Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 50 51 51 Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 50 Notes to the Financial Statements for the year ended 30 June 2017 Notes to the Financial Statements for the year ended 30 June 2017 (a) Income tax in profit or loss Income tax includes obligation payments totalling $2,654,361 (2016: $2,932,732) 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 USD30,000 is paid. In respect of gaming activities, DNA Star Vegas Co., Ltd (DNA Star Vegas) has to pay the obligatory 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. Note 7. Income tax expense Consolidated 2017 2016 $ $ Income tax expense Current tax 3,536,476 3,232,356 Adjustment recognised for prior periods – 764,375 Aggregate income tax expense 3,536,476 3,996,731 Income tax expense is attributable to: Profit from continuing operations 3,536,476 3,996,731 Aggregate income tax expense 3,536,476 3,996,731 Numerical reconciliation of income tax expense and tax at the statutory rate Profit before income tax expense from continuing operations 34,725,525 82,870,115 Profits tax using: Australian corporation tax at the statutory tax rate of 30% (2016: 30%) 10,417,658 24,861,035 Tax effect of difference in overseas corporation tax at the statutory tax rate of 20% (2016: 20%) (4,270,855) (9,473,073) Tax effect amounts which are not deductible/(taxable) in calculating taxable income 1,254,958 (10,930,302) Prior year tax losses applied to current year tax – (267,212) Losses not brought into account 5,333,402 6,065,355 Tax exempt profits from Cambodian operations (note (a)) (11,313,150) (9,049,176) Obligation payments in Cambodia (note (a)) 2,654,361 2,932,732 Adjustment for investment spending in Vietnam (539,898) (188,616) 3,536,476 3,950,742 Adjustment recognised for prior periods – 45,989 Income tax expense/(benefit) 3,536,476 3,996,731 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 an 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. 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 $824,314 (2016: $612,978). Note 8. Current assets – cash and cash equivalents Consolidated 2017 2016 $ $ Cash on hand 21,300,658 26,704,465 Cash at bank 41,835,143 49,512,338 Cash in transit 1,203,118 1,996,278 Short-term deposit 1,683,830 7,938 66,022,749 78,221,019 Note 9. Current assets – trade and other receivables Consolidated 2017 2016 $ $ Trade receivables 17,581,840 23,980,927 Interest receivable on bank deposits 467 1,678 Tax related receivables 14,460 20,212 17,596,767 24,002,817 Impairment of receivables The consolidated entity has recognised a loss of $0 (2016: $0) in profit or loss in respect of impairment of receivables for the year ended 30 June 2017. Note 10. Current assets – inventories Consolidated 2017 2016 $ $ Food and beverage – at cost 893,474 1,418,876