FLEETPARTNERS GROUP LIMITED - Annual Report 2017

Level 32, 1 O’Connell Street Sydney NSW 2000

Eclipx Group Limited | ABN: 85 131 557 901

Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

Dear Sir / Madam

2017 Financial Results – Appendix 4E and 2017 Financial Report for the year ended 30 September 2017

Please find attached for release to the market the following documents for the year ended 30 September 2017:

Appendix 4E – Preliminary Final Report, as required by ASX Listing Rule 4.3A; and
Eclipx Group Limited Financial Report for the year ended 30 September 2017.

Yours faithfully

Matt Sinnamon

Company Secretary General Counsel

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PRELIMINARY FINAL REPORT ECLIPX GROUP LIMITED ACN : 131 557 901

APPENDIX 4E

YEAR ENDED 30 SEPTEMBER 2017

1 Details of the reporting period and the previous corresponding period

Current period 1 October 2016 - 30 September 2017 Prior corresponding period 1 October 2015 - 30 September 2016

2 Results for announcement to the market

	Year Ended 30 Sep 2017	Year Ended 30 Sep 2016	Change on Previous Period	Change on Previous Period
Financial Performance	$'000	$'000	$'000	%
Revenue from continuing operations 604,517 504,837 99,680 19.7% Profit for the year after tax1 54,210 45,868 8,342 18.2% Net profit attributable to members 54,210 45,868 8,342 18.2% Cash netprofit after tax for theperiod2 68,276 55,330 12,946 23.4%
Earnings per share	Cents	Cents	Cents	%
Statutory earnings per share 20.31 18.88 1.43 7.6% Diluted statutory earnings per share 19.79 18.55 1.24 6.7% Cash earningsper share 25.11 22.19 2.93 13.2%
Number of ordinary shares used in calculating	Units	Units	Units	%
Statutory earnings per share 266,879,322 242,954,968 23,924,354 9.8% Diluted statutory earnings per share 273,993,890 247,295,831 26,698,059 10.8% Cash earningsper share3 271,859,362 249,379,968 22,479,394 9.0%

1. Profit for the year after tax for the year ended 30 Sep 2017 includes costs associated with acquisitions and restructuring of the business.(2016: Includes costs associated with acquisitions, restructuring of the business and replacing the corporate debt).

2. Cash net profit after tax for the year is the statutory profit after tax, adjusted for the after tax effect of material one-off items that does not reflect the ongoing operations of the Group and amortisation of intangible assets.Refer to note 2.1 of the attached Financial Report.

3. The number of ordinary shares used in calculating the cash earnings per share relates to all shares in issue (including loan shares) and new shares issued are weighted for the period under review based on the date of issue.

Dividends declared and paid	Amount per security Cents	Franked amount per security Cents
Interim dividend for the year ended 30 September 2016, declared on 5 May 2016. The interim dividend waspaid on 30 June 2016 to shareholders registered on 17 May2016.	6.75	6.75
Final dividend for the year ended 30 September 2016, declared on 1 November 2016. The final dividend will be paid on 20 January 2017 to shareholders registered on 30 December 2016.	7.00	7.00
Interim dividend for the year ended 30 September 2017, declared on 3 May 2017. The interim dividend waspaid on 7 July2017 to shareholders registered on 19 May2017.	7.50	7.50
Final dividend for the year ended 30 September 2017, declared on 7 November 2017. The final dividend will be paid on 19 January 2018 to shareholders registered on 29 December 2017.	7.75	7.75

Commentary
Refer to the 2017 Financial Report accompanying this report for a more detailed commentary.

APPENDIX 4E

PRELIMINARY FINAL REPORT ECLIPX GROUP LIMITED ACN : 131 557 901

3 Dividend reinvestment plans

The company has a Dividend Reinvestment Plan (DRP) that will be available to holders of ordinary shares. The DRP allows eligible shareholders to reinvest part or all of their dividends into new Eclipx shares. The issue price for DRP shares will be set at a 1.5 per cent discount to the five day Volume Weighted Average Market Price of Eclipx shares traded on the ASX from and including the first Trading Day after the Record Date.

4 Net Tangible Assets Per Security

Net Tangible Assets Per Security
	Year Ended 30 Sep 2017 cents	Year Ended 30 Sep 2016 cents
Net Tangible Assets Per OrdinarySecurity	32.89	24.18

5 Auditor's report

The financial report has been audited and an unqualified conclusion has been issued.

6 Attachments

The Annual Report of Eclipx Group Limited for the year ended 30 September 2017 is attached.

7 Signed

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Kerry Roxburgh Chairman Sydney

Date: 7 November 2017

For the year ended 30 September 2017

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Eclipx Group Limited ACN 131 557 901 Financial report for the year ended 30 September 2017

CONTENTS
	Page
Directors' Report	3
Lead Auditor's Independence Declaration	17
Letter from Remuneration and Nomination Committee (unaudited)	18
Remuneration Report (audited)	19
Financial Statements
Statement of Profit or Loss and Other Comprehensive Income	36
Statement of Financial Position	37
Statement of Changes in Equity	38
Statement of Cash Flows	39
Notes to the Financial Statements
1.0 INTRODUCTION TO THE REPORT	40
2.0 BUSINESS RESULT FOR THE YEAR
2.1 Segment information	44
2.2 Revenue	45
2.3 Expenses	47
2.4 Earnings per share	48
2.5 Business combinations	49
2.6 Taxation	51
3.0 OPERATING ASSETS AND LIABILITIES
3.1 Property, plant and equipment	56
3.2 Finance leases	58
3.3 Trade receivables and other assets	58
3.4 Trade and other liabilities	59
3.5 Intangibles	60
4.0 CAPITAL MANAGEMENT
4.1 Borrowings	63
4.2 Financial risk management	64
4.3 Cash and cash equivalents	69
4.4 Derivative financial instruments	69
4.5 Contributed equity	70
4.6 Commitments	71
4.7 Contingent liabilities	73
4.8 Dividends	74
5.0 EMPLOYEE REMUNERATION AND BENEFITS
5.1 Share based payments	75
5.2 Key management personnel disclosure	82
6.0 OTHER
6.1 Reserves	82
6.2 Parent entity information	83
6.3 Related party transactions	84
6.4 Remuneration of auditors	86
6.5 Deed of cross guarantee	86
6.6 Reconciliation of cash flow from operating activities	89
6.7 Events occurring after the reporting period	89
Directors' Declaration	90
Independent Auditor's Report	91

Eclipx Group Limited Directors' Report 30 September 2017

Directors' Report

The Directors present their report on the consolidated entity (referred to hereafter as Group or Eclipx) consisting of Eclipx Group Limited (Company) and the entities it controlled at the end of, or during, the year ended 30 September 2017.

1. Directors

The following persons were Directors of the Company during the financial year and up to the date of this report:

KERRY ROXBURGH BCOM, MBA, MeSAFAA

Chairman since 26 March 2015, Independent Non-Executive Director since 26 March 2015.

Mr Kerry Roxburgh has more than 50 years’ experience in the financial services industry. He is Chairman of Tyro Payments Ltd. He is the Lead Independent Non-Executive Director of Ramsay Health Care Ltd, a Non-Executive Director of the Medical Indemnity Protection Society and of MIPS Insurance Ltd. Until 30 September 2016, he was also a member of the Advisory Board of AON Risk Solutions in Australia.

He was previously CEO of ETRADE Australia and was subsequently Non-Executive Chairman until June 2007, when it was acquired by ANZ Bank. Prior to his time at ETRADE, Kerry was an Executive Director of HSBC Bank Australia where, for 10 years, he held various positions including Head of Corporate Finance and Executive Chairman of HSBC James Capel Australia.

Prior to HSBC, he spent more than 20 years as a Chartered Accountant with HLB Mann Judd and previously at Arthur Andersen.

He is a Practitioner Member of the Stockbrokers and Financial Advisers Association of Australia.

In addition to Eclipx Group Ltd, during the last three years Kerry also served as a Director for the following listed companies: Ramsay Health Care Ltd (appointed July 1997) and Charter Hall Ltd (retired November 2014).

GAIL PEMBERTON MA (UTS), FAICD, GCERT FIN

Independent Non-Executive Director since 26 March 2015.

Ms Gail Pemberton has more than 35 years’ experience in banking and wealth management and is a specialist in technology and operations.

Prior to taking up a Non-Executive Director career, Gail was Chief Operating Officer, UK at BNP Paribas Securities Services and CEO and Managing Director, BNP Paribas Securities Services, Australia and New Zealand. She was previously Group CIO, and subsequently Financial Services Group COO at Macquarie Bank.

Her current board roles include Chairman of OneVue Ltd and Melbourne IT Ltd. She is a Non-Executive Director of PayPal Australia Pty Ltd.

She previously was Chairman of Onthehouse, and served on the board of Alleron Funds Management, Air Services Australia, the Sydney Opera House Trust, Harvey World Travel, UXC Ltd and Queensland Investment Corporation. She has also provided independent consulting services to the NSW Government Department of Premier and Cabinet on their Corporate and Shared Services reform program.

In addition to Eclipx Group Ltd, during the last three years Gail also served as a Director for the following listed companies: OneVue Ltd (appointed 2007) and Melbourne IT Ltd (appointed May 2016).

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

1. Directors (continued)

TREVOR ALLEN BCOM (HONS), CA, FF, MAICD

Independent Non-Executive Director since 26 March 2015.

Mr Trevor Allen has 39 years of corporate and commercial experience, primarily as a corporate and financial adviser to Australian and international corporates.

He is a Non-Executive Director of Peet Ltd, Freedom Foods Group Ltd and Yowie Group Ltd. He is a Non-Executive Alternate Director, Company Secretary and Public Officer of Australian Fresh Milk Holdings Pty Ltd and Fresh Dairy One Pty Ltd. Trevor is a director of Brighte Capital Pty Ltd. Until August 2016 he was a board member of Aon Superannuation Pty Ltd, the trustee of the Aon Master Trust. He was a member of FINSIA’s Corporate Finance Advisory Committee for 10 years up until December 2013.

Prior to undertaking non-executive roles, he had senior executive positions as an Executive Director - Corporate Finance at SBC Warburg and its predecessors for eight years and as a Corporate Finance Partner at KPMG for nearly 12 years. At the time of his retirement from KPMG in 2011, he was the Lead Partner in its National Mergers and Acquisitions group.

He was Director - Business Development for Cellarmaster Wines from 1997 to 2000, having responsibility for the acquisition, integration and performance of a number of acquisitions made outside Australia in that period.

In addition to Eclipx Group Ltd, during the last three years Trevor also served as a Director for the following listed companies: Peet Ltd (appointed April 2012), Freedom Food Group Ltd (appointed July 2013) and Yowie Group Ltd (appointed March 2015).

RUSSELL SHIELDS FAICD, SA Fin

Independent Non-Executive Director since 26 March 2015.

Mr Russell Shields has more than 35 years’ experience in financial services including six years as Chairman Queensland and Northern Territory for ANZ Bank.

He is a Non-Executive Director of Aquis Entertainment Ltd and Retail Food Group Ltd. Previously Russell was the Chairman of Onyx Property Group Pty Ltd.

Prior to joining ANZ, he held senior executive roles with HSBC including Managing Director Asia Pacific - Transport, Construction and Infrastructure and State Manager Queensland, HSBC Bank Australia.

In addition to Eclipx Group Ltd, during the last three years Russell also served as a Director for the following listed companies: Aquis Entertainment Ltd (appointed August 2015) and Retail Food Group Ltd (appointed December 2015).

GREG RUDDOCK BCOM (UWA)

Non-Executive Director since 26 March 2015, Chairman to 26 March 2015.

Mr Greg Ruddock is the Joint Chief Executive Officer of Ironbridge and co-leads investment and portfolio management activities. He has 14 years of private equity experience with Gresham Private Equity and Ironbridge.

Prior to joining Ironbridge, he spent seven years with Wesfarmers in mergers and acquisitions, five years with Kalamazoo Ltd in various senior roles, and four years as Director of Gresham Private Equity.

Greg has represented the Ironbridge Funds on the boards of Stardex, Super Amart, BBQs Galore, Easternwell, ISGM and AOS.

In addition to Eclipx Group Ltd, during the last three years Greg also served as a Director for the following listed company: Navigator Resources Ltd (appointed February 2016).

IRWIN ('DOC') KLOTZ

Chief Executive Officer and Managing Director since 27 March 2014.

Mr Doc Klotz has over 25 years’ experience in senior executive roles in the financial services and travel industries in Australia, New Zealand and the United States.

Prior to joining Eclipx in 2014, he was Head of Operations at FlexiGroup, an ASX 200 company (ASX: FXL).

He has senior executive experience with Travel Services International, Hotels.com and Expedia, Inc. in the United States.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

1. Directors (continued)

GARRY McLENNAN BBUS (UTS), CPA, FAICD

Deputy Chief Executive Officer and Chief Financial Officer since 27 March 2014.

Mr Garry McLennan has over 35 years’ of experience in financial services including five years as Chief Financial Officer at FlexiGroup, an ASX 200 company (ASX: FXL).

Prior to his time at FlexiGroup, he spent 23 years at HSBC Bank Australia where he was Chief Financial Officer and subsequently Chief Operating Officer. He has previously served on the board of HSBC Bank Australia and The Australian Banking Industry Ombudsman Ltd.

Garry currently serves on the Board Audit Committee of Intersect, a full-service eResearch support agency.

2. Company Secretary

Mr Matt Sinnamon was appointed Company Secretary and Group General Counsel on 27 October 2014. He is admitted to the Supreme Court of New South Wales and the High Court of Australia. He is a member of the Governance Institute of Australia, a Chartered Secretary and is entered on the Roll of Public Notaries.

The Company Secretary function is responsible for ensuring the Company complies with its statutory duties and maintains proper documentation, registers and records. The role provides advice to the Directors and officers about corporate governance and legal matters.

3. Directors' Meetings

The table below sets out the numbers of meetings held during the 2017 financial year and the number of meetings attended by each Director. During the year eight Board meetings, six Audit and Risk Committee meetings and four Remuneration and Nomination Committee meetings were held.

		Board	Audit and Risk Committee	Audit and Risk Committee	Remuneration and Nomination Committee	Remuneration and Nomination Committee
Director	Held	Attended	Held	Attended	Held	Attended
Kerry Roxburgh	8	8	6	6	4	4
Gail Pemberton	8	8	-	-	4	4
Trevor Allen	8	8	6	6	4	4
Russell Shields	8	8	6	6	-	-
Gregory Ruddock	8	8	6	6	-	-
Garry McLennan	8	8	-	-	-	-
Doc Klotz	8	8	-	-	-	-

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations

Business acquisitions

On 18 November 2016 Eclipx acquired Anrace Pty Ltd trading as Onyx Car Rentals (Onyx). The principal activity of the business acquired is the provision of rental replacement vehicles to “not at fault” drivers that have accident damaged cars requiring repair. The business was acquired to accelerate the expansion in the Victorian medium term vehicle rental market. Onyx recorded a profit before tax of $2.4m for the period under review.

On 11 August 2017 Eclipx acquired Grays eCommerce Group Ltd (Grays). The principal activity of the business acquired is the provision of online auctioneering and valuation services in the industrial B2B sector together with online auctioneering and other online retail services in the B2C sector. The business was acquired to diversify earnings with an organisation that would integrate vertically and allow the Group to cross sell current and future offerings. Grays recorded a profit before tax of $1.7m for the period under review.

Principal activities

Eclipx is a diversified financial services organisation that provides complete fleet management services, corporate and consumer asset backed finance, medium term vehicle rentals and online auctioneering and associated services to the Australian and New Zealand market. As at 30 September 2017 Eclipx managed or financed in excess of 108,000 vehicles across Australia and New Zealand.

In Australia the Group operates under eight primary brands: FleetPartners, FleetPlus, FleetChoice, CarLoans.com.au, Right2Drive, Eclipx Commercial, Onyx and GraysOnline.com.

In New Zealand the Group operates under five primary brands: FleetPartners, FleetPlus, CarLoans.co.nz, Right2Drive and AutoSelect.

Business model

Eclipx generates revenue in different ways across its brands that can broadly be split as below:

Eclipx-funded model (used primarily by FleetPartners and Eclipx Commercial) is where Eclipx purchases vehicles to lease to customers and earns a spread, or net interest income, being the difference between the interest income it receives from customers and its cost of funds. Eclipx recognises net interest income over the life of the lease;
Third-party-funded model (used primarily by FleetPlus, FleetChoice and CarLoans) is where Eclipx acts as a broker or agent that arranges vehicle financing for the customer from third party banks and financial institutions. Under this model, as compensation for originating new business, Eclipx earns part of its revenue from upfront brokerage commissions paid by the third-party funders;
Eclipx earns management and maintenance fees, ancillary revenue from related products and services and end of lease income; and
Vehicle rental (Right2Drive, Onyx) is where Eclipx rents motor vehicles to “not at fault” drivers that have accident damaged vehicles; and
Auction proceeds (Grays) would include commissions earned on auctions, recovery of agreed costs associated with the auction and revenue on the sale of goods where Grays acquired the goods for resale purposes.

Eclipx believes Net Operating Income is a key measure of financial and operating performance for its businesses as it takes into account the direct costs incurred in generating gross revenue.

The origination of new business is a key driver of profitability and the group targets growth through business-to-business relationships and online and word of mouth business-to-consumer. The Group drives profitability by managing revenue, income generating assets, credit quality and operating expenses.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

The core capabilities of Eclipx are:

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Eclipx supports its core vehicle fleet leasing activities by offering customers a broad range of vehicle
Vehicle, fleet and management services, including initial vehicle procurement, ongoing maintenance, supply
asset management and contract amendments during and at the end of a lease. Eclipx also enhances the
management value of its products and quality of service to customers by leveraging economies of scale and
relationships with third party suppliers.
Eclipx through the Grays acquisition has nearly 17 years of online auctioneering experience, with
Grays being the largest industrial and commercial online auction business in the Asia-Pacific region.
Online Grays has national coverage across Australia and an international network which allows Grays to
auctioneering access networks of buyers and sellers in Asia, the Middle East, Africa and Europe. The extensive
coverage allows Grays to access a wide client base and achieve in excess of 38.5m visitors to its site
annually.
Eclipx draws on nearly 30 years of operating experience, a wealth of proprietary data (including
customer credit performance, arrears management, loss rates, and recovery rates), and external credit
Credit risk reporting data from local credit bureaus, to assess the credit risk of customers. The proprietary data
assessment and and experience assists Eclipx in pricing transactions and estimating the quantum of potential credit
management losses. Eclipx’s credit risk assessment team operates independently from the sales teams with
established processes to ensure formal credit policies are followed. Technology and credit scorecards
are used to enable prompt credit decision making and control the consistency of assessment.
Eclipx needs access to funding in order to purchase vehicles that it leases to its customers. Eclipx
utilises facilities called warehouse facilities (which in turn may be refinanced through the issuance of
Treasury and
asset backed securities), corporate debt and cash. In the broker funding model, Eclipx arranges
access to funding
funding for customers from third party banks and other funders (under principal and agency
arrangements or introducer arrangements).
Eclipx typically sells a vehicle at the end of the lease and seeks to recover net proceeds equal to or
Residual value greater than the residual value. In order to manage residual value risk, Eclipx seeks to estimate
accurately future used car values with the assistance of a proprietary algorithm, actively monitor car
risk management
usage and maintenance to manage in-life lease modifications and maximise end of lease sale
proceeds.
Customer-focused technology solutions and innovation are critical components of Eclipx’s business
model. They assist Eclipx in providing a competitive and attractive proposition to customers.
Technology solutions are focused both on delivering value or services to customers (e.g. through
Technology faster processing times), and on streamlining internal operations to improve efficiency and risk
management. Eclipx has commenced and is intending to continue to drive efficiency improvements to
make IT innovation a competitive advantage by upgrading and consolidating IT platforms,
infrastructure and apps.
Sales and Eclipx seeks to create a customer-centric, service-driven, culture, supported by aligned commission
distribution and incentive structures for staff, and a multi-channel and multi-brand sales and customer acquisition
strategy.
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Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

Group financial performance

The table below shows the key financial performance metrics for the 2017 financial year of the Group and its segments:

Australia Commercial Australia Consumer Australia Total 2017 2016 2017 2016 2017 2016 $'m $'m $'m $'m $'m $'m 135.9 112.4 79.6 45.1 215.5 157.5 (2.5) (1.7) (1.4) (0.6) (3.9) (2.3) (69.6) (54.9) (53.9) (30.9) (123.5) (85.8)	New Zealand Commercial 2017 2016 $'m $'m 39.7 38.8 (0.5) (0.3) (22.2) (22.3)	Total 2017 2016 $'m $'m 255.2 196.3 (4.4) (2.6) (145.7) (108.1)
63.8 55.8 24.3 13.6 88.1 69.4 (5.8) (3.8) (1.6) (1.2) (7.4) (5.0) (16.4) (7.6) (3.0) (5.4) (19.4) (13.0) (11.7) (13.1) (6.0) (2.1) (17.7) (15.2)	17.0 16.2 (1.8) (2.3) (0.6) (0.5) (4.0) (3.7)	105.1 85.6 (9.2) (7.3) (20.0) (13.5) (21.7) (18.9)
29.9 31.3 13.7 4.9 43.6 36.2 8.2 2.7 0.2 2.5 8.4 5.2 3.3 2.6 2.0 1.3 5.3 3.9	10.6 9.7 0.0 0.1 0.4 0.2	54.2 45.9 8.4 5.3 5.7 4.1
41.4 36.6 15.9 8.7 57.3 45.3	11.0 10.0	68.3 55.3

Whilst a non-IFRS measure, cash net profit after tax (Cash NPATA) reflects net profit after tax adjusted for the after tax effect of the amortisation of intangible assets and material one off adjustments or costs that do not reflect the ongoing operations of the business. The material one off adjustment for 2017 is for costs associated with acquisitions and significant business restructuring. The adjustment for 2016 relates to costs associated with acquisitions and significant debt and business restructuring.

