BETMAKERS TECHNOLOGY GROUP LTD - Annual Report 2017

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TopBetta Holdings Limited ABN 21 164 521 395

Annual Report - 30 June 2017

TopB etta Holding s Limited
Conte nts
30 Ju ne 2017
Corpo rate director y	2
Mana ging Director and ChiefE xecutive Of ficer's report	3
Direct ors' report	5
Audito r's independ ence declar ation	17
Statem ent of profit or loss and other comp rehensive in come	18
Statem ent of finan cial position	19
Statem ent of chan ges in equity	20
Statem ent of cash flows	21
Notes to the financ ial statemen ts	22
Direct ors' declarat ion	52
Indep endent audit or's report to the membe rs of TopBe tta Holdings Limited	53
Share holder inform ation	60

TopBetta Holdings Limited Corporate directory 30 June 2017

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Direct ors	Nicho las Chan -C hairman
	Todd Buckingham
	Matth ew Cain
	Simo n Dulhunty
Comp any secreta ry	Char ly Duffy
Notice of annualg eneral meet ing	Thed etails of the annual gen eral meeting of TopBetta Holdings Li mited are:
	22 La mbton Road ,
	Broa dmeadow,N SW 2292
	Wed nesday 22N ovember 20 17 at 11:00		am (AEDT)
Regis tered office	22 La mbton Road
	Broa dmeadow,N SW 2292
	Head office telep hone: (02)	4 957 4704
Share register	Com putershare I nvestor Serv ices Pty Lim ited
	Leve l 4
	60 C arrington Str eet
	Sydn ey, NSW 20 00
	Shar e registry tel ephone: 130 0 787 272
Audito r	PKF( NS) Audit & AssuranceL imited Partn ership
	755H unter Stree t
	Newc astle West, NSW 2302
Solici tors	Addis ons Lawyer s
	Leve l 12
	60 C arrington Str eet
	Sydn ey, NSW 20 00
Stock exchange li sting	TopB etta Holding s Limited	s hares are lis ted on the		AustralianS ecurities Ex change
	(ASX code: TBH)
Webs ite	www .topbetta.com
Corpo rate Govern ance Statem ent	TheC orporate G overnanceS tatement wh ich was app roved at the same timea s the
	Annu al Report ca n be founda t http://www .corporate.to pbetta.com /corporate-
	gove rnance

TopBetta Holdings Limited Managing Director and Chief Executive Officer's report 30 June 2017

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To F e llow Shareh o lders,

I am p leased to p r esent the Annual Repo r t for the ye a r ended June 30, 2017. It has been a remarkabl e and signifi c ant year for T o pBetta in our second ye a r as a publi c ly listed Co m pany.

The w agering an d gaming m arket in Australia is o n e of the m o st competi t ive and so p histicated m arkets in t h e world. TopB e tta operat e s in a field of large a n d dominan t local wag e ring busin e sses as w e ll as globa l multi-natio n als with subst a ntial resources.

Our relative size and the fo r midable competition means TopB e tta, from it s Newcastl e headquart e rs, has to be agile, innov a tive and re s ourceful to c ompete in t h e domestic market.

All th e se attribute s were teste d during the 2017 financial year.

Our c o ntent and f a ntasy platf o rms were c h allenged by a raft of ne w entrants a n d product e x tensions of existing co m petitors. The c hange in th e status of t he Norfolk G aming Aut h ority created not only a period of u ncertainty f o r TopBetta but also, ultim a tely, an unt e nable situation with reg a rd to our w a gering licence. TopBett a applied su c cessfully fo r a new lice n ce out of North e rn Territory that included moving p a rts of our operation to th e NT.

At th e same time, and a key h ighlight of o ur year, To p Betta identified an opp o rtunity to p r ovide a par i -mutuel pro d uct as a busin e ss to busi n ess offering to the Glo b al wagering market. This was an ambitious pr o ject that re q uired regul a tory and licensing authoris a tion, establishment of a leading-edge technolog y platform a n d generatio n of sufficie n t liquidity.

The G lobal Tote, a subsidiary of TopBetta Holdings Li m ited, was e stablished during Augu s t 2016. It holds a B2B e G ambling license out of Ald e rney, UK. Working with Mo d ern Wageri n g Systems, The Global Tote built u p a state-of-the art tote p latform, whi c h was laun c hed with limite d coverage i n May 2017. In addition, The Global T ote has established op e rations in S r i Lanka. We a r e confident the changing landscape of world w a gering, of w hich Australia is a small but vibrant part, has o p ened the door f or The Glob a l Tote to p o sition itself a s an attractive product o ffering for all approved i n ternational w agering operators.

Internationally, T h e Global Tote receive d (in July 2 0 17) its lic e nce from t h e UK Gambling Com m ission to launch the whol e sale B2B platform in th e UK marke t . It has als o applied fo r a licence t o operate it s pooled pro d ucts in the US. The Com p any is very e xcited by these expansion opportunities.

In ad d ition to the wholesale o pportunities for The Gl o bal Tote, th e retail busi n ess of Top B etta receiv e d approval for a UK licen c e in July 20 1 7. It allows the Compa n y to provid e facilities fo r “real event betting” in t h e UK. Top B etta has also applied for an Advance-D e posit Wag e ring licence (“ADW”) in t he US, whi c h if succes s ful would af f ord TopBet t a similar rig h ts in the US a s an Australi a n corporat e bookmake r ’s licence d o es in Austr a lia (althoug h only pari- m utuel bettin g is permitte d and not fixed o dds).

Durin g the last q u arter of 20 1 7, TopBett a acquired the wagerin g operations of Melbour n e-based o n line bookm a ker Mad Bookie to suppor t our retail w agering bu s iness of To p Betta. This was compl e ted in early June and r e sults are in line with expe c tations.

It is n o w clear to b oth manag e ment and th e board that the strategi c priorities o f the Compa n y are:

(i) our wholesale busine s s of The Gl o bal Tote; a n d (ii) the retail w agering op e rations of T opBetta and Mad Booki e

In lin e with these priorities, w e have wou n d back our activity in 1 2 Follow, our content ar m , and the pr o motional investment in our tournamen t (fantasy) a c tivity. We h a ve also sto p ped develo p ment of th e e-Sports o p portunity, G a meBetta.

As w e announce d in our mo s t recent Q u arterly Re p ort, the fan t asy tourna m ents platfo r m continue s to be a p a rt of the Com p any’s longe r -term strate g y but resources have b e en scaled b ack in the i n terim as the Company c o ntinues to d eliver on the w h olesale an d retail wage r ing prioritie s .

TopBetta Holdings Limited Managing Director and Chief Executive Officer's report 30 June 2017

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The financial res u lts for the June 30, 2 0 17 year re f lect the emerging natu r e of our b u siness. Re v enues gre w 95% to $5,621,636 from t urnover of $ 82,392,000. The Comp a ny delivere d a loss of $ 7,618,257 t h at included the write d o wn (noncash) of the 12Fo l low goodwil l of $1,802,453.

The m ost encour a ging aspect of our business was t h e turnover and revenu e s generate d in the June 2017 Qu a rter. The quart e r included the launch o f The Global Tote and t h e integratio n of Mad Bookie and sa w turnover r e ach $42,4 5 9,000 for the q u arter and to t al revenue o f $2,576,000.

Durin g the year, the Compa n y raised a further $8,094,577 in c a pital throu g h Placeme n ts and mor e recently t h e Share Placement Plan ( “ SPP”).

One o f the key goals set dow n by the Boa r d is for the C ompany to be operatio n ally cash p o sitive in the next 6 mont h s. Management an d the Board sees the n ext 12 to 1 8 months as a defini n g period a s the Com p any moves into the imple m entation p h ase of its strategy.

I wou l d like to tak e the opportunity to ext e nd my grati t ude to my tireless man a gement tea m and all th e hard-worki n g staff. I would also like to t hank the B o ard for their ongoing su p port and go v ernance of the Compa n y.

To o u r sharehold e rs, we esp e cially thank you for your continued support and interest. T h e Board looks forward t o holding the Company’s 2 0 17 AGM in Newcastle in Novemb e r. The agenda will be detailed in th e formal No t ice of Meeting and I hope t o see as m a ny of you a s possible.

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Todd Buckingha m CEO

15 A u gust 2017 Sydn e y

TopBetta Holdings Limited Directors' report 30 June 2017

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The directors pre s ent their re p ort, togethe r with the fin a ncial state m ents, on th e consolidat e d entity (ref e rred to her e after as the 'group') consi s ting of TopBetta Holdi n gs Limited ( referred to h ereafter as the 'compa n y', 'TopBet t a' or 'paren t entity') and t h e entities it c ontrolled at the end of, o r during, th e year ende d 30 June 2 0 17. Directors The f o llowing per s ons were directors of T o pBetta Holdings Limited during the w hole of the financial ye a r and up to t he date of thi s report, unl e ss otherwis e stated:

Nich o las Chan - C hairman Todd Buckingha m Matt h ew Cain Simo n Dulhunty

Principal activities The g roup's prin c ipal activiti e s during th e financial y ear were di g ital fantas y wagering, w agering, c o ntent servi c es and whol e sale wageri n g which wa s started by t he group cl o se at year e nd.

Dividends

Ther e were no di v idends paid , recommen d ed or decla r ed during t h e current or previous fin a ncial year.

Review of operations

The l o ss for the g r oup after pr o viding for i n come tax a m ounted to $ 7,618,257 ( 3 0 June 201 6 : $4,537,5 2 5).

The l o ss for the group after income tax of $7,618, 2 57 (30 Jun e 2016: $4, 5 37,525) in c luded a non-recurring g oodwill impai r ment expense of $1,80 2 ,453. Accor d ingly, the l o ss from rec u rring operations for the y ear was $5,815,804. The G roup operates online pl a tforms offer i ng wagerin g products.

Durin g the year, the Compa n y raised $ 8 ,094,577 t h rough Plac e ments and a Share P u rchase Plan. The fun d ing has allow e d the Co m pany to fa s t-track the launch of t h e wholesale product o perated by the Comp a ny’s wholly - owned, Alder n ey-based s ubsidiary, T he Global T ote Limite d (“The Glo b al Tote”), a nd also add to its ret a il division w ith the busin e ss acquisiti o n of online bookmaker M ad Bookie Pty Ltd (“M a d Bookie”).

Durin g the year t h e Board ma d e strategic decisions to restructure t he Group’s business se g ments (in D ecember 2 0 16) and reallo c ate availa b le resourc e s and capital as required into the two busi n ess divisions: (i) retail wagering division (www.topbetta.co m .au and w ww.madbo o kie.com.au); and (ii) w holesale w a gering divi s ion, a B2 B totalisator product operated by The G lobal Tote which is lic e nsed in the UK with an operations t eams in Sri Lanka. As a result, the Group’s revis e d forecasts suggested t h at insufficient cash flow s would be g enerated b y the conten t business o p erated by 12Follow to jus t ify the goo d will previously attribute d to it and, a ccordingly, the goodwill on this co n tent business was imp a ired by $1,80 2 ,453 in De c ember 201 6 .

Retai l division

The T opBetta ret a il division h a s continue d to grow steadily throug h out the year with the C o mpany rec o rding a 53 % growth in Active Users c o mpared wit h this time la s t year.

On 2 May 2017, T opBetta Pt y Limited c o mpleted th e business acquisition o f the assets of Melbour n e-based ra c ing and sport s wagering c ompany, M a d Bookie P ty Ltd. The acquisition b olsters the scale of th e Group’s re t ail division w ith the Mad Bookie dat a base consi s ting of 12 , 500 wagering clients ( generating an annuali s ed wagerin g turnover of circa $80,000,000). Fu r ther details regarding the terms of t h e acquisiti o n of Mad B o okie are set out in the A SX Annou n cement dated 2 May 201 7 .

The r e tail division now acquir e s and servi c es clients u n der both th e TopBetta a nd Mad Bo o kie brands.

In July 2017, th e Company released i t s Quarterly Activities R eport which showed s harp grow t h in wager i ng and tourn a ment turno v er and rev e nues for t h e June qu a rter. The strong last q u arter can be attributed to the Mad Bookie acqui s ition as well as the imp r oved produ c t offering o f The Global Tote Guarantee Products on the TopBetta web s ite. The Glob a l Tote Guar a ntee Products ensure that custom e rs are give n the best o d ds availabl e on all totes. Since its l a unch in May 2 017, this pr o duct has shown to be t h e best prici n g of all tote d erivative p r oducts in th e market ov e r 65% of th e time.

The r e tail division continued t o develop its proprietary p latform and released it s iOS and A n droid applic a tions in June 2017.

TopBetta Holdings Limited Directors' report 30 June 2017

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Whol e sale divisio n (The Glob a l Tote) In November 2016, the Company announced that T he Global T ote had be e n granted an eGambli n g licence from the Alder n ey Gambling Control C o mmission f o r its wholes a le tote product.

The C ompany launched the wholesale bu s iness to bu s iness platfo r m, The Glo b al Tote, on May 4, 201 7 .

With a soft launc h of 2-4 me e tings per d a y held over the first 8 w eeks The G lobal Tote h ad in exce s s of $10,00 0 ,000 in bets p laced on th e platform.

In ad d ition to se c uring the n ecessary li c ences to o p erate The Global Tot e both dom e stically and internation a lly, the Com p any also completed the transaction with Moder n Wagering Systems Pt y Ltd to acq u ire various intellectual p roperty rights associated w ith The Gl o bal Tote technology.

On 2 1 July 2017, the Compa n y also ann o unced it ha d received a licence to offer The Global Tote an d the TopBe t ta retail offeri n g into the UK market.

Significant changes in the state of affairs On 1 1 August 20 1 6, the grou p was granted a licence b y the North e rn Territory Racing Co m mission to c onduct business as a sports bookma k er. This en a bled the gr o up to prog r ess its tour n aments an d wagering b usiness in t his new juri s diction. This l i cence is val i d until 10 A u gust 2021.

On 1 6 September 2016, the group anno u nced that T he Global T ote had b e en granted an eGambling licence f rom the Alder n ey Gambling Control C o mmission f o r its wholesale tote pro d uct. In May 2017, Topb e tta Limited launched th e Global Tote o n selected A ustralian th o roughbred a nd greyho u nd races.

Ther e were no ot h er significa n t changes i n the state o f affairs of th e group duri n g the finan c ial year.

Matters subsequent to the end of the financial year On 3 July 2017, the compa n y issued 2,954,681 op t ions to vari o us key employees pu r suant to th e group’s long term incen t ive plan wit h an exercis e price of $ 0 .30 and an expiry date o f 31 Octob e r 2020. Th e options co m prise two tranches which are subject to various e m ployment a nd perform a nce-related vesting con d itions.

On 2 1 July 2017, the compa n y also announced it ha d received a licence to o f fer The Global Tote an d the TopBe t ta retail offeri n g into the UK market.

On 1 4 August 2 0 17, the co m pany anno u nced it ha d received a licence to offer The G lobal Tote and TopBe t ta retail offeri n gs into the U S market. No other matter o r circumsta n ce has aris e n since 30 June 2017 t hat has sig n ificantly aff e cted, or m a y significantly affect the g r oup's opera t ions, the re s ults of thos e operations, or the grou p 's state of a ffairs in futu r e financial y ears.

Likely developments and expected results of operations The group anticip a tes that it w ill continue t o face risks s uch as: ● W a gering risk s arising fro m the unpredictability of w agering liabilities; and ● Li q uidity risks – the comp a ny’s ability t o grow is d e pendent u p on sufficien t liquid finan c ial resourc e s to fund marketing and operational g r owth.

In co m ing years, a nd to the e x tent that the group expa n ds internationally, the c o mpany ma y also face currency risk s .

Environmental regulation The group is not s ubject to an y significant environmen t al regulatio n under Australian Com m onwealth o r State law.

TopBetta Holdings Limited Directors' report 30 June 2017

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Information on directors Nam e : Nich o las Chan Title: Chairman and N o n-Executiv e Director Expe r ience and expertise: Nich o las (Nick) C han has m ore than 3 0 years' ex p erience in m edia. He h as held seni o r leadershi p and oper a tional roles with leading Australia n media co m panies. Nick was most r e cently Gro u p Chief Op e rating Offic e r ('COO') a t Seven We s t Media and p rior to that, Chief Exec u tive Officer ( 'CEO') of P a cific Maga z ines, a sub s idiary of Sev e n West Me d ia, for nin e years. He joined Paci f ic Magazin e s from Tex t Media, whe r e he was a CEO. He held a ra n ge of seni o r positions at ACP P u blishing inclu d ing Group Publisher a n d COO. Ni c k is a for m er Chairma n of The M a gazines Publ i shers of Au s tralia and CEO of Baue r Media AN Z . Othe r current dir e ctorships: Non e Form e r directors h ips (last 3 y e ars): Non e Spec i al responsi b ilities: Me m ber of the Audit and Risk Com m ittee and Chairman of Nominat i on and Remuneration C o mmittee, a s at year end. Inter e sts in share s : Non e Inter e sts in optio n s: 3,50 0 ,000 option s over ordin a ry shares Nam e : Tod d Buckingha m Title: Man a ging Direct o r and Chief Executive O fficer Quali f ications: Dou b le Bachelor in teaching a nd health a nd physical e ducation Expe r ience and expertise: Tod d Buckingha m has mor e than 21 y e ars' experi e nce workin g in the Sp o rts and Wag e ring indust r y in Australia. After co m pleting his d ouble Bach e lor degree in 2000, he t a ught secondary educa t ion for five years at H u nter Sports High Scho o l whilst simultaneously w orking as a sports m a nager at a successful s ports man a gement com p any, NSRT. During his time at NSRT, Todd n e gotiated m o re than $2 0 million wort h of sporting contracts, c ulminating in his appoi n tment as M a naging Dir e ctor. As Man a ging Direct o r of NSRT, Todd’s res p onsibilities i ncluded managing the a ffairs of Rug b y League athletes, n e gotiating c o ntracts, so u rcing spon s orships, managing accounting and b udgeting af f airs, crisis m anagement and media relations. In 2 009, he foun d ed 12Follo w and in 2010 TopBetta. Othe r current dir e ctorships: Non e Form e r directors h ips (last 3 y e ars): Non e Spec i al responsi b ilities: Non e Inter e sts in share s : 4,87 0 ,862 ordinary shares Inter e sts in optio n s: 16,6 6 7,000 options over ordi n ary shares (refer to 'Se r vice agree m ents' sectio n ) Nam e : Matt h ew Cain Title: Non - Executive Director (Non - independent) Quali f ications: Bac h elor of Commerce (Hon s . in Financ e ) Expe r ience and expertise: Matt h ew Cain h a s over 19 y ears' expe r ience in th e financial s e rvices and banking indu s try. He brings a significant amo u nt of senior manage m ent, finan c ial and corp o rate experi e nce to the group. Matt h ew has an extensive f a mily backg r ound in racing and is in v olved with racing a n u mber of h o rses with p r ominent M e lbourne hors e trainers. M atthew is c u rrently a C o mmittee M e mber of th e Melbourn e Racing Club and a director of Fer g hana Capital and a N o n-Executiv e of Registr y Direct Limited. He is al s o a Board Trustee to th e Caulfield R a cecourse R eserve. Othe r current dir e ctorships: Non e Form e r directors h ips (last 3 y e ars): Non e Spec i al responsi b ilities: Chairman of th e Audit an d Risk Co m mittee an d member of Nominat i on and Remuneration C o mmittee. Inter e sts in share s : 315, 0 00 ordinar y shares Inter e sts in optio n s: 3,00 0 ,000 option s over ordin a ry shares

TopBetta Holdings Limited Directors' report 30 June 2017

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Name :		Simo n Dulhunty
Title:		Non- Executive D irector (Non- independen t)
Exper ience and e xpertise:		Simo n Dulhunty has over 25 years' experience in print an d digitalm edia in
		mana gement and operationa l roles at the top of metr opolitan and regional Au stralian
		medi a, including as an award -winning Ed itor of TheS un-Herald ne wspaper in Sydney
		and General Ma nager of Fa irfax Media's mobile dev elopment te am respons ible for
		accla imed iPada pps for The Age, The Sydney Mor ning Herald and The Au stralian
		Finan cial Review . Simon now runs his ow n private me dia consulta ncy.
Other current dire ctorships:		None
Forme r directorsh ips (last 3	ye ars):	None
Speci al responsib ilities:		Mem ber of the Audit and Risk Comm ittee and Nomination and Remu neration
		Com mittee.
Intere sts in shares :		419,4 38 ordinary shares
Intere sts in option s:		3,000 ,000 options over ordina ry shares

'Othe r current dir e ctorships' q u oted abov e are current directorships for listed e ntities only a nd exclude s directorships of all other types of entities, unless o therwise st a ted.

