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iProperty Group Limited ABN 99 126 188 538

Appendix 4D HALF YEAR REPORT

“Results for announcement to the Market.” Information for the half year ended 30 June 2015 given to ASX under listing rule 4.2A

Key iProperty Group information

Six months ended Jun 15 $000

Jun 14 $000 Change

Revenues from ordinary operations 15,100 11,006 37%Earnings before interest, tax, depreciation and amortisation (EBITDA)* 700 30 2233%Profit/(Loss) from ordinary activities after tax attributable to members (1,546) (8,972) 83%Profit/(Loss) after tax attributable to members (1,546) (8,972) 83% Cents Cents Loss per Share (basic) (0.82) (4.94) 83%Loss per Share (diluted) (0.82) (4.94) 83%NTA per Share (4.95) 5.44 191%

Dividends iProperty Group Limited does not propose to pay a dividend for this reporting period. This report is based on the attached half year financial report which has been subject to a review by the Company’s external auditor. The financial statements are not subject to any audit dispute or qualifications * See Note 3 of the Financial Report

For and on behalf of the Board Patrick Grove Chairman 20 August 2015


Financial Report

for the half year ended 30 June 2015

Contents Page Directors’ report 1

Auditor’s independence declaration 3

Directors’ declaration 4

Consolidated statement of comprehensive income 5

Consolidated statement of financial position 6

Consolidated statement of cash flows 7

Consolidated statement of changes in equity 8

Notes to the condensed consolidated financial statements 9

Independent auditor’s review report Corporate directory

16 18


1

Directors’ report

The Directors of iProperty Group Limited (‘the Company’) submit their financial report of the iProperty Group Limited and controlled entities (‘the Group’) for the half-year ended 30 June 2015. In order to comply with the provisions of the Corporations Act 2001, the Directors’ report as follows:

The names of the Directors of the Company during or since the end of the six month period ended 30 June 2015 are listed below. The Directors were in office for the entire period unless stated otherwise:

Patrick Grove (Chairman) Georg Chmiel Lucas Elliott John Armstrong Nick Geddes (resigned 31 July 2015) Owen Wilson (appointed 12 January 2015) Arthur Charlaftis (appointed 31 July 2015)

Principal Activities

The principal activities of the iProperty Group during the half year were the development and operation of internet based real estate portals in ASEAN and the greater Hong Kong and Macau region, together with the provision of associated offline property advertising activities, such as property expositions.

Review and results of operations

Financial Performance

The performance of the group has improved significantly in the six months ended 30 June 2015 in revenues, EBITDA (earnings before interest, tax, depreciation and amortisation) and EBITDA margin. The group is profitable (EBITDA) and shows its first positive operational cash flow of $1,039,866 (2014: negative $150,214) on the back of the continued strong performance of existing and new markets. Organic growth accelerated compared to the previous financial period. The integration of the recently acquired businesses of Squarefoot (Hong Kong) and ThinkofLiving (Thailand) into the group is ahead of expectations, as is reflected in their financial performance.

Malaysia generated revenues of $9,416,194 (2014: $7,265,729) up 30% and a record EBITDA of $4,961,924 (2014: $3,764,553) representing an EBITDA margin of 53% (2014: 52%). Revenues for the Hong Kong region were $3,866,973 up 94% and the EBITDA growth was more than 100%. Thailand saw revenues of $595,221 and an EBITDA of $221,498 (2014: nil) at margin of 37% since its acquisition on 1 April 2015.

The group’s EBITDA for the period was $699,678 (2014: $30,084) and the group is now profitable in four out of six segments (Malaysia, Hong Kong, Thailand and International Project Marketing). International Project Marketing (Transaction Businesses) started in 2014 and has expanded to encompass international developers selling to the iProperty markets. In the current period, revenues of $148,380 (2014: $6,774) were generated at a marginal EBITDA profit of $2,781 (2014: loss $33,482).

Loss before tax for the current period was $1,431,746 (2014: loss $8,900,150) despite charges for employee options expense and long term incentives and transaction advisory costs totalling $1,829,456 which were not incurred in the prior comparative period.


2

Dividends The Company does not propose to pay a dividend for this reporting period (2014: Nil).

