ABN: 48 074 735 452 Financial Report For The Year Ended 30 ... · Ms Sara Addison was appointed as company secretary 18 April 2008. Ms Addison is currently the General Manager Operations

ODYSSEY GAMING LIMITEDAND CONTROLLED ENTITIES

ABN: 48 074 735 452

Financial Report For The Year Ended30 June 2010

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ODYSSEY GAMING LIMITED AND CONTROLLED ENTITIES

30 June 2010

ABN: 48 074 735 452 CONTENTS Page

Directors' Report

1

Corporate Governance

5

Auditor's Independence Declaration

7

Consolidated Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Financial Statements

12

Directors' Declaration

38

Independent Auditor's Report

39

Additional Information for Listed Public Companies Corporate Directory

41

42

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Principal Activities and Significant Changes in Nature of Activities

Review of Operations

Financial Position

Significant Changes in State of Affairs

Dividends Paid or RecommendedThere are no dividends paid or declared for payment during the financial year.

After Balance Date Events

Future Developments, Prospects and Business Strategies

Environmental Issues

Information on Directors

———

——

—Directorships held in other listed entities during the three years prior to the current year

None

Has over 20 years of experience as a Company Chairman, Director and CEO with particular focus on the gaming industry.

Special Responsibilities10,000 ordinary sharesInterest in Shares and OptionsChairman of Remuneration and Nomination Committee and Governance Committee and member of Audit and Risk Committee

ODYSSEY GAMING LIMITED ABN: 48 074 735 452 AND CONTROLLED ENTITIESDIRECTORS' REPORT

Your directors present their report, together with the financial statements of the Group, being the Company and its controlled entities for the financial year ended 30 June 2010.

The principal activity of the consolidated group during the financial year was the provision of gaming machine monitoring and maintenance services in Queensland.

This year’s results reflect a year where venue based gaming receipts were consistently down on the corresponding previous monthly period last financial year. This was most evident in the area of elective maintenance work undertaken by venues contracted to Odyssey which during the period was down some 8.7% on the previous year.

There have been no significant changes in the state of affairs of the consolidated group during the financial year.

Odyssey won the contract to provide monitoring and ancillary services to the new Brisbane Lions AFL club facility in Springwood which is expected to be opened prior to Christmas.

There were no other significant changes in the nature of the consolidated group’s principal activities during the financial year.

Odyssey recorded a net profit after tax of $66,975 on sales of $9,517,272. By comparison the previous year produced a profit of $67,104 on sales of $9,509,590.

The operating costs of the group include additional consultancy costs incurred in the preparation of information required by the Victorian regulator, these costs totalled $104,786 in the financial year ended 30 June 2010.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the period was $755,581. This result was slightly lower than last year’s figure of $828,574.

Odyssey plans to commission a number of new systems in the second half of this financial year. The new Emark Solutions Call Logging, Inventory Control and WEB based venue reporting system will replace existing systems and provide venue operators with a host of new performance reports and information as well as the ability to log and track job lots online.

Experience

Despite the loss of the Caloundra RSL group's 408 gaming machines early in the financial year, soft demand for services in the second half and lower than expected sales of LCD monitor displays designed to rejuvenate ageing gaming machines, Odyssey managed to consolidate last year’s profit and secure sufficient additional gaming machines to end the year in line with the previous year.

Odyssey awaits the outcome of consultation between the State and Federal Government over the findings of the Productivity Commission report into gaming. In particular, legislation and regulation covering the possible extension of card based pre commitment programs. Odyssey participated in two government controlled pre commitment trials in Queensland, a fact that was extensively reported in the Commissions final report.

The directors believe the group is in a strong and stable financial position to expand and grow its current operations.

Odyssey will continue to seek new third party products and will again this year try to extend the service range of the maintenance division.

Gary Kenneth Garton

Odyssey is waiting for further information regarding the Monitoring Operator Licence in Victoria. Invitations to tender were expected to be issued in March this year.

The Queensland market will continue to remain extremely competitive in FY2011. Odyssey will remain focused on price, systems and service to grow market share.

Bachelor of Commerce, Melbourne University

The consolidated group is not subject to any significant environmental regulation in respect of its general activities.

QualificationsNon-executive Chairman

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11 11 1 1 1 1 1 1 11 11 1 1 1 1 1 1 3 3 - - - - - -

11 11 1 - 1 - 1 -

Committee Meetings

Mr Koops resigned as a director of Odyssey Gaming Limited on 7th October 2009.

Remuneration and Nomination

During the financial year, Odyssey Gaming Limited paid a premium of $21,403 to Oxley Insurance Brokers in respect of Directors and Officers Liability Insurance.

Numbereligible

to attend

Numberattended

Numberattended

• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

Non-audit Services

Indemnifying Officers or Auditor

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2010 has been received and can be found on page 7 of the Annual Report.

Michael Thomas Lloyd

Directorships held in other listed entities during the three years prior to the current year

Rolf Koops is an experienced commercial lawyer and has been in practice since 1986. He has been involved in banking and finance for many years and has been managing investments since 1996.

Rolf Koops

Gary Kenneth Garton

Audit and Risk

Numbereligible to

attend

598,233 ordinary shares held in Gaming Network Systems Pty Ltd (Receivers and Managers Appointed)

Has over 30 years experience in the hospitality and gaming industry and has been the General Manager, and later CEO of Odyssey Gaming Limited since 1998.

Interest in Shares and Options

ExperienceAnthony Charles Britten

Governance

None

QualificationsRolf Koops

Bachelor of Arts/ Bachelor of Laws, University of NSWExperience

Managing Directors and CEO

Non-executive director


None

Michael Thomas Lloyd Non-executive director


Interest in Shares and Options 200,000 ordinary shares

Admitted Licentiate Member, Institute of Building, England

Interest in Shares and Options 19,271,989 ordinary shares

Qualifications Higher National Diploma (Building Administration & Structures) Liverpool College of Building, England

Experience Has over 30 years experience in shopping centre development and management.

The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

Attendances by each director during the year were as follows:

Numbereligible to

attend

Numberattended

Anthony Charles Britten

• the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

Special Responsibilities Chairman of Audit and Risk Committee and member of Remuneration and Nomination Committee and Governance Committee

Numbereligible to

attend

Numberattended

Ms Sara Addison was appointed as company secretary 18 April 2008. Ms Addison is currently the General Manager Operations of Odyssey Gaming Services Pty Ltd, and has been employed by the company for 11 years.

Meetings of Directors

Company Secretary

During the financial year,11 meetings of directors (including committees of directors) were held.


None

Directors'

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Group Key Management Personnel


Remuneration Details for the Year Ended 30 June 2010

REMUNERATION REPORT

The following table of payments and benefits details, in respect to the financial year, the components of remuneration for each member of the key management personnel for the consolidated group and, to the extent different, the five group executives and five company executives receiving the highest remuneration:-

100 100 100


Sara Louise Addison 100

Total%

100 100

Gary Kenneth Garton

Rolf Koops

Proportions of elements of remuneration not related to performance

100 100

100



Company Secretary

Non executive directors are paid an annual fee for their services to the Company as determined by the Board from time to time by reference to comparable positions in public companies.

No fixed termNon-executive director

The key performance indicators (KPIs) are set annually, with a certain level of consultation with key management personnel to ensure buy-in. The measures are specifically tailored to the areas each individual is involved in and has a level of control over. The KPIs target areas the board believes hold greater potential for group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for the group and respective industry standards.

Performance based remuneration

Position Held as at 30 June 2010 and any change during the year


Executive director and CEO

The employment conditions of the Managing Director, Anthony Britten, are formalised in a contract of employment which was extended for a further three year period commencing 1 July 2009. The contract may be terminated by giving two (2) weeks notice for every year of service from 1 February 1998 to the termination date and the payment of a sum of money equal to the base salary for the period of notice. A minimum of ten (10) weeks notice is required should the Managing Director terminate the contract. The new contract was extended to include cash and shares bonus provisions based on the bid by Odyssey for Victoria and special termination provisions should the company be acquired or there be a substantial change in ownership.

Remuneration policy

Key management personnel receive a superannuation guarantee contribution required by the government, which is currently 9% and do not receive any other retirement benefits. Key management personnel may sacrifice part of their salary to increase payments to superannuation.

3 year contract commencing 1 July 2009Chairman No fixed term

No fixed termSara Louise Addison No fixed term

Odyssey aims to link the remuneration of its executive director to the financial performance of the Company and by reference to relevant market and economic conditions and having regard to the ASX recommendations relating to such remuneration.

The remuneration committee determines the proportion of fixed and variable compensation for each key management personnel, refer below:

Odyssey does not currently operate an employee share plan however part of the negotiations to extend the Managing Directors contract, included an incentive scheme based on the allocation of shares as part of the package.

Rolf Koops Non-executive director

Employment Details of Members of Key Management Personnel and Other Executives


All remuneration paid to key management personnel is valued at the cost to the company and expensed and is reviewed annually.

The following table provides employment details of persons who were, during the financial year, members of key management personnel of the consolidated group, and to the extent different, were amongst the five group executives or company executives receiving the highest remuneration. The table also illustrates the proportion of remuneration that was performance and non-performance based and the proportion of remuneration received in the form of option.

Contract details (duration & termination)

Gary Kenneth Garton

100

Fixed Salary/Fees

%

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2010

2009

Dated:

Securities Received that are not Performance Related

23/09/2010

3,553


No members of key management personnel are entitled to receive securities which are not performance-based as part of their remuneration package.


5,630 417,620 31,624 24,250 479,124

75,000


Long-term benefits



Gary Kenneth Garton

Michael Thomas LloydRolf KoopsAnthony Charles Britten

3,283

Table of Benefits and Payments for the year ended 30 June 2010

16,650 185,000

83,023

Salary, Fees and Leave

$

Gary Kenneth Garton

Sara Louise Addison

8,750 40,000

Rolf Koops

18,536 Sara Louise Addison

13,088 188,558 75,000

7,280 2,077 80,895 40,000

24,821


Salary, Fees and Leave

$Non-monetary

$

459,020

222,169

108,788

16,970

40,000

33,167

391,773 37,928

8,750 14,287

8,171

LSL$

Non-monetary$

Pension and superannuation

$

75,000

Post Employment

Total$

23,641 1,215

Post Employment

116,050

This Report of the Directors’, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.