Net operating income before operating expenses after impairment charges

Net operating income before operating expenses after impairment charges is $58.9m favourable to the prior period. The favourable variance has been achieved by: an increase in the volume of new business writings; the growth of Right2Drive and the contribution of Right2Drive for the full financial year; an increase in selling prices of vehicles that have been returned at the end of the lease; and contribution from the Grays acquisition.

Operating expenses

Operating expenditure has increased $37.6m compared to the prior period. The increase in operating expenditure is predominantly as a result of the acquisition of Right2Drive that occurred in May 2016 and resulted in part year consolidation in 2016 and a full year consolidation in 2017, coupled with the growth in Right2Drive. The 2017 operating expenditure includes operating costs of Grays as from the date of acquisition.

Holding company debt interest

The increase of $1.9m to the prior period is as a result of the incremental borrowings under the facility. The amounts drawn under the facility increased from $130.0m to $246.2m. The increase in holding company debt interest of $1.9m would only relate to the portion of holding company debt that was not allocated to the funding of leases through the warehouse funding structure.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

Adjustments and amortisation of intangible assets

The Group incurred costs that are not reflective of the Group net profit relating to the ongoing operations of the business. The adjustments for 2017 relate to costs incurred as a result of the business acquisitions of Grays and Onyx and the restructuring of Grays. The table below shows the value of adjustments for 2017 and 2016:

Cost description Transaction and restructuring costs Replacement of holding company debt Amortisation of intangibles	2017 2016 $'m $'m 12.0 5.1 - 2.5 8.0 5.9
	20.0 13.5

The transaction and restructuring costs for 2017 consists of $3.4m costs associated with the restructuring of Grays as the business exits unprofitable lines and integrates into Eclipx. Eclipx incurred $8.3m of acquisition related costs with the acquisition of Grays and $0.3m associated with the acquisition of Onyx.

The transaction and restructuring costs for 2016 relate to costs incurred as a result of the business acquisitions of Right2Drive and FleetSmart and restructuring of the business. Replacement of holding company debt reflects the costs associated with the early termination of the corporate debt originated in 2015.

Statutory net profit after tax

The statutory profit for 2017 has increased to $54.2m; this represents a growth of $8.3m against the prior period. The predominant factors attributed to this growth are:

Full period contribution and growth of Right2Drive;
Expansion through acquisition of Grays;
Growth in the fleet and equipment finance; and
Incremental costs associated with the acquisition and restructure of Grays.

Cash net profit after tax

Eclipx has increased Cash NPATA by $13.0m or 23.5%. The growth in Cash NPATA is a result of growth in the fleet and equipment finance, expansion through acquisition of Grays and full period contribution and growth of Right2Drive. The growth in revenue was partially offset by growth in operating expenses and increased bad debts.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

Segment results

In the accompanying financial report and consistent with prior periods, Eclipx has identified and disclosed the results of three operating segments:

	Australia Commercial	Australia Consumer	New Zealand Commercial
	• Vehicle fleet leasing and	• Online broker facilitating	• Vehicle fleet leasing and
	management business in	consumer financing for vehicles in	management business in New
	Australia.	Australia.	Zealand.
Description	• Commercial equipment finance and leasing.	• Consumer novated leasing business in Australia.	• Used vehicle retail sales.
	• Auctioneering and valuation	• Medium term rental to "not at	• Medium term rental to "not at
	services.	fault drivers".	fault drivers".
	• FleetPartners	• FleetPartners	• FleetPartners
	• FleetPlus	• FleetPlus	• FleetPlus
Brands	• Eclipx Commercial • GraysOnline.com	• FleetChoice • CarLoans.com.au	• AutoSelect • CarLoans.co.nz
		• Right2Drive	• Right2Drive
		• Onyx

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

Australia Commercial

The Australia Commercial segment has contributed 60.6% (2016: 66.2%) to the Cash NPATA of the Group. The segment has seen growth in new business writings of 6.0%. The segment has reported a net operating income of $135.9m which is $23.5m favourable to the amount reported for 2016.

Continued focus on the customer, building on our customer relationships and competitive pricing has allowed the business to experience growth in new business writings. The segment has been successful in increasing its market share with large corporates.

The Group acquired Grays on 11 August 2017 and the financial performance of Grays has been included in the Australia Commercial segment from this date. Grays contributed $14.0m to the growth in net operating income before operating expenses after impairment charges and contributed $1.0m to Cash NPATA post allocation of corporate overheads.

Operating expenses has increased predominantly as a result of the Grays acquisition, the operating costs of Grays have been included in the segment from date of acquisition. Cash NPATA for the segment has grown by 13.1% including Grays contribution or 10.4% excluding the contribution from Grays.

Eclipx Commercial has achieved a 4.8% growth in new business writings. Eclipx Commercial has allowed the Group to expand the product offering on financing to include non-vehicle assets; this continues to provide opportunities for cross selling finance and introducing new clients to the Group. On 25 September 2017 Eclipx Commercial entered into a strategic partnership with the Medical Indemnity Protection Society to provide financing solutions to its members.

Australia Consumer

This segment has contributed 23.3% (2016: 15.7%) to the Cash NPATA of the Group. The net operating income of $79.6m (2016: $45.1m) which represents a growth of $34.5m against the prior period was predominantly as a result of the full year contribution and growth in Right2Drive.

The investment in digital marketing has resulted in improved lead conversion and a lower acquisition cost. This has contributed to an increase in new business writings of 17.1% across the consumer segment.

Right2Drive has grown the footprint in Australia and New Zealand to 30 branches and is the largest operator in Australia and New Zealand. The business has grown the credit hire fleet to in excess of 2,000 vehicles.

New Zealand Commercial

The New Zealand Commercial segment has contributed 16.1% (2016: 18.1%) to the Cash NPATA of the Group. The net operating income of $39.7m (2016:$38.8m) represents growth of 2.3% against the prior period. The growth in net operating income is as a result of focusing on the profitability of new business writings and changes to the funding structures. On 6 July 2017 Eclipx issued its first Asset Backed Securitisation in New Zealand which assisted in lowering the cost of funds in New Zealand.

New Zealand continues to grow its strategic relationships so as to provide co-branded operating lease products to new vehicle sales outlets. AutoSelect, the retail sales channel continues to outperform the wholesale disposal options.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

5. Financial position

The Group financial position as at 30 September 2017 is summarised below:

Summary of financial position	2017 2016 $'m $'m
Cash and cash equivalents Restricted cash and cash equivalents Receivables and inventory Leases Intangibles Other Total assets Borrowings Trade and other liabilities Other Total liabilities Net assets	59.1 60.9 136.2 117.4 163.7 115.9 1,496.4 1,348.4 806.6 597.4 16.9 20.5
	2,678.9 2,260.5
	1,610.4 1,415.0 123.6 128.7 81.6 58.0
	1,815.6 1,601.7
	863.3 658.8

Receivables and inventory

The growth in receivables and inventory is a result of the growth in Right2Drive and Onyx coupled with the assets acquired with the acquisition of Onyx and Grays which equated to $14.6m.

Leases

Leases have increased against the prior period by $148.0m or 11.0%. This increase is attributable to the increased business writings that have been experienced in Australia. The increased business writings and increased income generating assets have created a base for profit in the coming years as the business derives annuity income on these assets over the remaining contractual term. The provision for impairment held against operating leases for 2017 is $3.5m (2016: $5.1m).

Borrowings

Borrowings for 2017 include an amount of $246.2m (2016: $130.0m) relating to corporate debt. The additional borrowings received from the corporate debt was utilised to fund the acquisition of Onyx, replace the lower rated funding notes in the Eclipx warehouse funding structure in Australia and New Zealand, support the growth in Right2Drive and fund the acquisition related costs associated with Grays.

The remaining borrowings balance of $1,364.2m (2016: $1,285.0m) relates to funding directly associated with leases and inventory.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

5. Financial position (continued)

Cash flows

For the financial year ended 30 September 2017, the Group increased the total cash holdings including restricted cash by $17.0m (2016: $13.7m).

The significant items impacting cash flow this year were:

An increase in finance and operating leases and inventory which were partially funded through cash;
The payment of dividends;
Additional investment in software, plant and equipment and fixture and fittings;
Expansion of Right2Drive; and
The acquisition of Grays and Onyx.

Funding

Eclipx looks to optimise the funding facilities that it has in place. Eclipx maintains committed funding facilities to cater for the forecast business growth and as at 30 September 2017, Eclipx had undrawn debt facilities of $215.6m (2016: $405.0m).

For leasing finance facilities where Eclipx acts as the funder, funding will be provided by a combination of warehouse and asset backed securitisation funding structures. Funders (major trading banks and institutional investors) provide financing to a special purpose vehicle established by Eclipx which is used to fund the purchase of assets that are to be leased to customers. These facilities are also known as revolving warehouse facilities because they can be drawn and repaid on an ongoing basis up to an agreed limit subject to conditions. A group of assets funded via a warehouse facility can be pooled together and refinanced by issuing securities (backed by those assets) to investors in public wholesale capital markets (such as domestic and international banks and institutional funds).

During the 2017 financial year Eclipx:

Rolled over warehouse facilities; and
Issued its first Asset Backed Securitisation in the New Zealand market.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

6. Business strategic objectives

Eclipx is focussed on improving business performance through a focus on enhancing and building on customer relationships, enhancement and development of technology, growth in the consumer segment and acquisitions.

Strategic objective To grow the market share in the fleet business. Diversify into adjacent markets. Leverage the Group's funding expertise to improve competitiveness. Utilisation of efficiencies of scale and cross selling.	Execution
	• Continued annual growth in the fleet business. • Expanded into the stategovernment and large corporate markets.
	• Acquisitions of CarLoans, Right2Drive and GraysOnline which are businesses that are growth opportunities and are complimentary to the Eclipx fleet business. • Diversified earnings from a 100% traditional fleet business to a business deriving approximately 16% from non-fleet activities while continuing to grow the profit from the fleet activities. • Established the Eclipx Commercial business.
	• Standalone warehouses to fund equipment finance, consumers and state government to optimise funding rates and capital structures. • Diversified funding sources to allow expansion. • The Group has issued its first asset backed securitization in the New Zealand market.
	• Introduction of telematics devices to assist clients in fleet management to reduce their operating costs. • Cross selling of equipment finance, operating leases and novated leases to clients. • The Group has leveraged the scale of the organisation to realise supply chain improvements.

7. Key risks

The key risks facing Eclipx are those risks that will have an impact on the financial performance and the execution of the strategy.

Key risk Eclipx may inaccurately set and forecast vehicle residual values and there may be unexpected falls in used vehicle prices. Eclipx may be exposed to increased funding costs due to changes in market conditions. Eclipx is exposed to credit risk. Eclipx may be affected by changes in fringe benefits tax legislation in Australia. Eclipx may be unable to access funding on competitive terms.	Mitigating Factors
	• Eclipx performs a monthly portfolio revaluation using market information on all assets where Eclipx is at risk on the residual value and any impairment identified is immediately recognised. • Eclipx has diversified wholesale and retail disposal channels for vehicles returning at the end of the lease, allowing them to minimise any losses on vehicles where the residual value is above the market value. • Residual values are reviewed regularly by the pricing and risk team and adjusted based on market and actualperformance.
	• Eclipx has a diversified funding structure which includes multiple funding parties. • Funding margins are negotiated and agreed on an annual basis. • Eclipx will have the ability to charge any margin increase onto new business that is written in theyear.
	• Eclipx has a dedicated credit team that assesses risk drawing on nearly 30 years of operating experience, a wealth of proprietary data (including customer credit performance, arrears management, loss rates, and recovery rates), and external credit reportingdata from local credit bureaus.
	• Eclipx has diversified the consumer segment to include non-novated services so as to provide alternative product offerings to consumers.
	• Eclipx has a diversified funding structure which includes multiple funding parties. • Funding facilities are negotiated and agreed on an annual basis. • Eclipx mitigates the interest rate risk by hedging the portfolio and funding is provided based on the contractual maturityof the lease.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

8. Outlook

For the financial year ended 30 September 2017 Eclipx has been able to exceed the targets set in terms of its financial performance, growth of assets under management or financed and growth in the customer and client base.

For the 2018 financial year Eclipx is forecasting to achieve growth in Cash NPATA and this will be achieved by:

Growing the volume of new business writings in all segments;
Managing the competitive price pressures experienced in the market;
Consolidation of platforms and processes;
Realising efficiencies across the Group including the integration of Grays;
Investing in technology; and
Growing the presence of Eclipx in the market.

9. Subsequent events

On 7 November 2017 the Board declared a fully franked dividend of 7.75 cents per share.

Except for the matters disclosed above, no other matter or circumstance has occurred since the end of the reporting period that may materially affect the Group's operations, the results of those operations or the Group's state of affairs in future financial years.

10. Changes in state of affairs

During the financial year, there was no significant change in the state of affairs of the Group other than that referred to in the financial statements or notes thereto.

11. Environmental factors

Eclipx is not subject to any significant environmental regulation under Australian Commonwealth or State Law. Eclipx recognises its obligations to its stakeholders (customers, shareholders, employees and the community) to operate in a way that lowers the impact it and its customers has on the environment. During the course of the year Eclipx has worked with funders and customers to support initiatives on improving their carbon footprint.

12. Dividends

Dividends paid during the financial year were as follows:

	2017	2016
	$'000	$'000
Fully franked final dividend for the year ended 30 September 2016 of 7.00 cents per ordinary share paid on 20 January 2017.	18,514	15,613
Fully franked interim dividend for the year ended 30 September 2017 of 7.50 cents per ordinary share paid on 7 July 2017.	19,897	16,287
	38,411	31,900

On 7 November 2017, the Directors declared a fully franked final dividend for the year ended 30 September 2017 of 7.75 cents per ordinary share, to be paid on 19 January 2018 to eligible shareholders on the register as at 29 December 2017. This equates to a total estimated dividend of $24,334,526 based on the number of ordinary shares on issue as at 30 September 2017. The financial effect of dividends declared after the reporting date are not reflected in the 30 September 2016 financial statements and will be recognised in subsequent financial reports. The Group will offer a Dividend Reinvestment Plan at a 1.5% discount with no participation limits.

13. Indemnification of Directors and Officers

The Directors and Officers of Eclipx are indemnified against liabilities pursuant to agreements with Eclipx. Eclipx has entered into insurance contracts with third party insurance providers, in accordance with normal commercial practices. Under the terms of the insurance contracts, the nature of the liabilities insured against and the amount of premiums paid are confidential.

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

14. Non-audit services

KPMG, the external auditors of Eclipx provided non-audit services during the financial year end 30 September 2017. The role of the external auditor is to provide an independent opinion that the financial reports are true and fair and that they comply with applicable regulations. The Audit and Risk Committee have implemented processes and procedures to review the independence of the external auditors and to ensure that they may only provide services that are consistent with their role of external auditor.

Eclipx acquired non-audit services from KPMG where the utilisation of KPMG would be beneficial to Eclipx due to the specific skills and knowledge the non-audit service team would have regarding the transaction and the impact this could have on the Group. The following non-audit services were acquired from KPMG:

KPMG Transaction services assisted with the due diligence relating to Grays, Onyx and unsuccessful acquisitions that did not proceed past due diligence;
KPMG Transaction services provided the Investigating Accountant’s report for inclusion in the Grays Ecommerce Group Scheme Booklet; and
KPMG Debt Advisory services assisted with the debt restructuring of Eclipx in Australia and New Zealand to address the funding impacts of APS 120 Securitisation.

Following review of the services provided by KPMG for the year ended 30 September 2017 the Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 in view of the nature and amount of the services provided, and that all non-audit services were subject to the corporate governance procedures adopted by the Company.

The fees paid or payable to KPMG were as follows:

Audit and assurance services Audit and review of financial statements Non-audit services Transactional services including IPO Debt restructuring Total remuneration for non-audit services for KPMG Total remuneration for KPMG	2017 2016 $ $ 757,087 746,254 563,947 179,134 599,067 540,000
	1,163,014 719,134
	1,920,101 1,465,388

A copy of the auditor’s independence declaration is set out on page 17 on this financial report, and forms part of the Directors Report.

15. Rounding of amounts

The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report and the Financial Report. Amounts, unless otherwise stated, have been rounded off to the nearest whole number of thousands of dollars.

This Directors’ Report is signed on behalf of the Directors in accordance with the resolution of Directors made pursuant to section 298(2) of the Corporations Act 2001.

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Kerry Roxburgh Chairman

Doc Klotz Chief Executive Officer

Sydney 7 November 2017

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Eclipx Group Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Eclipx Group Limited for the financial year ended 30 September 2017 there have been:

i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.

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KPMG

Dean Waters

Partner Melbourne

7 November 2017

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Eclipx Group Limited Letter from Remuneration and Nomination Committee (unaudited) 30 September 2017

Dear Shareholders

On behalf of the Board, I am pleased to present Eclipx Group Limited’s (Group) FY2017 Remuneration Report.

Eclipx has achieved a growth of 18.2% in net profit after tax (NPAT) and 23.4% in Cash NPATA compared to FY2016. The Group continues to deliver on its strategy to diversify into adjacent markets with the acquisition of Grays eCommerce Group and Onyx. Right2Drive, acquired in 2016, has been successfully integrated into Eclipx and has grown to 30 branches across Australia and New Zealand. The fleet and consumer businesses have seen growth in new business writings over the last 12 months.

Total Shareholder Return (TSR) and Earnings Per Share growth (EPS) are critical metrics to consider when evaluating the performance of the Group and our people. We are proud to have achieved a 95th percentile TSR ranking and EPS compound growth of 13.39% in relation to the first tranche of the LTI awards granted in April 2015. This strong performance is reflected in the LTI Outcomes located on page 27

Executive Key Management Personnel (Executive KMP) achieved or exceeded all key performance indicator (KPI) targets, which is reflected in their short-term incentive awards. The FY2017 Performance Outcomes table on page 23 outlines the achievements against each KPI. We have been particularly pleased to see significant improvements in customer satisfaction and employee engagement during FY2017 and look forward to continuing our focus on people following the appointment of Michelle Seddon as Human Resources Director for the Group.

I look forward to the opportunity to discuss the Remuneration Report with you at the Group’s Annual General Meeting in February 2018.

Yours faithfully

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Gail Pemberton

Chair of the Remuneration and Nomination Committee

7 November 2017

Eclipx Group Limited Remuneration Report (audited) 30 September 2017

Remuneration Report (audited)

The Remuneration and Nomination Committee (Committee) of the Board presents the Eclipx Group Limited Remuneration Report (Report) for the year ended 30 September 2017 (FY2017).

The Report has been audited as required by section 308(3C) of the Corporations Act 2001 and is presented in the following sections:

Introduction
Remuneration governance
Link to strategy
Remuneration framework
Performance against key metrics
Non-Executive Director fees
Service agreements
Executive remuneration disclosures
Equity instruments
Loans
Other transactions

1. Introduction

The Report outlines the Group’s approach to remuneration, its link to the Group’s business strategy, and how performance has been reflected in the remuneration outcomes for Key Management Personnel (KMP).

This report covers the KMP of the Group, who are the people responsible for determining and executing the strategy. This Group is comprised of both Executive KMP (CEO/ MD, Deputy CEO/CFO and COO), and Non-Executive Directors.

For the year ended 30 September 2017, the KMP were:

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KMP Position Term as KMP
Non-Executive Directors
Kerry Roxburgh Independent Chairman Full Year
Gregory Ruddock Non-Executive Director Full Year
Gail Pemberton Independent Non-Executive Director Full Year
Trevor Allen Independent Non-Executive Director Full Year
Russell Shields Independent Non-Executive Director Full Year
Executive Directors
Doc Klotz Chief Executive Officer and Managing Director Full Year
Garry McLennan Deputy Chief Executive Officer and Chief Financial Officer Full Year
Senior Executive
Jeff McLean Chief Operating Officer Full Year
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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

2. Remuneration governance

The committee consists of three Independent Non-Executive Directors:

Ms Gail Pemberton (Committee Chair);
Mr Kerry Roxburgh; and
Mr Trevor Allen.

