The BetMakers Holdings Limited
(Formerly known as TopBetta Holdings Limited)
ABN 21 164 521 395
Annual Report - 30 June 2018
For personal use only
The BetMakers Holdings Limited
Contents
30 June 2018
Corporate directory
Managing Director and Chief Executive Officer's report
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of The BetMakers Holdings Limited
Shareholder information
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3
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The BetMakers Holdings Limited
Corporate directory
30 June 2018
Directors
Nicholas Chan - Chairman
Todd Buckingham
Simon Dulhunty
Company secretary
Charly Duffy
Notice of annual general meeting
The details of the annual general meeting of The BetMakers Holdings Limited are:
22 Lambton Road,
Broadmeadow, NSW 2292
Friday, 23 November 2018 at 11:00 a.m. (AEDT)
Registered office
Share register
Auditor
Solicitors
22 Lambton Road
Broadmeadow, NSW 2292
Head office telephone: (02) 4957 4704
Computershare Investor Services Pty Limited
Level 4
60 Carrington Street
Sydney, NSW 2000
Share registry telephone: 1300 787 272
PKF(NS) Audit & Assurance Limited Partnership
755 Hunter Street
Newcastle West, NSW 2302
Addisons Lawyers
Level 12
60 Carrington Street
Sydney, NSW 2000
Stock exchange listing
The BetMakers Holdings Limited shares are listed on the Australian Securities
Exchange (ASX code: TBH)
Website
http://investors.thebetmakers.com
Corporate Governance Statement
The Corporate Governance Statement which was approved at the same time as the
Annual Report can be found at http://investors.thebetmakers.com/corporate-
governance/
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The BetMakers Holdings Limited
Managing Director and Chief Executive Officer's report
30 June 2018
To my fellow shareholders,
I am pleased to present the Annual Report for The BetMakers Holdings for the year ended June 30, 2018.
This year has seen the transformation of the business back to the core principle of our existence with the launch of several
internally-developed wagering products into the market.
Utilising the TopBetta platform we were able to successfully demonstrate the significance of The BetMakers' platforms and
products.
The ‘Wagering Platforms’ performed well over this period and several features have been released in the previous 12
months to demonstrate leading technology, unique offerings and scalability to accommodate any small to medium-sized
wagering operation.
The Global Tote's successful launch in 2017/18 has seen it process more than $100million worth of bets since inception,
again proving the scalability of our in-house technology.
We have continued to develop these technologies and are now able to focus on a more scalable approach to the business
and, with several key deals already announced to the market, we can now capitalise on the investment of our work to date.
While taking our wholesale products and technology to the market over the past 12 months we spent a significant amount of
money on marketing to ensure the successful roll-out and testing of these technologies. Approximately $5.3million was
spent marketing through the year, which allowed the business to showcase the products and win acceptance in the market.
On June 30, 2018, the company successfully sold its TopBetta and Mad Bookie assets for $6million, with $3million paid to
date and a further $3million to be paid on or before September 30, 2018 as part of the deferred payment sale agreement.
With the focus now on distribution of our products, platforms and technology, we have identified two key acquisition targets
that operate precisely in this space and will further strengthen our product and service offerings both in the domestic and
international markets. We have been pleased to be able to come to terms with both companies to acquire these businesses
and bring them into The BetMakers' group of companies.
We now believe we have the most innovative wagering technology and the most comprehensive distribution network to offer
these products in Australia, and we are on target to expand this rapidly into the International markets throughout 2019.
With the greater majority of Australian wagering operators already using at least some of The BetMakers group of
company’s products and services, we believe we are now integral in the Australian wagering landscape and about to
leverage this combined group’s extensive technology, products, service offerings and knowledge to be one of the most
important and influential operations in the wagering world.
Regards
Todd Buckingham
CEO
31 August 2018
Sydney
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The BetMakers Holdings Limited
Directors' report
30 June 2018
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the "group") consisting of The BetMakers Holdings Limited (referred to hereafter as the "company", "TBH" or '"parent
entity") and the entities it controlled at the end of, or during, the year ended 30 June 2018.
Directors
The following persons were directors of The BetMakers Holdings Limited during the whole of the financial year and up to
the date of this report, unless otherwise stated:
Nicholas Chan - Chairman
Todd Buckingham
Simon Dulhunty
Matthew Cain (resigned on 25 May 2018)
Principal activities
The group's principal activities during the financial year were digital fantasy wagering, wagering, content services and
wholesale wagering.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the group after providing for income tax amounted to $5,976,540 (30 June 2017: $7,618,257).
The loss included a non-recurring goodwill impairment expense of $1,144,385 (2017: $1,802,453) and an earn-out reversal
of $1,144,385 (2017: Nil). Accordingly, the loss from continuing operations after tax for the year amounted $314,992 (30
June 2017: loss of $5,499,823). The group had a gain on disposal of assets from TopBetta Pty Ltd and assets related to
Mad Bookie of $4,277,727.
Significant changes in the state of affairs
On 21 July 2017, the company announced it had received a licence to offer The Global Tote and the TopBetta retail
offering into the UK market.
On 14 August 2017, the company announced it had received a licence to offer The Global Tote and TopBetta retail
offerings into the US market.
On 25 June 2018, the company changed its name to The BetMakers Holdings Limited.
On 30 June 2018, the company completed the sale to PlayUp Australia Pty Limited ("PlayUp") of 100% of the shares in the
company's wholly owned subsidiary, TopBetta Pty Ltd ("TopBetta"), and the associated retails assets, TopBetta and Mad
Bookie. PlayUp has taken over the running of the Topbetta and Mad Bookie businesses from 1 July 2018.
There were no other significant changes in the state of affairs of the group during the financial year.
Matters subsequent to the end of the financial year
On 14 June 2018, the company expanded its wholesale strategy by entering into a conditional but binding Heads of
Agreement (“HOA”) to acquire 100% of the shares of DynamicOdds Pty Ltd (“DynamicOdds”) including its brands, data
and betting tools. Within 12 months of completion of the acquisition of assets, the company will make a payment of
$7,000,000. Final deal structure was announced on 29 August 2018, whereby $7,000,000 consideration will be paid, with
$150,000 having been paid on 1 August 2018, $1,350,000 to be paid on 31 August 2018, $1,000,000 on 12 December
2018 and $4,500,000 to be paid on 30 June 2019.
An additional $3,000,000 is payable to the vendor if the business achieves the following; if the EBIT for the Performance
Period is equal to or greater than AUD$1.25m but less than AUD$1.5m, the CDK Performance Payment will be
AUD$1.5m; or if the EBIT for the Performance Period is equal to or greater than AUD$1.5m, the CDK Performance
Payment will be AUD$3m.
On 18 July 2018, the group acquired through its newly incorporated subsidiary, BetMakers DNA Pty Ltd, 100% of shares in
leading global wagering service provider, Global Betting Services Pty Limited. Final deal structure was announced on 29
August 2018, whereby $7,000,000 consideration will be paid, with $1,000,000 to be paid in cash up-front on completion on
17 September 2018, $2,500,000 to be paid on 31 January 2019 and $3,500,000 to be paid 30 June 2019.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
An additional $3,000,000 is payable to the vendor if the business achieves the following; if the EBIT of GBS during the
Performance Period is equal to or more than $1.2m but less than $1.5m, the Performance Payment will be $1m; or if the
EBIT of GBS during the Performance Period is equal to or more than $1.5m, the Performance Payment will be $3m.
On 20 July 2018, the company announced a non-renounceable Entitlements Offer for fully paid ordinary shares in TBH
(new shares) to raise approximately $6,700,000. Under the accelerated Institutional Offer, TBH successfully raised
approximately $1.04 million from the issue of 12,961,897 at an issue price of 8 cents ($0.08) per share.
In after balance date events, the company completed the Entitlements Offer through a retail offering to existing
shareholders and through a shortfall offering to both new and existing shareholders. The total amount raised through the
offer was $4,471,957.
No other matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect
the group's operations, the results of those operations, or the group's state of affairs in future financial years.
Likely developments and expected results of operations
The group anticipates that it will continue to face risks such as:
Liquidity risks – the company’s ability to grow is dependent upon sufficient liquid financial resources to fund operational
growth.
In coming years, and to the extent that the group expands internationally, the company may also face currency risks.
Environmental regulation
The group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Experience and expertise:
Nicholas Chan
Chairman and Non-Executive Director
Nicholas (Nick) Chan has more than 31 years' experience in media. He has held
senior leadership and operational roles with leading Australian media companies.
Nick was most recently Group Chief Operating Officer ('COO') at Seven West Media
and prior to that, Chief Executive Officer ('CEO') of Pacific Magazines, a subsidiary of
Seven West Media, for nine years. He joined Pacific Magazines from Text Media,
where he was a CEO. He held a range of senior positions at ACP Publishing
including Group Publisher and COO. Nick is a former Chairman of The Magazines
Publishers of Australia and CEO of Bauer Media ANZ.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and Chairman of Nomination and
Remuneration Committee, as at 25 May 2018. After the resignation of Matthew Cain,
given the composition of the Board, the Board agreed to assume all responsibilities of
the Audit and Risk Committee and the Nomination and Remuneration Committee.