Events subsequent to reporting date

There have not been any transaction or events of a material and unusual nature between the end of the reporting period and the date of this report that will, in the opinion of the Directors of the Company, to significantly affect the operations of the consolidated entity, the results of those operations, or state of affairs of the consolidated entity in future years.

Indemnification of auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

Auditor’s independence declaration

The auditor’s independence declaration is included on page 3 of the half-year financial report.

Signed in accordance with a resolution of Directors made pursuant to s.306(3) of the Corporations Act 2001.

On behalf of the Directors

Patrick Grove

Chairman

Kuala Lumpur 20 August 2015

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation 3

Auditor’s Independence Declaration to the Directors of iProperty GroupLimited

In relation to our review of the financial report of iProperty Group Limited for the half-year ended 30June 2015, to the best of my knowledge and belief, there have been no contraventions of the auditorindependence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

D.R. McGregorPartner20 August 2015

Ernst & Young8 Exhibition StreetMelbourne VIC 3000 AustraliaGPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000Fax: +61 3 8650 7777ey.com/au


4

Directors’ declaration

In accordance with a resolution of the directors of iProperty Group Limited, I state that:

In the opinion of the directors: (a) The financial statements and notes of iProperty Group Limited for the half-year ended 30 June 2015

are 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 2015 and of

its performance for the half-year ended on that date; and

(ii) complying with accounting standards and the Corporations Regulations 2001 (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.

On behalf of the Directors

Patrick Grove

Chairman

Kuala Lumpur 20 August 2015


5

Condensed consolidated statement of comprehensive income for the half-year ended 30 June 2015

Consolidated Half-year ended

Note 30 Jun 2015

$ 30 Jun 2014

$

Revenue from continuing operations 15,100,398 11,005,571

Advertising and marketing expenses (1,877,505) (1,518,573)

Employment expenses (8,521,826) (6,720,029)

Premises and infrastructure expenses (1,330,887) (660,821)

Offline production costs (1,996,206) (1,393,988)

Other expenses (674,296) (682,076)

Depreciation and amortisation (391,882) (317,120)

Impairment of goodwill, intangibles, property, plant and equipment - (8,806,399)

Employee options expense and long term incentives (1,452,295) -

Transaction advisory costs (377,161) -

Total expenses (16,622,058) (20,099,006)

Interest income 89,914 193,285

Loss before tax (1,431,746) (8,900,150)

Income tax expense (113,809) (72,001)

Loss for the period (1,545,555) (8,972,151)

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods

Exchange differences on translation of foreign operations 111,684 (1,822,931)

Other comprehensive income/(loss) for the period 111,684 (1,822,931)

Total comprehensive income/(loss) for the period

(1,433,871)

(10,795,082)

Profit/(loss) attributable to:

Owners of the Company (1,545,555) (8,972,151)

Total comprehensive profit/(loss) attributable to:

Owners of the Company (1,433,871) (10,795,082)

Loss per share from continuing operation Cents Cents

Basic (0.82) (4.94)

Diluted (0.82) (4.94)

Notes to the condensed consolidated financial statements are included on pages 9 – 15.

In accordance with Note 2 Management use EBITDA modified for one-off items to measure performance of the underlying business and this is reconciled to the statutory result in Note 3.


6

Condensed consolidated statement of financial position as at 30 June 2015

Consolidated

Note 30 Jun 2015

$ 31 Dec 2014

$

Current assets

Cash and cash equivalents 4 5,987,790 11,748,507

Trade and other receivables 5,106,322 4,222,580

Other assets 996,011 1,114,650

Total current assets 12,090,123 17,085,737

Non-current assets

Property, plant and equipment 1,152,016 851,591

Intangibles 5 5,673,433 1,678,133

Goodwill 5 38,850,788 22,639,869

Other non-current assets 356,548 268,649

Total non-current assets 46,032,785 25,438,242

Total assets 58,122,908 42,523,979

Current liabilities

Trade and other payables 5 3,187,252 3,562,782

Billing in advance 5,971,852 4,794,513

Contingent consideration 5,058,389 615,688

Provisions 1,044,220 655,981

Current tax liabilities 92,265 26,611

Total current liabilities 15,353,978 9,655,575

Non-current liabilities

Deferred contingent consideration 7,536,014 -

Total non-current liabilities 7,536,014 -

Total liabilities 22,889,992 9,655,575

Net assets 35,232,916 32,868,404

Equity

Issued capital 7 54,032,040 51,243,759

Reserves 1,858,163 736,377

Accumulated losses (20,657,287) (19,111,732)

