Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 60 61 61 Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 60 Notes to the Financial Statements for the year ended 30 June 2017 Notes to the Financial Statements for the year ended 30 June 2017 Note 22. Non-current liabilities – borrowings Consolidated 2017 2016 $ $ Joint Stock Commercial Ocean Bank 6,979,949 10,300,174 OL Master Ltd – 22,519,671 Mega International Commercial Bank Co. Limited 46,573,678 78,874,154 53,553,627 111,693,999 Refer to note 28 for further information on financial instruments. Total secured liabilities The total secured liabilities (current and non-current) are as follows: Consolidated 2017 2016 $ $ Joint Stock Commercial Ocean Bank 9,771,928 13,243,081 OL Master Ltd – 22,519,671 Mega International Commercial Bank Co. Limited 98,690,297 116,038,381 108,462,225 151,801,133 Grant date Expiry date Share price at reporting date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value 07/07/2015 07/10/2018 $0.580 $0.76 47.85% – 1.66% $681,507 The remaining contractual life at 30 June 2017 is 1.27 years (2016: 2.27) The warrants are classified as current liabilities as they can be exercised at any time. Note 20. Current liabilities – income tax Consolidated 2017 2016 $ $ Provision for income tax 1,127,767 1,560,149 Note 21. Current liabilities – employee benefits Consolidated 2017 2016 $ $ Annual leave 95,613 39,775 Accrued salaries, wages and other benefits 885,393 442,322 981,006 482,097 As a requirement of the terms of the Group’s facility provided by OL Master Limited, the Company as guarantor has issued 70 warrants to subscribe for its ordinary shares. Each warrant has a notional value of USD100,000. The warrants have a term of 39 months and expire on 6 October 2018. The exercise price is AUD0.7579 and the maximum number of ordinary shares which may be issued is 12,334,408, and the Company may elect to settle the difference between the share price and exercise price in cash. The warrants associated with this transaction are classified as a derivative financial liability. On initial recognition the warrants issued are measured at fair value. At each reporting date the derivative financial liability is revalued to fair value with the movement in the fair value recorded in profit or loss. For the warrants granted during the prior financial year, fair value at grant date was $4,403,859. The valuation model inputs used to determine the fair value at the balance date, are as follows: Assets pledged as security A term loan facility from OL Master Limited was drawn down on 7 July 2015 to provide working capital for the consolidated entity. As a requirement of the terms of the consolidated entity’s facility provided by OL Master Limited, the Company as guarantor has issued 70 warrants to subscribe for its ordinary shares. Each warrant has a notional value of USD100,000. The warrants have a term of 39 months and expire on 6 October 2018. The exercise price is AUD0.7579 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.