None
2,000,000 options over ordinary shares
Interests in shares:
Interests in options:
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Name:
Title:
Qualifications:
Experience and expertise:
Todd Buckingham
Managing Director and Chief Executive Officer
Double Bachelor in teaching and health and physical education
Todd Buckingham has more than 22 years' experience working in the Sports and
Wagering industry in Australia. After completing his double Bachelor degree in 2000,
he taught secondary education for five years at Hunter Sports High School whilst
simultaneously working as a sports manager at a successful sports management
company, NSRT. During his time at NSRT, Todd negotiated more than $20 million
worth of sporting contracts, culminating in his appointment as Managing Director. As
Managing Director of NSRT, Todd’s responsibilities included managing the affairs of
Rugby League athletes, negotiating contracts, sourcing sponsorships, managing
accounting and budgeting affairs, crisis management and media relations. In 2009, he
founded 12Follow and in 2010 TopBetta.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
4,870,862 ordinary shares
Interests in shares:
16,667,000 options over ordinary shares (refer to 'Service agreements' section)
Interests in options:
Name:
Title:
Experience and expertise:
Simon Dulhunty
Non-Executive Director (Non-independent)
Simon Dulhunty has over 26 years' experience in print and digital media in
management and operational roles at the top of metropolitan and regional Australian
media, including as an award-winning Editor of The Sun-Herald newspaper in Sydney
and General Manager of Fairfax Media's mobile development team responsible for
acclaimed iPad apps for The Age, The Sydney Morning Herald and The Australian
Financial Review. Simon now runs his own private media consultancy.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and Nomination and Remuneration
Committee, as at 25 May 2018. After the resignation of Matthew Cain, given the
composition of the Board, the Board agreed to assume all responsibilities of the Audit
and Risk Committee and the Nomination and Remuneration Committee.
419,438 ordinary shares
1,500,000 options over ordinary shares
Interests in shares:
Interests in options:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Ms Charly Duffy is a qualified and practising corporate and commercial lawyer with over nine years’ of private practice
experience and is the director and principal of cdPlus Corporate Services Services, a company secretarial and legal
services business. Charly brings extensive legal experience to TopBetta, with a particular focus on equity capital markets,
mergers and acquisitions, corporate governance, initial public offerings, secondary capital raisings, business and share
sale transactions, takeovers, Takeovers Panel proceedings, financing, ASIC and ASX compliance and all aspects of
general corporate and commercial law.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2018, and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Nicholas Chan
Todd Buckingham
Matthew Cain
Simon Dulhunty
11
11
10
11
11
11
10
11
7
-
7
7
7
-
7
7
8
-
8
8
8
-
8
8
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report, which has been audited, outlines the Key Management Personnel ('KMP') remuneration
arrangements for the group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the group, directly or indirectly.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to KMP
Principles used to determine the nature and amount of remuneration
The objective of the group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good
reward governance practices:
●
●
●
●
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Nomination and Remuneration Committee ('NRC') is responsible for determining and reviewing remuneration
arrangements for its directors and executives. The performance of the group depends on the quality of its directors and
executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the NRC. The NRC may, from time to time, receive advice from
independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line
with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on
comparative roles in the external market. The chairman is not present at any discussions relating to the determination of
his own remuneration.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by shareholders.
The most recent determination was under the Constitution, where the shareholders approved that the aggregate
remuneration must not exceed $500,000 per annum.
Executive remuneration
The group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits;
short-term performance incentives;
share-based payments, such as long-term incentive plans; and
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are to be reviewed annually by
the NRC based on individual and business unit performance, the overall performance of the group and comparable market
remuneration.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the group and provides additional value to the executive.
The long-term incentives plan ('LTIP') program is designed to assist in the reward, retention and motivation of executives
and other KMP of the group. Subject to the ASX listing rules and under the terms of the LTIP, the Board may grant options
and/or performance rights (options with a zero exercise price) to eligible participants ('awards'). Each award granted
represents a right to receive one share once the award vests and is exercised by the relevant participant.
The Board has sole and absolute discretion to determine the terms and conditions of awards which are granted under the
LTIP including, but not limited to, the following:
● which individuals will be invited to participate in the LTIP;
● the number of awards to be granted to each participant;
● the fee payable, if any, by participants on the grant of awards;
● the terms (e.g. vesting conditions or performance hurdles) on which the awards will vest and become exercisable;
● the exercise price, if any, of each award granted to participants;
● the period during which a vested award can be exercised; and
● any forfeiture conditions or disposal restrictions applying to the awards and shares received upon exercise of awards.
Group's performance and link to remuneration
Remuneration for certain individuals is linked to their divisional performance and the performance of the group, if relevant.
Refer to section 'Details of remuneration' of the remuneration report for details.
Use of remuneration consultants
During the financial year ended 30 June 2018, the group had not engaged any remuneration consultants to review or
advise upon its existing remuneration policies, including the implementation of the LTIP.
Voting and comments made at the company's 2017 Annual General Meeting ('AGM')
At the 2017 AGM, 97% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2017. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Details of remuneration
Amounts of remuneration
The KMP of the group consisted of the directors of The BetMakers Holdings Limited and the following persons:
●
●
Oliver Shanahan - Chief Information Officer
Paul Jeronimo - Chief Operating Officer
Details of the remuneration of KMP of the group are set out in the following tables:
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Non-
Leave
monetary annuation benefits
Super-
$
$
$
Share-based payments
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
2018
Cash salary
and fees
$
Cash
bonus
$
Non-Executive
Directors:
Nicholas Chan
Matthew Cain *
Simon Dulhunty
Executive
Directors:
Todd Buckingham
Other KMP:
Oliver Shanahan
Paul Jeronimo
82,077
40,895
45,662
180,000
170,000
160,001
678,635
-
-
-
-
-
-
-
9,247
-
-
7,797
3,885
4,338
5,241
17,100
-
-
14,488
16,150
15,200
64,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
99,121
44,780
50,000
-
202,341
-
-
-
186,150
175,201
757,593
*
Remuneration until date of resignation as Director.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
2017
Cash salary
and fees
$
Cash
bonus
$
Non-
Leave
monetary annuation benefits
Super-
$
$
$
Share-based payments
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
Non-Executive
Directors:
Nicholas Chan
Matthew Cain
Simon Dulhunty
Executive
Directors:
Todd Buckingham
Other KMP:
Bill Butler *
Oliver Shanahan
Paul Jeronimo
91,324
45,662
45,662
-
-
-
-
-
-
8,642
4,338
4,338
180,000
36,000
5,023
20,520
136,494
158,462
160,001
817,605
-
-
-
36,000
-
-
-
5,023
8,331
15,054
15,200
76,423
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300
300
300
100,266
50,300
50,300
-
241,543
-
-
29,000
29,900
144,825
173,516
204,201
964,951
*
Remuneration until date of resignation as KMP.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Service agreements
Remuneration and other terms of employment for KMP are formalised in service agreements. Details of these agreements
are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Todd Buckingham
Managing Director and Chief Executive Officer
8 November 2015
Fixed term for two years and upon expiry may be mutually extended to continue on
an ongoing basis.
Todd Buckingham receives a total fixed remuneration of $180,000 per annum
(excluding superannuation) which includes all non-cash benefits he may be entitled to
receive plus a motor vehicle allowance of $18,000 per annum.
In addition, the company has issued to Todd:
(1) Tranche 1 - 10,000,000 options each with an exercise price of $0.25 and with an
option term of five years. The options will only vest and be exercisable into fully paid
ordinary shares in the company upon the earlier of either of the following vesting
conditions being met:
● the group achieving gross revenue of at least $3 million over a period of three
consecutive months within five years of the date of issue of the options; and
● the company's 20 day volume weighted average price ('VWAP') of its shares as
quoted on the ASX being at least $0.50 within five years of the date of issue of the
options; or
● a change of control event occurring within five years of the date of issue of the
options.
(2) Tranche 2 - 6,667,000 options each with an exercise price of $0.25 and with an
option term of five years. Those options will only vest and be exercisable into fully
paid ordinary shares in the company upon the earlier of either of the following vesting
conditions being met:
● the group achieving Earnings, Before Interest, Tax, Depreciation and Amortisation
('EBITDA') of $1 million over a period of three consecutive months within five years of
the date of issue of the options; and
● the company's 20 day VWAP of its shares as quoted on the ASX being at least
$1.00 within five years of the date of issue of the options; or
● a change of control event occurring within five years of the date of issue of the
options.
Both tranches were granted on 12 November 2015 and the fair value at grant date
was $0.047 for tranche 1 and $0.020 for tranche 2.
Todd is also eligible to participate in the LTIP.
After the initial two year fixed term, Todd may terminate his employment contract by
giving six months' notice in writing. In addition to the rights provided under the
Constitution, subject to the requirements of the Corporations Act, if, amongst other
circumstances, the Board determines that Todd is not satisfactorily performing his
duties as Managing Director, the Board may recommend and put a resolution to the
shareholders for his removal either during the fixed term or otherwise. Todd will be
subject to a restraint on solicitation of clients, suppliers and employees for a period of
12 months following the termination of his employment.
The Board has agreed that, in lieu of any increase to his annual salary, Todd will be
entitled to a short term cash incentive (including super) of up to 100% of his base
salary. The cash incentive is payable in three tranches, each of which is conditional
upon the satisfaction of various milestones of the company's financial and operational
performance. One of the conditions was satisfied during the financial year ended 30
June 2017 and accordingly, $36,000 of the cash incentive has been paid to Todd.
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The BetMakers Holdings Limited
Directors' report
30 June 2018
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Oliver Shanahan
Chief Information Officer
1 July 2014
Ongoing basis
Oliver Shanahan receives an annual salary of $170,467 (excluding superannuation)
and is also eligible for:
● mandatory superannuation contributions;
● a discretionary bonus and incentive payment scheme; and
● the LTIP.
Oliver may terminate his employment agreement by giving three weeks’ notice in
writing and the group may terminate his employment agreement by giving three
weeks’ notice in writing, or by the group making payment in lieu of part or all of the
usual summary dismissal grounds. Other than in relation to the protection of
confidential information and intellectual property, Oliver is not subject to any other
restrictions on his activities after his employment with the group ceases.
Paul Jeronimo
Chief Operating Officer
21 March 2016
Ongoing basis
Paul Jeronimo receives an annual salary of $160,000 (excluding superannuation) and
is also eligible for:
● mandatory superannuation contributions;
● a discretionary bonus and incentive payment scheme; and
● the LTIP.
The group or Paul may terminate his employment agreement by giving three months'
notice in writing, or by the group making a payment in lieu of part or all of the notice
period, in addition to the usual summary dismissal grounds. Other than in relation to
the protection of confidential information and intellectual property, Paul is not subject
to any other restrictions on his activities after his employment with the group ceases.
