2012 Annual Summary Report for Foodstuffs South Island Ltd

is in the detail...

SUMMARY REPORT 2012 Foodstuffs South Island Limited

CONTENTS Directors and Executive Team .....................................................

2

About Us ......................................................................................

4

Annual General Meeting ..............................................................

5

Chairman’s Review ......................................................................

7

Retail Review ................................................................................ 14 Food for Thought ......................................................................... 20 Foodstuffs (South Island) Community Trust ................................ 21 National Progress Report ............................................................ 22 Executive Team ............................................................................ 26 Independent Auditor’s Report ..................................................... 29 Foodstuffs South Island Limited Group Financial Statements .................................................................... 32 The Network ................................................................................. 36

Foodstuffs South Island Limited | Annual Report 2012

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DIRECTORS (left to right) Robin Brown New World Rangiora (Chairman)

John Niles Four Square Owaka (Deputy Chairman)

Chris McDonald PAK’nSAVE Dunedin

Kevin Ryan New World Alexandra

Stephen Boock PAK’nSAVE Northlands

Roy Bridgman New World Rolleston

Marcel Gray PAK’nSAVE Wainoni

Russell McKenzie New World St Martins

SOUND EXECUTIVE TEAM (left to right) Steve Anderson Chief Executive Officer

Alan Malcolmson General Manager Retail Operations

Kim DeGarnham General Manager Administration & Members’ Services, Company Secretary

John Mullins General Manager Supply Chain

Phil Wright General Manager Information Technology

Malcolm Wratt General Manager Finance

Roger Davidson General Manager Property & Retail Development

Philip Lemon General Manager Trents Wholesale Limited

LEADERSHIP

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ABOUT US Foodstuffs South Island Limited, is a South Island, 100% New Zealand owned co-operative, formed in 1988 from the merger of two longestablished grocery co-operatives Foodstuffs (Christchurch) Limited and Foodstuffs (Otago/Southland) Limited. Foodstuffs South Island Limited, whose membership consists of independent grocers who own and operate their own businesses and work together for their mutual benefit and the benefit of the co-operative, trades only in the South Island of New Zealand.

banner Group, independent grocer

Over recent years, the foodservice

or foodservice members.

industry and the number of

These members recognise that shareholding in the co-operative

customers/members involved in that industry have grown

confers on its members the right

dramatically. These people trade

to enjoy the benefits of the co-

with our wholly-owned subsidiary,

operative and the shares are

Trents Wholesale Limited. This

not held as a form of investment

subsidiary was specifically created

in equity shares. As such, our

to service this sector of the South

members are caretakers of the

Island economy and now has a

co-operative and its assets. They

strong South Island-wide customer

have a responsibility to hand them

base. Trents trade via seven

on to enable future generations of

Cash’nCarry sites throughout the

grocers to trade.

South Island or through one of our

It has two sister co-operatives, Foodstuffs (Auckland) Limited and Foodstuffs (Wellington) Co-operative Society Limited, which trade in the northern and southern sectors of the North Island of New Zealand.

The co-operative is principally

Trents distribution partners.

The three co-operatives are independent of each other and have their own boards and executive structures.

operative and paid for by deferring

The three co-operatives jointly own Foodstuffs (NZ) Limited, a small non-trading entity, which represents the three co-operatives’ interests on issues of national or grocery specific importance. They have also jointly entered into a purchasing Group with an Australian grocery wholesaler to achieve economies of scale for the purchase of housebranded products.

Currently, Foodstuffs South Island Limited has a membership of 603

funded using Retained Patronage Shares (previously five-year Redeemable Preference Shares).

These shares are issued to our members in direct ratio to their last year’s trading with the co-

Many of our grocery members lease their supermarket or shop premises from the Company which, in turn, is the registered proprietor or holds the head lease of the property concerned.

the physical payout of the year-end

The Company offers a substantial

rebate of profits until each tranche

degree of assistance to its

of shares is redeemed.

members as well as its core

Our membership generally falls

activity as a wholesale merchant.

in two categories; independent

These ancillary activities include

grocers trading as members of one

the marketing of their business

of our banner groups:

and products, industry-related

• PAK’nSAVE food warehouses

training and education, food safety

• New World supermarkets

programmes, business services,

• Four Square supermarkets

merchant guarantee funding

• On the Spot convenience stores • Henry’s Beer, Wine and Spirits; or members who trade independently of these groups in the convenience grocery or foodservice industries.

arrangements with major banks, and, at-call deposit facilities for trading members, former members and related parties.

ANNUAL GENERAL MEETING The 24th Annual General Meeting of Shareholders of Foodstuffs South Island Limited will be held on Tuesday, 24 July 2012 at the Dunedin office of the Company, Midland Street, Dunedin at 5.00pm.

