DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT 36 37 DONACO INTERNATIONAL LIMITED 2018 ANNUAL REPORT 37 36 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2018 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. NEW, REVISED OR AMENDING ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any material impact on the financial performance or position of the consolidated entity. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. BASIS OF PREPARATION These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the AASB and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’). Historical cost convention The financial statements have been prepared under the historical cost convention, except for the revaluation of financial assets and liabilities at fair value through profit or loss and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. PARENT ENTITY INFORMATION In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 33. PRINCIPLES OF CONSOLIDATION The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Donaco International Limited (‘company’ or ‘parent entity’) as at 30 June 2018 and the results of all subsidiaries for the year then ended. Donaco International Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. OPERATING SEGMENTS Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating CONSOLIDATED Note 2018 2017 $ $ CASH FLOW FROM OPERATING ACTIVITIES Receipts from customers 102,284,185 151,208,268 Payments to suppliers and employees (49,947,841) (78,700,882) 52,336,344 72,507,386 Interest received 93,786 100,011 Interest and other finance costs paid (7,829,780) (11,878,988) Government levies, gaming taxes and GST (9,968,146) (13,373,011) Net cash flows from operating activities 36(a) 34,632,204 47,355,398 CASH FLOW FROM INVESTING ACTIVITIES Payments for property, plant and equipment (5,668,289) (5,727,117) Net cash flows from investing activities (5,668,289) (5,727,117) CASH FLOW FROM FINANCING ACTIVITIES Repayment of borrowings 36(b) (44,326,139) (69,817,576) Drawdown of borrowings – 25,603,177 Payments of dividends (4,113,618) (8,246,843) Payments of acquisition of employee shares – (999,484) Payments for share buyback (2,077,954) – Net cash flows from financing activities (50,517,711) (53,460,726) Net decrease in cash and cash equivalents (21,553,796) (11,832,445) Cash and cash equivalents, beginning of the financial year 66,022,749 78,221,019 Effects of exchange rate changes on cash and cash equivalents 2,606,636 (365,825) Cash and cash equivalents at the end of the financial year 8 47,075,589 66,022,749 The above statement of cash flows should be read in conjunction with the accompanying notes. STATEMENT OF CASH FLOWS for the year ended 30 June 2018