KMP have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
No shares were issued to directors or other KMP as part of compensation during the year ended 30 June 2018.
Options
The terms and conditions of each grant of options issued by 30 June 2018 over ordinary shares affecting remuneration of
directors and other KMP in this financial year or future reporting years are as follows:
Name
Nicholas Chan
Todd Buckingham
- Tranche 1
Todd Buckingham
- Tranche 2
Matthew Cain
Simon Dulhunty
Paul Jeronimo
Oliver Shanahan
Number of
options
granted
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price at grant date
Fair value
per option
2,000,000 12/11/2015
12/11/2018
12/11/2018
$0.20
$0.0650
10,000,000
12/11/2015
12/11/2020
12/11/2020
$0.25
$0.0470
6,667,000
12/11/2015
1,250,000 12/11/2015
1,500,000 12/11/2015
2,000,000 28/07/2016
1,954,681 03/07/2017
12/11/2020
12/11/2018
12/11/2018
21/03/2019
31/10/2020
12/11/2020
12/11/2018
12/11/2018
21/03/2019
31/10/2020
$0.25
$0.20
$0.20
$0.25
$0.30
$0.0200
$0.0650
$0.0650
$0.0145
$0.0200
Todd Buckingham has performance conditions attached to his options. These are detailed in 'Service agreements' section
above. No other holders have performance conditions attached to their options.
11
For personal use only
The BetMakers Holdings Limited
Directors' report
30 June 2018
Options granted carry no dividend or voting rights.
There were no options over ordinary shares vested or lapsed by directors and other KMP as part of compensation during
the year ended 30 June 2018.
Additional disclosures relating to KMP
Shareholding
The number of shares in the company held during the financial year by each director and other members of KMP of the
group, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Todd Buckingham
Matthew Cain *
Simon Dulhunty
Paul Jeronimo
Oliver Shanahan
4,870,862
315,000
419,438
921,115
2,902,032
9,428,447
-
-
-
-
-
-
-
250,000
-
-
-
250,000
-
(565,000)
-
-
(502,564)
(1,067,564)
4,870,862
-
419,438
921,115
2,399,468
8,610,883
*
Disposals/other represents shares held at resignation date.
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of KMP of the group, including their personally related parties, is set out below:
Options over ordinary shares
Todd Buckingham *
Nicholas Chan
Matthew Cain
Simon Dulhunty
Paul Jeronimo
Oliver Shanahan
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
16,667,000
3,500,000
3,000,000
3,000,000
2,000,000
-
28,167,000
-
-
-
-
-
1,954,681
1,954,681
-
-
(250,000)
-
-
-
(250,000)
(1,500,000)
(1,500,000)
(1,500,000)
-
-
- 16,667,000
2,000,000
1,250,000
1,500,000
2,000,000
1,954,681
(4,500,000) 25,371,681
*
Conditions detailed in 'Service agreements' section above.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of The BetMakers Holdings Limited under option at the date of this report are as follows:
Grant date
12 November 2015
12 November 2015
28 July 2016
30 November 2016
30 November 2016
3 July 2017
Expiry date
12 November 2018
12 November 2020
21 March 2019
30 November 2019
30 November 2019
31 October 2020
12
Exercise
price
Number
under option
$0.20
9,750,000
$0.25 16,667,000
2,000,000
$0.25
1,000,000
$0.30
3,000,000
$0.25
2,954,681
$0.30
35,371,681
For personal use only
The BetMakers Holdings Limited
Directors' report
30 June 2018
10,250,000 options over ordinary shares are held by external parties to the group.
1,000,000 options over ordinary shares are held by non-KMP employees.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of The BetMakers Holdings Limited were issued during the year ended 30 June 2018 and up
to the date of this report on the exercise of options granted:
Date options granted
12 November 2015
Exercise
price
Number of
shares issued
$0.20
250,000
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 25 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
●
Officers of the company who are former partners of PKF(NS) Audit & Assurance Limited Partnership
There are no officers of the company who are former partners of PKF(NS) Audit & Assurance Limited Partnership.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
13
For personal use only
The BetMakers Holdings Limited
Directors' report
30 June 2018
Auditor
PKF(NS) Audit & Assurance Limited Partnership continues in office in accordance with section 327 of the Corporations Act
2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Nicholas Chan
Chairman
31 August 2018
Sydney
___________________________
Todd Buckingham
Director
14
For personal use only
The Betmakers 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 The Betmakers Holdings Limited for the year ended 30 June 2018, 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.
PKF
MARTIN MATTHEWS
PARTNER
31 AUGUST 2018
NEWCASTLE, NSW
PKF(NS) Audit & Assurance Limited
Partnership
ABN 91 850 861 839
Liability limited by a scheme
approved under Professional
Standards Legislation
Sydney
Newcastle
Level 8, 1 O’Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
755 Hunter Street
Newcastle West NSW 2302 Australia
PO Box 2368 Dangar NSW 2309
p
f
+61 2 8346 6000
+61 2 8346 6099
p
f
+61 2 4962 2688
+61 2 4962 3245
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
15
For personal use only The BetMakers Holdings Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Revenue from continuing operations
Revenue
Cost of sales
Gross profit
Other income
Expenses
Employee benefits expense
Professional fees
Marketing expenses
Administration expenses
IT expenses
Occupancy expenses
Depreciation and amortisation expense
Impairment of goodwill
Share of losses of associates accounted for using the equity method
Non-recurring (expenses)/income
Other expenses
Finance costs
Profit/(loss) before income tax (expense)/benefit from continuing operations
Income tax (expense)/benefit
Consolidated
Note
2018
$
2017
$
12,738,356
(11,148,002)
1,381,079
(788,712)
1,590,354
592,367
5,099,671
1,053,852
(3,182,492)
(987,106)
(19,072)
(670,403)
(779,996)
(196,187)
(392,689)
-
-
7,945
(254,623)
(27,269)
(2,640,974)
(1,533,975)
(28,590)
(582,907)
(592,217)
(184,546)
(141,027)
(1,802,453)
(11,932)
(51,718)
(140,180)
(55,864)
188,133
(6,120,164)
(503,125)
620,341
5
6
6
12
6
6
7
Loss after income tax (expense)/benefit from continuing operations
(314,992)
(5,499,823)
Loss after income tax benefit from discontinued operations
8
(5,661,548)
(2,118,434)
Loss after income tax (expense)/benefit for the year attributable to the owners
of The BetMakers Holdings Limited
20
(5,976,540)
(7,618,257)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of The
BetMakers Holdings Limited
(5,976,540)
(7,618,257)
Total comprehensive income for the year is attributable to:
Continuing operations
Discontinued operations
(314,992)
(5,661,548)
(5,499,823)
(2,118,434)
(5,976,540)
(7,618,257)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
For personal use only
The BetMakers Holdings Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Consolidated
Note
2018
$
2017
$
Cents
Cents
Earnings per share for loss from continuing operations attributable to the
owners of The BetMakers Holdings Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations attributable to the
owners of The BetMakers Holdings Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss attributable to the owners of The BetMakers
Holdings Limited
Basic earnings per share
Diluted earnings per share
33
33
33
33
33
33
(0.19)
(0.19)
(4.62)
(4.62)
(3.49)
(3.49)
(1.78)
(1.78)
(3.68)
(3.68)
(6.40)
(6.40)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
17
For personal use only
The BetMakers Holdings Limited
Statement of financial position
As at 30 June 2018
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Earn-out provision
Deferred revenue
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2018
$
2017
$
9
10
11
12
13
1,456,766
5,407,432
105,746
6,969,944
3,267,188
1,885,769
148,591
5,301,548
306,037
3,235,774
5,410,379
8,952,190
425,920
5,800,073
3,602,051
9,828,044
15,922,134 15,129,592
14
15
16
2,777,862
322,915
-
-
3,100,777
3,526,350
288,416
2,215,480
200
6,030,446
17
89,302
89,302
59,478
59,478
3,190,079
6,089,924
12,732,055
9,039,668
18
19
20
32,484,366 22,791,244
1,473,958
(15,225,534)
1,449,763
(21,202,074)
12,732,055
9,039,668
The above statement of financial position should be read in conjunction with the accompanying notes
18
For personal use only
The BetMakers Holdings Limited
Statement of changes in equity
For the year ended 30 June 2018
Consolidated
Balance at 1 July 2016
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 18)
Share-based payments (note 34)
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
14,696,667
1,253,340
(7,607,277)
8,342,730
-
-
-
-
-
-
(7,618,257)
-
(7,618,257)
-
(7,618,257)
(7,618,257)
8,094,577
-
-
220,618
-
-
8,094,577
220,618
Balance at 30 June 2017
22,791,244
1,473,958
(15,225,534)
9,039,668
Consolidated
Balance at 1 July 2017
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 18)
Share-based payments (note 34)
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
22,791,244
1,473,958
(15,225,534)
9,039,668
-
-
-
-
-
-
(5,976,540)
-
(5,976,540)
-
(5,976,540)
(5,976,540)
9,676,872
16,250
-
(24,195)
-
-
9,676,872
(7,945)
Balance at 30 June 2018
32,484,366
1,449,763
(21,202,074) 12,732,055
The above statement of changes in equity should be read in conjunction with the accompanying notes
19
For personal use only
The BetMakers Holdings Limited
Statement of cash flows
For the year ended 30 June 2018
Cash flows from operating activities
Receipts from customers - net
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Research and development tax received
Consolidated
Note
2018
$
2017
$
18,831,643
(31,098,922)
97,079
(7,649)
766,099
7,501,000
(14,216,548)
28,505
(5,982)
560,708
Net cash used in operating activities
31
(11,411,750)
(6,132,317)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for investments
Payments for property, plant and equipment
Payments for intangibles
Payment for earn-out on previous acquisitions
Proceeds from disposal of business
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Other
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
-
-
(64,305)
(500,000)
(150,000)
800,000
(100,000)
(50,000)
(262,566)
(200,000)
-
-
85,695
(612,566)
10,057,186
(546,553)
5,000
7,716,003
(139,625)
-
9,515,633
7,576,378
(1,810,422)
3,267,188
831,495
2,435,693
Cash and cash equivalents at the end of the financial year
9
1,456,766
3,267,188
The above statement of cash flows should be read in conjunction with the accompanying notes
20
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 1. General information
The financial statements cover The BetMakers Holdings Limited as a group consisting of The BetMakers Holdings Limited
(the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year (referred to in these financial
statements as the 'group'). The financial statements are presented in Australian dollars, which is The BetMakers Holdings
Limited's functional and presentation currency.