'Former directors h ips (last 3 y ears)' quot e d above a r e directors h ips held in the last 3 years for list e d entities o nly and exclu d es director s hips of all o t her types of entities, unl e ss otherwi s e stated.

Company secretary Ms Charly Duffy i s a qualifie d and practi s ing corpor a te and commercial law y er with over nine year s ’ of private practice experience and i s the direct o r and prin c ipal of cdPlus Corpora t e Services Services, a company secretarial a n d legal servi c es business. Charly bri n gs extensiv e legal expe r ience to To p Betta, with a particular focus on equity capital m arkets, merg e rs and acq u isitions, co r porate gov e rnance, initial public of f erings, sec o ndary capital raisings, business and share sale t ransactions , takeovers, Takeovers Panel proc e edings, fin a ncing, ASI C and ASX compliance and all as p ects of gene r al corporate and comm e rcial law.

Meetings of directors

The n umber of m e etings of t h e company's Board of D irectors ('the Board') a n d of each B oard comm i ttee held d u ring the year e nded 30 Ju n e 2017, an d the numbe r of meeting s attended b y each direc t or were:

				Nominat ion and	Nominat ion and
	Full	Board		R emuneratio n Committee		Audit an d Risk		Com mittee
	Attend ed	H eld		A ttended	Held	Attend	ed	H eld
Nicho las Chan	18		18	5	5		4	4
Todd Buckingham	18		18	-	-		-	-
Matth ew Cain	18		18	5	5		4	4
Simon Dulhunty	18		18	5	5		4	4

Held: represents t he number of meeting s held durin g the time t h e director held office o r was a me m ber of the relevant com m ittee.

Remuneration report (audited) The r emuneratio n report, w h ich has b e en audited , outlines t h e Key Ma n agement P ersonnel (' K MP') remu n eration arran g ements for t he group, i n accordanc e with the re q uirements o f the Corpo r ations Act 2 0 01 and its R egulations.

KMP are defined as those p e rsons havi n g authority and respo n sibility for planning, dir e cting and c ontrolling the major activi t ies of the gr o up, directly or indirectly .

The r e muneration report is se t out under t h e following main headings: ● P rinciples u s ed to deter m ine the nat u re and amo u nt of remu n eration ● D etails of re m uneration ● S ervice agreements ● S hare-base d compensation ● A dditional di s closures re l ating to KM P

TopBetta Holdings Limited Directors' report 30 June 2017

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Principles used to determine the nature and amount of remuneration The o bjective of the group' s executive reward fra m ework is to ensure r e ward for performance is competitive and appropriate for th e results delivered. The framework a ligns executive reward w ith the ac h ievement o f strategic o b jectives and t h e creation o f value for s hareholder s , and it is c onsidered t o conform t o the market best practi c e for the delivery of rewar d . The Boa r d of Direct o rs ('the Bo a rd') ensure s that exec u tive reward satisfies th e following k ey criteria f or good rewar d governan c e practices: ● c ompetitiveness and rea s onablenes s ; ● a cceptability to sharehol d ers; ● p erformance linkage / ali g nment of e x ecutive co m pensation; a nd ● t ransparenc y .

The N omination and Remu n eration Co m mittee ('NRC') is responsible fo r determining and revi e wing remu n eration arran g ements for its directors and execu t ives. The p e rformance o f the group depends o n the qualit y of its direc t ors and exec u tives. The r e muneration philosophy i s to attract, m otivate an d retain high performanc e and high q u ality perso n nel.

The r e ward fram e work is designed to alig n executive reward to s h areholders' interests. T h e Board ha v e consider e d that it shoul d seek to en h ance shar e holders' interests by: ● h aving econ o mic profit a s a core co m ponent of p l an design; ● f ocusing on s ustained growth in sha r eholder we a lth, consisti n g of divide n ds and gro w th in share price, and d e livering c onstant or i n creasing return on ass e ts as well a s focusing th e executive o n key non- f inancial driv e rs of value; and
● a ttracting an d retaining high calibre e xecutives.
Additionally, the r e ward frame w ork should seek to enhance executives' interes t s by: ● r ewarding c a pability and experience; ● r eflecting co m petitive re w ard for con t ribution to g r owth in sha r eholder we a lth; and ● p roviding a c lear structu r e for earnin g rewards.

In ac c ordance wi t h best pra c tice corpor a te governa n ce, the str u cture of n o n-executive director an d executive director remu n eration is s e parate.

Non- e xecutive dir e ctors' remu n eration Fees and paym e nts to non-executive directors refl e ct the de m ands and r esponsibiliti e s of their role. Non-e x ecutive direct o rs' fees an d payments are review e d annually b y the NRC. The NRC m ay, from ti m e to time, receive adv i ce from indep e ndent rem u neration consultants to ensure non - executive directors' fee s and paym e nts are ap p ropriate an d in line with t h e market. T he chairma n 's fees are determined independen t ly to the fe e s of other n o n-executiv e directors b a sed on comp a rative role s in the exte r nal market. The chairm a n is not pr e sent at any discussion s relating to t he determi n ation of his o w n remuneration.

ASX listing rules r equire the a ggregate n o n-executive directors' r e muneration be determined periodic a lly by shareholders. The m ost recen t determination was u n der the C o nstitution, w here the s hareholders approved that the a g gregate remu n eration mu s t not excee d $500,000 p er annum.

Exec u tive remun e ration

The group aims t o reward ex e cutives bas e d on their p o sition and r esponsibilit y , with a lev e l and mix of remunerati o n which has b o th fixed an d variable components.

The executive re m uneration and reward fr a mework ha s four comp o nents:

b ase pay an d non-mone t ary benefits ;
● s hort-term p e rformance incentives; ● s hare-based payments, s uch as long-term incent i ve plans; a n d ● o ther remun e ration such as superan n uation and l ong service leave.

The combination o f these co m prises the e x ecutive's total remuner a tion.

Fixed remunerati o n, consistin g of base s a lary, supera n nuation an d non-mone t ary benefits, are to be r e viewed an n ually by the N R C based o n individual a nd busines s unit perfor m ance, the o verall perfo r mance of the group and comparabl e market remu n eration.

Exec u tives may r e ceive their fixed remu n eration in t h e form of c ash or othe r fringe ben e fits (for ex a mple moto r vehicle benefits) where it does not cr e ate any additional costs to the grou p and provid e s additional value to the executive.

TopBetta Holdings Limited Directors' report 30 June 2017

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The l o ng-term in c entives plan ('LTIP') pro g ram is des i gned to as s ist in the re w ard, retention and moti v ation of ex e cutives and o t her KMP of the group. S ubject to th e ASX listin g rules and u nder the ter m s of the L T IP, the Boa r d may grant options and/or performance rights (options with a zero exe r cise price) to eligible p articipants ( 'awards'). E ach award granted repre s ents a right to receive one share on c e the awar d vests and i s exercised b y the relev a nt participa n t.

The B oard has s o le and absolute discreti o n to determine the terms and condi t ions of awa r ds which a r e granted u n der the LTIP i ncluding, b u t not limited to, the follo w ing:

w hich individ u als will be i n vited to par t icipate in th e LTIP;
t h e number o f awards to b e granted t o each parti c ipant;
t h e fee paya b le, if any, b y participant s on the gra n t of awards;
t h e terms (e. g . vesting co n ditions or performance hurdles) on w hich the a w ards will ve s t and beco m e exercisa b le;
● t h e exercise p rice, if any, of each aw a rd granted t o participant s ;
t h e period du r ing which a vested awa r d can be exercised; and
● any forfeiture conditions o r disposal r e strictions a p plying to th e awards an d shares rec e ived upon e xercise of a w ards.

Grou p 's performa n ce and link to remuner a tion Rem u neration for certain indi v iduals is lin k ed to their d ivisional pe r formance a n d the performance of t h e group, if r elevant. Refer to section ' D etails of re m uneration' o f the remun e ration repo r t for details.

Use o f remunerat i on consulta n ts Durin g the financial year en d ed 30 June 2017, the g roup had n ot engaged any remun e ration consultants to r e view or advis e upon its e x isting remu n eration poli c ies, including the imple m entation of t he LTIP.

Votin g and comm e nts made at the compa n y's 2016 A n nual Gener a l Meeting (' A GM') At th e 2016 AGM, 100% of t h e votes re c eived supp o rted the ad o ption of th e remunerati o n report fo r the year e n ded 30 June 2 016. The c o mpany did n ot receive a ny specific f eedback at t he AGM re g arding its remuneration p ractices.

Details of remuneration

Amo u nts of remu n eration

The K MP of the g r oup consist e d of the dir e ctors of To p Betta Holdi n gs Limited a nd the follo w ing person s : ● B ill Butler - C hief Financial Officer (r e signed on 31 January 2 0 17) ● O liver Shan a han - Chief Information O fficer ● P aul Jeroni m o - Chief O p erating Offi c er

Details of the rem u neration of KMP of the g roup are s e t out in the f ollowing tables:

TopBetta Holdings Limited Directors' report 30 June 2017

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S Cash salar and fees $ 91,324 45,662 45,662 180,000 136,494 158,462 160,00 hort-term be y Cash bonus $ 36,00 1 nefits Non- moneta $ - - - 0 5,0 - - - ry - - - 23 - - -	S Cash salar and fees $ 91,324 45,662 45,662 180,000 136,494 158,462 160,00 hort-term be y Cash bonus $ 36,00 1 nefits Non- moneta $ - - - 0 5,0 - - - ry - - - 23 - - -	S Cash salar and fees $ 91,324 45,662 45,662 180,000 136,494 158,462 160,00 hort-term be y Cash bonus $ 36,00 1 nefits Non- moneta $ - - - 0 5,0 - - - ry - - - 23 - - -	Post employm benef Supe annuat $ 8, 4, 4, 20, 8, 15, 15, - ent its r- ion 642 338 338 520 331 054 200	Long-t bene Leav bene $ erm fits e fits - - - - - - -	Shar Equ sett sha $ e-based pay ity- led Eq se res opt - - - - - - - 2 ments uity- ttled ions $ 300 300 300 - - - 9,000	Shar Equ sett sha $ e-based pay ity- led Eq se res opt - - - - - - - 2 ments uity- ttled ions $ 300 300 300 - - - 9,000	T 1 2 1 1 2 otal $ 00,266 50,300 50,300 41,543 44,825 73,516 04,201
817,605	36,00 0	5,0 23	76, 423	-	-	2 9,900	9 64,951
until dateo S Cash salar and fees $ 49,877 24,939 24,939 146,995 130,84 132,849 46,154 f resignatio hort-term be y Cash bonus $ 1 n as KMP. nefits Non- moneta $ - - - - 5,5 - - - ry - - - 11 - - -			Post employm benef Supe annuat $ 4, 2, 2, 13, 12, 12, 4, - ent its r- ion 738 369 369 964 430 613 385	Long-t bene Leav bene $ erm fits e fits - - - - - - -	Shar Equ sett sha $ 3 e-based pay ity- led Eq se res opt - 13 4,100 9 - 9 - 60 - - - ments uity- ttled ions $ 0,000 7,500 7,500 3,340 - - -		T 1 1 1 7 1 1 otal $ 84,615 58,908 24,808 69,810 43,271 45,462 50,539
556,594	-	5,5 11	52, 868	-	3 4,100	92 8,340	1,5 77,413

R emunerati o n from date of appointm e nt of KMP a nd represe n ts the direc t or fees. R emunerati o n from date of appointm e** nt of KMP.

TopBetta Holdings Limited Directors' report 30 June 2017

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Service agreements Rem u neration an d other term s of employ m ent for KM P are formal i sed in servi c e agreeme n ts. Details o f these agr e ements are a s follows:

Nam e : Tod d Buckingha m Title: Man a ging Direct o r and Chief Executive O fficer Agre e ment com m enced: 8 November 201 5 Term of agreeme n t: Fixe d term for tw o years and upon expiry may be mutually extend e d to contin u e on an o n going basi s . Details: Tod d Buckingha m receives a total fixed r e muneration of $180,00 0 per annum (excluding super a nnuation) w hich includ e s all non-ca s h benefits h e may be e n titled to receive plus a m o tor vehicle a llowance o f $18,000 pe r annum. In a d dition, the c o mpany has issued to T o dd: (1) Tranche 1 - 10,000,000 o p tions each w ith an exer c ise price of $0.25 and w ith an opti o n term of fiv e years. Th e options will only vest a n d be exerci s able into ful l y paid ordi n ary shares i n the company upon the earlier of ei t her of the following vesting conditions being met: ● th e group achieving gross revenue of a t least $3 million over a period of thr e e consecutive months within fi v e years of t h e date of is s ue of the o p tions; ● th e company' s 20 day vol u me weighte d average p r ice ('VWAP' ) of its shares as quot e d on the A S X being at l e ast $0.50 w ithin five ye a rs of the da t e of issue o f the opti o ns; or ● a c hange of c o ntrol event o ccurring wi t hin five yea r s of the dat e of issue of t he opti o ns. (2) Tranche 2 - 6,667,000 op t ions each w ith an exercise price of $ 0.25 and wi t h an opti o n term of fiv e years. Th o se options w ill only vest and be exer c isable into f ully paid ordinary sh a res in the c o mpany upo n the earlier of either of t h e following vesting conditions being met: ● th e group achieving Earni n gs, Before Interest, Tax , Depreciati o n and Amor t isation ('EBITDA') of $1 million over a period of t h ree consec u tive month s within five y ears of the d ate of issue of the optio n s; ● th e company' s 20 day VW A P of its sh a res as quot e d on the A S X being at l e ast $1.0 0 within five y ears of the date of issu e of the opti o ns; or ● a c hange of c o ntrol event o ccurring wi t hin five yea r s of the dat e of issue of t he opti o ns. Both tranches w e re granted o n 12 Nove m ber 2015 a n d the fair v a lue at grant date was $ 0.047 for tr a nche 1 an d $0.020 for t ranche 2. Tod d is also eligible to participate in the L TIP.

Afte r the initial t w o year fixed term, Todd may termin a te his empl o yment contr a ct by givin g six month s ' notice in w riting. In ad d ition to the rights provid e d under the Con s titution, sub j ect to the r e quirements o f the Corp o rations Act, if, amongst o ther circumstances, t h e Board de t ermines tha t Todd is no t satisfactoril y performin g his duti e s as Managing Director, the Board m ay recomm e nd and put a resolution to the shar e holders for his removal either durin g the fixed term or other w ise. Todd will be subj e ct to a restr a int on solicitation of clients, supplie r s and empl o yees for a p e riod of 12 m onths follo w ing the term i nation of hi s employme n t.

The B oard has a g reed that, i n lieu of any increase to h is annual s a lary, Todd w ill be entitled to a shor t term cash incentive (in c luding super) of up to 1 0 0% of his b a se sala r y. The cas h incentive is payable in three tranch e s, each of w hich is con d itional upo n the satisfa c tion of vario u s mileston e s of the Co m pany's fina n cial and oper a tional performance. On e of the con d itions was s atisfied duri n g the finan c ial year end e d 30 June 2017 and ac c ordingly, $3 6 ,000 of the cash incenti v e has been paid to Tod d .

TopBetta Holdings Limited Directors' report 30 June 2017

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Name :	Name :	Olive r Shanahan
Title:		Chief Information Officer
Agree ment comm enced:		1 Jul y 2014
Term	of agreemen t:	Ongo ing basis
Detai ls:		Olive r Shanahan receives an annual sala ry of $170,46 7 (excluding superannu ation)
		and i s also eligibl e for:
		●ma ndatory sup erannuation contribution s;
		●ad iscretionary bonus and i ncentive pay ment schem e; and
		●the LTIP.
		Olive r may termin ate his emp loyment agr eement byg iving threew eeks’ notice in
		writin g and the gr oup may ter minate hise mploymenta greementb y giving thre e
		week s’ notice inw riting, or by the groupm aking paym ent in lieu of part or all o f the
		usua l summaryd ismissal gro unds. Other than in relat ion to the pro tection of
		confi dential inform ation and in tellectual pr operty, Olive r is not subj ect to any ot her
		restri ctions on his activities af ter his emplo yment with the group ce ases.
Name :		Paul Jeronimo
Title:		Chief Information Officer
Agree ment comm enced:		21M arch 2016
Term	of agreemen t:	Ongo ing basis
Detai ls:		Paul Jeronimo re ceives an an nual salary of $160,000 (excludings uperannuati on) and
		is als o eligible for :
		●ma ndatory sup erannuation contribution s;
		●ad iscretionary bonus and i ncentive pay ment schem e; and
		●the LTIP.
		Theg roup or Pau l may termin ate his emp loyment agr eement byg iving threem onths'
		notic e in writing,o r by the gro up makinga payment in lieu of parto r all of then otice
		perio d, in addition to the usua l summaryd ismissal gro unds. Other than in relat ion to
		thep rotection of confidentiali nformationa nd intellectu al property, Paul is nots ubject
		to an y other restr ictions on hi s activitiesa fter his empl oyment with the group c eases.

KMP h ave no enti t lement to t e rmination p a yments in t h e event of r e moval for m isconduct.

Share-based compensation

Issue of shares No s h ares were i s sued to dire c tors or oth e r KMP as p a rt of compe n sation duri n g the year e nded 30 Ju n e 2017. Optio n s The t e rms and conditions of e ach grant o f options iss u ed by 30 J u ne 2017 over ordinary s hares affec t ing remune r ation of direct o rs and oth e r KMP in thi s financial y e ar or future reporting years are as f o llows:

	Number of						Fair value
	options		Vesting date and				pero ption
Name	granted	Grantd ate	exercisable	date	Expi ry date	Exercise price	at gra nt date
Nicho las Chan	2,000,0 00	12/11/2 015	12/11/2018		12/1 1/2018	$ 0.20	$ 0.0650
	1,500,0 00	16/03/2 017	16/03/2018		16/0 3/2018	$ 0.30	$ 0.0002
Todd Buckingham
- Tran che 1	10,000,0 00	12/11/2 015	12/11/2020		12/1 1/2020	$ 0.25	$ 0.0470
Todd Buckingham
- Tran che 2	6,667,0 00	12/11/2 015	12/11/2020		12/1 1/2020	$ 0.25	$ 0.0200
Matth ew Cain	1,500,0 00	12/11/2 015	12/11/2018		12/1 1/2018	$ 0.20	$ 0.0650
	1,500,0 00	16/03/2 017	16/03/2018		16/0 3/2018	$ 0.30	$ 0.0002
Simon Dulhunty	1,500,0 00	12/11/2 015	12/11/2018		12/1 1/2018	$ 0.20	$ 0.0650
	1,500,0 00	16/03/2 017	16/03/2018		16/0 3/2018	$ 0.30	$ 0.0002
PaulJ eronimo	2,000,0 00	28/07/2 016	21/03/2019		21/0 3/2019	$ 0.25	$ 0.0145

TopBetta Holdings Limited Directors' report 30 June 2017

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Todd Buckingha m has perfor m ance condi t ions attach e d to his options. These a re detailed in 'Service a greements' section abov e . No other holders have performanc e conditions attached to t heir options.

Optio n s granted carry no dividend or votin g rights.

Values of option s over ordi n ary shares granted a n d exercise d attributabl e to direct o rs and oth e r KMP as part of comp e nsation du r ing the year ended 30 J u ne 2017 ar e set out bel o w:

	Value of	Value of		Val ue of
	options	option s		opt ions
	granted	exercis ed		gra nted
	during the	duringt he		durin g prior
	year	year		ye ar
Name	$	$		$
Nicho las Chan	30 0		-	1 30,000
Todd Buckingham - Tranche1	-		-	4 70,000
Todd Buckingham - Tranche2	-		-	1 33,340
Matth ew Cain	30 0		-	97,500
Simon Dulhunty	30 0		-	97,500
PaulJ eronimo	29,00 0		-	-

Ther e were no o p tions over ordinary shar e s vested o r lapsed by d irectors an d other KMP as part of c ompensatio n during the y e ar ended 3 0 June 2017.