Total equity 35,232,916 32,868,404



7

Condensed consolidated statement of cash flows for the half-year ended 30 June 2015

Consolidated Half-year ended

Note

30 Jun 2015 $

30 Jun 2014 $

Cash flows from operating activities

Receipts from customers 16,311,702 11,278,689

Payments to suppliers (7,215,207) (4,951,252)

Payment to employees (8,194,842) (6,671,392)

Interest received 99,740 234,095

Income tax paid 38,473 (40,354)

Net cash generated/(used) in operating activities 1,039,866 (150,214)

Cash flows from investing activities

Payments for business acquisitions net of cash acquired (6,391,470) (551,403)

Purchases of property, plant and equipment (481,720) (73,816)

Payments for intangible assets (399,383) (157,109)

Receipt of government grants - 28,211

Net cash used in investing activities (7,272,573) (754,117)

Cash flows from financing activities

Proceeds from issue of shares 480,017 -

Payment for share issue costs (8,027) -

Net cash provided by financing activities 471,990 -

Net decrease in cash and cash equivalents (5,760,717) (904,331)

Cash and cash equivalents at the beginning of the period 11,748,507 14,518,547

Cash and cash equivalents at the end of the period 4 5,987,790 13,614,216



8

Condensed consolidated statement of changes in equity for the half-year ended 30 June 2015

Ordinary share

capital

Foreign currency

translation reserve

Treasury share

reserve

Equity reserve

Equity-settled

employee benefits reserve

Accumulated losses Total

$ $ $ $ $ $ $

Balance at 1 January 2014 38,965,896 706,568 (48,000) (182,514) 63,497 (8,380,399) 31,125,048

Profit/(loss) for the period - - - - - (8,972,151) (8,972,151)

Foreign currency translation difference - (1,822,931) - - - - (1,822,931)

Total comprehensive income for the period - (1,822,931) - - - (8,972,151) (10,795,082)

304,778 shares issued 255,600 - - - (63,497) - 192,103

Transaction costs relating to shares issued (4,990) - - - - - (4,990)

Recognition of share based expense - - - - 74,149 - 74,149

Balance at 30 June 2014 39,216,506 (1,116,363) (48,000) (182,514) 74,149 (17,352,550) 20,591,228

Balance at 1 January 2015 51,243,759 (119,346) (48,000) (182,514) 1,086,237 (19,111,732) 32,868,404

Profit/(loss) for the period - - - - - (1,545,555) (1,545,555)

Foreign currency translation difference - 111,684 - - - - 111,684

Total comprehensive income for the period - 111,684 - - - (1,545,555) (1,433,871)

996,713 shares issued 2,802,119 - - - (152,537) - 2,649,582

Transaction costs relating to shares issued (13,838) - - - - - (13,838)

Recognition of share based expense - - - - 1,162,639 - 1,162,639

Balance at 30 June 2015 54,032,040 (7,662) (48,000) (182,514) 2,096,339 (20,657,287) 35,232,916



9

Notes to the condensed consolidated financial statements

1. General information

The interim condensed consolidated financial statements for the six months ended 30 June 2015 were authorised for issue in accordance with a resolution on the 20 August 2015.

iProperty Group Limited (the Company) is a public company listed on the ASX and incorporated in Australia, The principal activities of the Company and its subsidiaries (the Group) are described within the Directors’ report.

2. Significant accounting policies

Basis of preparation

The interim condensed consolidated financial statements have been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. All amounts are presented in Australian dollars and are rounded to the nearest dollar unless otherwise noted.

The half year financial report does not include all notes of the type that are normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

It is recommended that the half year financial report be read in conjunction with the annual report for the year ended 31 December 2014 and considered together with any public announcements made by the iProperty Group Limited during the 6 months ended 30 June 2015 in accordance with the continuous disclosure obligations of the ASX listing rules.