Ordinary Business 1. To receive, consider and adopt the Directors’ Report, Group Income Statements, Statements of Comprehensive Income, Statements of Changes in Shareholders’ Equity, Balance Sheets and Audit Report for the year ended 29 February 2012.

2. To receive the results of the postal ballot conducted to elect three directors.

3. To fix the remuneration of Directors for the ensuing year.

4. To record the appointment of KPMG as Auditors and authorise the Board of Directors to fix the remuneration of the Auditors for the year to 28 February 2013.

5. To transact any other business whether by ordinary or special resolution that may be properly transacted at the Annual General Meeting.

‘A’ and ‘D’ Shareholders have the right and are entitled to attend and vote at the meeting. These members may appoint a proxy to attend and vote on their behalf. A form of proxy may be obtained from the Secretary. The completed proxy form must be deposited at the registered office of the Company not later than 48 hours before the time of the meeting. A proxy holder need not necessarily be an ‘A’ or ‘D’ Shareholder of the Company.

Dated this 12th day of June 2012.

By order of the board

K N DeGarnham Company Secretary

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A HELPING HAND

CHAIRMAN’S REVIEW On behalf of the Board of Directors of Foodstuffs South Island Ltd, I present to you the 24th Annual Report detailing our activities, highlights, challenges and financial results for the year ended 29 February 2012.

New Zealand’s economic outlook is currently more complicated than at any time in our recent history.

Reflecting on the financial year 2011/12 we noticed that the New Zealand economy was still affected by the uncertainty that has gripped the global markets brought on by the European sovereign debt crisis and the Canterbury earthquakes.

During the last half of the reported period, consumer confidence in New Zealand started to slip due to a barrage of negative news regarding the global economy, weakening of our labour market, rising fuel prices and the trend of constant rising costs for some core staples; on the positive side is the improvement in our property market.

• ensuring our commercial buildings in Christchurch adhere to the new building code, • delivering on each banner Group’s brand promise, • renewing focus on the in-store shopping experience, • the introduction of invoice scanning and workflow to manage members’ charge through invoice matching.

(This new technology has eliminated the manual entry of thousands of invoices each month), • streamlining the rollout of SAP into stores, • refurbishment and expansions of several retail properties, and • actively planning and preparing for our new high-tech distribution centre (DC).

During the reported year, Foodstuffs South Island Ltd achieved a strong financial result. Revenues were up which is an excellent result considering the difficult trading conditions retailers experienced

Against this background of the lacklustre economic performance of the economy, our co-operative again had a good year despite having to overcome various challenges. For Foodstuffs South Island, the earthquakes have been debilitating events with profound human and economic impacts that will be felt for many years.

throughout New Zealand.

Consequently, in the year under review the co-operative strived to dedicate time, effort and energy to: • rebuilding our earthquake damaged properties whilst dealing with the on-going insurance issues, • supporting our members who have been adversely affected by the earthquakes in areas such as supply, water, insurance, etc.

stores both experienced lift in trade.

Our major banner groups, given the circumstances in the past 12 months, traded strongly. This was achieved despite the closure due to the Canterbury earthquakes of three of our New Worlds, one Four Square and one Henry’s Beer Wine and Spirits. Four Square and New World For New World and PAK’nSAVE, there was a change in trading patterns due to the closure of various stores after the earthquakes. PAK’nSAVE stores’ trading was patchy due to the impact of the earthquakes – some stores were adversely affected whilst other stores were advantaged. Four Square‘s results can to some extent

be attributed to the earthquakes, and the re-enforcement of their rural supermarket profile combined with a much improved range of packaged meat, produce and bakery products.

Since starting in 2010, our Produce Distribution has been going from strength-to-strength with nearly all the New Worlds totally committed and the PAK’nSAVEs supporting it where feasible. The key objectives for establishing this Produce Distribution was to get a better level of consistency in pricing to stores, to improve the supply chain from grower to customer, and to reduce freight costs for our members.

These objectives have been met.

In December 2011 we received a letter from Canterbury Earthquake Recovery Authority (CERA) requesting a detailed engineering structural assessment of the Murdoch Manufacturing and Trents buildings. The tower’s structural integrity was found not to be compliant to the revised building code and we had to relocate Trents’ staff, Accountancy Services, Membership and Credit Control along with a section of Murdoch Manufacturing.

Our repack operation was relocated to our Sockburn site; the soft drinks section and its associated storage area was declared safe for operation and continues to operate from the Papanui site.

Trents Wholesale Ltd, our specialist food and beverage sector company, traded well despite their customers being hit hard by the earthquakes.

Last year, they set about redefining their strategy and focussing on opportunities for national customer growth, which resulted in an increase in retail sales despite many

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PRODUCT RANGE

CHAIRMAN’S REVIEW customers being unable to continue to trade.