Additional disclosures relating to KMP

Shar e holding

The n umber of s h ares in the company h e ld during th e financial y ear by each director an d other me m bers of KM P of the group, including t h eir persona l ly related p a rties, is set o ut below:

Ordin Todd Matth Simon PaulJ Oliver ary shares Buckingham ew Cain Dulhunty eronimo Shanahan	Bala thes the 4,8 2 2 7 3,0 nce at tart of year 70,862 95,000 96,438 09,151 44,532	R a rem eceived s part of uneration - - - - -	Additions 20,00 123,00 211,96 20,00 - 0 0 4 0	Disposa othe (162 ls/ r - - - - ,500)	Bala thee the 4,8 3 4 9 2,9 nce at nd of year 70,862 15,000 19,438 21,115 02,032
	9,2 15,983	-	374,96 4	(162 ,500)	9,4 28,447

Optio n holding

The n umber of o p tions over ordinary sh a res in the c ompany held during th e financial y ear by eac h director a n d other mem b ers of KMP of the grou p , including t h eir persona l ly related p a rties, is set o ut below:

Optio Todd Nicho Matth Simon PaulJ Oliver ns over ordin Buckingham las Chan ew Cain Dulhunty eronimo Shanahan* ary shares	Bala thes the 16,6 2,0 1,5 1,5 nce at tart of year 67,000 00,000 00,000 00,000 - -	Granted - 1,500,000 1,500,000 1,500,000 2,000,000 1,954,681	Exercised - - - - - -	Expire forfeite othe d/ d/ r - - - - - -	Bala thee the 16,6 3,5 3,0 3,0 2,0 1,9 nce at nd of year 67,000 00,000 00,000 00,000 00,000 54,681
	21,6 67,000	8,454,681	-	-	30,1 21,681

C onditions detailed in 'S e rvice agree m ents' secti o n above. O ptions wer e granted after the perio d ended 30 J** une 2017.

TopBetta Holdings Limited Directors' report 30 June 2017

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This concludes the remuneration report, which has been audited.

Shares under option Unissued ordinar y shares of T opBetta Hol d ings Limite d under opti o n at the dat e of this rep o rt are as follows:

Grant 12 No 12 No 28 Ju 30 No 30 No 16 Ma 14 Ju 3 July date vember 201 vember 201 ly 2016 vember 201 vember 201 rch 2017 ne 2017 2017 5 5 6 6 Expiryd 12 Nove 12 Nove 21 Marc 30 Nove 30 Nove 16 Marc 14 June 31 Octo ate mber 2018 mber 2020 h 2019 mber 2019 mber 2019 h 2018 2020 ber 2020 Exerci price $ $ $ $ $ $ $ $ se 0.20 0.25 0.25 0.30 0.25 0.30 0.20 0.30	Num under 10,0 16,6 2,0 1,0 3,0 4,5 2,0 2,9 ber option 00,000 67,000 00,000 00,000 00,000 00,000 00,000 54,681
	42,1 21,681

11,000,000 optio n s over ordin a ry shares a re held by e x ternal parti e s to the group.

1,000,000 options over ordinary shares ar e held by no n -KMP employees.

No p e rson entitle d to exercis e the option s had or has any right b y virtue of t h e option to p articipate i n any share issue of the c o mpany or o f any other body corpora t e.

Shares issued on the exercise of options Ther e were no or d inary shar e s of TopBe t ta Holdings Limited iss u ed on the e x ercise of o p tions durin g the year e n ded 30 June 2 017 and u p to the date of this repor t .

Indemnity and insurance of officers The company has indemnified the director s and execu t ives of the c ompany for costs incurr e d, in their c a pacity as a director or ex e cutive, for w hich they m a y be held personally lia b le, except w here there is a lack of good faith.

Durin g the financi a l year, the c ompany paid a premiu m in respect o f a contract to insure th e directors and executiv e s of the comp a ny against a liability t o the extent permitted b y the Corp o rations Ac t 2001. The contract of insurance p rohibits disclosure of the n ature of the liability and the amount o f the premi u m.

Indemnity and insurance of auditor The c ompany ha s not, during or since th e end of the financial ye a r, indemnifi e d or agree d to indemnify the audit o r of the comp a ny or any r e lated entity against a li a bility incurred by the au d itor.

Durin g the financi a l year, the c ompany ha s not paid a p remium in r espect of a c ontract to i n sure the au d itor of the company or an y related ent i ty.

Proceedings on behalf of the company

No p e rson has a p plied to th e Court und e r section 2 3 7 of the C o rporations A ct 2001 fo r leave to b r ing procee d ings on behal f of the co m pany, or to intervene i n any proceedings to w hich the co m pany is a party for th e purpose o f taking responsibility on b ehalf of the c ompany fo r all or part o f those proc e edings.

Non-audit services

Details of the am o unts paid o r payable to t he auditor f o r non-audit services provided durin g the financi a l year by th e auditor are o u tlined in no t e 23 to the financial stat e ments.

The d irectors are satisfied th a t the provis i on of non-audit service s during the financial ye a r, by the a u ditor (or by another person or firm on the auditor' s behalf), is compatible with the ge n eral standa r d of independence for a uditors imp o sed by the C o rporations A ct 2001.

TopBetta Holdings Limited Directors' report 30 June 2017

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The directors are o f the opini o n that the s e rvices as di s closed in n o te 23 to the financial st a tements do not compro m ise the exter n al auditor's independen c e requirem e nts of the Corporations A ct 2001 for the followin g reasons: ● a ll non-audit services ha v e been reviewed and a p proved to ensure that t h ey do not i m pact the int e grity and o b jectivity o f the audito r ; and
● n one of the s ervices un d ermine the g eneral prin c iples relatin g to auditor independen c e as set ou t in APES 1 1 0 Code o f Ethics for Professional Accountan t s issued by the Accoun t ing Profess i onal and Et h ical Stand a rds Board, i n cluding r eviewing or auditing th e auditor's o w n work, ac t ing in a ma n agement o r decision-making capa c ity for the c o mpany, a cting as ad v ocate for th e company o r jointly sharing econo m ic risks and rewards.

Officers of the company who are former partners of PKF(NS) Audit & Assurance Limited Partnership Ther e are no offic e rs of the c o mpany who are former p artners of PKF(NS) Audit & Assuran c e Limited P artnership.

Auditor's independence declaration A co p y of the au d itor's indep e ndence de c laration as r equired under section 307C of the C orporation s Act 2001 i s set out imme d iately after t his director s ' report.

Auditor PKF( N S) Audit & A ssurance L imited Part n ership conti n ues in offic e in accordance with se c tion 327 of t he Corporations Act 2001.

This r eport is made in accor d ance with a resolution of directors , pursuant t o section 2 9 8(2)(a) of t h e Corporations Act 2001.

On b e half of the directors

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_ _ _ _ _ _ ___
Nich o las Chan
Chai r man
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___ _ _ _ _ _ _
Tod d Buckingha m
Dire c tor
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15 A u gust 2017 Sydn e y

Topbetta Holdings Limited

ACN: 164 521 395

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

In accordance with the requirements of section 307C of the Corporations Act 2001 , as lead auditor for the audit of TopBetta Holdings Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been:

(i) No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) No contraventions of any applicable code of professional conduct in relation to the audit.

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PKF

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MARTIN MATTHEWS PARTNER

15 AUGUST 2017 NEWCASTLE, NSW

PKF(NS) Audit & Assurance Limited Sydney Newcastle Partnership Level 8, 1 O’Connell Street 755 Hunter Street ABN 91 850 861 839 Sydney NSW 2000 Australia Newcastle West NSW 2302 Australia GPO Box 5446 Sydney NSW 2001 PO Box 2368 Dangar NSW 2309 Liability limited by a scheme approved under Professional p +61 2 8346 6000 p +61 2 4962 2688 f +61 2 8346 6099 f +61 2 4962 3245

Liability limited by a scheme approved under Professional Standards Legislation

PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. For office locations visit www.pkf.com.au

TopBetta Holdings Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2017

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Reve Costo Gross Other Expe Emplo Profe Marke Admin IT exp Occu Depre Impai Share Non-r Other Finan Loss Incom Loss TopB Other Total TopB Basic Dilute nue f sales profit income nses yee benefits ssional fees ting expens istration exp enses pancy expen ciation and rment of goo of losses of ecurring exp expenses ce costs before inco e tax benefi after incom etta Holding comprehen comprehen etta Holding earnings pe d earningsp expense es enses ses amortisation dwill associates enses me tax ben t e tax benef s Limited sive income sive incom s Limited r share er share expense accounted fo efit it for the ye for the year, e for the ye r using the ar attributa net of tax ar attributab equity metho ble to the ow le to the ow d ners of ners of Note 5 6 6 12 6 6 7 32 32	C 2017 $ 5,621 (2,838 2,783 1,059 (4,071 (1,533 (2,903 (903 (949 (177 (141 (1,802 (11 (51 (162 (165 (9,030 1,411 (7,618 (7,618 Cents ( ( onsolidated 20 ,636 2,8 ,404) (1,0 ,232 1,8 ,783 6 ,277) (2,3 ,700) (8 ,054) (2,0 ,691) (7 ,046) (3 ,438) ( ,293) ( ,453) ,932) ( ,718) (1,5 ,103) ( ,475) (1 ,165) (5,6 ,908 1,1 ,257) (4,5 - ,257) (4,5 Ce 6.40) 6.40) 16 $ 84,923 41,120) 43,803 17,483 22,444) 26,914) 64,373) 63,772) 38,155) 83,006) 22,061) - 10,253) 13,064) 90,620) 11,481) 84,857) 47,332 37,525) - 37,525) nts (5.64) (5.64)
	2,783 ,232
	1,059 (4,071 (1,533 (2,903 (903 (949 (177 (141 (1,802 (11 (51 (162 (165 ,783 ,277) ,700) ,054) ,691) ,046) ,438) ,293) ,453) ,932) ,718) ,103) ,475)
	(9,030 1,411 ,165) ,908
	(7,618 ,257) -
	(7,618 ,257)
	Cents ( ( 6.40) 6.40)

The abov e statement o f profit or lo s s and othe r comprehen s ive income should be r e ad in conju n ction with t h e ac c ompanying notes 18

TopBetta Holdings Limited Statement of financial position As at 30 June 2017

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Asse Curre Cash Trade Prepa Total Non-c Inves Prope Intang Defer Total Total Liabi Curre Trade Emplo Earn- Defer Total Non-c Emplo Total Total Net a Equit Issue Rese Accum Total ts nt assets and cash eq and other re yments current asse urrent asse tments acco rty, plant an ibles red tax non-current assets lities nt liabilities and otherp yee benefits out provision red revenue current liabil urrent liab yee benefits non-current liabilities ssets y d capital rves ulated loss equity uivalents ceivables ts ts unted for usi d equipment assets ayables ities ilities liabilities es ng the equit y method Note 8 9 10 11 12 13 14 15 28 16 17 18	C 2017 $ 3,267 1,885 148 5,301 425 5,800 3,602 9,828 15,129 3,526 288 2,215 6,030 59 59 6,089 9,039 22,791 1,473 (15,225 9,039 onsolidated 20 ,188 2,4 ,769 1,2 ,591 ,548 3,7 - 2 ,920 2 ,073 4,2 ,051 2,1 ,044 6,9 ,592 10,6 ,350 2,0 ,416 2 ,480 200 ,446 2,3 ,478 ,478 ,924 2,3 ,668 8,3 ,244 14,6 ,958 1,2 ,534) (7,6 ,668 8,3 16 $ 35,693 29,370 59,005 24,068 39,747 71,330 75,527 78,618 65,222 89,290 65,557 19,795 - 18,045 03,397 43,163 43,163 46,560 42,730 96,667 53,340 07,277) 42,730
	5,301 ,548
	425 5,800 3,602 - ,920 ,073 ,051
	9,828 ,044
	15,129 ,592
	3,526 288 2,215 ,350 ,416 ,480 200
	6,030 ,446
	59 ,478
	59 ,478
	6,089 ,924
	9,039 ,668
	22,791 1,473 (15,225 ,244 ,958 ,534)
	9,039 ,668

The a b ove statem e nt of financ i al position s hould be re a d in conjun c tion with th e accompan y ing notes 19

TopBetta Holdings Limited Statement of changes in equity For the year ended 30 June 2017

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Issued capital $ 8,059,683 - -	Reserves $ - - -	Accumu losse $ (3,069 (4,537 lated s ,752) ,525) -	Total 4,9 (4,5 equity $ 89,931 37,525) -
- 6,636,984 -	1,253,34 - - 0	(4,537 ,525) - -	(4,5 6,6 1,2 37,525) 36,984 53,340
1 4,696,667	1,253,34 0	(7,607 ,277)	8,3 42,730
1 Issued capital $ 4,696,667 - -	Reserves $ 1,253,34 0 - -	Accumu losse $ (7,607 (7,618 lated s ,277) ,257) -	Total 8,3 (7,6 equity $ 42,730 18,257) -
- 8,094,577 -	220,61 - - 8	(7,618 ,257) - -	(7,6 8,0 2 18,257) 94,577 20,618
2 2,791,244	1,473,95 8	(15,225 ,534)	9,0 39,668

The a b ove statem e nt of chang e s in equity s hould be re a d in conjun c tion with th e accompan y ing notes 20

TopBetta Holdings Limited Statement of cash flows For the year ended 30 June 2017

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Cash Rece Paym Intere Intere Resea Net ca Cash Paym Paym Paym Paym Net ca Cash Proce Net (r Share Net ca Net in Cash Cash flows from ipts from cus ents to supp st received st and other rch and dev sh used ino flows from ent for purch ents for inve ents for prop ents for inta sh used in flows from eds from iss epayment of issue trans sh from fina crease in ca and cash eq and cash eq operating a tomers - net liers and em finance cos elopment ta perating ac investing a ase of busin stments erty, planta ngibles investing act financing a ue of shares )/proceedsf action costs ncing activit sh and cash uivalents at uivalents at ctivities ployees ts paid x received tivities ctivities ess, net ofc nd equipme ivities ctivities rom borrowi ies equivalents the beginnin the end of th ash acquire nt ngs g of the fina e financialy d ncial year ear Note 30 28 8	C 2017 $ 7,501 (14,216 28 (5 560 (6,132 (100 (50 (262 (200 (612 7,716 (139 7,576 831 2,435 3,267 onsolidated 20 ,000 3,6 ,548) (7,3 ,505 ,982) ( ,708 4 ,317) (3,3 ,000) ,000) (1 ,566) (2 ,000) ,566) (3 ,003 7,2 - (4 ,625) (1,1 ,378 5,6 ,495 2,0 ,693 4 ,188 2,4 16 $ 13,010 64,617) 45,092 32,766) 15,595 23,686) - 00,000) 72,563) - 72,563) 58,694 58,369) 00,770) 99,555 03,306 32,387 35,693
	(6,132 ,317)
	(100 (50 (262 (200 ,000) ,000) ,566) ,000)
	(612 ,566)
	7,716 (139 ,003 - ,625)
	7,576 ,378
	831 2,435 ,495 ,693
	3,267 ,188

Th e above stat e ment of ca s h flows sho u ld be read i n conjunctio n with the a c companyin g notes 21

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 1. General information

The f inancial sta t ements co v er TopBett a Holdings L imited as a group co n sisting of T opBetta H o ldings Limi t ed (the 'com p any' or 'par e nt entity') a nd the entit i es it contro l led at the end of, or during, the ye a r (referred to in these f inancial state m ents as th e 'group'). T he financial statement s are prese n ted in Aus t ralian dolla r s, which is TopBetta H oldings Limit e d's function a l and prese n tation curr e ncy.

TopB e tta Holdings Limited i s a listed p u blic company limited b y shares, i n corporated and domiciled in Aust r alia. Its regist e red office a nd principal place of bu s iness is:

22 L a mbton Roa d Broa d meadow, NSW 2292

A de s cription of t h e nature of t he group's o perations a n d its princi p al activities are include d in the direc t ors' report, w hich is not p a rt of the fin a ncial state m ents.

The financial stat e ments wer e authorised for issue, i n accordanc e with a res o lution of dir e ctors, on 1 5 August 2 0 17. The direct o rs have the power to a m end and reissue the fin a ncial state m ents.

Note 2. Significant accounting policies

The p rincipal acc o unting poli c ies adopted in the prep a ration of th e financial st a tements ar e set out eit h er in the re s pective notes or below. T h ese policie s have been consistently applied to all the years p resented, u n less other w ise stated.

New or amended Accounting Standards and Interpretations adopted The g roup has a d opted all o f the new or amended A ccounting Standards a nd Interpre t ations issu e d by the A u stralian Acco u nting Stan d ards Boar d ('AASB') that are mandatory for the curren t reporting p eriod. The adoption o f these Acco u nting Standards and In t erpretations did not ha v e any signi f icant impac t on the financial perfor m ance or position of the g r oup during t h e financial y ear.

Any new or amen d ed Accoun t ing Standar d s or Interpr e tations that are not yet m andatory have not bee n early adop t ed.

Going concern

The G roup has r e corded a n et current a sset deficit of $728,89 8 (2016: su r plus $1,420,671), inclu d ing cash a n d cash equiv a lents totalli n g $3,267,1 8 8 (2016: $ 2 ,435,693) a s at 30 Jun e 2017. The consolidate d entity reco r ded a net l o ss from conti n uing operations after t a x of $7,61 8 ,257 (2016: $4,537,52 5 ), and exp e rienced net cash outfl o ws from o p erating activi t ies of $6,1 3 2,317 (201 6 : $3,323,68 6 ) for the y e ar ended 3 0 June 201 7 . The abilit y of the Group to continue as a going concern and meet its s trategic obj e ctives in the mid to lo n g term is p r incipally dependent up o n raising a d ditional capit a l and the bu s iness conti n uing to gro w as it did in the final qu a rter of finan c ial year en d ed 30 June 2017.

The D irectors are satisfied th a t adequate c ash will be a vailable to m eet all obli g ations for a period of at least twelve months from t he date of t h is report, a n d on that basis are satis f ied that the going conc e rn basis of p reparation i s appropriat e .

Basis of preparation

Thes e general purpose finan c ial stateme n ts have been prepared in accordan c e with Aust r alian Accou n ting Stand a rds and Interpretations is s ued by th e Australian Accountin g Standards Board ('A A SB') and the Corpora t ions Act 2 0 01, as appropriate for for-profit orie n ted entities. These fina n cial statements also c o mply with I n ternational Financial R e porting Stan d ards as issued by the In t ernational A ccounting S t andards Board ('IASB').

Histo r ical cost co n vention

The financial stat e ments hav e been prep a red under the historical cost conve n tion, excep t for, where applicable, f inancial asset s at fair valu e through pr o fit or loss.

Critic a l accountin g estimates The p reparation o f the finan c ial statem e nts require s the use o f certain cri t ical accounting estima t es. It also r equires management to e xercise its j u dgement in the proces s of applyin g the group' s accountin g policies. T h e areas involving a highe r degree of judgement or complexi t y, or areas where ass u mptions a n d estimate s are signifi c ant to the f inancial state m ents, are disclosed in n o te 3.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 2. Significant accounting policies (continued)

Parent entity information In accordance w ith the Co r porations A ct 2001, these financi a l statemen t s present t he results of the gro u p only. Supplementary in f ormation a b out the parent entity is disclosed in n ote 27.

Principles of consolidation

The consolidated financial statements inc o rporate the assets and liabilities of a ll subsidiaries of TopB e tta Holdings Limited as at 3 0 June 2017 and the results of all s u bsidiaries f o r the year t h en ended.

Subsidiaries are a ll those e n tities over w hich the g r oup has c o ntrol. The g roup contr o ls an entity when the g roup is expo s ed to, or ha s rights to, v ariable retu r ns from its involvement with the entity and has t he ability to affect thos e returns throu g h its power to direct th e activities o f the entity. S ubsidiaries are fully consolidated f r om the dat e on which c o ntrol is transferred to the group. They are de-con s olidated fro m the date t h at control c e ases.

