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Report: 31st December, 2011

Flavorite Foods Limited


Consolidated Financial Statements
(Expressed in Trinidad and Tobago Dollars)
31 December 2011

Report: 31st December, 2011

Contents Page
Vision and Mission Statement 3
Chairmans Report 4-5
Notice of Meeting 6
Directors and Officials

Directors Report 8

Directors and Substantial Interests

Statement of Managements Responsibilities

10

Independent Auditors Report

11

Consolidated Statement of Financial Position

12

Consolidated Statement of Comprehensive Income

13

Consolidated Statement of Changes in Equity

14

Consolidated Statement of Cash Flows



Notes to the Consolidated Financial Statements

15

Management Proxy

45

Proxy Form

47

16-43

Report: 31st December, 2011

Vision
To be the leading manufacturer and marketer of
branded ice cream products,
frozen novelties and cultured products
in the Caricom.

Mission
To manufacture and market
a wide range of branded high quality
ice cream products, frozen novelties
and cultured products
that will delight and exceed
our customers expectations.
We recognize that our employees
are our most valuable resource
and we will provide them with opportunities
for learning and self development.
We will foster mutually beneficial
relationships with all our business partners
in pursuing and achieving
economic and social enhancement
for the national community.

Report: 31st December, 2011

Chairmans Report 2011


Results

Turnover for the year increased by $5.4 million (6%) but profits before tax were down from $8.9 million to just
over $4 million. The impact of the Curfew was the loss of high margin sales of over $3.5 million. Domestic sales
volumes in the industry continue their steep decline as the impact of cheap imported ice cream continues to
erode sales of the high quality local product. In addition, the costs of raw materials increased by an average
of 11% during the year, but we were unable to adjust our prices to reflect these increases because of the price
points of the cheap imports. Fortunately our efforts in the region have borne fruit and have enabled the company to achieve higher sales albeit at lower margins.
All of the optimism with which we started the year and which appeared to be justified came to a sudden halt
with the announcement of the State of Emergency and Curfew in August, 2011. At that time, the challenges
facing the local subsidiaries that I had identified in my report last year were being overcome, and we seemed
to be heading for an excellent year. The effect of the Curfew was immediate and destructive, and I am saddened to report that recovery, although underway, is painfully slow as consumers buying patterns changed
since they became accustomed to the modified lifestyle imposed on them.

Subsidiaries

Our regional subsidiaries in the tourist islands of Barbados and St. Lucia are performing below expectation but
we continue to adjust our strategy to ensure profitable performance.
Corrective action taken during the year has already begun to have a positive impact on the local subsidiaries,
and subject to the post-curfew economic lethargy, we expect to report profits on all of them in 2012.

Operations

We overhauled our sales and marketing operations during the course of the year and one of the initiatives
was the appointment of three new sub distributors. Due to delays in the arrival, clearing and commissioning
of equipment, these new appointments became effective in January 2012. The effect of this is to reduce our
direct overhead, increase cold storage facilities and provide a superior sales effort. If our experience with the
pilot scheme in East Trinidad is duplicated, we can expect greatly improved efficiency and sales.
Dependable and competent labour is scarce in Trinidad and Tobago, but we do have a permanent workforce that can be categorized as such. However, it is a daily challenge to our production department to find
temporary workers. Attendance, time keeping, work ethic and honesty are premium qualities which are rarely
seen. The fact that this problem is not unique to Flavorite offers no comfort to those charged with the delivery
of operational efficiency.
We constantly hear of our countrys vision to emulate the success of the Singapore model, but successive administrations have lacked the political will to change the bureaucracy and archaism of our operating environment so that Singapore remains as distant as it is geographically. Small, timid steps will not succeed and will
be frustrated by those agencies whose interests are not served by change. No, what is needed is a singular
determination and whenever necessary radical reform. We cannot compete effectively until those changes
are successfully implemented.

Report: 31st December, 2011

Corporate Action
In the latter part of the year, we entered into negotiations for the purchase of Romike Limited - a large frozen

meat, chilled products and dry goods supplier and successfully concluded the acquisition in January 2012. This
company, located at the corner of Churchill Roosevelt Highway and Boundary Road, operates within a similar
core activity as Flavorite and we believe that there are several synergies from which we can jointly benefit. In
addition there is room for expanding the business in Trinidad and Tobago. Romikes sales in 2011 amounted to
approximately $55 million with a net profit before tax of approximately $3 million.

2012

Flavorite has been positioned for growth. Some regional markets are still to be opened and some others, including those previously mentioned, may require new arrangements. Sales of franchises are also part of the
revenue generating projects that will be receiving greater attention in 2012. The new Island Naturals range is
now in the marketplace and we have high expectations of success in that category. The immediate short term
growth however, is likely to come from our recent acquisition of Romike and relationships previously and independently developed by Flavorite will be facilitated via that operation.

Acknowledgements

As always, I would like to record the contribution of the representative union, the OWTU, which has maintained
its position as a solid business partner in our company. During the year a number of long serving casual workers
were made permanent in a collaborative effort between the company and the union. This was just one of the
successes of the OWTUs representation.
During the year, two members of the Board, Carolyn John and Hayden Ameerali resigned for personal reasons.
This placed far greater responsibility on the remaining members and I would like to single out for special mention the outstanding contribution made by Richard Trotman.
I am pleased to report that our management team is strong and committed and is well equipped to achieve
the objectives and meet the challenges in the foreseeable future. I would like to thank each and every one of
them by name but unfortunately space constraints do not allow this.
If this sounds somewhat like a swansong, it is because it is indeed just that. I am officially retiring as the Chief
Executive Officer on 30th April, 2012, and placing, confidently, that responsibility in the hands of my successor,
Stefan Monteil. I will remain as non-executive Chairman as long as I am needed and will continue to provide
guidance and support to the company. I am secure in the knowledge that even in retirement, Life is Good!

Report: 31st December, 2011

NOTICE OF 41ST ANNUAL MEETING


Notice is hereby given that the 41st Annual Meeting of FLAVORITE FOODS LIMITED will be held at
Valpark Chinese Restaurant, Morequito Avenue, Valsayn, Trinidad at 10.00 am on Thursday May
24th, 2012 for the following purposes:
1.

To receive and consider the Audited Consolidated Financial Statements of the Company for
the financial year ended December 31st, 2011 together with the Report of the Directors and
Auditors thereon.

2.

To note the final Dividend.

3.

To elect Directors for the ensuing year.

4.

To appoint Auditors and fix their remuneration for the ensuing year.

5.

To transact any other ordinary business of the Company.

By Order of the Board,

_____________________________
Bernard Malcolm
Secretary
April 24, 2012
NOTES:

1.

No service contracts were entered into between the Company and any of its Directors.

2.


A member entitled to attend and vote is entitled to appoint one or more proxies to attend
and vote instead of him/her. Such proxy need not also be a member of the Company. All
proxies should be deposited at the Registered Office of the Company not less than
forty-eight hours before the time for holding the meeting.

Report: 31st December, 2011

DIRECTORS AND OFFICIALS


Directors:



Mr. Godfrey Bain


Mr. Richard Trotman
Mr. Martin Daly S.C.
Mr. L. Stefan Monteil
Mr. Michael La Caille

Secretary:

Bernard Malcolm

Registered Office:

128 Boundary Road, San Juan

Auditors:


Deloitte Trinidad and Tobago


54 Ariapita Avenue
Woodbrook
Port of Spain

Bankers:

Republic Bank Limited


59 Independence Square
Port of Spain

Chairman & C.E.O.


Audit Committee

Report: 31st December, 2011

DIRECTORS REPORT
The Directors submit their report and audited accounts for the year ended December 31st, 2011.
CONSOLIDATED

2011
Retained earnings for the year

2,294,273

Retained earnings at the beginning of the year

31,166,120

Final dividend 2010 25 per share

(1,944,416)

Interim dividend paid on Dec 15th, 2011 - 10 per share

(777,766)

Retained earnings at the end of the year 2011

30,738,211

The Directors have proposed a final dividend for 2011 of $0.06 per share ($466,660.00).
In accordance with the Companys By-Law No. 1, the directors who are not officers of the company
retire and being eligible, offer themselves for re-appointment.
In accordance with the Companys By-Law No. 1, Mr. Robert Mayers temporarily filled a vacancy with
effect from April 13, 2012 and being eligible, offers himself for election.
The Auditors, Deloitte Trinidad and Tobago, retire and offer themselves for re-appointment.

