RAS TECHNOLOGY HOLDINGS LIMITED — Annual Report 2021

Nov 18, 2021

ABN: 40 093 360 108

Financial Statements

For the Year Ended 30 June 2021

ABN: 40 093 360 108

Contents

For the Year Ended 30 June 2021

Financial Statements
Directors' Report	1
Auditor's Independence Declaration under Section 307C of the Corporations Act 2001	4
Statement of Profit or Loss and Other Comprehensive Income	5
Statement of Financial Position	6
Statement of Changes in Equity	7
Statement of Cash Flows	8
Notes to the Financial Statements	9
Directors' Declaration	37
Independent Audit Report	38

Page

ABN: 40 093 360 108

Directors' Report For the Year Ended 30 June 2021

The directors present their report on Racing & Sports Pty Ltd for the financial year ended 30 June 2021.

1. General information

Directors

The names of the directors in office at any time during, or since the end of, the year are:

Names

Robert Ignatius Vilkaitis Gary Alexander Crispe

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Principal activities and significant changes in nature of activities

The principal activities of Racing & Sports Pty Ltd during the financial year were:

The provision of B2B and B2C SaaS (Software as a Service) and DaaS (Data as a Service) solutions to the Racing and Sports Wagering industries on a global basis.

There were no significant changes in the nature of Racing & Sports Pty Ltd's principal activities during the financial year.

2. Operating results and review of operations for the year

Operating results

The profit of the Company amounted to $ 1,580,592, after providing for income tax.

3. Financial review

Financial position

The net assets of Racing & Sports Pty Ltd have increased by $1,130,592 from $1,415,504 at 30 June 2020 to $2,546,096 at 30 June 2021. This increase is largely due to the following factors:

Expansion of the client base for Data Services and the commercialisation of the Wagering Technology platform driving up contracted recurring revenue, offset by the declared dividend.

4. Other items

Significant changes in state of affairs

There have been no significant changes in the state of affairs of the Company during the year.

ABN: 40 093 360 108

Directors' Report For the Year Ended 30 June 2021

4. Other items

Dividends paid or recommended

Interim unfranked dividend paid	$150,000
Final unfranked dividend of $300 per share declared in the 2021 financial year	$300,000
2020 final franked dividend declared in the prior year	$10,000
2020 final unfranked dividend declared in the prior year	$563,445

Events after the reporting date

No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.

Future developments and results

Likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Company.

Environmental issues

The Company's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory of Australia.

Company secretary

The following person held the position of Company secretary at the end of the financial year:

Gary Crispe (Bachelor Technology (Civil). Bachelor Economics, MIEAust, CPEng (Rtd)) has been the Company's Secretary since 2000.

Meetings of directors

During the financial year, 2 meeting of directors were held. Attendances by each director during the year were as follows:

Directors'Meetings
Numbereligible toattend	Numberattended

Robert Ignatius Vilkaitis 2 2 Gary Alexander Crispe 2 2

6 Phipps Close Deakin ACT 2600 PO Box 322 Curtin ACT 2605

T 02 6282 5999 F 02 6282 5933 E info@hardwickes.com.au

www.hardwickes.com.au

Hardwickes ABN 35 973 938 183

Hardwickes Partners Pty Ltd ABN 21 008 401 536

Liability limited by a scheme approved under Professional Standards Legislation

Racing & Sports Pty Ltd

ABN: 40 093 360 108

Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 to the Directors of Racing & Sports Pty Ltd

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021, there have been:

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

Hardwickes Chartered Accountants

Bhaumik Bumia CA Partner

20 August 2021

Canberra

ABN: 40 093 360 108

Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2021

		2021	2020
	Note	$	$
Revenue from contracts with customers	4	5,290,485	3,646,357
Cost of sales	5	(96,134)	(65,202)
Gross profit		5,194,351	3,581,155
Other income	4	643,838	574,593
Administrative expenses		(201,285)	(107,888)
Advertising and promotions		(250,340)	(175,500)
Amortisation expense - Intangible assets	12(a)	(471,704)	(313,600)
Depreciation expense- Property, plant and equipment	11(a)	(67,315)	(66,225)
Depreciation expense - Right-of-use assets		(136,649)	(124,445)
Employee benefit expenses		(969,452)	(1,158,744)
Finance costs		(47,521)	(19,831)
Motor vehicle expenses		(15,322)	(21,630)
Professional expenses		(1,220,912)	(1,030,065)
Property expenses		(99,879)	(82,866)
Technology expenses		(113,069)	(148,056)
Travel expenses		14,582	(170,974)
Profit before income tax		2,259,323	735,924
Income tax expense	6	(678,731)	(327,543)
Profit for the year		1,580,592	408,381
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year		1,580,592	408,381

The accompanying notes form part of these financial statements.