The following diagram demonstrates how the Board, Committee, Remuneration Advisors and Management interact to set the remuneration structure and determine remuneration outcomes for the Group:

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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

3. Link to strategy

The Group’s remuneration strategy supports rewarding performance in areas critical to the achievement of Group strategy. This is achieved by attracting and retaining talented people who are motivated to achieve challenging performance targets aligned with both the business strategy and the long-term interests of shareholders. The following diagram illustrates the link between business strategy and remuneration outcomes:

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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework

Remuneration components and outcome

(i) Fixed remuneration

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What is included in
Fixed remuneration comprises base salary, non-monetary benefits and superannuation.
fixed remuneration?
Fixed remuneration, along with the other elements of Total Remuneration, for the Executive KMP
How is fixed
group is determined with reference to comparable roles in companies which have a similar market
remuneration
capitalisation and similar growth aspirations to Eclipx. Fixed remuneration for each individual is set
determined?
based on their experience, capability and the value they bring to the Group.
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(ii) Short term incentives

The following table outlines the major features of the FY2017 STI plan

What is the purpose of the STI?	To motivate and reward participants for achieving specific measurable financial and non-financial results which link pay to performance and hence contribute to the achievement of the Eclipx strategy.
Who is eligible to participate in the STI plan?	Eligibility to participate in the STI plan is determined by the Board. All Executive KMP participated in the FY2017 STI plan.
How is performance evaluated?	The Committee is responsible for making recommendations to the Board regarding the performance and ‘at risk’ remuneration of Executive KMP.
Is there a minimum profit gateway?	At least 95% of the Group’s profitability target must be achieved before any STI award will be payable to Executive KMP. Once this gateway is achieved the percentage achievement of KPIs will determine individual STI outcomes.
What are the FY2017 KPIs?	The FY2017 KPIs were set as follows: • 60% weighting to the Group Financial KPI • 25% weighting to People, Customer and Strategy KPIs • 15% to individual KPIs All KPIs are set to be challenging and represent a significant achievement. Please refer to the section FY2017 Performance Outcomes onpage 23.
Why were these KPIs chosen?	The combination of KPIs was chosen because the Board believes that there needs to be a balance between financial measures and those metrics which support the Group’s long term strategyand determines future returns for shareholders.
What is the maximum STI opportunity?	Executive KMP may not currently receive more than their target STI amount.
How is the award delivered?	Awards are paid in cash following the finalisation of the audited year-end financial statements.

Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework (continued)

Remuneration components and outcome (continued)

(ii) Short term incentives (continued)

FY2017 Performance Outcomes

The minimum profit gateway (95% of Cash NPATA) was achieved for FY2017, allowing for an individual’s STI award to be calculated based on their achievement of certain KPIs.

The table below outlines the KPIs that applied to the Executive KMP in FY2017, and the level of achievement against each respective KPI. 85% of KPIs are shared (i.e., Financial, People, Customer and Strategy), with the remaining 15% based on individual KPIs.

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FY2017 STI Outcomes

The following table outlines the STI awarded to each Executive KMP for FY2017:

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STI opportunity as % of
Name Target STI opportunity fixed remuneration STI earned as STI forfeited as
for FY2017 % of target % of target
Minimum Target
Executive Directors
Doc Klotz $850,000 0% 100% 100% 0%
Garry McLennan $700,000 0% 100% 100% 0%
Senior Executive
Jeff McLean $212,500 0% 50% 100% 0%
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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework (continued)

Remuneration components and outcome (continued)

(iii) Long term incentives

The following table outlines the major features of the FY2017 LTI plan

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What is the The Group established an LTI plan to assist in the motivation, retention and reward of key employees.
purpose of the The LTI plan is designed to align participants’ efforts with the interests of shareholders by providing
LTI plan? participants with exposure to Eclipx Group Limited shares.
Who is eligible to
Eligibility to participate in the LTI plan is determined by the Board. All Executive KMP participated in the
participate in the
FY2017 LTI plan.
plan?
When was the The FY2017 LTI grant was made to Senior Executives on 4 November 2016. The Executive Director
grant made? grants were approved at the Annual General Meeting and granted on 17 February 2017.
Awards made under the LTI Plan are subject to a three year performance period commencing on the first
What day of the applicable financial year (Performance Period).
performance
period applies? The FY2017 LTI performance period commenced on 1 October 2016 and will conclude on 30 September
2019.
The LTI is provided through a mix of Rights and Options (Award). The number of Rights and Options
granted in respect of each Award is determined by the Board.
The exercise price for the FY2017 Options was set at $3.60 which represented the share price on 4
How is the LTI November 2016.
delivered?
The Group currently uses the fair value methodology when calculating the number of rights and options
to grant each year. The mix of Rights to Options is determined by the Board on an annual basis. For the
FY2017 LTI grant, the ratio of the number of Rights to Options granted to each Executive KMP was
approximately one Right to four Options.
Are dividends
paid during the Dividends are not payable on the Award.
performance
period?
The Award is subject to the following equally weighted performance hurdles:
What
performance a) Relative Total Shareholder Return (TSR) versus Comparator Group (50% of total grant); and
hurdles need to
be met?
b) Absolute Earnings per Share (EPS) Growth (50% of total grant)
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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework (continued)

Remuneration components and outcome (continued)

(iii) Long term incentives (continued)

What performance hurdles need to be met? (continued)	Relative TSR component Relative TSR was selected as a performance measure to directly align executive remuneration with returns delivered to shareholders, relative to other ASX-listed companies. TSR is a method of calculating the return shareholders would earn if they held a notional number of shares over a period of time. TSR measures the percentage growth in the company’s share price plus the value of dividends received during the period, assuming that all of those dividends are re-invested into new shares. The Group’s relative TSR is measured against constituents of the ASX 200 (excluding GICS Industry “Metals & Mining” companies) over the vesting period for each grant. The comparator group was selected to ensure a robust and meaningful comparator group size, given the small number of listed direct competitors in the Australian market. Miraqle Metrics, a division of Orient Capital provides the Group with a periodic TSR Calculation and Ranking Reports which ranks the TSR performance of the Group against the constituents of the comparator group. The percentage of Awards comprising the relative TSR component that vests, if any, will be based on the following:	Relative TSR component Relative TSR was selected as a performance measure to directly align executive remuneration with returns delivered to shareholders, relative to other ASX-listed companies. TSR is a method of calculating the return shareholders would earn if they held a notional number of shares over a period of time. TSR measures the percentage growth in the company’s share price plus the value of dividends received during the period, assuming that all of those dividends are re-invested into new shares. The Group’s relative TSR is measured against constituents of the ASX 200 (excluding GICS Industry “Metals & Mining” companies) over the vesting period for each grant. The comparator group was selected to ensure a robust and meaningful comparator group size, given the small number of listed direct competitors in the Australian market. Miraqle Metrics, a division of Orient Capital provides the Group with a periodic TSR Calculation and Ranking Reports which ranks the TSR performance of the Group against the constituents of the comparator group. The percentage of Awards comprising the relative TSR component that vests, if any, will be based on the following:
	Relative TSR percentile ranking	% of relative TSR hurdled Awards that vest
	Below the 51st percentile	Nil
	At the 51st percentile	50%
	Between the 51st and 75th percentile	Straight line pro rata vesting between 50% and 100%
	At or above the 75th percentile	100%
	Absolute EPS component Absolute EPS was selected as a performance measure as EPS growth is a key strategic objective for the Group. The EPS targets are set annually with consideration to earnings and EPS forecasts, based on the following process. • Prior to each grant Management will prepare three-year earnings forecasts and calculate the three-year growth rate. • Forecasts are then converted into a three-year Compound Annual Growth Rate (CAGR) which will represent the growth required to achieve the EPS target by the end of the performance period. The CAGR is referred to in setting the top of the vesting range. • These forecasts are provided to the Committee who will review the appropriateness of the proposed targets and recommend the final targets to the Board for approval. For the FY2017 Award, the percentage of Awards subject to the Cash EPS hurdle that vest, if any, will be determined based on the Group’s compound annual growth in Cash EPS over the Performance Period by reference to the “base year” Cash EPS. FY16 will be the base year for Awards granted under the FY17 LTI Offer. Accordingly, to determine the growth in Cash EPS, the Cash EPS achieved in FY19 will be compared to Cash EPS achieved in FY16, and the level of compound annual growth (stated as a percentage) will determine the proportion of the Cash EPS hurdled Awards that vest.

Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework (continued)

Remuneration components and outcome (continued)

(iii) Long term incentives (continued)

What performance hurdles need to be met? (continued)	Absolute EPS component (continued)	Absolute EPS component (continued)
	The Group's annual compound Cash EPS growth rate	% of Cash EPS hurdled Awards that vest
	Below 7% compound annual growth	Nil
	At 7% compound annual growth	50%
	Between 7% and 10% compound annual growth	Straight line pro rata vesting between 50% and 100%
	At or above 10% compound annual growth	100%
How are the performance awards valued?	The TSR hurdled Awards are valued via the Monte-Carlo simulation method. The Cash EPS hurdle is valued via the Binominal tree method and has been chosen as it provides evidence of the Group’s growth in earnings and is directly linked to shareholder returns and the Group’s overall strategic objectives.
Is retesting available for any of the performance hurdles?	If, as a result of exceptional circumstances, Awards subject to the 50% TSR component only do not vest in full during the first Performance Period, they have the opportunity for a single retest over an extended performance period ending 12 months after the completion of the first Performance Period. Retesting was introduced upon listing in 2015 due to the volatility of the share price and the market. The Board reviews the LTI Plan design annually. The Board determined that retesting continued to be appropriate for the FY2017 grant due to the ongoing volatility of the share price and the market. If a retest was determined appropriate for the FY2017 LTI grant this would only occur over a single extended performanceperiod which would commence on 1 October 2016 and end on 30 September 2020.
What happens if an Executive KMP ceases employment?	Where an Executive KMP ceases employment defined by the Group as resignation or termination for cause, any unvested LTI Awards (or vested and unexercised Awards) are forfeited, unless otherwise determined by the Board. Where an Executive KMP ceases employment for any other reason, unvested Awards will continue “on-foot” and will be tested at the end of the original vesting period. Note that the Plan Rules provide the Board with discretion to determine that a different treatment should apply at the time of cessation, if applicable.
What happens if there is a change of control?	A change of control occurs where, as a result of any event or transaction, a new person or entity becomes entitled to a significant percentage of shares in the Group. In the event of a change of control of the Group the following treatment will apply: • Upon a 50% change of control, all unvested Awards will vest in full; • Upon a 30% change of control, all unvested Awards will vest in full, unless, prior to the 30% change of control occurring, the Board determines that the transaction should not be treated as a change of control for thepurpose of the LTIplan.

Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

4. Remuneration framework (continued)

Remuneration components and outcome (continued)

(iii) Long term incentives (continued)

LTI Outcomes

The table below summarises the performance and outcomes for the IPO FY2015 grant that vested during FY2017.

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Number of % LTI % LTI
Performance Performance
KMP Plan Award Type Condition awards outcomes tranche that tranche
granted vested forfeited
Relative TSR
FY2015 LTI Loan Shares Component 400,000 95th percentile 100% 0%
Doc Klotz 13.39%
Absolute TSR
FY2015 LTI Loan Shares 400,000 compound 100% 0%
Component annual growth
Relative TSR
FY2015 LTI Loan Shares 400,000 95th percentile 100% 0%
Component
Garry 13.39%
McLennan Absolute TSR
FY2015 LTI Loan Shares 400,000 compound 100% 0%
Component
annual growth
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Loan shares were only used for the IPO FY2015 grant and have not been offered for LTI grants from FY2016 onwards.

Executive KMP Remuneration Opportunity Mix

Each Executive KMP has a remuneration opportunity mix that consists of fixed and ‘at-risk’ remuneration. The ‘at-risk’ remuneration opportunity comprises a STI opportunity and LTI grant.

The relative mix of the three remuneration components is determined by the Board on the recommendation of the Committee.

The components are reviewed on an annual basis and quantum set to recognise the responsibilities of each role. The remuneration opportunity mix that applied for FY2017 is set out below. This incorporates the FY2017 STI Maximum Opportunity and the actual FY2017 LTI grant value.

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Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

5. Performance against key metrics

The following table provides information on FY2017 performance against key metrics:

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6. Non-Executive Director fees

Fees paid to Non-Executive Directors reflect the demands and responsibilities of each position. Fees are benchmarked against an appropriate group of comparator companies and determined within the approved aggregate Directors’ fee pool limit of $1.4 million per annum. Non-Executive Directors do not receive variable remuneration and base fees are inclusive of mandatory superannuation contributions.

There were no changes to Non-Executive Director fees during FY2017 and the following fee structure applied for the full year:

Base fees (per annum)
Chairman (K Roxburgh)	$250,000
Other Non-Executive Directors	$125,000
'
Additional fees (per annum)
Audit and Risk Committee – Chair (T Allen)	$25,000
Audit and Risk Committee – Member (K Roxburgh, R Shields, G Ruddock)	$12,500
Remuneration and Nomination Committee – Chair (G Pemberton)	$20,000
Remuneration and Nomination Committee – Member (K Roxburgh, T Allen)	$10,000

As required by Mr Ruddock’s conditions of employment with Ironbridge Capital Management Pty Ltd (“Ironbridge”), Non-Executive Director fees for Mr Greg Ruddock were paid to Ironbridge from 1 October 2016 to 3 February 2017. On 3 February 2017 Ironbridge ceased to be a shareholder in the Group and as such from 4 February 2017 to 30 September 2017 Non-Executive Director Fees for Mr Ruddock were paid directly to Mr Ruddock.

Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued)

6. Non-Executive Director fees (continued)

Share Rights Contribution Plan

The Share Rights Contribution Plan was established to facilitate Non-Executive Director shareholdings in the Company and improve the alignment of Non-Executive Director interests with those of shareholders.

Under the plan, Non-Executive Directors may elect to sacrifice, on a pre-tax basis, up to 50% of base Director fees (excluding Committee fees) to acquire share rights. The share rights will not be subject to performance conditions. However, if a participant ceases to hold office before their share rights convert to shares, all share rights will lapse and the fee amount sacrificed under the Share Rights Contribution Plan will be returned to the participant.

During FY2016, all Non-Executive Directors elected to sacrifice the maximum of 50% of base Director fees to acquire share rights. Subject to the Company's Securities Trading Policy, the salary sacrifice contributions were converted into Share Rights on 20 December 2016 and subsequently converted to Ordinary Shares in Eclipx Group Limited on 21 December 2016.

During FY2017, Mr Kerry Roxburgh elected to sacrifice the maximum of 50% of base Director fees to acquire share rights and Mr Trevor Allen elected to sacrifice 25% of base Director fees to acquire share rights. Subject to the Company's Securities Trading Policy, the salary sacrifice contributions were converted into Share Rights on 28 December 2016 and subsequently converted to Ordinary Shares in Eclipx Group Limited on 17 February 2017.

Non-Executive Directors (Cash and Share based payments)

The following table shows details of fees received by the Non-Executive Directors:

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Short term benefits Post-employment Share based
benefits payments
Salary and fees Total $
Salary and - value of share Non-monetary Superannuation Equity
fees - cash $ rights $ (1) $ $ (1) settled $
Kerry Roxburgh (Chairman)
FY2017 135,709 125,000 - 11,791 - 272,500
FY2016 135,787 125,000 - 11,713 - 272,500
Russell Shields
FY2017 125,571 - - 11,929 - 137,500
FY2016 68,493 62,500 - 6,507 - 137,500
Trevor Allen
FY2017 118,169 31,250 - 10,581 - 160,000
FY2016 89,470 62,500 - 8,030 - 160,000
Gail Pemberton
FY2017 132,420 - - 12,580 - 145,000
FY2016 75,342 62,500 - 7,158 - 145,000
Greg Ruddock (2)
FY2017 82,144 - - 7,804 - 89,948
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(1) Salary sacrifice contributions made in respect of the Share Rights Contributions Plan are included as salary and fees. Superannuation contributions do not apply to the salary sacrifice component.

(2) Non-Executive Director fees for Mr Greg Ruddock were paid to Ironbridge Capital Management Pty Ltd and not to Mr Ruddock directly until 4 February 2017.

Service agreement Employing Entity Notice period Serious misconduct Termination entitlement Restraint of Trade Chief Executive Officer and Managing Director Fleet Holdings (Australia) Pty Ltd Six months by either party Immediate termination When termination is initiated by the Company, up to six month’s fixed remuneration may be paid in lieu of notice. Payments are capped at 12 months’ remuneration per relevant legislative requirements 12 months following expiry of notice period Deputy Chief Executive Officer and Chief Financial Officer Chief Operating Officer FleetPartners Pty Ltd Six months following expiry of notice period 8. Executive remuneration disclosures Statutory Remuneration for Executive KMP The following table shows details of the remuneration received by Executives during FY2016 and FY2017:	Service agreement Employing Entity Notice period Serious misconduct Termination entitlement Restraint of Trade Chief Executive Officer and Managing Director Fleet Holdings (Australia) Pty Ltd Six months by either party Immediate termination When termination is initiated by the Company, up to six month’s fixed remuneration may be paid in lieu of notice. Payments are capped at 12 months’ remuneration per relevant legislative requirements 12 months following expiry of notice period Deputy Chief Executive Officer and Chief Financial Officer Chief Operating Officer FleetPartners Pty Ltd Six months following expiry of notice period 8. Executive remuneration disclosures Statutory Remuneration for Executive KMP The following table shows details of the remuneration received by Executives during FY2016 and FY2017:	Service agreement Employing Entity Notice period Serious misconduct Termination entitlement Restraint of Trade Chief Executive Officer and Managing Director Fleet Holdings (Australia) Pty Ltd Six months by either party Immediate termination When termination is initiated by the Company, up to six month’s fixed remuneration may be paid in lieu of notice. Payments are capped at 12 months’ remuneration per relevant legislative requirements 12 months following expiry of notice period Deputy Chief Executive Officer and Chief Financial Officer Chief Operating Officer FleetPartners Pty Ltd Six months following expiry of notice period 8. Executive remuneration disclosures Statutory Remuneration for Executive KMP The following table shows details of the remuneration received by Executives during FY2016 and FY2017:	Service agreement Employing Entity Notice period Serious misconduct Termination entitlement Restraint of Trade Chief Executive Officer and Managing Director Fleet Holdings (Australia) Pty Ltd Six months by either party Immediate termination When termination is initiated by the Company, up to six month’s fixed remuneration may be paid in lieu of notice. Payments are capped at 12 months’ remuneration per relevant legislative requirements 12 months following expiry of notice period Deputy Chief Executive Officer and Chief Financial Officer Chief Operating Officer FleetPartners Pty Ltd Six months following expiry of notice period 8. Executive remuneration disclosures Statutory Remuneration for Executive KMP The following table shows details of the remuneration received by Executives during FY2016 and FY2017:		Total $	2,698,336	2,320,283	2,234,918	1,853,415	934,609	778,020
				Long term benefits	Share based payments equity settled $	796,468	517,546	796,468	517,546	287,837	121,059
Restraint of Trade	12 months following expiry of notice period		Six months following expiry of notice period
					Superannuation $	19,735	19,764	19,735	19,764	19,735	19,764
Termination entitlement	When termination is initiated by the Company, up to six month’s fixed remuneration may be paid in lieu of notice. Payments are capped at 12 months’ remuneration per relevant legislative requirements
					Non-monetary $ (3)	7,134	2,301	5,845	1,872	3,199	1,136
				Short term benefits	Cash bonus payable in respect of current year $	850,000	799,000	700,000	665,000	212,500	199,750
Serious misconduct	Immediate termination				Movement in annual leave provision $ (2)	51,798	14,400	26,753	(36,631)	(3,281)	22,612
Notice period	Six months by either party
					Non-monetary $ (1)	142,940	137,036	5,856	5,628	9,358	8,463
Employing Entity	Fleet Holdings (Australia) Pty Ltd		FleetPartners Pty Ltd
					Salary and fees $	830,261	830,236	680,261	680,236	405,261	405,236
Service agreement	Chief Executive Officer and Managing Director	Deputy Chief Executive Officer and Chief Financial Officer	Chief Operating Officer
						FY2017	FY2016	FY2017	FY2016	FY2017	FY2016

							FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.	FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.	FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.	FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.	FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.	FY2017 680,261 665,000 19,735 1,312,000 2,676,996 FY2016 707,161 700,000 19,765 - 1,426,926 Senior Executive Jeff McLean FY2017 405,261 199,750 19,735 - 624,746 FY2016 418,750 200,000 19,765 - 638,515 (1) Salary and superannuation are paid fortnightly and may vary depending on the number of pay cycles within any given year. In 2016, there was one additional fortnightly pay. (2) Represents the value of loan shares granted in previous years that vested during the year, calculated as the number of loan shares that vested multiplied by the closing market price of Eclipx shares on the vesting date, less the loan amount outstanding.
	Total $	Executive Directors	Doc Klotz	2,936,996	1,732,695	Garry McLennan	2,676,996	1,426,926	Senior Executive	Jeff McLean	624,746	638,515
Equity that	vested during 2017 (2)			1,288,000	-		1,312,000	-			-	-
Long term benefits	Superannuation $			19,735	19,765		19,735	19,765			19,735	19,765
Short term benefits	Cash bonus paid in current year $			799,000	850,000		665,000	700,000			199,750	200,000
	Salary and fees $ (1)			830,261	862,930		680,261	707,161			405,261	418,750
				FY2017	FY2016		FY2017	FY2016			FY2017	FY2016


Expiry date	21 April 2020	21 April 2020	21 April 2020	21 April 2020
Vesting date/first exercise date	21 April 2018	21 April 2018	21 April 2018	21 April 2018
Fair value of award (at grant date) $	252,000	252,000	252,000	252,000
Fair value per award (at grant date) $	0.63	0.63	0.63	0.63
Exercise price	$2.30	$2.30	$2.30	$2.30
Number of awards granted	400,000	400,000	400,000	400,000
Performance condition	TSR tranche 2	EPS tranche 2	TSR tranche 2	EPS tranche 2
Award type	Loan shares		Loan shares
Plan	FY2015 LTI		FY2015 LTI
KMP	Doc Klotz		Garry McLennan