By order of the Board

____________________
Godfrey Bain
Chief Executive Officer

Report: 31st December, 2011

DIRECTORS AND SUBSTANTIAL INTERESTS


DIRECTORS INTERESTS
Ordinary shares of no par value 31.12.2011 31.3.2012
G. Bain
R. Trotman
M. La Caille

24,413
4,000
2,000

24,413
4,000
2,000

SUBSTANTIAL INTERESTS
To the knowledge of the Directors of the Company, the following held substantial/beneficial interest
in the share capital of the Company:
Ordinary shares of no par value

31.12.2011 31.3.2012

Stone Street Capital


T. Geddes Grant Pension Fund Plan

6,266,415 6,266,415
427,777 427,777

A substantial interest is defined as any holding, either directly or through a depository, of 5% or more
of the issued share capital of the Company.

Report: 31st December, 2011

Statement of managements responsibilities


It is the responsibility of management to prepare financial statements for each financial year which
give a true and fair view of the state of affairs of the Company as at the end of the financial year and
of the operating results of the Company for the year. It is also managements responsibility to ensure
that the Company keeps proper accounting records which disclose with reasonable accuracy at any
time the financial position of the Company. They are also responsible for safeguarding the assets of
the Company.
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the International Financial Reporting Standards, (IFRS). This responsibility includes
designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that
are reasonable in the circumstances.
Management accepts responsibility for the annual financial statements, which have been prepared
using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with the IFRS. Management is of the opinion that the financial statements give
a true and fair view of the state of the financial affairs of the Company and of its operating results.
Management further accepts responsibility for the maintenance of accounting records which may
be relied upon in the preparation of financial statements, as well as adequate systems of internal
financial control.
Nothing has come to the attention of Management to indicate that the Company will not remain a
going concern for at least the next twelve months from the date of this statement.

________________________________ _____________________________
Director Director

22 March 2012
22 March 2012

10

Report: 31st December, 2011

Independent Auditors Report


To the shareholders of
Flavorite Foods Limited
Report on the financial statements
We have audited the accompanying consolidated financial statements of Flavorite Foods Limited which comprise the consolidated statement of financial position as of 31 December 2011 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement
of cash flows for the year then ended and a summary of significant accounting policies and other explanatory
information.

Managements responsibility for the consolidated financial statements


Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

Auditors responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors judgement, including
the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the group as of 31 December 2011, and its financial performance and its cash flows for the year then ended
in accordance with International Financial Reporting Standards.

Deloitte & Touche


Port of Spain,
Trinidad, West Indies
22 March 2012____________________________________________________________________________

11

Report: 31st December, 2011


Flavorite Foods Limited
Consolidated statement of financial position
(Expressed in Trinidad and Tobago Dollars)

Notes

as at 31 December
2011
2010
$
$

ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investment

6
7
3.24

50,020,656
3,498,236
42,777

43,216,866
3,881,776
42,968

53,561,669

47,141,610

26,534,164
62,983
10,941,219
1,132,792

25,279,250
-8,703,486
3,223,110

Total current assets

38,671,158

37,205,846

Total assets

92,232,827

84,347,456

13,646,504
15,154,680
30,738,211

13,646,504
8,672,655
31,166,120

59,539,395

53,485,279

5,289,136
2,586,721
1,524,755

3,290,793
2,244,946
3,387,671

9,400,612

8,923,410

11,259,526
7
5,792,150
6,241,137

11,130,125
583,969
5,945,630
4,279,043

Total current liabilities

23,292,820

21,938,767

Total liabilities

32,693,432

30,862,177

Total equity and liabilities

92,232,827

84,347,456

Total non-current assets


Current assets
Inventories
Taxation recoverable
Trade and other receivables
Cash at bank and in hand

8
9

EQUITY AND LIABILITIES


Capital and reserves
Share capital
Revaluation reserve
Retained earnings

10

Total equity
Non-current liabilities
Deferred tax liability
Retirement and severance obligations
Borrowings

11
12
13

Total non-current liabilities


Current liabilities
Trade and other payables
Taxation payable
Retirement and severance obligation
Borrowings

14
12
13

The notes on pages 16 to 43 are an integral part of these consolidated financial statements.
On 22 March 2012, the Board of Directors of Flavorite Foods Limited authorised these financial
statements for issue.
________________________________ Director

12

_______________________________ Director

Report: 31st December, 2011

Flavorite Foods Limited


Consolidated statement of comprehensive income
(Expressed in Trinidad and Tobago Dollars)

Notes
Revenue
Cost of sales

95,209,603

89,769,300

(40,211,069)

(36,440,967)

54,998,534

53,328,333

788,449

1,032,497

55,786,983

54,360,830

(33,288,772)
(17,066,326)
(948,497)

(27,028,832)
(17,181,456)
(952,031)

15

(51,303,595)

(45,162,319)

17

(466,099)

(271,673)

15

Gross profit
Other operating income

Year ended 31 December


2011
2010
$
$

16

Expenses
Administrative
Distribution
Other operating

Finance expense
Profit before taxation
Taxation

18

Profit for the year

4,017,289

8,926,838

(1,752,498)

(2,545,090)

2,264,791

6,381,748

Other comprehensive income


Revaluation of freehold property
Tax effect of revaluation
Currency translation differences
Total comprehensive income for the year

8,642,700
(2,160,675)

---

6,482,025

--

29,482

248,609

8,776,298

6,630,357

0.29

0.82

7,777,660

7,777,660

Earnings per share


Basic and diluted

19

Weight average number of shares


Basic and diluted

The notes on pages 16 to 43 are an integral part of these consolidated financial statements.

13

Report: 31st December, 2011

Flavorite Foods Limited


Consolidated statement of changes in equity
(Expressed in Trinidad and Tobago Dollars)
Notes

Share
Capital
$

Revaluation
Reserve
$

Retained
Earnings
$

Total
Equity
$

Year ended 31 December 2011


Balance at 1 January 2011

13,646,504

8,672,655

31,166,120

53,485,279

Profit for the year

--

--

2,264,791

2,264,791

Other comprehensive income

--

6,482,025

29,482

6,511,507

Total comprehensive income

--

6,482,025

2,294,273

8,776,298

--

--

(2,722,182)

(2,722,182)

13,646,504

15,154,680

30,738,211

59,539,395

13,646,504

8,672,655

28,224,249

50,543,408

Profit for the year

--

--

6,381,748

6,381,748

Other comprehensive income

--

--

248,609

248,609

Total comprehensive income

--

--

6,630,357

6,630,357

Acquisition of non-controlling interest

--

--

(2,910,720)

(2,910,720)

--

--

(777,766)

(777,766)

13,646,504

8,672,655

Dividends

24

Balance at 31 December 2011


Year ended 31 December 2010
Balance at 1 January 2010

Dividends
Balance at 31 December 2010

24

31,166,120

The notes on pages 16 to 43 are an integral part of these consolidated financial statements.

14

53,485,279

Report: 31st December, 2011

Flavorite Foods Limited


Consolidated statement of cash flows
(Expressed in Trinidad and Tobago Dollars)

Notes
Operating activities
Profit before taxation
Adjustments to reconcile profit to net cash generated
from operating activities:
Depreciation
Amortisation of deferred franchise fees
Loss/(gain) on disposal of plant and equipment
Net change in operating assets and liabilities

Year ended 31 December


2011
2010
$
$
4,017,289

8,926,838

6,429,582
478,043
241,121
(3,174,951)

5,539,578
128,531
(56,412)
(3,722,602)

7,991,084
(2,561,775)

10,815,933
(2,514,708)

5,429,309

8,301,225

(94,500)
--(5,065,008)
251,336

(63,000)
(400,000)
(42,968)
(9,997,122)
137,002

(4,908,172)

(10,366,088)

Dividend paid to companys shareholders


Repayment of borrowings

(2,722,182)
(1,818,962)

(3,499,947)
3,052,759

Net cash used in financing activities

(4,541,144)

(447,188)

Net decrease in cash and cash equivalents

(4,020,007)

(2,512,051)

3,125,873

5,631,343

11,549

6,581

6
20

Taxation paid
Net cash generated from operating activities
Investing activities
Franchise fees paid
Acquisition of minority interest
Purchase of investments securities
Purchase of property, plant and equipment
Proceeds from sale of plant and equipment

Net cash used in investing activities


Financing activities

Cash and cash equivalents - beginning of year


Net foreign exchange difference
Cash and cash equivalents - end of year

(882,585)

3,125,873

Represented by
Cash at bank and in hand
Bank overdraft

13

1,132,792
(2,015,377)
(882,585)

Interest paid

466,099

3,223,110
(97,237)
3,125,873
271,673

The notes on pages 16 to 43 are an integral part of these consolidated financial statements.