ABN: 40 093 360 108

Statement of Financial Position

As At 30 June 2021

		2021	2020
	Note	$	$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	7	2,048,668	948,885
Trade and other receivables	8	386,336	728,950
Loans and advances	9	-	5,378
Other assets	10	36,276	21,140
TOTAL CURRENT ASSETS		2,471,280	1,704,353
NON-CURRENT ASSETS
Loans and advances	9	-	12,526
Property, plant and equipment	11	249,395	288,882
Deferred tax assets	21	201,130	145,612
Intangible assets	12	2,087,949	1,469,687
Right-of-use assets	13	459,253	332,575
TOTAL NON-CURRENT ASSETS		2,997,727	2,249,282
TOTAL ASSETS		5,469,007	3,953,635
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	15	1,709,195	1,366,830
Borrowings	16	21,428	45,995
Current tax liabilities	21	394	360,211
Contract liabilities	17	210,218	-
Employee benefits	18	276,300	207,872
Lease liabilities	14	98,914	64,477
TOTAL CURRENT LIABILITIES		2,316,449	2,045,385
NON-CURRENT LIABILITIES
Borrowings	16	142,421	163,849
Deferred tax liabilities	21	45,546	24,243
Contract liabilities	17	47,818	-
Employee benefits	18	2,937	20,539
Lease liabilities	14	367,740	284,115
TOTAL NON-CURRENT LIABILITIES		606,462	492,746
TOTAL LIABILITIES		2,922,911	2,538,131
NET ASSETS		2,546,096	1,415,504
EQUITY
Issued capital	19	50,925	50,925
Retained earnings		2,495,171	1,364,579
TOTAL EQUITY		2,546,096	1,415,504

The accompanying notes form part of these financial statements.

ABN: 40 093 360 108

Statement of Changes in Equity

For the Year Ended 30 June 2021

2021

		IssuedCapital	RetainedEarnings	Total
	Note	$	$	$
Balance at 1 July 2020		50,925	1,364,579	1,415,504
Profit for the year		-	1,580,592	1,580,592
Dividends paid or provided for	22	-	(450,000)	(450,000)
Balance at 30 June 2021		50,925	2,495,171	2,546,096

2020

		IssuedCapital	RetainedEarnings	Total
	Note	$	$	$
Balance at 1 July 2019		50,925	1,529,643	1,580,568
Profit for the year		-	408,381	408,381
Dividends paid or provided for	22	-	(573,445)	(573,445)
Balance at 30 June 2020		50,925	1,364,579	1,415,504

ABN: 40 093 360 108

Statement of Cash Flows

For the Year Ended 30 June 2021

		2021	2020
	Note	$	$
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers		5,702,261	4,083,588
Payments to suppliers and employees		(2,961,490)	(3,549,798)
Interest received		224	663
Interest paid		(47,521)	(19,831)
Income taxes paid/(refund)		-	112,643
Receipt from Government subsidy - cashflow boost and jobkeeper		252,500	92,000
R&D tax offset received		-	400,447
Net cash provided by operating activities	26	2,945,974	1,119,712
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for intangible asset		(1,089,966)	(843,559)
Purchase of property, plant and equipment		(27,828)	(14,152)
Net cash (used in) investing activities		(1,117,794)	(857,711)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans to directors, managers and employees		17,904	70,001
Repayment of borrowings		(61,355)	(43,619)
Dividends paid by parent entity		(525,054)	(273,469)
Principal repayment of lease liabilities		(159,892)	(146,768)
Net cash (used in) financing activities		(728,397)	(393,855)
Net (decrease) in cash and cash equivalents held		1,099,783	(131,854)
Cash and cash equivalents at beginning of year		948,885	1,080,739
Cash and cash equivalents at end of financial year	7	2,048,668	948,885

The accompanying notes form part of these financial statements.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

The financial report covers Racing & Sports Pty Ltd as an individual entity. Racing & Sports Pty Ltd is a for-profit Company limited by shares, incorporated and domiciled in Australia.

The functional and presentation currency of Racing & Sports Pty Ltd is Australian dollars.

Comparatives are consistent with prior years, unless otherwise stated.

1 Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards and the Corporations Act 2001.

These financial statements comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated.

2 Summary of Significant Accounting Policies

(a) Revenue and other income

Revenue from contracts with customers

The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Revenue is recognised by applying a five-step model as follows:

• 1. Identify the contract with the customer
• 1. Identify the performance obligations
• 1. Determine the transaction price
• 1. Allocate the transaction price to the performance obligations
• 1. Recognise revenue as and when control of the performance obligations is transferred

Generally the timing of the payment for sale of goods and rendering of services corresponds closely to the timing of satisfaction of the performance obligations, however where there is a difference, it will result in the recognition of a receivable, contract asset or contract liability.