Management uses EBITDA, in combination with other financial measures, to evaluate the Company’s operating performance before financing costs, depreciation and amortization, income tax and non cash capital related expenses (including impairment of goodwill, intangibles, property, plant & equipment as well as employee options expense and long term incentives). Additionally we believe EBITDA, although a non-International Financial Reporting Standards measure and hence not subject to review, is useful to investors because analysts and other members of the investment community largely view EBITDA as a key measure of operating performance. Accordingly EBITDA is calculated and included in the segment Note 3 which also includes a reconciliation to net profit after tax.

Depreciation and amortisation are calculated in accordance with AASB 116 Property, Plant and Equipment, AASB 138 Intangible Assets and interest is calculated in accordance with AASB 139 Financial Instruments: Recognition and Measurement respectively. The impairment of goodwill, intangibles, property, plant & equipment is calculated in accordance with AASB 136 Impairment of Assets. In addition the employee options expense is calculated in accordance with AASB 2 Share-based payment.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s 2014 annual financial report for the financial year ended 31 December 2014, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. The fair value of all financial assets and liabilities, including trade debtors, trade payables and provisions is equivalent to the carrying values of these balances.

Changes in accounting policy

There have been no changes in accounting policy, although certain comparative amounts have been reclassified to conform with the current period’s presentation.

Amendments to Australian Accounting Standards as listed below are effective for annual periods beginning on or after 1 July 2014, however none of these standards had any material impact on the financial statements of the Group. In addition, the Group has not elected to adopt early any new standards or amendments that are issued but not yet effective.

AASB 2014-1 Part A – Amendments to Australian Accounting Standards - Annual Improvements 2010–2012 Cycle sets out amendments to Australian Accounting Standards arising from the issuance by the International Accounting Standards Board (IASB) of International Financial Reporting Standards (IFRSs) Annual Improvements to IFRSs 2010–2012 Cycle and Annual Improvements to IFRSs 2011–2013 Cycle, addressing the following items:

AASB 2 - Clarifies the definition of 'vesting conditions' and 'market condition' and introduces the definition of 'performance condition' and 'service condition'.

AASB 3 - Clarifies the classification requirements for contingent consideration in a business combination by removing all references to AASB 137.

AASB 8 - Requires entities to disclose factors used to identify the entity's reportable segments when operating


10

2. Significant accounting policies (cont’d)

segments have been aggregated. An entity is also required to provide a reconciliation of total reportable segment assets to the entity's total assets.

AASB 116 & AASB 138 - Clarifies that the determination of accumulated depreciation does not depend on the selection of the valuation technique and that it is calculated as the difference between the gross and net carrying amounts.

AASB 124 - Defines a management entity providing key management personnel (KMP) services as a related party of the reporting entity. The amendments added an exemption from the detailed disclosure requirements in paragraph 17 of AASB 124 Related Party Disclosures for KMP services provided by a management entity. Payments made to a management entity in respect of KMP services should be separately disclosed.

AASB 2014-1 Part A – Amendments to Australian Accounting Standards - Annual Improvements 2011–2013 Cycle addresses the following items:

AASB 13 - Clarifies that the portfolio exception in paragraph 52 of AASB 13 applies to all contracts within the scope of AASB 139 or AASB 9, regardless of whether they meet the definitions of financial assets or financial liabilities as defined in AASB 132.

AASB 140 - Clarifies that judgment is needed to determine whether an acquisition of investment property is solely the acquisition of an investment property or whether it is the acquisition of a group of assets or a business combination in the scope of AASB 3 that includes an investment property. That judgment is based on guidance in AASB 3.

3. Segment information

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. Information reported to the Group’s Chief Executive Officer for the purposes of resource allocation and assessment of performance is focused on the geographical regions for residential properties. The Company’s reportable segments under AASB 8 are as follows:

Malaysia

Hong Kong

Thailand (new segment as a result of acquisition during the period)

Singapore

Indonesia

International Project Marketing

Corporate

The International Project Marketing segment (Transaction Businesses) was a new initiative during 2014 that was focused on working more closely with developers to generate sales for success based marketing fees. In 2015, the focus was widened to include international developers from outside the ASEAN and greater Hong Kong and Macau region.