Intercompany tra n sactions, b a lances and unrealised gains on tr a nsactions b e tween entities in the g r oup are eli m inated. Unre a lised losses are also eli m inated unl e ss the tran s action provi d es evidenc e of the imp a irment of t h e asset tra n sferred. Acco u nting polici e s of subsidiaries have b een chang e d where ne c essary to e nsure consi s tency with t he policies a dopted by th e group.

The acquisition of subsidiarie s is account e d for using the acquisiti o n method o f accounting. A change i n ownership interest, witho u t the loss o f control, i s accounted for as an e quity trans a ction, wher e the differ e nce betwe e n the consi d eration transferred and the book value of the s hare of th e non-contr o lling intere s t acquired i s recognis e d directly i n equity attrib u table to the parent.

Wher e the grou p loses con t rol over a s ubsidiary, i t derecognises the as s ets includi n g goodwill, liabilities a n d noncontr o lling interest in the sub s idiary together with an y cumulative translation d ifferences r ecognised in equity. The group recognises the fair value of th e considera t ion received and the fai r value of an y investmen t retained to g ether with a ny gain or reduction in pr o fit or loss.

Revenue recognition Reve n ue is recog n ised when it is probabl e that the economic ben e fit will flow t o the group and the rev e nue can b e reliably meas u red. Reve n ue is meas u red at the f air value of the conside r ation recei v ed or recei v able. Reve n ue includes fantasy wage r ing, wageri n g and cont e nt services.

Fantasy wagering

Fantasy wagerin g revenue, b e ing the entry fees to t o urnaments, is brought t o account a s revenue i n profit or lo s s when tourn a ments are c ompleted.

Wag e ring

Wag e ring revenu e is recogni s ed as the r e sidual valu e after dedu c ting the return to custo m ers from th e ir paid wag e rs. The amounts bet on a n event are r ecognised a s a liability i n the statem e nt of finan c ial position u ntil the outc o me of the e vents is deter m ined, at which time the revenue is b rought to a c count in pro f it or loss.

Cont e nt services Cont e nt services r evenue is r e cognised in profit or los s once the s e rvice has b e en rendered. Prepaid services are d eferred and r e cognised a s a liability in the statem e nt of financi a l position u n til the servi c e is render e d.

Current and non-current classification Asset s and liabilities are pres e nted in the s tatement of financial po s ition based on current a nd non-curr e nt classific a tion.

An asset is classi f ied as curre n t when: it i s either expected to be r e alised or int e nded to be sold or con s umed in the group's norm a l operating c ycle; it is h e ld primarily for the purp o se of tradin g ; it is expe c ted to be re a lised within 12 months a fter the repor t ing period; o r the asset is cash or c a sh equivalent unless re s tricted from being exch a nged or us e d to settle a liability for at least 12 mo n ths after th e reporting p e riod. All ot h er assets are classified a s non-curr e nt.

A lia b ility is class i fied as curr e nt when: it is either ex p ected to b e settled in t h e group's n ormal oper a ting cycle; i t is held primarily for the p urpose of t rading; it is due to be settled within 12 months after the reporting p e riod; or the r e is no unco n ditional righ t to defer th e settlement of the liabili t y for at least 12 months after the re p orting perio d . All other liabilities are cl a ssified as n on-current.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 2. Significant accounting policies (continued)

Defer r ed tax asse t s and liabili t ies are alw a ys classifie d as non-cur r ent.

Leases

The d eterminatio n of whethe r an arrangement is or c ontains a lease is base d on the su b stance of t h e arrange m ent and requi r es an asse s sment of w h ether the fu l filment of th e arrangem e nt is depen d ent on the u se of a sp e cific asset or assets and t h e arrangement conveys a right to u s e the asset.

A dis t inction is m a de betwee n finance le a ses, which e ffectively tr a nsfer from the lessor t o the lessee substantiall y all the risks a nd benefit s incidental to the owne r ship of leased assets, a nd operating leases, u n der which t h e lessor ef f ectively retain s substantia l ly all such risks and benefits.

Finance leases a r e capitalise d . A lease a s set and liability are est a blished at t h e fair value of the lease d assets, or if lower, the p r esent valu e of minimu m lease pay m ents. Lea s e payment s are allocat e d between the princip a l compone n t of the lease liability and t he finance c osts, so as t o achieve a constant ra t e of interest on the rem a ining balan c e of the liability.

Leas e d assets ac q uired unde r a finance l e ase are de p reciated ov e r the asset' s useful life o r over the s horter of th e asset's usefu l life and the lease term i f there is n o reasonable certainty th a t the group will obtain o w nership at the end of t h e lease term.

Oper a ting lease p ayments, n e t of any in c entives rec e ived from t h e lessor, ar e charged t o profit or lo s s on a straight-line basis over the ter m of the lea s e.

Impairment of financial assets

The g roup asses s es at the e n d of each r e porting per i od whether there is an y objective e v idence that a financial a sset or group of financial assets is i m paired. Obj e ctive evidence include s significant financial dif f iculty of the issuer or o b ligor; a breach of contra c t such as d efault or d e linquency i n payments; the lender granting to a borrower concession s due to econ o mic or leg a l reasons t h at the len d er would n o t otherwise do; it bec o mes proba b le that the borrower w ill enter bankruptcy or other financial r eorganisati o n; the disa p pearance o f an active m arket for t h e financial a sset; or ob s ervable data i n dicating th a t there is a m easurable d ecrease in estimated future cash fl o ws.

The a mount of th e impairmen t allowance f or loans an d receivable s carried at a mortised c o st is the dif f erence bet w een the asset's carrying amount and t he present v alue of estimated futur e cash flows, discounted at the origi n al effective interest rate. If there is a r eversal of i m pairment, t he reversal cannot exc e ed the amo r tised cost t h at would h a ve been re c ognised had t h e impairme n t not been m ade and is reversed to profit or los s .

Goods and Services Tax ('GST') and other similar taxes Reve n ues, expenses and as s ets are rec o gnised net of the amo u nt of asso c iated GST, unless the G ST incurred is not recov e rable from t he tax auth o rity. In this case it is re c ognised as part of the c ost of the a c quisition of the asset o r as part of the expense.

Receivables and payables a r e stated in c lusive of the amount o f GST receivable or pa y able. The n et amount of GST recov e rable from, or payable to, the tax a uthority is i ncluded in o ther receiv a bles or oth e r payables in the stat e ment of finan c ial position.

Cash flows are p resented o n a gross basis. The G ST compo n ents of ca s h flows ari s ing from in v esting or financing activi t ies which ar e recoverable from, or p a yable to th e tax authority, are prese n ted as ope r ating cash flows. Com m itments an d contingencies are discl o sed net of the amount o f GST reco v erable from, or payable t o, the tax a u thority.

New Accounting Standards and Interpretations not yet mandatory or early adopted Austr a lian Accounting Standards and I n terpretation s that hav e recently b een issued or amend e d but are not yet mandatory, have not been e a rly adopted by the group for the an n ual reporti n g period ended 30 Jun e 2017. The group's asse s sment of th e impact of t h ese new or amended A ccounting S t andards an d Interpretat i ons, most r e levant to th e group, are s e t out below.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 2. Significant accounting policies (continued)

AAS B 9 Financial Instruments

This s tandard is a pplicable t o annual rep o rting perio d s beginnin g on or after 1 January 2 018. The s t andard replaces all previ o us version s of AASB 9 and com p letes the p roject to replace IAS 3 9 'Financial Instrumen t s: Recognition and Meas u rement'. A A SB 9 introduces new cl a ssification a nd measur e ment mode l s for financial assets. A financial as s et shall be m e asured at a mortised c o st, if it is h e ld within a b usiness model whose o bjective is t o hold asse t s in order t o collect contr a ctual cash flows, which arise on sp e cified dates and solely principal and interest. All o ther financial instrume n t assets are t o be classifi e d and mea s ured at fair value through profit or loss unless the entity makes an irr e vocable ele c tion on initial recognition t o present gains and lo s ses on equi t y instrume n ts (that are not held-for-trading) in o ther compr e hensive inco m e ('OCI'). F o r financial liabilities, the standard requires the portion of t he change in fair valu e that relate s to the entity's own cred i t risk to be presented in OCI (unl e ss it would create an accounting mismatch). New simpler hedge acco u nting requir e ments are i n tended to m ore closely align the ac c ounting tre a tment with the risk man a gement act i vities of the e n tity. New i m pairment r equirement s will use a n 'expected credit loss' ('ECL') mo d el to reco g nise an all o wance. Impai r ment will b e measured u nder a 12- m onth ECL m ethod unle s s the credit risk on a fi n ancial instr u ment has increased significantly since initial recognition in which case the lifetime EC L method is a dopted. Th e standard i n troduces a d ditional new d isclosures. T he group w ill adopt this standard fr o m 1 July 2 0 18. It is not expected to significantly impact the f inancial state m ents on t h e basis th a t the main financial a s sets recog n ised repre s ent cash a nd cash e q uivalent a n d trade recei v ables that do not carry a significant financing c o mponent and involve a s ingle cash f low representing the re p ayment of pri n cipal, which in the case of trade rec e ivables is t h e transacti o n price. Bot h asset clas s es will continue to be m e asured at fac e value. Other financial a sset classes are not m a terial to the group. Financial liabiliti e s of the group are not i m pacted as th e group doe s not carry them at fair v a lue.

AAS B 15 Revenu e from Cont r acts with C u stomers This s tandard is a pplicable t o annual re p orting perio d s beginnin g on or afte r 1 January 2018. The s tandard pr o vides a singl e standard for revenue r e cognition. T h e core prin c iple of the s tandard is t h at an entity will recogni s e revenue to depict the tr a nsfer of pr o mised goo d s or servic e s to custo m ers in an a m ount that r e flects the c onsideratio n to which t h e entity expe c ts to be enti t led in exch a nge for tho s e goods or s ervices. Th e standard w ill require: c o ntracts (eit h er written, v erbal or impli e d) to be ide n tified, toge t her with the separate p e rformance o bligations w ithin the co n tract; deter m ine the tra n saction price, adjusted f o r the time value of m o ney excluding credit ri s k; allocati o n of the tr a nsaction price to the s eparate perfo r mance obli g ations on a basis of r e lative stand-alone selli n g price of e ach distinc t good or s e rvice, or estimation approach if no di s tinct observable prices e xist; and r e cognition of revenue w h en each pe r formance o b ligation is s atisfied. Credi t risk will b e presented separately as an expe n se rather than adjusted to revenue. For goo d s, the perf o rmance oblig a tion would b e satisfied w hen the cu s tomer obta i ns control o f the goods . For servic e s, the perfo r mance obli g ation is satisfied when th e service has been pro v ided, typica l ly for promi s es to transfer services to custome r s. For perf o rmance oblig a tions satisfi e d over time , an entity w o uld select a n appropria t e measure o f progress t o determin e how much r evenue shoul d be recogn i sed as the p erformanc e obligation i s satisfied. C ontracts wi t h customer s will be pre s ented in a n entity's state m ent of fina n cial position as a con t ract liability , a contract asset, or a receivable, depending on the rel a tionship betw e en the entit y 's performa n ce and the customer's p ayment. S u fficient qua n titative and q ualitative disclosure is r equired to en a ble users t o understan d the contra c ts with cust o mers; the s ignificant ju d gements m ade in appl y ing the gui d ance to those contracts; a nd any assets recogni s ed from th e costs to o b tain or fulfil a contract w ith a customer. The g r oup will adopt this standa r d from 1 J u ly 2018. It i s not expec t ed to significantly impa c t the financial stateme n ts on the b a sis that most o f the group's revenue i s recognise d at the time of transacti o n with the customer which represen t s the satisf a ction of the p r imary performance obligation.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 2. Significant accounting policies (continued)

AAS B 16 Leases

This s tandard is a pplicable to annual reporting period s beginning o n or after 1 January 20 1 9. The stan d ard replac e s AASB 117 ‘ L eases’ and f or lessees w ill eliminate the classifi c ations of op e rating leas e s and finan c e leases. S u bject to ex c eptions, a ‘rig h t-of-use’ a s set will be capitalised in the statement of fin a ncial positi o n, measur e d as the present valu e of the unav o idable futur e lease pa y ments to b e made ove r the lease t erm. The exceptions r e late to sho r t-term leas e s of 12 mont h s or less a nd leases of low-valu e assets (s u ch as per s onal comp u ters and s m all office f urniture) w h ere an acco u nting policy choice exist s whereby e i ther a ‘right - of-use’ ass e t is recogni s ed or lease payments a r e expensed to profit or lo s s as incur r ed. A liabi l ity corresp o nding to t h e capitalis e d lease will also be r ecognised, adjusted f o r lease prepayments, lea s e incentive s received, initial direct c osts incurr e d and an e s timate of a n y future re s toration, re m oval or dism a ntling costs. Straight-line operating lease expe n se recogni t ion will be r eplaced with a depreci a tion charg e for the lease d asset (included in op e rating costs) and an interest expen s e on the r e cognised lease liability (included in finance costs ) . In the earlier periods of the leas e , the expen s es associa t ed with the lease under AASB 16 w ill be high e r when comp a red to lea s e expense s under AA S B 117. H o wever EBI T DA (Earnings Before Interest, Ta x , Depreciation and Amor t isation) res u lts will be i m proved as t he operatin g expense i s replaced b y interest e x pense and d epreciation in profit or loss under AA S B 16. For c lassificatio n within the s tatement o f cash flows, the lease p ayments w i ll be separ a ted into both a principal (financing acti v ities) and i n terest (eith e r operating o r financing a ctivities) component. F o r lessor accounting, the s t andard doe s not substantially chan g e how a le s sor accoun t s for lease s . The grou p will adopt t his standar d from 1 July 2 019 but the impact of it s adoption h a s been ass e ssed to onl y impact cla s sification of assets, liab i lities and e x penses, no le n ding impact or covenan t impact exp e cted to occ u r.

Note 3. Critical accounting judgements, estimates and assumptions

The p reparation o f the financial stateme n ts requires m anagement to make j u dgements, e stimates a n d assumpti o ns that affect the reporte d amounts in the financi a l statement s . Managem e nt continually evaluates its judgements and esti m ates in relati o n to assets, liabilities, c ontingent li a bilities, rev e nue and e x penses. M a nagement b ases its ju d gements, e s timates and a ssumption s on histori c al experie n ce and on other vari o us factors , including expectation s of future events, management beli e ves to be r e asonable u n der the cir c umstances. The resulti n g accountin g judgemen t s and estim a tes will seldo m equal the related actu a l results. T h e judgeme n ts, estimate s and assu m ptions that h ave a signi f icant risk of causing a ma t erial adjust m ent to the carrying a m ounts of a s sets and liabilities (ref e r to the respective no t es) within t he next finan c ial year are discussed b e low.

Shar e -based pay m ent transa c tions

The g roup meas u res the cost of equity- s ettled trans a ctions with employees by referenc e to the fair value of th e equity instru m ents at th e date at w h ich they ar e granted. T he fair value is determ i ned by usi n g either th e Binomial or BlackScholes model, d e pending o n the equity- s ettled trans a ction, and t akes into a c count the t e rms and conditions up o n which the in s truments were granted. The accou n ting estimates and assumptions rel a ting to equity-settled sh a re-based p a yments would have no i m pact on th e carrying a m ounts of a s sets and li a bilities within the next a nnual repo r ting period b ut may impa c t profit or lo s s and equit y .

Good w ill

The g roup tests a nnually, or m ore freque n tly if event s or changes in circumst a nces indic a te impairment, whether g oodwill has s uffered an y impairmen t , in accor d ance with t he stated a ccounting p olicy. The recoverable amounts o f cashgene r ating units have been determined based on value-in-us e calculatio n s. These c alculations require the use of assu m ptions, incl u ding estim a ted discou n t rates bas e d on the c u rrent cost o f capital an d growth ra t es of the e s timated future cash flows.

Inco m e tax

The g roup is su b ject to inc o me taxes in the juris d ictions in w hich it ope r ates. Signi f icant judge m ent is required in deter m ining the p rovision for income tax. There are many trans a ctions and calculations undertaken during the o rdinary cours e of business for which t he ultimate t ax determi n ation is unc e rtain. The g roup recog n ises liabiliti e s for anticip a ted tax audit issues based on the gr o up's curren t understan d ing of the t a x law. Where the final t ax outcom e of these m a tters is differ e nt from the carrying a m ounts, such differences will impact the current and deferre d tax provisions in the p eriod in which such deter m ination is m ade. Refer t o Note 7 for further details.

Reco v ery of defe r red tax ass e ts Defer r ed tax ass e ts are reco g nised for t a x losses a n d deductibl e temporary differences only if the g roup consi d ers it is probable that futu r e taxable a m ounts will b e available t o utilise tho s e temporar y differences and losses.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 4. Operating segments

Identi f ication of re p ortable op e rating segments The g roup opera t es in four s egments b e ing the fa n tasy wagering and general wageri n g, content services, w h olesale wage r ing and cor p orate. This is based o n the internal reports tha t are review e d and use d by the Board of Direct o rs (who are i d entified as the Chief O perating Decision Ma k ers ('COD M ')) in asse s sing performance and in determi n ing the alloc a tion of reso u rces. There is no aggre g ation of op e rating segments.

The i n formation r e ported to the CODM is o n at least a monthly ba s is. The fina n cial inform a tion presen t ed in these f inancial state m ents are th e same as t h at presente d to the CO D M.

Type s of product s and servic e s The principal pro d ucts and se r vices of ea c h of these o p erating segments are a s follows: Retail wagering and fantasy The group operates an online wag e ring platfor m which utili s es proprietary technology wagering across risk manageme n t systems, o dds manag e ment, cont e nt delivery a nd consum e r facing plat f orms. The online fantas y wagering t o urnaments p latform is i n tegrated int o the group's ge n eral online w agering pl a tforms and e nable sport s fans to co m pete again s t each other via f a ntasy wage r ing on real s ports event s , with the focus on the social engag e ment. Cont e nt services The group operates a f r ee and pre m ium conten t platform, w hich enable s customers to seamlessl y access a r a nge of spor t ing and raci n g content. Whol e sale wager i ng The group operates a w holesale B 2 B product The Global T o te. The Glo b al Tote co m bines wagering li q uidity from bookmaker s and licensed in Alderney, UK. The G lobal Tote i s a new breed tote s ystem with o ut restrictio n s on size o f events and entrants m e aning that i n addition to racing prod u cts, The Gl o bal Tote ca n operate on major sporting events.

Majo r customers Ther e are no maj o r customer s that repres e nted more t han 10% of the total segment reven u e.

Oper a ting segme n t informatio n

R wag and wag 4,2 etail ering fantasy ering $ 40,558 -	Content services $ 534,249 -	Wholesale wagering $ 846,82 - 9	Corpor $ ate - -	To 4,7 8 tal $ 74,807 46,829
4,2 40,558	534,249	846,82 9	-	5,6 21,636
(3,4 29,959)	(3,580)	831,65 8	(5,299 ,741)	(7,9 (1 1,0 (1 ( ( (1,8 01,622) 41,293) 31,277 13,051 65,475) 51,718) 11,932) 02,453)
7,6 62,636	9,797	1,005,59 8	6,451 ,561
				(9,0 1,4 30,165) 11,908
				(7,6 18,257)
				15,1 29,592
5, 124,569	29,786	34,41 0	901 ,159	15,1 29,592
				6,0 89,924
				6,0 89,924

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 4. Operating segments (continued

R wag and wag 1,8 etail ering fantasy ering $ 97,273	Content services $ 987,650	Wholesale wagering $ -	Corpor $ ate -	To 2,8 tal $ 84,923
1,8 97,273	987,650	-	-	2,8 84,923
(1,4 29,770)	(79,564)	-	(3,124 ,329)	(4,6 ( 5 (1 (1,5 ( 33,663) 22,061) 60,573 45,092 11,481) 13,064) 10,253)
3,3 50,602	1,894,075	-	5,444 ,613
				(5,6 1,1 84,857) 47,332
				(4,5 37,525)
				10,6 89,290
3,9 37,701	77,037	-	(1,668 ,178)	10,6 89,290
				2,3 46,560
				2,3 46,560

Acco u nting policy for operatin g segments Oper a ting segme n ts are pre s ented using the 'mana g ement appr o ach', wher e the inform a tion prese n ted is on t h e same basis as the inter n al reports p rovided to t h e CODM. T he CODM i s responsibl e for the all o cation of re s ources to o p erating segm e nts and as s essing their performanc e .