15

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
1.

Incorporation and principal activity


Flavorite Foods Limited is incorporated in the Republic of Trinidad and Tobago and is engaged in
the manufacture of ice cream and related products. The majority shareholding belongs to Stone
Street Capital Limited, a company incorporated in the Republic of Trinidad and Tobago. The
subsidiary, Big Scoop Limited, incorporated in the Republic of Trinidad and Tobago, is wholly
owned and is engaged in the sale of ice cream. The registered office of both companies is #128
Boundary Road, San Juan. On 3 November 2006, a wholly owned subsidiary, FFL (Barbados)
Limited, located at 1 Webster Industrial Park, Barbados was incorporated. The company began
trading in January 2007. On 23 January 2008, Flavorite Foods Limited purchased 60%
shareholding in Original Foods Limited a company incorporated in Trinidad and Tobago and
involved in a retail ice cream shop. In August 2010 the residual 40% interest was also acquired.
During 2008 a new subsidiary Flavorite Foods (St. Lucia) Limited was incorporated in St. Lucia,
which commenced trading in January 2009.
In 2009, Sundaes Limited, a fully owned subsidiary was incorporated in the Republic of Trinidad
and Tobago to operate ice-cream parlours throughout the Caribbean. Trading began in September
2009.

2.

Application of new and revised International Financial Reporting Standards (IFRSs)

2.1

New and revised IFRSs affecting amounts reported in the current year (and/or prior years)
The following new and revised IFRSs have been applied in the current year and have affected the
amounts reported in these financial statements. Details of other new and revised IFRSs applied in
these financial statements that have had no material effect on the financial statements are set out
in section 2.2
Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to
IFRSs issued in 2010)
The amendment of IAS 1 clarifies that an entity may choose to disclose an analysis of other
comprehensive income by item in the statement of changes in equity or in the notes to the financial
statements. In the current year, for each component of equity the Group has chosen to present
such an analysis in the notes to the consolidated financial statements, with a single-line
presentation of other comprehensive income in the consolidated statement of changes in equity.
Such amendments have been applied retrospectively, and hence the disclosures in the
consolidated financial statements have been modified to reflect the change.
IAS 24 Related Party Disclosures (as revised in 2009)
IAS 24 (as revised in 2009) has been revised on the following two aspects: (a) IAS 24 (as revised
in 2009) has changed the definition of a related party and (b) IAS 24 (as revised in 2009)
introduces a partial exemption from the disclosure requirements for government-related entities.
The Company and its subsidiaries are not government-related entities. The related party
disclosures set out in the notes to the consolidated financial statements have been changed to
reflect the application of the revised Standard. Changes have been applied retrospectively.

2.2

New and revised IFRSs applied with no material effect on the consolidated financial
statements
The following new and revised IFRSs have also been adopted in these consolidated financial
statements. The application of these new and revised IFRSs has not had any material impact on
the amounts reported for the current and prior years but may affect the accounting for future
transactions or arrangements.

16

Report: 31st December, 2011


Flavorite Foods Limited
Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
2.

Application of new and revised International Financial Reporting Standards (IFRSs)


(continued)

2.2

New and revised IFRSs applied with no material effect on the consolidated financial
statements (continued)
Amendments to IFRS 3 Business Combinations
As part of improvements to IFRSs issued in 2010, IFRS 3 was amended to clarify that the
measurement choice regarding non-controlling interest as the date of acquisition is only available
in respect of non-controlling interests that are present ownership interest and that entitle their
holders to a proportionate share of the entitys net assets in the event of liquidation. All other types
of non-controlling interests are measured at their acquisition-date fair value, unless another
measurement basis is required by other Standards. In addition, IFRS 3 was amended to provide
more guidance regarding the accounting for share-based payment awards held by the acquirees
employees. Specifically, the amendments specify that share-based payment transaction of the
acquiree that are not replaced should be measured in accordance with IFRS 2 share-based
Payment at the acquisition date (market-based measure)
The application of the amendments has had no effect on the amounts reported in the current and
prior years.
Amendments to IAS 32 Classifications of Rights Issues
The amendments address the classification of certain rights issues denominated in a foreign
currency as either equity instruments or as financial liabilities. Under the amendment, rights,
options or warrants issued by an entity for the holders to acquire a fixed number of the entitys
equity instruments for a fixed amount of any currency are classified as equity instruments in the
financial statements of the entity provided that the offer is made pro rata to all of its existing owners
of the same class of its non-derivative equity instruments. Before the amendments to IAS 32,
rights, option or warrants to acquire a fixed number of an entitys equity instruments for a fixed
amount in foreign currency were classified as derivatives. The amendments require retrospective
application.
The application of the amendments has had no effect on the amounts reported in the current and
prior years because the Group has not issued instruments of this nature.
Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement
IFRIC 14 addresses when refunds of reduction in future contributions should be regarded as
available in accordance with paragraph 58 of IAS 19: how minimum funding requirements might
affect the availability of reduction in future contributions; and when minimum funding requirements
might give rise to a liability. The amendments now allow recognition of an asset in the form of
prepaid minimum funding contributions.
The application of the amendments has had no effect on the amounts reported in the current and
prior years because the Group does not carry an employee benefit plan.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
The interpretation provides guidance on the accounting for the extinguishment of a financial liability
by the issued of equity instruments. Specifically, under IFRIC 19, equity instruments issued under
such arrangement will be measured at their fair value, and any difference between the carrying
amount of the financial liability extinguished and the consideration paid will be recognized in profit
or loss.

17

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
2.

Application of new and revised International Financial Reporting Standards (IFRSs)


(continued)
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (continued)
The application of IFRIC 19 has had no effect on the amounts reported in the current and prior
years because the Group has not entered into any transaction of this nature.
Improvements to IFRSs issued in 2010
The improvements to IFRSs issued in 2010 has not had any material effect on amount reported in
the consolidated financial statements

2.3

Standards in issue not yet effective


The following is a list of standards and interpretations issued that are not yet effective up to the
date of issuance of the Groups financial statements. The Group reasonably expects these
standards and interpretations to be applicable at a future date and intends to adopt those
standards and interpretations when they become effective.
IAS 12 - Income Taxes - Recovery of Underlying Assets (effective January 1, 2012)
The amendment clarified the determination of deferred tax in investment property measured at fair
value by introducing a rebuttable presumption that deferred tax on investment property measured
using the fair value model in IAS 40 should be determined on the basis that its carrying amount will
be recovered through sale. Furthermore, the amendment introduces the requirement to calculate
deferred tax on non-depreciable assets that are measured using the revaluation model in IAS 16 to
always be measured on the sale basis of the asset.
IFRS 1 - First-time Adoption of International Financial Reporting Standards (Amendment) Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters
(effective July 1, 2011)
The amendment provides guidance on how an entity should resume presenting IFRS financial
statements when its functional currency ceases to be subject to severe hyperinflation.
IFRS 7 - Financial Instruments: Disclosures - Enhanced Derecognition Disclosure
Requirements (effective July 1, 2011)
The amendment requires additional disclosures about financial assets that have been transferred,
but not derecognised, to enable the user of the Groups financial statements to understand the
relationship with those assets that have not been derecognised and their associated liabilities. In
addition, the amendment requires disclosures about continuing involvement in derecognised
assets to enable the user to evaluate the nature of and risks associated with, the entitys continuing
involvement in those derecognised assets. The amendment affects disclosure only and is not
expected to have an impact on the Groups financial position or performance.

18

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
2.