Total$

Pension and superannuation

$

33,167 40,000

Short-term benefits

Short-term benefits

219,220

75,000

LSL$

4,498

Long-term benefits

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ODYSSEY GAMING LIMITED ABN: 48 074 735 452 AND CONTROLLED ENTITIES CORPORATE GOVERNANCE

Corporate Governance The Board of Directors is responsible for the Corporate Governance of Odyssey Gaming Limited (referred to in this document as “the Company”). The Directors are focused on fulfilling their responsibilities individually and as a Board to all of the Company’s stakeholders. This involves recognition of and a need to adopt principles of good corporate governance. The Board supports the guidelines on the “Principles of Good Corporate Governance and Best Practice Recommendations” established by the ASX Corporate Governance Council. A description of the Company’s practices in complying with the principles is set out below. Principle 1: Lay solid foundations for management and oversight The role of the Board is to lead and oversee the management and direction of the Company and its controlled entities. The Board have developed a Board Charter which sets out the role, composition and responsibilities of the Board of Odyssey Gaming Limited with the Company’s governance structure. The conduct of the Board is also governed by the Company’s constitution. Principle 2: Structure of the board to add value The Company’s constitution prescribes that it has a minimum number of three and a maximum number of twelve directors, and also requires that one third of directors, other than the managing directors, resign from office on an annual basis. The Board is currently comprised of three Directors, of whom one is executive and tow are non-executive. The ASX guidelines recommend that a Board should reflect a majority of independent directors. The board is currently comprised of the following persons:

Director Role Appointed Classification

Gary Garton Chairman 2006 Non-executive chairman Anthony Britten Director 2006 Executive Michael Lloyd Director 2006 Non-executive

Remuneration and Nomination Committee The Board has established a combined Remuneration and Nomination Committee comprising of the following directors: Gary Garton (chairman) Michael Lloyd The committee is responsible for the recruitment and evaluation of Board members. In addition the committee formulates the remuneration policies for the Board Members and the Managing Director of the Group. Audit and Risk Committee The Board has established a combined Audit and Risk Committee comprising of the following directors: Michael Lloyd (chairman) Gary Garton The Audit and Risk Committee has its own charter which sets out the purposes, goals and responsibilities and operations of the committee. Principle 3: Promote ethical and responsible decision making The Company has developed a Code of Conduct for the oversight of its obligations to stakeholders.

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ODYSSEY GAMING LIMITED ABN: 48 074 735 452 AND CONTROLLED ENTITIES CORPORATE GOVERNANCE

The Board has developed a Share Trading Policy which is focused upon maintaining a reputation for integrity. It is designed to create awareness to ensure the actions of directors, officers and employees are kept within the guidelines of the insider trading provisions in the Corporations Act 2001 and the ASX Listing Rule requirements. The Share Trading Policy can be viewed on the Company’s web-site. Principle 4: Safeguard integrity in financial reporting As stated above the Board has established an Audit and Risk Committee. Principle 5: Make timely and balance disclosure The Board recognises the importance of continuous disclosure and makes announcements in relation to material matters to the ASX. The Company engages external compliance and legal advice and seeks at all times to meet its obligations for disclosure as required by the ASX Listing Rules, and the Corporations Act 2001. The Board regularly monitors its responsibilities on disclosure in assessing the materiality and sensitivity of its activities. The Board has adopted a Disclosure Policy and a Compliance Effectiveness Policy which can be viewed on the Company’s web-site. In addition the Board has established a Governance Committee comprising of the following directors: Gary Garton (chairman) Michael Lloyd Principle 6: Respect the rights of shareholders The Company’s primary responsibility is to its shareholders and it seeks to communicate effectively with them by way of timely disclosure to the ASX, Annual Reports and easy access to general meetings of shareholders with opportunities for participation. Odyssey views shareholder meetings as opportunities for shareholders to meet with and question the Board and management of the Company. The Company’s Shareholder Communication Policy aims to provide good quality, clear communication with shareholders, using available methods and technologies. Principle 7: Recognise and manage risk As stated above the Board has an established Audit and Risk Committee, and has adopted a Risk Management Policy which can be viewed on the company web-site. The Audit and Risk Committee has responsibility for considering management’s presentations regarding processes which result in identifying, assessing and monitoring risks associated with Odyssey’s business operations and the implementation and maintenance of policies and control procedures to give adequate protection against key risks. The Board is responsible for approving and reviewing Odyssey’s operational risk management strategy and policy. The management of operational risk and the implementation of mitigation measures is the responsibility of Management. Principle 8: Remunerate fairly and responsibly The Board has established a Remuneration and Nominations Committee as stated above. The Company pays fees to its non-executive directors as a fixed amount per annum. Remuneration of employees is on a fair and reasonable basis having regard to factors such as skill and responsibility. Odyssey’s web-site at www.odysseygaming.com is a key source of information for Odyssey’s shareholders and prospective shareholders.

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7 “Liability limited by a scheme approved under Professional Standards Legislation”

WalterTurnbull Building

44 Sydney Avenue

BARTON ACT 2600

GPO Box 1955

CANBERRA ACT 2601

Tel 02 6247 6200

Fax 02 6162 9292

www.walturn.com.au

[email protected]

WalterTurnbull

ABN 90 613 256 181

BUSINESS ADVISORY SERVICES

ASSURANCE SERVICES

MANAGEMENT CONSULTING

FINANCIAL PLANNING

FRAUD & FORENSIC SERVICES

ACCOUNTING SOLUTIONS

CANBERRA SYDNEY

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ODYSSEY GAMING LIMITED AND CONTROLLED ENTITIES I declare that, to the best of my knowledge and belief, during the year ended 30 June 2010 there have been:

i. no contraventions of the auditor independence requirements as

set out in the Corporations Act 2001 in relation to the audit; and

ii. no contraventions of any applicable code of professional

conduct in relation to the audit.

Shane Bellchambers Canberra, 22 September 2010 Registered Company Auditor WalterTurnbull

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http://www.walturn.com.au/�

mailto:[email protected]�

2010 2009 2010 2009$ $ $ $

Continuing operationsSales Revenue 2 9,517,272 9,509,590 - - Cost of Sales (5,348,066) (5,283,454) - - Gross Profit 4,169,206 4,226,136 - - Other income 2 7,683 16,246 250,001 224,708 Occupancy expenses (152,444) (139,118) - - Employee benefits expense (2,266,846) (2,217,064) (7,822) (2,056)Telephone, fax & email expenses (86,209) (79,623) - - Finance costs (117,573) (153,986) - - Other expenses (897,809) (918,003) (241,164) (270,394)Write off of obsolete stock (18,000) (60,000) - - Depreciation & amortisation (563,118) (623,218) - - Profit before income tax 3 74,890 51,370 1,015 (47,742)Income tax expense 4 (7,915) 15,734 656 13,362 Profit from continuing operations 66,975 67,104 1,671 (34,380)Profit for the year 66,975 67,104 1,671 (34,380)Other comprehensive income for the period, net of tax - - - - Total comprehensive income for the period, net of tax 66,975 67,104 1,671 (34,380)

Total comprehensive income attributable to:Owners of the parent entity 66,975 67,104 1,671 (34,380)Non controlling interest - - - -

66,975 67,104 1,671 (34,380)

Overall operationsBasic and diluted earnings per share (cents) 8 0.0023 0.0024

The accompanying notes form part of these financial statements.

ODYSSEY GAMING LIMITED ABN: 48 074 735 452AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010

NoteConsolidated Group Parent Entity

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2010 2009 2010 2009$ $ $ $

ASSETSCURRENT ASSETSCash and cash equivalents 9 1,146,907 986,976 20,072 213 Trade and other receivables 10 921,637 1,070,969 - - Inventories 11 1,585,625 1,716,583 - - Other assets 16 108,589 181,477 - 3,333 TOTAL CURRENT ASSETS 3,762,758 3,956,005 20,072 3,546

NON-CURRENT ASSETSTrade and other receivables 10 - 14,375 - - Other financial assets 12 - - 11,262,869 11,368,599 Property, plant and equipment 14 775,210 951,661 - - Deferred tax assets 19 526,130 494,682 194,989 82,191 Intangible assets 15 2,182,896 2,291,582 106,835 106,835 TOTAL NON-CURRENT ASSETS 3,484,236 3,752,300 11,564,693 11,557,625 TOTAL ASSETS 7,246,994 7,708,305 11,584,765 11,561,171

LIABILITIESCURRENT LIABILITIESTrade and other payables 17 1,320,024 1,481,381 70,991 55,479 Borrowings 18 545,126 584,581 - - Short-term provisions 20 372,781 388,224 - - TOTAL CURRENT LIABILITIES 2,237,931 2,454,186 70,991 55,479

NON-CURRENT LIABILITIESBorrowings 18 745,927 1,121,083 - - Deferred tax liabilities 19 195,145 155,782 25,640 19,230 Other long-term provisions 20 57,582 33,820 - - TOTAL NON-CURRENT LIABILITIES 998,654 1,310,685 25,640 19,230 TOTAL LIABILITIES 3,236,585 3,764,871 96,631 74,709 NET ASSETS 4,010,409 3,943,434 11,488,134 11,486,462

EQUITYIssued capital 21 3,950,929 3,950,929 12,770,927 12,770,927 Retained earnings 59,480 (7,495) (1,282,793) (1,284,465)Parent interest 4,010,409 3,943,434 11,488,134 11,486,462 Non-controlling interest - - - - TOTAL EQUITY 4,010,409 3,943,434 11,488,134 11,486,462


Note


STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010Consolidated Group Parent Entity

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NoteOrdinary

Share Capital

Retained Earnings

Asset Revaluation Reserve

Total

$ $ $ $ 3,950,929 (217,712) 107,696 3,840,913

- 67,104 - 67,104

- 107,696 (107,696) - - 35,417 - 35,417

3,950,929 (7,495) - 3,943,434

7 - - - - 3,950,929 (7,495) - 3,943,434 3,950,929 (7,495) - 3,943,434

- 66,975 - 66,975 3,950,929 59,480 - 4,010,409

7 - - - - 3,950,929 59,480 - 4,010,409

NoteOrdinary

Share Capital

Retained Earnings Total

$ $ $ 12,770,927 (1,285,502) 11,485,425

- (34,380) (34,380)- 35,417 35,417

12,770,927 (1,284,465) 11,486,462

7 - - - 12,770,927 (1,284,465) 11,486,462 12,770,927 (1,284,465) 11,486,462

- 1,672 1,672 12,770,927 (1,282,793) 11,488,134

7 - - - 12,770,927 (1,282,793) 11,488,134



Balance at 30 June 2009Dividends paid or provided for

Adjustment for capital raising expenses

Parent Entity

Sub-total

Balance at 30 June 2010Dividends paid or provided for

Sub-totalTransactions with owners in their capacity as owners

Dividends paid or provided forBalance at 30 June 2009

Balance at 1 July 2008Total other comprehensive income for the year

Transactions with owners in their capacity as owners


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

Consolidated GroupBalance at 1 July 2008

Total other comprehensive income for the year

Balance at 1 July 2009

Balance at 30 June 2010

Sub-total

Dividends paid or provided for

- Asset revaluation reserve

Sub-totalAdjustment for capital raising expenses

Total other comprehensive income for the yearTransfer to and from reserves

Total other comprehensive income for the year

Balance at 1 July 2009



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2010 2009 2010 2009$ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 10,695,503 10,252,456 279,451 268,846 Interest received 7,683 16,246 - 121 Payments to suppliers and employees (9,666,886) (9,233,037) (259,592) (353,968)Finance costs (117,573) (153,986) - - Income tax paid - - - - Net cash provided by/(used in) operating activities 25 918,727 881,679 19,859 (85,001)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of property, plant and equipment - 90 - - Purchase of property, plant and equipment (115,404) (86,520) - - Purchase of shares in Subsidiary - - (50,000) - Net cash provided by/(used in) investing activities (115,404) (86,430) (50,000) -