Note 5. Other income

Resea Payro Intere Other rch and dev ll tax rebate st received income elopment ta x rebate *	C 2017 $ 1,031 15 13 onsolidated 20 ,277 5 ,455 ,051 16 $ 60,573 11,818 45,092	C 2017 $ 1,031 15 13 onsolidated 20 ,277 5 ,455 ,051 16 $ 60,573 11,818 45,092
	1,059 ,783	6 17,483

Re s earch and d evelopmen t tax rebate income inc l udes an a m ount of $2 2 5,000 repr e senting a r e versal of a liability origin a lly recogni s ed to refle c t R&D reb a te receipts for which t h e company believed it was no longer entitled to. The comp a ny has sin c e received a dvice that it remains entitled to thos e proceeds.

Acco u nting policy for other in c ome

Rese a rch and de v elopment t a x rebate Rese a rch and de v elopment t a x rebate is r e cognised a t fair value, b eing the ex p ected amo u nt to be rec e ived.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 5. Other income (continued)

Interest

Interest revenue i s recognise d as interest accrues using the effe c tive interest method. Th i s is a meth o d of calcul a ting the amor t ised cost of a financial a sset and allocating the interest inc o me over th e relevant p e riod using t he effective interest rate, w hich is the rate that ex a ctly discou n ts estimate d future cas h receipts th r ough the e x pected life o f the financial asset to the net carryin g amount of the financial a sset.

Othe r income

Other income is r e cognised w h en it is rec e ived or whe n the right t o receive pa y ment is est a blished.

Note 6. Expenses

Loss Depre Lease Plant Comp Furnit Total Amor Licen Total Emplo Emplo Define Total Finan Intere Renta Minim Non-r IPO tr Share Total before incom ciation hold improv and equipm uter equipm ure and fittin depreciation tisation ce depreciation yee benefits yee benefits d contributi employee be ce costs st and financ l expense re um lease pa ecurring exp ansaction co -based paym non-recurrin e tax includ ements ent ent gs and amortis expense ex on superann nefits e chargesp lating to ope yments enses sts ents expen g expenses es the follow ation cluding sup uation expe aid/payable rating lease se ing specific erannuation nse s expenses:	C 2017 $ 24 74 24 onsolidated 20 ,377 722 ,820 ,535 16 $ 3,448 1,500 12,988 4,125	C 2017 $ 24 74 24 onsolidated 20 ,377 722 ,820 ,535 16 $ 3,448 1,500 12,988 4,125
	124 ,454	22,061
	16 ,839	-
	141 ,293	22,061
	3,752 318 ,378 ,899	2,1 1 37,280 85,164
	4,071 ,277	2,3 22,444
	165 ,475	1 11,481
	144 ,730	66,685
	51 - ,718	2 1,2 59,724 53,340
	51 ,718	1,5 13,064

Acco u nting for fin a nce costs Finance costs att r ibutable to q ualifying as s ets are ca p italised as p art of the a s set. All oth e r finance c o sts are exp e nsed in the p e riod in whic h they are incurred.

Acco u nting for de f ined contribution super a nnuation pa y ments Contr i butions to d efined cont r ibution sup e rannuation plans are e x pensed to p rofit or loss in the peri o d in which t hey are incurr e d.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 7. Income tax benefit

Incom
Curre
Defer
Aggre
Defer
Increa
Nume
Loss
Taxa
Taxe
Im
Sh
Re
Su
Su
Adjus
Effect
Incom

Amou
Defer
e tax benefi
nt tax
red tax - orig
gate income
red tax inclu
se in deferr
rical reconc
before incom
t the statuto
ffect amount
pairment of
are-basedp
search and
perannuatio
ndry items
tment to def
of temporar
e tax benefi
nts credited
red tax asse
t
ination and
tax benefit
ded in incom
ed tax asset
iliation of inc
e tax benef
ry tax rate of
s which are
goodwill
ayments
developmen
n surcharge
erred tax ba
y difference
t
directly toe
ts (note 13)
reversal of te
e tax benef
s (note 13)
ome tax ben
it
27.5% (201
not deductib
t tax incentiv
lances as a
s now recog
quity
mporary dif
it comprises:
efit and tax
6: 30%)
le/(taxable)
e expenditu
result of cha
nised
ferences
at the statuto
in calculating
re
nge in statut
ry rate
taxable inc
ory tax rate
ome:

C
2017
$
(13
(1,398
(1,411
(1,398
(9,030
(2,483
495
14
346
(2
(1,629
181
36
(1,411
C
2017
$
(25
onsolidated
20
,750)
,158)
(1,1
,908)
(1,1
,158)
(1,1
,165)
(5,6
,295)
(1,7
,675
,235
3
,624
2
-
,945)
,706)
(1,0
,551
,247
(
,908)
(1,1
onsolidated
20
,275)
(3
16
$
-
47,332)
47,332)
47,332)
84,857)
05,457)
-
76,002
05,543
41,562
10,469
71,881)
-
75,451)
47,332)
16
$
30,231)

Acco u nting policy for income t ax

Inco m e tax for th e period is t h e tax paya b le on that p eriod's taxable income b ased on th e applicable income tax rate for each jurisdiction, adjusted by changes in deferred t a x attributable to tempo r ary differen c es, unused tax losses and the adjus t ment recog n ised for pri o r periods, where applicable.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 7. Income tax benefit (continued)

Acco u nting policy for deferred tax Defer r ed tax ass e ts and liabilities are re c ognised for temporary d ifferences a t the tax ra t es expecte d to apply w hen the asset s are recov e red or liabilities are set t led, except for (i) when the deferred tax asset or liability arises from t h e initial recognition of go o dwill or an a sset or liabi l ity in a tran s action that i s not a busi n ess combination and th a t, at the ti m e of the trans a ction, affec t s neither th e accountin g nor taxabl e profits; or ( ii) when th e taxable te m porary diff e rence is as s ociated with i n terests in s u bsidiaries, a ssociates o r joint ventu r es, and the t iming of the reversal ca n be controll e d and it is p robable that t h e temporar y difference w ill not reve r se in the for e seeable future.

Defer r ed tax ass e ts are reco g nised for d e ductible te m porary diff e rences and unused tax losses only if it is prob a ble that future taxable a m ounts will be availabl e to utilise t hose temp o rary differences and l o sses. The carrying a m ount of recognised and unrecognised deferred ta x assets ar e reviewed e ach reporti n g date. Def e rred tax as s ets recogn i sed are reduced to the ex t ent that it i s no longer p robable tha t future taxa b le profits w i ll be availa b le for the c a rrying amo u nt to be recov e red. Previo u sly unreco g nised defer r ed tax asse t s are recog n ised to the e xtent that it is probable that there a r e future taxab l e profits av a ilable to rec o ver the asset.

Defer r ed tax ass e ts and liabil i ties are off s et only whe r e there is a legally enf o rceable right to offset a n d they rela t e to the same taxable aut h ority on either the same taxable enti t y or differe n t taxable en t ities which intend to set t le simultan e ously.

Tax c o nsolidated g roup TopB e tta Holdings Limited (t h e 'head entity') and its wholly-owned Australi a n subsidiaries have for m ed an inc o me tax cons o lidated group ('tax grou p ') under th e tax consoli d ation regi m e. Each entity in the ta x group continues to ac c ount for their o wn current and deferre d tax amounts. The tax g roup has a p plied the 'group allocation' approac h in determi n ing the appropriate amo u nt of taxes to allocate to group members. In addition to its own tax amounts, t h e head en t ity also recognises the ta x arising fro m unused ta x losses and tax credits a ssumed fro m each subsidiary in the t ax group.

Asset s or liabilitie s arising un d er tax funding agreem e nts are rec o gnised as a mounts rec e ivable from or payable to other entiti e s in the tax group. The t ax funding a rrangement ensures th a t the intercompany char g e equals the current ta x liability or benefit of eac h tax group member, r e sulting in n either a contribution b y the head e ntity to th e subsidiaries nor a distri b ution by the subsidiarie s to the head entity.

Note 8. Current assets - cash and cash equivalents

Cash Cash Cash Restr on hand at bank on deposit icted cash	C 2017 $ 1,184 200 1,882 3,267 onsolidated 20 211 ,419 1,7 ,005 ,553 6 ,188 2,4 16 $ 711 71,083 - 63,899 35,693
	3,267 ,188

Restr i cted cash r e presents amounts hel d on behalf of players f u nds under Northern T e rritory ('NT' ) license and is not avail a ble for use b y the group . The corres p onding liability is recog n ised in other payables and accruals at note 14.

Acco u nting policy for cash an d cash equi v alents Cash and cash e q uivalents includes cash on hand, d e posits held at call with f inancial ins t itutions, oth e r short-ter m , highly liquid investments with original maturities o f three mon t hs or less t h at are readily convertibl e to known a mounts of cash and which are subject to an insignificant risk o f changes in value.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 9. Current assets - trade and other receivables

Trade Other Resea Renta Good receivables receivables rch and dev l bonds s and servic elopment ta es tax ('GST x receivable ') receivable *	C 2017 $ 262 onsolidated 20 ,969 16 $ 40,200	C 2017 $ 262 onsolidated 20 ,969 16 $ 40,200
	776 805 32 8 ,664 ,281 ,162 ,693	7 3 76,664 34,711 23,375 54,420
	1,622 ,800	1,1 89,170
	1,885 ,769	1,2 29,370

Ref e r to note 5 f o r further details.

Impai r ment of rec e ivables The group has no t recognised an impairm e nt of receiv a bles in pro f it or loss for the year en d ed 30 June 2017 (2016: Nil).

Receivables are n either past d ue nor imp a ired.

Acco u nting policy for trade an d other rece i vables Trad e receivable s are initially recognised at fair valu e and subs e quently me a sured at a m ortised cos t using the e ffective intere s t method, l e ss any pro v ision for im p airment. Tr a de receivab l es are generally due for settlement w ithin 30 da y s.

Colle c tability of tr a de receiva b les is revie w ed on an o n going basi s . Debts whi c h are know n to be unc o llectable ar e written off b y reducing t h e carrying amount dir e ctly. A pro v ision for i m pairment o f trade rece i vables is r a ised when there is objec t ive evidence that the g roup will not be able to collect a l l amounts d ue accordi n g to the original term s of the recei v ables. The amount of t he impairm e nt allowan c e is the di f ference bet w een the a s set's carrying amount and the present value of e stimated future cash flo w s, discoun t ed at the or i ginal effecti v e interest r a te. Cash fl o ws relating t o shortterm r eceivables a re not disc o unted if the e ffect of dis c ounting is i m material.

Other receivables are recogni s ed at amortised cost, le s s any provi s ion for imp a irment.

Acco u nting policy loans and r e ceivables Loan s and receiv a bles are n o n-derivative financial a s sets with fi x ed or deter m inable pay m ents that a re not quot e d in an activ e market. T h ey are initi a lly measur e d at fair va l ue and subsequently c a rried at a m ortised cos t using the e ffective intere s t rate meth o d. Gains a n d losses ar e recognised in profit or l o ss when th e asset is derecognised o r impaired.

Note 10. Non-current assets - investments accounted for using the equity method

On 2 9 March 2016, the co m pany acquired 12.5% o f the equity of Moder n Wagering Systems P t y. Ltd. ('M W S') for $250,000, of whi c h $150,00 0 was paid and $100, 0 00 remained unpaid a t 30 June 2 016. MWS creates white-label soluti o ns for pooli n g event an d wagering i n formation b e tween wag e ring operat o rs.

On 2 4 May 201 7 , The Glob a l Tote Limited ('TGT") completed its agreement with MWS regarding the granting of an exclu s ive licence. MWS has granted to T GT an irre v ocable, pe r petual, roy a lty free licence to use the MWS’s existing wage r ing technol o gies on an e xclusive basis for the fi r st two year s of the lice n ce and ther e after, on a n on-exclusi v e basis. In co n sideration f o r the licenc e , the Comp a ny has:

1 . paid $10 0 ,000 to eac h of MWS and Live Data c ast; 2 . issued a total of 3.5 million shar e s to MWS and Live Datacast (in e qual proportions), 2.5 m illion of w h ich are voluntaril y escrowed f or 12 months. Sharehol d er approval for the issu e of these s h ares was o b tained on 1 4 March 2017; an d transferre d its partly p a id shares i n MWS (on which $150 , 000 was p a id) to the o t her shareh o lders of MWS for n il consider a tion; and
3 . terminate d its call option over sha r es in MWS.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 10. Non-current assets - investments accounted for using the equity method (continued)

Inves tment in ass ociate 'MWS '	C 2017 $ onsolidated 20 - 2 16 $ 39,747

Acco r dingly, the i n vestment in the associa t e was disp o sed and the license wa s recognised in Note 12 - Intangibles.

Interests in associate Infor m ation relati n g to the ass o ciate is set out below:

					Own ership inter est	Own ership inter est
		Principal	place of bu	siness /	2017	20 16
Name		Country o f incorpora tion			%	%
Mode rn Wagering Systems Pt y. Ltd.		Australia			-	12.50%
Summ arised finan cial informat ion has bee n presented		for the year	ended 30 Ju ne 2016.		Th e profit or lo ss disclosed relates
only to the period from acquisi tion (April 20 16) to	30 Ju ne 2016.
Summ arised finan cial informat ion
						20 16
						$
Summ arised state ment of fina ncial positio n
Curre nt assets						1 58,555
Non-c urrent asset s						2,556
Total assets						1 61,111
Curre nt liabilities						10,093
Non-c urrent liabili ties						12,414
Total liabilities						22,507
Net a ssets						1 38,604
Summ arised state ment of pro fit or loss an d other	comp rehensive in come
Reve nue						15,403
Expen ses						( 97,428)
Loss before incom e tax						( 82,025)
Other comprehen sive income						-
Total comprehens ive income						( 82,025)
Recon ciliation oft he group'sc arrying amo unt
Open ing carrying amount						2 50,000
Share of loss afte r income tax						( 10,253)
Closin g carryinga mount						2 39,747

Sum m arised fina n cial informa t ion has been presented for the year ended 30 J u ne 2016. T h e profit or l o ss disclose d relates only t o the period from acquisition (April 2 0 16) to 30 J u ne 2016.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 10. Non-current assets - investments accounted for using the equity method (continued)

Acco u nting policy for associat e s Asso c iates are e n tities over which the g roup has significant in f luence but not control or joint control. Invest m ents in asso c iates are a c counted for using the e q uity metho d . Under the equity met h od, the share of the pr o fits or loss e s of the asso c iate is reco g nised in pr o fit or loss and the shar e of the mo v ements in e quity is rec o gnised in other compr e hensive inco m e. Investments in assoc i ates are ca r ried in the s t atement of f inancial position at cost plus post-a c quisition ch a nges in the g r oup's share of net asset s of the ass o ciate. Goodwill relating t o the associate is inclu d ed in the carrying amou n t of the inves t ment and is neither amortised n o r individually tested f o r impairme n t. Dividends received or receiva b le from asso c iates reduc e the carryin g amount of t he investm e nt.

Whe n the group's share of lo s ses in an a s sociate eq u als or exce e ds its interest in the as s ociate, incl u ding any un s ecured long-term receiva b les, the group does not recognise f u rther losses, unless it h a s incurred o bligations o r made pay m ents on behal f of the associate.

The g roup disco n tinues the use of the equity met h od upon the loss of s i gnificant in f luence ove r the associ a te and recognises any r e tained inve s tment at its fair value. A ny differenc e between t h e associat e 's carrying a mount, fair v alue of the retained inves t ment and p r oceeds fro m disposal is recognised in profit or l o ss.

Note 11. Non-current assets - property, plant and equipment

Lease Less: Plant Less: Comp Less: Furnit Less: hold improv Accumulate and equipm Accumulate uter equipm Accumulate ure and fittin Accumulate ements - at d depreciatio ent - at cost d depreciatio ent - at cost d depreciatio gs - at cost d depreciatio cost n n n n	C 2017 $ 144 (27 onsolidated 20 ,724 1 ,825) 16 $ 04,036 (3,448)	C 2017 $ 144 (27 onsolidated 20 ,724 1 ,825) 16 $ 04,036 (3,448)
	116 ,899	1 00,588
	16 (12 ,627 ,460)	( 16,627 11,738)
	4 ,167	4,889
	294 (90 ,962 ,536)	( 71,183 15,716)
	204 ,426	55,467
	130 (30 ,686 ,258)	1 16,109 (5,723)
	100 ,428	1 10,386
	425 ,920	2 71,330

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 11. Non-current assets - property, plant and equipment (continued)

Reco n ciliations

Reco n ciliations o f the written down value s at the beginning and end of the current and pr e vious finan c ial year ar e set out belo w :

Cons Balan Additi Depre Balan Additi Depre Balan olidated ce at 1 July ons ciation expe ce at 30 Jun ons ciation expe ce at 30 Jun 2015 nse e 2016 nse e 2017	Lea improv sehold ements $ - 104,036 (3,448)	P e lant and quipment $ 6,389 - (1,500)	Computer equipment $ 13,35 55,09 (12,98 8 7 8)	Furniture fitting $ 1 113 (4 and s ,081 ,430 ,125)	To 2 ( tal $ 20,828 72,563 22,061)
	100,588 40,688 (24,377)	4,889 - (722)	55,46 223,77 (74,82 7 9 0)	110 14 (24 ,386 ,577 ,535)	2 2 (1 71,330 79,044 24,454)
	116,899	4,167	204,42 6	100 ,428	4 25,920

Acco u nting policy for property , plant and equipment Plant and equip m ent is state d at historic a l cost less accumulated depreciati o n and imp a irment. His t orical cost i ncludes expe n diture that i s directly att r ibutable to t h e acquisition of the ite m s.

Depr e ciation is c a lculated on a straight-li n e basis to w rite off the net cost of each item of property, p lant and equipment over their expect e d useful live s as follows:

Lease hold improv ements	unde r the leaset erm
Plant and equipm ent	5 yea rs
Comp uter equipm ent	2.5y ears
Furnit ure and fittin gs	5 yea rs

The r e sidual valu e s, useful li v es and de p reciation m e thods are r eviewed, a n d adjusted i f appropriat e , at each r e porting date.

Leas e hold impro v ements and plant and equipment u n der lease a r e depreciat e d over the u nexpired p e riod of the l ease or the e s timated use f ul life of the assets, whi c hever is sh o rter.

An it e m of proper t y, plant and equipment is derecogni s ed upon di s posal or when there is n o future ec o nomic bene f it to the group. Gains and losses betw e en the carr y ing amount and the dis p osal proce e ds are take n to profit or l oss.

Note 12. Non-current assets - intangibles

Good Less: Licen Less: Brand will - at cost Impairment ce - at cost Accumulate - at cost d amortisatio n	C 2017 $ 6,559 (1,802 onsolidated 20 ,050 4,2 ,453) 16 $ 75,527 -	C 2017 $ 6,559 (1,802 onsolidated 20 ,050 4,2 ,453) 16 $ 75,527 -
	4,756 ,597	4,2 75,527
	1,010 (16 ,315 ,839)	- -
	993 ,476	-
	50 ,000	-
	5,800 ,073	4,2 75,527

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 12. Non-current assets - intangibles (continued)

Reco n ciliations Reco n ciliations o f the written down value s at the beginning and end of the current and pr e vious finan c ial year ar e set out belo w :

Cons Balan Balan Additi Additi Impai Amor Balan olidated ce at 1 July ce at 30 Jun ons ons through rment of ass tisation expe ce at 30 Jun 2015 e 2016 business co ets nse e 2017 mbinations (note 28)	Goodwill $ 4,275,527	Licence $ -	Brand $ -	To 4,2 tal $ 75,527
	4,275,527 - 2,283,523 (1,802,453) -	1,010,31 (16,83 - 5 - - 9)	50 - - ,000 - -	4,2 1,0 2,3 (1,8 ( 75,527 10,315 33,523 02,453) 16,839)
	4,756,597	993,47 6	50 ,000	5,8 00,073

Impai r ment testin g Good w ill acquired through bu s iness comb i nations hav e been alloc a ted to the f o llowing cas h -generatin g units:

Tourn Conte aments and nt services wagering	C 2017 $ 4,756 onsolidated 20 ,597 2,4 - 1,8 16 $ 73,074 02,453	C 2017 $ 4,756 onsolidated 20 ,597 2,4 - 1,8 16 $ 73,074 02,453
	4,756 ,597	4,2 75,527

The c ompany ha s impaired t he goodwill on the co n tent busine s s by $1,8 0 2,453 due t o insufficie n t cash flo w s being gene r ated to sup p ort its carrying value.