None of the revenue streams of the Company have any significant financing terms as there is less than 12 months between receipt of funds and satisfaction of performance obligations.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(a) Revenue and other income

Statement of financial position balances relating to revenue recognition

Contract assets and liabilities

Where the amounts billed to customers are based on the achievement of various milestones established in the contract, the amounts recognised as revenue in a given period do not necessarily coincide with the amounts billed to or certified by the customer.

When a performance obligation is satisfied by transferring a promised good or service to the customer before the customer pays consideration or the before payment is due, the Company presents the contract as a contract asset, unless the Company's rights to that amount of consideration are unconditional, in which case the Company recognises a receivable.

When an amount of consideration is received from a customer prior to the entity transferring a good or service to the customer, the Company presents the contract as a contract liability.

Grant revenue - R&D tax incentive

The grant revenue from R&D tax incentive are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis

Other income

Other income is recognised on an accruals basis when the Company is entitled to it.

(b) Income Tax

The tax expense recognised in the statement of profit or loss and other comprehensive income comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is not provided for the following:

• The initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
• Taxable temporary differences arising on the initial recognition of goodwill.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(b) Income Tax

• Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilised.

Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively.

(c) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

(d) Goods and services tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from or payable to the ATO, are presented as operating cash flows included in receipts from customers or payments to suppliers.

(e) Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment.

Plant and equipment

Plant and equipment are measured using the cost model.

Depreciation

Property, plant and equipment is depreciated on a reducing balance basis over the assets useful life to the Company, commencing when the asset is ready for use.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(e) Property, plant and equipment

Depreciation

Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.

The depreciation rates used for each class of depreciable asset are shown below:

Fixed asset class	Depreciation rate
Plant and equipment	10% - 66.67%
Leased motor vehicles	25%
Leasehold improvements	2.5%
General pool	30%

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

(f) Financial instruments

Financial instruments are recognised initially on the date that the Company becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification

On initial recognition, the Company classifies its financial assets into the following categories, those measured at:

• amortised cost
• fair value through profit or loss FVTPL
• fair value through other comprehensive income equity instrument (FVOCI equity)

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(f) Financial instruments

Financial assets

Amortised cost

Assets measured at amortised cost are financial assets where:

• the business model is to hold assets to collect contractual cash flows; and
• the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on the principal amount outstanding.

The Company's financial assets measured at amortised cost comprise trade and other receivables, loans and advances and cash and cash equivalents in the statement of financial position.

Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment.

Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss.

Fair value through other comprehensive income

Equity instruments

The Company has no strategic investments in listed and unlisted entities over which are they do not have significant influence nor control.

Financial assets through profit or loss

All financial assets not classified as measured at amortised cost or fair value through other comprehensive income as described above are measured at FVTPL.

The Company does not hold any assets that fall into this category.

Impairment of financial assets

Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:

• financial assets measured at amortised cost

When determining whether the credit risk of a financial assets has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company's historical experience and informed credit assessment and including forward looking information.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(f) Financial instruments

Financial assets

The Company uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk.

The Company uses the presumption that a financial asset is in default when:

• the other party is unlikely to pay its credit obligations to the Company in full, without recourse to the Company to actions such as realising security (if any is held); or
• the financial assets is more than 90 days past due.

Credit losses are measured as the present value of the difference between the cash flows due to the Company in accordance with the contract and the cash flows expected to be received. This is applied using a probability weighted approach.

Trade receivables and contract assets

Impairment of trade receivables and contract assets have been determined using the simplified approach in AASB 9 which uses an estimation of lifetime expected credit losses. The Company has determined the probability of non-payment of the receivable and contract asset and multiplied this by the amount of the expected loss arising from default.

The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount is written off against the associated allowance.

Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit or loss.

Other financial assets measured at amortised cost

Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. Where the asset has experienced significant increase in credit risk then the lifetime losses are estimated and recognised.

Financial liabilities

The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method.

The financial liabilities of the Company comprise trade payables, bank and other loans and lease liabilities.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(g) Impairment of non-financial assets

At the end of each reporting period the Company determines whether there is an evidence of an impairment indicator for non-financial assets.

Where an indicator exists and regardless for indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.

Where assets do not operate independently of other assets, the recoverable amount of the relevant cashgenerating unit (CGU) is estimated.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cashgenerating unit.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss.

(h) Intangibles

Database and software development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development costs subject to an annual impairments test and carried at cost and accumulated impairment losses.

Development costs that become commercially ready to deploy have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project which is 4.74 years.

Amortisation

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use.

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

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(i) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Bank overdrafts also form part of cash equivalents for the purpose of the statement of cash flows and are presented within current liabilities on the statement of financial position.

(j) Leases

At inception of a contract, the Company assesses whether a lease exists - i.e. does the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration.

