Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 62 63 63 Donaco International Limited / 2017 Annual Report Donaco International Limited / 2017 Annual Report 62 Notes to the Financial Statements for the year ended 30 June 2017 Notes to the Financial Statements for the year ended 30 June 2017 The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current parent entity’s share price at the time of the investment. The consolidated entity is subject to certain financing arrangements and meeting these is given priority in all capital risk management decisions. The financing arrangements contain certain covenants relating to interest cover (the ratio of consolidated EBITDA to consolidated finance charges), and debt ratio (the ratio of consolidated net debt to EBITDA), which apply to Donaco Hong Kong Limited. In addition, covenants relating to the debt equity ratio (the ratio of consolidated total debt to consolidated total equity), and minimum cash holdings, apply to the consolidated entity. There have been no events of default on the financing arrangements during the financial year. The capital risk management policy remains unchanged from the 2016 financial statements. Treasury shares are shares in Donaco International Limited that are held by Smartequity EIS Pty Ltd for the purpose of issuing shares under the employee share scheme. Shares issued to employees are recognised on a first-in-first-out basis. Note 23. Non-current liabilities – employee benefits Consolidated 2017 2016 $ $ Long service leave 32,669 16,212 32,669 16,212 Note 24. Equity – issued capital Consolidated 2017 2016 2017 2016 Shares Shares $ $ Ordinary shares – fully paid 831,211,424 831,211,424 359,968,884 360,968,368 Details Date Shares Issue price $ Balance 30 June 2015 683,250,290 $ – 246,719,609 Issued share – consideration for DNA Star Vegas Co Ltd 1 July 2015 147,199,529 $ 0.775 114,079,635 Employee short term incentive 1 October 2015 487,793 $ 0.700 341,455 Less: transaction costs arising on share issue multiple – $ – (443,131) Adjustment to equity reserve on issue of shares for acquisition multiple – $ – – Transfer from share based payments reserve for 2014 share based payments 273,812 $ – 270,800 Balance 30 June 2016 831,211,424 $ – 360,968,368 Acquisition of shares for employee share scheme – – $ – (999,484) Balance at 30 June 2017 – 831,211,424 $ – 359,968,884 Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Capital risk management The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Details Number of shares $ Opening balance 1 July 2015 – – Acquisition of shares by the Trust – – Balance 30 June 2016 – – Acquisition of shares by the Trust (average price:$0.4199 per share) 2,376,653 999,484 Balance 30 June 2017 2,376,653 999,484 Note 25. Equity – reserves Consolidated 2017 2016 $ $ Revaluation surplus reserve 1,855,327 1,855,327 Foreign currency reserve 4,275,055 19,697,748 Employee share option reserve 3,295,396 3,021,680 9,425,778 24,574,755