The r e coverable a mount of the group's g o odwill has b een determined by val u e-in-use calculations using discount e d cash flow m odels, bas e d on a one year projec t ion period a pproved by manageme n t and extra p olated for a further thr e e years using a steady rate, together w ith a termin a l value.

Key assumptions are those to which the r e coverable amount of an asset or ca s h-generatin g units is m o st sensitive.

The f o llowing key assumption s were used in the disco u nted cash f l ow model f o r the tourna m ents and w agering divi s ion: (a) 1 7 .5% (2016:17.5%) pre-t a x discount r a te; (b) te r minal value of 6.5x previous year’s E arnings, Be f ore Interest, Tax, Depr e ciation and A mortisation ('EBITDA'); (c) 3 % (2016: 3% ) per annum increase in e mployee b e nefits expe n se; and (d) re v enue growth at 80% of manageme n t’s forecast f or financial y ear to 30 J u ne 2018 w h ich would r e sult in a do u bling of activ e users in the coming y e ar and con t inuing at a steady pac e in subseq u ent years. For the peri o d April-June 2017, quart e rly-active s u bscribers ( a cross all s e rvices) wer e 9,093. Fo r the period July 2017- J une 2018, r evenue pe r user is modelled to incre a se by 2% c o mpared to t he average r evenue per active user d uring the p e riod April-J u ne 2017.

The d iscount rat e of 17.5% p re-tax reflects management’s con s ervative es t imate of th e time valu e of money and the group's weighted a verage cost of capital a djusted for t h e risk free r ate and the volatility of the share pri c e relative t o market move m ents.

The B oard believ e s the proje c ted revenu e growth rate is prudent a nd justified, based on t h e combinati o n of curren t growth rates and planne d product int r oductions.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 12. Non-current assets - intangibles (continued)

Sens i tivity analys i s

As di s closed in n o te 3, the dir e ctors have m ade judge m ents and e s timates ab o ut the futur e in respect o f impairment testing of go o dwill. Should these judgements an d estimates not occur a s approxim a ted, the re s ulting good w ill carrying amount may d ecrease. T h e sensitiviti e s of the car r ying value of goodwill to such judge m ents and e s timates are as follows: Eithe r revenue p e r user, or the numbe r of users, would need to decrea s e by 25% in cash flo w modelling for the Tour n ament and W agering di v ision before goodwill would become impaired, with all other a ssumptions remaining c o nstant.

The B oard believ e s that other reasonable changes in t he key ass u mptions on which the r e coverable amount of goodwill is base d would not c ause the re c overable a m ount to fall b elow the c a rrying amount.

Acco u nting policy for goodwill Good w ill arises o n the acquisition of a business. G oodwill is n ot amortis e d. Instead, goodwill is tested ann u ally for impai r ment, or m o re frequently if events o r changes in circumsta n ces indicat e that it mig h t be impair e d, and is c a rried at cost l ess accum u lated impairment loss e s. Impairment losses on goodwill are taken to profit o r loss and are not subs e quently rev e rsed.

Licen c e Significant costs associated w ith licence are deferr e d and amortised on a straight-lin e basis over the period of their expe c ted benefit, being their finite life of 5 years. Refe r to Note 10 f or further d e tails.

Bran d s

The M ad Bookie b rand name acquired in the business combinati o ns and has an indefinit e life which w ill be asse s sed for impai r ment.

Acco u nting policy for impairm e nt of other n on-financia l assets Other non-financi a l assets ar e reviewed f or impairm e nt whenev e r events or changes in circumstan c es indicate that the carryi n g amount m ay not be r ecoverable. An impair m ent loss is r ecognised f o r the amount by which the asset's carrying amount exceeds i t s recovera b le amount.

Reco v erable amount is the hi g her of an a sset's fair v a lue less co s ts of dispo s al and valu e -in-use. Th e value-in-u s e is the present value of t h e estimate d future cas h flows relating to the asset using a pre-tax disc o unt rate sp e cific to the a sset or cash- g enerating u nit to which the asset b e longs. Ass e ts that do n o t have ind e pendent ca s h flows are grouped to g ether to form a cash-gene r ating unit.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 13. Non-current assets - deferred tax

Defer Amou Ta Pr Int Ac Su Amou Tr Defer Move Open Credi Credi Closin red tax asse nts recognis x losses operty, plant angibles crued expen perannuatio nts recognis ansaction co red tax asse ments: ing balance ted to profito ted to equity g balance t comprises ed in profito and equipm ses n ed in equity sts on share t r loss (note (note 7) temporaryd r loss: ent : issue 7) ifferences at tributable to :	C 2017 $ 3,338 (53 (13 50 12 onsolidated 20 ,791 1,8 ,123) ( ,750) ,136 ,551 16 $ 64,443 49,002) - 78,887 20,105	C 2017 $ 3,338 (53 (13 50 12 onsolidated 20 ,791 1,8 ,123) ( ,750) ,136 ,551 16 $ 64,443 49,002) - 78,887 20,105
	3,334 ,605	1,9 14,433
	267 ,446	2 64,185
	3,602 ,051	2,1 78,618
	2,178 1,398 25 ,618 ,158 ,275	7 1,1 3 01,055 47,332 30,231
	3,602 ,051	2,1 78,618

Note 14. Current liabilities - trade and other payables

Trade Accru Other payables ed expenses payables	C 2017 $ 581 808 2,136 onsolidated 20 ,209 7 ,448 4 ,693 8 16 $ 38,999 44,955 81,603	C 2017 $ 581 808 2,136 onsolidated 20 ,209 7 ,448 4 ,693 8 16 $ 38,999 44,955 81,603
	3,526 ,350	2,0 65,557

Refer to note 20 f o r further inf o rmation on financial ins t ruments.

Acco u nting policy for trade an d other pay a bles Thes e amounts r e present lia b ilities for go o ds and ser v ices provid e d to the gr o up prior to t he end of t h e financial y ear and which are unpai d . Due to their short-term nature t h ey are me a sured at a m ortised co s t and are n ot discount e d. The amounts are uns e cured and are usually p a id within 30 days of rec o gnition.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017 Note 15. Current liabilities - employee benefits

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Annua l leave	C 2017 $ 288 onsolidated 20 ,416 2 16 $ 19,795

Acco u nting policy for short-te rm employee benefits

Liabilities for wages and salaries, includi n g non-mon e tary benefi t s, annual l e ave and lo n g service l e ave expect e d to be settle d wholly wit h in 12 mont h s of the rep o rting date a re measure d at the am o unts expect e d to be pai d when the liabilities are s e ttled.

Note 16. Non-current liabilities - employee benefits

Long service leav e	C 2017 $ 59 onsolidated 20 ,478 16 $ 43,163

Acco u nting policy for long-ter m employee b enefits

The liability for a n nual leave a nd long ser v ice leave not expected to be settle d within 12 m onths of the reporting d ate are meas u red as the present val u e of expect e d future pa y ments to b e made in respect of ser v ices provid e d by emplo y ees up to th e reporting date using t h e projected unit credit m ethod. Co n sideration i s given to e x pected fut u re wage an d salary levels, experienc e of employee departure s and periods of service. Expected f u ture payments are disc o unted usin g market yields at the repo r ting date o n corporate b onds with t e rms to mat u rity and cur r ency that match, as clo s ely as possible, the estim a ted future c ash outflow s . Note 17. Equity - issued capital Consolidated 2017 2016 2017 2016 Shares Shares $ $ Ordinary shares - fully paid 1 4 3,001,477 96,364,5 4 6 22,791,244 14, 6 96,667

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 17. Equity - issued capital (continued)

Move m ents in or d inary share c apital

Detai Balan Share existin Share existin Share Trans Defer 13) Balan Share Share Share Share Share Trans Defer 13) Balan ls ce s issued bef g sharehold -split 29:50 g share hel s issued at action costs red tax cred ce s issued s issues s issued s issued purchasep action costs red tax cred ce ore Initial Pu ers during th new shares d IPO it recognised lan it recognised blic Offering e financialy issued for ea directly ine directly ine ('IPO') to ear ch 1 quity (note quity (note Date 1 July 2015 15 Novembe 11 Decembe 30 June 201 24 August2 30 Novembe 17 May 201 24 May 201 23 June 201 30 June 201 r 2015 r 2015 6 016 r 2016 7 7 7 7	Shares 1,836,87 412,76 64,114,90 30,000,00 96,364,54 14,454,68 15,000,00 9,843,75 3,500,00 3,838,50 143,001,47 Issue p 9 6 $ 1 $ 0 $ - $ - $ 6 1 $ 0 $ 0 $ 0 $ 0 $ - $ - $ 7 rice 3.41 0.00 0.20 0.00 0.00 0.18 0.20 0.16 0.19 0.16 0.00 0.00	8,0 1,4 6,0 (1,1 3 $ 59,683 07,523 - 00,000 00,770) 30,231
		14,6 2,6 3,0 1,5 6 6 (4 96,667 01,842 00,000 75,000 82,500 14,160 04,200) 25,275
		22,7 91,244

Ordin a ry shares

Ordin a ry shares e ntitle the h older to pa r ticipate in d ividends a n d the proc e eds on the winding up of the co m pany in proportion to the n umber of a n d amounts p aid on the s hares held. The fully paid ordinary s h ares have n o par value and the comp a ny does no t have a limi t ed amount o f authorise d capital.

On a show of ha n ds every m e mber pres e nt at a mee t ing in pers o n or by pro x y shall hav e one vote and upon a poll each share shall have o ne vote.

Capit a l risk mana g ement The g roup's obje c tives when managing c apital is to safeguard its ability to c ontinue as a going co n cern, so th a t it can provi d e returns fo r sharehold e rs and benefits for other stakeholde r s and to ma i ntain an optimum capital structure t o reduce the c o st of capital .

Capit a l is regarde d as total equity, as rec o gnised in th e statement of financial p osition, plu s net debt. Net debt is c a lculated as tot a l borrowings less cash a nd cash eq u ivalents.

In or d er to maint a in or adjust the capital s tructure, th e group ma y raise additional capital, adjust the a mount of d i vidends paid t o sharehold e rs, return c a pital to sha r eholders, is s ue new sh a res or sell a s sets to red u ce debt.

The group intend s to raise ca p ital to assis t with workin g capital requirements o r when an o p portunity to invest in a b usiness or co m pany is se e n as value- a dding relati v e to the cu r rent compa n y's share p r ice at the ti m e of the in v estment. T h e group is actively pursuing additional investments in the short term as it c o ntinues to grow its existing businesses.

The group is not s ubject to an y financing a rrangement s covenants .

Acco u nting policy for issued c a pital Ordin a ry shares a re classified as equity.

Incre m ental costs directly attributable to t h e issue of n ew shares o r options ar e shown in e quity as a deduction, n e t of tax, from t he proceed s .

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 18. Equity - reserves

Share -based paym ents reserv e	C 2017 $ 1,473 onsolidated 20 ,958 1,2 16 $ 53,340

Shar e -based pay m ents reser v e The r eserve is used to rec o gnise the v alue of eq u ity benefits provided t o employee s and direct o rs as part of their remu n eration, an d other parti e s as part of their compe n sation for s e rvices.

Move m ents in reserves Move m ents in ea c h class of r e serve durin g the curren t and previo u s financial y ear are set o ut below:

Cons Balan Share Balan Share Balan olidated ce at 1 July -based paym ce at 30 Jun -based paym ce at 30 Jun 2015 ents e 2016 ents e 2017	Share-ba payme $ 1,253 sed nts - ,340	To 1,2 tal $ - 53,340
	1,253 220 ,340 ,618	1,2 2 53,340 20,618
	1,473 ,958	1,4 73,958

Note 19. Equity - dividends

Ther e were no di v idends paid , recommen d ed or decla r ed during t h e current or previous fin a ncial year.

Note 20. Financial instruments

Financial risk management objectives The group's activi t ies expose i t to a variet y of financial risks, particularly liquidi t y risk and w agering risk . The group' s overall risk m anagement program focuses on the unpredictab i lity of wage r ing liabilitie s and liquidit y .

Risk m anagemen t is carried o ut by senio r finance ex e cutives ('fin a nce') under policies ap p roved by th e Board of D irectors ('the Board'). Th e se policies include id e ntification a nd analysi s of the risk exposure of the gro u p and ap p ropriate procedures, controls and risk limits. Fina n ce identifie s , evaluates and hedge s financial ri s ks within t h e group's o p erating units. Finance reports to the Board on a monthly basis.

Market risk

Forei g n currency r isk The group is not e xposed to any foreign c u rrency risk.

Price risk

The group is not e xposed to any price risk .

Interest rate risk

The g roup's main interest rat e risk arose from loans t o related p a rties-borrowings which h ave now b e en fully rep a id. The group is not expo s ed to any significant int e rest rate ris k .

Credit risk Credi t risk refers to the risk t h at a count e rparty will d efault on it s contractual obligations resulting in financial loss to the group. The maxi m um exposu r e to credit ri s k at the re p orting date t o recognise d financial a s sets is the c arrying am o unt, net of an y provisions for impair m ent of thos e assets, a s disclosed in the state m ent of fin a ncial positi o n and note s to the finan c ial stateme n ts. The gro u p does not h old any coll a teral.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 20. Financial instruments (continued)

Liquidity risk Vigila n t liquidity ri s k manage m ent require s the group t o maintain s u fficient liquid assets (m a inly cash a n d cash equivalents) and a v ailable bor r owing facilit i es to be able to pay de b ts as and when they be c ome due a n d payable. T he group m anages liquidity risk by m a intaining a d equate cas h reserves, r aising capit a l to fund g r owth and b y monitoring actual and f orecast cash f lows and m a tching the m aturity profiles of financial assets a n d liabilities.

Rem a ining contra c tual maturi t ies The f o llowing tabl e s detail th e group's re m aining cont r actual maturity for its fi n ancial instr u ment liabilities. The tables have been drawn up b ased on th e undiscounted cash fl o ws of financial liabilitie s based on the earliest date on w h ich the finan c ial liabilities are require d to be paid. The tables include both interest and principal c a sh flows dis c losed as remaining contr a ctual maturities and the r efore these totals may d iffer from th e ir carrying a mount in th e statement o f financial p osition.

1 yea 5 2, 2,2 r or less $ 81,209 136,693 15,480	B an etween 1 d 2 years $ - - -	Between2 and 5 years $ - - -	Over 5y $ ears - - -	Rem contr mat 5 2,1 2,2 aining actual urities $ 81,209 36,693 15,480
4,9 33,382	-	-	-	4,9 33,382
1 yea 7 8 r or less $ 38,999 81,601	B an etween 1 d 2 years $ - -	Between2 and 5 years $ - -	Over 5y $ ears - -	Rem contr mat 7 8 aining actual urities $ 38,999 81,601
1,6 20,600	-	-	-	1,6 20,600

The c ash flows i n the maturit y analysis above are n o t expected t o occur sig n ificantly ea r lier than co n tractually d i sclosed abov e .

Wagering risk

The group faces w agering ris k as part of i t s wagering b usiness. T h is risk is co n trolled by s e tting limitations on the a mounts that clients may w in each da y , and, in ca s es that an exposure is deemed to o great or to o likely acc o rding to the group’s procedures and s y stems, that exposure is laid-off to other bookma k ers.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 21. Fair value measurement

Fair v alue hierarc h y

The f o llowing ta b les detail t h e group's a ssets and liabilities, m e asured or d isclosed at fair value, using a thr e e level hiera r chy, based o n the lowes t level of input that is sig n ificant to th e entire fair v alue meas u rement, bei n g: Level 1: Quoted p rices (una d justed) in a c tive marke t s for identi c al assets o r liabilities t h at the entit y can access at the meas u rement dat e Level 2: Inputs ot h er than qu o ted prices i n cluded within Level 1 t h at are obse r vable for th e asset or li a bility, eithe r directly or indirectly Level 3: Unobser v able inputs f or the asse t or liability

Cons Liabili Earn- Total olidated - 2 ties out provision liabilities 017	Level 1 $ -	Level 2 $ -	Level $ 2,215 3 ,480	To 2,2 tal $ 15,480
	-	-	2,215 ,480	2,2 15,480

Ther e were no transfers betw e en levels d u ring the fin a ncial year.

The c arrying amounts of trad e and other r eceivables a nd trade a n d other pa y ables are a s sumed to approximate t heir fair value s due to thei r short-term nature.

The f a ir value of f inancial lia b ilities is esti m ated by di s counting th e remaining contractual maturities a t the curren t market intere s t rate that i s available f o r similar fin a ncial liabilities.

Acco u nting policy for fair valu e measurem e nt Whe n an asset o r liability, fin a ncial or no n -financial, i s measured at fair valu e for recognition or discl o sure purpo s es, the fair v a lue is base d on the pric e that would be received to sell an a s set or paid t o transfer a liability in a n orderly tra n saction betw e en market p articipants at the mea s urement d a te; and assumes that t h e transacti o n will take place eithe r : in the princi p al market; o r in the abs e nce of a principal mark e t, in the mo s t advantag e ous market.

Fair v alue is me a sured usin g the assu m ptions that market par t icipants would use wh e n pricing t h e asset or liability, assu m ing they a c t in their ec o nomic bes t interests. F or non-fina n cial assets, the fair val u e measure m ent is bas e d on its highe s t and best use. Valuation techniq u es that are appropriate in the circ u mstances and for whic h sufficient d ata are avail a ble to mea s ure fair val u e, are use d , maximising the use of relevant o b servable inputs and m i nimising th e use of unob s ervable inp u ts.

Asset s and liabili t ies measur e d at fair value are clas s ified, into t h ree levels, u sing a fair v alue hierar c hy that refl e cts the significance of th e inputs us e d in makin g the meas u rements. C lassification s are revie w ed at each reporting date and transfers betwee n levels are d etermined b ased on a r eassessme n t of the low e st level of i n put that is s ignificant t o the fair value measurement.

For r e curring and non-recurri n g fair value measurem e nts, extern a l valuers m a y be used w hen intern a l expertise is either not a v ailable or when the val u ation is deemed to be s i gnificant. E x ternal valu e rs are selec t ed based o n market kn o wledge and r e putation. W here there is a signific a nt change in fair value of an asset or liability from one p e riod to another, an analy s is is undertaken, which includes a v erification o f the major inputs appli e d in the lat e st valuatio n and a comparison, wher e applicable, with extern a l sources of data.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 22. Key management personnel disclosures

Com p ensation

The aggregate co m pensation made to dir e ctors and o t her membe r s of KMP of the group is set out below:

Short Post-e Share -term employ mployment -based paym ee benefits benefits ents	C 2017 $ 858 76 29 onsolidated 20 ,628 5 ,423 ,900 9 16 $ 62,105 52,868 62,440	C 2017 $ 858 76 29 onsolidated 20 ,628 5 ,423 ,900 9 16 $ 62,105 52,868 62,440
	964 ,951	1,5 77,413

In ad d ition to the above, cert a in directors received payments for c onsultancy s ervices dir e ctly or indir e ctly as dis c losed in note 2 6.