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings - loan - 50,000 - 50,000 Repayment of borrowings (484,771) (483,141) 50,000 - Net cash provided by/(used in) financing activities (484,771) (433,141) 50,000 50,000 Net increase(decrease) in cash held 318,552 362,108 19,859 (35,001)Cash and cash equivalents at beginning of financial year 9 286,725 (75,383) 213 35,214 Cash and cash equivalents at end of financial year 9 605,277 286,725 20,072 213


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010


NoteConsolidated Group Parent Entity

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(a)

Change in accounting policy

The changes were implemented prospectively from 1 July 2009 however did not impact on any transactions of the group during the year.(b)

Investments in subsidiaries are accounted for at cost in the separate financial statements of Odyssey Gaming Limited.

As at the reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) the consolidated group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

Goodwill is recognised initially at the excess of cost over the acquirer's interest in the net fair value of the identifiable assets recognised. If the fair value of the acquirer's interest is greater than the cost, the surplus is immediately recognised in the profit or loss.

A list of controlled entities is contained in Note 14 to the financial statements.

Business Combinations

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable net assets as at acquisition date, being the date that control is obtained. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the asset transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

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

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method.

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Odyssey Gaming Limited at the end of the reporting period. A controlled entity is any entity over which Odyssey Gaming Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010

This financial report includes the consolidated financial statements and notes of Odyssey Gaming Limited and controlled entities (‘Consolidated Group’ or ‘Group’), and the separate financial statements and notes of Odyssey Gaming Limited as an individual parent entity (‘Parent Entity’).

Summary of Significant Accounting PoliciesNote 1

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Basis of Preparation

Principles of Consolidation

Income TaxThe income tax expense/(revenue) for the year comprises current income tax expense/ (income) and deferred tax expense/ (income).

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities/(assets) are therefore measured at the amounts expected to be paid to /(recovered from) the relevant taxation authority.

Current and deferred income tax expense/(income) is charged or credited directly to other comprehensive income instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

A revised AASB 3 Business Combinations became operative on 1 July 2009. While the revised standard continues to apply the purchase method to business combinations, there have been some significant changes. All purchase consideration is now recorded at fair value at the acquisition date. Contingent payments classified as debt are subsequently remeasured through profit or loss. Under the group's previous policy, contingent payments were only recognised when the payments were probable and could be measured reliably and were accounted for as an adjustment to the cost of acquisition.

Acquisition-related costs are expensed as incurred. Previously, they were recognised as part of the cost of acquisition and therefore included in goodwill. Non-controlling interests in an acquiree are now recognised either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable assets. This decision is made on an acquisition-by-acquisition basis. Under the previous policy, the non-controlling interest was always recognised at its share of the acquiree's net identifiable assets.

If the group recognises previous acquired deferred tax assets after the initial acquisition accounting is completed there will no longer be any adjustment to goodwill. As a consequence, the recognition of the deferred asset will increase the group's net profit after tax.

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(c)

(d)

Term of leasePlant and equipment leased to external parties

The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can bemeasured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Property, Plant and Equipment

The depreciation rates used for each class of depreciable assets are:

2 to 4 years

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

2 to 15 years

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

Useful lifeClass of Fixed Asset

Plant and equipment

The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Depreciation

Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Inventories are measured at the lower of cost and net realisable value. Irreparable or obsolete parts are written off and expensed. Items identified as 'slow moving' are assessed for impairment at each reporting date. The cost of repairs to parts are expensed at the time they are incurred.

Odyssey Gaming Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity.

Inventories

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Plant and equipment

Leased plant and equipment

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Tax Consolidation

The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2007. The tax consolidated group has entered a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to the head entity.

(ii) Rotatable parts comprising of parts which are rotated in the maintenance of machines. As these parts become faulty they are replaced, repaired and then become usable parts in the inventory system.(iii) Salvage parts are obtained from decommissioned machines and are entered into the inventory system at zero cost.

Inventories include an element of unrepaired parts which are deemed impaired at reporting date. Upon restoration, these inventories are subsequently brought back to account with the corresponding credit recognised in the income statement.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

(i) Merchandise stock are purchased non-machine peripheral items used in the monitoring and maintenance of gaming machines.

Inventories comprise of three categories of parts:

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

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(e)

(f)

(i)

(ii)

(iii)

(iv)

(v)

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leases

Financial Instruments

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred and recognised in the profit or loss on a straight-line basis over the period of the lease. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately.

Initial Recognition and Measurement

Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other financial assets are classified as current assets.)

Held-to-maturity investments

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.)

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Financial LiabilitiesNon-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Fair valueFair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

Classification and Subsequent Measurement

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

If during the period the Group sold or reclassified more than an insignificant amount of the held-to-maturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale.

Financial assets at fair value through profit or loss

Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other investments are classified as current assets.)

Loans and receivables

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading or for the purpose of short term profit taking. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

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(g)

(h)

(i) Functional and presentation currencyItems included in the financial statements of each of the group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is the Consolidated Group's functional and presentation currency.

Intangibles

When the recoverable amount of the goodwill is less than the carrying amount, an impairment loss is recognised. Impairment losses recognised for goodwill are not subsequently reversed.

Development costs have a finite life and are amortised on a systemic basis matched to the future economic benefits over the useful life of the project. The expected useful life of the Sentinal Monitoring System is 10 years.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill

Impairment

Goodwill and goodwill on consolidation and initially recorded at the amount by which the purchase price for a business combination exceeds the fair value attributed to the interest in the net fair value of identifiable assets at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Impairment of Assets

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the profit or loss.

Odyssey Gaming Limited performs its impairment testing at reporting date using a discounted cash flow methodology. Further details on the methodology and assumptions are outlined in note 16.

Monitoring Licence

Developments

At each reporting date, or more frequently if events or changes in circumstances indicate possible impairment, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include consideration of external factors, such as changes in expected future processes, technology and economic conditions, are also monitored to asses for indicators of impairment. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

The licence is initially recorded at cost and amortised on a straight line basis over the period of 10 years. The balance is reviewed annually and any balance representing future benefits for which the realisation is no longer probable is written off.

Odyssey Gaming Services Pty Ltd has invested in the development of a software upgrade for the Sentinel Monitoring System which is used in its core activities.

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(j)

(k)

(l)

(m)

(n)

(o)

(p)

(q)

(r)

Comparative Figures

Provisions

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

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

Goods and Services Tax (GST)

Borrowing Costs

Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised using the effective interest method

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on costs.

Critical Accounting Estimates and Judgments

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Trade and Other Payables

Employee Benefits

Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.

Revenue and Other Income

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

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

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period is disclosed.

Cash and Cash Equivalents

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

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

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

The management have identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

Further details of the nature of these assumptions and condition may be found in the relevant notes to the financial statements.

Receivables and payables in the statement of financial position are shown inclusive of GST.

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 evaluate their judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The management base their judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

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Key Estimates

Key Judgements

(s) Adoption of new and revised accounting standards

AASB 8 Operating Segments

With respect to cash flow projections for impairment of intangibles, numbers of Electronic Gaming Machines, (EGMs), have been factored into the valuation models at a static rate for the next five years on the basis of management’s expectations and previous performance.

Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on the managements' estimates of future cash flows. These depend on estimates of sales volumes, operating costs, capital expenditure, dividends and other future capital transactions. Judgements are also required about the application of income tax legislation.

Identification and measurement of segments – AASB 8 requires the ‘management approach’ to the identification, measurement and disclosure of operating segments. The ‘management approach’ requires that operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker, for the purpose of allocating resources and assessing performance. This could also include the identification of operating segments which sell primarily or exclusively to other internal operating segments. Under AASB 114 segments were identified by business and geographical areas, and only segments deriving revenue from external sources were considered.

(i) ImpairmentThe group assesses impairment at each reporting date by evaluating conditions and events specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the income statement.

The adoption of the ‘management approach’ to segment reporting has resulted in the identification of reportable segments largely consistent with the prior year.

Disclosure impact

In February 2007 the Australian Accounting Standards Board issued AASB 8 which replaced AASB 114: Segment Reporting. As a result, some of the required operating segment disclosures have changed with the addition of a possible impact on the impairment testing of goodwill allocated to the cash generating units (CGUs) of the entity. Below is an overview of the key changes and the impact on the Group’s financial statements.

Measurement impact

No impairment has been recognised in respect of goodwill or other intangible assets at the end of the reporting period.

(i) Recovery of deferred tax assets

(ii) Taxation

The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these standards and interpretations has had on the financial statements of Odyssey Gaming Limited.

During the current year the Group has adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory.

Deferred tax assets are recognised for deductable temporary differences, the directors' consider that it is probable that future taxable profits will be available to utilise those temporary differences.

Impairment Testing of the Segments Goodwill

AASB 8 requires a number of additional quantitative and qualitative disclosures, not previously required under AASB 114, where such information is utilised by the chief operating decision maker. This information is now disclosed as part of the financial statements.

Management have considered the requirements of AASB 136 and determined implementation of AASB 8 has not impacted the CGU’s of each operating segment.

AASB 136: Impairment of Assets, para 80 requires that goodwill acquired in a business combination shall be allocated to each of the acquirer’s CGUs, or group of CGUs that are expected to benefit from the synergies of the combination. Each cash generating unit (CGU) which the goodwill is allocated to must represent the lowest level within the entity at which goodwill is monitored, however it cannot be larger than an operating segment. Therefore, due to the changes in the identification of segments, there is a risk that goodwill previously allocated to a CGU which was part of a larger segment could now be allocated across multiple segments if a segment had to be split as a result of changes to AASB 8.

The group's accounting policy for taxation requires the directors' judgement as to the types of arrangements considered to be a tax on income in contrast to an operating profit. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets are only recognised where it is considered more likely than not that they will be recovered, which is dependant on the generation of sufficient future tax profits. Deferred tax liabilities are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future.

