Financial Statements
Notes to the Group Financial Statements (continued) for the year ended 31 December 2016 30. CAPITAL COMMITMENTS AND CONTINGENCIES Capital commitments The Directors have authorised capital expenditure of €41,130,000 (2015: €20,979,000) at the balance sheet date. Capital expenditure contracted for at 31 December 2016 amounted to €4,261,000 (2015: €1,474,000). Subsidiaries In order to avail of the exemption under Section 357 of the Companies Act 2014, the Company has guaranteed the liabilities of certain of its subsidiaries registered in Ireland. As a result, the following subsidiaries have been exempted from the provisions of Sections 347 and 348 of the Companies Act 2014: Bolanpass Limited Total Produce Ireland Limited Iverk Produce Limited Total Produce Management Services Limited Total Produce C Holdings Limited Uniplumo (Ireland) Limited Total Produce International Limited Waddell Limited Total Produce International Holdings Limited Guarantees Company Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies or joint ventures and associates within the Group, the Company considers these to be insurance arrangements and accounts for them as such. The Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee. The following are details of contracts made by the Company at 31 December 2016 to guarantee the indebtedness of other companies or joint ventures and associates within the Group: (i) The Company has guaranteed bank borrowings of subsidiaries in the amount of €164,132,000 (2015: €131,786,000). (ii) The Company has guaranteed bank borrowings of €4,274,000 (2015: €1,385,000) within joint venture and associate companies. (iii) The Company has provided counter-indemnities of €7,000,000 (2015: €Nil) in respect of guarantees given by non-controlling interests in a subsidiary. Group In addition to the Company guarantees above, certain Group subsidiaries have given guarantees totalling €7,577,000 (2015: €7,345,000) in respect of other trading obligations arising in the ordinary course of business. Contingencies From time to time, the Group is involved in claims and legal actions, which arise in the normal course of business. Based on information currently available to the Group, and legal advice, the Directors believe such litigation will not, individually or in aggregate, have a material adverse effect on the financial statements and that the Group is adequately positioned to deal with the outcome of any such litigation.
31. RELATED PARTIES Identity of related parties Under IAS 24 Related Party Disclosures, the Group has a related party relationship with its joint ventures and associates. Transactions with the Group’s joint ventures and associates are set out below. IAS 24 also requires the disclosure of compensation paid to the Group’s key management personnel. This comprises its Executive Directors, Non-Executive Directors, Company Secretary and other senior management within the Group. Remuneration of key management personnel 2016 €’000
2015 €’000
Short term benefits (salary, bonus, incentives) Post-employment benefits Share-based payment expense
7,676 687 101
6,987 671 106
Remuneration
8,464
7,764
Short term incentive plan (a)
1,190
1,047
Total
9,654
8,811
(a) The Compensation Committee made an award of €1,190,000 (2015: €1,047,000) to the Executive Directors under the short term incentive plan. See pages 53 and 55 for details.
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Total Produce plc Annual Report and Accounts 2016