The BetMakers Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
22 Lambton Road
Broadmeadow, NSW 2292
A description of the nature of the group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2018. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the group during the financial year.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern and recoverability of intangible assets and deferred tax assets
During the year, the group incurred a net loss after tax of $5,976,540 (2017: $7,618,257) and net operating cash outflows
of $11,411,750 (2017: $6,132,317). The yearly report has been prepared on a going concern basis which contemplates the
realisation of assets and extinguishment of liabilities in the ordinary course of business. The company has prepared
cashflow forecasts as at 30 June 2018 to determine the appropriateness of the going concern assumption and the
recoverability of the group’s intangibles and deferred tax assets.
The key assumptions underlying these forecasts are as follows:
(a) Capital raising of up to $8m prior to 30 June 2019 depending on performance;
(b) The successful transition of the GBS and Dynamic Odds businesses into the consolidated entity; and
(c) Increased Global Tote turnover from additional bookmakers and international platforms.
The inability to achieve these strategies would have a material negative impact on the anticipated trading results and cash
flows that underline the use of the going concern assumption. The Directors are confident of realizing these objectives and
accordingly they believe the going concern assumption is appropriate and the group’s intangibles and deferred tax assets
are recoverable.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, financial
assets at fair value through profit or loss.
21
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the group only.
Supplementary information about the parent entity is disclosed in note 29.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of The BetMakers Holdings
Limited as at 30 June 2018 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the group has control. The group controls an entity when the group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or reduction in profit or loss.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the group and the revenue can be reliably
measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue includes fantasy
wagering, wagering and content services.
Fantasy wagering
Fantasy wagering revenue, being the entry fees to tournaments, is brought to account as revenue in profit or loss when
tournaments are completed.
Wagering
Wagering revenue is recognised as the residual value after deducting the return to customers from their paid wagers. The
amounts bet on an event are recognised as a liability in the statement of financial position until the outcome of the events is
determined, at which time the revenue is brought to account in profit or loss.
Content services
Content services revenue is recognised in profit or loss once the service has been rendered. Prepaid services are deferred
and recognised as a liability in the statement of financial position until the service is rendered.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
22
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower,
the present value of minimum lease payments. Lease payments are allocated between the principal component of the
lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the group will obtain ownership at the end of the lease
term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
Impairment of financial assets
The group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or
group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or obligor; a
breach of contract such as default or delinquency in payments; the lender granting to a borrower concessions due to
economic or legal reasons that the lender would not otherwise do; it becomes probable that the borrower will enter
bankruptcy or other financial reorganisation; the disappearance of an active market for the financial asset; or observable
data indicating that there is a measurable decrease in estimated future cash flows.
The amount of the impairment allowance for loans and receivables carried at amortised cost is the difference between the
asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest
rate. If there is a reversal of impairment, the reversal cannot exceed the amortised cost that would have been recognised
had the impairment not been made and is reversed to profit or loss.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other 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 tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
23
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
Comparatives
Comparatives have been realigned where necessary to agree with current year presentation. There was no change in the
profit or net assets.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the group for the annual reporting period ended 30 June 2018. The group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the group,
are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities of
the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The group will adopt this standard from 1 July 2018. It is not expected to significantly impact the financial
statements on the basis that the main financial assets recognised represent cash and cash equivalent and trade
receivables that do not carry a significant financing component and involve a single cash flow representing the repayment
of principal, which in the case of trade receivables is the transaction price. Both asset classes will continue to be measured
at face value. Other financial asset classes are not material to the group. Financial liabilities of the group are not impacted
as the group does not carry them at fair value.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or
implied) to be identified, together with the separate performance obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation
approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied.
Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is
satisfied when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue
should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's
statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship
between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required
to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to
those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The group will
adopt this standard from 1 July 2018. It is not expected to significantly impact the financial statements on the basis that
most of the group's revenue is recognised at the time of transaction with the customer which represents the satisfaction of
the primary performance obligation.
24
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 2. Significant accounting policies (continued)
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 ‘Leases’ and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a ‘right-of-use’ asset will be capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a ‘right-of-use’ asset is recognised or lease payments are expensed to profit
or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or
dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit
or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into
both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases. The group will adopt this standard from 1
July 2019 but the impact of its adoption has been assessed to only impact classification of assets, liabilities and expenses,
no lending impact or covenant impact expected to occur.
IASB revised Conceptual Framework for Financial Reporting
The revised Conceptual Framework has been issued by the International Accounting Standards Board ('IASB'), but the
Australian equivalent has yet to be published. The revised framework is applicable for annual reporting periods beginning
on or after 1 January 2020 and the application of the new definition and recognition criteria may result in future
amendments to several accountings standards. Furthermore, entities who rely on the conceptual framework in determining
their accounting policies for transactions, events or conditions that are not otherwise dealt with under Australian Accounting
Standards may need to revisit such policies. The group will apply the revised conceptual framework from 1 July 2020 and
is yet to assess its impact.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Share-based payment transactions
The group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model, depending on the equity-settled transaction, and takes into account the terms and conditions upon which
the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may
impact profit or loss and equity.
Goodwill
The group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
has suffered any impairment, in accordance with the stated accounting policy. The recoverable amounts of cash-
generating units have been determined based on value-in-use calculations. These calculations require the use of
assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated
future cash flows.
25
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Income tax
The group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The group recognises liabilities for anticipated tax
audit issues based on the group's current understanding of the tax law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in
which such determination is made. Refer to Note 7 for further details.
Recovery of deferred tax assets
Deferred tax assets are recognised for tax losses and deductible temporary differences only if the group considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Note 4. Operating segments
Identification of reportable operating segments
The group operates in four segments being the fantasy wagering and general wagering, content services, wholesale
wagering and corporate. This is based on the internal reports that are reviewed and used by the Board of Directors (who
are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the
allocation of resources. There is no aggregation of operating segments.
The information reported to the CODM is on at least a monthly basis. The financial information presented in these financial
statements are the same as that presented to the CODM.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Retail wagering and fantasy
wagering
The group operates an online wagering platform which utilises proprietary technology
across risk management systems, odds management, content delivery and consumer
facing platforms. The online fantasy wagering tournaments platform is integrated into the
group's general online wagering platforms and enable sports fans to compete against each
other via fantasy wagering on real sports events, with the focus on the social engagement.
The group operates a free and premium content platform, which enables customers to
seamlessly access a range of sporting and racing content.
The group operates a wholesale B2B product The Global Tote. The Global Tote combines
wagering liquidity from bookmakers and is licensed in Alderney, UK. The Global Tote is a
new breed tote system without restrictions on size of events and entrants meaning that in
addition to racing products, The Global Tote can operate on major sporting events.
Content services
Wholesale wagering
Major customers
There is one major customers that represented 43% (2017: Nil) of the total segment revenue.
26
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 4. Operating segments (continued)
Operating segment information
Consolidated - 2018
Revenue
Sales to external customers
Total revenue
Segment result
Depreciation and amortisation
Research and development tax rebate
Gain on disposal of discontinued operation
Payroll tax rebate
Earn-out reversal
Interest revenue
Finance costs
Impairment of goodwill
Share options expense
Profit/(loss) before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Discontinued
operations
Retail
wagering
and fantasy
wagering
$
Continuing
operations
Continuing
operations
Continuing
operations
Content
services
$
Wholesale
wagering
$
Corporate
$
Total
$
4,508,121
4,508,121
42,629 12,695,727
42,629 12,695,727
- 17,246,477
- 17,246,477
(7,660,926)
-
-
-
-
1,144,385
8,315
(162,383)
(1,144,385)
-
(7,814,994)
(3,683)
-
-
-
-
-
-
(176)
-
-
(3,859)
(232,700)
(213,396)
-
-
-
-
-
(1,824)
-
-
(447,920)
(4,263,142)
(179,293)
733,180
4,277,727
29,818
-
58,946
(25,269)
-
7,945
639,912
(12,160,451)
(392,689)
733,180
4,277,727
29,818
1,144,385
67,261
(189,652)
(1,144,385)
7,945
(7,626,861)
1,650,321
(5,976,540)
147,978
98,985
2,481,784 13,193,387 15,922,134
15,922,134
13,284
1,935
567,658
2,607,202
3,190,079
3,190,079
27
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 4. Operating segments (continued)
Consolidated - 2017
Revenue
Sales to external customers
Total revenue
Segment result
Depreciation and amortisation
Research and development tax rebate
Payroll tax rebate
Interest revenue
Finance costs
Share options expenses
Share of losses of associates
Impairment of goodwill
Profit/(loss) before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Discontinued
operations
Retail
wagering
and fantasy
wagering
$
Continuing
operations
Continuing
operations
Continuing
operations
Content
Wholesale
services
$
wagering
$
Corporate
$
Total
$
4,796,222
4,796,222
534,249
534,249
846,830
846,830
-
-
6,177,301
6,177,301
(2,806,054)
(266)
-
-
5,931
(109,612)
-
-
-
(2,910,001)
(3,580)
-
-
-
-
126
-
-
(1,802,453)
(1,805,907)
831,658
(16,839)
-
-
-
(10)
-
-
-
814,809
(5,939,190)
(124,188)
1,031,277
15,545
7,120
(55,980)
(51,718)
(11,932)
-
(5,129,066)
(7,917,166)
(141,293)
1,031,277
15,545
13,051
(165,476)
(51,718)
(11,932)
(1,802,453)
(9,030,165)
1,411,908
(7,618,257)
7,662,636
9,797
1,005,598
6,451,561 15,129,592
15,129,592
5,124,569
29,786
34,410
901,159
6,089,924
6,089,924
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
Note 5. Other income
Research and development tax rebate
Payroll tax rebate
Interest received
Gain on disposal of business *
Other income
Consolidated
2018
$
2017
$
733,180
29,818
58,946
4,277,727
1,031,277
15,455
7,120
-
5,099,671
1,053,852
* This gain on disposal of assets corresponds to the sale of TopBetta Pty Ltd and the assets of Mad Bookie. Refer to note
8 for further details.