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AASB 101 Presentation of Financial Statements

(t) New Accounting Standards for application in future periods

─────

─

Terminology changes – The revised version of AASB 101 contains a number of terminology changes, including the amendment of the names of the primary financial statements.

● AASB 2009-10: Amendments to Australian Accounting Standards – Classification of Rights Issues [AASB 132] (applicable for annual reporting periods commencing on or after 1 February 2010)

allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument

Reporting changes in equity – The revised AASB 101 requires all changes in equity arising from transactions with owners in their capacity as owners to be presented separately from non-owner changes in equity. Owner changes in equity are to be presented in the statement of changes in equity, with non-owner changes in equity presented in the statement of comprehensive income. The previous version of AASB 101 required that owner changes in equity and other comprehensive income be presented in the statement of changes in equity.

Statement of comprehensive income – The revised AASB 101 requires all income and expenses to be presented in either one statement, the statement of comprehensive income, or two statements, a separate income statement and a statement of comprehensive income. The previous version of AASB 101 required only the presentation of a single income statement.

removing the tainting rules associated with held-to-maturity assets

In September 2007 the Australian Accounting Standards Board revised AASB 101, and as a result there have been changes to the presentation and disclosure of certain information within the financial statements. Below is an overview of the key changes and the impact on the Group’s financial statements.

This standard removes the requirement for government related entities to disclose details of all transaction with the government and other government related entities and clarifies the definition of a related party to remove inconsistencies and simplify the structure of the standard. No changes are expected to materially affect the Group.

These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Group has not yet determined any potential impact on the financial statements.

removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost

The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:

The amendments clarify that rights, options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro-rata to all existing owners of the same class of its own non-derivative equity instruments. The amendments are not expected to impact the Group.

Disclosure impact

● AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011)

● AASB 9: Financial Instruments and AASB 2009-11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013)

This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. The standard also amends AASB 8 to require entities to exercise judgement in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. The amendments are not expected to impact the Group.

simplifying the requirements for embedded derivatives

● AASB 2009-5 “Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139] (applicable for annual reporting periods commencing from 1 January 2010)

financial assets will need to be reclassified where there is a change in an entity’s business model as they are initially classified based on(a) the objective of the entity’s business model for managing the financial assets; and(b) the characteristics of the contractual cash flows

simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value

● AASB 2009-12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011)

This standard details numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Group.

The changes made to accounting requirements include:

The group’s financial statements now contain a statement of comprehensive income.

Other comprehensive income – The revised version of AASB 101 introduces the concept of “other comprehensive income” which comprises of income and expense that are not recognised in profit or loss as required by other Australian Accounting Standards. Items of other comprehensive income are to be disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating to each component of other comprehensive income. The previous version of AASB 101 did not contain an equivalent concept.

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Note2010 2009 2010 2009

$ $ $ $

— 9,517,272 9,509,590 - - 9,517,272 9,509,590 - -

— 2(a) 7,683 16,246 1 121 — - - 250,000 224,587

7,683 16,246 250,001 224,708 9,524,955 9,525,836 250,001 224,708

(a) Interest revenue from:— 7,683 16,246 1 121

7,683 16,246 1 121

Note2010 2009 2010 2009

(a) $ $ $ $ 5,348,066 5,283,454 - -

Write-off of obsolete stock 18,000 60,000 Impairment of inventories (i) 27,494 128,257 - - Consultancy costs (ii) 104,786 88,271 34,422 51,322 Finance costs— 117,573 153,986 - -

Total finance costs 117,573 153,986 - - Bad and doubtful debts:— 23,433 17,184 - -

23,433 17,184 - -

— 73,518 72,000 - -

13,593 9,881 - -

(b)

(i) 27,494 128,257 - - (ii) 104,786 88,271 34,422 51,322

● AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvement Project [AASB 3,7, 121, 128, 131, 132 & 139] (applicable for annual reporting periods commencing from 1 July 2010)

● AASB 2010-4 Amendments to Australian Accounting Standards arising from the Annual Improvement Project [AASB 1, 7, 101, 134 & Interpretation 13] (applicable for annual reporting periods commencing from 1 January 2011)


Consolidated Group Parent Entity

trade receivables

Profit for the Year

Rental expense on operating leases

Note 3

minimum lease payments

Cost of sales


This Interpretation deals with how a debtor would account for the extinguishment of a liability through the issue of equity instruments. The Interpretation states that the issue of equity should be treated as the consideration paid to extinguish the liability, and the equity instruments issued should be recognised at their fair value unless fair value cannot be measured reliably in which case they shall be measured at the fair value of the liability extinguished. The Interpretation deals with situations where either partial or full settlement of the liability has occurred. This Interpretation is not expected to impact the Group.

The Group does not anticipate early adoption of any of the above Australian Accounting Standards.

Sales Revenuesale of goods & services

Revenue and Other Income

Total Sales Revenue

interest receivedother revenue

Consolidated Group

Expenses

Total interest revenue

Other Revenue

other persons

Total Other RevenueTotal Sales Revenue & Other Revenue

Consultancy costs

(ii) Consultancy costs in the year ended 2010 relate to additional consultation required in the expression of interest submitted to the Victorian Government for the future allocation of a single Monitoring Operator Licence in Victoria.

(i) Inventories were impaired in the year 2010 to reflect the balance of unrepaired stock held at full value in the inventories.

Impairment of inventories

The following significant revenue and expense items are relevant in explaining the financial performance:

Other persons

Loss on disposal of property, plant and equipment

Significant Revenue and Expenses

Total bad and doubtful debts

● AASB 2009-13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] (applicable for annual reporting periods commencing on or after 1 July 2010)

This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The amendments allow a first-time adopter to apply the transitional provisions in Interpretation 19. This Interpretation is not expected to impact the Group.

● AASB Interpretation 19 “Extinguishing Financial Liabilities with Equity Instruments” (applicable for annual reporting periods commencing from 1 July

Parent Entity

The financial report was authorised for issue on 22nd September 2010 by the Board of Directors.

Note 2

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2010 2009 2010 2009Note $ $ $ $

(a)- - - -

19 24,762 23,673 305 (13,362)(16,847) (39,407) (961) -

- - 7,915 (15,734) (656) (13,362)

(b)

— 22,467 15,411 — 305 (14,323)

— 2,295 8,262 - 961 24,762 23,673 305 (13,362)

— 16,847 39,407 (961) - — - - - -

7,915 (15,734) (656) (13,362)

10.6% (30.6%) (64.6%) 28.0%

2010 2009$ $

Short-term employee benefits 429,701 449,244 Post-employment benefits 24,821 24,250 Other long term benefits 4,498 5,630

459,020 479,124

other non-allowable items

parent entityAdd:Tax effect of:

Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s key management personnel for the year ended 30 June 2010.

The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:

Prior year adjustment

Current tax

Income Tax Expense

The components of tax expense comprise:

Parent Entity

prior year adjustment

Over provision in respect of prior years

Income tax attributable to entityoverprovision for income tax in prior year

Tax effect of:

Interests of Key Management Personnel (KMP)Note 5

Less:

The applicable weighted average effective tax rates are as follows:

consolidated group

The prima facie tax on profit from ordinary activities beforeincome tax is reconciled to the income tax as follows:

Prima facie tax payable on profit from ordinary activities before income tax at 30% (2009: 30%)

Deferred tax

Consolidated Group

Note 4

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KMP Shareholdings

30 June 2010

Balance at beginning of

year

Granted as remuneration

during the year

Issued on exercise of

options during the year

Other changes during the year

Balance at end of year

10,000 10,000 (i) 598,233 598,233 (ii) 19,271,989 (19,271,989) -

200,000 8,600 208,600 4,000 4,000

20,084,222 - - (19,263,389) 820,833

30 June 2009

Balance at beginning of

year

Granted as remuneration

during the year

Issued on exercise of

options during the year

Other changes during the year

Balance at end of year

10,000 10,000 (i) 598,233 598,233 (ii) 19,271,989 19,271,989

200,000 200,000 4,000 4,000

20,084,222 - - - 20,084,222

(i)(ii)

Other KMP Transactions

2010 2009 2010 2009$ $ $ $

Remuneration of the auditor of the parent entity for:— 128,097 77,282 48,597 45,114

For details of other transactions with KMP, refer to Note Note 27: Related Party Transactions.

Note 6

Gary Kenneth Garton

There have been no other transactions involving equity instruments other than those described in the tables above.

Auditors’ Remuneration

Sara Louise Addison

Anthony Charles BrittenRolf KoopsMichael Thomas Lloyd

Consolidated Group

Gary Kenneth Garton

Sara Louise Addison



The number of ordinary shares in Odyssey Gaming Limited held by each KMP of the Group during the financial year is as follows:

Parent Entity

auditing or reviewing the financial report

Mr Koops resigned as a director of Odyssey Gaming Limited on 7th October 2009.The shares held by Mr Britten are held in Gaming Network Systems Pty Ltd (Receivers and Managers appointed).

Rolf Koops

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2010 2009 2010 2009$ $ $ $

(a)

—

216,924 216,924 731,986 731,986 216,924 216,924 731,986 731,986

2010 2009$ $

(a)

66,975 67,104

66,975 67,104

No. No.(b) 28,509,070 28,509,070

Note2010 2009 2010 2009

$ $ $ $ 605,277 286,725 20,072 213 541,630 700,251 - -

28 1,146,907 986,976 20,072 213

(i) 18 - (106,010) - - - (106,010) 20,072 -

605,277 286,725 20,072 213 18 - (106,010) - -

605,277 180,715 20,072 213

Note2010 2009 2010 2009

$ $ $ $

930,284 1,051,758 - - 10a (25,814) (2,995) - -

904,470 1,048,763 - - 17,167 22,206 - -

921,637 1,070,969 - -

- 14,375 - - - 14,375 - -

Reconciliation of cash

Parent Entity

Provision for impairmentTrade receivables

Consolidated Group

CURRENT

Term receivables

Note 9

Note 10

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows:

Reconciliation of earnings to profit or loss

credits arising from:

Consolidated Group

Trade and Other Receivables

Total current trade and other receivables

Term receivablesNON-CURRENT

Cash and cash equivalents

Cash and Cash Equivalents

Parent Entity

Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS

Cash at bank held for jackpotsCash at bank and in hand

Earnings used in the calculation of dilutive EPS

Dividends

Consolidated Group

Note 7

dividends recognised as receivables, and franking debits arising from payment of proposed dividends, and franking credits that may be prevented from distribution in subsequent financial years

Earnings per Share

Bank overdrafts

(i) Jackpot trust accounts in overdraft represent short term timing differences between member contributions and jackpot wins. On 1st July 2009 all jackpot accounts were combined into a single bank facility as approved by the Office of Liquor and Gaming Regulation.