This involves an assessment of whether:

• The contract involves the use of an identified asset this may be explicitly or implicitly identified within the agreement. If the supplier has a substantive substitution right then there is no identified asset.
• The Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.
• The Company has the right to direct the use of the asset i.e. decision making rights in relation to changing how and for what purpose the asset is used.

At the lease commencement, the Company recognises a right-of-use asset and associated lease liability for the lease term. The lease term includes extension periods where the Company believes it is reasonably certain that the option will be exercised.

The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the lease liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any lease incentives received.

The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment in accordance with the impairment of assets accounting policy.

The lease liability is initially measured at the present value of the remaining lease payments at the commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be readily determined then the Company's incremental borrowing rate is used.

Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest rate method. The lease liability is remeasured whether there is a lease modification, change in estimate of the lease term or index upon which the lease payments are based (e.g. CPI) or a change in the Company's assessment of lease term.

Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

2 Summary of Significant Accounting Policies

(k) Employee benefits

Provision is made for the Company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled .

Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on high quality corporate bond rates incorporating bonds rated AAA or AA by credit agencies, with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.

(l) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options which vest immediately are recognised as a deduction from equity, net of any tax effects.

(m) New Accounting Standards and Interpretations

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Company has decided not to early adopt these Standards. The following table summarises those future requirements, and their impact on the Company where the standard is relevant:

Standard Name	Effective datefor entity	Requirements	Impact
AASB 2018-7 Amendmentsto Australian AccountingStandards – Definition ofMaterial	1 July 2021	The amendments refine the definition ofmaterial in AASB 101 to clarify the definitionof material and its application by improvingthe wording and aligning the definitionacross AASB Standards and otherpublications. The amendment also includessome supporting requirements in AASB 101in the definition to give it more prominenceand clarifies the explanation accompanyingthe definition of material.	Unlikely to be anyimpact on thereported financialposition,performance orcash flows in thefinancialstatements.
AASB 2020-1 Amendmentsto Australian AccountingStandards – Classificationsof Liabilities as Current orNon-Current	1 July 2022	This Standard amends AASB 101 to clarifyrequirements for the presentation ofliabilities in the statement of financialposition as current or non-current.For example, the amendments clarify that aliability is classified as non-current if anentity has the right at the end of thereporting period to defer settlement of theliability for at least 12 months after thereporting period. The meaning of settlementof a liability is also clarified.	Minor impactexpected butentities shouldconsider theappropriateclassification ofliabilities as currentor non-current.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

3 Critical Accounting Estimates and Judgments

The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates.

The significant estimates and judgements made have been described below.

Key estimates - impairment of property, plant and equipment

The Company assesses impairment at the end of each reporting period by evaluating conditions specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

Key estimates - fair value of financial instruments

The Company has certain financial assets and liabilities which are measured at fair value. Where fair value has not able to be determined based on quoted price, a valuation model has been used. The inputs to these models are observable, where possible, however these techniques involve significant estimates and therefore fair value of the instruments could be affected by changes in these assumptions and inputs.

Key estimates - receivables

The receivables at reporting date have been reviewed to determine whether there is any objective evidence that any of the receivables are impaired. An impairment provision is included for any receivable where the entire balance is not considered collectible. The impairment provision is based on the best information at the reporting date.

Key judgement - Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Key judgement - Database development

Included within intangible assets at the end of the reporting period is Database development which has a net carrying value of $1,553,245 (2020: $1,069,687). The database has been active for over 20 years and the data is still used in the predictive modelling and analytical algorithms.

The directors have taken the position that a reasonable useful life for the database is twice the average tenure of an active racer which has more than one race in total. Based on this definition, directors believe that the useful life of database is 4.74 years.

The entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value

less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions .

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

4 Revenue and Other Income

		2021	2020
		$	$
	Revenue from contracts with customers
	- Data services	4,231,950	3,316,620
	- Technology Solutions	518,491	-
	- Digital & Media	429,887	300,837
	- Other Services	110,157	28,900
		5,290,485	3,646,357
	Other income
	- Government grant - R&D tax incentive	354,112	409,635
	- Government subsidy - Cashflow boost and jobkeeper	240,000	104,500
	- Other income	32,192	60,458
	- Gain on the termination of the storage - Right of use	17,534	-
		643,838	574,593
	Total revenue and other income	5,934,323	4,220,950
5	Cost of sales
		2021	2020
		$	$
	Cost of sales	-	-
	Direct wages	14,090	27,776
	Internet Subscription - Amazon	82,044	37,425
		96,134	65,201
6	Income Tax Expense
	(a) The major components of tax expense (income) comprise:
		2021	2020
		$	$
	Current tax expense	712,947	359,816

Deferred tax expense (34,216) (32,273)

