RENT.COM.AU LIMITED — Annual Report 2016

Oct 23, 2016

RENT.COM.AU LIMITED

ABN 25 062 063 692

Financial Report

30 June 2016

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Corporate Information

This financial report includes the financial statements and notes of Rent.com.au Limited (‘the Company’) and its controlled entities (‘the Group’). The Group’s functional presentation currency is AUD ($).

A description of the Group’s operations and of its principal activities is included in the review of operations and activities in the Directors’ report on pages 2 to 19. The Directors’ report is not part of the financial report.

Directors

Auditors

Dr. Garry Garside Non‐Executive Chairman RSM Australia Partners Mr. John Wood Non‐Executive Director 8 St Georges Terrace Mr. Samuel McDonagh Non‐ Executive Director Perth WA 6000 Mr. Philip Warren Non‐ Executive Director

Bankers

Joint Company Secretary

Mr. Jan Ferreira Mr. Steven Wood

Registered Office

945 Wellington Street WEST PERTH WA 6005

Westpac Banking Corporation Level 13, 109 St Georges Terrace PERTH WA 6008

Commonwealth Bank of Australia 150 St Georges Terrace PERTH WA 6000

Solicitors

Share Registry

Automic Registry Services Level 1, 7 Ventnor Ave WEST PERTH WA 6005 Phone: 1300 288 664

Website

http://investors.rent.com.au/

GTP Legal Level 1, 28 Ord Street WEST PERTH WA 6005

Stock Exchange

Australian Securities Exchange Limited Level 40, Central Park 152‐158 St George’s Terrace PERTH WA 6000 ASX Code: RNT

[1]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report

The Board of Directors presents the following report on Rent.com.au Limited and its controlled entities (referred to hereafter as ‘the Group’) for the year ended 30 June 2016.

Directors

The names of the Directors in office during the financial year and until the date of this report are as follows. All directors were in office for the entire period unless otherwise stated:

Name	Position	Date of Appointment	Date of resignation
Mr. PhilipWarren	Non‐Executive Director	18 September 2014	‐
Dr. GarryGarside	Non‐Executive Chairman	15 June 2015	‐
Mr. Mark Woschnak	ManagingDirector	15 June 2015	22 July2016
Mr. John Wood	Non‐Executive Director	15 June 2015	‐
Mr. Samuel McDonagh	Non‐Executive Director	15 June 2015	‐

Principal Activities

The Group operates real estate websites focusing on the rental property market. The primary website operated by the Group is www.rent.com.au.

Review of Operations

The Consolidated Statement of Profit or Loss and Other Comprehensive Income shows a net operating loss after tax of $12,820,585 for the year ended 30 June 2016 (for the six months ended 30 June 2015: $3,655,771). The net operating loss for the year ended 30 June 2016 included non‐cash share based payments expense of $5,447,424 associated with performance based convertible securities issued to advisors, shareholders and employees. Earnings Before Interest, Tax, Depreciation and Amortisation for the year ended 30 June 2016 was an operating loss of $7,216,670 (for the six months ended 30 June 2015: $927,249).

The Company achieved the objectives it had set for the year ended 30 June 2016, which were to grow the www.rent.com.au audience and increase the number and range of rental property listings on the site, particularly from the non‐agent (private landlord) sector. Specifically, the targets it set were:

• Increasing the volume of renter traffic to 500,000 unique visitors per month;

• Increasing market share of property listings from property agents; and

• Significantly increasing the level of rental property listings from non‐agent landlords.

The Company exceeded its audience objective, growing monthly site traffic to over 700,000 unique visitors during the year. As a result of achieving three consecutive months of greater than 500,000 unique visitors per month in the March 2016 quarter, the performance milestone for 8,160,771 Performance Shares was achieved and these converted to Ordinary Shares on 4[th] April 2016.

Both agent and non‐agent landlord rental property listings have increased significantly, with the Company achieving over 2,600 active non‐agent landlord listings in June 2016, an increase of almost 3,800% off the low base of the previous year. Agent registrations also increased strongly based upon temporarily increased field and telesales resources to drive the content growth. Between March 2016 and June 2016 when 10 field sales agents and 12 tele sales agents were engaged to conduct the content campaign, over 2,100 property agents registered with the Company, resulting in the market share of rental property listings increasing to approximately 90% of all real estate agent listings.

To support these objectives, and in preparation for the next phase of commercialisation, the Company conducted 2 successful capital raisings during the financial year ended 30 June 2016. In November 2015, the Company completed the placement of 13,169,875 shares using its 15% placement capacity under Listing Rule 7.1. The placement was completed at an issue price of $0.28 per share, raising $3,687,565 (before costs). In May 2016,

[2]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Review of Operations (cont’d)

the Company issued 36,376,607 shares at an issue price of $0.15 each under a fully underwritten, non‐ renounceable pro rata offer to existing shareholders. The issue raised $5,456,491 (before costs), with existing shareholders taking up 39.8% of the offer and the balance taken up by the underwriters.

Dividends

No dividend has been paid or recommended by the Directors since the commencement of the financial period.

Significant Changes in State Of Affairs

On 9 May 2016 the company completed the issue of 36,376,607 shares at an issue price of $0.15 non‐ renounceable rights issue primarily for the purpose of funding a mass market branding campaign to drive the next phase of growth.

On 18 November 2015 the company successfully completed the issue of 13,169,875 shares using its 15% placement capacity under Listing Rule 7.1. The Placement was completed at an issue price of $0.28 per share, raising $3,687,565 (before costs) which will allow the Company to accelerate its strategy of creating the complete rental marketplace.

Events since the end of the Financial Year

On 22 July 2016, the Founder and Managing Director of Rent.com.au, Mr. Mark Woschnak, announced that he was stepping down from his roles with the Company and its associated entities. Mr. Greg Bader was appointed as interim Chief Executive Officer while a thorough recruitment process is undertaken by the Board.

By agreement with the Board, the Options and Performance Rights held by Mr. Woschnak at that date were treated as follows:

1. The following securities where the performance criteria had already been met, became vested and capable of being exercised on and with effect from 22 July 2016:

2. 9,000,000 Tranche 1 Options;

3. 4,500,000 Tranche 2 Options;

4. 3,333,334 Tranche 4 Options;

5. 3,333,333 Tranche 5 Options;

6. 2,110,976 Tranche 1 Performance Rights; and

7. 1,172,765 Tranche 4 Performance Rights,

8. For the following securities where the performance criteria had not yet been met, the continuous service vesting conditions applicable to them are waived and the securities will continue to be held subject to the rules of the LTIP and will vest upon achievement of a Volume Weighted Average share Price of $0.60 over a 20‐day period:

9. 4,500,000 Tranche 3 Options; and

10. 3,333,333 Tranche 6 Options

11. The following securities irrevocably lapsed on 22 July 2016 and are incapable of vesting or being exercised:

12. 2,110,976 Tranche 2 Performance Rights;

13. 2,110,976 Tranche 3 Performance Rights;

14. 1,172,765 Tranche 5 Performance Rights; and

15. 1,172,765 Tranche 6 Performance Rights

No other matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years.

[3]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Likely Developments and Expected Results

With the achievement of its audience and content objectives during the year ended 30 June 2016, the Company’s focus will shift to the next phase of its commercialisation, maximising the efficiency of its cost and revenue model, whilst positioning www.rent.com.au as the destination of choice for renters.

Financial Position

The net assets of the Group have increased from $4,218,549 at 30 June 2015 to $5,217,209 at 30 June 2016. Cash reserves increased from $4,453,304 at 30 June 2015 to $5,876,127 at 30 June 2016.

Information on Directors

Mr. Philip Warren	–	Director (Non‐Executive),appointed 18 September 2014
Age	–	42
Qualifications	–	B. Com, Chartered Accountant
Experience	–	Mr. Warren is an executive director of Grange Consulting Group Pty
		Ltd. He has over 18 years of experience in finance and corporate
		roles in Australia and Europe. Mr. Warren has specialised in company
		valuations, mergers and acquisitions, capital raisings, debt financing,
		financial management, corporate governance and company
		secretarial services for a number of public and private companies.
Special responsibilities	–	None.
Interest in shares & options:	–	125,909 Ordinary shares (indirect)
Held in Rent.com.au Limited		1,012,500 options ($ 0.30, 23 June 2020) (indirect)
		37,501 unlisted options ($12.00,30 June 2016) (indirect)
Directorships held in other listed	–	Non‐Executive Director of Cassini Resources Limited
entities

– Dr. Garry Garside Chairman (Non‐Executive) appointed 15 June 2015 Age – 59 – Qualifications N/A – Experience Mr. Garside has extensive corporate experience and has successfully established and operated a variety of significant businesses across both the health and corporate sectors. He currently manages an emerging property development company and chairs a range of unlisted investment syndicates and companies. Mr. Garside founded Prime Health Group in 1988 before merging with Westpoint Healthcare to form Endeavour Healthcare Limited in 2000 and becoming its Managing Director, a position he held until 2002. – Interest in shares & options 1,739,775 Ordinary shares (indirect) Held in Rent.com.au Limited 230,406 Ordinary shares escrowed to 23 June 2017 (indirect) 452,175 Ordinary shares escrowed to 23 June 2017 (indirect) 581,382 Performance shares escrowed to 23 June 2017 (indirect) 950,000 Employee options escrowed to 23 June 2017 334,239 Performance rights escrowed to 23 June 2017 Directorships held in other listed – None

– Directorships held in other listed entities

[4]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Information on Directors (cont’d)

Mr. Mark Woschnak	–	Managing Director_appointed 15 June 2015, resigned 22 July 2016_
Age	–	49
Qualifications	–	BBus
Experience	–	Mr. Woschnak is the founder and current Managing Director of
		RENT. He has 25 years’ experience in real estate, digital publishing
		and classifieds services. Mr. Woschnak developed RealWeb, a real
		estate online service, launched with Telstra in 1997 and also
		pioneered the range of Mobile Information Services used by
		Vodafone, Macquarie and LINK.
		Mr. Woschnak has a Bachelor of Business degree, has maintained a
		real estate license for 20 years, and was a ten year Associate of the
		Australian Property Institute.
Interest in shares & options	–	2,911,444 Ordinary shares
Held in Rent.com.au Limited		6,566,393 Ordinary shares escrowed to 23 June 2017
		3,283,741 Ordinary shares escrowed to 23 June 2017 (indirect)
		1,985,892 Performance shares escrowed to 23 June 2017
		28,000,000 Employee options escrowed 24 months (indirect)
Directorships held in other listed	–	None
entities
Mr. John Wood	–	Director (Non‐Executive)appointed 15 June 2015
Age	–	50
Qualifications	–	N/A
Experience	–	Mr. Wood has extensive experience in retail, property, sales and
		marketing, business management and tourism. He is current the
		Managing Director of National Lifestyle Villages (NLV) a company he
		founded in 1999. Mr. Wood as CEO of NLV grew the business to win
		the prestigious Telstra WA Business of the Year award in 2007. He
		was also awarded the Rothwell’s Young Entrepreneur Award and the
		West Australian Young Achievers Award.
		Prior to this Mr. Wood established and managed the growth of
		Fleetwood Corporation’s manufactured homes division. He grew this
		business to be a market leader throughout the 1990’s and was
		appointed an executive member of the industry association for 15
		years in varying capacities including President.
Interest in shares & options	–	775,126 Ordinary shares
Held in Rent.com.au Limited		5,427,443 Ordinary shares (indirect)
		5,567,794 Ordinary shares escrowed to 23 June 2017 (indirect)
		6,068,082 Performance shares escrowed to 23 June 2017 (indirect)
		500,000 Employee options escrowed to 23 June 2017
		175,914 Performance rights escrowed to 23 June 2017
Directorships held in other listed	–	None
entities

[5]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Information on Directors (cont’d)

Mr. Samuel McDonagh	–	Director (Non‐Executive)appointed 15 June 2015
Age	–	45
Qualifications	–	Chartered Accountant
Experience	–	Mr. McDonagh has over 20 years’ experience in senior management
		roles at companies including General Manager of eBay in Southeast
		Asia and Chief Sales and Marketing Officer for iiNet Limited. Mr.
		McDonagh and is currently the Country Manager of Airbnb Australia
		and New Zealand
Interest in shares & options	–	47,010 Ordinary shares
Held in Rent.com.au Limited		141,032 Ordinary shares escrowed to 23 June 2017
		37,606 Performance shares escrowed to 23 June 2017
		1,600,000 Employee options escrowed to 23 June 2017
		562,926 Performance rights escrowed to 23 June 2017
Directorships held in other listed	–	None
entities

Directors’ Meetings

The number of directors’ meetings held and the number of meetings attended by each of the directors of the Company for the time the director held office for the period ended 30 June 2016:

	Number of Meetings Eligible to Attend	Number of Meetings Directors Attended
PhilipWarren	12	12
GarryGarside	12	12
Mark Woschnak	12	12
John Wood	12	12
Samuel McDonagh	12	12

Company Secretary

Steven Wood was appointed as a company secretary effective 18 September 2014. Steven specialises in corporate advisory, company secretarial and financial management services. Steven is a Chartered Accountant and has previously been involved in various private and seed capital raisings as well as successful ASX listings, whilst also providing company secretarial and financial management services to both ASX and unlisted public and private companies.