Jackpot trust accounts in overdraft

Note 8

Balance of franking account at year end adjusted for

Earnings used to calculate basic EPS

There are no dividends paid or declared for payment during the financial year.

Parent EntityConsolidated Group

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(a) Provision For Impairment of Receivables

Movement in the provision for impairment of receivables is as follows:Opening Balance

Charge for the Year

Amounts paid by debtors

Amounts Written Off

Closing Balance

01.07.08 30.06.09Consolidated Group $ $ $ $ $Current trade receivables 1,444 17,693 - (16,142) 2,995

1,444 17,693 - (16,142) 2,995 Parent EntityCurrent trade receivables - - - - -

- - - - - Opening Balance

Charge for the Year

Amounts paid by debtors

Amounts Written Off

Closing Balance

01.07.09 30.06.10Consolidated Group $ $ $ $ $Current trade receivables 2,995 24,477 (983) (675) 25,814

2,995 24,477 (983) (675) 25,814 Parent EntityCurrent trade receivables - - - - -

- - - - -

Credit risk - Trade and Other Receivables

<30 31-60 61-90 >90$ $ $ $ $ $ $

913,440 25,814 16,480 20,361 (161) 7,750 843,194 17,167 - - - - - 17,167

930,607 25,814 16,480 20,361 (161) 7,750 860,361

<30 31-60 61-90 >90$ $ $ $ $ $ $

1,074,845 2,995 23,854 447 175 1,128 1,046,246 14,137 - - - - - 14,137

1,088,982 2,995 23,854 447 175 1,128 1,060,383

<30 31-60 61-90 >90$ $ $ $ $ $ $

- - - - - - - - - - - - - - - - - - - - -

<30 31-60 61-90 >90$ $ $ $ $ $ $

- - - - - - - - - - - - - - - - - - - - -

Gross Amount

Other receivablesTotal

2010Trade and term receivables

Past due and impaired

Consolidated Group

Other receivablesTotal

Neither the Group nor parent entity holds any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired.

Total

Within initial trade terms

Past due but not impaired(days overdue)

Trade and term receivables



Other receivables

Gross Amount




Parent Entity

2009

There are balances within trade and other receivables that contain assets that are not impaired and are past due. It is expected these balances will be received when due. Impaired assets are provided for in full.

Gross Amount

The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled within the terms and conditions agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.


2009

Parent Entity

Gross Amount

2010

Past due but not impaired(days overdue)Consolidated Group



TotalOther receivables


The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and mentioned within Note 10. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.

The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.

Current trade and term receivables are non-interest bearing loans and generally on 30-day terms. Non-current trade and term receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is an objective evidence that an individual trade or term receivable is impaired. These amounts have been included in the other expenses item.


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2010 2009 2010 2009(b) Financial Assets classified as loans and receivables Note $ $ $ $

Trade and other Receivables— Total Current 921,637 1,070,969 - - — Total Non-Current - 14,375 - -

921,637 1,085,344 - -

Financial Assets 28 921,637 1,085,344 - -

Note2010 2009 2010 2009

$ $ $ $

1,750,376 1,844,840 - - (i) (164,751) (128,257) - -

1,585,625 1,716,583 - -

Note2010 2009 2010 2009

$ $ $ $(a), (b) - - 11,262,869 11,368,599

- - 11,262,869 11,368,599

(a)

2010 2009Subsidiaries of Odyssey Gaming Limited:

100.00 100.00 100.00

2010 2009 2010 2009$ $ $ $

904,909 977,860 - - (671,256) (703,333) - - 233,653 274,527 - -

1,786,252 1,610,081 - - (1,244,695) (932,947) - -

541,557 677,134 - -

775,210 951,661 - -

Inventories

Investment in controlled entities at cost

Parent Entity

Odyssey Gaming Services Pty LtdAustraliaOdyssey Gaming Services Victoria Pty Ltd

Accumulated depreciation

Note 13 Controlled Entities

Accumulated depreciation

Capitalised leased assets

Total Plant and Equipment

Leased plant and equipment

PLANT AND EQUIPMENTPlant and equipment:At cost

Note 14

Controlled Entities Consolidated


Parent Entity

Australia

Odyssey Gaming Services Victoria Pty Ltd was established 11 February 2010 as a 100% owned subsidiary of Odyssey Gaming Limited.

Country of Incorporation Percentage Owned (%)*

(b) On 11 February 2010, the parent entity established a new subsidiary Odyssey Gaming Services Victoria Pty Ltd as required by the expression of interest submitted to the Victorian Government for the future allocation of a single Licenced Monitoring Operator licence in Victoria. The initial set up was an issue of 5 shares at $10,000 each.

Parent Entity


Parts held for provision of maintenance services at standard costImpairment of stock

Note 11

* Percentage of voting power is in proportion to ownership

Consolidated Group

Consolidated Group

CURRENTAt cost

Other Financial Assets

Consolidated Group

Note 12

(i) Inventories were impaired in the year ended 2010 to reflect the balance of unrepaired stock held at full value within inventories.

(a) There is no formal agreement for repayment of the investment in the controlled entity, however the parent entity can request repayment on call.

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(a)

Plant and Equipment

Leased Plant and

Equipment Total$ $ $

320,849 820,616 1,141,465 138,596 196,105 334,701

(9,972) - (9,972) 274,527 677,134 951,661 115,405 176,170 291,575 (13,593) - (13,593)

(142,686) (311,747) (454,433) 233,653 541,557 775,210

(a) Reconciliation of carrying amounts at the beginning and end of the period.2010 2009 2010 2009

$ $ $ $

Formation costs 752 752 - -

1,286,540 1,286,540 - - - - - -

1,286,540 1,286,540 - -

303,605 303,605 - - (86,021) (55,660) - -

217,584 247,945 - -

890,071 890,071 106,835 106,835 (212,051) (133,726) - - 678,020 756,345 106,835 106,835

Formation Cost Goodwill LicencesDevelopment

Costs$ $ $ $

752 1,286,540 278,305 834,670 - - - - - - (30,360) (78,325)

752 1,286,540 247,945 756,345

752 1,286,540 247,945 756,345 - - - - - - (30,361) (78,325)

752 1,286,540 217,584 678,020

(i)

(ii)

(b) Description of the Group's intangible assets and goodwill

(i) Formation costs

Formation costs are carried at cost.

Amortisation charge

On 16 January 2008 the group acquired the business and intellectual property of Saturn Software Solution Pty Limited for a total cost of $712,500. The consideration consisted of $150,000 in cash and $562,500 through the issue of 1,125,000 ordinary shares at a par value of $0.50. The share issue is recognised in the accounts at $0.20 which represents the market price on the issue date of the shares of 1 January 2008.

On 27 August 2007 the Monitoring Operators Licence was renewed for a further period of 10 years. The intangible asset is amortised over the life of the licence.

Closing value at 30 June 2010

Consolidated Group:

Additions

Consolidated Group:

DisposalsBalance at 30 June 2009

Development & Listing costs

The group's site controllers which were previously revalued as at 30 June 2003 were disposed of on 30 June 2009. The revaluation surplus held in the asset revaluation reserve in shareholder's equity was reclassified from equity and recognised in profit or loss as a reclassification adjustment.

Movements in Carrying Amounts

Disposals

Balance at 1 July 2008Additions

Balance at the beginning of year

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

Depreciation expense

Additions


Intangible Assets

Parent Entity

Cost

Accumulated amortisation and impairmentNet carrying value

Additions

Net carrying value

Goodwill

Note 15

Consolidated Group

Cost

Cost

Accumulated impaired losses

Net carrying value

Year ended 30 June 2010

Amortisation charge

Balance at the beginning of year

Year ended 30 June 2009

Monitoring Licence

Accumulated amortisation and impairment

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(ii) Goodwill

(iii) Monitoring licence

The Monitoring Operators Licence is held for a period of 10 years and is amortised over the life of the licence.

(iv) Development and listing costs

Listing costs are carried at cost.

(c) Impairment tests for goodwill and intangibles with indefinite useful lives

(i) Description of cash generating units and other relevant information

2010 2009$ $

Maintenance 702,290 702,291 Monitoring 584,250 584,249 Total 1,286,540 1,286,540

(ii) Key assumptions use in value in use calculations for Maintenance unit

The calculation of value in use for the maintenance units is most sensitive to the following assumptions:

- Gross margins

- Growth rates

- Operational costs

- Discount rates

a)

b)

c) d)

Discount rates used in the value in use calculations include the following assumptions:

After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment losses. Goodwill is not amortised but is subject to impairment testing on an annual basis or whenever there is an indication of impairment.

Cost of debt based on the average rate of interest currently being incurred by the Consolidated Entity

Goodwill acquired through business acquisitions have been allocated to two individual cash generating units, each of which is a reportable segment, for impairment testing as follows:

Operational costs have been forecast forward at current levels, this represents management view that savings in operational costs from process improvements will offset any increases in external costs.

Bond rates produced by the Reserve Bank of Australia at 30 June 2010

The management recognise that the growth rates for numbers of Electronic Gaming Machines, (EGMs), have remained static in the previous reporting period and therefore cash flow forecasts are based on the 30 June 2010 levels.

Expected market return based on assumptions made by the Board of Directors

The development costs relate to the Qcom 1.6 upgrade to the Sentinel Monitoring System used in the monitoring of gaming venues. The intangible asset is amortised over 10 years which is the expected useful life of the Sentinel Monitoring System.

The recoverable amount of the goodwill arising from the acquisition of B&B Gaming Services business is determined based on value-in-use calculations. Value-in-use is calculated based on the present value on the incremental cash flow differentials that are generated as a consequence of the internalisation of the maintenance operations that were formerly outsourced to B&B Gaming Services Pty Limited as a contractor. The value-in-use represents the present value of these cash flows over a five year period on a static poker machine population. The goodwill for this acquisition is included in the Maintenance cash generating unit.

Gross margins are based on average margins achieved in the previous two years, with the assumption that these levels will be maintained in the forecasted period.

The recoverable amount of Saturn Software Solutions is also determined on a value-in-use calculations. Value-in-use is calculated based on the present value on the incremental cash flow differentials that are generated as a consequence of Titan software the major product of Saturn Software, being integrated into the machine population. The value-in-use represents the present value of these cash flows over a five year period on a static poker machine population.