Application of new and revised International Financial Reporting Standards (IFRSs)


(continued)
IFRS 9 - Financial Instruments: Classification and Measurement ((Phase 1) effective January
1, 2013)
IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and
applies to classification and measurement of financial assets and liabilities as defined in IAS 39. In
subsequent phases, the Board will address impairment and hedge accounting. The completion of
this project is expected in mid 2011. The adoption of the first phase of IFRS 9 will primarily have an
effect on the classification and measurement of the Groups financial assets. The Group is
currently assessing the impact of adopting IFRS 9, however, since the impact of adoption depends
on the assets held by the Group at the date of adoption, it is not practical to quantify the effect at
this time.
IFRS 10 - Consolidated Financial Statements, IAS 27 Separate Financial Statements
(effective January 1, 2013)
IFRS 10 replaces the portion of IAS 27 that addresses the accounting for consolidated financial
statements. It also addresses the issues raised in SIC-12 Consolidation Special Purpose
Entities resulting in SIC-12 being withdrawn. IAS 27, as revised, is limited to the accounting for
investments in subsidiaries, joint ventures, and associates in separate financial statements.
IFRS 11 - Joint Arrangements, IAS 28 Investments in Associates and Joint Ventures
(effective January 1, 2013)
IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities Nonmonetary Contributions by Venturers. Joint control under IFRS 11 is defined as the contractually
agreed sharing of control of an arrangement, which exists only when the decisions about the
relevant activities require the unanimous consent of the parties sharing control. The reference to
control in joint control refers to the definition of control in IFRS 10.
IFRS 12 - Disclosure of Interests in Other Entities (effective January 1, 2013)
IFRS 12 applies to an entity that has an interest in subsidiaries, joint arrangements, associates
and/or structured entities. Many of the disclosure requirements of IFRS 12 were previously
included in IAS 27, IAS 31, and IAS 28, while others are new.
IFRS 13 - Fair Value Measurement (effective January 1, 2013)
IFRS 13 does not affect when fair value is used, but rather describes how to measure fair value
where fair value is required or permitted by IFRS. Fair value under IFRS 13 is defined as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (i.e., an exit price). Fair value as used in
IFRS 2 Share-based Payments and IAS 17 Leases is excluded from the scope of IFRS 13.
IAS 1 - Presentation of Items of Other Comprehensive Income Amendments to IAS 1
(effective July 1, 2012)
The amendments to IAS 1 change the grouping of items presented in Other Comprehensive
Income (OCI). Items that would be reclassified (or recycled) to profit or loss at a future point in time
(for example, upon derecognition or settlement) would be presented separately from items that will
never be reclassified. The amendments do not change the nature of the items that are currently
recognised in OCI, nor do they impact the determination of whether items in OCI are reclassified
through profit or loss in future periods.

19

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
2.

Application of new and revised International Financial Reporting Standards (IFRSs)


(continued)
IAS 19 - Employee Benefits (Revised) (effective January 1, 2013)
The revised standard includes a number of amendments that range from fundamental changes to
simple clarifications and re-wording. The more significant changes include the following:
For defined benefit plans, the ability to defer recognition of actuarial gains and losses (i.e., the
corridor approach) has been removed. As revised, actuarial gains and losses are recognised in
OCI when they occur. Amounts recorded in profit or loss are limited to current and past service
costs, gains or losses on settlements, and net interest income (expense). All other changes in the
net defined benefit asset (liability) are recognised in OCI with no subsequent recycling to profit or
loss. Objectives for disclosures of defined benefit plans are explicitly stated in the revised standard,
along with new or revised disclosure requirements. These new disclosures include quantitative
information of the sensitivity of the defined benefit obligation to a reasonably possible change in
each significant actuarial assumption. Termination benefits will be recognised at the earlier of when
the offer of termination cannot be withdrawn, or when the related restructuring costs are
recognised under IAS 37 Liabilities. The distinction between short-term and other long-term
employee benefits will be based on expected timing of settlement rather than the employees
entitlement to the benefits.
In May 2010, the International Accounting Standards Board issued Improvements to IFRSs,
which is part of its annual improvements project, and a vehicle for making non-urgent but
necessary amendments to various IFRSs. These amendments primarily become effective for
annual periods beginning on or after July 1, 2010 or January 1, 2011. The following shows the
IFRSs and topics addressed by these amendments:
IFRS Subject of Amendment
IAS 1 Presentation of Financial Statements
IAS 27 Consolidated and Separate Financial Statements
IAS 34 Interim Financial Reporting
IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 3 Business Combinations
IFRS 7 Financial Instruments: Disclosures
IFRIC 13 Customer Loyalty Programmes

20

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies


The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.

3.1

Statement of compliance
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards.

3.2

Basis of preparation
These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards under the historical cost convention as modified by the revaluation
of land and buildings which are carried at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Groups accounting policies. The areas involving a higher degree of judgement or
complexity, or those where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 5.

3.3

Basis of consolidation
Control is achieved where the Company has the power to govern the financial and operating
policies of an entity generally accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the group controls another entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The group uses the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group
recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling
interests proportionate share of the acquirees net assets.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect
changes in consideration arising from contingent consideration amendments. Cost also includes
direct attributable costs of investment.
The excess of the consideration transferred for the amount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the
fair value of the groups share of the identifiable net assets acquired is recorded as goodwill. If this
is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain
purchase, the difference is recognised directly in the statement of comprehensive income.

21

Report: 31st December, 2011


Flavorite Foods Limited
Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.3

Basis of consolidation (continued)


Inter-company transactions, balances and unrealised gains on transactions between group
companies are eliminated. Unrealised losses are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the group.
Transactions and non-controlling interests
The group treats transactions with non-controlling interests as transactions with equity owners of
the group. For purchases from non-controlling interests, the difference between any consideration
paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in
equity

3.4

Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief decision-maker. The chief decision-maker is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the chief executive
officer that makes strategic decisions

3.5

Foreign currency translation


i)

Functional and presentation currency


Items included in the financial statements of each of the Groups entities are measured using
the currency of the primary economic environment in which the entity operates (the functional
currency).
These consolidated financial statements are presented in Trinidad and Tobago dollars, which
is the Companys functional and the Groups presentation currency.

ii)

Transactions and balances


Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income.
Foreign currency exchange gains and losses that relate to borrowings and cash and cash
equivalents are presented in the statement of comprehensive income within finance income or
cost. All other foreign exchange gains and losses are presented in the statement of
comprehensive income within other (losses)/gains net.

22

Report: 31st December, 2011


Flavorite Foods Limited
Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.5

Foreign currency translation (continued)


iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:

3.6

Assets and liabilities for each statement of financial position presented are translated at
the closing rate at the date of that statement of financial position;

Income and expenses for each statement of comprehensive income are translated at
average exchange rates;

All resulting exchange differences are recognised as a separate component of equity; and

On consolidation, exchange differences arising from the translation of the net investment
in foreign operations investments, are taken to other comprehensive income.

Property, plant and equipment


Land and buildings, which comprise mainly factories and offices, are shown at fair value less
subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is
eliminated against the gross carrying amount of the asset and the net amount is restated to the
revalued amount of the asset. Managements policy is to revalue land and buildings at intervals
not exceeding five years. All other plant and equipment are stated at historical cost less
depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the statement of comprehensive income during the financial period in which they are
incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method
to allocate their cost to their residual values over their estimated useful lives, as follows:
Freehold buildings and building improvements
Plant and machinery
Vehicles, carts and cycles
Office furniture, fittings and equipment

2 - 33 %
8 - 33 %
20 - 50%
10 - 33 %

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each
statement of financial position date.
An assets carrying amount is written down immediately to its recoverable amount if the assets
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in the statement of comprehensive income.
When revalued assets are sold, the amounts included in the revaluation reserve are transferred to
retained earnings.

23

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.
3.7

Summary of significant accounting policies (continued)


Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and
are tested annually for impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair
value less costs to sell and value in use. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.

3.8

Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Groups share
of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses. Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to
benefit from the business combination in which the goodwill arose identified according to operating
segment.

3.9

Financial assets
Classification
The Group classifies its financial assets in the following categories: loans and receivables. The
classification depends on the purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the statement of financial position date. These are classified as noncurrent assets. The Groups loans and receivables comprise trade and other receivables and cash
and cash equivalents in the statement of financial position (notes 3.12 and 3.13).

