

carsales.com Ltd online advertising offerings can be broken into two key product sets being classified advertising and display advertising services.

Classified Advertising allows customers (including dealers and consumers) to advertise automotive and non-automotive goods and services for sale across the carsales Network. Classified advertising typically allows a customer to advertise their red Brand X, model Y car with 20,000km for $10,000 on a carsales website. This segment includes services such as subscriptions, lead fees and priority placement services across automotive and non-automotive websites.

Display advertising, typically involves corporate customers such as automotive manufacturers/importers, finance and insurance companies etc, placing advertisements on a carsales Network website. These advertisements typically display the product or service offerings of the corporate advertiser such as a special offer on new utes by manufacturer X, or save 10% on insurance this month only etc, as banner advertisements or other sponsored links.

Online advertising includes carsales' investment in tyresales which is an online tyre advertisement website that allows consumers to transact and purchase tyres.

Data and Research Services

The carsales.com Ltd divisions of Redbook, LiveMarket, Live Trade, Datamotive and Datamotive Business Intelligence provide various solutions to a range of customers including manufacturers/importers, dealers, industry bodies, finance and insurance companies offering products including software, research and reporting, valuation services, website development and hosting as well as photography services. This segment also includes display advertising related to these divisions.

International

carsales.com Ltd has operations in overseas countries through both subsidiaries and equity accounted associate investments as set out below:

Automotive Data Services:

• Auto Information Limited (New Zealand) - 100%

• Red Book Automotive Services (M) Sdn Bhd (Malaysia) - 100%

• Red Book Automotive Data Services (Beijing) Limited (China) - 100%

• Automotive Data Services (Thailand) Company Limited - 100%

Online automotive classifieds:

• Webmotors S.A.(operation in Brazil) - 30%

• iCar Asia Limited (operations in Indonesia, Malaysia and Thailand) - 20.2%

• SK ENCARSALES.COM Ltd (operation in South Korea) - 49.9%

• carsales Mexico SAPI de CV (operation in Mexico) - 65%

13

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

2 Segment information (continued)

(a) Description of segments (continued)

Finance and Related Services

Finance and Related Services includes the Stratton Finance Pty Ltd subsidiary which provides innovative vehicle finance arrangements, vehicle procurement and other related services to customers. Segment revenues arise from commissions paid by finance providers and other related service providers.

14

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

2 Segment information (continued)

(b) Primary reporting format - business segments

Half-year ended 31 December 2015 Segment revenue Segment revenue (Note 2(c)(i)) Total segment revenue Segment result EBITDA (Note 2(c)(ii)) Depreciation and amortisation Net interest paid Share of profit/(loss) from associates Gain on associate dilution Profit before income tax Income tax expense Non-controlling interests Profit for the half-year Segment assets (Note 2(c)(iii)) Total segment assets Deferred tax assets Unallocated assets Total assets Half-year ended 31 December 2014 Segment revenue Segment revenue (Note 2(c)(i)) Total segment revenue Segment result EBITDA (Note 2(c)(ii)) Depreciation and amortisation Net interest paid Share of profit/(loss) from associates Profit before income tax Income tax expense Non-controlling interests Profit for the half-year Segment assets (Note 2(c)(iii)) Total segment assets Deferred tax assets Unallocated assets Total assets	Online Advertising $'000 Data and Research $'000 International $'000 Finance and Related Services $'000 Consolidated $'000 115,771 16,397 1,740 33,428 167,336	Online Advertising $'000 Data and Research $'000 International $'000 Finance and Related Services $'000 Consolidated $'000 115,771 16,397 1,740 33,428 167,336
	115,771 16,397 1,740 33,428 167,336
	62,046 9,874 620 8,914 81,454
	- - (4,099) - - (4,217) 3,331 (582) 2,749 955 - 955 4,906 8,332 76,842 - - (22,780) - - (2,724) 4,906 8,332 51,338 106,082 15,191 250,570 63,023 434,866
		76,842 (22,780) - (2,724)
		51,338
		434,866
	756 - - - 756 70,942 - - - 70,942 177,780 15,191 250,570 63,023 506,564 Online Advertising Data and Research International Finance and Related Services Consolidated $'000 $'000 $'000 $'000 $'000 105,952 15,169 1,355 28,457 150,933	756 70,942
		506,564
	105,952 15,169 1,355 28,457 150,933
	58,402 8,066 825 5,647 72,940
	- $0.00 (2,185) - $0.00 (4,102) 2,546 $0.00 2,546 3,371 $0.00 69,199 - $0.00 (20,646) - $0.00 (1,824) 3,371 $0.00 46,729 95,689 19,355 257,027 65,279 437,350
		0 46,729
		437,350
		6,646 41,910
		485,906

15

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

2 Segment information (continued)

(c) Notes to, and forming part of, the segment information

(i) Segment revenues

Segment revenues are derived from sales to external customers as set out in the table above. The nature of the segment revenues are as described in Note 2(a) above.

(ii) Segment EBITDA

The consolidated entity's chief operating decision maker assesses the performance of the segments based on a measure of EBITDA. Interest revenue and expense, depreciation and amortisation are not reported to the chief operating decision maker by segment. These items are assessed at a consolidated entity level.

(iii) Segment assets

Segment assets include goodwill and trade receivables. Unallocated assets include property, plant and equipment, intangibles and other assets utilised across multiple segments. All unallocated assets are assessed by the chief operating decision maker at a consolidated entity level.