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2021 2020 2021 2020 2021 2020
Expiry date 10 November 10 November 10 November 10 November 10 November 10 November
2019 2018 2019 2018 2019 2018
Vesting date/first
exercise date 10 November 10 November 10 November 10 November 10 November 10 November
163,020 247,390 299,200 316,800 123,950 220,150 140,000 144,000 163,020 247,390 299,200 316,800 123,950 220,150 140,000 144,000 85,020 122,070 125,875 130,625 130,200 192,500 203,000 210,000
award (at
Fair value of grant date) $
2.28 3.46 0.68 0.72 1.34 2.38 0.35 0.36 2.28 3.46 0.68 0.72 1.34 2.38 0.35 0.36 2.18 3.13 0.53 0.55 1.86 2.75 0.58 0.60
Fair value
per award (at grant date) $
- - - - - - - - - - - -
price $3.60 $3.60 $3.06 $3.06 $3.60 $3.60 $3.06 $3.06 $3.60 $3.60 $3.06 $3.06
Exercise
awards granted 71,500 71,500 440,000 440,000 92,500 92,500 400,000 400,000 71,500 71,500 440,000 440,000 92,500 92,500 400,000 400,000 39,000 39,000 237,500 237,500 70,000 70,000 350,000 350,000
Number of
condition
Performance TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche TSR tranche EPS tranche
type
Award Rights Options Rights Options Rights Options Rights Options Rights Options Rights Options
Plan FY2017 LTI FY2016 LTI FY2017 LTI FY2016 LTI FY2017 LTI FY2016 LTI
KMP Doc Klotz Garry McLennan Jeff McLean
The minimum value of the outstanding Awards is nil if no performance hurdles are met. The maximum value of Awards that may vest in future years that will be recognised as share-based payments in future years is set out in the table below. The amount reported is the value of share-based payments calculated in accordance with AASB2 Share-based payment over the vesting period.
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									Doc Klotz 3,802,954 185,000 800,000 38,407 143,000 880,000 3,841,361 328,000 1,680,000 Garry McLennan 3,821,432 (1) 185,000 800,000 50,000 143,000 880,000 3,871,432 328,000 1,680,000 Senior Executive Jeff McLean 1,678,200 140,000 700,000 (145,000) 78,000 475,000 1,533,200 218,000 1,175,000 (1) 43,478 of these shares are held by a close family member of the Executive KMP. (2) Options for Non-Executive Directors were purchased at IPO at an issue price of $0.24 per option. Each option is exercisable over one share with an exercise price of 264.50 cents, immediately vested and exercisable, and with an expiry date of 21 April 2020.	Doc Klotz 3,802,954 185,000 800,000 38,407 143,000 880,000 3,841,361 328,000 1,680,000 Garry McLennan 3,821,432 (1) 185,000 800,000 50,000 143,000 880,000 3,871,432 328,000 1,680,000 Senior Executive Jeff McLean 1,678,200 140,000 700,000 (145,000) 78,000 475,000 1,533,200 218,000 1,175,000 (1) 43,478 of these shares are held by a close family member of the Executive KMP. (2) Options for Non-Executive Directors were purchased at IPO at an issue price of $0.24 per option. Each option is exercisable over one share with an exercise price of 264.50 cents, immediately vested and exercisable, and with an expiry date of 21 April 2020.	Doc Klotz 3,802,954 185,000 800,000 38,407 143,000 880,000 3,841,361 328,000 1,680,000 Garry McLennan 3,821,432 (1) 185,000 800,000 50,000 143,000 880,000 3,871,432 328,000 1,680,000 Senior Executive Jeff McLean 1,678,200 140,000 700,000 (145,000) 78,000 475,000 1,533,200 218,000 1,175,000 (1) 43,478 of these shares are held by a close family member of the Executive KMP. (2) Options for Non-Executive Directors were purchased at IPO at an issue price of $0.24 per option. Each option is exercisable over one share with an exercise price of 264.50 cents, immediately vested and exercisable, and with an expiry date of 21 April 2020.	Doc Klotz 3,802,954 185,000 800,000 38,407 143,000 880,000 3,841,361 328,000 1,680,000 Garry McLennan 3,821,432 (1) 185,000 800,000 50,000 143,000 880,000 3,871,432 328,000 1,680,000 Senior Executive Jeff McLean 1,678,200 140,000 700,000 (145,000) 78,000 475,000 1,533,200 218,000 1,175,000 (1) 43,478 of these shares are held by a close family member of the Executive KMP. (2) Options for Non-Executive Directors were purchased at IPO at an issue price of $0.24 per option. Each option is exercisable over one share with an exercise price of 264.50 cents, immediately vested and exercisable, and with an expiry date of 21 April 2020.
Held as at 30 September 2017	Options	Non-Executive Directors	200,000	100,000	200,000	200,000	200,000	Executive Directors	1,680,000	1,680,000	Senior Executive	1,175,000
	Rights		-	-	-	-	-		328,000	328,000		218,000
	Shares		135,000	228,777	96,331	96,641	600,000		3,841,361	3,871,432		1,533,200
Net Change	Options		-	(100,000)	-	-	-		880,000	880,000		475,000
	Rights		-	-	-	-	-		143,000	143,000		78,000
	Shares		1,305	157,430	26,984	17,294	-		38,407	50,000		(145,000)
Held at 1 October 2016	Options (2)		200,000	200,000	200,000	200,000	200,000		800,000	800,000		700,000
	Rights		-	-	-	-	-		185,000	185,000		140,000
	Shares		133,695	69,347	69,347	79,347	600,000		3,802,954	3,821,432 (1)		1,678,200
			Kerry Roxburgh (Chairman)	Russell Shields	Trevor Allen	Gail Pemberton	Greg Ruddock		Doc Klotz	Garry McLennan		Jeff McLean

Eclipx Group Limited Remuneration Report (audited) 30 September 2017 (continued) 10. Loans Loan shares issued under the Group’s LTI plans prior to FY2016 were funded by the Group. Recourse under the loans is limited to the shares and proceeds of any sale of the shares. The loan is interest free and must be repaid by the expiry date. Mr Klotz, Mr McLennan and Mr McLean were offered loan shares under the share ownership plan prior to the IPO that are not subject to vesting conditions. Details of these loans are as follows:	KMP Opening loan balance $ Closing loan balance $ Number of vested loan shares not yet exercised Exercise price Loan expiry date Doc Klotz 5,854,967 5,854,967 3,539,118 $1.65 September 2021 Garry McLennan 5,854,967 5,854,967 3,539,118 $1.65 September 2021 Jeff McLean 2,234,770 2,077,403 (1) 1,416,931 $1.47 September 2019 (1) Loan repayments apply to Mr McLean only and equate to dividends paid less tax applicable on dividends. Mr Klotz and Mr McLennan were granted loan shares under the FY2015 LTI plan for which loans are still outstanding and subject to vesting conditions or yet to be exercised. Details of these loans are as follows:	KMP Grant date Opening loan balance $ Closing loan balance $ (1) Number of unvested loan shares relating to loan Number of vested loan shares relating to loan Exercise price Loan expiry date Doc Klotz 22 April 2015 3,551,960 3,411,840 800,000 800,000 $2.30 April 2020 Garry McLennan 22 April 2015 3,525,670 3,353,300 800,000 800,000 $2.30 April 2020 (1) Loan repayments relate to dividends paid on the relevant shares less tax applicable on dividends. A higher tax rate applies to Mr Klotz as a result of his United States citizenship and resulting tax obligations. 11. Other transactions Transactions with other related parties are made on normal commercial terms and conditions. Refer to Note 6.3 related party for more information. 35

Eclipx Group Limited

Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 September 2017

Eclipx Group Limited Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 September 2017
Note Revenue from continuing operations 2.2 Cost of revenue 2.2 Lease finance costs 2.3 Net operating income before operating expenses and impairment charges Impairment losses on loans and receivables Employee benefit expense Depreciation, amortisation and impairment expense 2.3 Operating overheads 2.3 Total overheads Operating finance costs 2.3 Profit before income tax Income tax expense 2.6(i) Profit for the year Other comprehensive income Item that may be reclassified to profit or loss Changes in the fair value of cash flow hedges Exchange differences on translation of foreign operations Other comprehensive income for the year, net of tax Total comprehensive income for the year Profit attributable to: Owners of Eclipx Group Limited Total comprehensive income for the year attributable to: Owners of Eclipx Group Limited Earnings per share Basic earnings per share 2.4 Diluted earnings per share 2.4	Consolidated 2017 $'000 2016 $'000 604,517 504,837 (276,973) (241,537) (67,993) (65,097)
	259,551 198,203 (4,295) (1,989) (96,883) (71,835) (12,372) (8,526) (60,935) (41,259)
	(170,190) (121,620) (9,192) (9,828)
	75,874 64,766 (21,664) (18,898)
	54,210 45,868 7,225 (643) (5,089) 5,290
	2,136 4,647
	56,346 50,515
	54,210 45,868
	- - 56,346 50,515
	Cents Cents 20.31 18.88 19.79 18.55

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Eclipx Group Limited Statement of Financial Position As at 30 September 2017

Note ASSETS Cash and cash equivalents 4.3 Restricted cash and cash equivalents 4.3 Trade receivables and other assets 3.3 Inventory Finance leases 3.2 Operating leases reported as property, plant and equipment 3.1 Deferred tax assets 2.6(ii) Property, plant and equipment 3.1 Intangibles 3.5 Total assets LIABILITIES Trade and other liabilities 3.4 Provisions Derivative financial instruments 4.4 Other Deferred tax liabilities 2.6(ii) Borrowings 4.1 Total liabilities Net assets EQUITY Contributed equity 4.5 Reserves 6.1 Retained earnings Total equity	Consolidated 2017 $'000 2016 $'000 59,078 60,922 136,157 117,376 138,533 95,321 25,171 20,532 444,544 349,139 1,051,848 999,251 2,671 9,519 14,304 11,050 806,609 597,369
	2,678,915 2,260,479
	123,591 128,719 19,879 7,205 9,715 20,700 2,784 1,744 49,276 28,257 1,610,407 1,415,039
	1,815,652 1,601,664
	863,263 658,815
	635,246 455,484 12,357 3,470 215,660 199,861
	863,263 658,815

The presentation format of the Consolidated Statement of Financial Position has been changed from a current/non-current basis to order of liquidity. See Note 1 for additional disclosures.

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Eclipx Group Limited

Statement of Changes in Equity For the year ended 30 September 2017

Consolidated Note Balance at 1 October 2015 Profit for the year Cash flow hedges Foreign currency translation Total comprehensive income for the year Issue of new shares and rights for acquisition of Right2Drive Pty Ltd Transactions with owners in their capacity as owners: Employee share schemes 5.1 Movement in treasury reserve Issue of shares under the Dividend Reinvestment Plan 4.5 Dividends paid 4.8 Balance at 30 September 2016 Balance at 1 October 2016 Profit for the year Cash flow hedges Foreign currency translation Total comprehensive income for the year Issue of new shares for the acquisition of Grays eCommerce Group Ltd 2.5 Transactions with owners in their capacity as owners: Employee share schemes 5.1 Movement in treasury reserve Issue of shares under the Dividend Reinvestment Plan 4.5 Issue of shares on exercise of options 4.5 Dividends paid 4.8 Balance at 30 September 2017*	Attributable to owners of Eclipx Group Limited
	Contributed equity $'000 Reserves $'000 Retained earnings $'000 Total equity $'000 375,005 (8,776) 185,893 552,122
	- - 45,868 45,868 - (643) - (643) - 5,290 - 5,290
	- 4,647 45,868 50,515
	73,819 3,708 - 77,527 - 2,860 - 2,860 - 1,031 - 1,031 6,660 - - 6,660 - - (31,900) (31,900)
	455,484 3,470 199,861 658,815
	455,484 3,470 199,861 658,815
	- - 54,210 54,210 - 7,225 - 7,225 - (5,089) - (5,089)
	- 2,136 54,210 56,346
	170,906 - - 170,906 - 4,462 - 4,462 - 2,289 - 2,289 8,591 - - 8,591 265 - - 265 - - (38,411) (38,411)
	635,246 12,357 215,660 863,263

The issuance of shares under the Dividend Reinvestment Plan included the issuing of 1,084,412 shares on 29 January 2016 and 958,099 ordinary shares on 30 June 2016.

** The issuance of shares under the Dividend Reinvestment Plan included the issuing of 816,908 shares on 20 January 2017 and 1,511,759 ordinary shares on 7 July 2017.

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Eclipx Group Limited Statement of Cash Flows For the year ended 30 September 2017

Note Cash flows from operations Receipts from customers Payments to suppliers and employees Income tax paid Interest received Interest paid Net cash inflow from operating activities 6.6 Cash flows from investing activities Purchase of items reported under operating leases 3.1 Purchase of items reported under finance leases Purchase of property, plant and equipment and intangibles Payment for acquisitions (net of cash acquired) (Note 2.5) Proceeds from sales of items reported under operating leases Net cash outflow from investing activities Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Dividends paid Proceeds from settlement of long term incentive plans Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year, net of overdraft Exchange rate variations on New Zealand cash and cash equivalent balances Cash and cash equivalents at end of the year, net of overdraft 4.3	Consolidated 2017 $'000 2016 $'000 872,124 744,193 (418,230) (303,479)
	453,894 440,714 (8,861) (8,125) 2,199 2,561 (65,099) (64,633)
	382,133 370,517
	(444,329) (431,452) (226,350) (221,435) (17,436) (10,174) (13,857) (388) 172,136 159,487
	(529,836) (503,962)
	858,222 811,156 (664,443) (640,721) (29,820) (25,240) 2,194 -
	166,153 145,195
	18,450 11,750 178,298 164,565 (1,513) 1,983
	195,235 178,298

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017

1.0 INTRODUCTION TO THE REPORT

Statement of compliance

These general purpose Financial Statements of the consolidated results of Eclipx Group Limited (ACN 131 557 901) have been prepared in accordance with the Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).

The financial report was authorised for issue by the Board of Directors on 7 November 2017.

Basis of preparation

These Financial Statements have been prepared under the historical cost convention, except for the financial assets and liabilities (including derivative instruments) at fair value through profit or loss and certain classes of property, plant and equipment.

Rounding of amounts

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the Financial Statements. Amounts in the Financial Statements have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

Critical accounting estimates and assumptions

The preparation of Financial Statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

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Accounting estimates and judgements Note Page
Impairment of goodwill 3.5 62
Taxation 2.6 55
Leased property 3.1 57
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Significant accounting policies

The significant accounting policies adopted in the preparation of the financial report are set out below. Other significant accounting policies are contained in the notes to the financial report to which they relate. The financial statements are for the Group consisting of Eclipx Group Limited (Company) and its controlled entities.

(i) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all controlled entities of Eclipx Group Limited as at 30 September 2017 and the results of all controlled entities for the year ended. Eclipx Group Limited and its controlled entities together are referred to in this financial report as the Group or the consolidated entity.

The Company controls an entity if it is exposed, or has rights, to variable returns from its involvement with the controlled entity and has the ability to affect those returns through its power over the controlled entity. All controlled entities have a reporting date of 30 September.

Profit or loss and other comprehensive income of controlled entities acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. In preparing the financial report, all intercompany balances, transactions and unrealised profits arising within the consolidated entity are eliminated in full.

(ii) Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in Australian dollars (AUD), which is also the functional currency of the Company.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

1.0 INTRODUCTION TO THE REPORT (continued)

Significant accounting policies (continued)

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement of monetary items at year end exchange rates are recognised in profit or loss.

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the date of transaction), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Foreign operations

In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than AUD are translated into AUD upon consolidation. The functional currency of the entities in the Group has remained unchanged during the reporting period.

On consolidation, assets and liabilities have been translated into AUD at the closing rate at the reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into AUD at the closing rate. Income and expenses have been translated into AUD at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the cumulative translation differences recognised in equity are reclassified to profit or loss and recognised as part of the gain or loss on disposal.

Changes in accounting policies

Except for the changes below, the Group has consistently applied the accounting policies set out in the notes to the financial statements to all periods presented in these consolidated financial statements.

(i) AASB 101 Presentation of Financial Statements

During 2017, management have elected to disclose the Statement of Financial Position in order of Liquidity in accordance with paragraph 60 of Accounting Standards AASB 101 Presentation of Financial Statements . Previously, the Statement of Financial Position was prepared on a current/non-current basis.

The Directors believe the presentation of the Statement of Financial Position in order of liquidity provides information that is more reliable and is consistent with the manner in which the broader financial services industry reports. As a consequence, the comparative period (2016) has been represented to be consistent with the current year order of liquidity.

New and revised standards and interpretations adopted by the Group

The Group has adopted, for the first time, certain standards that made changes to a number of existing Australian Accounting Standards and they have not had any material effect on the Group’s financial position or performance. These standards have been set out below.

AASB 2015-2: Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 101 AASB 2014-4: Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of Depreciation and Amortisation

AASB 2015-1: Amendments to Australian Accounting Standards - Annual improvements to Australian Accounting Standards 2012-2014 Cycle

New and revised standards and interpretations not yet adopted by the Group

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 September 2017 and are set out below.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

1.0 INTRODUCTION TO THE REPORT (continued)

New and revised standards and interpretations not yet adopted by the Group (continued)

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Reference Description Application ofStandard Application byGroup
Amendments to Australian Accounting Standards – Recognition of
Deferred Tax Assets for Unrealised Losses. Amends AASB 112
AASB 2016-1 Income Taxes to clarify when deductible temporary differences arise, 1 January 1 October
estimation of probable future taxable profits and where an entity would 2017 2017
assess a deferred tax asset in combination with other deferred tax
assets of the same type.
Amendments to Australian Accounting Standards – Disclosure
Initiative: Amendments to AASB 107 Statement of Cash Flows to
require entities preparing financial statements in accordance with Tier 1 January 1 October
AASB 2016-2 1 reporting requirements to provide disclosures that enable users of 2017 2017
financial statements to evaluate changes in liabilities arising from
financing activities, including both changes arising from cash flows
and non-cash changes.
AASB 9 Financial Instruments will replace AASB 139 Financial
Instruments: Recognition and Measurement. The new standard results
in changes to accounting policies for financial assets and financial
liabilities covering classification and measurement, impairment and
hedge accounting. For impairments AASB 9 replaces the incurred loss
model of AASB 139 with an expected loss model, resulting in an
acceleration of impairment recognition. Hedge accounting under
AASB 9 is more closely aligned with financial risk management, and
AASB 9
Financial may be applied to a greater variety of hedging instruments and risks. 1 January 1 October
AASB 9 is effective for the Group for the annual periods beginning 1 2018 2018
Instruments
October 2018. The Group is expected to apply the standard
retrospectively, recognising the cumulative effect of initially applying
the standard as an adjustment to the opening balance of retained
earnings. The implementation of the new standard will result in an
increase in the impairments held against trade receivables. The Group
is in the process of assessing the impact on impairments as a result of
AASB 9 and is not yet able to quantify the impact on its financial
statements.
AASB 15 Revenue from Contracts with Customers replaces all current
guidance on revenue recognition from contracts with customers. It
requires identification of performance obligations within a transaction
and an associated transaction price allocation to these obligations.
Revenue is recognised upon satisfaction of these performance
obligations, which occur when control of the goods or services are
transferred to the customer. Revenue received for a contract that
AASB 15 includes a variable amount is subject to revised conditions for
Revenue from recognition, whereby it must be highly probable that no significant 1 January 1 October
Contracts with reversal of the variable component may occur when the uncertainties 2018 2018
Customers around its measurement are removed. The Group will first apply AASB
15 in the financial year beginning 1 October 2018 and is expected to
apply the standard retrospectively, recognising the cumulative effect of
initially applying the standard as an adjustment to the opening balance
of retained earnings. The adoption of AASB 15 by the Group will result
in a change in the recognition of certain revenue streams from upfront
to over time. The Group is in the process of estimating the impact of
these revenue streams on its financial statements.
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Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

1.0 INTRODUCTION TO THE REPORT (continued)

New and revised standards and interpretations not yet adopted by the Group (continued)

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Reference Description Application ofStandard Application byGroup
AASB 16 Leases replaces the current AASB 117 Leases standard and
sets out a comprehensive model for identifying lease arrangements
and the subsequent measurement. A contract contains a lease if it
conveys the right to control the use of an identified asset for a period
of time. The majority of leases from the lessee perspective within the
scope of AASB 16 will require the recognition of a ‘right-of-use’ asset
and a related lease liability, being the present value of future lease
payments. This will result in an increase in the recognised assets and
liabilities in the statement of financial position as well as a change in
expense recognition, with interest and depreciation replacing
AASB 16 1 January 1 October
Leases operating lease expense. Accounting for leases from the Group's 2019 2019
perspective as lessor remains unchanged under AASB 16. AASB 16
is effective for the Group for the annual periods beginning 1 October
2019 with the option to early adopt in the financial year beginning 1
October 2018. The Group is expected to apply the standard
retrospectively, recognising the cumulative effect of initially applying
the standard as an adjustment to the opening balance of retained
earnings. The adoption of AASB 16 by the Group will result in the
Group recognising assets and liabilities for its operating leases over
premises and equipment as well as recognition of interest and
depreciation replacing operating lease expense.
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Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0 BUSINESS RESULT FOR THE YEAR

This section provides the information that is most relevant to understanding the financial performance of the Group during the financial year and, where relevant, the accounting policies applied and the critical judgements and estimates made.