Note 23. Remuneration of auditors

Durin g the financ i al year the following fe e s were pai d or payabl e for servic e s provided b y PKF(NS) Audit & Assurance Limit e d Partnersh i p, the audit o r of the co m pany:

Audit Audit Other Audit Dued Prepa Taxat Advic Revie services -P or review of services -P services for iligence rep ration of the ion advice e on LTIP ta w of Turnov KF(NS) Aud the financia KF(NS) financial yea orting for IPO investigatin xation er certificate it & Assuran l statements rs 30 June2 g accountan ce LimitedP 012 to 2015 t report for I artnership PO	C 2017 $ 125 onsolidated 20 ,164 16 $ 79,186	C 2017 $ 125 onsolidated 20 ,164 16 $ 79,186
	13 3 - - - - ,000 ,600	85,623 45,316 40,139 10,000 750 -
	16 ,600	1 81,828
	141 ,764	2 61,014

Note 24. Contingent liabilities

The g roup has g iven bank g uarantees as at 30 J u ne 2017 o f $200,000 (2016: $nil) for Northe r n Territory Licence Requ i rements.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 25. Commitments

Lease Comm Within Onet commitmen itted at the one year o five years ts - operatin reporting da g te but not re cognised as liabilities, pa yable:	C 2017 $ 120 327 onsolidated 20 ,723 1 ,444 4 16 $ 39,458 48,167	C 2017 $ 120 327 onsolidated 20 ,723 1 ,444 4 16 $ 39,458 48,167
	448 ,167	5 87,625

Oper a ting lease c ommitment s include am o unts relate d to five yea r leases of o ffices (with t he option to extend for a further five y e ars). Annu a l amounts w ill increase at the greater of 3% or CPI. Includ e d also is a f ive year op e rating leas e over a moto r vehicle an d a short ter m property l e ase whose term has b e en extend e d as from 3 1 Decembe r 2016 on t h e same terms (unless ter m inated by e i ther party).

Note 26. Related party transactions

Pare n t entity TopB e tta Holding s Limited is the parent e n tity.

Subs i diaries Interests in subsi d iaries are s e t out in not e 29.

Asso c iates Interests in assoc i ates are set out in note 1 0.

Key m anagement personnel

Discl o sures relati n g to key m anagement personnel a re set out in note 22 a nd the rem u neration report include d in the direct o rs' report.

Tran s actions with related part i es The f o llowing transactions oc c urred with r e lated partie s

			C onsolidated	C onsolidated
			2017	20 16
			$	$
Paym ent for other expenses:
Cons ulting fees pa id to Fergha na CapitalP ty Ltd ('Ferg hana') (a co mpany cont rolled by
direct or, Matthew Cain)			130 ,000	1 10,000
Cons ulting fees pa id to Media	SolutionsC ompany Pty	Ltd ('SDMSC ') (a compa ny controlle d
by dir ector Simon Dulhunty)			120 ,000	60,000

Rece i vable from a nd payable t o related p a rties The f o llowing bal a nces are outstanding at the reportin g date in rel a tion to transactions with related parties:

	C onsolidated	C onsolidated
	2017	20 16
	$	$
Curre nt payables:
Trade payables to Ferghanaf or expenses on behalf of the compan y	11 ,041	274
Trade payables to SDMSC for consultings ervices	11 ,231	11,000

Loan s to/from rel a ted parties Ther e were no lo a ns to or fro m related pa r ties at the c u rrent and p r evious reporting date.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 26. Related party transactions (continued)

Term s and condit i ons

All transactions w e re made o n normal co m mercial ter m s and cond i tions and at market rate s .

Note 27. Parent entity information Set o u t below is t h e supplem e ntary inform a tion about t he parent e n tity. State m ent of prof i t or loss an d other comp r ehensive income

Loss Total Statem Total Total Total Total Equity Iss Sh Ac Total after income comprehens ent of finan current asse assets current liabil liabilities ued capital are-basedp cumulated l equity tax ive income cial position ts ities ayments res osses erve	2017 $ (9,515 Parent 20 ,366) (5,3 16 $ 01,718)	2017 $ (9,515 Parent 20 ,366) (5,3 16 $ 01,718)
	(9,515 ,366)	(5,3 01,718)
	2017 $ 1,582 Parent 20 ,005 1,3 16 $ 36,436
	2,514 ,893	3,7 15,064
	-	-
	-	-
	22,791 1,473 (21,750 ,244 ,958 ,309)	14,6 1,2 (12,2 96,667 53,340 34,943)
	2,514 ,893	3,7 15,064

Guar a ntees enter e d into by the parent ent i ty in relatio n to the debt s of its subsi d iaries The parent entity h ad no guar a ntees in rel a tion to the d ebts of its subsidiaries a s at 30 Jun e 2017 and 3 0 June 201 6

Conti n gent liabiliti e s The parent entity h ad no contingent liabilit i es as at 30 J une 2017 and 30 June 2 016.

Capit a l commitm e nts - Prope rt y, plant an d equipment The parent entity h ad no capit a l commitm e nts for prop e rty, plant a n d equipme n t as at 30 J u ne 2017 an d 30 June 2 0 16.

Signi fi cant accou n ting policie s The a ccounting p o licies of th e parent ent i ty are consistent with t h ose of the g roup, as di s closed in n o te 2, excep t for the follo w ing: ● Investments in subsidiaries are acco u nted for at c ost, less an y impairment, in the par e nt entity. ● D ividends r e ceived from subsidiarie s are recognised as oth e r income b y the parent entity and it s receipt m a y be an indicator of a n impairme n t of the inv e stment.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 28. Business combinations

Mad B ookie

On 1 May 2017, t he group a c quired Mad Bookie bus i ness from M ad Bookie Pty Ltd for total consideration trans f erred of $2,315,480. This a cquisition w ill improve a n important capability f o r the group' s strategy. T h e values id e ntified in relation to the a c quisition of M ad Bookie are provisio n al as at 30 J une 2017. T he acquire d business c o ntributed r e venues of $ 6 57,000 and net profit of $ 3 35,000 to t h e group for the period f r om 1 May 2 0 17 to 30 June 2017.

Acqui s ition costs e xpensed to profit or los s during the f inancial ye a r were $2,5 0 0. These c o sts have be e n recognis e d in the non-r e curring exp e nses, in th e statement o f profit or lo s s and othe r comprehensive income .

Details of the acq u isition are a s follows:

Brand Defer Emplo Net a Good Acqui Repre Cash Earn- red tax liabil yee benefits ssets acquire will sition-date fa senting: paid or paya out ity d ir value of t ble to vendo he total cons r ideration tra* nsferred	Fair ( value $ 50,000 13,750) (4,293)
	2,2 31,957 83,523
	2,3 15,480
	(1 (2,2 00,000) 15,480)
	(2,3 15,480)

Sub j ect to satisf y ing certain e arn-out co n ditions duri n g the perio d ending on t he first anni v ersary of c o mpletion, a multiple of 2x Net Gaming revenue will be paid to t he vendors. This paym e nt can be m ade by a mixture of cas h or of shar e s in the cons o lidated entit y .

Acco u nting policy for busines s combinatio n s The a cquisition m ethod of a ccounting is used to a ccount for business c ombination s regardles s of whethe r equity instru m ents or ot h er assets ar e acquired.

The c onsideratio n transferred is the sum of the acquisition-date f air values o f the asset s transferred, equity inst r uments issue d or liabilitie s incurred b y the acquirer to former o wners of th e acquiree a n d the amount of any no n -controlling interest in the acquiree. F o r each business combi n ation, the n o n-controllin g interest in the acquire e is measured at either f a ir value or at the proporti o nate share of the acq u iree's identi f iable net a s sets. All ac q uisition co s ts are expensed as incurred to profit or loss.

On the acquisitio n of a busin e ss, the gro u p assesses the financial assets acquired and li a bilities assumed for ap p ropriate classi f ication and designatio n in accordance with th e contractu a l terms, ec o nomic con d itions, the g roup's ope r ating or acco u nting policies and other pertinent co n ditions in e x istence at t h e acquisitio n -date.

Wher e the busin e ss combin a tion is achi e ved in stages, the gro u p remeasu r es its previ o usly held e quity intere s t in the acqui r ee at the a c quisition-d a te fair valu e and the dif f erence bet w een the fai r value and the previou s carrying a m ount is recognised in pro f it or loss.

Conti n gent consi d eration to b e transferr e d by the a c quirer is re c ognised at the acquisition-date fai r value. Sub s equent chan g es in the f a ir value of t h e continge n t considera t ion classifi e d as an as s et or liabilit y is recogni s ed in profit or loss. Conti n gent consi d eration cla s sified as e q uity is not r emeasured and its su b sequent se t tlement is a ccounted f o r within equit y .

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 28. Business combinations (continued)

The d ifference b e tween the a cquisition- d ate fair val u e of asset s acquired, liabilities assumed and any non-controlling intere s t in the ac q uiree and t h e fair value of the consi d eration tra n sferred and the fair value of any pre-existing investment in the acquiree is recognised a s goodwill. If the consideration tran s ferred and the pre-exist i ng fair valu e is less tha n the fair value of the identifiable net a s sets acquired, being a bargain pur c hase to th e acquirer, t h e differenc e is recogni s ed as a gain d irectly in pr o fit or loss b y the acquir e r on the ac q uisition-dat e , but only a fter a reass e ssment of t h e identifica t ion and meas u rement of t he net asse t s acquired, the non-co n trolling inte r est in the a c quiree, if a n y, the cons i deration tra n sferred and t h e acquirer's previously h eld equity i n terest in th e acquirer.

Business combinations are initially acc o unted for o n a provi s ional basis . The acqu i rer retrosp e ctively adj u sts the provi s ional amou n ts recognis e d and also recognises a dditional a s sets or liabi l ities during t he measur e ment perio d , based on n e w informati o n obtained about the f a cts and cir c umstances that existe d at the acq u isition-date. The meas u rement perio d ends on ei t her the earlier of (i) 12 months fro m the date o f the acquisi t ion or (ii) w h en the acq u irer receive s all the infor m ation possi b le to deter m ine fair valu e .

Note 29. Interests in subsidiaries

The c onsolidated financial statements i n corporate t he assets, liabilities a n d results o f the follo w ing subsidiaries in accor d ance with t h e accounti n g policy de s cribed in no t e 2:

				Own ership	inter est
	Principal	place of bu	siness /	2017	20 16
Name	Country o f incorpora tion			%	%
Operi s Momentus Pty Ltd	Australia			100. 00%	10 0.00%
TopB etta Pty Ltd	Australia			100. 00%	10 0.00%
12Fol low Pty Ltd	Australia			100. 00%	10 0.00%
OM IP Pty Ltd	Australia			100. 00%	10 0.00%
OMA pps Pty Ltd	Australia			100. 00%	10 0.00%
TheB ookies Tote Pty Ltd *	Australia			100. 00%	10 0.00%
TheG lobal ToteL imited	Alderney			100. 00%	-

O n 6 Octob e r 2016 the company ch a nged its na m e to The Global Tote A u stralia Pty L imited. Note 30. Reconciliation of loss after income tax to net cash used in operating activities

Loss Adjus Depre Impai Share Share Finan Chan Inc Inc Inc Inc Inc Inc Net ca after income tments for: ciation and rment of goo of loss - as -based paym ce costs - no ge in operati rease in tra rease in de rease in pre rease in tra rease in em rease in de sh used ino tax benefitf amortisation dwill sociates ents n-cash ng assets an de and othe ferred tax as payments de and othe ployee bene ferred reven perating ac or the year d liabilities: r receivables sets r payables fits ue tivities	C 2017 $ (7,618 141 1,802 11 220 159 (656 (1,384 (89 1,218 80 (17 onsolidated 20 ,257) (4,5 ,293 ,453 ,392 ,618 1,2 ,493 ,399) (1 ,334) (1,4 ,586) ( ,212 1,4 ,643 1 ,845) 16 $ 37,525) 22,061 - 10,253 53,340 - 27,834) 77,563) 59,005) 11,616 62,926 18,045	C 2017 $ (7,618 141 1,802 11 220 159 (656 (1,384 (89 1,218 80 (17 onsolidated 20 ,257) (4,5 ,293 ,453 ,392 ,618 1,2 ,493 ,399) (1 ,334) (1,4 ,586) ( ,212 1,4 ,643 1 ,845) 16 $ 37,525) 22,061 - 10,253 53,340 - 27,834) 77,563) 59,005) 11,616 62,926 18,045
	(6,132 ,317)	(3,3 23,686)

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 31. Non-cash financing activities

Share Share Share $10,0 Note 3 Loss Weigh Weigh Basic Dilute s issued for s issued on s issued for 03 of cash re 2. Earning after income ted average ted average earnings pe d earningsp amounts rec conversion services rec ceived in 20 s per share tax attributa number of number of r share er share eived in prio of loan eived 16 related to ble to the ow ordinary sha ordinary sha r year shares issu ners of Top res used inc res used inc ed in the pr Betta Holdin alculatingb alculatingd ior year. gs Limited asic earning iluted earnin s per share gs per share	C 2017 $ 75 onsolidated 20 - - ,000 16 $ 65,000 44,732 49,100	C 2017 $ 75 onsolidated 20 - - ,000 16 $ 65,000 44,732 49,100
	75 ,000	1 58,832
	C 2017 $ (7,618 onsolidated 20 ,257) (4,5 16 $ 37,525)
	Numb 119,096 er ,279	Num 80,4 ber 16,379
	119,096 ,279	80,4 16,379
	Cents ( ( 6.40) 6.40)	Ce nts (5.64) (5.64)

39,167,000 optio n s over ordinary shares a re not inclu d ed in the c a lculation of diluted earnings per share because t hey are anti-dilutive for th e year ende d 30 June 2017. These o p tions could potentially d ilute basic earnings per s hare in the future.

Acco u nting policy for earning s per share

Basic earnings p e r share

Basic earnings p e r share is calculated b y dividing t he profit at t ributable to the owner s of TopBetta Holdings Limited, exclu d ing any co s ts of servicing equity o t her than or d inary shar e s, by the w e ighted ave r age numbe r of ordinar y shares outst a nding durin g the financi a l year, adju s ted for bon u s elements in ordinary s hares issue d during the financial ye a r.

Diluted earnings p er share

Diluted earnings p er share a d justs the figures used i n the deter m ination of b a sic earning s per share t o take into account the a f ter income t ax effect of interest and other finan c ing costs a s sociated w i th dilutive p o tential ordi n ary shares and the weig h ted averag e number of shares ass u med to ha v e been iss u ed for no c onsideratio n in relation to dilutive p otential ordin a ry shares.

Note 33. Share-based payments

The l o ng-term in c entives pla n ('LTIP') pr o gram has b een establi s hed by the group. Subj e ct to the ASX listing r u les and unde r the terms of the LTIP, t h e Board m a y grant opti o ns and/or p erformance rights (opti o ns with a zero exercise p rice) to eligible participan t s ('awards'). Each awa r d granted r e presents a right to rec e ive one sh a re once the award vest s and is exerc i sed by the relevant participant.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 33. Share-based payments (continued)

Set o u t below are summaries o f options g r anted unde r the plan:

Bala thes the 5,0 5,0 16,6 nce at tart of year 00,000 00,000 67,000 - - - - -	Granted - - - 2,000,000 1,000,000 3,000,000 4,500,000 2,000,000	Exercised - - - - - - - -	Expire forfeite othe d/ d/ r - - - - - - - -	Bala thee the 5,0 5,0 16,6 2,0 1,0 3,0 4,5 2,0 nce at nd of year 00,000 00,000 67,000 00,000 00,000 00,000 00,000 00,000
26,6 67,000	1 2,500,000	-	-	39,1 67,000
Bala thes the nce at tart of year - - -	1 Granted 5,000,000 5,000,000 6,667,000	Exercised - - -	Expire forfeite othe d/ d/ r - - -	Bala thee the 5,0 5,0 16,6 nce at nd of year 00,000 00,000 67,000
-	2 6,667,000	-	-	26,6 67,000

S hares gran t ed under th e Long Ter m Incentive P lan (LTIP), w hich has b e en establis h ed by the g roup. Subject to the A SX listing r ules and u n der the ter m s of the LTIP, the Boa r d may gran t options an d /or performance rights (options w ith a zero e xercise pri c e) to eligibl e participan t s (‘awards’). Each awa r d granted r e presents a right to rec e ive one s hare once t h e award vests and is e x ercised by t h e relevant p articipant.

The w eighted average share p rice was $0 . 24 (2016: $ 0 .19).

The w eighted av e rage remai n ing contractual life of o ptions outs t anding at t h e end of th e financial y ear was 2. 3 5 years (2016: 3.9 years).

For t h e options g r anted durin g the current financial ye a r, the valu a tion model i n puts used t o determine the fair val u e at the grant date, are as follows:

		Sharep rice	Exe rcise	E xpected	Dividend	Risk-fr ee	Risk-fr ee	Fair value
Grant date	E xpiry date	at grant date	p rice	volatility	yield	interest	rate	at gra nt date
12/11 /2015	1 2/11/2018	$ 0.20	$0.20	45.00%	-	2.	17%	$ 0.0650
12/11 /2015	1 2/11/2020	$ 0.00	$0.25	45.00%	-	2.	17%	$ 0.0470
12/11 /2015	1 2/11/2020	$ 0.00	$0.25	45.00%	-	2.	17%	$ 0.0200
28/07 /2016	2 1/03/2019	$ 0.19	$0.25	45.00%	-	1.	96%	$ 0.0145
30/11 /2016	3 0/11/2019	$ 0.20	$0.30	41.70%	-	1.	93%	$ 0.0339
30/11 /2016	3 0/11/2019	$ 0.20	$0.25	41.70%	-	1.	93%	$ 0.0450
16/03 /2017	1 6/03/2018	$ 0.11	$0.30	41.70%	-	1.	51%	$ 0.0002
14/06 /2017	1 4/06/2020	$ 0.20	$0.20	41.70%	-	1.	66%	$ 0.0600

Acco u nting policy for share-b a sed payme n ts Equit y -settled sh a re-based compensation benefits are provided to employees a nd adviser s . Equity-set t led transactions are awar d s of shares, or options o ver shares, that are provided to em p loyees in e x change for the renderi n g of service s and to other s as part of t h eir compensation for s e rvices.

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

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Note 33. Share-based payments (continued)

The cost of equit y -settled tran s actions are measured a t fair value o n grant dat e . Fair value is independently deter m ined for each option granted using either the Bi n omial or Black-Schole s option pri c ing model, as appropriate, that ta k es into acco u nt the exer c ise price, the term of th e option, th e impact of d ilution, the s hare price a t grant date and expect e d price volatility of the u n derlying sh a re, the ex p ected divid e nd yield a n d the risk f r ee interest rate for the term of th e option, toget h er with no n -vesting conditions that do not d e termine wh e ther the g r oup receiv e s the services that entitle the empl o yees to rec e ive payment. No accou n t is taken o f any other v e sting condi t ions.

The c ost of equit y -settled tra n sactions a r e recognised as an ex p ense with a correspon d ing increas e in equity o ver the vesti n g period. T h e cumulative charge to profit or loss is calculat e d based o n the grant d ate fair val u e of the a w ard, the best e stimate of t he number o f awards t h at are likel y to vest an d the expire d portion of the vesting period. The amount recognised in pro f it or loss fo r the period is the cumul a tive amoun t calculated a t each rep o rting date l e ss amounts already recognised in pre v ious period s .

Mark e t conditions are taken i n to consider a tion in dete r mining fair v alue. There f ore any aw a rds subject t o market c o nditions are c o nsidered to vest irresp e ctive of wh e ther or not t h at market c ondition ha s been met, provided all other condit i ons are satisfied.

If equity-settled a w ards are m odified, as a minimum a n expense i s recognise d as if the m odification h as not bee n made. An a d ditional expense is rec o gnised, ov e r the remai n ing vesting period, for a ny modific a tion that in c reases the t otal fair value of the share-based com p ensation b e nefit as at t h e date of m o dification.

If the non-vesting condition is within the c o ntrol of the group or e m ployee, the f ailure to sa t isfy the con d ition is trea t ed as a canc e llation. If th e condition i s not within t h e control of the group or employee a nd is not s a tisfied durin g the vestin g period, any r e maining ex p ense for th e award is re c ognised ov e r the remai n ing vesting period, unle s s the awar d is forfeited.