Jan Ferreira has been appointed as joint company secretary from 15 June 2015. Jan has over 20 years’ experience, having held senior finance roles in financial services and utilities after starting his career at Ernst & Young. He is a CPA (Australia) and has a Certificate in Governance Practice from the Governance Institute of Australia. Mr. Ferreira has previously been Chief Financial Officer and Company Secretary at ASX listed ThinkSmart Limited.

Performance Shares

The terms and conditions of the Performance shares have been previously outlined in the Company’s prospectus dated 7 April 2015. Please refer to section 6.9 Capital Structure of the Prospectus dated 7 April 2015 for any additional information that is not outlined in this report.

[6]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Performance Shares (cont’d)

As at the date of this report, Performance Shares on issue are as follows:

Class	Date Granted	Issue Price of Shares	ExpiryDate	Number
B	17 June 2015	Nil	14 days after the release of the audited financial reports forperiod ended 31 December 2018	8,160,771
C	17 June 2015	Nil	14 days after the release of the audited financial reports forperiod ended 31 December 2019	8,160,771

The vesting conditions of the two classes of performance shares on issue are outlined below:

Class B – will convert on achievement of greater than $10,000,000 in revenue by Rent in any 12 month period on or before 31 December 2018.

Class C – will convert on achievement of greater than $3,000,000 EBITDA by Rent in any 12 month period on or before 31 December 2019.

Performance Rights

As at the date of this report, Performance Rights on issue are as follows:

Tranche	Date Granted	Issue Price of Shares	ExpiryDate	Number
1	17 June 2015	Nil	31 January2019	117,277
2	17 June 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2018.	117,277
3	17 June 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2019.	117,277
4	17 June 2015	Nil	31 January2019.	678,443
4	13 August 2015	Nil	31 January 2019	46,6671
4	22 February 2016	Nil	31 January 2019	40,0002
5	17 June 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2018.	678,443
5	13 August 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2018.	46,6671
5	22 February 2016	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2018.	80,0002
6	17 June 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2019.	678,441
6	13 August 2015	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2019.	46,6661
6	22 February 2016	Nil	14 days after the release of the audited financial reports for the period ended 31 December 2019.	80,0002

[7]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Performance Rights (cont’d)

Tranche 1 – will vest upon continuous employment with the group until 31 December 2016; achievement of greater than 500,000 unique visitors to the website www.rent.com.au in each of 3 consecutive months, on or before 31 December 2018.

Tranche 2 ‐ will vest upon continuous employment with the group until 31 December 2016; achievement of greater than $10,000,000 in revenue by Rent in any 12 month period on or before 31 December 2018. Tranche 3 – will vest upon continuous employment with the group until 31 December 2016; achievement of greater than $3,000,000 EBITDA by Rent in any 12 month period on or before 31 December 2019.

Tranche 4 – will vest upon continuous employment with the group until 31 December 2016; achievement of greater than 500,000 unique visitors to the website www.rent.com.au in each of 3 consecutive months, on or before 31 December 2018.

Tranche 5 – will vest upon continuous employment with the group until 31 December 2016; achievement of greater than $10,000,000 in revenue by Rent in any 12 month period on or before 31 December 2018. Tranche 6 – will vest upon continuous employment with the group until 31 December 2016; achievement of greater than $3,000,000 EBITDA by Rent in any 12 month period on or before 31 December 2019.

1 Subsequent rights granted in August 2015 will vest upon continuous employment with the group until 30 June 2017.

2 Subsequent rights granted in February 2016 will vest upon continuous employment with the group until 31 December 2017.

Indemnification of officers

During the financial period, the Company entered into a policy to indemnify directors and officers against certain liabilities incurred as a director or officer, including costs and expenses associated in successfully defending legal proceedings. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or an auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Proceedings on behalf of the Group

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

[8]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Non‐Audit Services

Details of the amounts paid or payable to the auditor for non‐audit services provided by the auditor are outlined in Note 7 to the financial statements.

The Board considers non‐audit services provided by the auditor in accordance with written advice provided by resolution of the Board to satisfy themselves that the provision of those non‐audit services is compatible with, and does not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non‐audit services are subject to the corporate governance procedures adopted by the Company and review of the audit committee to ensure they do not impact the integrity and objectivity of the auditor; and

• all non‐audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Shares under option

Unissued ordinary shares of Rent.com.au Limited under option as at 30 June 2016 are as follows:

Date Options Granted	ExpiryDate	Issue Price of Shares	Number Under Option
17 June 2015	23 June 2020	$0.30	7,000,0001
17 June 2015	17 June 2020	$0.25	19,000,0002
17 June 2015	17 June 2020	$0.30	14,185,0003
13 August 2015	30 June 2017	$0.30	400,0003
22 February2016	31 December 2017	$0.30	2,100,0003
19 May2016	19 August 2016	$0.15	10,000,0001

1. Advisor options.

2. Employee options:

Tranche 1 – 10,000,000. Vest upon continuous employment with the group until 31 December 2016. Tranche 2 – 4,500,000 Vest upon continuous employment with the group until 31 December 2016 and the VWAP of shares trading at greater than $0.30 over 20 consecutive trading days.

Tranche 3 –4,500,000 Vest upon continuous employment with the group until 31 December 2016 and the VWAP of shares trading at greater than $0.40 over 20 consecutive trading days.

3. Employee options:

Tranche 4 – 4,820,001. Vest upon continuous employment with the group until 31 December 2016 and the VWAP of shares trading at greater than $0.30 over 20 consecutive trading days.

Tranche 5 – 4,820,001. Vest upon continuous employment with the group until 31 December 2016 and the VWAP of shares trading at greater than $0.40 over 20 consecutive trading days.

Tranche 6 – 4,819,998. Vest upon continuous employment with the group until 31 December 2016 and the VWAP of shares trading at greater than $0.60 over 20 consecutive trading days.

Total unissued ordinary shares under option as at the date of this report is 52,685,000.

[9]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Shares issued on the exercise of options

There were two (2) ordinary shares of Rent.com.au Limited issued during the six months ended 30 June 2015, and up to the date of this report, on the exercise of options.

Audited Remuneration report

The remuneration report is set out under the following main headings:

• A. Principles used to determine the nature and amount of remuneration

• B. Details of remuneration

• C. Service agreements

• D. Share‐based compensation

• E. Additional information

Voting and comments made at the company's 2015 Annual General Meeting ('AGM')

At the 2015 AGM, 99.8% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2015. The company did not receive any specific feedback at the AGM regarding its remuneration practices.

• A. Principles used to determine the nature and amount of remuneration

Remuneration Governance

The Board has elected to establish a remuneration committee in accordance with its Corporate Governance Policy.

The following items are considered and discussed as deemed necessary at the remuneration committee meetings:

• make specific recommendations to the board on remuneration of directors and senior officers;

• recommend the terms and conditions of employment for any Executive Directors;

• undertake a review of any Executive Director’s performance, at least annually, including setting with the Executive Director goals for the coming year and reviewing progress in achieving those goals;

• consider and report on the recommendations and remuneration of any Executive Directors; and

• develop and facilitate a process for Board and Director evaluation.

Non‐Executive Directors

Fees and payments to non‐executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non‐executive directors’ fees and payments are reviewed annually by the remuneration committee.

Directors’ Fees

Non‐executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $350,000 per annum and was approved at a previous annual general meeting.

The following fees were paid since 1 July 2015:

Non‐executive directors1:	$175,000
Managing director:	$350,400

1Fee paid in total Garry Garside, John Wood, Samuel McDonagh and Philip Warren.

[10]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

• A. Principles used to determine the nature and amount of remuneration (cont’d)

• Additional fees

A director may also be paid fees or other amounts as the directors determine if a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Retirement allowances for directors

Superannuation contributions required under the Australian Superannuation Guarantee Legislation continue to be made and are deducted from the directors’ overall fee entitlements.

Executive pay

The executive pay and reward framework has the following components:

• base pay and benefits, including superannuation;

• car allowance;

• short‐term incentives; and

• long‐term incentives through participation in the Long Term Incentive Plan.

The combination of these comprises the executive’s total remuneration.

Base pay

The employment cost package which may be delivered as a combination of cash and prescribed non‐financial benefits at the executives’ discretion.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for executives is reviewed annually to ensure the executives’ pay is competitive with the market. An executive’s pay is also reviewed every 12 months and may increase every 12 months.

Benefits

No benefits other than noted above are paid to directors or management except as incurred in normal operations of the business.

Long term incentives

Long term incentives have been provided to directors and employees through the issue of performance shares, employee options and performance rights during the year ended 30 June 2016.

At the annual general meeting of the Company, the Long Term Incentive Plan (‘LTIP’) was approved by shareholders. The LTIP allows the Company to provide incentives which promote the long term performance, growth and support of the Company.

[11]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

• A. Principles used to determine the nature and amount of remuneration (cont’d)

The LTIP provides for the issuance of:

• (a) Performance Rights which, upon a determination by the Board that the performance conditions attached to the Performance Rights have been met, will result in the issue of one ordinary Share in the Company for each Performance Right; and

• (b) Plan Options which, upon a determination by the Board that the vesting conditions attached to the Plan Options have been met, will result in the Plan Options vesting and being able to be exercised into Shares by payment of the exercise price.

To achieve its corporate objectives, the Company needs to attract and retain its key staff. The Board believes that grants made to eligible participants under the Plan will provide a powerful tool to underpin the Company's employment and engagement strategy, and that the implementation of the Plan will:

• (a) enable the Company to recruit, incentivise and retain Key Management Personnel and other eligible Employees needed to achieve the Company's business objectives;

• (b) link the reward of key staff with the achievements of strategic goals and the long term performance of the Company;

• (c) align the financial interest of participants of the Plan with those of Shareholders; and

• (d) provide incentives to participants of the Plan to focus on superior performance that creates Shareholder value.

The key features of the Plan are as follows:

• (a) The Board will determine the number of Performance Rights and Plan Options (Plan Securities) to be granted to Eligible Employees (or their Affiliates) and the vesting conditions, expiry date of the Plan Securities and the exercise price of the Plan Options in its sole discretion.

• (b) The Plan Securities are not transferable unless the Board determines otherwise or the transfer is required by law and provided that the transfer complies with the Corporations Act.

• (c) Subject to the Corporations Act and the Listing Rules and restrictions on reducing the rights of a holder of Plan Securities, the Board will have the power to amend the Plan as it sees fit.