2.1 Segment information
2.2 Revenue
2.3 Expenses
2.4 Earnings per share
2.5 Business combinations
2.6 Taxation

2.1 Segment information

Identification of reportable segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenue and incur expenses, whose operating results are reviewed regularly by the Group's Chief Operating Decision Maker in order to effectively allocate Group resources and assess performance.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Chief Operating Decision Makers to make strategic decisions. The Chief Operating Decision Makers are the Chief Executive Officer and the Deputy Chief Executive Officer.

Three reportable segments have been identified: Australia Commercial, Australia Consumer and New Zealand Commercial. The segments are based on the class of customer to which services are provided. Included in all segments are services related to the provision of lease finance and fleet management to customers. Australia Commercial includes auctioneering services and Australia Consumer includes the credit hire business.

In addition to statutory profit after tax, the business is assessed on a Cash Net Profit After Tax (Cash NPATA) basis. Whilst a non-IFRS measure, Cash NPATA is defined as statutory profit after tax, adjusted for the after tax effect of material one-off items that do not reflect the ongoing operations of the Group and amortisation of intangible assets. Each of these operating segments is managed separately as each of these service lines requires different resources as well as marketing approaches.

2017

Net operating income before operating expenses and impairment charges Depreciation and amortisation of non-financial assets Bad and doubtful debts Operating expenses Profit before tax, non-recurring costs and interest Holding company debt interest Adjustments Tax Statutory net profit after tax Intangibles amortisation including tax impact One-off costs including tax impact Cash net profit after tax*	Australia Commercial $'000 Australia Consumer $'000 Australia Total $'000 New Zealand Commercial $'000 Total $'000 139,053 80,276 219,329 40,222 259,551 (2,504) (1,415) (3,919) (449) (4,368) (3,095) (705) (3,800) (495) (4,295) (69,616) (53,931) (123,547) (22,244) (145,791)
	63,838 24,225 88,063 17,034 105,097 (5,791) (1,563) (7,354) (1,838) (9,192) (16,458) (2,973) (19,431) (600) (20,031) (11,707) (5,932) (17,639) (4,025) (21,664)
	29,882 13,757 43,639 10,571 54,210 3,312 1,898 5,210 432 5,642 8,209 215 8,424 - 8,424
	41,403 15,870 57,273 11,003 68,276

Adjustments relate to acquisition related costs ($8,632,000), amortisation of intangible assets ($8,004,000) and restructuring costs ($3,395,000).

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.1 Segment information (continued)

2016

Net operating income before operating expenses and impairment charges Depreciation and amortisation of non-financial assets Bad and doubtful debts Operating expenses Profit before tax, non-recurring costs and interest Holding company debt interest Adjustments Tax Statutory net profit after tax Intangibles amortisation including tax impact Restructure and acquisition costs including tax impact Cash net profit after tax*	Australia Commercial $'000 Australia Consumer $'000 Australia Total $'000 New Zealand Commercial $'000 Total $'000 113,885 45,052 158,937 39,266 198,203 (1,663) (568) (2,231) (336) (2,567) (1,531) - (1,531) (458) (1,989) (54,870) (30,874) (85,744) (22,289) (108,033)
	55,821 13,610 69,431 16,183 85,614 (3,828) (1,216) (5,044) (2,295) (7,339) (7,606) (5,450) (13,056) (453) (13,509) (13,099) (2,083) (15,182) (3,716) (18,898)
	31,288 4,861 36,149 9,719 45,868 2,651 1,313 3,964 214 4,178 2,669 2,502 5,171 113 5,284
	36,608 8,676 45,284 10,046 55,330

Adjustments relate to acquisition related costs, corporate debt restructuring costs, amortisation of intangibles and other restructuring costs.

2.2 Revenue

Recognition and measurement

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

Finance income

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Operating lease rentals

Rental revenue arising from operating lease contracts is brought to account in the period it is earned. The operating lease rentals are recognised on a straight line basis over the lease term. The instalments are classified and presented in finance income and operating lease rentals.

Maintenance and management income

Maintenance income is recognised over the life of the contract with reference to the stage of completion. Management income and management fees are recognised on a straight line basis over the term of the contract.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.2 Revenue (continued)

Sale of goods

Sale of goods revenue is recognised when there is persuasive evidence that the goods have passed to the consumer. Evidence is usually in the form of a delivery docket issued at the time of the delivery of goods to the customer. The delivery of goods docket indicates that there has been a transfer of the risk and rewards of ownership. Amounts disclosed as revenue are net of sales returns and trade discounts.

Auction commission

Commissions including handling, buyers' premiums and valuation fees are recognised once the auction or valuation has been completed.

Recovery of expenses

Recovery of expenses are recognised, to the extent that they are recoverable once the auction or valuation has been completed.

Brokerage, commissions and advice services income

Income is recognised when the relevant services have been provided and a reliable estimate of the income can be made.

End of lease income

End of lease income includes profits on the sale of vehicles from terminated lease contracts and other revenue generated at the end of a lease.

Rental hire income

Rental hire income is brought to account in the period it is earned.

Cost of revenue

Cost of revenue comprises the cost associated with providing the service components of the lease instalments and rental hire income. Cost of revenue is recognised for each reporting period by reference to the stage of completion when the outcome of the services contracts can be estimated reliably. The stage of completion of services contracts is based on the proportion that costs incurred to date bear to total estimated costs. Rental hire expense includes amounts paid to third parties for vehicles under operating leases.

Revenue from continuing operations: Finance income Maintenance and management income Sale of goods Recovery of expenses Auction commissions Related products and services income Operating lease rentals Brokerage income Sundry income End of lease income Rental hire income Total revenue from continuing operations Cost of revenue: Maintenance and management expense Related products and services expense Recoverable expenses Changes in inventories of finished goods and work Impairment on operating leased assets Depreciation on operating leased assets Rental hire expense Total cost of revenue	Consolidated 2017 $'000 2016 $'000 104,880 101,642 102,501 97,484 3,938 - 2,952 - 13,127 - 33,387 30,011 204,196 200,461 18,051 16,695 8,916 7,672 36,093 31,876 76,476 18,996
	604,517 504,837
	39,430 41,629 5,234 4,797 3,293 - 2,603 - 309 (118) 204,190 189,413 21,914 5,816
	276,973 241,537

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.3 Expenses

Recognition and measurement

Depreciation

Depreciation on assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

Motor vehicles 2-10 years;
Furniture and fittings 3-10 years; and
Plant and equipment 3-10 years.

Interest expense

Interest expense is recognised in the statement of profit or loss and other comprehensive Income using the effective interest method.

Amortisation

Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised include external direct costs of materials and service and direct payroll and payroll related costs of employees' time spent on the project. Amortisation is calculated on a straight line basis over periods generally ranging from three to five years for non-core costs, and seven to ten years for core system software costs.

Profit before income tax includes the following specific expenses: aaa Depreciation and amortisation Plant and equipment - fixture and fittings Amortisation - Intangible assets Software Total depreciation and amortisation expense Lease finance costs Interest and finance charges - Third parties Hedge (gain)/loss Total lease finance costs Operating finance costs Facility finance costs Total operating finance costs Operating overheads Rental of premises Technology costs Restructuring costs Acquisition related costs Other overheads Total operating overheads	Consolidated 2017 $'000 2016 $'000 4,368 2,567 4,830 3,711 3,174 2,248
	12,372 8,526
	68,424 64,633 (431) 464
	67,993 65,097
	9,192 9,828
	9,192 9,828
	10,199 6,668 9,956 7,301 3,395 1,760 5,517 3,301 31,868 22,229
	60,935 41,259

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.4 Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of fully paid ordinary shares outstanding during the financial year and excluding treasury shares.

From continuing operations attributable to the ordinary equity holders of the Company Total basic earnings per share attributable to the ordinary equity holders of the company	Consolidated 2017 Cents 2016 Cents 20.31 18.88
	20.31 18.88

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

From continuing operations attributable to the ordinary equity holders of the company Total diluted earnings per share attributable to the ordinary equity holders of the company Reconciliation of earnings used in calculating earnings per share Basic earnings per share Profit attributable to the ordinary equity holders of the company used in calculating basic earnings per share: From continuing operations Diluted earnings per share Profit attributable to the ordinary equity holders of the company used in calculating diluted earnings per share From continuing operations Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Weighted average number of ordinary shares used as the denominator in calculating diluted earnings per share	Consolidated 2017 Cents 2016 Cents 19.79 18.55
	19.79 18.55
	Consolidated 2017 $'000 2016 $'000 54,210 45,868
	54,210 45,868
	54,210 45,868
	54,210 45,868
	Consolidated 2017 Number 2016 Number 266,879,322 242,954,968
	273,993,890 247,295,831

Reconciliation of earnings used in calculating earnings per share

Weighted average number of shares used as the denominator

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.5 Business combinations

Recognition and measurement

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a controlled entity comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the controlled entity. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interests in the acquiree either at fair value or at the non-controlling interests' proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred and the amount of any non-controlling interests in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the controlled entity acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent and deferred consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

Summary of acquisition - Grays eCommerce Group Limited

On 11 August 2017, the Group completed the 100% acquisition of Grays eCommerce Group Limited (Grays) that consisted of the following entities: GEG No 1 Pty Ltd, Grays (Aust) holdings Pty Ltd, GEG No 3 Pty Ltd, GEG No 2 Pty Ltd, Grays (NSW) Pty Ltd, Graysonline (SA) Pty Ltd, Grays (VIC) Pty Ltd, GLC Fine Wines & Liquor, Grays Auctions Ltd (NZ), Grays Eisdell Timms (WA) Pty Ltd, Grays Eisdell Timms (QLD) Pty Ltd, CM Pty Ltd and GEM Trust. Grays’ principal activity is the provision of online auctioneering and valuation services in the B2B sector together with online auctioneering and other online retail services in the B2C sector. Grays was acquired to diversify earnings from an organisation that would integrate vertically and allow the Group to cross sell current and future offerings.

The Group acquired all the share capital of Grays for an initial consideration of $170,906,000 settled by the issue of 47,081,636 Eclipx ordinary shares to the existing shareholders of Grays.

Provisional goodwill of $161,561,000 is primarily related to growth expectations, monetisation of certain consumer segments and a significant reduction in corporate overheads by leveraging Eclipx infrastructure. The goodwill that arose from this business combination is not expected to be deductible for tax purposes.

The purchase price allocation is provisional and may be revised within 12 months of acquisition date.

Grays recorded revenue of $20,161,000 and a profit before tax of $1,724,000 for the period from 11 August 2017 to 30 September 2017. If Grays had been acquired on 1 October 2016, revenue of the Group for the year would have increased by $117,046,000, and profit before tax for the year would have increased by $1,814,000.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.5 Business combinations (continued)

Summary of acquisition - Onyx

On 18 November 2016, the Group acquired 100% of Anrace Pty Ltd trading as Onyx Car Rentals (Onyx). Onyx's principal activity is the provision of accident replacement vehicles and was acquired to accelerate the expansion of our accident replacement business in the Victorian medium term vehicle rental market.

The Group acquired all the share capital of Onyx for consideration of $9,515,000 which was settled with available cash (inclusive of a deferred amount of $515,000 held in escrow).

Provisional goodwill of $9,241,000 is primarily related to growth expectations, expected future profitability and the expertise of Onyx's workforce. The goodwill that arose from this business combination is not expected to be deductible for tax purposes.

The purchase price allocation is provisional and may be revised within 12 months of acquisition date.

Onyx recorded revenue of $9,487,000 and a profit before tax of $2,376,000 for the period from 18 November 2016 to 30 September 2017. If Onyx had been acquired on 1 October 2016, revenue of the Group for the year would have increased by $886,000 and profit before tax for the year would have increased by $392,000.

The following tables summarise the consideration paid, the fair values of assets acquired and liabilities assumed at the acquisition date.

Purchase consideration Cash paid Deferred consideration Issue of shares in Eclipx Group Limited Total Acquisition-related costs are not included as part of consideration transferred and have been recognised as an expense in the consolidated statement of profit or loss and other comprehensive income, as part of other expenses. The expense recognised during the period is: Fair values of assets acquired and liabilities assumed: Cash and cash equivalents Trade and other receivables Inventory Property, plant and equipment Intangible asset - Brand name Intangible asset - Software Intangible asset - Customer relationships Trade and other liabilities Borrowings Provisions Deferred tax liabilities Total identifiable net assets Provisional goodwill on acquisition Purchase consideration	Grays 2017 $'000 Onyx 2017 $'000 - 9,000 - 515 170,906 -
	170,906 9,515
	8,287 345
	Grays Onyx Provisional Fair value $'000 Provisional Fair value $'000 (4,770) 428 11,242 1,216 2,107 - 831 4,540 18,931 1,167 11,630 - 2,865 - (16,574) (1,093) (3,568) (5,316) (11,514) (318) (1,835) (350) 9,345 274 161,561 9,241 170,906 9,515

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.5 Business combinations (continued)

Purchase consideration - cash (outflow)/inflow Cash consideration Deferred consideration* Less: Balances acquired (Outflow)/inflow of cash - Investing activities	Grays $'000 Onyx $'000 - (9,000) - (515) (4,770) 428
	(4,770) (9,087)

*Deferred consideration on the Onyx acquisition represents amounts paid on acquisition being held in escrow which is expected to be released to the vendor within the next 12 months.

2.6 Taxation

Recognition and measurement

Current tax

Current tax assets and liabilities are measured at the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is accounted for in respect of temporary differences arising from differences between the carrying amount of assets and liabilities and the corresponding tax base.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and tax offsets, to the extent that it is probable that sufficient future taxable profits will be available to utilise them.

However, deferred tax assets and liabilities are not recognised for:

taxable temporary differences that arise from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future; and
taxable temporary differences arising from goodwill.

Deferred tax assets and liabilities are measured at the tax rates and tax laws that are expected to apply the year when the asset is utilised or liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Income taxes relating to items recognised directly in equity are recognised directly in equity and not in the statement of profit or loss and other comprehensive income.

Offsetting deferred tax balances

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Tax consolidation legislation

Eclipx Group Limited and its wholly owned Australian controlled entities are part of a tax-consolidated group under Australian taxation law. Eclipx Group Limited is the head entity in the tax-consolidated group. Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Eclipx Group Limited and each of the entities in the tax-consolidated group have agreed to pay (or receive) a tax equivalent payment to (or from) the head entity, based on the current tax liability or current tax asset of the entity.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)] 2.6 Taxation (continued)

(i) Reconciliation of income tax expense

(i) Reconciliation of income tax expense
Profit from continuing operations before income tax expense Prima facie tax rate of 30.0% (2016 - 30.0%) New Zealand tax rate differentials Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Share based payments not deductible Contingent consideration Finance income on convertible notes Other Income tax expense Income tax expense comprises of: Current tax Deferred tax Income tax expense Effective tax rate	Consolidated 2017 $'000 2016 $'000 75,874 64,766
	22,762 19,430 (294) (327) 331 434 (674) (210) (610) (489) 149 60
	21,664 18,898
	8,600 15,391 13,064 3,507
	21,664 18,898
	54,210 45,868 28.6% 29.2%

										Deferred tax	liability	$'000	-	-	-	(43,837)	(39,465)	-	(20,621)	(103,923)	54,647	(49,276)
										Deferred tax	asset	$'000	891	596	2,758	50,336	-	2,737	-	57,318	(54,647)	2,671
										Closing	balance	$'000	891	596	2,758	6,499	(39,465)	2,737	(20,621)	(46,605)	-	(46,605)
								Acquired	through	business	combination	$'000	141	433	-	5,098	-	2,125	(9,982)	(2,185)	-	(2,185)
								Reclassification	between	current tax	payable	$'000	-	-	-	(5,506)	-	-	(4,871)	(10,377)	-	(10,377)
							Charged to	other	comprehensive	income and	equity	$'000	-	-	(2,241)	-	-	-	-	(2,241)	-	(2,241)
										Charged to	profit or loss	$'000	(1,407)	(16)	(930)	(8,066)	(9,343)	-	6,698	(13,064)	-	(13,064)
Eclipx Group Limited	Notes to the Financial Statements	For the year ended 30 September 2017	(continued)	2.0 BUSINESS RESULT FOR THE YEAR (continued)	2.6 Taxation (continued)	(ii) Movement of deferred tax				Opening	balance	2017 $'000	Doubtful debt provision 2,157	Deferred revenue 179	Hedging assets and liabilities 5,929	Accruals, employee provisions and other 14,973	Leasing adjustments (30,122)	Acquisition cost 612	Intangible assets (12,466)	(18,738)	Set off DTL against DTA -	Net tax assets/(liabilities) (18,738)

									Deferred tax	liability	$'000	-	-	-	(26,749)	(30,122)	-	(12,466)	(69,337)	41,080	(28,257)
									Deferred tax	asset	$'000	2,157	179	5,929	41,722	-	612	-	50,599	(41,080)	9,519
									Closing	balance	$'000	2,157	179	5,929	14,973	(30,122)	612	(12,466)	(18,738)	-	(18,738)
							Acquired	through	business	combination	$'000	636	-	-	437	-	-	(5,837)	(4,764)	-	(4,764)
							Reclassification	between	current tax	payable	$'000	-	-	-	(10,443)	10,443	-	-	-	-	-
						Charged to	other	comprehensive	income and	equity	$'000	-	-	268	-	-	-	-	268	-	268
									Charged to	profit or loss	$'000	746	40	114	(4,262)	(2,862)	612	2,105	(3,507)	-	(3,507)
Eclipx Group Limited	Notes to the Financial Statements	For the year ended 30 September 2017	(continued)	2.0 BUSINESS RESULT FOR THE YEAR (continued)	2.6 Taxation (continued)				Opening	balance	2016 $'000	Doubtful debt provision 775	Deferred revenue 139	Hedging assets and liabilities 5,547	Accruals, employee provisions and other 29,241	Leasing adjustments (37,703)	Acquisition cost -	Intangible assets (8,734)	(10,735)	Set off DTL against DTA -	Net tax assets/(liabilities) (10,735)

Notes to the Financial Statements For the year ended 30 September 2017

Eclipx Group Limited

(continued)

2.0[BUSINESS RESULT FOR THE YEAR (continued)]

2.6 Taxation (continued)

(iii) Franking credits

(iii) Franking credits
Franked dividends (Australia) Franking credits available for subsequent financial years based on a tax rate of 30%	Consolidated 2017 $'000 2016 $'000 (1,797) 9,144
	(1,797) 9,144

The decrease in franking credits in 2017 resulted from the utilisation of $16,462,000 franking credits for the payment of dividends to shareholders, which was greater than Australian tax amounts paid during the year. Eclipx paid a franking deficit tax of $1,800,000 on 31 October 2017 resulting in the franking credit balance no longer being in deficit at that date. The franking deficit tax paid will be utilised against future required tax payments for the Australian tax consolidated group.

Key estimate and judgement: Taxation

The Group is subject to income taxes in Australia and New Zealand. Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax based on estimates. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES

This section provides information relating to the operating assets and liabilities of the Group.

3.1 Property, plant and equipment

Recognition and measurement

Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the reporting period in which they are incurred.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the statement of profit or loss and other comprehensive income.

Leased property

Leased property is stated at cost less accumulated depreciation and impairment. Cost includes initial direct costs incurred in negotiating and arranging the operating lease contract. In the event that the settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value at the date of acquisition.

Depreciation is brought to account on leased property. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life (being the term of the related lease contract) to its estimated residual value. The assets’ residual values and useful lives are revised, and adjusted if appropriate, at the end of each reporting period.

Residual values are assessed for impairment and in the event of a shortfall, an impairment charge is recognised in the current period.