In August 2011, Trents Wholesale Ltd extended their distribution capabilities into the foodservice chilled and frozen product range by acquiring Glacier Chilled Foods in Nelson. This enabled Trents to become a ‘one stop shop’ for their Nelson/Blenheim customers.

Group Sales and Profitability The co-operative has recorded solid revenue growth, up 4.0% or $92m for the year.

Financial performance has also been strong, with Operating Profit of $239.4m reported, which is just over $20m higher than last year.

There are a number of issues in this year’s financial statements which are worthy of further explanation, in particular the accounting for the earthquakes, deferred tax on building fit-out and the application of accounting rules on planned distributions to members.

1. Earthquakes. Operating Expenses include a one-off $14.7m of earthquake related costs incurred by the co-operative this year as well as $0.8m being the expected excess cost. Other Income includes $15.8m recognising the insurance money which has been received or expected to be received relating to this financial period.

Other Income also includes a further $20.9m of earthquake related money which has, or is expected to be, received from insurers. This amount represents the difference between the replacement cost of buildings which have, or will be, demolished

continued due to earthquake damage, and the depreciated values that these buildings were recorded at in the co-operative’s accounts. This one-off increase in value has been recorded in Operating Income and will therefore flow through into Operating Profit for the year.

2. Taxation. A $6.0m deferred taxation provision has been recorded this year in the income statement. This provision is similar in nature to the entry made last year ($35.3m) when the government announced the removal of tax depreciation for buildings. Inland Revenue recently announced a draft ruling which would mean the co-operative cannot claim tax depreciation on its building fit-out assets as well.

While the co-operative does not agree with the IRD’s draft position, for the purposes of the financial accounts it has recognised the deferred tax provision that would be required under International Financial Reporting Standards.

The entry is a non-cash, accounting provision only, and as such the Board has decided it will not affect the level of rebates declared this year.

3. Recognition of Planned Distributions. Your Board has decided that in light of the record profit this year, there will be a special one-off 2012 Redeemable Preference Share and Dividend issue. Since this is a one-off distribution that could only be declared after 29 February when the profit for the year was known, it cannot be recorded in this year’s Financial Statements, and so is only disclosed by way of note

(see Note 7 and 29 of the Financial Statements).

This does not affect the share issue or dividend, it simply means it will be recorded in the 2012/13 financial accounts rather than this year.

Distribution to Members Total value of distributions to members this year is $234.8m, an increase of $19.3m or 9.0%.

We have continued our practice of paying monthly rebates, based on bulk and repack purchases during the year, and distributing these and supplier driven rebates directly to members during the year. In total, $148.8m will be distributed to members in this manner.

Year-end rebates will total $54.8m and be distributed in three main ways.

• Firstly, there will the Loyalty rebate totalling $42.8m, which will be issued this year through a combination of Retained Patronage Shares and cash dividends. Forty million shares will be issued, with a specified value of $1.00, partly paid up to a value of 94.5 cents per share. A 12.5 cent dividend will be paid immediately after these shares are issued, with 5.5 cents being used to fully pay up the share to its specified value of $1.00, and the remaining 7.0 cents paid as a cash dividend. The 12.5 cent dividend will be issued fully imputed.

• Secondly, there will be the payment of two cash rebates totalling 2.0m.

The Produce rebate will be based on ex-warehouse Produce purchases and will be paid at a rate of 3% on qualifying sales. An IT Leasing rebate will also be paid out of profits

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CHAIRMAN’S REVIEW made on the IT Leasing scheme and distributed pro-rata based on members’ IT leasing charges.

• Thirdly, there will be special $10.0m Trading Deposit rebate issued.

This rebate will be distributed to members based on their qualifying sales for the year ended 29 February 2012 and will be directly credited to members’ Trading Deposit Account. Any amounts in excess of the required two weeks Trading Deposit or owing to exmembers will be paid into their At Call deposit accounts.

In addition to the year-end rebates, there are $5.4m of dividends on RPS shares which will be paid out fully imputed. The Board has also decided to pay a dividend on the Trading Deposit Shares held by members.

This dividend will be at the same rate as the RPS shares (3.67% fully imputed) and equals $0.8m in total.

Lastly, this year the co-operative will also be making a special, one-off distribution in the form of a 2012 Redeemable Preference Share issue. 13.5 million Redeemable Preference Shares will be issued, with a nominal value of $1.00 and paid up to 1.0 cent. A 104 cent dividend will be paid immediately after these shares are issued, with 99 cents being used to fully pay up the share to its nominal value of $1.00, and the remaining 5 cents paid as a cash dividend. The 104 cent dividend will be issued fully imputed.

The shares will be allocated to members based on eligible sales for the six-month period of March to August 2010, which is the period immediately preceding the September 2010 earthquake. The Board’s

continued intention is for this one-off profit distribution to those members who were trading with us leading up to the earthquakes which greatly affected the assets of the co-operative.