Equity beta factor based on assumptions made by the Board of Directors

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2010 2009 2010 2009$ $ $ $

108,589 25,921 - 3,333 (i) - 155,556 - -

108,589 181,477 - 3,333

(i)

Note2010 2009 2010 2009

$ $ $ $

616,604 522,915 31,379 33,020 161,024 264,765 39,612 22,459 542,396 693,701 - -

1,320,024 1,481,381 70,991 55,479

Note2010 2009 2010 2009

$ $ $ $

(b) - 106,010 - - (c) 190,000 190,000 - - (d) 355,126 288,571 - -

545,126 584,581 - -

(c) 380,000 570,000 - - (d) 365,927 551,083 - -

745,927 1,121,083 - -

28 1,291,053 1,705,664 - -

(a)- 106,010 - -

570,000 760,000 - - Lease liability 721,053 839,654 - -

1,291,053 1,705,664 - -

(b)

(c)

--

(d)

Lease liabilities are secured by the underlying leased assets.

Sundry payables and accrued expensesTrade payables

Jackpot liability

Jackpot trust accounts in overdraft represent short term timing differences between member contributions and jackpot wins. On 1st July 2009 all jackpot accounts were combined into a single bank facility as approved by the Office of Liquor and Gaming Regulation.

Trade and Other Payables


Note 16

Note 18 Borrowings

CURRENT

CURRENT

Consolidated Group

Note 17

Parent Entity

Prepayments

Other Assets

The lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statement revert to the lessor in the event of default.

Bank overdrafts - Jackpot AccountCURRENT

Bank loans

Consolidated Group

The bank loans are secured against fixed and floating charges over all present and future assets, undertaking (including goodwill) and unpaid/ uncalled capital of the companies.

Interest cover to be greater than 3 times

Bank overdraft

Secured liabilities

Bank loan

Parent Entity

Lease liability

Total current and non-current secured liabilities:

Total non-current borrowings

Total borrowings

Total external debt to EBITDA (earnings before interest, tax, depreciation and amortisation) to be less than 3 times

Bank loansLease liability

NON-CURRENTTotal current borrowings

Jackpot accounts in overdraft

The bank overdrafts of the parent entity and subsidiaries are secured by a first registered fixed and floating charge over all the current and future assets and undertakings of the company. The Jackpot trust accounts in overdraft at 30 June 2009 represent short term timing differences between member contributions and jackpot wins. On 1st July 2009 all jackpot accounts were combined into a single bank facility as approved by the Office of Liquor and Gaming Regulation.

The bank loan is subject to a number of covenants regarding reporting and performance obligations. The performance covenants have been met in the year ending 30 June 2010, details of these covenants are as follows:

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2010 2009 2010 2009$ $ $ $

- - - - - - - -

Opening Balance


Charged to income

Charged directly to

equityClosing Balance

Consolidated Group $ $ $ $ $

72,898 25,562 38,092 136,552 26,986 21,251 6,410 (35,417) 19,230 99,884 46,813 44,502 (35,417) 155,782

136,552 (31,791) 64,744 - 169,505 19,230 - 6,410 - 25,640

155,782 (31,791) 71,154 - 195,145

132,487 433 56,255 - 189,175 231,016 - (30,445) - 200,571

24,131 64,536 2,102 - 90,769 - 21,251 (7,084) - 14,167

387,634 86,220 20,828 - 494,682

189,175 19,405 7,948 - 216,528 200,571 (33,402) 16,558 - 183,727

90,769 (1,499) 29,521 - 118,791 14,167 - (7,083) - 7,084 14,167 -

494,682 (15,496) 46,944 - 526,130

Opening Balance


Charged to income

Charged directly to

equityClosing Balance

Parent Entity $ $ $ $ $

26,986 21,251 6,410 (35,417) 19,230 26,986 21,251 6,410 (35,417) 19,230

19,230 - 6,410 - 25,640 19,230 - 6,410 - 25,640

11,700 - (7,100) - 4,600 29,469 - 33,955 - 63,424

- 21,251 (7,084) - 14,167 41,169 21,251 19,771 - 82,191

4,600 - (1,000) 3,600 63,424 103,746 16,558 183,728 14,167 - (7,083) 7,084

- 769 (192) 577 82,191 104,515 8,283 - 194,989

2010 2009 2010 2009CURRENT $ $ $ $

388,224 338,483 - - 288,133 227,170 - - (303,576) (177,429) - - 372,781 388,224 - -

Listing costsDeferred Tax Liability

Tax losses

Balance as at 30 June 2009


Provisions and accruals


Property, Plant and EquipmentTax losses

Note 20

Additional provisions

NON-CURRENT

TOTALIncome Tax Payable

Opening balance at 1 July 2009

Parent Entity

Amounts used

Listing costs

Deferred Tax Liability

Note 19

CURRENT

Capital raising costs

Listing costs


Tax

Consolidated Group

Deferred Tax AssetsProvisions and accruals


Provisions

Deferred Tax Assets

Provisions and accruals

Other

Tax losses


Listing costs

Provisions and accrualsTax lossesCapital raising costsBalance as at 30 June 2009







Short-term Employee Benefits



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2010 2009 2010 2009$ $ $ $

33,820 38,221 - - 23,762 - - -

- (4,401) - - 57,582 33,820 - -

2010 2009 2010 2009$ $ $ $

372,781 388,224 - - 57,582 33,820 - -

430,363 422,044 - -

2010 2009 2010 2009$ $ $ $

3,950,929 3,950,929 12,770,927 12,770,927 3,950,929 3,950,929 12,770,927 12,770,927

(a) 2010 2009 2010 2009No. No. No. No.

28,509,079 28,509,079 28,509,079 28,509,079 - - - -

28,509,079 28,509,079 28,509,079 28,509,079

(b) Capital Management

2010 2009 2010 2009Note $ $ $ $

17, 18 2,611,077 3,187,045 70,991 55,479 9 (1,146,907) (986,976) (20,072) (213)

1,464,170 2,200,069 50,919 55,266 4,010,409 3,943,434 11,488,134 11,486,462 5,474,579 6,143,503 11,539,053 11,541,728

27% 36% 0% 0%

Provision for Long-term Employee Benefits

Current

Parent Entity


Analysis of Total Provisions

Opening balance at 1 July 2009

Amounts usedAdditional provisions

Net debt

Total capital

Parent Entity

Total equity

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

Consolidated Group

Consolidated Group

Parent Entity

Gearing ratio

At the beginning of the reporting period

28,509,079 (2009: 28,509,079) fully paid ordinary shares

Ordinary Shares

At the end of the reporting periodShares issued during the year

There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. The gearing ratio's for the year ended 30 June 2010 and 30 June 2009 are as follows:

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

There are no externally imposed capital requirements.

Consolidated Group

The company has authorised share capital amounting to 28,509,079 ordinary shares.

Note 21 Issued Capital

The group’s debt and capital includes ordinary share capital, redeemable preference shares, convertible preference shares and financial liabilities, supported by financial assets.

Less cash and cash equivalents

At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Consolidated Group

Parent Entity

Management effectively manages the group’s capital by assessing the groups financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

Total borrowings

Consolidated Group

A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report.

NON CURRENT

Non-current

Long-term Employee Benefits

Parent Entity

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2010 2009 2010 2009Note $ $ $ $

(a)

409,459 355,812 - - 395,762 609,965 - -

- - - - 805,221 965,777 - - (84,167) (126,123) - -

18 721,053 839,654 - -

2010 2009 2010 2009(b) $ $ $ $

129,104 128,184 - - 170,346 299,659 - - 299,450 427,843 - -

(i)

(ii)

(a)

(b)

(c)

(d)Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

Finance Lease Commitments

Types of products and services by segmentMonitoring

Identification of reportable segments

— greater than 5 years

Capital and Leasing Commitments

The company leases various plant and equipment under finance leases expiring within one to five years. Under the terms of the leases, the group has the option to acquire the leased assets at their agreed residual value on the expiry of the leases.

Contingent Liabilities and Contingent Assets

Operating Segments

Maintenance

Consolidated Group

— not later than 12 months

Note 22

The monitoring segment is the primary segment in terms of regulatory control although not the primary source of revenue. The key role of monitoring is to report gaming machine revenue to the Queensland Treasury as required by the licence held. Major product lines of the division include the provision of Jackpots, Titan management information system and player reward systems.

Payable — minimum lease payments

Less future finance charges

Inter-segment transactions

Consolidated Group

Operating Lease Commitments

Parent Entity

Note 23

— between 12 months and 5 years

The maintenance segment provides a range of services including fixed monthly fees for services involved in break fix repair of gaming machines as well as ancillary services such as installation, conversion and relocation of machines.

Present value of minimum lease payments

Segment assets

Note 24

Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and in determining the allocation of resources.

Where an asset is used across multiple segments, the asset is allocated to that segment that receives the majority of economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

— not later than 12 months

Payable — minimum lease payments

The property lease is a non-cancellable lease with a five-year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by CPI annually on the anniversary of the commencement date. An option exists to renew the lease at the end of the five year term for an additional term of five years. The lease allows for subletting of all lease areas.

Non-cancellable operating leases contracted for but not capitalised in the financial statements

No contingent assets or liabilities exist at 30 June 2010 and 30 June 2009.

Minimum lease payments

— between 12 months and 5 years

Parent Entity

Segment liabilities

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

Accounting policies adoptedBasis of accounting for purposes of reporting by operating

Segment revenues, expenses and results include transfers between segments. The prices charged on inter segment transactions are the same as those charged for similar goods to parties outside of the consolidated group at an arm's length. These transfers are eliminated on consolidation.

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(e)

(f)

(i) Segment performanceMonitoring Maintenance Other Total

$ $ $ $

External sales 3,525,882 5,175,946 815,444 9,517,272 Interest revenue 7,683 7,683 Total segment revenue 3,525,882 5,175,946 823,127 9,524,955 Reconciliation of segment revenue to group revenueTotal group revenue 9,524,955 Segment net profit before tax 2,393,746 1,413,849 369,294 4,176,889 Reconciliation of segment result to group net profit/loss before tax

— Occupancy expenses (152,444)— Employee benefits expense (2,266,846)— Telephone, fax and email expenses (86,209)— Finance costs (117,573)— Depreciation and amortisation (563,118)— Write off of obsolete stock (18,000)— Other (897,809)

Net profit before tax from continuing operations 74,890 Monitoring Maintenance Other Total

$ $ $ $

External sales 3,400,947 5,169,756 938,887 9,509,590 Interest revenue 16,246 16,246 Total segment revenue 3,400,947 5,169,756 955,133 9,525,836 Reconciliation of segment revenue to group revenueTotal group revenue 9,525,836 Segment net profit before tax 2,216,011 1,628,163 398,208 4,242,382 Reconciliation of segment result to group net profit/loss before tax

— Occupancy expenses (139,118)— Employee benefits expense (2,217,064)— Telephone, fax and email expenses (79,623)— Finance costs (153,986)— Depreciation and amortisation (623,218)— Write off of obsolete stock (60,000)— Other (918,003)

Net profit before tax from continuing operations 51,370

(ii) Segment assetsMonitoring Maintenance Other Total

$ $ $ $Segment assets 1,330,401 2,287,915 - 3,618,316 Segment asset increases for the period:— capital expenditure 291,575

- - - 291,575 Reconciliation of segment assets to group assetsIntersegment eliminationsUnallocated assets:— Cash and cash equivalents (non jackpot) 605,277 — Trade and other receivables 921,637 — Other assets 108,589 — Property, plant and equipment 775,210 — Deferred tax assets 526,130 — Intangible assets (remaining balance) 691,835

Total group assets 7,246,994 Monitoring Maintenance Other Total

$ $ $ $Segment assets 1,597,706 2,418,873 - 4,016,579 Segment asset increases for the period:— capital expenditure 334,701

- - - 334,701

Comparative information

30 June 2009

30 June 2010

i. Unallocated items

The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

This is the first reporting period in which AASB 8 has been adopted. Comparative information has been restated to conform to the requirements of this standard.