678,731 327,543

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

6 Income Tax Expense

(b) Reconciliation of income tax to accounting profit:
		2021	2020
		$	$
Prima facie tax payable on profit from ordinaryactivities before income tax at 26% (2020: 27.5%)		587,424	202,379
Add:
Tax effect of:
- non-deductible expenses		177,705	251,564
		765,129	453,943
Less:
Tax effect of:
- non-assessable income		86,398	126,400
Income tax expense		678,731	327,543
Cash and Cash Equivalents
		2021	2020
	Note	$	$
Cash at bank and in hand		2,048,668	948,885

Reconciliation of cash

Cash and Cash equivalents reported in the statement of cash flows are reconciled to the equivalent items in the statement of financial position as follows:

		2021	2020
		$	$
Cash and cash equivalents		2,048,668	948,885
Balance as per statement of cash flows		2,048,668	948,885
8Trade and Other Receivables
		2021	2020
	Note	$	$
CURRENT
Trade receivables	20	299,913	113,360
R&D tax incentive receivable		86,423	615,575
Other receivables		-	15
Total current trade and other receivables		386,336	728,950

The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements.

20 2,048,668 948,885

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

9 Loans and Advances

		Note	2021$	2020$
	CURRENT
	Loans to directors, managers and employees		-	5,378
		20	-	5,378
			2021$	2020$
	NON-CURRENT
	Loans to directors, managers and employees	20	-	12,526
			-	12,526
10	Other assets
			2021	2020
			$	$
	CURRENT
	Prepayments		36,276	8,640
	Accrued income		-	12,500
			36,276	21,140
11	Property, plant and equipment
			2021	2020
			$	$
	PLANT AND EQUIPMENT
	Plant and equipment
	At cost		160,558	132,731
	Accumulated depreciation		(112,902)	(95,553)
	Total plant and equipment		47,656	37,178
	Leased motor vehicles
	At costAccumulated depreciation		289,320(148,277)	289,320(101,262)
	Total leased motor vehicles
			141,043	188,058
	Leasehold improvementsAt cost		69,427	69,427
	Accumulated amortisation		(12,080)	(10,566)
	Total leasehold improvements		57,347	58,861
	General pool
	At written down value		3,349	4,785
	Total general pool		3,349	4,785
	Total property, plant and equipment		249,395	288,882

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

11 Property, plant and equipment

(a) Movements in carrying amounts of property, plant and equipment

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

	Plant andEquipment$	Leased motorvehicles$	LeaseholdImprovements$	General pool$	Total$
Year ended 30 June 2021
Balance at the beginning of year	37,178	188,058	58,861	4,785	288,882
Additions	27,828	-	-	-	27,828
Depreciation expense	(17,350)	(47,015)	(1,514)	(1,436)	(67,315)
Balance at the end of the year	47,656	141,043	57,347	3,349	249,395

	Plant andEquipment	Leased motorvehicles	LeaseholdImprovements	General pool	Total
	$	$	$	$	$
Year ended 30 June 2020
Balance at the beginning of year	42,425	88,919	60,401	6,836	198,581
Additions	14,152	192,664	-	-	206,816
Disposals	-	(50,290)	-	-	(50,290)
Depreciation expense	(19,399)	(43,235)	(1,540)	(2,051)	(66,225)
Balance at the end of the year	37,178	188,058	58,861	4,785	288,882

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

12 Intangible Assets

	2021	2020
	$	$
Database development
At cost	2,713,506	1,758,244
Accumulated amortisation and impairment	(1,160,261)	(688,557)
Net carrying value	1,553,245	1,069,687
Software - work in progress
At cost	534,704	400,000
Net carrying value	534,704	400,000
Total Intangible assets	2,087,949	1,469,687

(a) Movements in carrying amounts of intangible assets

	Software -work inprogress$	Databasedevelopment$	Total$
Year ended 30 June 2021
Balance at the beginning of the year	400,000	1,069,687	1,469,687
Additions	134,704	955,262	1,089,966
Amortisation	-	(471,704)	(471,704)
Closing value at 30 June 2021	534,704	1,553,245	2,087,949

	Software -work inprogress$	Databasedevelopment$	Total$
Year ended 30 June 2020
Balance at the beginning of the year	400,000	839,728	1,239,728
Additions	-	543,559	543,559
Amortisation	-	(313,600)	(313,600)
Closing value at 30 June 2020	400,000	1,069,687	1,469,687

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

13 Right-of-use assets

	Officepremises	Storagefacility	Total
	$	$	$
Year ended 30 June 2021
At cost	529,907	-	529,907
Accumulated depreciation	(70,654)	-	(70,654)
Balance at end of year	459,253	-	459,253

	Officepremises$	Storagefacility$	Total$
Year ended 30 June 2020
At cost	204,576	367,697	572,273
Accumulated depreciation	(175,351)	(64,347)	(239,698)
Balance at end of year	29,225	303,350	332,575