Rebates and Dividends In summary, this year’s total rebates and dividends to members are; Bulk and Repack rebates Supplier rebates Monthly cash rebates

$132.2m $16.6m $148.8m

2012 Retained Patronage Shares and Dividend

$42.8m

2012 One-off Redeemable Preference Share issue and Dividend

$14.2m

Produce rebate

$1.0m

IT Leasing rebate

$ 1.0m

Trading Deposit rebate

$10.0m

Dividends on RPS and Trading Credit shares Total Dividends and Rebates Imputation Credits Total value of distributions to Members

$6.2m $224.0m $10.8m

$234.8m

Information Technology The Valentine Project and SAP were the main focus for the Group during the year with the continued rollout into retail and the major service pack upgrade in October 2011. It is pleasing to report that the IT systems proved very robust during the earthquakes as they stayed operational and provided accurate data which greatly assisted decision making processes during the aftermath of the earthquakes. Other major initiatives throughout the year have been: • Self checkout • GS1net and eCommerce enablement • Essential IT infrastructure upgrades • Website and online presence • Produce • Invoice scanning

Project Valentine/SAP The retail rollout has progressed well as stores moved from project into business-as-usual mode. At the end of the financial year, 30 stores were on full SAP with 21 stores in various phases of implementation. Rollout has commenced to our Henry’s Beer Wine & Spirits stores and our Four Square stores and, by the end of the financial year, we had 2 Henry’s on full SAP and 6 Four Square’s on Module 1.

Foodstuffs and owner-operators are realising the benefits of the system where ongoing system optimisation and fine tuning has delivered improved benefits.

EFTPOS compliance The project to upgrade our pin pads at retail stores to meet the industry compliance standard were completed mid 2011. This project technology was very challenging as the upgrade encountered technical difficulties in the supplier network. Once the technical problems were resolved, the pin pads performed very well demonstrating faster response times for chip cards. A by-product of the project has been a development of service-quality reports which have been useful to monitor performance.

Retail Development The year under review has been a particularly busy year and has seen Foodstuffs (South Island) Properties Ltd focus on the establishment of New World Ilam, several refurbishments of company-owned retail properties and the rebuilding of damaged supermarket premises.

New World Kaiapoi was damaged beyond repair in the September 2010

earthquake and it was a significant achievement to have this store open and trading in December 2011. New World Ilam was opened on the 17th of November and is the first large New World to be established in the Christchurch metropolitan area since 2003, and sets a new benchmark for existing and new stores to aspire to.

New World Northwood’s floor area increased by 60% and incorporated many of the new features established in New World Ilam, highlighting that even with refurbishments, existing stores can lift their presentation to a new level. The work at New Worlds Ilam and Northwood allowed the company to develop the “coffee to go” concept as in previous stores and to create a purpose-built café which has been favourably received by customers. The format of polished concrete floors and open ceilings has proven to be well-suited for New World Ilam and this same format will be incorporated into the rebuild of New World St Martins. Other projects completed during the year were the refurbishment to the exterior of Amberley Four Square and a cosmetic upgrade to New World Rolleston.

The year ahead will be busy for the property team, and the challenge for them will be to ensure Foodstuffs remains at the forefront of food retailing in the South Island by identifying and obtaining the best locations for new stores, or expanding the company’s presence by upgrading existing stores ensuring an exciting shopping experience for customers. Major projects underway are; • the rebuild of New World St Martins and Redcliffs which both had to be demolished due to being damaged beyond repair in the February 2011 earthquake, • the building of our 10th new

PAK’nSAVE in Blenheim, • the refurbishment of New World Windsor, • extension to PAK’nSAVE Dunedin, and • most importantly, the building of our new state-of the art distribution centre covering 38,000 square metres in Hornby.

Supply Chain Over the reported year, our Supply Chain division’s main focus was on the planning of the new Hornby distribution Centre with construction started in April 2012. The project team is now fully focused on product location, materials handling equipment requirements, yard area and vehicle movement volumes. On completion of this phase, work will commence in earnest on the threestage staff and inventory transitional period that will cover the months of March to July 2013, resulting in the final closure of the Papanui distribution centre.

TSI Logistics has had a good year of growth with new Foodstuffs inbound business, an enhanced management structure, and with the recent takeover of the Transotway fleet and drivers in November 2011. We have continued to improve the financial reporting of the TSI company as it is important we retain visibility on the margin retained from our inbound freight network, along with the cost to serve of our outbound volumes.

Administrative In 2011, Foodstuffs South Island achieved a tertiary level certification from ACC. Achieving the tertiary level is not easy and the co-operative acknowledges that this shows our commitment to the reduction of work injuries and our dedication to

rehabilitation of not only staff with work injuries but also for non-work and medical-related issues. Over the same period, Hornby Chilled and Frozen distribution centre achieved 500 consecutive days with no lost time due to injury. This achievement was the first time one of our DCs has attained this target.