3.10

Impairment of financial assets


Assets carried at amortized cost
The group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or group of financial assets is impaired. A financial asset or a group of financial
assets is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset
(a loss event) and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset or group of financial assets that can be reliably estimated.

24

Report: 31st December, 2011


Flavorite Foods Limited
Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.10

Impairment of financial assets (continued)


The criteria that the group uses to determine that there is objective evidence of an impairment
loss include:

significant financial difficulty of the issuer or obligor;

a breach of contract, such as a default or delinquency in interest or principal payments;

the group, for economic or legal reasons relating to the borrowers financial difficulty,
granting to the borrower a concession that the lender would not otherwise consider;

it becomes probable that the borrower will enter bankruptcy or other financial
reorganization;

the disappearance of an active market for that financial asset because of financial
difficulties; or

observable data indicating that there is a measurable decrease in the estimated future
cash flows from a portfolio of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial assets in the
portfolio, including:
-

adverse changes in the payment status of borrowers in the portfolio;

national or local economic conditions that correlate with defaults on the assets in the
portfolio.

The group first assesses whether objective evidence of impairment exists.


The amount of the loss is measured as the difference between the assets carrying amount
and the present value of estimated future cash flows (excluding future credit losses that have
not been incurred) discounted at the financial assets original effective interest rate. The
carrying amount of the asset is reduced and the amount of the loss is recognised in the
consolidated statement of comprehensive income. If a loan or held-to-maturity investment has
a variable interest rate, the discount rate for measuring any impairment loss is the current
effective interest rate determined under the contract. As a practical expedient, the group may
measure impairment on the basis of an instruments fair value using an observable market
price.
3.11

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is as follows:
i.

Raw and packaging materials at the average cost.

ii.

Finished goods at the cost of raw and packaging material, direct labour plus production
overheads which are based on normal operating capacity.

iii. Engineering spares on the first-in, first-out basis.


iv. Miscellaneous inventory on the first-in first-out basis.
v.

Goods in transit are valued at invoice cost.

Net realisable value is the estimated selling price in the ordinary course of business, less
applicable variable selling expenses.
Borrowing costs are not included in inventory.

25

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.12

Trade receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in
the ordinary course of business. If collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as current assets. If not, they are
presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised
cost, less provision for impairment.

3.13 Cash and cash equivalents


Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less.
Bank overdrafts are shown in current liabilities on the statement of financial position.
3.14

Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity.

3.15

Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the statement of comprehensive income over the
period of the borrowings using the effective interest method. Loan fees are amortised over the
term of the loan.

3.16

Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Accounts payable are classified as current liabilities if
payment is due within one year or less (or in the normal operating cycle of the business if longer).
If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost.

3.17

Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to the statement of comprehensive income on a
straight-line basis over the period of the lease.
The Group leases certain property, plant and equipment. Leases of property, plant and equipment
where the Group has substantially all the risks and rewards of ownership are classified as finance
leases. Finance leases are capitalised at the leases commencement at the lower of the fair value
of the leased property and the present value of the minimum lease payments.

26

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.17

Leases (continued)
Each lease payment is allocated between the liability and finance charges so as to achieve a
constant rate on the finance balance outstanding. The corresponding rental obligations, net of
finance charges, are included in other long-term payables. The interest element of the finance cost
is charged to the statement of comprehensive income over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period. The
property, plant and equipment acquired under finance leases are depreciated over the shorter of
the useful life of the asset and the lease term.

3.18

Current and deferred income tax


The tax expense for the period comprises current and deferred tax. Tax is recognised in the
statement of comprehensive income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the statement of financial position date in the countries where the companys
subsidiaries and associates operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the
statement of financial position date and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference is controlled by
the group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the taxable
entity or different taxable entities where there is an intention to settle the balances on a net basis.

3.19

Employee benefits
The Group currently has no pension plan.
The permanent unionised employees are entitled to severance pay on voluntary retirement after 20
years from inception of employment. This liability has been provided for under retirement and
severance obligations.

27

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
3.

Summary of significant accounting policies (continued)

3.20

Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a
result of past events; it is more likely than not that an outflow of resources will be required to settle
the obligation; and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.

3.21

Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods
and services in the ordinary course of the Groups activities. Revenue is shown net of value-added
tax, returns, rebates and discounts and after eliminating sales within the Group. Revenue is
recognised as follows:
i)

Sales of goods wholesale


Sales of goods are recognised when a group entity has delivered products to the customer, the
customer has accepted the products and collectability of the related receivables is reasonably
assured.

ii)

Sales of goods - retail


All retail sales are done on a cash basis. Sale of goods are recognised when a Group entity
sells a product to a customer.

iii) Interest income


Interest income is recognised on a time-proportion basis using the accrual method.
3.22

Comparatives
Where necessary comparative figures have been adjusted to conform with changes in presentation
in the current year.

3.23

Dividend distribution
Dividend distribution to the Companys shareholders is recognised as a liability in the Groups
financial statements in the period in which the dividends are approved by the Companys directors.

3.24

Investments
Investments consist of investments in unquoted equities. Unquoted equity instruments are
recognised at cost, being fair value consideration paid for the acquisition of the investments.
Unquoted equities are reviewed annually for impairment. When securities become impaired, the
related impairment allowance is recognised in the consolidated statement of comprehensive
income as an impairment expense in investment securities.

28

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
4.

Financial risk management


The Groups activities expose it to a variety of financial risks including foreign currency risk, credit
risk and liquidity risk.
Market risk
Foreign exchange risk
2011

TTD
$

BDS
$

XC
$

USD
$

Total
$

Assets
Investments
Trade and other receivable
Cash at bank and in hand

-6,450,739
391,180

42,777
760,434
1,919

-219,987
162,513

-3,510,059
577,180

42,777
10,941,219
1,132,792

Total assets

6,841,919

805,130

382,500

4,087,239

12,116,788

2,173,539
8,378,871
6,286,645

71,556
-174,418

--40,006

5,520,797
-4,758,457

7,765,892
8,378,871
11,259,526

Total liabilities

16,839,055

245,974

40,006

10,279,254

27,404,289

Net

(9,997,136)

559,156

342,494

(6,192,015)

(15,287,501)

27,958

17,125

(309,601)

Liabilities
Borrowings
Retirement and severance
Trade and other payables

Impact on net profit


increase/decrease in 500 basis
points
2010

-TTD
$

BDS
$

XC
$

USD
$

(264,518)
Total
$

Assets
Investments
Trade and other receivables
Cash at bank and in hand

-5,591,500
1,613,998

42,968
625,467
1,606

-258,156
272,077

-2,228,363
1,335,429

42,968
8,703,486
3,223,110

Total assets

7,205,498

670,041

530,233

3,563,792

11,969,564

Liabilities
Borrowing
Retirement and severance
Trade and other payables

393,347
8,190,576
6,979,163

97,237
-111,533

--52,888

7,176,130
-3,986,541

7,666,714
8,190,576
11,130,125

Total liabilities

15,563,086

208,770

52,888

11,162,671

26,987,415

Net

(8,357,588)

461,271

477,345

(7,598,879)

(15,017,851)

23,064

23,867

(379,944)

(333,013)

Impact on net profit


increase/decrease in 500 basis
points

--

29

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
4.

Financial risk management (continued)


Market risk (continued)
Foreign exchange risk (continued)
The Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises from
future commercial transactions and recognised monetary assets and liabilities. The Group
mitigates its risk by monitoring its net holding of foreign currency.
Foreign currency sensitivity
If the Trinidad and Tobago dollar strengthens by 5% against the US dollar the profit for the year
would have been $264,518 (2010: $333,013) higher/lower mainly as a result of foreign exchange
gains/losses on translation of US dollar denominated trade receivables and payables
Price risk
The Group has no exposure to price risk or commodity price risk.
Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets, the Groups income and operating cash
flows are substantially independent of changes in market interest rates.
The Groups interest rate risk arises from long-term borrowings. Borrowings issued at variable
rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the
Group to fair value interest rate risk. The Group currently has only fixed rate borrowings, except
for its overdraft facilities, as such is not exposed to cash flow interest rate but to fair value interest
rate risk. The fair values of fixed rate borrowings are disclosed in note 13.
Credit risk
The Group has no significant concentrations of credit risk. It has policies in place to ensure that
wholesale sales of products are made to customers with an appropriate credit history. The Group
has policies that limit the amount of credit exposure to any single customer. All retail sales are
done on a cash basis or using debit and credit cards.

