Answer
Holland owns a significant portion of the company's shares and his affiliate acts as the food broker of the company. His affiliates are thus, related parties. Any transactions with his affiliates are related party transactions, the nature and amounts of which are disclosed separately in the notes to the financial statements. Extensive disclosure of related party transactions is required because of the significance of such transactions due to the nature as such transactions usually take place on terms that are often different from the usual business terms. Users of financial statements deserve to know any transactions occurring between the company and its related parties.
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