28
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 5. Other income (continued)
Accounting policy for other income
Research and development tax rebate
Research and development tax rebate is recognised at fair value, being the expected amount to be received.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Note 6. Expenses
Profit/(loss) before income tax from continuing operations includes the following specific
expenses:
Depreciation
Leasehold improvements
Plant and equipment
Computer equipment
Furniture and fittings
Total depreciation
Amortisation
Intellectual property
Total depreciation and amortisation
Employee benefits
Employee benefits expense excluding superannuation
Defined contribution superannuation expense
Total employee benefits
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
Minimum lease payments
Non-recurring expenses
Share-based payments expense/(income)
Consolidated
2018
$
2017
$
28,941
723
127,652
26,870
24,377
722
74,820
24,269
184,186
124,188
208,503
16,839
392,689
141,027
2,931,814
250,678
2,442,837
198,137
3,182,492
2,640,974
27,269
55,864
158,834
172,583
(7,945)
51,718
Accounting for finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Accounting for defined contribution superannuation payments
Contributions to defined contribution superannuation plans are expensed to profit or loss in the period in which they are
incurred.
29
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 7. Income tax benefit
Income tax benefit
Current tax
Deferred tax - origination and reversal of temporary differences
Aggregate income tax benefit
Income tax benefit is attributable to:
Profit/(loss) from continuing operations
Loss from discontinued operations
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Increase in deferred tax assets (note 13)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Profit/(loss) before income tax (expense)/benefit from continuing operations
Loss before income tax benefit from discontinued operations
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Impairment of goodwill
Share-based payments
Research and development tax incentive expenditure
Sundry items
Adjustment to deferred tax balances as a result of change in statutory tax rate
Effect of temporary differences now recognised
Income tax benefit
Amounts credited directly to equity
Deferred tax assets (note 13)
Consolidated
2018
$
2017
$
-
(1,650,321)
(13,750)
(1,398,158)
(1,650,321)
(1,411,908)
503,125
(2,153,446)
(620,341)
(791,567)
(1,650,321)
(1,411,908)
(1,650,321)
(1,398,158)
188,133
(7,814,994)
(6,120,164)
(2,910,001)
(7,626,861)
(9,030,165)
(2,097,387)
(2,483,295)
314,705
(2,185)
(52,826)
144,532
495,675
14,235
346,624
(2,945)
(1,693,161)
-
42,840
(1,629,706)
181,551
36,247
(1,650,321)
(1,411,908)
Consolidated
2018
$
2017
$
(144,257)
(25,275)
Accounting policy for income tax
Income tax for the period is the tax payable on that period's taxable income based on the applicable income tax rate for
each jurisdiction, adjusted by changes in deferred tax attributable to temporary differences, unused tax losses and the
adjustment recognised for prior periods, where applicable.
30
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 7. Income tax benefit (continued)
Accounting policy for deferred tax
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, except for (i) when the deferred tax asset or liability arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting nor taxable profits; or (ii) when the taxable temporary difference is associated
with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of
recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred tax assets recognised are
reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be
recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future
taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Tax consolidated group
The BetMakers Holdings Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income
tax consolidated group ('tax group') under the tax consolidation regime. Each entity in the tax group continues to account
for their own current and deferred tax amounts. The tax group has applied the 'group allocation' approach in determining
the appropriate amount of taxes to allocate to group members. In addition to its own tax amounts, the head entity also
recognises the tax arising from unused tax losses and tax credits assumed from each subsidiary in the tax group.
Assets or liabilities arising under tax funding agreements are recognised as amounts receivable from or payable to other
entities in the tax group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability
or benefit of each tax group member, resulting in neither a contribution by the head entity to the subsidiaries nor a
distribution by the subsidiaries to the head entity.
Note 8. Discontinued operations
Description
On 30 June 2018, the group completed the sale to PlayUp Australia Pty Limited ('PlayUp') of 100% of the shares in the
company's wholly owned subsidiary, TopBetta Pty Ltd ('TopBetta'), and the associated retails assets, TopBetta and Mad
Bookie. PlayUp has taken over the running of the Topbetta and Mad Bookie businesses from 1 July 2018.
The retail businesses, TopBetta and Mad Bookie was sold to PlayUp for a consideration amount of $6,000,000 (shares
held in TopBetta and the goodwill totalled $1,722,273 recognising a gain on sale of business for $4,277,727 in other
income (note 5)).
The non-current assets disposed included client databases and lists of both the TopBetta and Mad Bookie retail
businesses, along with the trademarks for both brands. The sale did not include the sale of the proprietary
technologies that these brands utilise.
31
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 8. Discontinued operations (continued)
Financial performance information
Revenue
Cost of sales
Gross profit
Interest received
Earn-out reversal *
Total other income
Employee benefits expense
Professional fees
Marketing expenses
Administration expenses
IT expenses
Occupancy expenses
Depreciation and amortisation expense
Impairment of goodwill *
Other expenses
Finance costs
Total expenses
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit from discontinued operations
Cash flow information
Net cash from/(used in) operating activities
Net cash used in investing activities
Consolidated
2018
$
2017
$
4,508,121
(3,965,072)
543,049
4,796,222
(2,605,356)
2,190,866
8,315
1,144,385
1,152,700
(1,322,127)
-
(5,316,639)
(576,485)
(991,083)
16,400
-
(1,144,385)
(14,041)
(162,383)
(9,510,743)
5,931
-
5,931
(1,430,303)
275
(2,874,464)
(320,784)
(356,828)
7,108
(266)
-
(21,924)
(109,612)
(5,106,798)
(7,814,994)
2,153,446
(2,910,001)
791,567
(5,661,548)
(2,118,434)
Consolidated
2018
$
2017
$
(1,830,344)
(150,000)
1,562,282
(100,000)
Net increase/(decrease) in cash and cash equivalents from discontinued operations
(1,980,344)
1,462,282
* Refer to note 23 for further details.
Accounting policy for discontinued operations
A discontinued operation is a component of the group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the face of the statement of profit or loss and other
comprehensive income.
32
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 9. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
Restricted cash
Consolidated
2018
$
2017
$
203
1,356,563
100,000
-
211
1,184,419
200,005
1,882,553
1,456,766
3,267,188
Restricted cash represents amounts held on behalf of players funds under Northern Territory ('NT') license and is not
available for use by the group. The corresponding liability is recognised in other payables and accruals at note 15. This
was disposed at 30 June 2018, as part of the sale of the retail businesses.
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Note 10. Current assets - trade and other receivables
Trade receivables
Other receivables *
Research and development tax receivable
Rental bonds
Goods and services tax ('GST') receivable
Consolidated
2018
$
2017
$
184,098
262,969
4,328,045
774,028
27,650
93,611
5,223,334
776,664
805,281
32,162
8,693
1,622,800
5,407,432
1,885,769
* Other receivables include the amount receivable at year end for the sale of TopBetta of $3,217,544. Refer to note 8 for
further details.
Impairment of receivables
The group has not recognised an impairment of receivables in profit or loss for the year ended 30 June 2018 (2017: Nil).
Receivables are neither past due nor impaired.
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the group will not be able to collect all amounts due according to the original terms of the
receivables. The amount of the impairment allowance is the difference between the asset's carrying amount and the
present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-
term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
33
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 10. Current assets - trade and other receivables (continued)
Accounting policy loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are initially measured at fair value and subsequently carried at amortised cost using the effective
interest rate method. Gains and losses are recognised in profit or loss when the asset is derecognised or impaired.
Note 11. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
Furniture and fittings - at cost
Less: Accumulated depreciation
Consolidated
2018
$
2017
$
144,724
(56,766)
87,958
4,888
(1,444)
3,444
348,263
(218,187)
130,076
139,526
(54,967)
84,559
144,724
(27,825)
116,899
16,627
(12,460)
4,167
294,962
(90,536)
204,426
130,686
(30,258)
100,428
306,037
425,920
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2016
Additions
Depreciation expense
Balance at 30 June 2017
Additions
Depreciation expense
Leasehold
Plant and
improvements equipment
Computer Furniture and
equipment
$
$
$
fittings
$
100,588
40,688
(24,377)
116,899
-
(28,941)
4,889
-
(722)
4,167
-
(723)
55,467
223,779
(74,820)
204,426
53,302
(127,652)
110,386
14,577
(24,535)
100,428
11,001
(26,870)
Total
$
271,330
279,044
(124,454)
425,920
64,303
(184,186)
Balance at 30 June 2018
87,958
3,444
130,076
84,559
306,037
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
34
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 11. Non-current assets - property, plant and equipment (continued)
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Computer equipment
Furniture and fittings
under the lease term
5 years
2.5 years
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or
the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Note 12. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Intellectual property - at cost
Less: Accumulated amortisation
Brand - at cost
Consolidated
2018
$
2017
$
3,753,254
(1,802,453)
1,950,801
6,559,050
(1,802,453)
4,756,597
1,542,513
(257,540)
1,284,973
1,010,315
(16,839)
993,476
-
50,000
3,235,774
5,800,073
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2016
Additions
Additions through business combinations
Impairment of assets
Amortisation expense
Balance at 30 June 2017
Additions *
Disposals/impairment on discontinued operations
Amortisation expense
Goodwill
$
Intellectual
property
$
Brand
$
Total
$
4,275,527
-
2,283,523
(1,802,453)
-
4,756,597
-
(2,805,796)
-
-
1,010,315
-
-
(16,839)
993,476
500,000
-
(208,503)
-
-
50,000
-
-
4,275,527
1,010,315
2,333,523
(1,802,453)
(16,839)
50,000
-
(50,000)
-
5,800,073
500,000
(2,855,796)
(208,503)
Balance at 30 June 2018
1,950,801
1,284,973
-
3,235,774
35
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 12. Non-current assets - intangibles (continued)
*
The acquisition corresponds to MWS software code for the wholesale business. The company had previously secured
an irrevocable, perpetual, royalty-free licence to use MWS’s wagering technologies for the wholesale business. The
purchase gives the company control to increase the speed of future product development while retaining the
intellectual property rights to all future development.