[12]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

B. Details of remuneration

Amounts of remuneration

Details of the remuneration of the directors and the key management personnel of the Company are found below:

Director	Appointed	Resigned
Mr. PhilipWarren	18 September 2014	‐
Dr. GarryGarside	15 June 2015	‐
Mr. Mark Woschnak	15 June 2015	22 July2016
Mr. John Wood	15 June 2015	‐
Mr. Samuel McDonagh	15 June 2015	‐

Dr. GarryGarside Mr. Mark Woschnak Mr. John Wood Mr. Samuel McDonagh	15 June 2015 15 June 2015 15 June 2015 15 June 2015	‐ 22 July2016 ‐ ‐
KMP	Appointed	Resigned
Mr. Jan Ferreira	28 April 2014	‐
Maya William	21 September 2015	‐
Scott Waters	14 September 2015	‐

1. Mr David Berridge and Mr Rupert Quekett ceased to be KMP upon establishment of Executive Team following commencement of Ms. William and Mr. Waters.

Key Management personnel and other executives of the Company

Details of remuneration for the twelve months ended 30 June 2016

KMP	Base Fee $	Super‐annuation $	Long Service Leave $	Performance Rights $	Options1 $	Total $	Percentage based on performance
PhilipWarren	40,000	‐	‐	‐	‐	40,000	0.00%
GarryGarside	55,000	‐	‐	6,227	79,965	141,192	61.05%
Mark Woschnak	319,819	30,334	‐	183,518	2,374,666	2,908,337	86.32%
John Wood	40,000	‐	‐	3,277	43,380	86,657	53.84%
Samuel McDonagh	40,000	‐	‐	10,487	130,080	180,567	77.85%
Jan Ferreira	225,000	21,414	‐	5,899	73,170	325,483	24.29%
Maya William	155,384	14,764	‐	507	12,918	183,573	7.31%
Scott Waters	143,308	13,866	‐	507	12,918	170,599	7.87%
David Berridge2	25,385	2,412	‐	‐	‐	27,797	0.00%
Rupert Quekett2	26,923	2,558	‐	‐	‐	29,481	0.00%
Total	1,070,819	85,348	‐	210,422	2,727,097	4,093,686	71.76%

1. Options include both share based payments and advisor options.

2. 2 Ceased to be KMP upon establishment of Executive Team following commencement of Ms. William and Mr. Waters.

[13]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

B. Details of remuneration (cont’d)

Details of remuneration for the six months ended 30 June 2015

KMP	Base Fee $	Superannuation $	Performance Rights $	Options1 $	Total $	Percentage based on performance
Ian Macliver	20,000	‐	‐	‐	20,000	0.00%
Mark Titchener	20,000	‐	‐	‐	20,000	0.00%
PhilipWarren	20,000	‐	‐	129,296	149,296	86.50%
GarryGarside	2,292	‐	43	3,086	5,421	57.73%
Mark Woschnak	21,157	2,010	1,278	91,434	115,879	80.01%
John Wood	1,667	‐	23	1,659	3,349	50.23%
Samuel McDonagh	1,667	‐	73	5,072	6,812	75.53%
Jan Ferreira	15,577	1,480	41	2,853	19,951	14.51%
David Berridge	9,363	889	73	‐	10,325	0.71%
RupertQuekett	9,742	926	37	2,536	13,241	19.43%
Total	121,465	5,305	1,568	235,936	364,274	29.71%

1. Options include both share based payments and advisor options.

Performance Rights granted as part of remuneration for the year ended 30 June 2016.

KMP	Grant Date	Number Granted	Number vested at year end	Average fair value per performance share at grant date	Maximum total of grant yet to vest	Expiry date
Maya William	22 February2016	100,000	‐	$0.225	100,000	Various
Scott Waters	22 February2016	100,000	‐	$0.225	100,000	Various
Total		200,000			200,000

Options (share based payments and advisor options) granted as compensation to KMP for the year ended 30 June 2016.

2016.
KMP	Grant Date	Number Granted	Vesting date	Expiry Date	Exercise price	Fair value per option at grant date
Maya William	22 February2016	500,000	31 December 2017	21 February2021	$0.30	$0.135
Scott Waters	22 February2016	500,000	31 December 2017	21 February2021	$0.30	$0.135
Total		1,000,000

[14]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

• C. Service agreements

Remuneration and other terms of employment for the Managing Director and other Key Management Personnel are formalised in employment contracts. Other major provisions of the agreements relating to remuneration are set out below:

Mark Woschnak, Managing Director:

• Mr. Woschnak stepped down from his role on 22 July 2016 and is no longer a KMP of Rent.com.au Limited.

• No set term of agreement, will continue in accordance with provisions in Executive Service Agreement.

• Base salary, exclusive of superannuation, was $300,000 per annum

• $20,000 car allowance per annum

• The number of performance rights and employee options under the Long Term Incentive Plan

• A payment based on a percentage of the Base Salary on the achievement of key performance indicators to be set by the Company, having regard to the financial position and performance of the Group, under a short term incentive plan to be implemented by the Company.

Jan Ferreira, Chief Financial Officer and Joint Company Secretary

• Mr. Ferreira’s Executive Services Agreement for the position of Chief Financial Officer and Company Secretary has no fixed period and may be terminated by provision of six months’ prior written notice by either party.

• Mr. Ferreira received a base salary of $225,000 per annum, plus statutory superannuation entitlements.

• Mr. Ferreira is eligible to participate in the Long Term Incentive Plan and was issued 900,000 Employee Options and 316,647 Performance Rights.

• Mr. Ferreira will also be eligible to participate in a short term incentive scheme which RENT is proposing to implement. The Board will determine a percentage of base salary that may be payable to Mr. Ferreira on the achievement of key performance indicators to be set having regard to the financial position and performance of the Group.

Scott Waters, General Manager – Products & Services

• Mr. Waters’ Executive Services Agreement for the position of General Manager – Products & Services has no fixed period and may be terminated by provision of three months’ prior written notice by either party.

• Mr. Waters received a base salary of $180,000 per annum, plus statutory superannuation entitlements.

• Mr. Waters is eligible to participate in the Long Term Incentive Plan and was issued 500,000 Employee Options and 100,000 Performance Rights.

• Mr. Waters will also be eligible to participate in a short term incentive scheme which RENT is proposing to implement. The Board will determine a percentage of base salary that may be payable to Mr. Waters on the achievement of key performance indicators to be set having regard to the financial position and performance of the Group.

[15]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

C. Service agreements (cont’d)

Maya William, General Manager – Marketing

• Ms. William’s Executive Services Agreement for the position of General Manager ‐ Marketing has no fixed period and may be terminated by provision of three months’ prior written notice by either party.

• Ms. William received a base salary of $200,000 per annum, plus statutory superannuation entitlements.

• Ms. William is eligible to participate in the Long Term Incentive Plan and was issued 500,000 Employee Options and 100,000 Performance Rights.

• Ms. William will also be eligible to participate in a short term incentive scheme which RENT is proposing to implement. The Board will determine a percentage of base salary that may be payable to Ms. William on the achievement of key performance indicators to be set having regard to the financial position and performance of the Group.

The non‐executive directors are subject to service agreements which cover relevant provisions including term, fees, independence, re‐election and the role requirements.

D. Share‐based compensation

Other than outlined above, Rent.com.au Limited paid no share‐based compensation during the year.

E. Additional Information

Equity instruments held by Key Management Personnel

1. Options

The number of options over ordinary shares held by each KMP of the Company during the year ended 30 June 2016 is as follows:

30 June 2016	Balance at start of the period Granted during the period Exercised during the period Other changes during the period Balance at 30 June 2016 Vested during the period Vested and exercise‐ able Vested and unexercis‐ able
Philip Warren Garry Garside John Wood Mark Woschnak2 Samuel McDonagh Jan Ferreira Rupert Quekett1 Maya William Scott Waters Total	1,051,149 ‐ ‐ (1,148) 1,050,001 1,012,500 37,501 1,012,500 950,000 ‐ ‐ ‐ 950,000 ‐ ‐ ‐ 500,000 ‐ ‐ ‐ 500,000 ‐ ‐ ‐ 28,000,000 ‐ ‐ ‐ 28,000,000 ‐ ‐ ‐ 1,600,000 ‐ ‐ ‐ 1,600,000 ‐ ‐ ‐ 900,000 ‐ ‐ ‐ 900,000 ‐ ‐ ‐ 800,000 ‐ ‐ (800,000) ‐ ‐ ‐ ‐ ‐ 500,000 ‐ ‐ 500,000 ‐ ‐ ‐ ‐ 500,000 ‐ ‐ 500,000 ‐ ‐ ‐
	33,801,149 1,000,000 ‐ (801,148) 34,000,001 1,012,500 37,501 1,012,500

1. Mr Berridge and Mr Quekett ceased to be key management personnel from 14 September 2015.

2. Mr Woschnak resigned subsequent to year end on 22 July 2016.

[16]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

2. Shareholdings

The number of ordinary shares in Rent.com.au Limited held by each KMP of the Company during the year ended 30 June 2016 is as follows:

30 June 2016 Philip Warren Garry Garside John Wood Mark Woschnak2 Samuel McDonagh Jan Ferreira David Berridge1 Rupert Quekett1 Total

Balance at beginning of the period Granted as remuneration during the period Issued on exercise of options during the period Other changes during the period Balance at 30 June 2016 94,432 ‐ ‐ 31,477 125,909 1,889,665 ‐ ‐ 532,691 2,422,356 8,432,219 ‐ ‐ 3,338,144 11,770,363 6,454,743 ‐ ‐ 6,306,835 12,761,578 122,229 ‐ ‐ 65,813 188,042 34,046 ‐ ‐ (29,508) 4,538 273,825 ‐ ‐ (273,825) ‐ 9,900 ‐ ‐ (9,900) ‐

17,311,059 ‐ ‐ 9,961,727 27,272,786

1. Mr Berridge and Mr Quekett ceased to be KMP from 14 September 2015.

2. Mr Woschnak resigned subsequent to year end on 22 July 2016.

3. Performance Rights

The number of performance rights in Rent.com.au Limited held by each KMP of the company during the year ended 30 June 2016 is as follows:

30 June 2016	Balance at start of the period Received as Remuneration Performance Rights Converted Other Movements Balance at 30 June 2016 Vested and Exercisable at 30 June 2016 Unvested at 30 June 2016
Philip Warren Garry Garside John Wood Mark Woschnak2 Samuel McDonagh Jan Ferreira Maya William Scott Waters David Berridge1 Rupert Quekett1 Total	‐ ‐ ‐ ‐ ‐ ‐ ‐ 334,239 ‐ ‐ ‐ 334,239 ‐ 334,239 175,914 ‐ ‐ ‐ 175,914 ‐ 175,914 9,851,223 ‐ ‐ ‐ 9,851,223 ‐ 9,851,223 562,926 ‐ ‐ ‐ 562,926 ‐ 562,926 316,647 ‐ ‐ ‐ 316,647 ‐ 316,647 ‐ 100,000 ‐ ‐ 100,000 ‐ 100,000 ‐ 100,000 ‐ ‐ 100,000 ‐ 100,000 562,926 ‐ ‐ (562,926) ‐ ‐ ‐ 281,463 ‐ ‐ (281,463) ‐ ‐ ‐
	12,085,338 200,000 ‐ (844,389) 11,440,949 ‐ 11,440,949

1. Mr Berridge and Mr Quekett ceased to be KMP from 14 September 2015.

2. Mr Woschnak resigned on 22 July 2016 and ceased to be KMP

[17]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

E. Additional Information (cont’d)

4. Performance Shares

Performance shares were issued as consideration to the vendors of Rent.com.au. The number of performance shares in Rent.com.au Limited held by each KMP of the company during the year ended 30 June 2016 is as follows:

30 June 2016	Balance at start of the period Received as Remuneration Performance Shares Converted Other Movements Balance at 30 June 2016 Vested and Exercisable at 30 June 2016 Unvested at 30 June 2016
Philip Warren Garry Garside John Wood Mark Woschnak Samuel McDonagh Jan Ferreira David Berridge Rupert Quekett Total	‐ ‐ ‐ ‐ ‐ ‐ ‐ 872,073 ‐ (290,691) ‐ 581,382 ‐ 581,382 7,758,137 ‐ (1,690,055) ‐ 6,068,082 ‐ 6,068,082 2,978,838 ‐ (992,946) ‐ 1,985,892 ‐ 1,985,892 56,409 ‐ (18,803) ‐ 37,606 ‐ 37,606 13,615 ‐ (4,538) ‐ 9,077 ‐ 9,077 126,369 ‐ (42,123) (84,246) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
	11,805,441 ‐ (3,039,156) (84,246) 8,682,039 ‐ 8,682,039

Other KMP Transactions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties:

	30 June 2016
	$
Transactions:
Company secretarial fee ‐ Grange Consulting[1]	73,066
Advisory and capital issue costs – Grange Consulting(1)	47,905
Rental expense ‐ Prime Health Group Property Trust[2]	43,048
Interest expense ‐Prime Health Group Property Trust[2]	31,069
Other expenses [2]	4,007
Balances:
Amount due to Prime Health Group Property Trust[2]	343,037
Amount due to Sealcrest Pty Ltd[2]	‐

[1] Philip Warren is a director and shareholder.