(a) Movements in carrying amounts of right of use assets

	Officepremises	Storagefacility	Total
	$	$	$
Year ended 30 June 2021
Balance at beginning of year	29,225	303,350	332,575
Depreciation charge	(99,879)	(36,770)	(136,649)
Additions to right-of-use assets	529,907	-	529,907
Reductions in right-of-use assets due totermination of lease	-	(266,580)	(266,580)
Balance at end of year	459,253	-	459,253

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

14 Lease Liabilities

			2021$	2020$
	CURRENTLease liabilities		98,914	64,477
			98,914	64,477
			2021	2020
			$	$
	NON-CURRENT
	Lease liabilities		367,740	284,115
			367,740	284,115
15	Trade and Other Payables
			2021	2020
		Note	$	$
	CURRENT
	Trade payables	20	87,414	-
	Accrued expense		519,478	374,988
	Credit card liability		588	184
	Deferred grant revenue - R&D tax incentive		746,382	556,885
	Dividend payable		300,020	375,074
	GST payable		19,245	38,399
	Other payables		36,068	21,300
			1,709,195	1,366,830

Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

16 Borrowings

	Note	2021$	2020$
CURRENTChattel mortgage		21,428	45,995
Total current borrowings		21,428	45,995
		2021$	2020$
NON-CURRENTChattel mortgage		142,421	163,849
Total non-current borrowings		142,421	163,849
Total borrowings	20	163,849	209,844

Summary of borrowings

Chattel mortgages are secured by the underlying leased assets.

Defaults and breaches

During the current and prior year, there were no defaults or breaches on any of the loans.

17 Contract Liabilities

	2021	2020
	$	$
CURRENT
Amounts received in advance	210,218	-
Total	210,218	-
	2021	2020
	$	$
NON-CURRENT
Amounts received in advance	47,818	-
Total	47,818	-

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

18 Employee Benefits

		2021	2020
		$	$
	CURRENT
	Provision for long service leave	123,407	80,999
	Provision for annual leave	152,893	126,873
		276,300	207,872
		2021	2020
		$	$
	NON-CURRENT
	Provision for long service leave	2,937	20,539
		2,937	20,539
19	Issued Capital	2021	2020
		$	$
	1,000 (2020: 1,000) Ordinary shares	50,925	50,925
	Total	50,925	50,925

(a) Ordinary shares

The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote.

The Company does not have authorised capital or par value in respect of its shares.

(b) Capital Management

The key objectives of the Company when managing capital is to safeguard its ability to continue as a going concern and maintain optimal benefits to stakeholders. The Company defines capital as its equity and net debt.

There has been no change to capital risk management policies during the year.

The Company manages its capital structure and makes funding decisions based on the prevailing economic environment and has a number of tools available to manage capital risk. These include maintaining a diversified debt portfolio, the ability to adjust the size and timing of dividends paid to shareholders and the issue of new shares.

The Board monitors a range of financial metrics including return on capital employed and gearing ratios. A key objective of the Company's capital risk management is to maintain compliance with the covenants attached to the Company's debts. Throughout the year, the Company has complied with these covenants.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

20 Financial Risk Management

The Company is exposed to a variety of financial risks through its use of financial instruments.

The Company's overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets.

The most significant financial risks to which the Company is exposed to are described below:

Specific risks

• Liquidity risk
• Credit risk
• Market risk interest rate risk

Financial instruments used

The principal categories of financial instrument used by the Company are:

• Trade receivables
• Cash at bank
• Trade and other payables
• Finance lease liabilities
• Floating rate bank loans

		2021	2020
	Note	$	$
Financial assets
Held at amortised cost
Cash and cash equivalents	7	2,048,668	948,885
Loans and advances	9	-	17,904
Trade and other receivables	8	299,913	113,360
Total financial assets		2,348,581	1,080,149
Financial liabilities
Financial liabilities at fair value
Borrowings	16	163,849	209,844
Trade and other payables	15	87,414	-
Total financial liabilities		251,263	209,844

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

20 Financial Risk Management

Objectives, policies and processes

The Board of Directors have overall responsibility for the establishment of Racing & Sports Pty Ltd's financial risk management framework. This includes the development of policies covering specific areas such as interest rate risk, liquidity risk and credit risk.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Racing & Sports Pty Ltd's activities.

The day-to-day risk management is carried out by Racing & Sports Pty Ltd's finance function under policies and objectives which have been approved by the Board of Directors. The Chief Financial Officer has been delegated the authority for designing and implementing processes which follow the objectives and policies. This includes monitoring the levels of exposure to interest rate and foreign exchange rate risk and assessment of market forecasts for interest rate and foreign exchange movements.

The Board of Directors receives monthly reports which provide details of the effectiveness of the processes and policies in place.

Mitigation strategies for specific risks faced are described below:

Liquidity risk

Liquidity risk arises from the Company's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due.