Consolidated 2016 Opening net book amount Acquired as part of business combinations Additions Transfers to inventory Impairment charge Depreciation charge Foreign exchange variation Closing net book amount 2016 Cost Accumulated depreciation and impairment Net book amount	Plant and equipment $'000 Fixture and fittings $'000 Motor vehicles and equipment $'000 Total $'000 4,328 5,637 919,811 929,776 512 139 - 651 1,717 1,240 431,452 434,409 - - (175,282) (175,282) - - 118 118 (1,574) (993) (189,413) (191,980) 14 30 12,565 12,609
	4,997 6,053 999,251 1,010,301
	13,093 10,188 1,487,900 1,511,181 (8,096) (4,135) (488,649) (500,880)
	4,997 6,053 999,251 1,010,301

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.1 Property, plant and equipment (continued)

Consolidated Plant and equipment $'000 Fixture and fittings $'000 Motor vehicles and equipment $'000 Total $'000 2017 Opening net book amount 4,997 6,053 999,251 1,010,301 Acquired as part of business combinations (note 2.5) 4,684 687 - 5,371 Additions 1,326 947 444,329 446,602 Transfers to inventory - - (176,560) (176,560) Impairment charge - - (309) (309) Depreciation charge (2,819) (1,549) (204,190) (208,558) Foreign exchange variation (4) (18) (10,673) (10,695) Closing net book amount 8,184 6,120 1,051,848 1,066,152 2017 Cost 19,011 11,747 1,741,071 1,771,829 Accumulated depreciation and impairment (10,827) (5,627) (689,223) (705,677) Net book amount 8,184 6,120 1,051,848 1,066,152 Consolidated 2017 $'000 2016 $'000 Motor vehicle and equipment operating leases reported as property, plant and equipment Operating leases terminating within 12 months 246,408 212,268 Operating leases terminating after more than 12 months 805,440 786,983 1,051,848 999,251 Net book amount of property, plant and equipment Plant and equipment 8,184 4,997 Fixture and fittings 6,120 6,053 14,304 11,050 Total property, plant and equipment 1,066,152 1,010,301	Plant and equipment $'000 Fixture and fittings $'000 Motor vehicles and equipment $'000 Total $'000 4,997 6,053 999,251 1,010,301 4,684 687 - 5,371 1,326 947 444,329 446,602 - - (176,560) (176,560) - - (309) (309) (2,819) (1,549) (204,190) (208,558) (4) (18) (10,673) (10,695)	Plant and equipment $'000 Fixture and fittings $'000 Motor vehicles and equipment $'000 Total $'000 4,997 6,053 999,251 1,010,301 4,684 687 - 5,371 1,326 947 444,329 446,602 - - (176,560) (176,560) - - (309) (309) (2,819) (1,549) (204,190) (208,558) (4) (18) (10,673) (10,695)
	8,184 6,120 1,051,848 1,066,152
	19,011 11,747 1,741,071 1,771,829 (10,827) (5,627) (689,223) (705,677)
	8,184 6,120	1,051,848 1,066,152
		Consolidated 2017 $'000 2016 $'000 246,408 212,268 805,440 786,983
		1,051,848 999,251
		8,184 4,997 6,120 6,053
		14,304 11,050
		1,066,152 1,010,301

Key estimate and judgement: Leased property

The Group reviews the value of leased property at regular intervals. Determining the residual value and any fair value adjustment on leased motor vehicles requires the use of assumptions, including the future value of motor vehicles, economic and vehicle market conditions and dynamics.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.2 Finance leases

Recognition and measurement

Amounts due from lessees under finance leases are recorded as receivables. Finance lease receivables are initially recognised at amounts equal to the present value of the minimum lease payments receivable plus the present value of any guaranteed residual value expected to accrue at the end of the lease term. Finance lease payments are allocated between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Assets leased under finance leases are classified and presented as lease receivables.

Gross investment Unearned income Amount expected to be recovered within 12 months Amount expected to be recovered after more than 12 months	Consolidated 2017 $'000 2016 $'000 503,662 399,406 (59,118) (50,267)
	444,544 349,139
	139,291 104,645 305,253 244,494
	444,544 349,139

The future minimum lease payments under non-cancellable leases are disclosed in note 4.6(c).

3.3 Trade receivables and other assets

Recognition and measurement

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

The amount of the impairment loss is recognised in profit or loss within impairment losses on loans and receivables. When a trade receivable for which an impairment allowance had been recognised becomes uncollectable in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against impairment losses on loans and receivables in profit or loss.

Collectability of trade receivables is disclosed as part of credit risk. Refer to note 4.2.

Net trade receivables Trade receivables Provision for doubtful debts Sundry debtors Prepayments Other assets Current tax receivable Total trade receivables and other assets	Consolidated 2017 $'000 2016 $'000 98,708 57,335 (9,025) (5,242)
	89,683 52,093 24,635 17,005 21,329 17,720 34 34 2,852 8,469
	138,533 95,321

A significant portion of the above amounts are expected to be recovered within 12 months. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.3 Trade receivables and other assets (continued)

All of the Group's trade receivables and other assets have been reviewed for indicators of impairment. Certain trade receivables were found to be impaired and an allowance for credit losses of $9,025,357 (2016: $5,242,195) has been recorded accordingly.

Movements in the provision for impairment of receivables are as follows:

At 1 October Acquired as part of business combinations Provision for doubtful debts recognised/(released) during the year At 30 September	Consolidated 2017 $'000 2016 $'000 5,242 3,332 1,693 2,121 2,090 (211)
	9,025 5,242

The creation and release of the provision for impaired receivables has been included in the statement of profit or loss and other comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

3.4 Trade and other liabilities

Recognition and measurement

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid.

Trade payables Lease liability Accrued expenses Current tax liabilities Maintenance income received in advance Contingent and deferred consideration (a) Other payables Total trade and other liabilities	Consolidated 2017 $'000 2016 $'000 46,871 40,010 6,854 7,927 16,480 17,102 - 16,834 11,452 11,793 3,821 6,145 38,113 28,908
	123,591 128,719

Amount expected to be settled within 12 months Amount expected to be settled after more than 12 months Total trade and other liabilities	Consolidated 2017 $'000 2016 $'000 120,362 123,509 3,229 5,210
	123,591 128,719

(a) Under the terms of the sale agreement on the acquisition of FleetSmart during the year ended 30 September 2016, a further cash component of consideration may be payable over a period of eight years of up to $5,233,000, based on achievement of certain performance conditions. The contingent consideration was an estimate of the probable consideration that was to be paid as at the end of the reporting period. As at 30 September 2017, $2,512,000 of this balance remains as contingent. Deferred consideration of $793,000 (2016: $912,000) is recognised at 30 September 2017, payable over a remaining period of four years. The remaining balance of $515,500 relates to deferred consideration of the acquisition of Onyx (refer to note 2.5) which is expected to be released to the vendor within the next 12 months.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.5 Intangibles

Recognition and measurement

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets of the acquired controlled entities at the date of acquisition. Goodwill on acquisitions of controlled entities are included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to a cash-generating unit (CGU) for the purpose of impairment testing. The allocation is made to those CGU's that are expected to benefit from the business combination in which the goodwill arose.

Customer relationships and brand names

Other intangible assets include customer relationships and brand names acquired as part of business combinations and recognised separately from goodwill. Customer relationships are amortised over 10 years on a straight line basis. Brand names are amortised over 20 years on a straight line basis.

Software

Software costs include only those costs directly attributable to the development phase and are only recognised following completion of technical feasibility and where the Group has an intention and ability to use the asset.

2016 Opening net book amount Acquired as part of business combination (note 2.5) Additions Amortisation charge Foreign exchange variation Closing net book amount 2016 Cost Accumulated amortisation and impairment Net book amount	Brand names $'000 Customer relationships $'000 Software $'000 Goodwill $'000 Total $'000 4,132 25,848 8,792 466,012 504,784 14,373 5,083 - 62,828 82,284 34 - 11,487 - 11,521 (457) (3,254) (2,248) - (5,959) 3 256 46 4,434 4,739
	18,085 27,933 18,077 533,274 597,369
	18,751 34,681 28,377 533,274 615,083 (666) (6,748) (10,300) - (17,714)
	18,085 27,933 18,077 533,274 597,369

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.5 Intangibles (continued)

2017 Opening net book amount Acquired as part of business combination (note 2.5) Additions Amortisation charge Foreign exchange variation Closing net book amount 2017 Cost Accumulated amortisation and impairment Net book amount	Brand Names $'000 Customer relationships $'000 Software $'000 Goodwill $'000 Total $'000 18,085 27,933 18,077 533,274 597,369 20,098 2,865 11,630 170,802 205,395 - - 15,164 - 15,164 (1,172) (3,658) (3,174) - (8,004) (2) (19) (220) (3,074) (3,315)
	37,009 27,121 41,477 701,002 806,609
	38,847 37,520 54,847 701,002 832,222 (1,838) (10,399) (13,370) - (25,613)
	37,009 27,121 41,477 701,002 806,609

(i) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

For the purpose of annual impairment testing, goodwill is allocated to the following CGUs, which are the units expected to benefit from the synergies of the business combinations in which the goodwill arises.

Australia Commercial Australia Consumer New Zealand Commercial Unallocated Goodwill allocation at 30 September	Consolidated 2017 $'000 2016 $'000 280,780 280,780 145,871 136,567 112,790 115,927 161,561 -
	701,002 533,274

Unallocated goodwill relates to goodwill on the acquisition of Grays which has not been allocated to a CGU at 30 September 2017 as the final assessment of the benefits to the relevant CGU's was yet to be finalised.

Goodwill is reviewed on an annual basis or more frequently if events or changes in circumstances indicate a potential impairment. There is no impairment recognised in 2017 (2016: $nil). The impairment test is applied consistently for all CGUs that have goodwill allocated and is based on value in use. The value in use was determined by discounting future cash flows generated from the businesses. Cash flows were projected based on a three-year forecast prepared by management for the applicable CGU, with an extrapolation of expected cash flows for the units’ remaining useful lives using the growth rates determined by management.

Long term growth rate: Australia 2.00% (2016: 2.50%)
Long term growth rate: New Zealand 2.00% (2016: 3.00%)
Discount rates (post tax) 11.00% (2016: 11.00%)

Growth rates are reviewed on an annual basis and adjusted based on forecasted expectations of the industry performance, historical data and risks to these expectations. Long term growth rates are based on forecast economic data from the Reserve Bank Australia and the Reserve Bank New Zealand.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

3.0 OPERATING ASSETS AND LIABILITIES (continued)

3.5 Intangibles (continued)

The discount rate takes into consideration the capital and financing structure of the business going forward and adjusted to factor in the changes to the cash flow model which considers the net cash flows and the distribution of these cash flows to equity investors.

Key estimate and judgement: Impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT

This section provides information relating to the Group's capital structure and its exposure to financial risk, how they affect the Group's financial position and performance, and how the risks are managed. The capital structure of the Group consists of debt and equity.

4.1 Borrowings

Recognition and measurement

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of profit or loss and other comprehensive income over the period of the borrowings using the effective interest method. Fair value approximates carrying value in relation to borrowings.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

The secured borrowings may be drawn at any time and is subject to annual review. Subject to the continuance of satisfactory credit ratings, the borrowing facilities may be drawn at any time and have an average maturity of 16 months (2016: 12 months).

Bank loans Notes payable Borrowing costs Chattel mortgages Total secured borrowings Amount expected to be settled within 12 months Amount expected to be settled after more than 12 months Total secured borrowings	Consolidated 2017 $'000 2016 $'000 254,768 130,000 1,359,442 1,290,242 (7,704) (5,203) 3,901 -
	1,610,407 1,415,039
	337,410 303,713 1,272,997 1,111,326
	1,610,407 1,415,039

Bank loans

Bank loans are secured by fixed and floating charge over the assets of the Company and all wholly owned subsidiaries. The carrying amount of assets pledged as security was $237,085,000 (2016: $187,825,000).

Notes payable

Notes payable are secured by fixed and floating charge over the motor vehicles and equipment that are leased to customers. The carrying amount of assets pledged as security was $1,632,549,000 (2016: $1,465,766,000).

Financing arrangements

The Group had access to the following undrawn borrowing facilities at the end of the reporting period:

Loan facilities used at reporting date Loan facilities unused at reporting date Total loan facilities available	Consolidated 2017 $'000 2016 $'000 1,618,111 1,420,242 215,621 404,961
	1,833,732 1,825,203

Financial covenants

The Group has complied with financial covenants of its borrowing facilities during the 2017 and 2016 reporting periods.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management

This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance. Current year profit or loss information has been included where relevant to add further context.

Risk management

The Group's capital management objectives are to:

ensure the Group's ability to continue as a going concern; and
provide an adequate return to shareholders,

by pricing products and services commensurately with the level of risk.

The Group monitors capital on the basis of the carrying amount of equity plus its subordinated loan, less cash and cash equivalents as presented on the face of the statement of financial position and cash flow hedges recognised in other comprehensive income.

Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure whilst avoiding excessive leverage. This takes into account the subordination levels of the Group’s various classes of debt. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

a Net debt Total equity Capital-to-overall financing ratio	Consolidated 2017 $'000 2016 $'000 1,415,172 1,236,741 863,263 658,815
	61% 53%

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management (continued)

Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the New Zealand dollar.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The Group manages its exposures to the New Zealand dollar by ensuring that its assets and liabilities in New Zealand are predominantly in New Zealand dollars.

For sensitivity measurement purposes, a +/- 10% (2016:10%) sensitivity in foreign exchange rates to the Australian dollar has been selected as this is considered realistic given the current levels of exchange rates, the recent levels of volatility and market expectations for future movements in exchange rates. Based on the financial instruments held at 30 September 2017, had the Australian dollar weakened/strengthened by 10% (2016:10%) against the New Zealand dollar compared to year-end rates, with other variables held constant, the consolidated entity’s after-tax profits for the year and equity would have been $889,824 (2016: $1,159,074) higher/lower, as a result of exposure to exchange rate fluctuations of foreign currency operations. All foreign exchange risk is due to the translation of the New Zealand entities on consolidation.

(ii) Interest rate risk

(ii) *Interest rate risk*
	2017		2016
	Weighted		Weighted
	average		average
	interest rate	Balance	interest rate	Balance
	%	$'000	%	$'000
Borrowings	3.838%	1,610,407	4.011%	1,415,039
Interest rate swaps (notional principal amount)	2.665%	(1,514,210)	2.900%	(1,263,911)
Unhedged variable debt		96,197		151,128

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management (continued)

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date and assuming that the rate change occurs at the beginning of the financial year and is then held constant throughout the reporting period.

The selected basis points (bps) increase or decrease represents the Group’s assessment of the possible change in interest rates. A positive number indicates a before-tax increase in profit and equity and a negative number indicates a before-tax decrease in profit and equity.

Sensitivities have been based on an increase in interest rates by 100 bps (2016: 100 bps) and a decrease by 100 bps (2016: 100 bps) across the yield curve.

2017 Financial assets Cash and cash equivalents Finance leases - Fixed interest rate Total (decrease)/increase Financial liabilities Borrowings - Floating rate Trade and other liabilities Derivatives used for hedging Total increase/(decrease) 2016 Financial assets Cash and cash equivalents Finance leases - Fixed interest rate Total (decrease)/increase Financial liabilities Borrowings - Floating rate Trade and other liabilities Derivatives used for hedging Total increase/(decrease)	Interest rate risk Carrying amount $'000 -100 bps Profit/equity $'000 +100 bps Profit/equity $'000 195,235 (1,952) 1,952 444,544 - -
	639,779 (1,952) 1,952
	1,610,407 16,104 (16,104) 123,591 - - 9,715 (15,142) 15,142
	1,743,713 962 (962)
	Interest rate risk Carrying amount $'000 -100 bps Profit/ Equity $'000 +100 bps Profit/ Equity $'000 178,298 (1,783) 1,783 349,139 - -
	527,437 (1,783) 1,783
	1,415,039 14,150 (14,150) 128,719 - - 20,700 (12,639) 12,639
	1,564,458 1,511 (1,511)

Credit risk

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. For amounts due under leases, delinquency would be for amounts more than 30 days overdue. Receivables due under credit hire have different indicators for impairment due to the nature of the product. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management (continued)

The credit quality of financial assets is managed by the Group using internal indicators based on their current probability of default. These indicators are compared to market benchmarks to enable wider comparisons.

Finance leases are secured against individual assets. The carrying values of the assets held as security approximate the written down value of the finance leases.

written down value of the finance leases.
Unimpaired past due loans and receivables Past due under 30 days Unimpaired past due loans and receivables Past due 30 days to under 60 days Past due 60 days to under 90 days Past due 90 days and over Total unimpaired past due loans and receivables Total unimpaired loans and receivables Unimpaired past due as a percentage of total unimpaired loans and receivables Unimpaired past due 30 days and over as a percentage of total unimpaired loans and receivables	Consolidated 2017 $'000 2016 $'000 10,137 7,887 5,593 4,418 4,715 2,852 23,696 8,479
	44,141 23,636 89,683 52,093
	49% 45% 38% 30%

Trade receivables includes amounts associated with the credit hire business, Right2Drive and Onyx. The credit hire business looks to recover costs from the party at fault or their insurance company. The ageing of credit hire receivables would, by its nature, be materially higher than non-credit hire receivables. The period of ageing is not the main characteristic that defines an impairment for credit hire.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. To mitigate against liquidity risk, the Group maintains cash reserves and committed undrawn credit facilities to meet anticipated funding requirements for new business. In addition, the Group can redraw against its committed credit limits if the principal outstanding is reduced by the contractual amortisation payments. Details of unused available loan facilities are set out in note 4.1.

Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the Group’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Amounts due to funders are repaid directly by rental and repayments received from the Group’s customers.

The table below analyses the Group’s contractual financial liabilities into relevant maturity groupings. The amounts disclosed below are the contractual undiscounted cash flow. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. For interest rate swaps, the cash flows have been estimated using forward interest rates applicable at the end of the reporting period.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management (continued)

Contractual maturities of financial liabilities 2017 Non-derivatives Trade and other liabilities Borrowings Provisions Total non-derivatives Derivatives Interest rate swaps Total derivatives	Less than 1 year $'000 Between 1 and 2 years $'000 Between 2 and 5 years $'000 Over 5 years $'000 Total contractual cash flows $'000 Carrying amount $'000 (120,362) (940) (1,951) (338) (123,591) (123,591) (380,030) (362,596) (915,377) (60,836) (1,718,839) (1,610,407) (16,404) (3,475) - - (19,879) (19,879)
	(516,796) (367,011) (917,328) (61,174) (1,862,309) (1,753,877)
	(8,765) (1,798) 557 212 (9,794) (9,715)
	(8,765) (1,798) 557 212 (9,794) (9,715)

Contractual maturities of financial liabilities 2016 Non-derivatives Trade and other liabilities Borrowings Provisions Total non-derivatives Derivatives Interest rate swaps Total derivatives	Less than 1 year $'000 Between 1 and 2 years $'000 Between 2 and 5 years $'000 Over 5 years $'000 Total contractual cash flows $'000 Carrying amount $'000 (123,509) (1,890) (2,851) (469) (128,719) (128,719) (351,084) (345,897) (779,918) (62,782) (1,539,681) (1,415,039) (5,712) (1,493) - - (7,205) (7,205)
	(480,305) (349,280) (782,769) (63,251) (1,675,605) (1,550,963)
	(10,123) (6,563) (4,512) (255) (21,453) (20,700)
	(10,123) (6,563) (4,512) (255) (21,453) (20,700)

Fair value risk

This section explains the judgements and estimates made in determining the fair values of the assets and liabilities that are recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its assets and liabilities into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table.

2017 Financial liabilities Derivatives used for hedging Total financial liabilities 2016 Financial liabilities Derivatives used for hedging Total financial liabilities	Level 1 $'000 Level 2 $'000 Level 3 $'000 Total $'000 - 9,715 - 9,715
	- 9,715 - 9,715
	Level 1 $'000 Level 2 $'000 Level 3 $'000 Total $'000 - 20,700 - 20,700
	- 20,700 - 20,700

There were no transfers between levels for recurring fair value measurements during the year.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.2 Financial risk management (continued)

A description of the level in the hierarchy is as follows:

Level 2: The fair value of assets and liabilities that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an asset or liability are observable, these are included in level 2.

Valuation techniques used to determine fair values

The fair values of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves. The fair value of interest rates swaps are included in level 2. No other assets or liabilities held by the Group are measured at fair value.

4.3 Cash and cash equivalents

Recognition and measurement

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. Restricted cash, that represents cash held by the entity as required by funding arrangements, is disclosed separately on the statement of financial position and combined for the purpose of presentation in the statement of cash flows.

Unrestricted Operating accounts 1 Restricted Collections accounts Liquidity reserve accounts Vehicle servicing and maintenance reserve accounts Cash at bank and on hand Total as disclosed in the statement of cash flows	Consolidated 2017 $'000 2016 $'000 59,078 60,922
	59,078 60,922
	77,009 31,933 30,648 42,707 28,500 42,736
	136,157 117,376
	195,235 178,298

The weighted average interest rate received on cash and cash equivalents for the year was 0.76% (2016: 1.10%).

Liquidity reserve, maintenance reserve, vehicle servicing, collateral and customer collection accounts represent cash held by the entity as required under the funding arrangements and are not available as free cash for the purposes of operations of the Group until such time as the obligations of each trust are settled. Term deposit accounts are also not available as free cash for the period of the deposit.

4.4 Derivative financial instruments

Recognition and measurement

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges).

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.4 Derivative financial instruments (continued)

(i) Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within other income or other expense.

Amounts accumulated in equity are recycled in the statement of profit or loss and other comprehensive income in the periods when the hedged item will affect profit or loss (for instance, when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.

(ii) Derivatives that do not qualify for hedge accounting

Where a derivative instrument does not qualify for hedge accounting or hedge accounting has not been adopted, changes in the fair value of these derivative instruments are recognised immediately in the statement of profit or loss and other comprehensive income.