[2] Garry Garside is a director of Sealcrest Pty Ltd atf Prime Health Group Property Trust.

There have been no other transactions other than those described above.

[18]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Report (continued)

Audited Remuneration report (cont’d)

E. Additional Information (cont’d)

Additional information

The earnings of the consolidated entity for the five years to 30 June 2016 are summarised below:

	2016	2015+	2014	2013*	2012*
	$	$	$	$	$
Sales revenue	748,495	171,197	454,289	50,484	49,105
EBITDA	(7,216,670)	(927,249)	(1,442,099)	(9,878,470)	(2,598,192)
EBIT	(7,464,919)	(1,059,369)	(1,647,509)	(9,878,470)	(2,598,192)
Loss after income tax	(12,820,585)	(3,655,771)	(1,647,509)	(9,878,470)	(2,598,192)

The factors that are considered to affect total shareholders return ('TSR') are summarised below:

	2016	2015	2014	2013	2012
Share price at financial year end ($)	0.16	0.18	0.01	0.01	0.20
Total dividends declared (cents per
share)	-	-	-	-	-
Basic earnings per share (cents per
share)	(12.42)	(6.62)	(3.75)	(0.14)	(0.15)

• relates to Select Exploration Ltd. On 15 June 2015, Select Exploration Ltd completed the acquisition of 100% of Rent.com.au (Operations) Pty Ltd and was subsequently renamed to Rent.com.au Ltd and changed the scale and nature of its activities.

• The 2015 financial year was an abridged, 6 month financial year.

[This concludes the remuneration report, which has been audited]

Auditor

RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.

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

The lead auditor’s independence declaration is set out on the following page for the year ended 30 June 2016.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors

Dr. Garry Garside Non-executive Chairman 22 August 2016

[19]

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Rent.com.au Limited for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• (ii) any applicable code of professional conduct in relation to the audit.

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RSM AUSTRALIA PARTNERS

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Perth, WA Dated: 22 August 2016

TUTU PHONG Partner

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RENT.COM.AU LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Rent.com.au Limited, which comprises the statement of financial position as at 30 June 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Rent.com.au Limited, would be in the same terms if given to the directors as at the time of this auditor's report .

Opinion

In our opinion:

• (a) the financial report of Rent.com.au Limited is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Rent.com.au Limited for the year ended 30 June 2016 complies with section 300A of the Corporations Act 2001 .

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RSM AUSTRALIA PARTNERS

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Perth, WA Dated: 22 August 2016

TUTU PHONG Partner

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June 2016

or the year ended 30 June 2016
Note Revenue 3 Other Income Administration charges Consulting and business development costs Depreciation and amortisation Employee benefits expense Finance charges Restructuring/relisting expense 11 Share based payment expense 25 Others 4 Loss before income tax Income tax benefit/expense 5 Loss after Income Tax Other comprehensive income Total comprehensive (loss) attributable to owners of Rent.com.au Limited Earnings per share for loss from continuing operations attributable to the ordinary equity holders of the company: Basic and diluted (loss) per share (cents per share) 8	Consolidated 30 June 2016 6 Months to 30 June 2015 $ $ 748,495 171,197 123,049 3,064
	871,544 174,261 (1,289,396) (188,624) (102,940) (120,790) (248,249) (132,120) (3,780,807) (461,251) (31,291) (66,841) ‐ (1,524,642) (5,447,424) (1,007,983) (2,792,022) (327,781)
	(12,820,585) (3,655,771) ‐ ‐
	(12,820,585) (3,655,771) ‐ ‐
	(12,820,585) (3,655,771)
	(12.42) (6.62)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

[23]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Consolidated Statement of Financial Position

As at 30 June 2016

s at 30 June 2016
Note ASSETS CURRENT ASSETS Cash and cash equivalents 9 Trade and other receivables 10 TOTAL CURRENT ASSETS NON‐CURRENT ASSETS Plant and equipment 16 Intangible assets 17 TOTAL NON‐CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 13 Borrowings 20 Employee benefits 18 TOTAL CURRENT LIABILITIES NON‐CURRENT LIABILITIES Trade and other payables 13 Borrowings 20 TOTAL NON‐CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 14 Reserve 12 Accumulated losses 19 TOTAL EQUITY	Consolidated 30 June 2016 30 June 2015 $ $ 6,080,209 4,453,304 170,430 156,967
	6,250,639 4,610,271
	122,060 15,685 754,799 549,587
	876,859 565,272
	7,127,498 5,175,543
	1,405,399 345,427 41,542 ‐ 363,912 256,606
	1,810,853 602,033
	36,086 354,961 63,350 ‐
	99,436 354,961
	1,910,289 956,994
	5,217,209 4,218,549
	26,777,938 16,773,963 4,823,253 1,007,983 (26,383,982) (13,563,397)
	5,217,209 4,218,549

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

[24]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Consolidated Statement of Changes in Equity

For the year ended 30 June 2016 Note	Issued Capital Share based payment reserve $ $	Accumulated Losses Total $ $
Balance at 1 July 2015 Total loss for the year Total comprehensive income/(loss) for the year Transaction with owners in their capacity as owners: Shares issued Share based payments Share issue costs Balance at 30 June 2016 For the six months ended 30 June 2015 Consolidated Note Balance at 1 January 2015 Total loss for the year Total comprehensive income/(loss) for the year Transaction with owners in their capacity as owners: Shares issued Elimination of existing investment in Rent.com.au (Operations) Pty Ltd Issue of shares for acquisition of subsidiary Share based payments Shares issued Share issue costs Balance at 30 June 2015	16,773,963 1,007,983	(13,563,397) 4,218,549
		(12,820,585) (12,820,585)
	‐ ‐	(12,820,585) (12,820,585)
	10,776,210 ‐ ‐ 3,815,270 (772,235) ‐	‐ 10,776,210 ‐ 3,815,270 ‐ (772,235)
	10,003,975 3,815,270	‐ 13,819,245
	26,777,938 4,823,253	(26,383,982) 5,217,209
	Issued Capital Share based payment reserve $ $ 10,384,424 ‐	Accumulated Losses Total $ $ (9,907,626) 476,798
	‐ ‐	(3,655,771) (3,655,771)
	‐ ‐	(3,655,771) (3,655,771)
	40,000 ‐ (250,000) ‐ 1,949,539 ‐ ‐ 1,007,983 5,000,000 ‐ (350,000) ‐	‐ 40,000 ‐ (250,000) ‐ 1,949,539 1,007,983 ‐ 5,000,000 ‐ (350,000)
	6,389,539 1,007,983	‐ 7,397,522
	16,773,963 1,007,983	(13,563,397) 4,218,549

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

[25]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Consolidated Statement of Cash Flows

For the year ended 30 June 2016

For the year ended 30 June 2016
Note	30 June 2016 $ 6 Months to 30 June 2015 $ Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Interest paid Other income Net cash used in operating activities 24 CASH FLOWS FROM INVESTING ACTIVITIES Payment for property, plant and equipment Payments for development costs Receipt from R&D grant Acquisition of subsidiary, net cash acquired 11 Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital Repayment of borrowings Share issue costs Net cash provided by financing activities Net increase in cash held Cash and cash equivalents at beginning of financial year/period Cash and cash equivalents at end of financial year/period	765,136 118,797 (7,148,050) (973,692) 56,506 3,064 (31,292) (66,841) 66,544 137,705
	(6,291,156) (780,967)
	(15,070) (4,751) (491,179) (200,176) 74,839 ‐ ‐ 260,967
	(431,410) 56,040
	9,145,237 5,040,000 (23,531) ‐ (772,235) (350,000)
	8,349,471 4,690,000
	1,626,905 3,965,073 4,453,304 488,231
	6,080,209 4,453,304

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

[26]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements

This financial report of Rent.com.au Limited (‘company’) and its controlled entities (‘consolidated entity’ or ‘the Group’) for the year ended 30 June 2016 was authorised for issue in accordance with a resolution of the Directors on 22 August 2016.

Rent.com.au Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

1. Significant Accounting Policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New, revised or amending Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Basis of Preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for‐profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available‐for‐sale financial assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Parent entity information

In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed within these financial statements.

The presentation currency is Australian dollars.

[27]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Rent.com.au Limited ('company' or 'parent entity') as at 30 June 2016 and the results of all subsidiaries for the year then ended. Rent.com.au Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity' or ‘the Group’.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de‐consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non‐controlling interest acquired is recognised directly in equity attributable to the parent.

Non‐controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non‐ controlling interest in full, even if that results in a deficit balance.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non‐controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Reverse Acquisition accounting

During the prior year, Rent.com.au Limited (formerly Select Exploration Limited), the legal parent and legal acquirer, completed the acquisition of Rent.com.au (Operations) Pty Ltd (previously Rent.com.au Pty Ltd) (“Rent.com.au Subsidiary”). The acquisition did not meet the definition of a business combination in accordance with AASB 3 Business Combinations. Instead the acquisition has been treated as a group recapitalisation, using the principles of reverse acquisition accounting in AASB 3 Business Combinations given the substance of the transaction is that Rent.com.au Subsidiary has effectively been recapitalised. Accordingly, the consolidated financial statements have been prepared as if Rent.com.au Subsidiary has acquired Rent.com.au Limited, not vice versa as represented by the legal position. The recapitalisation is measured at the fair value of the equity instruments that would have been given by Rent.com.au Subsidiary to have exactly the same percentage holding in the new structure at the date of the transaction.

The impact of the group restructure on each of the primary statements is as follows:

[28]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Statement of Profit or Loss and Other Comprehensive Income

• The 30 June 2016 comparative statements comprise 12 months of Rent.com.au Subsidiary and Rent.com.au Limited.

• The 30 June 2015 consolidated statements comprise 6 months of Rent.com.au Subsidiary and 15 days of Rent.com.au Limited.

Operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Rent.com.au Limited's functional and presentation currency.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year‐end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Revenue Recognition

Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Subscription services

Subscription revenues are recognised on a straight‐line basis over the contract period.

Listing fees

Listing fees are recognised when the customer places an advertisement leading to an enforceable claim by the Group.

Products and services revenue

Products and services revenue is recognised at the point of sale. Amounts disclosed are net of returns and discounts.