If eq u ity-settled a wards are c ancelled, it is treated a s if it has v ested on t h e date of c ancellation, and any remaining expe n se is recog n ised imme d iately. If a new replace m ent award i s substitute d for the cancelled awar d , the cancelled and new a ward is trea t ed as if the y were a mo d ification.

Note 34. Events after the reporting period

On 3 July 2017, the compa n y issued 2,954,681 op t ions to vari o us key employees pu r suant to th e group’s long term incen t ive plan wit h an exercis e price of $ 0 .30 and an expiry date o f 31 Octob e r 2020. Th e options co m prise two tranches which are subject to various e m ployment a nd perform a nce-related vesting con d itions.

On 2 1 July 2017, the compa n y also announced it ha d received a licence to o f fer The Global Tote an d the TopBe t ta retail offeri n g into the UK market.

TopBetta Holdings Limited Directors' declaration 30 June 2017

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In the directors' o p inion:

t he attached financial st a tements a n d notes co m ply with th e Corporatio n s Act 2001, the Accou n ting Stand a rds, the C orporation s Regulation s 2001 and o ther manda t ory professional reporti n g requirem e nts;
t he attached financial st a tements an d notes com p ly with Inte r national Financial Reporting Standards as issued by the International Accounting Standards B oard as described in no t e 2 to the fi n ancial state m ents;
t he attached financial st a tements and notes giv e a true and fair view of the group's financial position as at 30 June 2 017 and of its performa n ce for the financial yea r ended on t h at date; an d
t here are re a sonable gr o unds to beli e ve that the company will be able to pay its debt s as and wh e n they bec o me due a nd payable .

The directors hav e been give n the declarations requir e d by sectio n 295A of th e Corporatio n s Act 2001.

Signed in accord a nce with a r e solution of d irectors made pursuant to section 2 9 5(5)(a) of t h e Corporati o ns Act 200 1 .

On b e half of the directors

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_ _ _ _ _ _ ___
Nich o las Chan
Chai r man
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___ _ _ _ _ _ _
Tod d Buckingha m
Dire c tor
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15 A u gust 2017 Sydn e y

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF TOPBETTA HOLDINGS LIMITED

Report on the Financial Report

Opinion

We have audited the accompanying financial report of TopBetta Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and 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.

In our opinion, the financial report of TopBetta Holdings 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 2017 and of its performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Those Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those Standards are further described in the Auditor’s Responsibility section of our report.

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

Independence

We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

Liability limited by a scheme approved under Professional Standards Legislation

Key Audit Matters (cont’d)

1. Impairment testing of goodwill and other intangible assets

Why significant

How our audit addressed the key audit matter

As disclosed in note 12, the Group has goodwill and other intangible assets of $5.8m as at 30 June 2017.

At the end of each reporting period, the Group is required to determine whether there is any indication that the intangible assets are impaired under Australian Accounting Standard (AASB) 136 Impairment of Assets.

An asset is considered impaired if its carrying value is greater than its recoverable amount. The Group uses the “value-in-use” methodology in determining the recoverable amount which measures the present value of future cashflows expected to be derived from these assets.

The evaluation of the recoverable amount requires the Group to exercise significant judgment in determining key assumptions, which include:

5-year cash flow forecast;
Terminal growth factor; and

As part of our procedures we assessed the Group’s determination of Cash Generating Units (CGUs). Our procedures included but were not limited to:

to assessing and challenging:
- the assumptions supporting the number of cash generating units being appropriate;
- the accuracy of the FY18 budget approved by the Board by comparing the budget to FY17 actuals;
- the assumptions used for the future growth rate by comparing normalised average growth rate from FY16 to FY17 to the growth rate adopted in the impairment model;
- the key assumptions for long term growth in the forecast cash flows by comparing them to historical results and industry forecasts; and
- the discount rate applied by comparing the Weighted Average Cost of Capital to industry benchmarks.
Discount rate.

The outcome of the impairment assessment could vary if different assumptions were applied. As a result, the evaluation of the recoverable amount of intangible assets including goodwill is a Key Audit Matter.

testing, on a sample basis, the mathematical accuracy of the cash flow models;
agreeing inputs in the cash flow models to relevant data including approved budgets and latest forecasts;
reviewing management’s sensitivity analysis in relation to key assumptions including discount rate, growth rate and terminal value; and
we assessed the appropriateness of the disclosures including those relating to sensitivities in the assumptions used, included in Note 12.

Based on these procedures, goodwill relating to the content business was considered impaired during the financial year and an impairment expense of $1.8m was duly recorded.

Key Audit Matters (cont’d)

2. Acquisition of Mad Bookie business

Why significant

The Group entered into an agreement with Mad Bookie Pty Ltd on 1 May 2017 to acquire the Mad Bookie business.

The consideration payable by the Group consisted of an upfront payment of $100,000 and deferred consideration dependent on net gaming revenue derived in the first 12 months after acquisition.

How our audit addressed the key audit matter

Our procedures included but were not limited to:

reviewing the contract for sale and confirming the acquisition date, the identification of an acquirer and the entity being acquired under AASB 3;
assessing and challenging:

AASB 3 Business Combinations requires the Group to recognise and measure the fair value of the assets acquired and the liabilities assumed with any resulting goodwill resulting from the Mad Bookie transaction.

The assessment of consideration payable and the fair value of assets and liabilities assumed could vary if different assumptions were applied.

This transaction is material to the understanding of the 30 June 2017 financial statements and accordingly is considered to be a Key Audit Matter.

the assumptions used to assess fair value of the assets acquired and liabilities assumed;
the assumptions used to estimate the consideration payable;
ensuring goodwill and other intangibles have been correctly calculated;

We have also assessed the appropriateness of the discourses included in Note 28 in respect of the business acquisition.

3. Recognition and Valuation of Deferred Tax Assets

Why significant

As disclosed in Note 13 of the financial report, at 30 June 2017 the Group has recorded a deferred tax asset of $3.602m relating to deductible temporary differences and tax losses incurred.

As noted in Note 3 of the financial report, deferred tax assets are only recognised if the Group considers it probable that future taxable income will be generated to utilise these temporary differences and losses.

Significant judgement is required in forecasting future taxable income.

Based on the above, we have considered the recognition and valuation of deferred tax assets to be a Key Audit Matter.

How our audit addressed the key audit matter

We have assessed and challenged management’s judgements relating to the Group’s forecasts and the ability to generate future taxable income, and also the recognition criteria under AASB 112.

Our procedures included but were not limited to:

ensuring the consistency of these forecasts to the Board approved budget used in the impairment testing;
the reasonableness of key assumptions used in the forecasts with respect to income and expenditure;
testing, on a sample basis, the mathematical accuracy of the cash flow models;
reviewing the nature of the deferred tax asset (i.e. temporary differences or revenue / capital losses) and its probability of being realised.

We have also assessed the appropriateness of the disclosures included in Note 13 in respect of the deferred tax balances.

Key Audit Matters (cont’d)

4. Regulatory Compliance

Why significant

The Group operates in a highly regulated environment and holds a bookmaker licence in the Northern Territory, Australia (issued 11 August 2016) and an eGambling license in Alderney, United Kingdom (issued 3 November 2016).

Each licence has terms and conditions and reporting requirements. Compliance with these requirements is critical for the Group’s operations as the suspension or cancellation of these licences would have a material adverse impact on its ability to operate.

Based on the above, we have considered compliance with the licenses to be a Key Audit Matter.

How our audit addressed the key audit matter

We have reviewed the following in relation to the licences:

the terms and conditions associated with both the NT and Alderney license;
held discussions with management to assess compliance procedures;
reviewed on a sample basis, the reporting documentation submitted to regulators and information prepared by management as reported to the Board;
reviewed correspondence with the licencing authorities to ensure that any potential complaints or issues have been managed in a timely manner; and
obtained a solicitors’ representation letters to ensure that there are no ongoing legal matters.

5. Acquisition of License

Why significant

On the 24 May 2017, the Group entered into an agreement with MWS Pty Limited and Live Data Datacast Pty Limited to acquire a perpetual and irrevocable software license.

The consideration paid by the Group was $1,010,315 which included the issuance of 3.5m Topbetta shares.

In accordance with AASB 138 Intangible Assets, the license has been capitalised as an intangible asset as disclosed in Note 12.

AASB 138 requires the amortisation of the license over its useful life. Management have estimated the useful life of the asset to be five years in consideration of the license’s nature.

This transaction is material to the understanding of the 30 June 2017 financial statements and accordingly is considered to be a Key Audit Matter.

How our audit addressed the key audit matter

We have reviewed the following in relation to the licence acquisition:

Obtained and reviewed the contract regarding the license;
Assessed and challenged management’s judgements regarding the quantum of consideration paid and ensure this has been appropriately capitalised;
Assessed and challenged management’s judgements regarding the asset’s useful life;
Ensured an appropriate level of amortisation expense was recorded in the year ended 30 June 2017.

We have also assessed the appropriateness of the related disclosures in Note 12.

Key Audit Matters (cont’d)

6. Funding & Liquidity

Why significant

How our audit addressed the key audit matter

While the Group recorded cash at bank at 30 June 2017 of $3,267,188, the Group’s net cash outflows from operating activities totalled $6,132,317 for the year then ended.

The Group has also disclosed in note 2 (Going Concern) that further capital may be required to meet the Group’s near and long-term plans.

The going concern assumption is pervasive to the preparation of the 30 June 2017 financial statements and accordingly is considered to be a Key Audit Matter.

We evaluated the Group’s funding and liquidity position at 30 June 2017 and the ability of the Group to repay its debts as and when they fall due for a minimum of 12 months from the date of signing the financial report.

In order to assess the funding and liquidity position, we:

reviewed the process undertaken to determine the appropriateness of the use of the going concern basis;
reviewed Board approved forecasts;
reviewed the funding plan for the Group to achieve its future operational and program development needs; and
obtained external confirmation of the Group’s cash and short-term deposits.

Other Information

Other information is financial and non-financial information in the annual report of the Group which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other Information in the annual report.

The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s report. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.

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

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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

Directors’ Responsibilities for the Financial Report

The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Directors’ Responsibilities for the Financial Report (cont’d)

In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.

In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue and auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit.

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 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 of the financial report that gives a true and fair view 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.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Auditor’s Responsibilities for the Audit of the Financial Report (cont’d)

The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Remuneration Report

Opinion

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Topbetta Holdings Limited for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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PKF

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MARTIN MATTHEWS PARTNER

15 AUGUST 2017 NEWCASTLE, NSW

TopBetta Holdings Limited Shareholder information 30 June 2017

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The shareholder i n formation set out belo w was applic a ble as at 9 A ugust 2017 .

Distribution of equitable securities Analy s is of numb e r of equitab l e security h o lders by si z e of holding :

1 to 1 1,001 5,001 10,00 100,0 Holdin ,000 to 5,000 to 10,000 1 to 100,000 01 and over g less than a marketabl e parcel	Numb of hold of ordin share er ers ary s 13 152 119 420 182	Num of ho of op o ord sh ber lders tions ver inary ares - - - - 13
	886	13
	13	-

Holdi n g less than a marketable parcel

Equity security holders

Twen t y largest quoted equity s ecurity hol d ers The names of the twenty larg e st security h olders of quoted equity s ecurities ar e listed belo w :

J PM RBW LOBS HSBC TODD GILLA CRAI NICO OLIVE PAUL JO-AN MOD TREN JODA REDA WILL MICH CITIC 18 KN PECO ORGAN NO NOMINEES TER BEACH CUSTODY CAMERON RD SUPER G MICHAEL LE ANN BA R SHANAH ANDREWH NE BUCKI ERN WAGE WITH TECH HBI PTY LIM N STREET IAM PATRIC AEL GUYP ORP NOMIN OT VENTU T MELLE IN MINEES AU PTY LTD (R PTY LTD NOMINEES BUCKINGH ANNUATIO PEARCE NNERMAN( AN AIN NGHAM (BU RING SYST NOLOGYP ITED (WIL PTY LTD (T K BUTLER EARCE EES PTYL RES PTY LT VESTMENT STRALIA L BW DISCR (AUSTRAL AM N PTY LIMIT P B FAMILY CKINGHAM EMS PTY LT TY LTD GAFLO INV HE CONSV IMITED D (GREEN S PTY LTD IMITED ETIONARY IA) LIMITED ED (GILLAR A/C) FAMILY A/ D ESTMENTS EST SUPER ARROWSA (PARK ST A/C) D SUPER C) PTY LTD) FUND A/C) /C) A/C) FUND A/C)	Ord Number 22,712 9,898 5,750 3,105 2,977 2,836 2,586 2,219 2,139 2,000 1,893 1,750 1,750 1,657 1,550 1,509 1,461 1,340 1,274 1,246 inary share % of sh held iss ,367 ,999 ,000 ,405 ,258 ,000 ,205 ,438 ,842 ,000 ,604 ,000 ,000 ,605 ,000 ,692 ,519 ,951 ,000 ,375 s total ares ued 15.88 6.92 4.02 2.17 2.08 1.98 1.81 1.55 1.50 1.40 1.32 1.22 1.22 1.16 1.08 1.06 1.02 0.94 0.89 0.87	Ord Number 22,712 9,898 5,750 3,105 2,977 2,836 2,586 2,219 2,139 2,000 1,893 1,750 1,750 1,657 1,550 1,509 1,461 1,340 1,274 1,246 inary share % of sh held iss ,367 ,999 ,000 ,405 ,258 ,000 ,205 ,438 ,842 ,000 ,604 ,000 ,000 ,605 ,000 ,692 ,519 ,951 ,000 ,375 s total ares ued 15.88 6.92 4.02 2.17 2.08 1.98 1.81 1.55 1.50 1.40 1.32 1.22 1.22 1.16 1.08 1.06 1.02 0.94 0.89 0.87
	71,659 ,260	50.09

TopBetta Holdings Limited Shareholder information 30 June 2017

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Unqu o ted equity s ecurities

			Numb er	Num ber	Num ber
			on iss ue	of ho lders
Unlist ed Optionse xpiring	12	N ovember 20 18 (escrowe d) with strik e price at $0 .20	10,000 ,000		4
Unlist ed Optionse xpiring	12	N ovember 20 20 (escrowe d) with strik e price at $0 .25	16,667 ,000		1
Unlist ed Optionse xpiring	21	M arch 2019w ith strike pr ice at $0.25	2,000 ,000		1
Unlist ed Optionse xpiring	30	N ovember 20 19 with strik e price at $0 .30	1,000 ,000		1
Unlist ed Optionse xpiring	30	N ovember 20 19 with strik e price at $0 .25	3,000 ,000		2
Unlist ed Optionse xpiring	16	M arch 2018w ith strike pr ice at $0.30	4,500 ,000		3
Unlist ed Optionse xpiring	14	J une 2020 wi th strike pric e at $0.20	2,000 ,000		1
Unlist ed Optionse xpiring	31	O ctober 2020 with strike price at $0.3 0	2,954 ,681		5

Substantial holders

The f ollowing holders are registered by the compa n y as a su b stantial hol d er, having declared a relevant in t erest in accor d ance with t h e Corporations Act 2001 (Cth), in the voting shares below:

	Ord inary	share s
		% of total
	Numb er	sh ares
	held 1	Issu ed 2
Steve n N Gillard	9,908 ,922	6.93
Indus try Super Ho ldings PtyL td	10,754 ,291	7.52
Ryde r Capital Lim ited	8,272 ,222	5.78
Todd Buckingham	4,850 ,862	3.39

1 As disclosed in t h e last notic e lodged wit h the ASX b y the substa n tial shareh o lder

2 The percentage set out in the notice lod g ed with the ASX is bas e d on the total issued capital of the C ompany at t he date of int e rest.

	O ptions	over
	ordina ry	Ord inary
	share s	sh ares
		% of total
		opt ions
	Number held	iss ued
TODD CAMERON BUCKINGH AM	16,667 ,000	39.57

Voting rights Ordin a ry shares Subject to any rig h ts or restri c tions for the time being a ttached to a ny class or classes at g e neral meet i ngs of shar e holders or cla s ses of shar e holders:

a ) each sha r eholder is e n titled to vot e and may v o te in perso n or by prox y , attorney o r representa t ive; b ) on a sho w of hands , every per s on present who is a s h areholder o r a proxy, attorney or representat i ve of a sharehol d er has one v ote; and

c ) on a poll, every pers o n present w h o is a shar e holder or a proxy, attor n ey or representative of a shareholder shall, in respe c t of each f u lly paid share held, o r in respect of which h e/she has a ppointed a proxy, att o rney or represent a tive, is enti t led to one v o te per shar e held.

Optio n s Optio n s do not ca r ry any voting rights.

TopBetta Holdings Limited Shareholder information 30 June 2017

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Restricted securities

Class Ordin Secur Class Ordin Ordin Share ary Sharess ities subjec ary Sharess ary Sharess Buy-Backs ubject to es t to volunta ubject to es ubject to es crow ry escrow crow crow Expiry date 11 Decembe Expiry date 11 Decembe 23 May 2018 r 2017 r 2017	Num of s 13,5 Num of s 9,3 2,5 ber hares 64,451 ber hares 13,712 00,000
	11,8 13,712

Ther e is no curre n t on-market buy-back s c heme.

AI assistant

BETMAKERS TECHNOLOGY GROUP LTD — Annual Report 2017

64512_rns_2017-08-15_216adf55-b0e9-4005-bad9-aacaa500a258.pdf

TopBetta Holdings Limited ABN 21 164 521 395

TopBetta Holdings Limited Managing Director and Chief Executive Officer's report 30 June 2017

Dividends

Review of operations

Retai l division

TopBetta Holdings Limited Directors' report 30 June 2017

TopBetta Holdings Limited Directors' report 30 June 2017

Meetings of directors

Exec u tive remun e ration

Details of remuneration

TopBetta Holdings Limited Directors' report 30 June 2017

Share-based compensation

Optio n s granted carry no dividend or votin g rights.

Additional disclosures relating to KMP

Shar e holding

Optio n holding

This concludes the remuneration report, which has been audited.

Proceedings on behalf of the company

Non-audit services

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

PKF

TopBetta Holdings Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2017

TopBetta Holdings Limited Statement of changes in equity For the year ended 30 June 2017

TopBetta Holdings Limited Statement of cash flows For the year ended 30 June 2017

Note 1. General information

Note 2. Significant accounting policies

Going concern

Basis of preparation

Histo r ical cost co n vention

Note 2. Significant accounting policies (continued)

Principles of consolidation

Fantasy wagering

Wag e ring

Note 2. Significant accounting policies (continued)

Leases

Impairment of financial assets

Note 2. Significant accounting policies (continued)

AAS B 9 Financial Instruments

Note 2. Significant accounting policies (continued)

AAS B 16 Leases

Note 3. Critical accounting judgements, estimates and assumptions

Shar e -based pay m ent transa c tions

Good w ill

Inco m e tax

Note 4. Operating segments

Oper a ting segme n t informatio n

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

Note 4. Operating segments (continued

Note 5. Other income

Acco u nting policy for other in c ome

Note 5. Other income (continued)

Interest

Othe r income

Note 6. Expenses

TopBetta Holdings Limited Notes to the financial statements 30 June 2017

Note 7. Income tax benefit

Acco u nting policy for income t ax

Note 7. Income tax benefit (continued)

Note 8. Current assets - cash and cash equivalents

Note 9. Current assets - trade and other receivables

Note 10. Non-current assets - investments accounted for using the equity method

Note 10. Non-current assets - investments accounted for using the equity method (continued)

Note 11. Non-current assets - property, plant and equipment

Note 11. Non-current assets - property, plant and equipment (continued)

Reco n ciliations

Note 12. Non-current assets - intangibles

Note 12. Non-current assets - intangibles (continued)

Note 12. Non-current assets - intangibles (continued)

Sens i tivity analys i s

Bran d s

Note 13. Non-current assets - deferred tax

Note 14. Current liabilities - trade and other payables

Acco u nting policy for short-te rm employee benefits

Note 16. Non-current liabilities - employee benefits

Acco u nting policy for long-ter m employee b enefits

Note 17. Equity - issued capital (continued)

Move m ents in or d inary share c apital

BETMAKERS TECHNOLOGY GROUP LTD Annual Report 2017