30

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
4.

Financial risk management (continued)


Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities
and the availability of funding through an adequate amount of committed credit facilities.
The table below analyses the Groups financial liabilities into relevant maturity groupings based on
the remaining period at the statement of financial position date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows.
Less than
1 year
$

Between 1
And 2 years
$

Between 2
And 5 years
$

Over
5 years
$

11,259,526
5,792,150
6,865,250

--1,677,230

-161,556
--

-2,425,165
--

11,130,125
5,945,630
4,512,867

--2,266,904

-80,244
1,530,939

-2,164,702
--

At 31 December 2011
Trade and other payables
Retirement and severance obligations
Borrowings
At 31 December 2010
Trade and other payables
Retirement and severance obligations
Borrowings
Fair value
The carrying value less impairment provision of trade receivables and payables are assumed to
approximate their fair values. Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances.
Capital risk management
The Groups objectives when managing capital are to safeguard the Groups ability to continue as
a going concern in order to provide returns to shareholders and benefits to other stakeholders and
to maintain an optimal capital structure to reduce the cost of capital.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt
divided by total capital. Net debt is calculated as total borrowings (including current and noncurrent borrowings as shown in the statement of financial position) less cash and cash
equivalents. Total capital is calculated as equity plus net debt.
2011
$
Total borrowings (note 13)

2010
$

7,765,892

7,666,714

(1,132,792)

(3,223,110)

6,633,100

4,443,604

Total equity

59,539,395

53,485,279

Total capital

66,172,495

57,928,883

10%

8%

Less: cash at bank and in hand


Net debt

Gearing ratio

31

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
5.

Critical accounting estimates and judgements


Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.

5.1

Critical accounting estimates and assumptions


The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, rarely equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are outlined below:
Estimated impairment of goodwill
The assessment of goodwill impairment involves the determination of the fair value of the cash
generating business units to which the goodwill has been allocated. Determination of fair value
involves the estimation of future cash flows or of net income from ordinary activities of these
business units and the expected returns to providers of capital to the business units and/or the
Group as a whole.
The Group updates its business unit financial projections annually and applies discounted cash
flow or earnings multiple models to these projections to determine if there is any impairment of
goodwill. If the growth rate increased/decreased by 10% and the discount rate increased to 15%
there will still be no impairment to goodwill.
Income taxes
The group is subject to income taxes in jurisdictions outside of Trinidad and Tobago. Significant
judgement is required in determining the Groups provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is uncertain. The group
recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes
will be due. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current and deferred income tax assets and
liabilities in the period in which such determination is made.
Retirement and severance benefits
As part of the collective agreement between the Company and Oilfield Workers Trade Union, the
Company is required to make severance benefit payments to permanent employees who have
completed 20 years of permanent service and whose employment has been terminated due to
retrenchment, redundancy, retirement due to ill health and voluntary resignation after 20 years
service provided by the permanent worker is not covered by a pension plan established by the
Company; retirement at age 60 and death in service.
The collective agreement states that the benefit should be calculated on the following scale basis.
Years of service
1-3
4-10
11 and over

Benefit entitlement
Three weeks pay for each year of service
Three and a half weeks pay for each year of service
Four weeks pay for each year of service

The Company begins to accrue this benefit for each permanent employee from the date of
permanent employment.

32

6.

29,800,000
-29,800,000

20,368,965
1,111,380
--(202,063)
21,278,282

22,067,774
(789,492)
21,278,282

At 31 December 2011
Cost/valuation
Accumulated depreciation
Net book amount

Year ended 31 December 2010


Opening net book amount
Additions
Foreign currency
Disposals
Depreciation
Closing net book amount

At 31 December 2010
Cost/valuation
Accumulated depreciation
Net book amount

1,301,048
(33,654)
1,267,394

808,110
484,055
--(24,771)
1,267,394

2,077,327
(1,047,146)
1,030,181

1,267,394
17,157
---(223,496)
(30,874)
1,030,181

Leasehold,
land &
building
$

48,134,475
(32,569,401)
15,565,074

13,567,338
5,338,342
53,572
(18,710)
(3,375,468)
15,565,074

51,166,055
(36,010,192)
15,155,863

15,565,074
3,534,345
5,278
296,351
-(184,868)
(4,060,317)
15,155,863

Plant &
machinery
$

11,909,250
(8,796,585)
3,112,665

3,124,778
1,431,435
44,554
(51,155)
(1,436,947)
3,112,665

12,303,019
(9,986,924)
2,316,095

3,112,665
765,670
11,923
--(83,228)
(1,490,935)
2,316,095

Vehicles,
carts &
cycles
$

5,669,117
(4,027,640)
1,641,477

859,757
1,279,936
12,840
(10,727)
(500,329)
1,641,477

6,060,535
(4,505,729)
1,554,806

1,641,477
558,666
920
--(865)
(645,392)
1,554,806

Office
furniture &
equipment
$

351,974
-351,974

-351,974
---351,974

163,711
-163,711

351,974
108,088
-(296,351)
---163,711

Work in
progress
$

89,433,638
(46,216,772)
43,216,866

38,728,948
9,997,122
110,966
(80,592)
(5,539,578)
43,216,866

101,570,647
(51,549,991)
50,020,656

43,216,866
5,065,008
18,121
-8,642,700
(492,457)
(6,429,582)
50,020,656

Total
$

Depreciation expense of $2,156,294 (2010: $2,011,593) has been included in distribution expenses and $4,273,288 (2010: $3,527,985) in administrative
expenses. The freehold land and buildings were revalued by professional valuators, on a market value basis as at 31 December 2011.

21,278,282
81,082
--8,642,700
-(202,064)
29,800,000

Freehold
land &
buildings
$

Year ended 31 December 2011


Opening net book amount
Additions
Foreign currency
Transfers
Revaluation
Disposals
Depreciation
Closing net book amount

Property, plant and equipment

Notes to the consolidated financial statements


31 December 2011
(Expressed in Trinidad and Tobago Dollars)

Flavorite Foods Limited

Report: 31st December, 2011

33

Report: 31st December, 2011


Flavorite Foods Limited
Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
6.

Property, plant and equipment (continued)


If land and buildings were stated at historical cost basis, the amounts would be as follows:
2011
$

2010
$

Cost
Accumulated depreciation

11,708,106
(1,686,745)

11,609,866
(1,543,949)

Net book amount

10,021,361

10,065,917

Leasing arrangements
Leasehold land and building relates to leases with terms of between 2 and 5 years. Payments
recognised as an expense 2011: $1,372,000 (2010: $1,706,000).
7.

Intangible assets

Goodwill
$

Other
Deferred
Costs
$

2011
Total
$

2010
Total
$

As at 1 January 2011
(Amortisation)/additions

2,237,696
--

1,644,080
(383,540)

3,881,776
(383,540)

3,816,245
65,531

As at 31 December 2011

2,237,696

1,260,540

3,498,236

3,881,776

Impairment test for goodwill


Goodwill arose out of the acquisition of Original Foods Limited in 2008. The recoverable amount of
the Cash Generating Unit is determined based on projections for a 5-year period.
The key assumptions used for value-in-use calculations are 5%-10% growth rate based on 2011
budgets and 7% discount rate.
Management determines budgets based on historical performance and its assessment of market.
The discount rates used are pre-tax and reflect risks relating to the entity.
8.

Inventories
2011
$
Packaging materials
Engineering spares
Raw materials
Finished goods
Goods in transit
Miscellaneous
Provision for impairment:
Engineering spares
Damaged goods

2010
$

9,047,856
6,909,287
6,587,443
5,752,636
621,044
141,612
29,059,878

8,431,950
6,943,901
5,638,709
4,600,460
1,935,459
120,190
27,670,669

(1,381,857)
(1,143,857)

(1,318,083)
(1,073,336)

26,534,164

25,279,250

The cost of inventories recognised as expense and included in cost of sales amounted to
$35,618,793 (2010: $31,910,510).

34

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
9.