Unallocated items

• Operating expenses (excluding advertising and promotions, bank charges, cleaning and health and safety expenses)• Current and non current assets (excluding jackpot balances, inventories and intangible assets)• Current and non current liabilities (excluding jackpot liabilities)

REVENUE

30 June 2009REVENUE

30 June 2010

i. Unallocated items

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Reconciliation of segment assets to group assetsUnallocated assets:— Cash and cash equivalents (non jackpot) 286,725 — Trade and other receivables 1,085,344 — Other assets 181,477 — Property, plant and equipment 951,661 — Deferred tax assets 494,682 — Intangible assets (remaining balance) 691,837

Total group assets 7,708,305

(iii) Segment liabilitiesMonitoring Maintenance Other Total

$ $ $ $Segment liabilities 542,396 542,396 Reconciliation of segment liabilities to group liabilitiesUnallocated liabilities:— Trade and other payables 777,628 — Borrowings 1,291,053 — Provisions 430,363 — Deferred tax liabilities 195,145

Total group liabilities 3,236,585 Monitoring Maintenance Other Total

$ $ $ $Segment liabilities 693,701 693,701 Reconciliation of segment liabilities to group liabilitiesUnallocated liabilities:— Trade and other payables 787,680 — Borrowings 1,705,664 — Provisions 422,044 — Deferred tax liabilities 155,782

Total group liabilities 3,764,871

(iv) Revenue by geographical region

2010 2009 2010 2009$ $ $ $

(a)

66,975 67,104 1,671 (34,380)

108,684 108,685 - - 454,433 514,533 - -

23,433 17,184 - - 18,000 60,000 - -

13,593 9,881 - -

- 35,417 - 35,417 192,885 (351,442) - 20,350 (82,668) 31,369 3,333 -

112,958 277,135 - - (5,800) 117,626 15,512 (54,276)

- - 105,730 - 7,915 (51,153) (106,387) (48,779) 8,319 45,340 - (3,333)

918,727 881,679 19,859 (85,001)

2010 2009 2010 2009$ $ $ $

(b) 1,520,000 1,520,000 - -

(721,053) (839,654) - - 798,947 680,346 - -

The economic entity's business is located in Queensland.

Non-cash flows in profit

30 June 2010

Write-off of obsolete stock

Increase/(decrease) in income taxes payable

Increase/(decrease) in provisions

Credit facility

Cash Flow Information

Consolidated Group

Depreciation

p p g activities

Amortisation

Increase/(decrease) in deferred taxes payable

Cash flow from operations

Write-off bad debts

Net (gain)/loss on disposal of property, plant and equipment

Credit Standby Arrangements with Banks

Adjustment for capital raising costs

Consolidated Group

Increase/(decrease) in trade payables and accruals

Profit after income tax

30 June 2009

Reconciliation of Cash Flow from Operations with Profitafter Income Tax

Parent Entity

(Increase)/decrease in inventories(Increase)/decrease in prepayments(Increase)/decrease in trade and term receivables

Note 25

Parent Entity

Amount utilised

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The major facilities are summarised as follows:(i) Asset finance

(ii)

(c) 570,000 760,000 (570,000) (760,000)

- - - -

2010 2009 2010 2009$ $ $ $

(a)

- 2,316 - -

- 10,918 - 10,918

- 79,647 - -

(b)

The company leases various plant and equipment under finance Interest rates are variable and are fixed on acquisition of the asset.

Events After the Reporting Period

Note 27

The major facilities are summarised as follows:

Odyssey won the contract to provide monitoring and ancillary services to the new Brisbane Lions AFL club facility in Springwood which is expected to be opened prior to Christmas.

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

Parent Entity

The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, loans to and from subsidiaries and leases.

Key Management Personnel

Identification of Related Parties Ultimate Parent Entity

Financial Risk Management

A former director, Rolf Koops who resigned 7th October 2009, is a director and shareholder of KM Superannuation Pty Ltd, which took ownership of the building occupied by Odyssey Gaming Services Pty Limited on 1st July 2009. Rents were paid to KM Superannuation on normal commercial terms and conditions. Rolf Koops has since divested his interest in the building.

A former director, Rolf Koops who resigned 7th October 2009, is a director and shareholder of ACN 098 362 246 Pty Ltd (In Liquidation), formerly known as Koops Martin Lawyers Pty Limited, which provided professional services to Odyssey Gaming Limited on normal commercial terms and conditions.

Related Party Transactions

Loan facilitiesAmount utilised

Note 26

The bank loan is secured against fixed and floating charges over all present and future assets, undertakings (including goodwill) and unpaid/ uncalled capital of the companies. The loan is subject to a number of covenants as listed in Note 18 Borrowings.

Note 28

A former director, Rolf Koops who resigned 7th October 2009, is a director and shareholder of ACN 098 362 246 Pty Ltd (In Liquidation), formerly known as KM Group Services Pty Limited, which provided professional services to Odyssey Gaming Limited on normal commercial terms and conditions.

Bank overdrafts

Consolidated Group

Bank overdraft facilities are arranged with the general terms and Interest rates are variable and subject to adjustment.

Loan Facilities

Finance will be provided under all facilities provided the company and the consolidated group have not breached any borrowing requirements and the required financial ratios are met.

Term Loan

The parent entity is ultimately controlled by LKM Capital Limited (Receivers and Managers Appointed) which is incorporated in Australia.

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

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2010 2009 2010 2009Note $ $ $ $

Financial Assets9 1,146,907 986,976 20,072 213

10b 921,637 1,085,344 - -

12 - - 11,262,869 11,368,599 Total Financial Assets 2,068,544 2,072,320 11,282,941 11,368,812

Financial Liabilities

— 17 1,320,024 1,481,381 70,991 55,479 — 18 1,291,053 1,705,664 - -

Total Financial Liabilities 2,611,077 3,187,045 70,991 55,479

Financial Risk Management Policies

Specific Financial Risk Exposures and Management

a. Credit risk

b. Market Riski. Interest rate risk

Profit Equity Profit EquityYear ended 30 June 2010 $ $ $ $

(8,053) - 1 - Decrease in interest rate by 1% 1,188 - (1) -

Profit Equity Profit EquityYear ended 30 June 2009 $ $ $ $

(535) - 183 - Decrease in interest rate by 1% 267 - (121) -

The Risk and Audit Committee (RAC) has been delegated responsibility by the Board of Directors for, amongst other issues, monitoring and managing financial risk exposures of the group. The RAC has delegated the responsibility to the CEO and CFO. Together, the CEO and CFO monitor the Group's financial risk management policies and exposures and approve financial transactions within the scope of their authority. In addition there is a review of the effectiveness of internal controls relating to financing risk and interest rate risk.

Loans and receivables

The consolidated group's exposure to interest rate risk, which is the risk that a financial instrument value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities.

Credit Risk Exposures

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

Financial liabilities at amortised cost

The company and the group are exposed to interest rate risk as entities in the group borrow funds at both fixed and floating interest rates. The risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings.


Trade and other payables

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

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the group's maximum exposure to without taking into account the value of any collateral obtained.

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

Credit risk is managed through the maintenance of procedures (such procedures include the monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Credit terms are generally 7 to 30 days from the invoice date.

Parent Entity

The following table illustrates sensitivities to the Group's exposures to changes in interest rates, with all other variables remaining constant.

Sensitivity Analysis

Consolidated Group

Increase in interest rate by 1%

Increase in interest rate by 1%


Borrowings

Investments in controlled entities at

Cash and cash equivalents

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FootnoteNet Carrying

Value Net Fair ValueNet Carrying

ValueNet Fair Value

Consolidated Group $ $ $ $Financial assetsCash and cash equivalents (i) 1,146,907 1,146,907 986,976 986,976 Trade and other receivables (i) 904,470 904,470 1,048,763 1,048,763 Term receivables (ii) 17,167 17,167 36,581 36,581 Total financial assets 2,068,544 2,068,544 2,072,320 2,072,320

Financial liabilitiesTrade and other payables (i) 777,628 777,628 787,680 787,680 Lease liability (iii) 721,053 721,053 839,654 839,654 Bank debt (i) 570,000 570,000 866,010 866,010 Deposits held in trust for jackpots (iv) 542,396 542,396 693,701 693,701 Total financial liabilities 2,611,077 2,611,077 3,187,045 3,187,045

FootnoteNet Carrying

Value Net Fair ValueNet Carrying

ValueNet Fair Value

Parent Entity $ $ $ $Financial assetsCash and cash equivalents (i) 20,072 20,072 213 213 Investments in controlled entities at cost (v) 11,262,869 11,262,869 11,368,599 11,368,599 Total financial assets 11,282,941 11,282,941 11,368,812 11,368,812

Financial liabilitiesTrade and other payables (i) 70,991 70,991 55,479 55,479 Total financial liabilities 70,991 70,991 55,479 55,479

(i)

(ii)(iii)

(iv)

(v)

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

• preparing forward looking cash flow analysis in relation to its operational, investing and financing activities• monitoring undrawn credit facilities• obtaining funding from a variety of sources

The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Net Fair Values

2010

Differences between fair values and carrying values of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the Group. Most of these instruments which are carried at amortised cost (i.e. term receivables, held-to-maturity assets, loan liabilities) are to be held until maturity and therefore the net fair value figures calculated bear little relevance to the Group.

Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants.

2009

Fair value estimation

The investment in the controlled entity is not subject to any formal agreement for repayments, however the parent entity can request repayment on call. The carrying value is considered equivalent to the fair value.

