b'< DIRECTORS REPORTMATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEARDIVIDENDThere will be no dividend declared for FY19.SALE OF SHARESOn 5 July 2019, the Australian Securities and Investment Commission (ASIC) appointed Morgan Stanley Wealth Management Australia to sell 80,000,000 ordinary shares in the company, pursuant to a decision by the Takeovers Panel (the Panel) to vest shares in the Commonwealth for sale by ASIC. These shares, representing approximately 9.71% of the companys issued capital, were initially acquired by OL Master (Singapore Fund 1) Pte Limited (OCP) between 7 and 31 December 2018, at the same time that OCP was seeking to liaise with Total Alpha Investments Limited (Alpha), a related party of Mr Joey Lim, the former Managing Director and Chief Executive Officer of the Company, in respect of a potential restructure of the terms of the bonds between OCP and Alpha (OCP and companies controlled by Mr Lim, including Alpha, had entered into a secured lending arrangement in 2017). On 27 February 2019, OCP enforced its security interest after defaults by the companies controlled by Mr Lim, and acquired shares representing 27.25% of the company. This resulted in OCP having a total of 37% voting interest in the company.An application was submitted on 8 April 2019 by several shareholders of the company (some,if not all of whom were parties to the secured lending arrangement) to the Panel for a declaration of unacceptable circumstances. On 7 May 2019, the Panel made a declaration of unacceptable circumstances in relation to the share acquisition by OCP and ordered that the 80,000,000 shares be vested in ASIC for sale and that the sales process was to follow the requirements specified by the Panel.In Cambodia, there was an award made by an arbitrator on 21 August 2019 ruling that the vendor is entitled to terminate the Star Vegas lease. However this decision is not enforceable unlessit is affirmed by a court and has already been appealed.No other matter or circumstance has arisen since 30 June 2019 that has significantly affected,or may significantly affect the consolidated entitys operations, the results of those operations,or the consolidated entitys state of affairs in future financial years.LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONSThe company operates leisure and entertainment businesses across the Asia Pacific region.Our largest business is DNA Star Vegas, a successful casino and hotel complex in Poipet, Cambodia, on the border with Thailand. Star Vegas was established in 1999, and is the largest and highest quality of the Poipet casino hotels. The property has more than 100 gaming tables, approximately 1,000 slot machines and 385 hotel rooms.Our flagship business is the Aristo International Hotel, a successful boutique casino in northern Vietnam, on the border with Yunnan Province, China. Established in 2002, the property is nowa five star resort complex with 400 hotel rooms. Donaco is a pioneer casino operator in Vietnam and owns a 95% interest in the business, in a joint venture with the Government of Vietnam.The operation and marketing of both of these properties will underpin our growth during the next 12 months. Our strategy is to take advantage of the demand for leisure and entertainment in the Asia Pacific region, and to leverage the experience of the Board and management in the gaming sector. This will complement the growth at the expanded casinos in both Cambodia and Vietnam, and provide for diversification.DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT 17'