Given the earthquake disasters in Christchurch and the resulting impact on local businesses, our credit control department has done an outstanding job working closely with Trents Wholesale staff, members and customers to ensure that this year’s bad debts were kept to a minimum.

Summary I would like to reiterate that our co-operative has delivered a strong financial result for the 2011/12 financial year. This outcome was made possible by the concerted efforts involving our members, the Board of Directors; our management – in how they handled the various challenges and in some instances turning them to our advantage; and most importantly, all our staff for their devotion and unrelenting hard work.

It is with gratitude that I thank my fellow Directors, Foodstuffs’ management, staff and members whose help and commitment assisted us through this tumultuous year.

Robin Brown Chairman

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RETAIL EXPERIENCE

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every day a NEW WORLD In light of another challenging year with the ongoing impact of earthquakes, the New World Group performed very well with strong growth in sales and market share including a record Christmas trading period.

The brand continues to innovate with new marketing, promotional, product development, and loyalty campaigns delivered at store by a passionate group of local owner operators and their staff.

In Christchurch, the brand has led the way with the opening of New Worlds Ilam and Kaiapoi along with a number of markets reinvesting in total store refurbishments. This year provided opportunity for various approved operators to purchase larger stores, creating an opportunity for experienced individuals who went through the approved operators programme to enter and become part of the New World Group.

The ongoing rollout of the SAP project is providing stores greater insight to the supermarkets’ businesses which will lead to more informed decision making to ensure New World remains New Zealand’s most loved supermarket.

everyday low prices at PAK’nSAVE The PAK’nSAVE Group continued a steady trading year despite the damage to two key stores in the Christchurch area from the earthquakes. Sales in provincial areas gained shortterm benefit from earthquakes in Christchurch during the first half of the year. Earthquakes in June and December caused more stock losses, however, all stores recovered operation rapidly to provide their customers with much-needed grocery items.

The Group initiated a number of new promotional strategies and strategic objectives during the year which contributed to the delivery of new offers to the consumer whilst emphasising the Group’s low price position.

‘Stickman’ continues to be used nationally to deliver the brand message and has been used in a number of innovative promotions to deliver the

Group’s key price message. “1987 prices all over again” was an example of how this was executed during the Rugby World Cup. The Group continues to ensure customers are offered the lowest prices on everyday products with a strong shelf and promotional pricing programme.

PAK’nSAVE owners have continued to invest in their stores in the past year with new plant, lighting and ongoing work on flooring to ensure high instore standards are met.

The PAK’nSAVE Group completed a fabulous milestone by fully implementing SAP into all stores by the end of 2011. The Group is already using the benefits of SAP with integrated reporting and benchmarking to improve overall performance.

FRESH FOODS

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... WHERE YOU’LL FIND ALL YOUR KIWI ESSENTIALS PLUS A FRIENDLY WELCOME AWAITING YOU.

FOUR SQUARE We are pleased to report that The Four Square Group has had an excellent trading year achieving a sales growth for same stores of 5.99%.

The earthquakes played a significant part in the Group’s growth and, although this was shared throughout the South Island, the North and MidCanterbury stores, in particular, had exceptional increases.

The Group took on the challenge to “Raise the Bar” and this was the direction and focus promoted across all aspects of the members’ businesses.

• • •

• •

produced and rolled out, participation instore with the theme of Rugby World Cup, a successful SAP pilot for five stores with module 1, a five-year strategic plan was approved and presented to the members, the launch of a national Four Square web site, and sponsorship of three new St John Health Shuttles to the value of $345,000.

Highlights for the year included: • six new TV commercials were

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TRENTS Wholesale Ltd Despite losing about 360 customers due to the earthquakes, lack of tourism, and the Rugby World Cup being played mostly in the North Island, Trents Wholesale Ltd still managed to deliver a strong result in what was the most challenging trading year the subsidiary has ever experienced.

Highlights during the reported period were: • The key highlight was the purchase of Glacier Chilled and Frozen in Nelson which provides Trents with the opportunity to develop their knowledge and expertise within the foodservice ‘Chilled and Frozen’ category. Trents is pleased to

acknowledge that Glacier Chilled and Frozen has made a significant market share gain in their first six months of operation.

• The rebranding of our On the Spot Express and On the Spot convenience stores has started and is progressing well. Stores that have been upgraded have been very well received by customers and suppliers.

• The successful integration of the National Prisoner Ration supply initiative throughout the country.

HENRY’S beers, wines & spirits The Henry’s BWS Group continues to consolidate and prosper in the South Island. The 2011-12 year was very challenging for the Group with our New Brighton store being closed permanently as a result of the September and February earthquakes.

Moorhouse and Barbadoes stores were both closed for several months but are now fully renovated and operating successfully.