11

3. Segment information (cont’d)

Information regarding these segments is presented below. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Revenue Segment Profit/(loss) Half-year ended

30 Jun 2015

$

30 Jun 2014

$

30 Jun 2015

$

30 Jun 2014

$

Malaysia 9,416,194 7,265,729 4,961,924 3,764,553

Hong Kong including Squarefoot.com.hk 3,866,973 1,996,929 231,048 115,194

Thailand 595,221 - 221,498 -

Singapore 1,028,446 1,154,939 (636,445) (570,466)

Indonesia 718,522 716,196 (1,129,158) (1,174,846)

Revenue and EBITDA – Advertising businesses

15,625,356 11,133,793 3,648,867 2,134,435

International Project Marketing 148,380 6,774 2,781 (33,482)

Corporate and consolidation (673,338) (134,996) (2,951,970) (2,070,869)

External Revenue and EBITDA 15,100,398 11,005,571 699,678 30,084

Impairment of goodwill, intangibles, property, plant and equipment

- (8,806,399)

Employee options expense and long term incentives

(1,452,295) -

Transaction advisory costs (377,161) -

Depreciation and amortisation (391,882) (317,120)

Net interest 89,914 193,285

Income tax expense (113,809) (72,001)

Consolidated revenue and profit/(loss) for the year

15,100,398 11,005,571 (1,545,555) (8,972,151)

No single customer contributes 10% or more to the Group’s revenue for 2015 or 2014. Cross border transactions are grossed up 100% for both segments involved in each cross border transaction and then a central consolidation adjustment made at a Corporate level, resulting in negative revenue in this segment.

Segment assetsSegment assets and liabilities

30 Jun 2015

$ 31 Dec 2014

$Malaysia 11,196,487 10,884,723

Hong Kong 22,147,865 19,895,465

Thailand 20,301,698 -

Singapore 435,216 563,240

Indonesia 702,045 660,438

International Project Marketing 247,255 288,637

Corporate 3,092,343 10,231,476

Total segment assets 58,122,909 42,523,979

Consolidated total assets 58,122,909 42,523,979

The segment assets disclosed in the table above include goodwill and other intangible assets.


12

3. Segment information (cont’d)

Segment liabilities

30 Jun 2015

$ 31 Dec 2014

$ Malaysia 4,902,231 4,474,154

Hong Kong

Thailand

Singapore

Indonesia

International Project Marketing

3,871,428

590,222

826,794

658,369

81,072

1,806,097

-

1,018,197

443,602

739,855

Corporate 11,959,876 1,173,670

Total segment liabilities 22,889,992 9,655,575

Consolidated total liabilities 22,889,992 9,655,575

4. Cash and cash equivalents

30 Jun 2015

$

31 Dec 2014

$

Cash at bank and on hand 3,987,790 3,248,507

Term deposits 2,000,000 8,500,000

5,987,790 11,748,507

Total payments for business acquisitions net of cash acquired during the period were $6,391,470 (2014: $551,403).

5. Significant balances

Trade and Other payables

30 Jun 2015

$

31 Dec 2014

$

Current

Trade payables 1,723,356 2,119,187

Sundry payables and accrued expenses 1,314,779 1,094,776

GST payable 149,117 348,819

3,187,252 3,562,782

Goodwill Summary

Malaysia 4,669,963 4,768,801

Hong Kong 19,113,486 17,846,677

Thailand 15,042,948 -

Other 24,391 24,391

38,850,788 22,639,869

Intangibles Summary

Malaysia 923,551 865,928

Hong Kong 334,118 321,463

Thailand

Indonesia

3,881,442

59,071

-

29,290

Other 475,251 461,452

5,673,433 1,678,133

6. Dividends

No dividends have been paid (2014: Nil), declared or recommended for payment.


13

7. Contributed equity

2015 2014

No $ No $

Reconciliation of contributed equity for the half year

Opening balance 1 January 186,703,204 51,243,759 181,398,426 38,965,896

Share issue 996,713 2,802,119 304,778 255,600

Transaction costs relating to shares issued NIL (13,838) NIL (4,990)

Closing balance 30 June 187,699,917 54,032,040 181,703,204 39,216,506

During the half year reporting period, the Company issued 153,305 ordinary shares to the Directors and employees as share based payments with a value of $444,017. In the same period 675,570 ordinary shares with a value of $1,878,085 were issued as purchase consideration for the acquisition of ThinkofLiving.com and a further 167,838 ordinary shares with a value of $480,017 were issued to the REA Group under the top up right granted as per the business sale and purchase agreement dated 14 October 2014. In the prior corresponding half year reporting period, the Company also issued 304,778 ordinary shares to Directors as share based payments with a value of $255,600.