Advertising revenue

Revenues from site display advertising are recognised when the advertisements are displayed. Where the Group has utilised the services of an external sales agency to sell advertising services on behalf of the Group, the revenues are recorded net of the sales commissions paid to the sales agency. Revenues from database advertising are recognised when the obligations under the relevant contract are fulfilled.

Interest

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.

[29]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Revenue Recognition (cont’d)

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

All revenue is stated net of the amount of goods and services tax (GST).

Income Tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or

• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Current and non‐current classification

Assets and liabilities are presented in the statement of financial position based on current and non‐current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non‐current.

[30]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Current and non‐current classification (cont’d)

A liability is classified as current when: it is either expected to be settled in the entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non‐current.

Deferred tax assets and liabilities are always classified as non‐current.

Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short‐term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.

Trade and Other Receivables

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

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the consolidated entity 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 (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. 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. Cash flows relating to short‐term receivables are not discounted if the effect of discounting is immaterial.

Other receivables are recognised at amortised cost, less any provision for impairment.

Non‐current assets or disposal groups classified as held for sale

Non‐current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non‐current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non‐current assets and assets of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non‐current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.

[31]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Non‐current assets or disposal groups classified as held for sale (cont’d)

Non‐current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non‐current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight‐line basis to write off the net cost of each item of plant and equipment over their expected useful lives as follows:

Computer equipment	2‐4 years
Furniture and fittings	4 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.

[32]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Leases (cont’d)

Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership at the end of the lease term.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight‐line basis over the term of the lease.

Intangible assets

IT development and software

Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems.

These intangible assets have finite lives and are subject to amortisation on a straight line basis. The useful lives for these assets are as follows:

Software

4 years

Research and development

Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved services) are recognised as intangible assets when it is probable that the project will, after considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible asset and amortised from the point of which the asset is ready for use on a straight line basis over its useful life of 4 years.

Impairment of non‐financial assets

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non‐financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value‐in‐use. The value‐ in‐use is the present value of the estimated future cash flows relating to the asset using a pre‐tax discount rate specific to the asset or cash‐generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash‐generating unit.

[33]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Trade and Other Payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short‐term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre‐tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.

Employee benefits

Short‐term employee benefits

Liabilities for wages and salaries, including non‐monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Other long‐term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

[34]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Employee benefits (cont’d)

Defined contribution superannuation expense

Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.

Share‐based payments

Equity‐settled and cash‐settled share‐based compensation benefits are provided to employees. Equity‐ settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash‐settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity‐settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black‐Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non‐vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity‐settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash‐settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black‐Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

• during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.

• from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash‐settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity‐settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share‐based compensation benefit as at the date of modification.

[35]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Employee benefits (cont’d)

Share‐based payments – continued

If the non‐vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity‐settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

Fair value measurement

When an asset or liability, financial or non‐financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non‐financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

For recurring and non‐recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Issued capital

Ordinary shares are classified as equity.

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

Dividends

Dividends are recognised when declared during the financial year and no longer at the discretion of the company.

[36]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Business Combination

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition‐date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non‐controlling interest in the acquiree. For each business combination, the non‐controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition‐date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition‐date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition‐date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

The difference between the acquisition‐date fair value of assets acquired, liabilities assumed and any non‐ controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre‐existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre‐existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition‐date, but only after a reassessment of the identification and measurement of the net assets acquired, the non‐controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition‐date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Pinnacle Listed Comprehensive Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

[37]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

Earnings per share (cont’d)

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2016. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held‐for‐trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12‐ month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the consolidated entity.

[38]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (cont’d)

New Accounting Standards and Interpretations not yet mandatory or early adopted (cont’d)

AASB 15 Revenue from Contracts with Customers

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand‐alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the consolidated entity.

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right‐of‐use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short‐term leases of 12 months or less and leases of low‐value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right‐of‐use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight‐line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity will adopt this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by the consolidated entity.

[39]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Share‐based payment transactions

The company measures the cost of equity‐settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black‐Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity‐settled share‐ based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

3. Revenue

3. Revenue
	Consolidated 30 June 2016 $ 30 June 2015 $
Revenue Agent fee Private listings Product and services Advertising Total Revenue	178,795 18,061 36,305 45,712 201,699 66,225 331,696 41,199
	748,495 171,197

4. Expenses

Consolidated

. Expenses	Consolidated
Information technology costs Other cost of sales Sales and marketing Total	30 June 2016 $ 30 June 2015 $ (337,159) (61,446) (112,141) (27,140) (2,342,722) (239,195)
	(2,792,022) (327,781)

[40]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

5. Income Tax

5. Income Tax
	Consolidated 30 June 2016 $ 30 June 2015 $
a) The components of tax expense comprise: Current tax Deferred tax Total b) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax payable on loss from ordinary activities before income tax at 28.5% (30 June 2015: 30%) Tax effect of: Share based payments Listing expenses Tax losses not recognised Timing differences not recognised Other Total The applicable weighted average effective tax rates are as follows: c) Deferred tax assets at 30 June 2016 not brought to account are: Carried forward losses Others Total The benefit for tax losses will only be obtained if:	‐ ‐ ‐ ‐
	‐ ‐
	(3,653,867) (1,096,731) 1,552,516 302,395 ‐ 457,393 2,151,076 336,943 (14,626) ‐ (35,099) ‐
	‐ ‐
	0% 0% 4,918,017 3,082,663 394,168 ‐
	5,312,185 3,082,663

 the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; and

• the losses are transferred to an eligible entity in the Group; and

• the Group continues to comply with the conditions for deductibility imposed by tax legislation; and

• no changes in tax legislation adversely affect the consolidated in realising the benefit from the deduction for the losses.

[41]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

6. Interests of Key Management Personnel (KMP)

Compensation of Key Management Personnel

Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the Group’s key management personnel for the period ended 30 June 2016.

The aggregate compensation made to key management personnel of the economic and Parent Entity is set out below:

:
	Consolidated 30 June 2016 $ 30 June 2015 $
Short‐term employee benefits Post‐employment benefits Share based payments	1,070,819 121,465 85,348 5,305 2,937,519 237,504
	4,093,686 364,274

7. Auditor’s Remuneration

Consolidated

Share based payments 7. Auditor’s Remuneration	2,937,519 237,504 4,093,686 364,274 Consolidated
	30 June 2016 $ 30 June 2015 $
Remuneration of the auditor of the entity:  Auditing or reviewing of the financial report ‒ RSM Australia Partners  Taxation and corporate services ‒ RSM Australia Total	44,000 32,500 9,590 6,880
	53,590 39,380

8. Earnings per Share

 Taxation and corporate services ‒ RSM Australia Total 8. Earnings per Share	9,590 6,880 53,590 39,380
	Consolidated 30 June 2016 $ 30 June 2015 $
Basic and diluted (loss) per share a) Reconciliation of earnings to profit or loss Net loss Loss used in the calculation of basic EPS b) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS	(12.42) (6.62) (12,820,585) (3,655,771)
	(12,820,585) (3,655,771)
	103,261,837 51,191,865

Options have not been included in the calculation of dilutive EPS as the options are anti‐dilutive.

[42]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

9. Cash and Cash Equivalents

. Cash and Cash Equivalents
Current Cash at bank and in hand Term Deposit*	Consolidated 30 June 2016 $ 30 June 2015 $ 5,876,127 4,453,304 204,082 ‐
	6,080,209 4,453,304

Cash at bank and in hand earns interest at floating rates based on daily bank rates.

*The effective interest rate on short‐term bank deposits was 2.6%. Commonwealth Bank of Australia has a charge over this term deposit as security for a bank guarantee that it has provided on behalf of Rent.com.au (Operations) Pty Ltd, to Amelia Correia Holdings the lessor under the lease for the office at Level 2, 7 Ventnor Avenue West Perth.

Reconciliation of cash

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents 6,080,209 4,453,304

The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

10. Trade and Other Receivables

cash and cash equivalents mentioned above. 10. Trade and Other Receivables
	Consolidated 30 June 2016 $ 30 June 2015 $
Current Trade debtors Prepayment GST receivable	103,257 58,802 47,575 ‐ 19,598 98,165
	170,430 156,967

As at 30 June 2016 there were no trade and other receivables past due or impaired.

Credit Risk – Trade and Other Receivables

The Group has no significant concentration of credit risk with respect to any single counter party other than Australian Taxation Office. The class of assets described as trade and other receivables is considered to be the main source of credit risk related to the Group.

All trade and other receivables are within initial trade terms and considered to be of high credit quality.

[43]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

11. Controlled Entities

All controlled entities are included in the consolidated financial statements. The parent entity does not guarantee to pay the deficiency of its controlled entities in the event of a winding up of any controlled entity. The financial year end of the controlled entity is the same as that of the parent entity, being 30 June.

	Country of	Principal Activity	Percentage	Owned (%)
	Incorporation
			2016	2015
Parent Entity
Rent.com.au Limited	Australia	Investment/Parent
Name of controlled entity
Rent.com.au (Operations) Pty Ltd	Australia	Information Technology	100	100
Interest in Associate:
Time Finance and Homeloans Pty Ltd	Australia	Dormant	25	25

Acquisition of Controlled Entity

During the prior year, Rent.com.au Limited (formerly Select Exploration Limited), the legal parent and legal acquirer, completed the acquisition of Rent.com.au (Operations) Pty Ltd (formerly Rent.com.au Pty Ltd) (Rent.com.au Subsidiary). The acquisition did not meet the definition of a business combination in accordance with AASB 3 Business Combinations. Instead the acquisition has been treated as a group recapitalisation, using the principles of reverse acquisition accounting in AASB 3 Business Combinations given the substance of the transaction is that Rent.com.au Subsidiary has effectively been recapitalised. Accordingly, the consolidated financial statements have been prepared as if Rent.com.au Subsidiary had acquired Rent.com.au Limited, and not versa as represented by the legal position. The recapitalisation is measured at the fair value of the equity instruments that would have been given by Rent.com.au Subsidiary to have exactly the same percentage holding in the new structure at the date of the transaction.

As the activities of Rent.com.au Limited would not constitute a business based on the requirements of AASB 3, the transaction has been accounted for as a share based payment under AASB 2. The excess of the deemed consideration over the fair value of Rent.com.au Limited, as calculated in accordance with the reverse acquisition accounting principles and with AASB 2, is considered to be a payment for a group restructure and has been expensed.

Rent.com.au Limited is the legal acquirer of Rent.com.au Subsidiary in this transaction and the consideration for the acquisition was the issue by Rent.com.au Limited of:

• 53,049,895 fully paid ordinary shares in Rent.com.au Limited in accordance with reverse asset acquisition accounting principles the consideration is deemed to have been incurred by Rent.com.au Subsidiary in the form of equity instruments issued to Rent.com.au Limited shareholders. The acquisition date fair value of this consideration has been determined with reference to the fair value of the issued shares of Rent.com.au limited immediately prior to the acquisition and has been determined to be $1,949,539; and

[44]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

11. Controlled Entities (cont’d)

• 24,482,313 Performance Shares, comprising 8,160,771 Class A Performance Shares, 8,160,771 Class B Performance Shares and 8,160,771 Class C Performance Shares. The fair value of these performance shares has been included as part of the consideration for the transaction in accordance with the relevant accounting standard.

• (Conversion on achievement of Milestone A) On achievement of greater than 500,000 unique visitors to the website rent.com.au in each of 3 consecutive months on or before 31 December 2018 (Milestone A), each Class A Performance Share will convert on a one for one basis into a Share.

• (A Expiry) Milestone A must be achieved on or before 5.00 pm on 31 January 2019 (A Expiry Date).

• (Conversion on achievement of Milestone B) On achievement of greater than $10,000,000 in revenue by Rent in any 12 month period on or before 31 December 2018 (Milestone B), each Class B Performance Share will convert on a one for one basis into a Share.