The number of stores is currently 17 with another store scheduled to be opened later this year in Yaldhurst, Christchurch. The Rolleston store has completed a significant extension and several other stores have completed or are planning upgrades of their flooring.

The Group continues to look for opportunities to expand throughout the South Island. In October 2011, Henry’s Te Awamutu was opened and this significant occasion was the first Henry’s store in the North Island.

Fly Buys continues to develop under the Henry’s brand and is now emerging as a very strong sales tool as customer awareness grows. The Henry’s website has developed to be a very important marketing tool for the Group.

The Group has achieved very good sales and customer growth during the last financial year and continues to enhance its reputation within the traditional liquor market.

A FRIENDLY SMILE

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FOOD for thought Food for Thought is our community health and nutrition programme which is delivered free to year 5 and 6 primary school students in New Zealand at the schools’ request. The Food for Thought Trust employed a fourth nutritionist in 2011 to cover the increasing requests for the programme. Schools have been eager to jump on board with Food for Thought, and once they have received the programme, teachers are very enthusiastic to continue year after year.

Earthquakes in Christchurch caused many schools to close for several weeks. This meant some

cancellations of the Food for Thought programme and as the schools in the Christchurch region already had a full year’s programme it became a challenge to re-engage them and deliver.

The collaboration between the Food for Thought Education Trust and the National Heart Foundation has been a logical and smarter way to work.

The support and referrals from the Heart Foundation as well as public health nurses, public health workers and Health Promoting Schools advisors has been fantastic. This year 10,188 students participated in the Food for Thought programme.

Foodstuffs (South Island) COMMUNITY TRUST The Trust is pleased to report another successful year for the Foodstuffs (South Island) Community Trust.

Major Sponsorship The Trust is continuing a successful partnership with the St John Friends of the Emergency Department (FEDs’) programme. The current services the Trust is assisting with are; • FEDs, Hospital Friends – a service that is provided in smaller hospitals where volunteers chat and give assistance to patients and relatives in nominated wards, • Hospital Hosts – where volunteers are based in the foyer area supporting patients and visitors.

These services are currently operating in Nelson, Wairau, Christchurch, Timaru, Oamaru, Dunedin and Invercargill.

There are 230 volunteers contributing 30,700 volunteer hours.

First Foundation This year, the Trust has taken on sponsorship of Carly Martin from Linwood College, and continues to support the development of Hannah Davidson from Dunedin, and Emma Muir who completed her 3rd year at Canterbury University.

As the First Foundation grows, several businesses were keen to support students but did not have the infrastructure to train and employ these young people throughout the year so PAK’nSAVEs Northlands and Riccarton and New World Rangiora offered to assist three more students. Our Training team is assisting facilitating these scholarship recipients to enable them to develop their various skills over the next 3 to 4 years.

Milestone The Trust was incorporated in July

1998 and, each year, our sponsorship continues to grow, enabling the Trust to assist more community groups and individuals requiring assistance.

It is with pleasure we report that in October 2011 the Trust hit $2m in total sponsorship since incorporation. Well done to members in supporting their local communities!

Grants This year, the following grants were distributed to groups and individuals in the South Island community: Educational Grants $70,900 Community Grants $360,732 The Trustees continue to monitor the Canterbury region to assist community groups starting up after the settling down period of earthquakes.

At the end of the year, the Trustees tweaked the sponsorship levels to allow for some of our smaller Banner Group members to come on board with the Trust and enable greater opportunity to reach those smaller communities in the South Island.

The new levels are; • Platinum • Gold • Silver • Bronze

Sponsors During the year, we welcomed seven new sponsors and three supporters.

New Sponsors • DS & CM Howard Limited – PAK’nSAVE Richmond • SC & JD McDonald Limited – PAK’nSAVE Riccarton

Resignations On behalf of the Trust, I would like to thank Shaun Ryan (NW Mosgiel), Barry Gray (NW Halswell), Peter Harman and Brenda Rutledge (NW Stoke), and Ross and Jan Parry (NW Gardens) for their past financial contributions and wish them well in their future endeavours.

Trustees

Sponsorship

New Supporters John & Jane Mullins Arron Perriam Roger & Heather Davidson

• LB & SF Murray Limited – New World Waimate • Kelvin Gray Limited – New World Halswell • JK Supermarkets Limited – New World Northside • PCNW Limited – New World Port Chalmers • RC & PJ Flannery Limited – New World Kaikoura

Jan Parry of New World Gardens resigned as a trustee on the sale of their business. The Trust would like to thank Jan for her tireless effort as trustee for the last 7 years.

Justin Smith from New World Oamaru has volunteered his time to serve the Trust as a trustee.

In summary, the Foodstuffs (South Island) Community Trust is operating well and I am appreciative of all our sponsors; existing, new, and those who have upgraded their contributions during the past year.