Trade and other receivables


2011
$

2010
$

Trade receivables
Less: Provision for bad and doubtful debts

9,832,589
(412,058)

8,006,029
(562,897)

Trade receivables net


Other receivables
Prepayments

9,420,531
848,507
672,181

7,443,132
514,573
745,781

10,941,219

8,703,486

9,420,531
848,507
672,181

7,443,132
514,573
745,781

10,941,219

8,703,486

The fair value of receivables and prepayments are as follows:


Trade receivables
Other receivables
Prepayments

There is no concentration of credit risk with respect to trade receivables, as the Group has a large
number of customers widely dispersed.
Not past due and not impaired

9,420,531

7,443,132

As of 31 December 2011, trade receivables of $412,058 (2010: $562,897) were impaired and
provided for. The individually impaired receivables mainly relate to wholesalers, which are in
difficult economic situations. The ageing of these receivables is as follows:
Over 3 months

412,058

562,897

Movement on the Groups provision for the impairment of trade receivables:


As at 1 January
Receivable written off as uncollectible
Provision reversed during the year
As at 31 December

562,897
(14,510)
(136,329)

742,245
(23,737)
(155,611)

412,058

562,897

The carrying amounts of the Groups trade and other receivables are denominated in the following
currencies:
Currency:
TT Dollars
US Dollars
BDS Dollars
EC Dollars

6,450,739
3,510,059
760,434
219,987

5,591,500
2,228,363
625,467
258,156

10,941,219

8,703,486

35

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
10.

Share capital
Authorised
An unlimited number of ordinary shares of no par value
Issued and fully paid
2011
$
7,777,660 ordinary shares of no par value

11.

13,646,504

2010
$
13,646,504

Deferred tax liability


Deferred income taxes are calculated on all temporary differences under the liability method using a
principal tax rate in the jurisdiction in which the subsidiary operates.
Deferred tax liability and the deferred tax charge in the statement of comprehensive income are
attributable to the following items:
Accumulated
tax
revaluation
depreciation
surplus
$
$
1 January 2011
Charge to statement of comprehensive income

12.

36

Total
$

399,908
(162,332)

2,890,885
2,160,675

3,290,793
1,998,343

31 December 2011

237,576

5,051,560

5,289,136

1 January 2010
Charge to statement of comprehensive income

390,221
9,687

2,890,885
--

3,281,106
9,687

31 December 2010

399,908

2,890,885

3,290,793

Retirement and severance obligations


2011
$

2010
$

At beginning of year
Charge to the statement of comprehensive income
Payments

8,190,576
785,265
(596,970)

6,786,619
1,523,763
(119,806)

At end of year

8,378,871

8,190,576

Disclosed as:
Current liabilities < 1 year
Non- current liabilities > 1 year

5,792,150
2,586,721

5,945,630
2,244,946

8,378,871

8,190,576

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
13.

Borrowings
Current
2011
$
i.
ii.
iii.
iv.

Bank overdraft
Bankers acceptances
Bank borrowings
Finance lease liabilities

2010
$

2,015,377
2,259,122
1,811,250
155,388

97,237
2,215,168
1,811,250
155,388

6,241,137

4,279,043

1,450,426
74,329

3,149,713
237,958

1,524,755

3,387,671

7,765,892

7,666,714

Non-current
v. Borrowings
vi. Finance lease liabilities

Total borrowings
i

The Group has an overdraft facility of $3,000,000 which is secured by a debenture giving
a fixed and floating charge over the assets of the Group stamped to cover $3,180,000,
and a mortgage over property at Boundary Road, San Juan. Interest is charged at 7.75%
per annum.

ii

The bankers acceptance was taken at year-end 15 December, 2011. Interest is charged
at 6.25% and balance is repayable over 30 days.

iii and v. Collateral Mortgage: Registered Second Demand mortgage security stamped to cover
TT$ 5,300,000.00 with power to upstamp giving FirstCaribbean International Bank Limited
a 2nd charge over the properties at Boundary Road, San Juan stamped collateral to the
above debenture, plus acknowledged assignment of fire and all other risks/perils
insurance, with loss payable to FirstCaribbean International Bank Limited as 2nd
mortgage. The loans are repayable by monthly instalments of US$9,688.84 ending 15
December, 2012, US$7,782 which ends in December 2013 and US$9,582.91 which ends
in December 2013. Interest is charged at 6.95% , 7% and 6% per annum respectively.
iv and vi.Finance lease liabilities are held with General Finance Corporation Limited. Lease
liabilities are effectively secured as the rights to the leased assets revert to the lessor in
the event of default. The effective interest rate on lease liabilities is 8.75% per annum.
2011
$

2010
$

Maturity of non-current borrowings


(excluding finance lease liabilities):
Between 1 and 2 years
Between 2 and 5 years

1,450,426
--

1,834,022
1,315,691

1,450,426

3,149,713

37

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
13.

Borrowings (continued)

2011
$

2010
$

Not later than 1 year


Later than 1 year and not later than 5 years

211,884
37,221

211,884
249,105

Future finance charges on finance leases

249,105
(19,388)

460,989
(67,643)

Present value of finance lease liabilities

229,717

393,346

Representing lease liabilities:


- Current
- Non-current

155,388
74,329

155,388
237,958

229,717

393,346

Finance lease liabilities minimum lease payments:

The carrying amount and fair value of the non-current borrowings are as followings

Bank borrowings
14.

Trade and other payables

Trade payables
Accrued expenses
Other payables

15.

38

Expenses by nature

Carrying
Value

Fair
Value

1,450,426

3,149,713

2011
$

2010
$

6,924,970
4,126,829
207,727

5,411,871
5,550,749
167,505

11,259,526

11,130,125

2011
$

2010
$

Raw material and consumables used


Employee benefit expense (Note 15.1)
Other expenses
Depreciation (Note 6)
Advertising costs
Changes in inventory of finished goods
Transportation
Total cost of goods sold, distribution,
administrative and other operating expenses

34,535,944
23,830,013
18,935,019
6,429,582
3,693,244
1,082,848
3,008,014

31,910,510
22,755,230
14,007,744
5,539,578
3,704,612
1,078,337
2,607,275

91,514,664

81,603,286

Cost of sales
Expenses

40,211,069
51,303,595

36,440,967
45,162,319

91,514,664

81,603,286

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
15.

Expenses by nature (continued)

15.1

Employee benefit expense


2011
$
Wages and salaries
Employee benefits
Retirement and severance obligations
Pension cost

15.2

20,878,715
2,152,948
785,265
13,085

19,291,537
1,928,830
1,523,763
11,100

23,830,013

22,755,230

Employee benefit expense


2011
$
Average number of employees:
Full-time
Part-time

16.

2010
$

2010
$

222
44

151
95

266

246

Other operating income


This primarily relates to sales of empty containers, gain on sale of fixed assets and foreign
exchange gain on transactions during the year.
2011
$
Miscellaneous income

17.

788,449

2010
$
1,032,497

Finance expense

Interest expense

2011
$

2010
$

(466,099)

(271,673)

39

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
18.

Taxation
2011
$
Current tax
Deferred tax charge (Note 11)
Green fund levy
Prior year under provision

2010
$

1,819,662
(162,332)
95,168
--

2,375,808
9,687
87,695
71,900

1,752,498

2,545,090

The tax on the Groups profit before tax differs from the theoretical amount that would arise using
the basic rate of tax as follows:
Profit before tax

4,017,289

8,926,838

Tax calculated at 25% (2010: 25%)


Tax losses not utilised
Expenses not deductible for tax purposes
Net effect of allowances
Green fund levy
Business levy
Prior year under provision

1,004,322
615,513
40,647
(33,277)
95,168
30,125
--

2,231,710
95,297
99,659
(53,794)
87,695
12,623
71,900

1,752,498

2,545,090

Tax losses of $557,567 (2010: $381,188) have not been recognised in these financial statements
due to the uncertainty of the timing of its recovery.
19.

Earnings per share


Earnings per share is calculated by dividing the net profit attributable to shareholders by the
weighted average number of ordinary shares in issue during the year.
2011
$
Net profit attributable to equityholders

2,264,791

6,381,748

Weighted average number of ordinary shares in issue

7,777,660

7,777,660

0.29

0.82

Basic and diluted earnings per share


20.

