DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT 26 27 DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT another person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 30 to the financial statements do not compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor • none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF CROWE HORWATH There are no officers of the company who are former partners of Crowe Horwath. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page. AUDITOR Crowe Horwath Sydney continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors, pursuant to section 298(2)(1) of the Corporations Act 2001. On behalf of the directors, Mr Stuart McGregor – Chairman 28 September 2018, Melbourne No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate. In addition to the above, on 7 July 2015 Donaco International Limited issued 70 warrants to subscribe for its ordinary shares. Each warrant has a notional value of US$100,000. The warrants have a term of 39 months and expire on 6 October 2018. The exercise price is $0.7579 cents and the maximum number of ordinary shares which may be issued is 12,339,408. The company may elect to settle the difference between the share price and exercise price in cash. SHARES ISSUED ON THE EXERCISE OF OPTIONS The were no ordinary shares of Donaco International Limited issued, during the year ended 30 June 2018 and up to the date of this report, on the exercise of options granted (2017: nil). INDEMNITY AND INSURANCE OF AUDITOR The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. NON-AUDIT SERVICES Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 30 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by ADDITIONAL DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL Shareholding The number of shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is shown below. SHARES UNDER OPTION Unissued ordinary shares of Donaco International Limited under option at the date of this report are shown below. TRANSACTIONS WITH RELATED PARTIES AND KEY MANAGEMENT PERSONNEL The following transactions occurred with related parties during 2018. Option holding The number of options over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is shown below. DIRECTORS’ REPORT DIRECTORS’ REPORT BALANCE AT THE START OF THE YEAR RECEIVED AS PART OF REMUNERATION ADDITIONS DISPOSALS/ OTHER BALANCE AT THE END OF THE YEAR Ordinary shares S J McGregor 411,735 – – – 411,735 Lim K Y 267,559,325 784,872 562,600 (37,500,000) 231,406,797 B P Reichel 522,079 396,166 – – 918,245 Lim K H 144,811,200 – – (37,500,000) 107,311,200 R A Hines 145,321 – 50,000 – 195,321 H T Sukjaroenkraisri 148,199,529 – – – 148,199,529 Goh K B 700,000 300,320 – (200,000) 800,320 BALANCE AT THE START OF THE YEAR GRANTED EXERCISED EXPIRED/ FORFEITED/ OTHER BALANCE AT THE END OF THE YEAR VESTED UNVESTED Options over ordinary shares Lim K Y 2,257,873 – – (326,116) 1,931,757 1,506,887 424,870 B P Reichel 1,256,389 – – (229,796) 1,026,593 814,158 212,435 Goh K B 1,212,292 – – (442,099) 770,193 682,720 87,473 4,726,554 – – (998,011) 3,728,543 3,003,765 724,778 CONSOLIDATED 2018 2017 $ $ Leasing fees paid to Lee Hoe Property Co., Ltd – a director-related entity 77,382 156,012 Rental received from director’s immediate family 58,332 111,734 Technical support fees paid by Lao Cai JVC to iSentric Limited – a director-related entity 139,243 187,214 Management fees received for Star Paradise Casino property from MMD Travel Co Ltd – a director-related entity 477,992 2,338,782 Disposal of property, plant and equipment to previous owner of DNA Star Vegas Co, Ltd – a director-related entity 141,351 586,237 The above transactions occurred at commercial rates. This concludes the remuneration report, which has been audited. GRANT DATE EXPIRY DATE EXERCISE PRICE NUMBER UNDER OPTION 1 July 2015 1 July 2019 $0.890 349,377 25 August 2015 1 July 2019 $0.770 1,156,784 25 August 2015 1 July 2020 $0.770 1,008,025 2,514,186