The Company carried out transactions in the ordinary course of its business with parties who are defined as related parties as per Sri Lanka Accounting Standard - LKAS 24 on ‘Related Party Disclosures’, the details of which are reported below:
According to Sri Lanka Accounting Standard - LKAS 24 on ‘Related Party Disclosures’, Key Management Personnel are those having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Board of Directors of the Company (Executive and Non-Executive Directors) have been classified as KMPs. As the Company is the ultimate parent of the subsidiaries (listed in Note 2.3), the Board of Directors of the Company has the authority and responsibility for planning or controlling the activities of the Group directly or indirectly. Accordingly, the Board of Directors of the Company (Executive & Non-Executive) are KMPs of the Group.
Officers who are employees of Diesel & Motor Engineering PLC and Directors of the subsidiaries and not of the Company have been classified as KMPs of the respective subsidiary only.
The Executive Directors are entitled to a structured incentive scheme which is linked to performance.
The Company contributes towards a post-employment contribution plan for the Executive Directors. In addition to their salaries, the Company provides non-cash benefits to KMPs.
There are no share-based payments made to the Directors during the year.
No Loans were granted to KMPs of the Company.
Compensation to Key Management Personnel of the Company are as follows:
The Company also has an obligation towards a post-employment benefit plan for the Executive Directors. The liability arising from the post-employment obligation has been provided for, based on an actuarial valuation and is covered under Employee Benefits referred to in Note 4.22 to the Financial Statements.
Close family members are defined as spouse or dependant. Dependant is defined as any one who depends on the respective Director for more than 50% of his/her financial needs.
There were no transactions with the close family members during the year.
Mr. A.M. Pandithage who is a Director of the Company is also the Chairman of Hayleys PLC.
The balances due to and due from Hayleys Group as at 31st March 2014 are as follows:
Terms and Conditions of Transactions with the companies on which KMPs have Significant Influence
Outstanding balances at the year-end relating to the Companies on which KMPs have significant influence are unsecured, interest free, and all related-party dues are on demand. There have been no guarantees provided or received for any related party receivables or payables for the year ended 31st March 2014. The Group has not recorded any impairment of receivables relating to amounts owed by related parties (2013 - Rs. Nil).
The Company has carried out transactions with Group entities in the Ordinary course of business. The details are set out in Note 4.29.
Capital expenditure committed by the Board of Directors for which a provision has not been made in the Financial Statements amount to approximately Rs.824.2mn (2012/13 - Rs. 2,101.4 mn).
Guarantees
The contingent liabilities as at 31st March 2014 on guarantees given by Diesel & Motor Engineering PLC, in respect of bank guarantees, bid bonds and performance bonds amounted to Rs. 753.9 mn (2012/13 - Rs. 731.7 mn).
Litigation Against the Company
The claims for lawsuits filed against the Company as at 31st March 2014 amount to Rs. 41.2 mn (2013 - Rs. 37.9 mn). Although, there can be no assurance, the Directors believe, based on the information currently available that the ultimate resolution of such lawsuits are not likely to have a material effect on the results of operations, financial position or liquidity.
Comparative information is reclassified wherever necessary to confirm with the current year’s classification in order to provide better presentation.
Subsequent to the reporting date, the Board of Directors of the Company approved a first & final dividend of Rs. 10.00 per share for the year ended 31st March 2014. Details of the above dividend are disclosed in Note 4.8.1 to the Financial Statements.
There were no other material events that occurred after the reporting date that require adjustments to or disclosure in the Financial Statements.