• (B Expiry) Milestone B must be achieved on or before 5.00 pm on the date which is 14 days after the release of the audited financial reports for period ended 31 December 2018 (B Expiry Date)

• (Conversion on achievement of Milestone C) On achievement of greater than $3,000,000 in EBITDA by Rent in any 12 month period on or before 31 December 2019 (Milestone C), each Class C Performance Share will convert on a one for one basis into a Share.

• (C Expiry) Milestone C must be achieved on or before 5.00 pm on the date which is 14 days after the release of the audited financial reports for period ended 31 December 2019 (C Expiry Date).

As Rent.com.au Limited is deemed to be the acquiree for accounting purposes, the carrying values of its assets and liabilities are required to be recorded at fair value for the purposes of the acquisition. No adjustments were required to the historical values to effect this change.

required to the historical values to effect this change.
	$
Consideration 53,049,895 fully paid ordinary vendor shares 24,482,313 Performance Shares* Total value of consideration Fair value of Rent.com.au Limited at acquisition: Cash Trade and other receivables Financial asset Trade and other payables Fair value of net assets Excess of consideration provided over the fair value of net assets at the date of acquisition expensed, being group restructuring and relisting costs	1,949,539 ‐
	1,949,539
	260,967 21,938 250,000 (108,008)
	424,897
	1,524,642

*Performance shares were issued as additional consideration, valued at nil, as the probability of performance hurdles being met was assessed as less than probable on the date of acquisition.

[45]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

11. Controlled Entities (cont’d)

Investment in associate‐ Accounted for using the equity method

Investment in associate‐ Accounted for using the equity method
	Consolidated 30 June 2016 $ 30 June 2015 $
Investment in associate Impairment Movement: Beginning of period End of period	200,000 200,000 (200,000) (200,000)
	‐ ‐
	‐ ‐
	‐ ‐

Summarised financial information for investment in associate is not disclosed as the entity is dormant during the year.

12. Reserves

year. 12. Reserves
	Consolidated 30 June 2016 $ 30 June 2015 $
Share Based Payment Reserve	4,823,253 1,007,983
	4,823,253 1,007,983

Share Based Payment Reserve

The option reserve recognises options, performance rights/shares issued as share based payments.

13. Trade and Other Payables

13. Trade and Other Payables
	Consolidated 30 June 2016 $ 30 June 2015 $
Current Trade creditors Other payables Non‐current Other payables Total	764,649 126,716 640,750 218,711
	1,405,399 345,427
	36,086 354,961
	1,441,485 700,388

Trade payables are non‐interest bearing and are normally settled on 60 day terms.

*An amount of $343,037 (30 June 2015: $290,462) owing to Prime Health Group is included in trade creditors. Interest of 8.5%p.a. (30 June 2015: 8.5%p.a.) is payable on this balance and as at 30 June 2016 there was $52,575 (30 June 2015: $64,499) in interest outstanding on this balance. The balance was fully repaid in July 2016.

[46]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

14. Issued Capital

14. Issued Capital
		Consolidated 30 June 2016 $ 30 June 2015 $
Ordinary shares fully paid Movements in ordinary share capital	26,777,938 16,773,963 26,777,938 16,773,963 30 June 2016 30 June 2015 No. of shares $ No. of shares $	26,777,938 16,773,963
		26,777,938 16,773,963
a) Ordinary Shares At the beginning of the reporting period Add: ‐ Share Issued Less: ‐ Elimination of Existing Rent.com.au Subsidiary shares Add: ‐ Existing Rent.com.au Limited shares on acquisition1 Add shares issued during the period ‐ Capital raising ‐ Conversion of Class A shares to ordinary shares ‐ Issue of Rent.com.au Limited shares on acquisition of Rent.com.au Subsidiary Transaction costs relating to share issues At the end of the reporting period	87,799,174 16,773,963 67,592,266 10,384,424 ‐ ‐ 296,296 40,000 ‐ ‐ (67,888,562) (250,000) ‐ ‐ 9,749,279 ‐ 49,546,482 9,144,056 25,000,000 5,000,000 8,160,771 1,632,154 ‐ ‐ ‐ ‐ 53,049,895 1,949,539 ‐ (772,235) ‐ (350,000)
	145,506,427 26,777,938 87,799,174 16,773,963

1Securities shown on a post 33.333 to 1 consolidation.

The ordinary shares are ordinary shares and rank equally in all respects with all ordinary shares in the Company. The rights attaching to the Shares arise from a combination of the Company’s Constitution, statute and general law. Copies of the Company’s Constitution are available for inspection during business hours at its registered office.

Shareholders are entitled to receive all notices, reports, accounts and other documents required to be furnished to shareholders under the Company’s Constitution, the Corporations Act and the Listing Rules. Subject to any rights or restrictions at the time being attached to any class or classes of shares, at a general meeting of the Company on a show of hands, every ordinary Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote and upon a poll, every Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote for any share held by the Shareholder.

b) Capital Management

Management controls the capital of the Company in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Company can fund its operations and continue as a going concern.

[47]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

15. Dividends Paid or Proposed

The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

16. Plant and equipment

a dividend to the date of this report. 16. Plant and equipment
	Consolidated 30 June 2016 $ 30 June 2015 $
Plant and equipment Less: Accumulated depreciation Balance at the end of the year Movement: Balance at the beginning of the year Additions Depreciation Disposal Balance at the end of the year	213,190 69,694 (91,130) (54,009)
	122,060 15,685
	15,685 14,075 143,495 4,751 (37,120) (3,141) ‐ ‐
	122,060 15,685

17. Intangible assets

Disposal Balance at the end of the year 17. Intangible assets	‐ ‐ 122,060 15,685
	Consolidated 30 June 2016 $ 30 June 2015 $
Software and development – at cost Less: Accumulated amortisation Movement: Balance at the beginning of the year Additions Amortisation Balance at the end of the year	2,627,825 2,211,484 (1,873,026) (1,661,897)
	754,799 549,587
	549,587 478,391 416,340 200,176 (211,128) (128,980)
	754,799 549,587

[48]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

18. Employee benefits

18. Employee benefits
			Consolidated
	30	June	2016	30 June	2015
		$		$
Employee benefits		363,912			256,606

Amounts not expected to be settled within the next 12 months

The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro‐rata payments in certain circumstances. The entire amount is presented as current, since the consolidated entity does not have an unconditional right to defer settlement. However, based on past experience, the consolidated entity does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.

The following amounts reflect leave that is not expected to be taken within the next 12 months:

Employee benefits obligation expected to be settled after 12 months

181,956 128,303

19. Equity – accumulated losses

19. Equity – accumulated losses
	Consolidated 30 June 2016 $ 30 June 2015 $
Accumulated losses at the beginning of the financial year (Loss) after income tax expense for the year Accumulated losses at the end of the financial year 20. Borrowings	(13,563,397) (9,907,626) (12,820,585) (3,655,771)
	(26,383,982) (13,563,397)
	Consolidated 30 June 2016 $ 30 June 2015 $
Lease Liability ‐ Current Lease Liability – Non current	41,542 ‐
	63,350 ‐

These are finance leases for computer equipment with an average outstanding terms of 2 years and 5 months.

[49]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

21. Commitments

Corporate and software services commitments:

Future minimum service fees payable under non‐cancellable are as follows:

	Consolidated 30 June 2016 $ 30 June 2015 $
Within one year After one year but not more than five years	‐ 70,000 ‐ ‐ ‐ 70,000

Operating lease commitments

Future minimum rentals payable under non‐cancellable office leases are as follows:

	Consolidated 30 June 2016 $ 30 June 2015 $
Within one year After one year but not more than five years	371,600 183,227 154,833 526,433
	526,433 709,660

The property lease is a non‐cancellable lease with a remaining term of 1 year and 5 months, with rent payable monthly in advance. Rental provisions within the lease agreement require the lease payments to be fixed for the remaining term. An option exists to renew the lease at the end of the term for an additional term of 3 years with a minimum fixed increase percentage of 4%.

Lease commitments ‐ finance

a minimum fixed increase percentage of 4%. Lease commitments ‐ finance
	Consolidated 30 June 2016 $ 30 June 2015 $
Committed at the reporting date and recognised as liabilities, payable: Within one year One to five years Total commitment Less: Future finance charges Net commitment recognised as liabilities	48,273 67,094 115,367 (10,475) 104,892	‐ ‐
		‐ ‐
		‐

Finance lease commitments includes contracted amounts for various plant and equipment with a written down value of $101,819 (2015: $nil) secured under finance leases expiring within one to five years. Under the terms of the leases, the consolidated entity has the option to acquire the leased assets for predetermined residual values on the expiry of the leases.

[50]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

22. Contingent Liabilities

There are no contingent liabilities (30 June 2015: nil).

23. Operating Segments

The Group only had one operating segment, which is the Group’s main strategic division. The strategic division is based on geographic locations and industry, which is information technology in Australia.

24. Cash Flow Information

24. Cash Flow Information
	Consolidated
	30 June 2016 $ 30 June 2015 $
a) Reconciliation of Cash Flow from Operations with Loss after Income Tax Loss after income tax ‐ Share based payments ‐ Depreciation and amortisation ‐ Restructuring/ relisting cost Changes in assets and liabilities ‐ trade and other receivables ‐ trade payables and accruals ‐ employee benefits Cash flows used in operations b)Non‐cash investing activities Acquisition of plant and equipment by means of finance leases	(12,820,585) (3,655,771) 5,447,424 1,007,983 248,249 132,120 ‐ 1,524,642 (13,467) 17,564 739,917 72,7547 107,306 119,947
	(6,291,156) (780,967)
	128,425 ‐

Acquisition of plant and equipment by means of finance leases

25. Share Based Payments

The Company established the Rent.com.au Limited Long Term Incentive Plan (“LTIP”) as approved by shareholders on 20 May 2015. All employees, directors and consultants are eligible to participate in the LTIP.

The LTIP provides for the issuance of:

• (a) Performance Rights which, upon a determination by the Board that the performance conditions attached to the Performance Rights have been met, will result in the issue of one ordinary Share in the Company for each Performance Right; and

• (b) Plan Options which, upon a determination by the Board that the vesting conditions attached to the Plan Options have been met, will result in the Plan Options vesting and being able to be exercised into Shares by payment of the exercise price.

To achieve its corporate objectives, the Company needs to attract and retain its key staff. The Board believes that grants made to eligible participants under the Plan will provide a powerful tool to underpin the Company’s employment and engagement strategy, and that the implementation of the Plan will:

• (a) enable the Company to recruit, incentive and retain Key Management Personnel and other eligible Employees needed to achieve the Company’s business objectives;

[51]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

25. Share Based Payments (cont’d)

• (b) link the reward of key staff with the achievements of strategic goals and the long term performance of the Company;

• (c) align the financial interest of participants of the Plan with those of Shareholders; and

• (d) provide incentives to participants of the Plan to focus on superior performance that creates Shareholder value.

The key features of the Plan are as follows:

• (a) The Board will determine the number of Performance Rights and Plan Options (Plan Securities) to be granted to Eligible Employees (or their Affiliates) and the vesting conditions, expiry date of the Plan Securities and the exercise price of the Plan Options in its sole discretion.

• (b) The Plan Securities are not transferable unless the Board determines otherwise or the transfer is required by law and provided that the transfer complies with the Corporations Act.

• (c) Subject to the Corporations Act and the Listing Rules and restrictions on reducing the rights of a holder of Plan Securities, the Board will have the power to amend the Plan as it sees fit.

• a) Expenses arising from share‐based payment transactions

Total expenses arising from share‐based payment transactions recognised during the period were as follows:

follows:
	30 June 2016 $ 30 June 2015 $
Performance shares/rights issued to employees Performance shares/rights issued to shareholders Option issued under employee option plan Advisor fee	240,198 5,118 1,632,154 ‐ 2,900,915 108,894 674,157 893,971
	5,447,424 1,007,983

b) Options

All options granted to key employees, consultants and advisors of the Company are for ordinary shares in Rent.com.au Limited which confer a right of one ordinary share for every option held.