The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities as and when they fall due. The Company maintains cash and marketable securities to meet its liquidity requirements for up to 30 day periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.

The Company manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as cash-outflows due in day-to-day business.

Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are identified monthly.

At the reporting date, these reports indicate that the Company expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances and will not need to draw down any of the financing facilities.

Financial guarantee liabilities are treated as payable on demand since Racing & Sports Pty Ltd has no control over the timing of any potential settlement of the liabilities.

The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the statement of financial position due to the effect of discounting.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

20 Financial Risk Management

The table below reflects the undiscounted contractual maturity analysis for financial liabilities (excluding lease liabilities for the current year - refer to note 13).

Financial liability maturity analysis - Non-derivative

	Within 1 Year		1 to 5 Years		Total
	2021	2020	2021	2020	2021	2020
	$	$	$	$	$	$
Financial liabilities due for payment
Trade and other payables	87,414	-	-	-	87,414	-
Borrowings (excluding lease liabilities)	21,428	45,995	142,421	163,849	163,849	209,844
Total contractual outflows	108,842	45,995	142,421	163,849	251,263	209,844

The timing of expected outflows is not expected to be materially different from contracted cashflows.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company.

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding receivables and committed transactions.

The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

Trade receivables and contract assets

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The risk management committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company review includes external ratings, if they are available, financial statements, credit agency information and industry information. Credit limits are established for each customer and the utilisation of credit limits by customers is regularly monitored by line management. Customers who subsequently fail to meet their credit terms are required to make purchases on a prepayment basis until creditworthiness can be re-established.

The Board receives monthly reports summarising the turnover, trade receivables balance and aging profile of each of the key customers individually and the Company's other customers analysed by industry sector as well as a list of customers currently transacting on a prepayment basis or who have balances in excess of their credit limits.

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which the customers operate.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

20 Financial Risk Management

Credit risk

Management considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due.

The Company has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

(i) Interest rate risk

The Company is exposed to interest rate risk when funds are borrowed at floating and fixed rates. Borrowings issued at fixed rates expose the Company to fair value interest rate risk.

The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. Long-term borrowings are therefore usually at fixed rates. At the reporting date, the Company has no exposure to changes in market interest rates through bank borrowings.

21 Tax assets and liabilities

(a) Current Tax Liability

	2021	2020
	$	$
Income tax payable	394	360,211
Current tax liabilities	394	360,211

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

21 Tax assets and liabilities

(b) Deferred Tax Assets

	OpeningBalance	Charged toIncome	ClosingBalance
	$	$	$
Deferred tax assets
Property, plant and equipment
- impairment	-	3,079	3,079
Provisions - employee benefits	38,343	1,069	39,412
Superannuation payable	7,414	(7,414)	-
Accruals	65,997	37,124	103,121
Balance at 30 June 2020	111,754	33,858	145,612
Property, plant and equipment
- depreciation	3,079	4,736	7,815
Provisions - employee benefits	39,412	13,215	52,627
Accruals	103,121	37,567	140,688
Balance at 30 June 2021	145,612	55,518	201,130

(c) Deferred Tax Liabilities

	OpeningBalance	Charged toIncome	ClosingBalance
	$	$	$
Deferred tax liability
Property, plant and equipment
- depreciation	5,268	(5,268)	-
Intangible assets - amortisation	17,387	1,042	18,429
Accrued income	-	3,438	3,438
Prepayment	-	2,376	2,376
Balance at 30 June 2020	22,655	1,588	24,243
Intangible assets - amortisation	18,429	23,287	41,716
Accrued income	3,438	(3,250)	188
Prepayment	2,376	1,266	3,642
Balance at 30 June 2021	24,243	21,303	45,546

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

22 Dividends

	2021	2020
	$	$
a.The following dividends were declared and paid:
Final franked ordinary dividend of Nil (2020: $10) cents per share	-	10,000
Unfranked dividend of $450 (2020: $563) cents per share	450,000	563,445
Total	450,000	573,445

Franked dividends declared or paid during the year were franked at the tax rate of 26.00%.

Franking account

The above available balance is based on the dividend franking account at year-end adjusted for:

• (a) Franking credits that will arise from the payment of the current tax liabilities;
• (b) Franking debits that will arise from the payment of dividends recognised as a liability at the year end;
• (c) Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year.

The impact on the franking credit of the dividends proposed after the end of the reporting period is to reduce it by $ - (2020: $ 47,386).

The ability to use the franking credits is dependent upon the Company's future ability to declare dividends.