Net change in operating assets and liabilities


2011
$
Increase in inventories
Increase in trade and other receivables
Increase in retirement and severance obligations
Increase/(decrease) in trade and other payables

40

2010
$

2010
$

(1,254,914)
(2,237,733)
188,295
129,401

(1,776,506)
(1,312,793)
1,403,957
(2,037,260)

(3,174,951)

(3,722,602)

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
21.

Segment information
The Group has one main activity which is the manufacture and distribution of frozen desserts,
mainly ice cream and other frozen treats. Therefore its primary reporting format is geographic,
details of which are as follows:
Domestic
$

Export
$

Total
$

Year ended 31 December 2011


Revenue

71,903,263

23,306,340

95,209,603

46,835,337
(5,331,035)
(466,099)
(39,878,701)

8,163,197
(1,098,547)
-(4,206,863)

54,998,534
(6,429,582)
(466,099)
(44,085,564)

Profit before tax

1,159,502

2,857,787

4,017,289

Segment assets

83,707,729

8,525,098

92,232,827

Segment liabilities

27,648,984

5,044,448

32,693,432

68,927,319

20,841,981

89,769,300

44,737,352
(4,465,759)
(271,673)
(34,463,803)

8,590,981
(1,073,819)
-(4,126,441)

53,328,333
(5,539,578)
(271,673)
(38,590,244)

Profit before tax

5,536,117

3,390,721

8,926,838

Segment assets

76,073,905

8,273,551

84,347,456

Segment liabilities

26,613,959

4,248,218

30,862,177

Gross profit
Depreciation
Finance Cost net
Other expenses

Year ended 31 December 2010


Revenue
Gross profit
Depreciation
Finance cost net
Other expenses

Total segment assets include additions to property, plant and equipment as follows:
Domestic
$

Export
$

Total
$

31 December 2011

4,619,019

445,989

5,065,008

31 December 2010

9,335,615

661,507

9,997,122

41

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
22.

Financial instruments by category


The accounting policies for financial instruments have been applied to the line items below:
2011
$

2010
$

Financial assets as per statement of financial position


Trade receivables (Note 9)
Cash at bank and in hand

9,420,531
1,132,792

7,443,132
3,223,110

10,553,323

10,666,242

7,765,892
6,924,970
8,378,871

7,666,714
5,411,871
8,190,576

23,069,733

21,269,161

Financial liabilities as per statement of financial position


Borrowings (Note 13)
Trade payables (Note 14)
Retirement and severance obligations (Note 12)

23.

Contingent liabilities
Bonds in favour of Customs and Excise for $5,485,000 (2010: $685,000).

24.

Dividends paid and proposed


i)

Declared and paid during the year.


Equity dividends as ordinary shares
2011
$
Final dividends 2010: 0.25 (2009: 0.00)
Interim dividends 2011: 0.10 (2010: 0.10)

ii)

2010
$

1,944,416
777,766

777,766

2,722,182

777,766

Proposed for approval at Annual General Meeting not recognised as a liability as at 31


December.
Equity dividends as ordinary shares
Final dividends 2011: 0.06 (2010: 0.25)

42

466,660

1,944,416

Report: 31st December, 2011

Flavorite Foods Limited


Notes to the consolidated financial statements
31 December 2011
(Expressed in Trinidad and Tobago Dollars)
25.

Subsidiaries

Country of
incorporation
FFL (Barbados) Limited
Flavorite Foods (St Lucia) Limited
Big Scoop Limited
Sundaes Limited
Original Foods Limited
26.

Barbados
St. Lucia
Trinidad and Tobago
Trinidad and Tobago
Trinidad and Tobago

2011
Percentage
of equity
held

2010
Percentage
of equity
held

100%
100%
100%
100%
100%

100%
100%
100%
100%
100%

Related party transactions


2011
$
Sale of fixed asset to a director - proceed
- loss on disposal
Key management compensation:
Non-unionised employees

27.

2010
$
1

--

64,999

--

3,578,215

3,673,389

Credit quality of financial assets


Cash and cash equivalents of $1,088,410 (2010: $3,181,279) were held with reputable financial
institutions.

28.

Subsequent events
Subsequent to the year end, the Company acquired the 100% interest in Romike Limited, a
Company involved in the importation and distribution of groceries and related products. The
Company is located at Corner of Boundary Road and Churchill Roosevelt Highway, San Juan and
is incorporated in the Republic of Trinidad and Tobago.

29.

Comparative
The prior year 2010 liabilities and retained earnings have been adjusted. Dividends proposed and
declared with respect to 2010 after the year end was recognised as a liability which is not in
accordance with IFRS. The effect of the adjustment is as follows:
2010
Liabilities
$

Retained
Earnings
$

As previously stated

23,883,182

29,221,705

Adjustment:
Reversed of proposed dividends

(1,944,415)

1,944,415

Adjusted balance

21,938,767

31,166,120

43

Report: 31st December, 2011

44

Report: 31st December, 2011

MANAGEMENT PROXY CIRCULAR


Republic of Trinidad and Tobago
The Companies Act 1995 (Section 144)
1.

Name of the Company:


FLAVORITE FOODS LIMITED. Company No. F-85(C).

2.

Particulars of Meeting:
Forty-First Annual Meeting of the Company to be held on Thursday May 24th,
2012 at 10.00 am at the Valpark Chinese Restaurant, Morequito Avenue, Valsayn,
Trinidad.

3.

Solicitation:
It is intended to vote the Proxy solicited hereby (unless the Shareholders direct
otherwise) in favour of all resolutions specified therein.

4.

Any Directors statement submitted pursuant to Section 76(2):


No statement has been received from the Auditors of the Company pursuant to
Section 171(1) of the Companies Act, 1995.

5.

Any Shareholders proposal submitted pursuant to Sections 116(a) and


117(2):
No statement has been received from Shareholders pursuant to Sections 116(a)
and 117(2) of the Companies Act, 1995.

Date
April 24th, 2012

Name and Title


Bernard Malcolm
Secretary

Signature

45

Report: 31st December, 2011

46

Report: 31st December, 2011

FLAVORITE FOODS LIMITED


PROXY FORM
I/We
(Block Capitals)
a member/members of the above named Company, having its registered office at 128
Boundary Road, San Juan, Trinidad and Tobago, do hereby appoint the Chairman of the
meeting

or failing him
to be my/our proxy
to vote for me/us on my/our behalf at the Forty-First Annual Meeting of the Company to
be held at the Valpark Chinese Restaurant, Valpark Plaza, Morequito Avenue, Valsayn,
Trinidad on Thursday May 24, 2012 at 10.00 am and at any adjournment thereof.
Signed this

day of

, 2012.

Signature of Member(s)
Please indicate with an X in the spaces below how you wish your votes to be cast on
the under mentioned resolutions.
FOR
1.

2.

AGAINST

To receive the report of the Directors and the


Audited Financial Statements of the Company for
the year ended December 31st, 2011 together with
the report of the Auditors thereon.
To elect Directors for the ensuing year.
In accordance with the Companys By-Law No. 1,
the following Directors retire and being eligible,
offer themselves for re-election:
i) Richard Trotman
ii) Martin Daly S.C.
In accordance with the Companys By-Law No. 1,
the following Director temporarily filled a vacancy
with effect from April 13, 2012 and being eligible,
offers himself for election:
i) Robert Mayers

3.

To declare a final dividend of 6 which brings the


total dividend for the year ended 2011 to 16.

4.

To appoint the auditors and fix their remuneration.

47

Report: 31st December, 2011

NOTES:
1.

A member may appoint a proxy of his own choice. If such an appointment is


made, delete the words the Chairman of the meeting and insert the name of
the person appointed proxy in the space provided and initial the alteration.

2.

If the appointer is a corporation, this form must be under its common seal or
the hand of an officer or attorney so authorized in that behalf.

3.

In the case of joint holders, the signature of any one holder will suffice but the
names of all the holders should be stated.

4.

If the form is returned without indication as to how the person appointed


should vote, he will exercise his discretion as to how he votes or whether he
abstains from voting.

5.

To be valid, this form must be deposited at the office of the Secretary of the
Company not less than forty eight (48) hours before the time fixed for the
meeting or adjourned meeting.

The Secretary
FLAVORITE FOODS LIMITED
128 Boundary Road
San Juan

48