Impairment testing
Goodwill acquired through business combinations has been allocated to the following cash-generating units:
Platforms and widgets
Consolidated
2018
$
2017
$
1,950,801
4,756,597
During the current financial year, the company partially impaired the goodwill related to the Mad Bookie business which
was acquired in May 2017. Included in the terms of the acquisition was an earn-out liability payable to the vendors which
could be triggered during the period ending on the first anniversary of acquisition date and which would be based on 2
times net gaming revenue. The Net Gaming Revenue earned by the business were not as high as originally forecast. This
resulted in a partial reversal of the earn-out liability and the impairment of goodwill as shown in note 8. This transaction did
not affect the net result for the period, as these items offset each other.
The recoverable amount of the group's goodwill has been determined by value-in-use calculations using discounted cash
flow models, based on a one year projection period approved by management and extrapolated for a further four years
using a steady rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive.
The following key assumptions were used in the discounted cash flow model for the tournaments and wagering division:
(a) 17.5% (2017:17.5%) pre-tax discount rate;
(b) terminal value of 4.5x previous year’s Earnings, Before Interest, Tax, Depreciation and Amortisation ('EBITDA');
(c) 20% (2017: 3%) per annum increase in employee benefits expense; and
(d) revenue growth at 80% of management’s forecast for financial year to 30 June 2019.
The discount rate of 17.5% pre-tax reflects management’s conservative estimate of the time value of money and the
group's weighted average cost of capital adjusted for the risk free rate and the volatility of the share price relative to market
movements.
The Board believes the projected revenue growth rate is prudent and justified, based on the combination of current growth
rates and planned product introductions.
Sensitivity analysis
As disclosed in note 3, the directors have made judgements and estimates about the future in respect of impairment testing
of goodwill. Should these judgements and estimates not occur as approximated, the resulting goodwill carrying amount
may decrease. The sensitivities of the carrying value of goodwill to such judgements and estimates are as follows:
Either revenue per user, or the number of users, would need to decrease by 11% in cash flow modelling for the
Tournament and Wagering division before goodwill would become impaired, with all other assumptions remaining constant.
The Board believes that other reasonable changes in the key assumptions on which the recoverable amount of goodwill is
based would not cause the recoverable amount to fall below the carrying amount.
Accounting policy for goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
36
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 12. Non-current assets - intangibles (continued)
Intellectual property
Intellectual property primarily consists of the cost of acquiring the software code for the wholesale business. Significant
costs associated with the acquisition of additional intellectual property are deferred and amortised on a straight-line basis
over the period of their expected benefit, being their finite life of five years.
Brands
The Mad Bookie brand name acquired in the business combinations had an indefinite life which was assessed for
impairment annually. It has now been disposed of.
Accounting policy for impairment of other non-financial assets
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Note 13. Non-current assets - deferred tax
Consolidated
2018
$
2017
$
5,031,953
(76,346)
-
30,365
12,704
3,338,791
(53,123)
(13,750)
50,136
12,551
4,998,676
3,334,605
411,703
267,446
5,410,379
3,602,051
3,602,051
1,650,321
144,257
13,750
2,178,618
1,398,158
25,275
-
5,410,379
3,602,051
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Property, plant and equipment
Intangibles
Accrued expenses
Superannuation
Amounts recognised in equity:
Transaction costs on share issue
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss (note 7)
Credited to equity (note 7)
Adjustment from prior year
Closing balance
37
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 14. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Consideration for business (note 23)
Other payables
Consolidated
2018
$
2017
$
1,568,292
62,699
905,700
241,171
581,209
808,448
-
2,136,693
2,777,862
3,526,350
Refer to note 22 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Note 15. Current liabilities - employee benefits
Annual leave
Consolidated
2018
$
2017
$
322,915
288,416
Accounting policy for short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Note 16. Current liabilities - earn-out provision
Contingent consideration
Consolidated
2018
$
2017
$
-
2,215,480
Earn-out provision
The provision represents the obligation to pay consideration for Madbookie business acquired in May 2017. Refer to notes
8 and 23 for further details.
Accounting policy for provisions
Provisions are recognised when the group has a present (legal or constructive) obligation as a result of a past event, it is
probable the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
38
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 17. Non-current liabilities - employee benefits
Long service leave
Consolidated
2018
$
2017
$
89,302
59,478
Accounting policy for long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured as the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted using market
yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Note 18. Equity - issued capital
Consolidated
2018
Shares
2017
Shares
2018
$
2017
$
Ordinary shares - fully paid
168,205,929 143,001,477 32,484,366 22,791,244
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued
Shares issues
Shares issued
Shares issued
Share purchase plan
Transaction costs
Deferred tax credit recognised directly in equity (note
13)
Balance
Shares issued
Exercise of options
Shares issued
Shares issued
Transaction costs
Deferred tax credit recognised directly in equity (note
13)
1 July 2016
24 August 2016
30 November 2016
17 May 2017
24 May 2017
23 June 2017
96,364,546
14,454,681
15,000,000
9,843,750
3,500,000
3,838,500
-
14,696,667
2,601,842
3,000,000
1,575,000
682,500
614,160
(404,200)
$0.18
$0.20
$0.16
$0.19
$0.16
$0.00
-
$0.00
25,275
30 June 2017
29 August 2017
28 December 2017
28 December 2017
26 February 2018
143,001,477
21,445,681
-
250,000
3,508,771
-
22,791,244
9,007,186
16,250
50,000
1,000,000
(405,589)
$0.42
$0.00
$0.20
$0.29
$0.00
-
$0.00
25,275
Balance
30 June 2018
168,205,929
32,484,366
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
39
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 18. Equity - issued capital (continued)
Capital risk management
The group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the group may raise additional capital, adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The group intends to raise capital to assist with working capital requirements or when an opportunity to invest in a business
or company is seen as value-adding relative to the current company's share price at the time of the investment. The group
is actively pursuing additional investments in the short term as it continues to grow its existing businesses.
The group is not subject to any financing arrangements covenants.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 19. Equity - reserves
Share-based payments reserve
Consolidated
2018
$
2017
$
1,449,763
1,473,958
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in the share premium reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2016
Share-based payments
Balance at 30 June 2017
Share-based payments
Exercise of options
Expired options
Non vested options
Balance at 30 June 2018
40
Share-based
payments
$
1,253,340
220,618
1,473,958
14,773
(16,250)
(900)
(21,818)
1,449,763
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 20. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax (expense)/benefit for the year
Accumulated losses at the end of the financial year
Note 21. Equity - dividends
Consolidated
2018
$
2017
$
(15,225,534)
(5,976,540)
(7,607,277)
(7,618,257)
(21,202,074)
(15,225,534)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 22. Financial instruments
Financial risk management objectives
The group's activities expose it to a variety of financial risks, particularly liquidity risk and wagering risk. The group's overall
risk management program focuses on the unpredictability of wagering liabilities and liquidity.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the group's operating
units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The group is not exposed to any foreign currency risk.
Price risk
The group is not exposed to any price risk.
Interest rate risk
The group's main interest rate risk arose from loans to related parties-borrowings which have now been fully repaid. The
group is not exposed to any significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
group. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net
of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements. The group does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable. The group manages
liquidity risk by maintaining adequate cash reserves, raising capital to fund growth and by monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.
41
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 22. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Consideration for business
Total non-derivatives
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Earn-out provision
Total non-derivatives
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
1,568,292
241,171
905,700
2,715,163
-
-
-
-
-
-
-
-
-
-
-
-
1,568,292
241,171
905,700
2,715,163
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
581,209
2,136,693
2,215,480
4,933,382
-
-
-
-
-
-
-
-
-
-
-
-
581,209
2,136,693
2,215,480
4,933,382
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Wagering risk
The group faces wagering risk as part of its wagering business. This risk is controlled by setting limitations on the amounts
that clients may win each day, and, in cases that an exposure is deemed too great or too likely according to the group’s
procedures and systems, that exposure is laid-off to other bookmakers.
Note 23. Fair value measurement
Fair value hierarchy
The following tables detail the group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2018
Liabilities
Consideration for business
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
905,700
905,700
905,700
905,700
42
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 23. Fair value measurement (continued)
Consolidated - 2017
Liabilities
Earn-out provision
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
2,215,480
2,215,480
2,215,480
2,215,480
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2016
Earn-out provision
Balance at 30 June 2017
Amounts paid in cash after settle the purchase price
Amount reversed
Balance at 30 June 2018
Earn-out
provision
$
-
(2,215,480)
(2,215,480)
165,395
1,144,385
(905,700)
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
43
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of KMP of the group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2018
$
2017
$
693,123
64,470
-
858,628
76,423
29,900
757,593
964,951
In addition to the above, certain directors received payments for consultancy services directly or indirectly as disclosed in
note 28.
Note 25. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PKF(NS) Audit & Assurance
Limited Partnership, the auditor of the company:
Audit services - PKF(NS) Audit & Assurance Limited Partnership
Audit or review of the financial statements
Other services - PKF(NS) Audit & Assurance Limited Partnership
Advice on LTIP taxation
Review of Turnover certificate
Advice on performance of options
Consolidated
2018
$
2017
$
92,623
125,164
-
17,500
6,500
13,000
3,600
-
24,000
16,600
116,623
141,764
Note 26. Contingent liabilities
The group has given bank guarantees as at 30 June 2018 of $Nil (2017: $200,000) for Northern Territory Licence
Requirements.