(iii) Derivatives

Derivatives are only used for economic hedging purposes (to hedge interest rate risk) and not as trading or speculative instruments. The Group has the following derivative financial instruments:

Interest rate swaps - cash flow hedges Total derivative financial instrument liabilities Amount expected to be settled within 12 months Amount expected to be settled after more than 12 months Total derivative financial instrument liabilities	Consolidated 2017 $'000 2016 $'000 9,715 20,700
	9,715 20,700
	8,843 10,643 872 10,057
	9,715 20,700

4.5 Contributed equity

Recognition and measurement

Ordinary fully paid shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Share capital Fully paid ordinary shares space Other equity securities Treasury shares Total issued equity	2017 Shares 2016 Shares 2017 $'000 2016 $'000 310,518,887 258,058,584 635,246 455,484
	3,475,000 6,425,000 - -
	313,993,887 264,483,584 635,246 455,484

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.5 Contributed equity (continued)

Movements in ordinary share capital

ements in ordinary share capital
Date Details 1 October 2015 Opening balance 29 January 2016 Issue of shares under the Dividend Reinvestment Plan - 2015 final dividend 19 May 2016 Issue of new shares for acquisition of Right2Drive Pty Ltd 30 June 2016 Issue of shares under the Dividend Reinvestment Plan - 2016 interim dividend 30 September 2016 Closing balance 20 January 2017 Issue of shares under the Dividend Reinvestment Plan - 2016 final dividend 22 April 2017 Loan shares vested 7 July 2017 Issue of shares under the Dividend Reinvestment Plan - 2017 interim dividend 11 August 2017 Issue of new shares for acquisition of Grays eCommerce Group 1 September 2017 Issue of shares on exercise of options 30 September 2017 Closing balance	Number of shares $'000 233,781,298 375,005 1,084,412 3,381 22,234,775 73,819 958,099 3,279
	258,058,584 455,484 816,908 3,129 2,950,000 - 1,511,759 5,462 47,081,636 170,906 100,000 265
	310,518,887 635,246

Treasury shares

Treasury shares are shares in Eclipx Group Limited that are held by Eclipx Group Limited Employee Share Trust or by staff under loans. These shares are issued under the Eclipx Group Limited Employee Share scheme and the executive LTI plan. The shares that have not been settled in cash are funded with a loan and are in substance an option and are reflected with zero value until such time that they are settled in cash so as to exercise the option.

value until such time that they are settled in cash so as to exercise the option.
Details Opening balance Loan shares vested Closing balance	Number of shares 2017 Number of shares 2016 6,425,000 6,425,000 (2,950,000) -
	3,475,000 6,425,000

4.6 Commitments

a. Telecommunication commitments

Telecommunication commitments contracted for at the end of the reporting period but not recognised as liabilities, are as follows:

Telecommunication commitments

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Consolidated
2017 2016
$'000 $'000
2,673 5,686
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Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.6 Commitments (continued)

b. Lease commitments: Group as lessee

i. Operating leases

The Group leases motor vehicles and commercial premises under non-cancellable operating leases expiring within the next five years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

Commitments in relation to leases contracted for at the end of each reporting period but not recognised as liabilities, are as follows:

Within one year Later than one year but not later than five years Later than five years	Consolidated 2017 $'000 2016 $'000 17,548 12,000 23,493 20,167 8,109 -
	49,150 32,167

ii. Finance leases

The Group leases fixed assets which lease expires within the next five years.

Commitments in relation to leases contracted for at the end of each reporting period and recognised as liabilities, are as follows:

Within one year Later than one year but not later than five years	Consolidated 2017 $'000 2016 $'000 920 607 1,864 1,137
	2,784 1,744

c. Lease commitments: Group as lessor

i. Finance leases

Future minimum lease payments due to the Group under non-cancellable leases, are as follows:

Commitments in relation to finance leases are receivable as follows: Within one year Later than one year but not later than five years Later than five years	Consolidated 2017 $'000 2016 $'000 162,525 123,624 340,364 275,660 773 122
	503,662 399,406

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.6 Commitments (continued)

c. Lease commitments: Group as lessor (continued)

ii. Operating leases

Minimum lease payments receivable on leases of motor vehicles are as follows:

*ii. Operating leases* Minimum lease payments receivable on leases of motor vehicles are as follows:
Minimum lease payments under non-cancellable operating leases of motor vehicles not recognised in financial statements are receivable as follows: Within one year Later than one year but not later than five years Later than five years	Consolidated 2017 $'000 2016 $'000 299,323 314,676 354,554 360,229 22,826 25,080
	676,703 699,985

d. Contractual commitments for the acquisition of property, plant or equipment

The Group had contractual commitments for the acquisition of property, plant or equipment totalling $50,739,551 (2016: $62,535,510). These commitments are not recognised as liabilities as the relevant assets have not yet been received.

4.7 Contingent liabilities

On the acquisition of Grays eCommerce Group Limited, the Group acquired a bank guarantee facility. As at 30 September 2017, $3,188,000 of the bank guarantee facility has been utilised with $1,812,000 of this facility remaining unused.

Bank guarantees	Consolidated 2017 $'000 2016 $'000 3,188 -

During the course of its business, Grays Group may issue to its customers guarantees relating to the future financial outcomes of auction sales events. Internal controls are in place to ensure that there are no potential future losses arising from these guarantees. At the end of the financial year, the maximium exposure is $5,000,000 of guarantee commitments of this nature on issue, all of which are expected to be settled within 12 months from balance date. The Group does not expect that any of these guarantees will result in losses.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

4.0 CAPITAL MANAGEMENT (continued)

4.8 Dividends

Recognition and measurement

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, before or at the end of the financial year but not distributed at balance date.

Details of dividends paid and proposed during the financial year are as follows:

Final dividends paid
2016 final dividend paid on 20 January 2017: 7.00 cents per ordinary share franked to
100% (2016: 6.50 cents)
Interim dividends paid
2017 interim dividend paid on 7 July 2017: 7.50 cents per ordinary share franked to 100%
(2016: 6.75 cents)
Total dividends paid
Spacing
Final dividends proposed but not recognised at year end
2017: 7.75 cents (2016: 7.00 cents) per ordinary share franked to 100%

Consolidated
2017
$'000
2016
$'000
18,514
15,613
19,897
16,287

38,411
31,900

24,335
18,514

On 07 November 2017, the Directors declared a fully franked final dividend for the year ended 30 September 2017 of 7.75 cents per ordinary shares, to be paid on 19 January 2018 to eligible shareholders on the register as at 29 December 2017. This equates to a total estimated distribution of $24,334,526 based on the number of ordinary shares on issues as at 30 September 2017. The final 2017 dividend has not been declared at the reporting date and therefore is not reflected in the financial statements,

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

5.0 EMPLOYEE REMUNERATION AND BENEFITS

Recognition and measurement

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Retirement benefit obligations

The Group makes payments to employees’ superannuation funds in line with the relevant superannuation legislation. Contributions made are recognised as expenses when they arise.

Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

Bonus plans

The Group recognises a liability and an expense for bonuses on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

5.1 Share based payments

Share based payments

Share based compensation benefits are provided to employees via the Eclipx Group LTI plan.

The fair value of options granted under the Eclipx Group LTI plan is recognised as an expense by the employing entity that receives the employee's services. with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options (vesting period).

The fair value at grant date is independently determined using a Binomial tree option pricing model and Monte-Carlo simulation pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The fair value of the options granted is then adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable. At the end of each reporting period, the Group revises its estimate of the number of options that are expected to become exercisable.

The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of profit or loss and other comprehensive income, with a corresponding adjustment to equity.

In the event a share scheme is cancelled, the remaining unexpensed fair value of the original grant for those options still vesting at the date of cancellation is taken as a charge to the statement of profit or loss and other comprehensive income.

Loan shares

Eclipx Group Limited issued shares to senior management employees of the Group with consideration satisfied by loans to the employees granted by Eclipx Group Limited. These arrangements are considered to be “in substance options” and treated as share-based payments. Whilst the above awards have been made by Eclipx Group Limited, the employees provide services to other entities within the Group, and therefore the associated expenses are borne by those entities that receive the relevant employees’ services.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

5.0 EMPLOYEE REMUNERATION AND BENEFITS (continued)

5.1 Share based payments (continued)

Options

Eclipx Group Limited issued options to key employees of the Group. Whilst the above awards have been made by Eclipx Group Limited, the employees provide services to other entities within the Group, and therefore the associated expenses are borne by those entities that receive the relevant employees’ services. Options do not carry a right to receive any dividends. If options vest and are exercised to receive shares, these shares will be eligible to receive any dividends.

Rights

Eclipx Group Limited issued rights to key employees of the Group. Whilst the above awards have been made by Eclipx Group Limited, the employees provide services to other entities within the Group, and therefore the associated expenses are borne by those entities that receive the relevant employees’ services. Rights do not carry a right to receive any dividends. If rights vest and are exercised to receive shares, these shares will be eligible to receive any dividends.

The loan shares, options and rights are subject to the same performance hurdles. Refer to remuneration report for details of these performance hurdles.

(i) Long Term Incentive Plan

For the year ended 30 September 2017, the following awards were provided under the following employee share ownership plans:

Options and rights

Each award is subject to testing against certain total shareholder return (TSR) and earnings per share (EPS) conditions on the third year anniversary of the grant.

			Vested option	not exercised	Number		787,500	129,744	10,612,972	281,356	2,900,000	-		787,500	129,744	11,190,775	450,000	-	-
	Unvested	balance at	end of the	year	Number		-	-	-	-	-	2,950,000		-	-	-	-	2,950,000	2,950,000
	Vested and	exercised	during the	year	Number		-	-	(577,803)	(168,644)	(50,000)	-		-	-	-	-	-	-
		Forfeited	during	the year	Number		-	-	-	-	-	-		-	-	-	-	(150,000)	(150,000)
							-	-	-	-	-	-		-	-	-	-	-	-
Loan shares	Weighted	Expected average Balance at Granted	Grant date vesting date Exercise price exercise price start of the year during the year		Number Number	2017	25-Sep-08 $0.90 $0.90 787,500	08-May-13 $2.03 $2.03 129,744	25-Sep-14 $1.47 - $1.65 $1.60 11,190,775	10-Mar-15 $2.30 $2.30 450,000	22-Apr-15 $2.30 $2.30 2,950,000	22-Apr-15 21-Apr-18 $2.30 $2.30 2,950,000	2016	25-Sep-08 $0.90 $0.90 787,500	08-May-13 $2.03 $2.03 129,744	25-Sep-14 $1.47 - $1.65 $1.60 11,190,775	10-Mar-15 $2.30 $2.30 450,000	22-Apr-15 21-Apr-17 $2.30 $2.30 3,100,000	22-Apr-15 21-Apr-18 $2.30 $2.30 3,100,000

	Vested option not exercised	Number		450,000	-	-	-	-	-	-		-	-	-	-	-
	Unvested balance at end of the year	Number		-	725,000	3,730,000	1,625,000	1,000,000	4,605,000	1,760,000		725,000	725,000	3,875,000	1,625,000	1,000,000
	Vested and exercised during the year	Number		(275,000)	-	-	-	-	-	-		-	-	-	-	-
	Forfeited during the year	Number		-	-	(145,000)	-	-	(140,000)	-		(75,000)	(75,000)	(150,000)	-	-
	Granted during the year	Number		-	-	-	-	-	4,745,000	1,760,000		-	-	4,025,000	1,625,000	1,000,000
	Balance at start of the year	Number		725,000	725,000	3,875,000	1,625,000	1,000,000	-	-		800,000	800,000	-	-	-
	Weighted average exercise price			$2.30	$2.30	$3.06	$3.06	$3.80	$3.60	$3.60		$2.30	$2.30	$3.06	$3.06	$3.80
	Exercise price			$2.30	$2.30	$3.06	$3.06	$3.80	$3.60	$3.60		$2.30	$2.30	$3.06	$3.06	$3.80
	Expected vesting date			21-Apr-17	21-Apr-18	30-Sep-18	30-Sep-18	30-Sep-19	30-Sep-19	30-Sep-19		21-Apr-17	21-Apr-18	30-Sep-18	30-Sep-18	30-Sep-19
Options	Grant date		2017	22-Apr-15	22-Apr-15	10-Nov-15	19-Feb-16	5-Sep-16	4-Nov-16	17-Feb-17	2016	22-Apr-15	22-Apr-15	10-Nov-15	19-Feb-16	5-Sep-16

	Unvested balance at end of the year	Unvested balance at end of the year	Unvested balance at end of the year	Number		865,000	400,000	489,000	286,000		935,000	400,000
	Forfeited	during the	year	Number		(70,000)	-	-	-		(35,000)	-
	Granted	during the	year	Number		-	-	489,000	286,000		970,000	400,000
	Balance at	start of the	year	Number		935,000	400,000	-	-		-	-
	Expected vesting date					30-Sep-18	30-Sep-18	30-Sep-19	30-Sep-19		30-Sep-18	30-Sep-18
Rights		Grant date			2017	10-Nov-15	19-Feb-16	4-Nov-16	17-Feb-17	2016	10-Nov-15	19-Feb-16

10 Nov 2015	Rights	30 Sep 2018	30 Sep 2019	10 Nov 2018	10 Nov 2020	$3.06	Nil	3.0 years	30%	1.93%	3.50%	$2.31
10 Nov 2015	Options	30 Sep 2018	30 Sep 2019	10 Nov 2018	10 Nov 2020	$3.06	$3.06	4.0 years	30%	2.06%	3.50%	$0.59
19 Feb 2016	Rights	30 Sep 2018	30 Sep 2019	10 Nov 2018	10 Nov 2020	$2.62	Nil	3.0 years	30%	1.78%	3.50%	$1.86
19 Feb 2016	Options	30 Sep 2018	30 Sep 2019	10 Nov 2018	10 Nov 2020	$2.62	$3.06	3.8 years	30%	1.85%	3.50%	$0.36
5 Sep 2016	Options	30 Sep 2019	30 Sep 2020	4 Nov 2019	4 Nov 2021	$3.80	$3.80	4.1 years	29%	1.53%	4.15%	$0.60
4 Nov 2016	Rights	30 Sep 2019	30 Sep 2020	4 Nov 2019	4 Nov 2021	$3.60	Nil	3.1 years	28.5%	1.70%	4.67%	$2.66
4 Nov 2016	Options	30 Sep 2019	30 Sep 2020	4 Nov 2019	4 Nov 2021	$3.60	$3.60	4.0 years	28.5%	1.78%	4.67%	$0.54
17 Feb 2017	Rights	30 Sep 2019	30 Sep 2020	4 Nov 2019	17 Feb 2022	$3.90	Nil	2.8 years	28.5%	1.96%	4.42%	$2.87
17 Feb 2017	Options	30 Sep 2019	30 Sep 2020	4 Nov 2019	17 Feb 2022	$3.90	$3.60	3.9 years	28.5%	2.12%	4.42%	$0.70
Grant date	Award type	First test date	Retest date	First vesting date	Loan repayment date/expiry date	Share price at the grant date	Loan/exercise price	Expected life	Volatility	Risk free interest rate	Dividend yield (p.a)	Average assessed fair value per instrument

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

5.0 EMPLOYEE REMUNERATION AND BENEFITS (continued)

5.1 Share based payments (continued)

(ii) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

Awards issued to employees of controlled entities during the year	Consolidated 2017 $'000 2016 $'000 4,462 2,860

(iii) Terms and conditions of Share Schemes

The share based payments issued since the IPO are subject to vesting conditions. Refer to the remuneration report for details of these vesting conditions.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

5.0 EMPLOYEE REMUNERATION AND BENEFITS (continued)

5.2 Key management personnel disclosure

Short-term employee benefits Post-employment benefits Long-term employee benefits Share-based payments	Consolidated 2017 $'000 2016 $'000 4,662 4,505 114 93 16 5 1,881 1,156
	6,673 5,759

6.0 OTHER

6.1 Reserves

Recognition and measurement

Share-based payment reserve

The share based payment reserve is used to recognise:

the fair value of options issued to Directors and employees but not exercised;
the fair value of shares issued to Directors and employees; and
other share-based payment transactions.

Cash flow hedge reserve

The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the associated hedge transaction affects profit or loss.

Treasury reserve

Treasury shares are unpaid loan shares in Eclipx Group Limited that have been issued as part of the Eclipx Group Share scheme and the executive LTI plan. See note 5.1 for further information.

Foreign currency translation reserve

The foreign currency translation reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to Australian Dollars.

Reconciliation of reserves Hedging reserve - cash flow hedges Treasury reserve Foreign currency translation reserve Share based payments reserve Total reserves Movements in reserves *Hedging reserve - cash flow hedges* Balance 1 October Revaluation Deferred tax Balance 30 September	Consolidated 2017 $'000 2016 $'000 (6,110) (13,335) 991 (1,298) (124) 4,965 17,600 13,138
	12,357 3,470
	(13,335) (12,692) 10,204 (911) (2,979) 268
	(6,110) (13,335)

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.1 Reserves (continued)

6.1 Reserves (continued)
Share based payments reserve Balance 1 October Rights issued as part of the Right2Drive Pty Ltd acquisition Awards issued to employees of controlled entities during the year Balance at 30 September	Consolidated 2017 $'000 2016 $'000 13,138 6,570 - 3,708 4,462 2,860
	17,600 13,138

6.2 Parent entity information

(i) Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

Statement of financial position Current assets Non-current assets Total assets a Current liabilities Non-current liabilities Total liabilities a Shareholders equity Issued share capital Reserves Retained earnings Profit/(loss) for the year	Consolidated 2017 $'000 2016 $'000 8,566 1,232 1,027,961 778,612
	1,036,527 779,844
	(6,338) (12,829) (244,256) (127,609)
	(250,594) (140,438)
	635,246 455,484 10,412 5,144 140,275 178,778
	785,933 639,406
	(92) 1,285

(ii) Guarantees entered into by the parent entity

There are cross guarantees given by Eclipx Group Limited, Pacific Leasing Solutions (Australia) Pty Limited, Leasing Finance (Australia) Pty Limited, Fleet Holding (Australia) Pty Limited, PLS Notes (Australia) Pty Limited, Fleet Partners Pty Limited, Fleet Aust Subco Pty Limited, Fleet Partners Franchising Pty Limited, CLFC Pty Limited, Car Insurance Pty Limited, FleetPlus Holdings Pty Limited, CarLoans.com.au Pty Ltd, Fleet Choice Pty Ltd, CLFC Media Holdings Pty Limited, FleetPlus Pty Limited, Eclipx Commercial Pty Ltd, FleetPlus Novated Pty Limited, PackagePlus Australia Pty Limited, Eclipx Insurance Pty Ltd, CarInsurance.com.au Pty Ltd, Right2Drive Pty Ltd, Anrace Pty Ltd, Eclipx MMF Finance Pty Ltd, Grays eCommerce Group Limited, GEG No 1 Pty Ltd, Grays (Aust) Holdings Pty Ltd, GEG Capital Pty Ltd, GEG International Pty Ltd, Grays (NSW) Pty Ltd, Graysonline (SA) Pty Ltd, Grays (VIC) Pty Ltd, GLC Fine Wines Liquor Pty Limited, Grays Eisdell Timms (WA) Pty Limited, Grays Eisdell Timms (QLD) Pty Limited and C M Pty Limited.

No liability was recognised by the parent entity or the consolidated entity in relation to the above guarantee as the fair value of the guarantee is immaterial.

(iii) Contingent liabilities of the parent entity

The parent entity did not have any contingent liabilities as at 30 September 2017 or 2016. For information about guarantees given by the parent entity, see above.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.3 Related party transactions

(i) Transactions within the wholly owned Group

The following transactions occurred with related parties:

The related party payables among Australian entities are interest free and are not due for payment within the next 12 months.

(ii) Controlling entity

The parent entity of the Group is Eclipx Group Limited.

(iii) Interest in other entities

The controlled entities of the Group listed below were wholly owned during the current and prior year, unless otherwise stated:

Australia

Australia
Fleet Aust Subco Pty Ltd	FP Turbo Trust 2007-1 (Australia)
Pacific Leasing Solutions (Australia) Pty Ltd	FP Turbo Series 2014-1 Trust
Leasing Finance (Australia) Pty Ltd	FP Turbo Warehouse Trust 2014-1 (Australia)
PLS Notes (Australia) Pty Ltd	Fleet Partners Franchising Pty Ltd
Fleet Holding (Australia) Pty Ltd	Eclipx Insurance Pty Ltd
Fleet Partners Pty Ltd	CarInsurance.com.au Pty Ltd
FleetPlus Holdings Pty Limited	Car Insurance Pty Ltd
FleetPlus Pty Ltd	CLFC Pty Ltd
FleetPlus Novated Pty Ltd	CarLoans.com.au Pty Ltd
PackagePlus Australia Pty Ltd	Fleet Choice Pty Ltd
CLFC Media Holdings Pty Ltd	FP Turbo Series 2015-1 Equipment Trust
Eclipx Commercial Pty Ltd	FleetPlus Asset Securisation Pty Ltd (c)
Right2Drive Pty Ltd (b)	FP Turbo Government Lease Trust 2016-1
Grays eCommerce Group Ltd (a)	GEG No. 1 Pty Ltd (a)
Grays (Aust) Holdings Pty Ltd (a)	GEG Capital Pty Ltd (a)
GEG International Pty Ltd (a)	Grays (NSW) Pty Ltd (a)
Grays (NSW) Pty Ltd (a)	GraysOnline (SA) Pty Ltd (a)
Grays (VIC) Pty Ltd (a)	GLC Fine Wines & Liquor Pty Ltd (a)
Gray Eisdell Timms (WA) Pty Ltd (a)	Gray Eisdell Timms (QLD) Pty Ltd (a)
C M Pty Ltd (a)	GEM Trust (a)
Anrace Pty Ltd (d)	Eclipx MMF Finance Pty Ltd (e)
New Zealand
FleetPlus Ltd (NZ)	Eclipx Fleet Holding (NZ) Ltd (f)
CarLoans.co.nz Ltd	Fleetpartners NZ Trustee Ltd
Fleet NZ Limited	Truck Leasing Ltd
Eclipx Pacific Leasing Solutions (NZ) Limited (g)	FP Ignition Trust 2011-1 New Zealand
Eclipx Leasing Finance (NZ) Limited (h)	FleetPartners NZ Trust
PLS Notes (NZ) Ltd	FPNZ Warehouse Trust 2015-1
Right2Drive (New Zealand) Ltd (b)	FP Ignition 2017 Warehouse Trust
Grays Auctions Ltd (NZ) (a)	FP Ignition 2017 B Trust
Eclipx NZ Ltd (i)

(a) On 11 August 2017, the Group concluded the 100% acquisition of Grays eCommerce Group Limited.