The Trust and trustees thank Foodstuffs personnel for their assistance, KPMG for their voluntary auditing of accounts and, once again, all our sponsors.

Chris Griffin Chairman Foodstuffs (South Island) Community Trust Foodstuffs South Island Limited | Annual Report 2012

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NATIONAL PROGRESS REPORT The year ending February 2012 was another busy one from a property development perspective, with new stores opening and a large number of store refurbishments.

During the year, New World stores were opened in Tokoroa, Stonefields in Auckland, the Auckland CBD (Metro), Churton Park in Wellington, Kaiapoi, and Ilam in Christchurch.

New PAK’nSAVE stores were opened in Kaitaia, and Papakura, and a new Four Square store was built at Cooper’s Beach in Northland.

Extension and/or refurbishment projects were completed at the New World stores at Victoria Park in Auckland, Brookfield in Tauranga, Island Bay in Wellington, Broadway in Palmerston North, Northwood in Christchurch and the township of Rolleston. A refurbishment project was also completed at Wairau Road PAK’nSAVE on Auckland’s North Shore.

The Aramoho and Cloverlea Four Squares were extended and refitted to align with brand standards, while other Four Square store extensions and/or refurbishments were undertaken at: Patea, Shalimar, Waikanae, St John’s, National Park, Mahora in Hastings, Dannevirke, Awapuni, Kaponga, Waterloo in Lower Hutt, and Amberley in Canterbury.

New fuel facilities were built as part of the Kaitaia PAK’nSAVE store development and the PAK’nSAVE Wairau Road refurbishment project.

New markets and extensions to existing markets provided an additional gross retail floor area of 25,635 square metres, an increase of 7.7% nationally.

At the end of February, Foodstuffs co-operative members operated 48 PAK’nSAVE stores, 137 New World stores, 275 Four Square stores, 150 On The Spot convenience stores, 18 Henry’s Beer, Wine, and Spirit outlets, 8 Gilmours’ stores and 43 fuel sites.

The companies continue to review and fine-tune their store formats introducing a number of innovations in each case.

Foodstuffs Auckland Ltd opened its first store in the Auckland central business district – New World Metro, catering for those living and working in the inner-city. The store has a strong emphasis on fresh food.

Foodstuffs (Wellington) Co-operative Society set up a pop-up New World store in Tawa as a temporary shopping solution for customers while it builds a permanent New World in the suburb. The store, which will open in 2012, will feature a new produce format with new style fixtures and ticketing.

The expansion of the New Worlds stores at Ilam and Northwood allowed Foodstuffs South Island Ltd to further develop the small ‘coffee to go ‘ area that appeared in some earlier developments trialling purpose-built cafés. Customer reaction to these cafés has been favourable and the company will assess how they enhance the customer experience with a view to determining the café concept’s suitability for future developments.

The adoption of polished concrete floors and open ceilings has proven to be well suited to the New World Ilam environment and this same format is to be incorporated into the

rebuild of New World St Martins.

The combination of vinyl floor tiles and suspended ceilings will still form part of the South Island’s New World format. To enhance the developments in this area, new composite floor tiles which are harder wearing and able to withstand the rigours of supermarket foot-traffic have been installed at the New Worlds in Kaiapoi, Rangiora, and Northwood. The advantage of this tile is that it does not require a strip and polish and is less prone to cracking than the clay tiles previously been used.

The new refrigeration colour “Steel Alloy” adopted in the South Island has proved to be less imposing than the old ‘Brunswick Green’ colour. To ensure a smooth changeover within stores and that a patchwork of colours does not occur, each store expressing interest in the new colour has been asked to provide a programme for changing the colours of their refrigeration and checkouts within a defined timeframe.

As part of a continued focus on enhancing the shopping experience, a lower produce cabinet was used in New World Ilam to create an impression of space. There is a continued emphasis on, where possible, providing serve-over meat counters and displaying a working bakery environment to customers.

The companies have continued to invest in their wholesale infrastructure, to support growth objectives, improve the efficiency of operations, and provide better servicing for the membership.

Foodstuffs Auckland Ltd completed

Foodstuffs South Island Limited | Annual Report 2012

23

NATIONAL PROGRESS REPORT continued the first phase of Programme Lightening, a programme initiated in 2010 to improve operating efficiencies and to establish the platform which will underpin the company’s vision and strategy. Key objectives for the programme include more effective buying, tighter inventory controls, timely analysis of sales and performance data, and more efficient processes and operating practices.

Foodstuffs (Wellington) Co-operative

The company defined its future business model and business tool requirements, and instigated a Business Readiness Programme which was successfully rolled out in eleven stores. Roll out of the programme continues in 2012 when the company will commence the design and build phase.

is scheduled to launch in early 2013.