8. Business Combinations

Name of business acquired Principal activity

Date of acquisition

Percentage of shares acquired Cost of acquisition

% $

Acquisitions in 2015

ThinkOfLiving Operator of online

property portal

1 April 2015

100

20,366,383

Acquisitions in 2014

Squarefoot

Operator of online property portal and

magazine

22 December 2014 100

12,076,260

Acquisition of Square Foot

The Group completed the acquisition of Squarefoot.com.hk from REA Group Limited, (a substantial shareholder in iProperty Group) on 22 December 2014. Squarefoot.com.hk is the #2 ranked property portal in Hong Kong and also publishes a property magazine targeting the English speaking segment of the local market. The business was acquired to consolidate the Group’s #1 position in the greater Hong Kong region, improve the Group’s penetration into the local expatriate market and provide a platform for further expansion into the adjoining parts of mainland China.

Consideration for the transaction was 5,000,000 new ordinary shares issued at $3.00. For acquisition accounting purposes the consideration was valued at $2.41 per share based on the market value. During the period, cash of $26,260 was paid as further consideration in accordance with the business sale and purchase agreement in respect of prepaid expenses identified during the ongoing completion accounting process. The excess of the purchase consideration over the fair value of net assets acquired has been classified as provisional goodwill since the acquisition accounting process will be finalised during the second half of 2015 when the audited year end 2014 financial statements of the Hong Kong entity is prepared and completed.

The Group recognised an asset for the Squarefoot website at a value of $147,219 based on the fair value of the asset acquired and is amortised in accordance with the Group’s accounting policies. The Group also assessed the brand and customer relationships acquired to determine if they constituted separately identifiable assets. Given that the business acquired was expected to continue to be loss making for the foreseeable future there was not considered to be a reliable method of measurement of fair value. As such, any value which may be attributable to the brand or customer relationships is encompassed in goodwill. The provisional goodwill is attributable to future revenue


14

8. Business Combinations (cont’d)

growth, synergies with the other existing Hong Kong businesses and the ability to better monetise the brand through existing channels.

Purchase consideration $

5,000,000 shares valued @ $2.41 per share 12,050,000

Cash paid for working capital (in 2015) 26,260

Cash acquired NIL

Total consideration 12,076,260

Allocation of purchase consideration

Squarefoot domain & website 147,219

Other assets excluding goodwill 105,912

Provisional goodwill 12,063,442

Deferred revenue (101,521)

Other liabilities (138,792)

Net assets 12,076,260

Acquisition of ThinkOfLiving

The Group acquired ThinkOfLiving.com, the leading developer website in Thailand, on 1 April 2015 for 675,570 ordinary shares, cash consideration of $5,893,895 and deferred cash consideration contingent upon hitting revenue and EBITDA targets over the next three years. For acquisition accounting purposes the shares were valued at $2.78 based on market value. The discounted net present value of total consideration is estimated to fall between $20,000,000 to $21,000,000 with no maximum, subject to any necessary adjustments upon completion of the acquisition accounting process.

The fair value of the contingent consideration arrangement of $12,594,403 was estimated by applying the income approach. The fair value measurement is based on significant inputs that are not observable in the market, which AASB 13 Fair Value Measurement refers to as Level 3 inputs. Key assumptions include a discount rate range of 13-16 per cent and assumed probability-adjusted annual revenues over a three year period.

ThinkOfLiving.com focuses on the property developer market. At the date of acquisition 106 property developers were active clients on the portal and all 20 top developers in Thailand already subscribed to its services. The business was acquired to expand the iProperty network of leading property portals in ASEAN. The provisional goodwill is attributable to future revenue growth, revenue synergies via the rest of the iProperty network and the ability to monetise the agent platform in future periods.

Although the acquisition accounting is provisional the Group has recognised an asset for the ThinkofLiving brand, an intangible asset considered to have an indefinite useful life and which will be assessed for impairment on an annual basis. The brand has been valued at $4,017,328, calculated on a relief from royalty method. Since it was a mid-year acquisition which was only recently completed, further work is required to finalise the acquisition accounting, including an audit of the books and records at the date of acquisition which could potentially alter the consideration due. Hence it is impracticable to state the revenue and profits of the acquisition for the six month period ending 30 June 2015 and the excess of the purchase consideration over the provisional fair value of net assets acquired has been classified as provisional goodwill.