[52]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

25. Share Based Payments (cont’d)

Grant Date Expiry Date Exercise Price	Balance at start of year Granted during the period Exercised during the period Expired/ forfeited/ other Balance at end of the period Vested & exercisable at end of the period Number Number Number Number Number
24 Oct 2012 30 Jun 2016 $0.36 24 Oct 2012 30 Sep 2015 $0.35 31 Jan 2013 30 Jun 2016 $0.36 26 Feb 2013 30 Jun 2016 $0.36 26 Feb 2013 30 Jun 2016 $0.35 3 May 2013 30 Jun 2016 $0.36 15 Jun 2015 17 Jun 2020 $0.25 15 Jun 2015 17 Jun 2020 $0.30 23 Jun 2015 22 Jun 2020 $0.30 13 Aug 2015 30 Jun 2017 $0.30 22 Feb 2016 31 Dec 2017 $0.30 19 May 2016 19 Aug 2016 $0.15	60,007 ‐ ‐ (60,007) ‐ ‐ 200,002 ‐ ‐ (200,002) ‐ ‐ 30,000 ‐ ‐ (30,000) ‐ ‐ 22,500 ‐ ‐ (22,500) ‐ ‐ 623,538 ‐ ‐ (623,538) ‐ ‐ 3,000 ‐ ‐ (3,000) ‐ ‐ 19,000,000 ‐ ‐ ‐ 19,000,000 14,460,000 ‐ (275,000) 14,185,000 7,000,000 ‐ ‐ ‐ 7,000,000 7,000,000 ‐ 400,000 ‐ ‐ 400,000 ‐ 2,100,000 ‐ ‐ 2,100,000 10,000,000 ‐ ‐ 10,000,000 10,000,000
	41,399,047 12,500,000 ‐ (1,214,047) 52,685,000 17,000,000

The following table sets out the assumptions made in determining the fair value of the options granted during the financial year:

uring the financial year:
	Options	Options	Options
	Granted	Granted	Granted
	13 August 2015	22 February 2016	19 May 2016
Expected volatility (%)	90	90	76
Risk free interest rate (%)	2.28	1.79	1.62
Weighted average expected life of options (years)	5	5	5
Expected dividends	Nil	Nil	Nil
Option exercise price (cents)	30	30	15
Share price at grant date (cents)	16	21	21
Fair value of option (cents)	9.2	13.5	6.7
Number of options	400,000*	2,100,000**	10,000,000
Expiry date	13 August 2020	21 February 2021	19 August 2016
Vesting date	13 August 2016	22 February 2016	19 May 2016

*Employee options:

Tranche 4 – 133,333. Vest upon continuous employment with the group until 30 June 2017 and the VWAP of shares trading at greater than $0.30 over 20 consecutive trading days.

Tranche 5 – 133,333. Vest upon continuous employment with the group until 30 June 2017 and the VWAP of shares trading at greater than $0.40 over 20 consecutive trading days.

Tranche 6 – 133,334. Vest upon continuous employment with the group until 30 June 2017 and the VWAP of shares trading at greater than $0.60 over 20 consecutive trading days.

**Employee options:

Tranche 4 – 700,000. Vest upon continuous employment with the group until 31 December 2017 and the VWAP of shares trading at greater than $0.30 over 20 consecutive trading days.

Tranche 5 – 700,000. Vest upon continuous employment with the group until 31 December 2017 and the VWAP of shares trading at greater than $0.40 over 20 consecutive trading days.

Tranche 6 – 700,000. Vest upon continuous employment with the group until 31 December 2017 and the VWAP of shares trading at greater than $0.60 over 20 consecutive trading days.

The weighted average remaining contractual life of options outstanding at year‐end was 5 years. The exercise price of outstanding shares at the end of the reporting period was $0.22.

[53]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

25. Share Based Payments (cont’d)

Grant Date Expiry Date Exercise Price	Grant Date Expiry Date Exercise Price		Balance at start of year Granted during the period Exercised during the period Number Number Number	Consolidated during the period Balance at end of the period Vested & exercisable at end of the period Number Number Number
2015 24 October 2012 30 Jun 2016 $0.36 24 October 2012 30 Sep 2015 $0.35 31 January 2013 30 Jun 2016 $0.36 26 February 2013 30 Jun 2016 $0.36 26 February 2013 30 Jun 2016 $0.35 3 May 2013 30 Jun 2016 $0.36 15 June 2015 17 Jun 2020 $0.25 15 June 2015 17 Jun 2020 $0.30 23 June 2015 22 June 2020 $0.30 c) Performance shares/rights Grant Date Expiry Date Exercise Price 2016 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2019 Nil 15 June 2015 31 December 2018 Nil 15 June 2015** 31 December 2018 Nil 15 June 2015 31 December 2019 Nil 13 August 2015 31 January 2019 Nil 13 August 2015 31 December 2018 Nil 13 August 2015 31 December 2019 * Nil 22 February 2016* 31 January 2019 Nil 22 February 2016 31 December 2018 * Nil 22 February 2016 31 December 2019 * Nil			2,000,000 ‐ ‐ 6,666,667 1,000,000 ‐ ‐ 750,000 ‐ ‐ 20,777,217 ‐ ‐ 100,000 ‐ ‐ ‐ 19,000,000 ‐ ‐ 14,460,000 ‐ ‐ 7,000,000 ‐	(1,939,995) 60,005 60,005 (6,466,649) 200,018 200,018 (969,999) 30,001 30,001 (727,499) 22,501 22,501 (20,153,695) 623,552 623,552 (97,000) 3,000 3,000 ‐ 19,000,000 ‐ ‐ 14,460,000 ‐ ‐ 7,000,000 7,000,000
			31,293,884 40,460,000 ‐	(30,354,837) 41,399,077 7,939,077
			Balance at start of year Granted during the period Exercised during the period Number Number Number	Expired/ forfeited/ other Balance at end of the period Vested & exercisable at end of the period Number Number Number
	2016 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2019 Nil 15 June 2015 31 December 2018 Nil 15 June 2015** 31 December 2018 Nil 15 June 2015 31 December 2019 Nil 13 August 2015 31 January 2019 Nil 13 August 2015 31 December 2018 Nil 13 August 2015 31 December 2019 * Nil 22 February 2016* 31 January 2019 Nil 22 February 2016 31 December 2018 * Nil 22 February 2016 31 December 2019 * Nil		8,160,771 (8,160,771) 8,160,771 ‐ 8,160,771 ‐ 4,111,812 ‐ 4,111,812 ‐ 4,111,812 ‐ ‐ 46,667 ‐ ‐ 46,667 ‐ ‐ 46,666 ‐ ‐ 40,000 ‐ ‐ 80,000 ‐ ‐ 80,000 ‐	‐ ‐ ‐ ‐ 8,160,771 ‐ ‐ 8,160,771 ‐ (32,351) 4,079,461 ‐ (32,351) 4,079,461 ‐ (32,351) 4,079,461 ‐ ‐ 46,667 ‐ ‐ 46,667 ‐ ‐ 46,666 ‐ ‐ 40,000 ‐ ‐ 80,000 ‐ ‐ 80,000 ‐
			36,817,749 340,000 (8,160,771)	(97,053) 28,899,925 ‐

[54]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

26. Share Based Payments (cont’d)

c) Performance shares/rights

• Class A Performance Shares/rights – these performance shares will vest on the achievement of greater than 500,000 unique visitors to the website, Rent.com.au in each of 3 consecutive months on or before 31 December 2018.

• Class B Performance Shares/rights – these performance shares will vest on the achievement of greater than $10,000,000 in revenue by the group in any 12 month period on or before 31 December 2018.

• *** Class C Performance Shares/rights – these performance shares will vest upon the achievement of greater than $3,000,000 in EBITDA by the group in any 12 month period on or before 31 December 2019.

• **** 14 days after the release of the audited financial report for the period ended 31 December 2018.

• * 14 days after the release of the audited financial report for the period ended 31 December 2019.

For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

		Number of	Share price at
	Grant date	performance right	grant date	Fair	value at grant date
	13 August 2015	140,000	$0.16		$22,400
	22 February 2016	200,000	$0.225		$45,000
Type	Shares/rights (No.)	Underlying share price	Probability %*		Value ($)
Class A	4,166,128	$0.2		95%	791,564
Class B	12,366,899	$0.2		2%	49,468
Class C	12,366,899	$0.2		0%	‐
	28,899,925	$0.2		‐	841,032

*The probability estimated by the management is over the expiry date of the performance shares/rights.

Grant Date Expiry Date Exercise Price	Balance at start of year Granted during the period Exercised during the period Consolidate d during the period Balance at end of the period Vested & exercisable at end of the period Number Number Number Number Number Number
2015 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2018 Nil 15 June 2015 31 December 2019 Nil 15 June 2015 31 December 2018 Nil 15 June 2015** 31 December 2018 Nil 15 June 2015 31 December 2019 Nil	‐ 8,160,771 ‐ ‐ 8,160,771 ‐ ‐ 8,160,771 ‐ ‐ 8,160,771 ‐ ‐ 8,160,771 ‐ ‐ 8,160,771 ‐ ‐ 4,111,812 ‐ ‐ 4,111,812 ‐ ‐ 4,111,812 ‐ ‐ 4,111,812 ‐ ‐ 4,111,812 ‐ ‐ 4,111,812 ‐
	‐ 36,817,749 ‐ ‐ 36,817,749 ‐

[55]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

26. Events After The Reporting Period

On 22 July 2016, the Founder and Managing Director of Rent.com.au, Mr. Mark Woschnak, announced that he was stepping down from his roles with the Company and its associated entities. Mr. Greg Bader was appointed as interim Chief Executive Officer while a thorough recruitment process is undertaken by the Board.

By agreement with the Board, the Options and Performance Rights held by Mr. Woschnak at that date were treated as follows:

• a) The following securities where the performance criteria had already been met, became vested and capable of being exercised on and with effect from 22 July 2016:

• 9,000,000 Tranche 1 Options;

• 4,500,000 Tranche 2 Options;

• 3,333,334 Tranche 4 Options;

• 3,333,333 Tranche 5 Options;

• 2,110,976 Tranche 1 Performance Rights; and

• 1,172,765 Tranche 4 Performance Rights,

• b) For the following securities where the performance criteria had not yet been met, the continuous service vesting conditions applicable to them are waived and the securities will continue to be held subject to the rules of the LTIP and will vest upon achievement of a Volume Weighted Average share Price of $0.60 over a 20‐day period:

• 4,500,000 Tranche 3 Options; and

• 3,333,333 Tranche 6 Options,

• c) The following securities irrevocably lapsed on 22 July 2016 and are incapable of vesting or being exercised:  2,110,976 Tranche 2 Performance Rights;

• 2,110,976 Tranche 3 Performance Rights;

• 1,172,765 Tranche 5 Performance Rights; and

• 1,172,765 Tranche 6 Performance Rights.

No other matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years.

[56]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

27. Related Party Transactions

Related Parties

a. The Group’s main related parties are as follows:

(i) Entities exercising control over the Group:

The ultimate parent entity that exercises control over the Group is Rent.com.au Limited, which is incorporated in Australia.

(ii) Key management personnel:

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel.

For details of disclosures relating to key management personnel, refer to Note 5.

(iii) Entities subject to significant influence by the Group:

An entity that has the power to participate in the financial and operating policy decisions of an entity, but does not have control over those policies, is an entity which holds significant influence. Significant influence may be gained by share ownership, statute or agreement.