(iv) Liabilities

Liabilities are not reported to the chief operating decision maker by segment. All liabilities are assessed at a consolidated entity level.

3 Contributed equity

Movement in ordinary shares during the period Balance at 1 July 2014 Exercise of options and performance rights under the carsales.com Ltd Option Plan Dividend reinvestment plan Balance at 30 June 2015 Balance at 1 July 2015 Exercise of options and performance rights under the carsales.com Ltd Option Plan Dividend reinvestment plan Balance at 31 December 2015	Number of Shares $'000 237,828,965 77,603 1,346,474 5,252 906,157 9,050
	240,081,596 91,905
	240,081,596 91,905 449,471 1,518 300,352 2,898
	240,831,419 96,321

16

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

4 Investments accounted for using the equity method Name of entity Ownership interest % Webmotors S.A. 30.0 iCar Asia Limited 20.2 SK ENCARSALES.COM Ltd 49.9 RateSetter Australia Pty Ltd 20.0 Total equity accounted investments 5 Dividends	31 December 30 June 2015 2015 $'000 $'000 70,338 82,811 22,942 19,362 148,179 144,851 9,731 10,227
	251,190 257,251

(a) Ordinary shares

Final dividend Final fully franked cash dividend for the year ended 30 June 2015 of 17.7 cents (2014 - 17.4 cents) per fully paid ordinary share plus a special dividend of 1.4 cents (2014: nil cents) paid on 15 October 2015. Final fully franked dividend for the year ended 30 June 2015 of 17.7 cents (2014 - 17.4 cents) plus a special dividend of 1.4 cents (2014: nil cents) - satisfied through the issuance of shares under the Dividend Reinvestment Plan. (b) Dividends not recognised at the end of the reporting period In addition to the above dividends, since half-year end the Directors have recommended the payment of 17.8 cents per fully paid ordinary share (2014 - 16.2 cents), fully franked based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on 15 April 2016 out of retained earnings at 31 December 2015, but not recognised as a liability at the end of the reporting period, is	Half-year 31 December 2015 $'000 31 December 2014 $'000 43,000 37,109 2,898 4,363
	45,898 41,472
	2015 $'000 2014 $'000 42,868 38,718

17

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

6 Business combination

(a) SoloAutos acquisition

On 2 October 2015 carsales.com Ltd acquired 65% of carsales Mexico SAPI de CV ("SoloAutos").

Details of the purchase consideration, the net assets acquired and goodwill are as follows:

$1.00 Purchase consideration: Cash $1.00 The assets and liabilities acquired are as follows: $1.00 Cash and cash equivalents Plant and equipment Net assets Outside shareholders interests Goodwill Net assets acquired	$'000 9,747
	4,269 88 4,357
	(3,207) 8,597
	9,747

i) Initial accounting

Both the net asset value and the allocation of the purchase price to acquired assets are still preliminary. In particular, the fair values assigned to intangible assets are still being assessed and may be subject to change. The acquisition accounting will be finalised within 12 months of the acquisition date.

ii) Earn out agreement

As part of the inducement agreement there is a portion of deferred consideration that is payable in respect of the purchase of the trade and assets of the business from SoloAutos over a 3 year period after the acquisition date. This amounts to USD $2.15m.

carsales has the option to purchase the remaining 35% of the shares subject to satisfaction of the terms and conditions.

iii) Non-controlling interest

The Group will recognise the non-controlling interests in SoloAutos at fair value rather than at the proportionate share of net identifiable assets. The fair value of the non-controlling interest will be determined with reference to the purchase price of the acquired interest, as this represented a transaction between a willing buyer and independent willing sellers.

The current ownership structure of SoloAutos is as follows:

carsales.com Limited $1.00 Non-controlling interests: Jose Antonio Ramirez (and other legacy shareholders)	65% 35%
	100%

18

carsales.com Ltd Notes to the consolidated financial statements 31 December 2015 (continued)

7 Events occurring after the reporting period

No matters or circumstances have occurred subsequent to period end that has significantly affected, or may significantly affect, the operations of the group, the results of those operations or the state of affairs of the group or economic entity in subsequent financial years.

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carsales.com Ltd Directors' declaration 31 December 2015

In the directors' opinion:

• (a) the financial statements and notes set out on pages 8 to 19 are in accordance with the Corporations Act 2001 , including:

• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• (ii) giving a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the half-year ended on that date, and

• (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and

• (c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

This declaration is made in accordance with a resolution of the directors.

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Greg Roebuck Managing Director and CEO

Sydney, New South Wales 9th February 2016

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Independent auditor's review report to the members of carsales.com Ltd

Report on the half-year financial report

We have reviewed the accompanying half-year financial report of carsales.com Ltd (the Company), which comprises the consolidated statement of financial position as at 31 December 2015, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors' declaration for carsales.com Ltd (the consolidated entity). The consolidated entity comprises the Company and the entities it controlled during that half-year.

Directors' responsibility for the half-year financial report

The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Australian Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of carsales.com Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

PricewaterhouseCoopers, ABN 52 780 433 757

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001

T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of carsales.com Ltd is not in accordance with the Corporations Act 2001 including:

• a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of its performance for the half-year ended on that date;

• b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

PricewaterhouseCoopers Anton Linschoten Partner

Melbourne 9 February 2016

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