(b) On 19 May 2016, the Group concluded the 100% acquisition of the Right2Drive Group.

(d) On 18 November 2016, the Group concluded the 100% acquisition of Anrace Pty Ltd.

(e) On 22 November 2016, the Group established Eclipx MMF Finance Pty Ltd.

(f) On 15 August 2017, Fleet Holding (NZ) Limited changed its name to Eclipx Fleet Holding (NZ) Limited.

(g) On 15 August 2017, Pacific Leasing Solutions (NZ) Limited changed its name to Eclipx Pacific Leasing Solutions (NZ) Limited.

(h) On 15 August 2017, Leasing Finance (NZ) Limited changed its name to Eclipx Leasing Finance (NZ) Limited.

(i) On 28 September 2017, the Group established Eclipx NZ Limited.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.3 Related party transactions (continued)

(iv) Transactions with other related parties

(a) Relationship with Ironbridge

During the year, Eclipx Group Limited has incurred $51,900 in fees (2016: $137,500) from Ironbridge Capital Management PLC in relation to Director Fees for G Ruddock. Refer to the remuneration report for further information.

(b) Logbook Me Pty Limited

Eclipx Group Limited is party to a contract with Logbook Me Pty Limited (LogbookMe) which supplies a software product that utilises GPS tracking devices which Eclipx on sells to its customers. This product allows Eclipx fleet customers to manage their fringe benefits and fuel tax costs on their fleet as well as fulfilling key driver safety monitoring obligations under workplace health and safety legislation. LogbookMe has agreed not to distribute its product to other fleet management and vehicle finance providers for the term of the contract, subject to minimum subscriber volumes. The term of the contract is 10 years from 15 October 2014. The device, freight and subscription fees paid to LogbookMe amounted in 2017 to $536,388 (2016: $219,571); the increase resulting from incremental product sales to Eclipx customers.

The LogbookMe tool provided to Eclipx has been instrumental in securing corporate and government tenders.

The Chief Executive Officer and Deputy Chief Executive Officer have a direct equity interest in LogbookMe.

The contract with LogbookMe has been negotiated on an arms length basis with Board oversight.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.4 Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor of the Group.

(a) Audit and assurance services Audit Services KPMG Australian firm: Audit and review of financial statements Under accrual of fees (b) Non-audit services KPMG Australian firm: Debt restructuring Transactional services Total remuneration for non-audit services for KPMG Total remuneration for KPMG	Consolidated 2017 $ 2016 $ 757,087 746,254 - - 599,067 540,000 563,947 179,134
	1,163,014 719,134
	1,920,101 1,465,388

6.5 Deed of cross guarantee

Eclipx Group Limited, Pacific Leasing Solutions (Australia) Pty Limited, Leasing Finance (Australia) Pty Limited, Fleet Holding (Australia) Pty Limited, PLS Notes (Australia) Pty Limited, Fleet Partners Pty Limited, Fleet Aust Subco Pty Limited, Fleet Partners Franchising Pty Limited, CLFC Pty Limited, Car Insurance Pty Limited, FleetPlus Holdings Pty Limited, CarLoans.com.au Pty Ltd, Fleet Choice Pty Ltd, CLFC Media Holdings Pty Limited, FleetPlus Pty Limited, Eclipx Commercial Pty Ltd, FleetPlus Novated Pty Limited, PackagePlus Australia Pty Limited, Eclipx Insurance Pty Ltd, CarInsurance.com.au Pty Ltd, Right2Drive Pty Ltd, Anrace Pty Ltd, Eclipx MMF Finance Pty Ltd, Grays eCommerce Group Limited, GEG No 1 Pty Ltd, Grays (Aust) Holdings Pty Ltd, GEG Capital Pty Ltd, GEG International Pty Ltd, Grays (NSW) Pty Ltd, Graysonline (SA) Pty Ltd, Grays (VIC) Pty Ltd, GLC Fine Wines & Liquor Pty Limited, Grays Eisdell Timms (WA) Pty Limited, Grays Eisdell Timms (QLD) Pty Limited and C M Pty Limited are parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.

The above companies represent a ‘Closed Group' for the purposes of the Class Order, and as there are no other parties to the deed of cross guarantee that are controlled by Eclipx Group Limited, they also represent the ‘Extended Closed Group'.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.5 Deed of cross guarantee (continued)

Set out below is a statement of profit or loss and other comprehensive income for the year of the Closed Group.

Statement of profit or loss and other comprehensive income Revenue from continuing operations Cost of revenue Lease finance costs Net operating income before operating expenses and impairment charges Impairment losses on loans and receivables Net operating income before operating expenses Employee benefit expense Depreciation and amortisation expense Operating overheads Total overheads Operating finance costs Profit before income tax Income tax expense Profit for the year Other comprehensive income/(loss), net of tax Total comprehensive income for the year	Consolidated 2017 $'000 2016 $'000 461,870 412,201 (191,479) (166,171) (44,018) (41,861)
	226,373 204,169 (3,800) (1,530)
	222,573 202,639
	(79,955) (58,073) (11,240) (7,894) (57,463) (32,062)
	(148,658) (98,029) (5,903) (6,515)
	68,012 98,095 (17,552) (13,812)
	50,460 84,283 2,136 4,647
	52,596 88,930

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.5 Deed of cross guarantee (continued)

Set out below is a consolidated statement of financial position as at reporting date of the Closed Group.

ASSETS Cash and cash equivalents Restricted cash and cash equivalents Trade and other receivables Inventory Finance leases Operating leases reported as property, plant and equipment Property, plant and equipment Receivables - advances to related parties Deferred tax assets Intangibles Total assets LIABILITIES Trade and other liabilities Provisions Derivative financial instruments Other Borrowings Payables - Advances from related parties Deferred tax liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Retained earnings Total equity	Consolidated 2017 $'000 2016 $'000 35,374 49,326 90,490 72,371 118,814 73,768 11,369 10,673 424,568 331,899 655,780 621,406 12,761 9,938 99,731 55,764 29,657 3,737 681,127 471,182
	2,159,671 1,700,064
	30,594 29,020 18,427 6,410 5,992 14,162 2,784 1,744 1,214,069 1,017,663 715 4,250 49,276 -
	1,321,857 1,073,249
	837,814 626,815
	635,246 455,484 15,771 (1,282) 186,797 172,613
	837,814 626,815

The presentation format of the Consolidated Statement of Financial Position has been changed from a current/non-current basis to order of liquidity. See Note 1 for additional disclosures.

Eclipx Group Limited Notes to the Financial Statements For the year ended 30 September 2017 (continued)

6.0 OTHER (continued)

6.6 Reconciliation of cash flow from operating activities

Profit after tax for the year Depreciation and amortisation Doubtful debts Share based payments expense Fleet and stock impairment Corporate debt restructuring costs Unwind on contingent consideration Net (gain)/loss on sale of non-current assets Hedging gain Exchange rate variations on New Zealand cash and cash equivalents Net cash inflow from operating activities before change in assets and liabilities Change in operating assets and liabilities: Increase in trade and other receivables Principal settlement of finance leases Decrease/(increase) in deferred tax assets/liabilities Increase in trade and other liabilities Decrease in current provisions Increase in other current liabilities Net cash inflow from operating activities	Consolidated 2017 $'000 2016 $'000
	54,210 45,868 216,562 197,939 4,295 1,989 4,467 2,860 309 (118) - 1,615 (2,840) (778) (24,972) (16,234) (431) 464 1,513 (1,983)
	253,113 231,622 (39,886) 7,975 130,945 106,370 29,375 2,437 (5,128) 23,186 12,674 (2,010) 1,040 937
	382,133 370,517

6.7 Events occurring after the reporting period

Eclipx Group Limited Directors' Declaration For the year ended 30 September 2017

Directors' Declaration

In the opinion of the Directors of Eclipx Group Limited (Group):

(a) The consolidated Financial Statements and notes of the Group that are set out on pages 36 to 89 are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the Group's financial position as at 30 September 2017 and of its performance for the financial year ended on that date; and
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and
(b) There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
(c) There are reasonable grounds to believe that the Group and the group entities identified in Note 6.5 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC Class Order 98/1418.
(d) The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 September 2017.
(e) The Directors draw attention to note 1 of the consolidated financial statements which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the Directors:

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Kerry Roxburgh Chairman

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Doc Klotz Chief Executive Officer

Sydney 7 November 2017

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Independent Auditor’s Report

To the shareholders of Eclipx Group Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of Eclipx Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001 , including:

giving a true and fair view of the Group’s financial position as at 30 September 2017 and of its financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
The Financial Report comprises the:
Consolidated statement of financial position as at 30 September 2017
Consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the year then ended
Notes including a summary of significant accounting policies
Directors’ Declaration.
The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 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 fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matters

The Key Audit Matters we identified are:

Valuation of goodwill;
Determination of vehicle residual values;
Revenue recognition; and
Acquisition of Grays eCommerce Group Liited (GEG).

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.

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

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Valuation of goodwill – ($701.0m)

Valuation of goodwill – ($701.0m)	Valuation of goodwill – ($701.0m)

Refer to Note 3.5 in the Financial Report.
The key audit matter	How the matter was addressed in our audit
	Working with our valuation specialists, our procedures included: � evaluating the approach to the value in use valuation methodology adopted against the AASB 136_Impairment_ _of Assets_accounting standard, � assessing the integrity of the value in use model used, including the accuracy of the underlying calculation formulas; � assessing the Group’s determination of their CGUs based on our understanding of the operations of the Group’s business and the impact of acquisitions during the year. We analysed how independent cash inflows of the Group were generated against the requirements of the relevant accounting standards; � analysing the significant acquisition of Grays eCommerce Group Limited during the year and the Group’s internal reporting to assess the Group’s monitoring and management of activities and the consistency of the allocation of goodwill to CGUs; � assessing the Group’s discount rates against publicly available data for a group of comparable entities and independently developing discount rate ranges considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the CGU and the industry and geography they operate in; � challenging the Group’s cash flow forecast and growth assumptions, including those relating to the fleet size of new customer wins using our knowledge of the Group, its industry and the Group’s past performance, and industry growth projections and inflation expectations across different geographies. We also compared the Group’s long-term growth and inflation assumptions to published studies of industry trends and expectations across different geographies, and considered differences experienced across the Group’s operations; � assessing the Group’s historical forecasting accuracy by checking prior actuals to prior forecasts to inform our assessment of forecasts incorporated in the model; � considering the sensitivity of the model by varying key assumptions such as discount rates and forecast growth rates, within a reasonably possible range, to identify those assumptions at higher risk and to assess the presence of indicators of impairment; and � assessing the disclosures in the Financial Report using our understanding of the Group obtained from our testing and against the requirements of the relevant accounting standards.
Valuation of the Group’s goodwill is a Key Audit Matter due to: � the size of the balance (being 25% of total assets); and � the high level of judgment involved by us in assessing the inputs into the model supporting the Group’s annual assessment for impairment. We focused on the significant forward- looking assumptions the Group applied in its value in use model, including: � forecast growth rates for the Group’s underlying cash flows, which can vary based on a number of factors such as the number and fleet size of new customer wins, industry growth projections and inflation expectations. The Group operates across different geographies with varying market pressures, which increases the risk of inaccurate forecasts; and � the discount rates, which are complex in nature and may vary according to the conditions and environment the specific cash generating units (CGUs) are subject to from time to time. The Group also made a significant acquisition during the year, resulting in $161.6m of provisional goodwill arising from the acquisition of Grays eCommerce Group Limited. We involved valuation specialists to supplement our senior auditors in assessing this Key Audit Matter.

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Determination of vehicle residual values

Refer to Critical Accounting Estimates and Assumptions and disclosures over residual values in the context of property, plant and equipment in Notes 1.0 and 3.1 in the Financial Report.

Determination of vehicle residual values	Determination of vehicle residual values
Refer to Critical Accounting Estimates and Assumptions and disclosures over residual values in the context of property, plant and equipment in Notes 1.0 and 3.1 in the Financial Report.

The key audit matter	How the matter was addressed in our audit
Understanding the process for, and robustness of, residual value setting is considered a Key Audit Matter due to the significant audit effort required and the high degree of judgement applied by us in assessing the Group’s valuation of the residual value of their fleet and the impact residual value setting has on a number of key accounts. We focused on vehicle impairment and vehicle trading profit as an indicator of the Group’s ability to set accurate residual values. We considered the Group’s following significant judgements: � expected forecast residual value at the end of the lease term; � periodical future lease-related fee cash flow assumptions; and � assumptions on the timing and future condition of vehicles returned at the end of the lease, and associated cash flows. Residual value setting has the following impacts within the Financial Report: � Vehicle depreciation ($204.2m) over the lease term is calculated with reference to the residual value as the terminating value; and � Vehicle impairment ($0.3m) recognised where residual values exceed estimated future sales prices. The timing of revenue recognition across the term of a lease may be affected by aggressive or conservative residual value setting as it impacts the level of revenue recognised during the term of the lease compared to at the end of the lease.	Our procedures included: � Understanding the process by which residual values are calculated; � Testing the key controls for the Group’s residual valuation process such as the bi-annual review and approval of residual value changes by senior management to assess residual value settings on existing vehicles; � Assessing the Group’s judgement on future lease- related fee cash flows and end of lease cash flow assumptions based on timing and future condition of returned vehicles used in the vehicle impairment model by comparing to historical cash flow experience for a sample of previous leases; � Assessing the Group’s ability to forecast vehicle residual values by selecting a statistical sample of vehicles disposed of during the year and comparing the sale price to sales invoices and written down values; and � Comparing a sample of the current residual values of vehicles against the current market value of those vehicles sourced from an independent external database of used vehicle valuations.

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Revenue recognition ($604.5m)

Revenue recognition ($604.5m)	Revenue recognition ($604.5m)

Refer to Note 2.2 in the Financial Report.
The key audit matter	How the matter was addressed in our audit
The Group’s operations include a number of unique revenue streams, including but not limited to: finance and operating lease related revenue, rental hire income, maintenance and other service revenue, auction sales revenue and commission revenue. Some of these revenue streams include a high level of estimation or accounting complexity, resulting in the measurement and recognition of those revenue streams being considered a Key Audit Matter due to the audit effort arising from: � The estimation of maintenance revenue using a stage of completion method and key assumptions of the average age, term and useage of the vehicle fleet as well as cost of maintenance performed; � The de-recognition of certain maintenance cash flows due to principal or agent considerations; � The dependence of the Group on the automation of lease invoicing and, thus its revenue recognition, necessitates the involvement of our information technology (IT) specialists; and � The significant judgement required by the Group in assessing the recoverability of rental hire receivables, and therefore the additional audit effort required to assess the quantum of the revenue associated with those receivables.	Our procedures included: � Assessing the Group’s revenue recognition policies in accordance with relevant accounting standards; � Testing key controls in the sales system, in particular the matching control of invoices, lease receipt allocation and cash receipts; � Recalculating and assessing the reasonableness of the Group’s estimates of the stage of completion of the contracted maintenance of leased assets by checking the mathematical accuracy of the stage of completion model and checking the average age, term and distance assumptions for consistency with internal system generated lease portfolio statistics. These are tested on a sample basis; � Challenging the Group’s judgement in determining the key assumptions by comparing the average cost of maintenance activities performed to publicly available market rates and costs; � Assessing the Group’s judgement on principal or agent maintenance revenue recognition in accordance with AASB 118 Revenue; � With assistance from IT specialists, testing key automated controls within the leasing database; and � Challenging the Group’s judgement on the rental hire revenue recorded based on the historical and expected recoverability of rental hire receivables, we test a statistical sample of rental hire receivables to subsequent receipts of cash and evaluate trends in recoverability of rental hire revenue.

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Acquisition of Grays eCommerce Group Limited (GEG) ($170.9m)

Refer to Note 2.5 in the Financial Report.

Acquisition of Grays eCommerce Group Limited (GEG) ($170.9m)	Acquisition of Grays eCommerce Group Limited (GEG) ($170.9m)
Refer to Note 2.5 in the Financial Report.

The key audit matter	How the matter was addressed in our audit
The acquisition of Grays eCommerce Group Limited (GEG) for $170.9m is considered a Key Audit Matter due to the size of the acquisition and the audit complexity arising from the Group’s estimation process in the purchase price allocation (PPA). The process involved in accounting for the acquisition is complex, requiring us to assess the Group’s judgement in determining the fair value of acquired assets and liabilities, in particular the valuation of goodwill and separately identifiable intangible assets, such as brand names and customer relationships. The valuation of intangible assets (including brand names and customer relationships) requires us to assess the Group’s judgement in selecting appropriate valuation models and the key assumptions such as growth rates, projected cash flows, discount rates and royalty rates underpinning this. The Group engaged an independent expert to assist with this. We involved our valuation specialists to supplement our senior auditors in assessing this Key Audit Matter.	Our procedures included: � Assessing the acquisition against the criteria of a business combination in the relevant accounting standards by reading the key transaction documents to understand key terms and conditions; � Working with our valuation specialists to assess and challenge the key assumptions used in the PPA to identify and value intangible assets. This involved: `o` Assessing the competence, objectivity and scope of the Group’s independent expert; `o` Challenged the key inputs used by the Group’s independent valuation expert to determine the value of intangible assets, including growth rates, projected cash flows, discount rates and royalty rates, we did this by comparing the key inputs against approved business forecasts, published studies of economic growth and inflation expectations and an external, independent database of comparable royalty rates; and `o` Challenged the Group’s judgmental assumptions such as the identification of separable identifiable intangible assets and the Group’s independent valuation expert’s approach and methodology of valuing these assets by comparing to accepted industry practice and accounting standards requirements. � Assessing the fair value of other significant assets and liabilities recorded in the purchase price allocation, by performing procedures including independently confirming cash balances acquired, performing subsequent receipts and settlement testing on trade receivables and payables; and � Assessing the Group’s disclosures in respect of the acquisition in accordance with relevant accounting standards.

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Other Information

Other Information is financial and non-financial information in Eclipx Group Limited’s annual reporting, which is provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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.

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

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 Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Financial Report.

A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.

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Report on the Remuneration Report

Opinion

In our opinion, the Remuneration Report of Eclipx Group Limited for the year ended 30 September 2017, complies with Section 300A of the Corporations Act 2001 .

Director’s responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001 .

Our responsibilities

We have audited the Remuneration Report contained within the Director’s report for the year ended 30 September 2017.

Our responsibility is to express an opinion on the Remuneration Report, based on our Audit conducted in accordance with Australian Auditing Standards .

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KPMG

Dean Waters

Partner

Melbourne

7 November 2017

AI assistant

FLEETPARTNERS GROUP LIMITED — Annual Report 2017

64940_rns_2017-11-07_ba11f58f-5c40-4dcf-9a8d-0dc2be80d65a.pdf

2017 Financial Results – Appendix 4E and 2017 Financial Report for the year ended 30 September 2017

Matt Sinnamon

APPENDIX 4E

YEAR ENDED 30 SEPTEMBER 2017

1 Details of the reporting period and the previous corresponding period

APPENDIX 4E

PRELIMINARY FINAL REPORT ECLIPX GROUP LIMITED ACN : 131 557 901

3 Dividend reinvestment plans

4 Net Tangible Assets Per Security

5 Auditor's report

6 Attachments

7 Signed

Eclipx Group Limited ACN 131 557 901 Financial report for the year ended 30 September 2017

CONTENTS

Directors' Report

1. Directors

KERRY ROXBURGH BCOM, MBA, MeSAFAA

GAIL PEMBERTON MA (UTS), FAICD, GCERT FIN

1. Directors (continued)

TREVOR ALLEN BCOM (HONS), CA, FF, MAICD

RUSSELL SHIELDS FAICD, SA Fin

GREG RUDDOCK BCOM (UWA)

IRWIN ('DOC') KLOTZ

1. Directors (continued)

GARRY McLENNAN BBUS (UTS), CPA, FAICD

2. Company Secretary

3. Directors' Meetings

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations

Business acquisitions

Principal activities

Business model

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

4. Review of operations (continued)

Group financial performance

Net operating income before operating expenses after impairment charges

Operating expenses

Holding company debt interest

4. Review of operations (continued)

Adjustments and amortisation of intangible assets

Statutory net profit after tax

Cash net profit after tax

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

4. Review of operations (continued)

Segment results

4. Review of operations (continued)

Australia Commercial

Australia Consumer

New Zealand Commercial

5. Financial position

Receivables and inventory

Leases

Borrowings

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

5. Financial position (continued)

Cash flows

Funding

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

6. Business strategic objectives

7. Key risks

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

8. Outlook

9. Subsequent events

10. Changes in state of affairs

11. Environmental factors

12. Dividends

13. Indemnification of Directors and Officers

Eclipx Group Limited Directors' Report 30 September 2017 (continued)

14. Non-audit services

15. Rounding of amounts

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Eclipx Group Limited

Eclipx Group Limited Letter from Remuneration and Nomination Committee (unaudited) 30 September 2017

Dear Shareholders

Remuneration Report (audited)

1. Introduction

FLEETPARTNERS GROUP LIMITED Annual Report 2017