15

8. Business Combinations (cont’d)

$

Purchase consideration

Cash paid on completion (1 April 2015) 5,893,895

675,570 ordinary shares valued @ $2.78 per share 1,878,085

Contingent consideration:

Current

Non-current

5,058,389

7,536,014

Total consideration 20,366,383

Allocation of purchase consideration

Trade receivables 497,636

Cash and cash equivalents 170,259

Fixed Assets 121,117

Provisional goodwill 15,679,336

Brand 4,017,328

Other assets 45,917

Trade & other payables (68,325)

Other liabilities (96,885)

Net assets 20,366,383

9. Contingent claims and liabilities

Various claims arise in the ordinary course of business against iProperty Group Limited and its subsidiaries. The amount of the liability (if any) at 30 June 2015 cannot be ascertained and the Directors believe that any resulting liability would not materially affect the financial position of the Group.

10. Subsequent events

There have not been any transactions or events of a material and unusual nature between the end of the reporting period and the date of this report that will, in the opinion of the Directors of the Company, significantly affect the operations of the consolidated entity, the results of those operations, or state of affairs of the consolidated entity in future years.


Report on the Half-Year Financial ReportWe have reviewed the accompanying half-year financial report of iProperty Group Limited, which comprises thecondensed statement of financial position as at 30 June 2015, the condensed statement of comprehensiveincome, condensed statement of changes in equity and condensed statement of cash flows for the half-yearended on that date, notes comprising a summary of significant accounting policies and other explanatoryinformation, and the directors’ declaration of the consolidated entity comprising the company and the entities itcontrolled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial ReportThe directors of the company are responsible for the preparation of the half-year financial report that gives atrue and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the half-yearfinancial report that is free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express a conclusion on the half-year financial report based on our review. We conductedour review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a FinancialReport Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of theprocedures described, we have become aware of any matter that makes us believe that the financial report is notin accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’sfinancial position as at 30 June 2015 and its performance for the half-year ended on that date; and complyingwith Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As theauditor of iProperty Group Limited and the entities it controlled during the half-year, ASRE 2410 requires thatwe comply with the ethical requirements relevant to the audit of the annual financial report.

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

IndependenceIn conducting our review, we have complied with the independence requirements of the Corporations Act 2001.We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which isincluded in the Directors’ Report.

Ernst & Young8 Exhibition StreetMelbourne VIC 3000 AustraliaGPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000Fax: +61 3 8650 7777ey.com/au


ConclusionBased on our review, which is not an audit, we have not become aware of any matter that makes us believe thatthe half-year financial report of iProperty Group Limited is not in accordance with the Corporations Act 2001,including:

a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of itsperformance for the half-year ended on that date; and

b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the CorporationsRegulations 2001.

Ernst & Young

D.R. McGregorPartnerMelbourne20 August 2015


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Corporate Directory iProperty Group Limited ABN 99 126 188 538 ASX Listing Code: IPP Website:

www.iproperty-group.com Directors:

Patrick Grove (Chairman) Lucas Elliott Georg Chmiel Owen Wilson John Armstrong

Arthur Charlaftis

Chief Executive Officer and Managing Director

Georg Chmiel Email: [email protected] Acting Chief Financial Officer Shiao Chan Email: [email protected] Company Secretary Nick Geddes Email: [email protected] Share Registry:

Boardroom Pty Ltd Grosvenor Place Level 12, 225 George Street Sydney NSW 2000 Australia www.boardroomlimited.com.au Auditors

Ernst & Young 8 Exhibition Street MELBOURNE VIC 3000

Registered office: Suite 806, Level 8 70 Pitt Street Sydney NSW 2000 Australia Tel: +612 9239 0277 Fax: +612 9233 4497 Head office: Suite 11.01, Level 11 Menara IGB Mid Valley City 59200 Kuala Lumpur Malaysia Tel: +60 (3) 2264 6888 Fax: +60 (3) 2264 6999

iproperty group limitedimages.group.ippstatic.com/uploads/pdf/appendix-4d...(a) the financial...

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