(iv) Other related parties:

Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel have joint control.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties:

	30 June 2016	30 June 2015
	$	$
Transactions:
Company secretarial fee‐ Grange Consulting[1]	73,066	3,150
Advisory and capital issue costs‐ Grange Consulting (1)	47,905	‐
Rental expense‐ Prime Health Group Property Trust[2]	43,048	24,321
Interest expense‐Prime Health Group Property Trust[2]	31,069	64,499
Other expenses[2]	4,007	5,607
Balances:
Amount due to Prime Health Group Property Trust[2]	343,037	359,540
Amount due to Sealcrest Pty Ltd[2]	‐	697

[1] Philip Warren is a director and shareholder of Grange Consulting Pty Ltd

[2] Garry Garside is a director of Sealcrest Pty Ltd atf Prime Health Group Property Trust.

Time Finance and Homeloans Pty Ltd is a company owned 25% by the group and 75% by an entity controlled by Mr. Mark Woschnak. Time Finance and Homeloans Pty Ltd is a licenced finance and mortgage broking business that provides the group a ‘white label’ service through which renters are able to obtain information about various finance products and submit enquiries to be contacted by brokers. The group receives a referral fee of 30% of the commission payable to Time Finance (less specified fees). Time Finance and Homeloans Pty Ltd were dormant during the financial periods.

[57]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

28. Financial Risk Management

The Group’s financial instruments consist mainly of deposits with banks and accounts payable.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

accounting policies to these financial statements, are as follows:
Note	Consolidated 30 June 2016 $ 30 June 2015 $
Financial Assets Cash and cash equivalents 9 Trade and other receivables 10 Total Financial Assets Financial Liabilities Trade and other payables 13 Borrowings 20 Total Financial Liabilities	6,080,209 4,453,304 150,832 156,967
	6,231,041 4,610,271
	1,441,485 700,388 104,892 ‐
	1,546,377 700,388

Financial Risk Management Policies

The Board of Directors is responsible for monitoring and managing financial risk exposures of the Group. The Board monitors the Group’s financial risk management policies and approves financial transactions. It also reviews the effectiveness of internal controls relating to counterparty credit risk, financing risk and interest rate risk.

The Board’s overall risk management strategy seeks to assist the Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of the credit risk policies and future cash flow requirements.

Specific Financial Risk Exposures and Management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign currency risk.

a) Credit risk

Exposure to credit risk relating to financial assets arises from the potential non‐performance by counterparties of contract obligations that could lead to a financial loss to the Group.

Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 30 to 60 days from the invoice date.

Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating.

[58]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

28. Financial Risk Management (cont’d)

Credit Risk Exposures

The maximum exposure to credit risk by class of recognised financial assets at reporting date is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position.

The Group has no significant concentration of credit risk with any single counterparty or group of counterparties, except the Australian Taxation Office.

Trade and other receivables that are neither past due or impaired are considered to be of high credit quality.

Credit risk related to balances with banks and other financial institutions is managed by the board in accordance with approved board policy. The following table provides information regarding the credit risk relating to cash and money market securities based on Standard & Poor’s counterparty credit ratings.

Note	Consolidated
	30 June 2016 $ 30 June 2015 $
Cash and cash equivalents ‐ AA‐ Rated ‐ A+ Rated Unrated 9	6,080,209 4,453,304 ‐ ‐ ‐ ‐
	6,080,209 4,453,304

b) Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

• preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;

• obtaining funding from a variety of sources;

• maintaining a reputable credit profile;

• managing credit risk related to financial assets;

• only investing surplus cash with major financial institutions; and

• comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.

Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward.

[59]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

28. Financial Risk Management (cont’d)

Financial Liability and Financial Asset Maturity Analysis

Weighted average effective interest rate Company % Financial liabilities due for payment Trade and other payables (excluding GST. annual leave) ‐ Trade payables 8.50% Borrowings 7.84% Financial assets — cash flows realisable Cash and cash equivalents 2.6% Trade and other receivables (excluding GST) ‐	Within 1 year 1 to 5 Years Total 30 June 2016 30 June 2015 30 June 2016 30 June 2015 30 June 2016 30 June 2015 $ $ $ $ $ $ 1,098,448 409,926 ‐ ‐ 1,098,448 409,926 343,037 ‐ ‐ 290,462 343,037 290,462 41,542 ‐ 63,350 ‐ 104,892 ‐
	6,080,209 4,453,304 ‐ ‐ 6,080,209 4,453,304 150,832 156,967 ‐ ‐ 150,832 156,967

c) Market Risk

i. Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group does not have material exposure to interest rate risk at reporting date.

ii. Price risk

The Group’s currently has no exposure to equity securities price risk arising from investments held by the group and classified in the statement of financial position as fair value through profit or loss.

iii. Foreign Currency Risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations.

The Group does not have any foreign currency exposure.

[60]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Notes to the Consolidated Financial Statements (continued)

28. Financial Risk Management (cont’d)

• d) Fair value measurement

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

29. Parent Information

The following information has been extracted from the book and records of the parent and has been prepared in accordance with the accounting standards.

accordance with the accounting standards.
	30 June 2016 $ 30 June 2015 $
Statement of profit and loss and other comprehensive income (Loss) for the period / year Total comprehensive loss Statement of Financial Position Assets Current assets Non‐current assets Total assets Liabilities Current liabilities Total liabilities Equity Issued capital Share‐Based Payment Reserve Accumulated losses Total equity	(15,535,530) (4,214,128)
	(15,535,530) (4,214,128)
	61 184,055 5,243,070 4,218,549
	5,243,131 4,402,604
	(25,923) (50,102)
	(25,923) (50,102)
	64,782,176 54,778,201 8,210,090 4,394,820 (67,775,058) (54,820,519)
	5,217,208 4,352,502

Contingent Liabilities and Capital expenditure

There are no contingent liabilities for the parent entity for both financial periods ended 30 June 2016 and 30 June 2015.

The parent entity did not have capital expenditure commitments for the acquisition of property, plant and equipment contracted but not provided for.

Guarantees

During the reporting period, Rent.com.au Limited had not entered into any guarantees in relation to the debts of its subsidiaries.

[61]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Directors’ Declaration

In the Directors’ opinion:

• (a) the financial statements and notes 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 June 2016 and of its performance for the year ended on that date; and

• (ii) Comply with Australian Accounting Standards, which as stated in Note 1 to the financial statements, constitutes compliance with International Financial Reporting Standards;

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

This declaration has been made after receiving the declarations required to be made by the directors in accordance with sections of 295A of the Corporations Act 2001.

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

---

Dr. Garry Garside Non-Executive Chairman 22 August 2016

[62]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

Corporate Governance

Corporate Governance Statement

The Company’s corporate governance statement can be found at the following URL: http://investors.rent.com.au/irm/content/governance.aspx

The Board of Directors (“the Board”) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

This statement outlines the main Corporate Governance practices in place throughout the financial year, which comply with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with the 2014 Amendments 3[rd] edition unless otherwise stated.

[63]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

ASX Additional Information

Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set out below.

1. Holdings

The issued capital of the Company as at 12 October 2016 includes the following securities:

EquityClass	Number of holders	Total on issue
Fully paid ordinaryshares	2,907	148,790,168
Unlisted Options($15.00,31 March 2017)	2	2
Unlisted Options($0.30,23 June 2020)	20	7,000,000
Performance Shares	138	16,321,542
Performance Rights	13	9,294,642
Employee Options	27	39,435,000

All issued fully paid ordinary shares carry one vote per share.

1. Distribution of Ordinary Shares as at 12 October 2016

Range 1‐1,000 1,001‐5,000 5,001‐10,000 10,001‐100,000 100,001‐and over Total	Holders Units % 1,573 108,938 0.07 302 906,892 0.61 203 1,677,640 1.13 615 23,672,096 15.91 208 122,424,602 82.28
	2,901 148,790,168 100

There were 1,783 holders of less than a marketable parcel of ordinary share, and 71 holders from overseas holding 11,808,657 shares.

[64]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

ASX Additional Information (continued)

3. Top 20 Largest Holders of Ordinary Shares as at 12 October 2016

. Top 20 Largest Holders of Ordinary Shares as at 12 October 2016
Name 1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 2 RENT INVESTMENT PTY LTD 3 MARK WOSCHNAK 4 AUSTCORP NO 214 PTY LTD 5 TEFIG PTY LTD 6 MARKIT SYSTEMS PTY LTD 7 BT PORTFOLIO SERVICES LIMITED 8 NETWEALTH INVESTMENTS LIMITED 9 MR JASON ALAN CARROLL 10 KERIMI INVESTMENTS PTY LTD 11 GARRY DESMOND & FRANCES GARSIDE 12 NETWEALTH INVESTMENTS LIMITED 13 MR CHARLES NIGHTINGALE & MRS JENNIFER NIGHTINGALE 14 BADER SMSF PTY LTD 15 MS CATHERINE LOFTUS‐HILLS & MR STEPHEN BELL 16 MR NASER KERIMI & MRS DEBORAH LYNN KERIMI 17 CHEZ CORPORATION PTY LTD 18 WAINFORD HOLDINGS LIMITED 19 JULIAN PHILIP WARNE 20 TREASURE ISLAND HIRE BOAT COMPANY PT LTD Total Top 20 Others Total Ordinary Shares on Issue	Number % 10,299,575 6.92 9,624,450 6.47 9,477,837 6.37 6,666,667 4.48 5,779,544 3.88 3,283,741 2.21 3,056,348 2.05 2,198,526 1.48 2,000,021 1.34 1,779,947 1.20 1,728,181 1.16 1,473,000 0.99 1,450,462 0.97 1,434,414 0.96 1,417,569 0.95 1,250,000 0.84 1,232,060 0.83 1,194,040 0.80 1,086,371 0.73 1,055,720 0.71
	67,488,473 45.36 81,301,695 54.64
	148,790,168 100.00

4. Voting Rights

See note 14 of the financial statements.

5. Substantial shareholder notices lodged with the Company

Name	Number	%
MARK WOSCHNAK	12,761,578	8.58
MR JOHN WOOD	11,770,363	7.91
WAINFORD HOLDINGS LIMITED	8,118,457	5.46

[65]

Annual Report for the year ended 30 June 2016 Rent.com.au Limited

ASX Additional Information (continued)

6. Unquoted Securities

The names of the security holders holding more than 20% of an unlisted class of security are listed below:

Unlisted Options $15.00 31 March 2017 Unlisted Options $0.30 23 June 2020	Performance Shares Performance Rights Employee Options
Mr Christopher Lindsay Bollam 1 ‐ Mr David William Maxfield 1 ‐ GMP Securities Australia ‐ 2,000,000 Mr Greg Bader ‐ ‐ Rent Investment Pty Ltd ATF Rent Investment Unit Trust ‐ ‐ Markit Systems Pty Ltd ‐ ‐ Total other holders ‐ 5,000,000 Total 2 7,000,000 Total holdings over 20% 2 1 Other holders ‐ 19	‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,874,900 ‐ ‐ ‐ 3,750,000 ‐ ‐ ‐ 28,000,000 10,446,642 5,544,642 11,435,000 16,321,542 9,294,642 39,435,000 1 1 1 68 12 26

7. Restricted securities subject to escrow period

The following securities are subject to escrow periods:

7. Restricted securities subject to escrow period The following securities are subject to escrow periods:
Equity Class	Escrowed 24 months until 23 June 2017
Fully paid ordinary shares	19,064,263
Unlisted options ($15.00 31 March 2017)	2
Unlisted options ($0.30 23 June 2020)	7,000,000
Performance Shares	10,539,538
Performance Rights	1,073,079
Employee Options	31,050,000

8. On‐market buy back

There is currently no on‐market buyback program for any of Rent.com.au Limited’s listed securities.

9. Group cash and assets

In accordance with Listing Rule 4.10.19 the Company confirms that it has been using the cash and assets it had acquired at the time of re‐instatement and for the year ended 30 June 2016 in a way that is consistent with its business objectives and strategy.

[66]