DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT 52 53 DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT 53 52 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2018 Certain amendments to the Law of Investment (‘LOI’) and Law of Taxation (‘LOT’) were promulgated in March 2003. Under the amendments made to the LOT, distribution of dividends to non–residents will be subject to a withholding tax on the distribution of net of 20% corporate tax, at a rate of 14%, resulting in a net distribution tax of 31.2%. These amendments are not applicable to DNA Star Vegas as they will be regulated by the Casino Law which is yet to be enacted. (b) The parent entity has not brought to account tax losses with a tax effect of $1,612,835 (2017: $1,449,439). NOTE 7. INCOME TAX EXPENSE CONSOLIDATED 2018 2017 $ $ Income tax expense Current tax 3,661,667 3,536,476 Aggregate income tax expense 3,661,667 3,536,476 Income tax expense is attributable to: Profit from continuing operations 3,661,667 3,536,476 Aggregate income tax expense 3,661,667 3,536,476 Numerical reconciliation of income tax expense and tax at the statutory rate Profit before income tax expense from continuing operations (120,587,204) 34,725,525 Profits tax using Australian corporation tax at the statutory tax rate of 30% (2017: 30%) (36,176,162) 10,417,658 Tax effect of difference in overseas corporation tax at the statutory tax rate of 20% (2017: 20%) 11,524,310 (4,270,855) Tax effect amounts which are not deductible in calculating taxable income 30,560,656 1,254,958 Losses not brought to account 2,941,532 5,333,402 Tax exempt profits from Cambodian operations (note (a)) (7,005,429) (11,313,150) Obligation payments in Cambodia (note (a)) 2,620,496 2,654,361 Adjustment for investment spending in Vietnam (803,736) (539,898) Income tax expense 3,661,667 3,536,476 (a) Income tax in profit or loss Income tax includes obligation payments totalling $2,620,496 (2017: $2,654,361) payable to the Ministry of Economy and Finance of Cambodia (‘MOEF’). As at the date of this report, the Casino Law in respect of casino taxes in Cambodia is yet to be introduced. The MOEF levies an Obligatory Tax Payment, payable on a monthly basis. The Obligatory Tax Payment is comprised of a fixed gaming tax and a fixed non–gaming tax payment. In addition, an annual casino licence fee of US$30,000 is paid. In respect of gaming activities, DNA Star Vegas Co., Ltd (DNA Star Vegas) has to pay the Obligatory Tax Payment which is a fixed gaming tax, and with the payment of this fixed gaming tax, DNA Star Vegas will be exempted from all categories of taxes on gaming activities including advance profits tax, minimum tax and advance tax on distribution of dividends. As for non–gaming obligatory payment, it is considered as a composite of various other taxes such as salary tax, fringe benefit tax, withholding tax, value–added tax, tax on rental of moveable and unmoveable assets, minimum tax, advance profit tax, advertising tax and specific tax on entertainment services. Monthly payments for the obligatory payment are due on the first week of the following month. DNA Star Vegas has made the obligatory payment on timely manner. In the event of late payment within seven days from the due date, there will be a penalty of 2% on the late payment and interest of 2% per month. In addition, after 15 days when official government notice is issued to DNA Star Vegas for the late payment and additional penalty of 25% will be imposed. In the case where DNA Star Vegas does not comply with the above–mentioned requirements, the MOEF will not issue the casino licences to DNA Star Vegas in the successive years. NOTE 8. CURRENT ASSETS – CASH AND CASH EQUIVALENTS CONSOLIDATED 2018 2017 $ $ Cash on hand 28,360,270 21,300,658 Cash at bank 16,130,913 41,835,143 Cash in transit 840,465 1,203,118 Short–term deposit 1,743,941 1,683,830 47,075,589 66,022,749 NOTE 9. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES CONSOLIDATED 2018 2017 $ $ Trade receivables 2,389,633 17,581,840 Other receivables 8,132,629 2,806,040 Interest receivable on bank deposits 683 467 Tax-related receivables 22,085 14,460 10,545,030 20,402,807 IMPAIRMENT OF RECEIVABLES The consolidated entity has not recognised any loss in profit or loss in respect of impairment of receivables for the year ended 30 June 2018 (2017: $nil). NOTE 10. CURRENT ASSETS – INVENTORIES CONSOLIDATED 2018 2017 $ $ Food and beverage – at cost 1,397,344 893,474