Term receivables are fixed terms at no interest and therefore the carrying value is equivalent to fair value.

2010

Lease liabilities are fixed contracts for each lease item therefore the carrying value is considered equivalent to fair value.

The fair values disclosed in the above table have been determined based on the following methodologies:

2009

Deposits held in trust for jackpots are subject to no interest exposure and can be called upon at any time, the fair value is therefore considered the same as the carrying value.

Cash and cash equivalents, trade and other receivables and trade and other payables are short term instruments in nature whose carrying value is equivalent to fair value. Trade and other payables excludes amounts provided for relating to annual leave which is not considered a financial instrument.

• maintaining a reputable credit profile• managing credit risk related to financial assets

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Financial liability maturity analysis

Consolidated Group2010

$ 2009

$2010

$2009

$2010

$2009

$2010

$2009

$

Financial liabilities due for payment

190,000 296,010 380,000 570,000 - - 570,000 866,010

777,628 787,680 - - - - 777,628 787,680

355,126 288,571 365,927 551,083 - - 721,053 839,654

542,396 693,701 - - - - 542,396 693,701 1,865,150 2,065,962 745,927 1,121,083 - - 2,611,077 3,187,045

- (106,010) - - - - - (106,010) 1,865,150 1,959,952 745,927 1,121,083 - - 2,611,077 3,081,035

Consolidated Group2010

$ 2009

$2010

$2009

$2010

$2009

$2010

$2009

$Financial Assets - cash flows realisable

1,146,907 986,976 - - - - 1,146,907 986,976 921,637 1,070,969 14,375 14,375 - - 936,012 1,085,344

2,068,544 2,057,945 14,375 14,375 - - 2,082,919 2,072,320

203,394 97,993 (731,552) (1,106,708) - - (528,158) (1,008,715)

Financial liability maturity analysis

Parent Entity2010

$ 2009

$2010

$2009

$2010

$2009

$2010

$2009

$Financial liabilities due for payment

70,991 55,479 - - - - 70,991 55,479 70,991 55,479 - - - - 70,991 55,479

- - - - - - - - 70,991 55,479 - - - - 70,991 55,479

Parent Entity2010

$ 2008

$2010

$2009

$2010

$2009

$2010

$2009

$Financial Assets - cash flows realisable

20,072 213 20,072 213

- - - - 1,148,270 1,304,000 10,114,599 10,064,599 11,262,869 11,368,599 1,168,342 1,304,213 - - 10,114,599 10,064,599 11,282,941 11,368,812

1,097,351 1,248,734 - - 10,114,599 10,064,599 11,211,950 11,313,333

Total anticipated

Net (outflow) / inflow on financial instruments

Over 5 years Total contractual cash

Cash and cash Trade, term and loans receivablesOther investments

Total contractual Less bank overdraftsTotal expected

Within 1 Year 1 to 5 years

Trade and other

Total anticipated

Net (outflow) / inflow on financial instruments

Within 1 Year 1 to 5 years Over 5 years Total contractual cash

Within 1 Year 1 to 5 years Over 5 years Total

Cash and cash equivalentsTrade, term and loans

Financial lease liabilitiesDeposits held in trust for jackpotsTotal contractual

Less bank overdraftsTotal expected

Bank overdrafts and loansTrade and other payables (excl. est. annual leave)

Investments in subsidiaries in the parent entity are subject to no formal agreement and the parent entity can request repayment on call, therefore this has been classified within 1 year. The available for sale investment held in the parent entity has been classified as over 5 years as there is no intention to dispose of the assets in the short term.

Within 1 Year 1 to 5 years Over 5 years Total

The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Bank overdrafts have been deducted in the analysis as management does not consider that there is any material risk that the bank will terminate such facilities. The bank does however maintain the right to terminate the facilities without notice and therefore the balances of overdrafts outstanding at year end could become repayable within 12 months.

Deposits held for Jackpots have been classified as due within 1 year, these accounts are held in trust and can be called upon at any time.

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a. Asset Revaluation ReserveThe asset revaluation reserve records revaluation of non-current assets. The fixed assets relating to this reserve were disposed at 30 June 2009 and the reserve has been reversed into equity accordingly.

Reserves

Unit 1, 8 Miller Street

Note 29

Note 31

Economic DependencyNote 30

Odyssey Gaming Limited

The revenues of Odyssey Gaming Limited are generated by the licence issued by the Queensland Office of Liquor, Gaming and Racing.

Unit 1, 8 Miller Street

The registered office of the company is:

Murarrie QLD

Odyssey Gaming Limited

Company Details

The principal places of business are:

Murarrie QLD

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1.

(a)(b)

2.(a)

(b)(c)

3.

give a true and fair view of the financial position as at 30 June 2010 and of the performance for the year ended on that date of the company and consolidated group;

the Chief Executive Officer and Chief Finance Officer have each declared that:

ODYSSEY GAMING LIMITED ABN: 48 074 735 452AND CONTROLLED ENTITIES DIRECTORS’ DECLARATION

The directors of the company declare that:

the financial statements and notes, as set out on pages 8 to 37, are in accordance with the Corporations Act 2001 and:

comply with Accounting Standards; and

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

the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;the financial statements and notes for the financial year comply with the Accounting Standards; andthe financial statements and notes for the financial year give a true and fair view;

in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become subject to, by virtue of the deed.

DirectorAnthony Charles Britten

Dated this day of September 201022nd

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39 “Liability limited by a scheme approved under Professional Standards Legislation”

WalterTurnbull Building

44 Sydney Avenue

BARTON ACT 2600

GPO Box 1955

CANBERRA ACT 2601

Tel 02 6247 6200

Fax 02 6162 9292

www.walturn.com.au

[email protected]

WalterTurnbull

ABN 90 613 256 181

BUSINESS ADVISORY SERVICES

ASSURANCE SERVICES

MANAGEMENT CONSULTING

FINANCIAL PLANNING

INSOLVENCY SERVICES

ACCOUNTING SOLUTIONS

CANBERRA SYDNEY

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ODYSSEY GAMING LIMITED AND CONTROLLED ENTITES Report on the Financial Report We have audited the accompanying financial report of Odyssey Gaming Limited (the company) and Odyssey Gaming Limited and Controlled Entities (the consolidated entity), which comprises the statement of financial position as at 30 June 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures that the financial statements, comprising the financial statements and notes, complies with IFRS. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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http://www.walturn.com.au/�

mailto:[email protected]�

40

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ODYSSEY GAMING LIMITED AND CONTROLLED ENTITES (CONTINUED) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Odyssey Gaming Limited on 22 September 2010, would be in the same terms if provided to the directors as at the date of this auditor’s report. Auditor’s Opinion In our opinion:

a) the financial report of Odyssey Gaming Limited and Odyssey Gaming Limited and Controlled Entities is in accordance with the Corporations Act 2001, including:

i) giving a true and fair view of the company and consolidated entity’s financial

position as at 30 June 2010 and of their performance for the year ended on that date; and

ii) complying with Australian Accounting Standards (including the Australian

Accounting Interpretations) and the Corporations Regulations 2001;

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

Report on the Remuneration Report We have audited the Remuneration Report included in pages 3 to 4 of the report of the directors for the year ended 30 June 2010. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with s300A 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. Auditor’s Opinion In our opinion the Remuneration Report of Odyssey Gaming Limited for the year ended 30 June 2010, complies with s300A of the Corporations Act 2001.

Shane Bellchambers Canberra, 22 September 2010 Registered Company Auditor WalterTurnbull

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1. Shareholding

a. Distribution of ShareholdersHolders Shares

70 38,801 247 842,986

73 621,256 61 1,881,843 16 25,124,193

467 28,509,079

b.

c.

Shareholder Ordinary % 11,964,664 41.97

7,435,336 26.08

d. Voting Rights

–

e.

Name

Number of Ordinary Fully Paid Shares

Held

% Heldof Issued

Ordinary Capital1. 11,964,664 41.97 2. 7,435,336 26.08 3. 1,125,000 3.95 4. 788,077 2.76 5. 600,000 2.10 6. 572,041 2.01 7. 467,000 1.64 8. 460,222 1.61 9. Mr Nicholas Bruce Thomas 397,299 1.39 10. 250,000 0.88 11. Mr John Bryan and Mr Richard Barker 210,000 0.74 12. CEYX Holdings Pty Ltd 200,000 0.70 13. Mr Christopher Lemke and Mrs Leigh Anne Lemke 200,000 0.70 14. Tomlik Pty ltd 200,000 0.70 15. Brownlow Pty Ltd 144,287 0.51 16. Macren Investments Pty Limited 110,267 0.39 17. Southport Workers Community Club Inc 100,000 0.35 18. Mr Graham Barry Mcpherson 78,847 0.28 19. Mrs Hollie Pauline Schroeder 75,000 0.26 20. Mr Shane Robert Hart and Mrs Katrina Elizabeth Hart 70,000 0.25

25,448,040 89.27

KM Superannuation Pty Ltd

Peronhill Pty Ltd


ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.

Gaming Network Systems Pty LtdLKM Capital LimitedSaturn Software Solutions Pty LtdGurner Superannuation Nominees Pty LtdMrs Verena Marie Craven

Category (size of holding)Number

Number

The names of the substantial shareholders listed in the holding company’s register as at 20th September 2010 are:

1 – 1,0001,001 – 5,0005,001 – 10,000

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

100,001 – and over

Mr Peter Douros and Mr Richard BarkerMr Anthony John Huntley

20 Largest Shareholders — Ordinary Shares

The number of shareholdings held in less than marketable parcels is 422 (25,000 shares).

Gaming Network Systems Pty LtdLKM Capital Limited

10,001 – 100,000

Ordinary sharesThe voting rights attached to each class of equity security are as follows:

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CORPORATE DIRECTORY Board of Directors Gary Garton Non-executive chairman Anthony Britten Executive director & Chief Executive Officer Michael Lloyd Non-executive director Company Secretary Sara Addison Auditors Walter Turnbull Bankers Australia & New Zealand Banking Group Limited Share Registry Computershare Investor Services Pty Ltd 452 Johnston Street Abbotsford, Melbourne, VIC Australia 3067 Telephone: (03) 9415 4000 Fax: (03) 9473 2500 Stock Exchange Listings Odyssey Gaming Limited shares are listed on the Australian Stock Exchange Stock Code: ODG Registered office Odyssey Gaming Limited Unit 1, 8 Miller Street Murarrie QLD 4172 Telephone: (07) 3907 6000 Fax: (07) 3390 8262

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Documents

ABN: 48 074 735 452 Financial Report For The Year Ended 30 ... · Ms Sara Addison was appointed as company secretary 18 April 2008. Ms Addison is currently the General Manager Operations