23 Key Management Personnel Remuneration

The totals of remuneration paid to the key management personnel of Racing & Sports Pty Ltd during the year are as follows:

		2021	2020
		$	$
	Short-term employee benefits	193,125	249,999
	Post-employment benefits	18,347	23,750
		211,472	273,749
	Payment to management company to professional services	240,205	195,144
		240,205	195,144
	Total key management personnel remuneration	451,677	468,893
24	Auditors' Remuneration	2021	2020
		$	$
	Remuneration of the auditor Hardwickes CharteredAccountants, for:)
	- auditing or reviewing the financial statements	15,000	15,000
	Total	15,000	15,000

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

25 Related Parties

The Company's main related parties are as follows:

Key management personnel - refer to Note 23.

Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members.

(a) Transactions with related parties

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

	Purchases$	Other$
Entities with control, joint control or significant influenceover the entity
Rental payments - Office and storage to Racing and SportsProperty Trust1	186,291	-
Rental payments - CEO1	22,061	-
Other related partiesEmployment remuneration of related parties - Corporateservices2	381,254	-
1 The lease of 2 storage facility have been terminated as at 30 June 2021

2Five family members are employed, they are classifed as associates.

(b) Loans to related parties

	Openingbalance	Closingbalance$
	$
Loans to KMP1
2021	-	-
2020	63,952	-
Loans to related parties - Motor vehicle loan2
2021	17,904	-
2020	23,558	17,904

1 KMP loans are short term loans which have been subsequently cleared in the 2020 financial year. No interest is paid on KMP loans

2 A seven year motor vehicle loan to staff. Interest is charged @ 4.94%.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

26 Cash Flow Information

Reconciliation of result for the year to cashflows from operating activities

	2021	2020
	$	$
Profit for the year	1,580,592	408,381
Cash flows excluded from profit attributable to operating activities
- Finance costs	47,521	19,831
Non-cash flows in profit:
- amortisation - intangible assets	471,704	313,600
- depreciation - property, plant and equipment	67,315	66,225
- depreciation - right of use	136,649	124,445
- net gain on termination of lease	(17,534)	-
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables	(186,538)	121,906
- (increase)/decrease in R&D tax incentive receivable	(543,610)	(215,128)
- (increase)/decrease in other assets	(15,136)	(21,140)
- (increase)/decrease in current tax asset	-	71,700
- (increase)/decrease in deferred tax asset	(55,518)	(33,858)
- increase/(decrease) in R&D deferred grant revenue	189,497	205,941
- increase/(decrease) in trade and other payables	227,922	52,020
- (increase)/decrease in contract liabilities	258,036	-
- increase/(decrease) in income taxes payable	712,945	313
- increase/(decrease) in deferred tax liability	21,303	1,588
- increase/(decrease) in employee benefits	50,826	3,888
Cashflows from operations	2,945,974	1,119,712

(a) Non-cash financing and investing activities

During the year ended 30 June 2020, the company acquired a motor vehicle valued at $192,664 using a chattel mortgage. This acquisition is not reflected in the statement of cash flow for the year ended 30 June 2020. No such purchases are made during the year ended 30 June 2021.

27 Contingencies

In the opinion of the Directors, the Company did not have any contingencies at 30 June 2021 (30 June 2020:None).

28 Events Occurring After the Reporting Date

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

ABN: 40 093 360 108

Notes to the Financial Statements

For the Year Ended 30 June 2021

29 Statutory Information

Registered office

The registered office of the company is: Racing & Sports Pty Ltd RSM, "Equinox Building 4" Level 2 Deakin ACT 2600

Principal place of business 1

The principal place of business is: Racing & Sports Pty Ltd Unit 4, 19 Trenerry St Weston ACT 2611

6 Phipps Close Deakin ACT 2600 PO Box 322 Curtin ACT 2605

T 02 6282 5999 F 02 6282 5933 E info@hardwickes.com.au

www.hardwickes.com.au

Hardwickes ABN 35 973 938 183

Hardwickes Partners Pty Ltd ABN 21 008 401 536

Liability limited by a scheme approved under Professional Standards Legislation

Racing & Sports Pty Ltd

Independent Audit Report to the members of Racing & Sports Pty Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Racing & Sports Pty Ltd (the Company), which comprises the statement of financial position as at 30 June 2021, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the Company's financial position as at 30 June 2021 and of its financial performance for the year ended; 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. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of 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 (including Independence Standards) (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.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

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

Responsibilities of Directors 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.

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

Auditor's Responsibilities for the Audit of the Financial Report

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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

6 Phipps Close Deakin ACT 2600 PO Box 322 Curtin ACT 2605

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www.hardwickes.com.au

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Hardwickes Partners Pty Ltd ABN 21 008 401 536

Liability limited by a scheme approved under Professional Standards Legislation

Racing & Sports Pty Ltd

Independent Audit Report to the members of Racing & Sports Pty Ltd

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

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 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.
• Obtain an understanding of internal control relevant to the audit 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 Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• 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 Company'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 Company to cease to continue as a going concern.
• 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 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.

Hardwickes Chartered Accountants

Bhaumik Bumia CA Partner

Canberra

20 August 2021