44
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 27. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2018
$
2017
$
123,799
203,645
120,723
327,444
327,444
448,167
Operating lease commitments include amounts related to five year leases of offices (with the option to extend for a further
five years). Annual amounts will increase at the greater of 3% or CPI. Included also is a five year operating lease over a
motor vehicle.
Note 28. Related party transactions
Parent entity
The BetMakers Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2018
$
2017
$
Payment for other expenses:
Consulting fees paid to Ferghana Capital Pty Ltd ('Ferghana') (a company controlled by
director, Matthew Cain)
Consulting fees paid to Media Solutions Company Pty Ltd ('SDMSC') (a company controlled
by director Simon Dulhunty)
100,000
130,000
100,000
120,000
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2018
$
2017
$
-
-
11,041
11,231
Current payables:
Trade payables to Ferghana for expenses on behalf of the company
Trade payables to SDMSC for consulting services
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
45
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2018
$
2017
$
(7,871,629)
(9,515,366)
(7,871,629)
(9,515,366)
Parent
2018
$
2017
$
1,545,753
1,582,005
3,981,960
2,514,893
-
-
-
-
32,154,135 22,791,244
1,473,958
(21,750,309)
1,449,763
(29,621,938)
3,981,960
2,514,893
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2018 and 30 June 2017.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 and 30 June 2017.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2018 and 30 June 2017.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the group, as disclosed in note 2, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
46
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Operis Momentus Pty Ltd
TopBetta Pty Ltd *
12Follow Pty Ltd
OM IP Pty Ltd
OM Apps Pty Ltd
The Global Tote Australia Pty Limited
The Global Tote Limited
Global Tote Lankan (PVT)
*
Divested on 30 June 2018.
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Alderney
Sri Lanka
Note 31. Reconciliation of loss after income tax to net cash used in operating activities
Ownership interest
2017
2018
%
%
100.00%
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
Consolidated
2018
$
2017
$
Loss after income tax (expense)/benefit for the year
(5,976,540)
(7,618,257)
Adjustments for:
Depreciation and amortisation
Impairment of goodwill
Net gain on disposal of non-current assets
Share of loss - associates
Share-based payments
Revaluation of Earn-out
Finance costs - non-cash
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in deferred tax assets
Decrease/(increase) in prepayments
Increase in trade and other payables
Increase in employee benefits
Decrease in other provisions
Increase in deferred revenue
Net cash used in operating activities
Note 32. Non-cash financing activities
Shares issued for services received
47
392,689
1,144,385
(4,277,727)
-
(7,945)
(1,144,385)
(3,858)
141,293
1,802,453
-
11,392
220,618
-
159,493
(304,119)
(1,808,328)
42,845
482,505
64,323
(15,395)
(200)
(656,399)
(1,384,334)
(89,586)
1,218,212
80,643
-
(17,845)
(11,411,750)
(6,132,317)
Consolidated
2018
$
2017
$
-
75,000
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 33. Earnings per share
Earnings per share for loss from continuing operations
Loss after income tax attributable to the owners of The BetMakers Holdings Limited
Consolidated
2018
$
2017
$
(314,992)
(5,499,823)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
162,308,941 119,096,279
Weighted average number of ordinary shares used in calculating diluted earnings per share 162,308,941 119,096,279
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations
Loss after income tax attributable to the owners of The BetMakers Holdings Limited
Cents
Cents
(0.19)
(0.19)
(4.62)
(4.62)
Consolidated
2018
$
2017
$
(5,661,548)
(2,118,434)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
162,308,941 119,096,279
Weighted average number of ordinary shares used in calculating diluted earnings per share 162,308,941 119,096,279
Basic earnings per share
Diluted earnings per share
Earnings per share for loss
Loss after income tax attributable to the owners of The BetMakers Holdings Limited
Cents
Cents
(3.49)
(3.49)
(1.78)
(1.78)
Consolidated
2018
$
2017
$
(5,976,540)
(7,618,257)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
162,308,941 119,096,279
Weighted average number of ordinary shares used in calculating diluted earnings per share 162,308,941 119,096,279
Basic earnings per share
Diluted earnings per share
Cents
Cents
(3.68)
(3.68)
(6.40)
(6.40)
35,371,681 options over ordinary shares are not included in the calculation of diluted earnings per share because they are
anti-dilutive for the year ended 30 June 2018. These options could potentially dilute basic earnings per share in the future.
48
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 33. Earnings per share (continued)
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of The BetMakers Holdings Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Note 34. Share-based payments
The long-term incentives plan ('LTIP') program has been established by the group. Subject to the ASX listing rules and
under the terms of the LTIP, the Board may grant options and/or performance rights (options with a zero exercise price) to
eligible participants ('awards'). Each award granted represents a right to receive one share once the award vests and is
exercised by the relevant participant.
Set out below are summaries of options granted:
2018
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
12/11/2018
12/11/2018
12/11/2020
21/03/2019
30/11/2019
30/11/2019
16/03/2018
14/06/2020
31/10/2020
31/10/2020
12/11/2015
12/11/2015
12/11/2015
28/07/2016
30/11/2016
30/11/2016
16/03/2017
14/06/2017
03/07/2017
03/07/2017
2017
5,000,000
$0.20
$0.20
5,000,000
$0.25 16,667,000
2,000,000
$0.25
1,000,000
$0.30
3,000,000
$0.25
4,500,000
$0.30
2,000,000
$0.20
-
$0.30
-
$0.30
39,167,000
-
-
-
-
-
-
-
-
1,954,681
1,000,000
2,954,681
(250,000)
-
-
-
-
-
-
-
-
-
(250,000)
4,750,000
-
-
5,000,000
- 16,667,000
2,000,000
-
1,000,000
-
3,000,000
-
-
(4,500,000)
(2,000,000)
-
1,954,681
-
1,000,000
-
(6,500,000) 35,371,681
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
12/11/2015
12/11/2015
12/11/2015
28/07/2016
30/11/2016
30/11/2016
16/03/2017
14/06/2017
12/11/2018
12/11/2018
12/11/2020
21/03/2019
30/11/2019
30/11/2019
16/03/2018
14/06/2020
-
$0.20
5,000,000
-
5,000,000
$0.20
-
$0.25 16,667,000
2,000,000
-
$0.25
1,000,000
-
$0.30
3,000,000
-
$0.25
4,500,000
-
$0.30
2,000,000
-
$0.20
26,667,000 12,500,000
-
-
-
-
-
-
-
-
-
-
5,000,000
5,000,000
-
- 16,667,000
2,000,000
-
1,000,000
-
3,000,000
-
4,500,000
-
-
2,000,000
- 39,167,000
*
Shares granted under the Long Term Incentive Plan (LTIP), which has been established by the group. Subject to the
ASX listing rules and under the terms of the LTIP, the Board may grant options and/or performance rights (options
with a zero exercise price) to eligible participants (‘awards’). Each award granted represents a right to receive one
share once the award vests and is exercised by the relevant participant.
49
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 34. Share-based payments (continued)
The weighted average share price was $0.25 (2017: $0.24).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.62 years
(2017: 2.35 years).
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
12/11/2015
12/11/2015
12/11/2015
28/07/2016
30/11/2016
30/11/2016
16/03/2017
14/06/2017
03/07/2017
12/11/2018
12/11/2018
12/11/2020
21/03/2019
30/11/2019
30/11/2019
16/03/2018
14/06/2020
31/10/2020
Share price Exercise
at grant date
price
Expected
volatility
Dividend
Risk-free
Fair value
yield
interest rate at grant date
$0.20
$0.00
$0.00
$0.19
$0.20
$0.20
$0.11
$0.20
$0.09
$0.20
$0.20
$0.25
$0.25
$0.30
$0.25
$0.30
$0.20
$0.30
45.00%
45.00%
45.00%
45.00%
41.70%
41.70%
41.70%
41.70%
70.00%
-
-
-
-
-
-
-
-
-
2.17%
2.17%
2.17%
1.96%
1.93%
1.93%
1.51%
1.66%
1.89%
$0.0650
$0.0470
$0.0200
$0.0145
$0.0339
$0.0450
$0.0002
$0.0600
$0.0200
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees and advisers. Equity-settled transactions are
awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services and to
others as part of their compensation for services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined for
each option granted using either the Binomial or Black-Scholes option pricing model, as appropriate, that takes into
account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether the group receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
50
For personal use only
The BetMakers Holdings Limited
Notes to the financial statements
30 June 2018
Note 35. Events after the reporting period
On 14 June 2018, the company expanded its wholesale strategy by entering into a conditional but binding Heads of
Agreement (“HOA”) to acquire 100% of the shares of DynamicOdds Pty Ltd (“DynamicOdds”) including its brands, data
and betting tools. Within 12 months of completion of the acquisition of assets, the company will make a payment of
$7,000,000. Final deal structure was announced on 29 August 2018, whereby $7,000,000 consideration will be paid, with
$150,000 having been paid on 1 August 2018, $1,350,000 to be paid on 31 August 2018, $1,000,000 on 12 December
2018 and $4,500,000 to be paid on 30 June 2019.
An additional $3,000,000 is payable to the vendor if the business achieves the following; if the EBIT for the Performance
Period is equal to or greater than AUD$1.25m but less than AUD$1.5m, the CDK Performance Payment will be
AUD$1.5m; or if the EBIT for the Performance Period is equal to or greater than AUD$1.5m, the CDK Performance
Payment will be AUD$3m.
On 18 July 2018, the group acquired through its newly incorporated subsidiary, BetMakers DNA Pty Ltd, 100% of shares in
leading global wagering service provider, Global Betting Services Pty Limited. Final deal structure was announced on 29
August 2018, whereby $7,000,000 consideration will be paid, with $1,000,000 to be paid in cash up-front on completion on
17 September 2018, $2,500,000 to be paid on 31 January 2019 and $3,500,000 to be paid 30 June 2019.
An additional $3,000,000 is payable to the vendor if the business achieves the following; if the EBIT of GBS during the
Performance Period is equal to or more than $1.2m but less than $1.5m, the Performance Payment will be $1m; or if the
EBIT of GBS during the Performance Period is equal to or more than $1.5m, the Performance Payment will be $3m.
