2011 Annual Report - Cargills (Ceylon)

Annual Report 201163Notes to the financial statements contd...33 Transfer of operations within the GroupWith effect from 1 June 2010, the operations of Cargills Retail (Private) Limited, a wholly owned subsidiary of Cargills (Ceylon) PLC,was transferred to Cargills (Ceylon) PLC as part of a restructuring process of the Group. Consequently the business assets of CargillsRetail (Private) Limited is now used by the Company for which a rent is paid to the subsidiary. The Company expects to purchase allthe assets and liabilities of Cargills Retail (Private) Limited.The operations of Cargills Food Services (Private) Limited was transferred to Cargills Food Processors (Private) Limited, the parentof Cargills Food Services (Private) Limited, with effect from 1 October 2010. Cargills Food Processors (Private) Limited expects topurchase all the assets and liabilities of Cargills Food Services (Private) Limited.34 Events after the balance sheet dateMillers Brewery Limited (MBL), wholly owned subsidiary of Cargills (Ceylon) PLC, finalised the sale and purchase agreement withMaCallum Breweries (Ceylon) (Private) Limited, MaCallum Brewing Company (Private) Limited and Three Coins Company (Private)Limited, and commercial operations commenced in May 2011. With the finalisation of agreement, the business and business assets ofabove companies were transferred to MBL.The Board of Directors has proposed a final dividend of Rs. 1 per share (on the 224,000,000 shares now in issue) for the year ended 31March 2011 which is to be approved by the shareholders at the Annual General Meeting.As required by Section 56 (2) of the Companies Act No. 7 of 2007, the Board of Directors has confirmed the Company satisfies theSolvency test, and has obtained a certificate from the auditors. In accordance with SLAS 12 (Revised 2005) - “Events after the BalanceSheet Date”, the proposed dividend has not been recognised as a liability in the financial statements.Dawson Office Complex (Private) Limited made a share issue to Cargills (Ceylon) PLC amounting to Rs. 100,000 subsequent to thebalance sheet date.Subsequent to the balance sheet date, the name of Diana Biscuits Manufactures (Private) Limited, a sub-subsidiary of the Company,was changed to Cargills Quality Confectionaries (Private) Limited.No events other than the above, have occurred since the balance sheet date which would require any adjustment to, or disclosure inthe financial statements.35 Transactions with group companiesThe Company has provided corporate guarantees for term loans and banking facilities obtained by its subsidiary companies, thedetails of which have been disclosed under note 24 (c ) to the financial statements.The Company provides Secretarial and Management services to its subsidiary companies free of charge.Companies within the Group engage in trading and business transactions under normal commercial terms which give rise to relatedcompany balances. The balances have been disclosed under note 20 to the financial statements.(a) Transactions with key management personnel (KMP)According to SLAS 30 (revised 2005) - “Related Party Disclosure”, KMP are those having authority and responsibility for planning,directing, controlling the activities of the entity. Accordingly, the Directors of the Company and its parent (including executive andnon - executive Directors) and their immediate family members have been classified as KMP of the Group.The Company has provided an owned apartment to the Deputy Chairman/Chief Executive Officer for the due performance of hisoffice.The Group has paid Rs. 74.63 Mn (2010 - Rs. 40.88 Mn) to the Directors as emoluments during the year. There are no other paymentsmade to key management personnel apart from the disclosed amount.