On 20 July 2018, the company announced a non-renounceable Entitlements Offer for fully paid ordinary shares in TBH
(new shares) to raise approximately $6,700,000. Under the accelerated Institutional Offer, TBH successfully raised
approximately $1.04 million from the issue of 12,961,897 at an issue price of 8 cents ($0.08) per share.
In after balance date events, the company completed the Entitlements Offer through a retail offering to existing
shareholders and through a shortfall offering to both new and existing shareholders. The total amount raised through the
offer was $4,471,957.
No other matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect
the group's operations, the results of those operations, or the group's state of affairs in future financial years.
51
For personal use only
The BetMakers Holdings Limited
Directors' declaration
30 June 2018
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the group's financial position as at 30 June
2018 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Nicholas Chan
Chairman
31 August 2018
Sydney
___________________________
Todd Buckingham
Director
52
For personal use only
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF THE BETMAKERS HOLDINGS LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of The Betmakers Holdings Limited (the company), which
comprises the consolidated statement of financial position as at 30 June 2018, 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 The Betmakers Holdings Limited is in accordance with the Corporations Act
2001, including:
i)
ii)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of
its performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Emphasis of Matter regarding Going Concern & Recoverability of Intangibles and Deferred Tax
Assets
As noted in Note 2, the half-year report has been prepared by the Directors on a going concern basis. The
Directors have formed this view on the basis of the cash flow forecasts prepared with assumptions regarding
increased revenue growth from the wholesale wagering business and the successful transition of the two
businesses acquired after 1 July 2018 into the consolidated entity’s business activities.
As detailed in Note 2, the cash flow forecasts have included successful future capital raisings of $8m before 30
June 2019 to assist with the settlement of the deferred consideration relating to these acquisitions. Should the
consolidated entity be unable to raise the capital prior to 30 June 2019, this may have a material negative impact
on cash flows underpinning the going concern assumption and the recoverability of the intangibles and deferred tax
assets.
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.
PKF(NS) Audit & Assurance Limited
Partnership
ABN 91 850 861 839
Liability limited by a scheme
approved under Professional
Standards Legislation
Sydney
Newcastle
Level 8, 1 O’Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
755 Hunter Street
Newcastle West NSW 2302 Australia
PO Box 2368 Dangar NSW 2309
p
f
+61 2 8346 6000
+61 2 8346 6099
p
f
+61 2 4962 2688
+61 2 4962 3245
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
53
For personal use only 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
1.
Impairment testing of goodwill and other intangible assets
Why significant
How our audit addressed the key audit matter
As part of our procedures we assessed the consolidated entity’s
determination of Cash Generating Units
(CGUs). Our
procedures included but were not limited to assessing and
challenging:
•
•
•
•
•
the accuracy of the FY19 budget approved by the
Board by comparing the budget to FY18 actuals and
other financial information;
the key assumptions for long term growth in the
forecast cash flows by comparing them to historical
results and industry forecasts;
the discount rate applied by comparing the Weighted
Average Cost of Capital to industry benchmarks;
on a sample basis, the mathematical accuracy of the
cash flow models;
the impact of the acquisitions recently announced to
the market to the FY19 forecasts;
• 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
the
assumptions used, included in Note 12.
to sensitivities
relating
those
in
As disclosed in Note 12, the consolidated entity has goodwill
and other intangible assets of $3.25m as at 30 June 2018.
At the end of each reporting period, the consolidated entity is
required to determine whether there is any indication that the
intangible assets are impaired under AASB 136 Impairment of
Assets.
An asset is considered impaired if its carrying value is greater
than its recoverable amount. The consolidated entity 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
consolidated entity
judgment
determining key assumptions, which include:
to exercise significant
the
in
•
•
•
5-year cash flow forecast;
Terminal growth factor; and
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.
54
For personal use only Key Audit Matters (cont’d)
2. Sale of Topbetta Pty Limited
Why significant
How our audit addressed the key audit matter
The consolidated entity sold its interests in Topbetta Pty
Limited on 30 June 2018 to PlayUp Limited for $6m.
Our procedures included but were not limited to:
This transaction is material to the understanding of the 30 June
2018 financial statements and accordingly is considered to be
a Key Audit Matter.
•
reviewing the contract for sale and confirming the acquisition
date;
• assessing and challenging:
o
o
the assumptions used to assess the value of the
assets and liabilities disposed;
the assumptions used to estimate the consideration
receivable;
• ensuring the profit on sale has been correctly calculated;
We have also assessed the appropriateness of the disclosures
included in Note 8 in respect of the business disposal and
discontinued operations.
3. Recognition and Valuation of Deferred Tax Assets
Why significant
How our audit addressed the key audit matter
As disclosed in Note 13 of the financial report, at 30 June 2017
the consolidated entity has recorded a deferred tax asset of
$5.4m relating to deductible temporary differences and tax
losses incurred.
We have assessed and challenged management’s judgements
relating to the consolidated entity’s forecasts and the ability to
generate future taxable income, and also the recognition criteria
under AASB 112.
As noted in Note 3 of the financial report, deferred tax assets
are only recognised if the consolidated entity 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.
Our procedures included but were not limited to:
•
•
•
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 in accordance with the
carried forward tests.
We have also assessed the appropriateness of the disclosures
included in Note 13 in respect of the deferred tax balances.
55
For personal use only Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity 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.
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.
56
For personal use only Auditor’s Responsibilities for the Audit of the Financial Report (cont’d)
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.
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.
57
For personal use only Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2018.
In our opinion, the Remuneration Report of Topbetta Holdings Limited for the year ended 30 June 2018, 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.
PKF
MARTIN MATTHEWS
PARTNER
31 AUGUST 2018
NEWCASTLE, NSW
58
For personal use only The BetMakers Holdings Limited
Shareholder information
30 June 2018
The shareholder information set out below was applicable as at 20 July 2018.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
J P Morgan Nominees Australia Limited
RBW Nominees Pty Ltd (RBW Discretionary A/C)
Spenceley Management Pty Ltd (Spenceley Family S/F A/C)
Gillard Superannuation Pty Limited (Gillard Super Fund A/C)
Lobster Beach Pty Ltd
Todd Cameron Buckingham
HSBC Custody Nominees (Australia) Limited
Mr Craig Graeme Chapman (Nampac Discretionary A/C)
Mr Craig Michael Pearce
Nicole Ann Bannerman (P B Family A/C)
Oliver Shanahan
Forsyth Barr Custodians Ltd (Forsyth Barr Ltd-Nominee A/C)
Trenwith Technology Pty Ltd
Mr Paul Andrew Hain
Jodahbi Pty Limited (Wilgaflo Investments Pty Ltd)
Redan Street Pty Ltd (The Consvest Super Fund A/C)
William Patrick Butler
Michael Guy Pearce
Jo-Anne Buckingham (Buckingham Family A/C)
SMSM Superannuation Pty Ltd (The Mace Family S/F A/C)
59
Number
of holders
of options
Number
of holders
of ordinary ordinary
over
shares
shares
48
177
163
504
214
1,106
240
-
-
-
-
13
13
-
Ordinary shares
% of total
shares
issued
Number held
32,630,650
9,898,999
5,400,000
3,136,000
2,976,897
2,888,758
2,551,613
2,486,167
2,221,205
2,219,438
2,139,842
1,945,000
1,750,000
1,700,000
1,657,605
1,550,000
1,509,692
1,461,519
1,437,652
1,389,330
17.49
5.30
2.89
1.68
1.60
1.55
1.37
1.33
1.19
1.19
1.15
1.04
0.94
0.91
0.89
0.83
0.81
0.78
0.77
0.74
82,950,367
44.45
For personal use only
The BetMakers Holdings Limited
Shareholder information
30 June 2018
Unquoted equity securities
Unlisted Options expiring 12 November 2018 with strike price at $0.20
Unlisted Options expiring 12 November 2020 with strike price at $0.25
Unlisted Options expiring 21 March 2019 with strike price at $0.25
Unlisted Options expiring 30 November 2019 with strike price at $0.30
Unlisted Options expiring 30 November 2019 with strike price at $0.25
Unlisted Options expiring 31 October 2020 with strike price at $0.30
Number
on issue
Number
of holders
9,750,000
16,667,000
2,000,000
1,000,000
3,000,000
2,954,681
5
1
1
1
2
5
Substantial holders
The following holders are registered by the company as a substantial holder, having declared a relevant interest in
accordance with the Corporations Act 2001 (Cth), in the voting shares below:
RBW Nominees Pty Ltd ( RBW Discretionary Trust)
Industry Super Holdings Pty Ltd
Ryder Capital Limited
Todd Cameron Buckingham & Jo-Anne Buckingham ( Buckingham Family Trust)
Todd Cameron Buckingham
Ordinary shares
% of total
shares
Number held
1
issued 2
10,245,033
10,754,291
8,272,222
4,850,862
5.49
5.76
4.43
2.60
Options over ordinary
shares
% of total
options
issued
Number held
16,667,000
47.12
1 As disclosed in the last notice lodged with the ASX by the substantial shareholder
2 The percentage set out in the notice lodged with the ASX is based on the total issued capital of the Company at the date
of interest.
Voting rights
Ordinary shares
Subject to any rights or restrictions for the time being attached to any class or classes at general meetings of shareholders
or classes of shareholders:
(a)
each shareholder is entitled to vote and may vote in person or by proxy, attorney or representative;
(b)
shareholder has one vote; and
on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a
(c)
on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall,
in respect of each fully paid share held, or in respect of which he/she has appointed a proxy, attorney or representative, is
entitled to one vote per share held.
Options
Options do not carry any voting rights.
Share Buy-Backs
There is no current on-market buy-back scheme.
60
For personal use only