The company launched a second major programme of work to ensure a solid foundation for its growth and upon which to build Programme Lightening and other transformational business initiatives.

Programme Foundation has already significantly enhanced the company’s technology capability and will deliver new datacentres and core network capability in 2012.

New Zealand. It is scheduled to be

Following on from the success of the national careers website the company has looked at other human resource related initiatives to collaborate on with sister companies. As a result of dialogue with Foodstuffs (Wellington) Co-operative Society Limited the two companies have rolled out Sonar 6 – an online performance management programme. In Auckland, the tool is now being used at the Support Centre and for management and supervisory staff across all its supply chain sites.

Society Ltd began developing a new warehousing facility for AF Logistics Ltd. The facility is being built in the Wellington harbour-side suburb of Seaview and is due to be completed in August 2012.

The company also began investigating an on-line shopping network and made decisions to implement this 2012. The new facility

Foodstuffs South Island announced Project Greenfields to develop a new ‘state-of-art’ distribution centre in Hornby, Christchurch. Construction of the facility begins in April 2012.

The new building will total 40,000 square metres making it the largest single food distribution centre in operational by March 2013.

Foodstuffs NZ Ltd, as the Federation Headquarters of the Foodstuffs Group of companies, continued its role of co-ordinating the national activities of the Group where appropriate.

During the year, the company strengthened our ability to build our brands nationally with the establishment of a Group marketing function. This development has allowed us to improve cost and efficiency in areas such as public relations and negotiate improved media rates. It has also allowed us to connect more effectively with our supplier partners to launch national programmes such as the successful Wattie’s Truckload Blowout. Other activities will be brought into the national Group as appropriate in order to improve quality and/or cost

outcomes for the Group.

Key highlights of the national team included an increased impact of PAK’nSAVE advertising and promotions. This included talkedabout programmes such as the New Zealand Apples campaign, ‘1987 Again’ during the Rugby World Cup, and Meat Lovers Week. The team also improved our speed to market – responding to topical opportunities as well as combating competitive fuel promotional offers. In addition to the national promotional schedule for the New World banner, the overall brand strategy has been under the microscope and a major restage will occur in 2012.

Also integrated into the Group marketing function is our ongoing work programme designed to bring in rebates from transactional services for members. This work will continue throughout 2012 with an added emphasis on understanding the implications and appropriate strategies for the acceptance of contactless ‘scheme-debit’ cards in the future.

Foodstuffs NZ Ltd continues to coordinate national submissions and advocacy on public policy issues.

A major focus in this last year has been the alcohol reform process which culminated in an Alcohol Reform Bill being introduced to the House last August. Foodstuffs submissions resulted in a number of helpful technical amendments to the Bill as reported back by Select Committee. More recently we have been working to secure support for a Supplementary Order Paper to amend clause 105A which introduces a single

alcohol display in a non-prominent location. Our intent is to ensure that the government’s policy intent can be achieved in a manner that provides certainty for business with minimum compliance costs.

National submissions were also prepared for: the Commerce Select Committee’s Inquiry into the Price of Milk, the Smoke-free (Controls and Enforcement) Amendment Bill, passed in July last year; Ministry of Health’s consultations on Smokefree regulations; the Department of Labour’s Minimum Wage Review; the Productivity Commission’s Review of International Freight; the Ministry of Transport’s consultation on changes to road-user charges, the Ministry of Education’s Review of Industry Training, the Ministry of Justice’s Investigation of Minimum Pricing of Alcohol, and the Consumer Law Reform Bill, among others.

appreciation to my fellow directors and to the executives and staff of the respective Foodstuffs companies for the commitment and enthusiasm they show in ensuring the ongoing progress, development, and success of the wider Foodstuffs organisation.

Robert Redwood Chairman, Foodstuffs (NZ) Limited

In July 2011 Immigration NZ granted Foodstuffs’ application to have bakers added to the Immediate Skills Shortage List, providing formal government recognition of a skill shortage in this occupation. The change has made it easier for stores to recruit and retain foreign bakers on temporary work visas.

Further changes to accident compensation, food regulation, and employment law are expected to be introduced in 2012 and Foodstuffs will continue to monitor these developments and to provide advocacy as needed on behalf of its members.

In conclusion, as Chairman of Directors, I would like to express my

Foodstuffs South Island Limited | Annual Report 2012

25

EXECUTIVE TEAM PAK’nSAVE EXECUTIVE COMMITTEE

CORPORATE EXECUTIVES

Steven McDonald [Chairman]

PAK’nSAVE Riccarton

Steve Anderson

Chief Executive Officer

Stephen Boock

PAK’nSAVE Northlands

Yvonne Botha

Executive Assistant

Bryan Dobson

PAK’nSAVE Invercargill

Roger Davidson

Marcel Gray

PAK’nSAVE Wainoni

General Manager Property & Retail Development

Andrew Howard

PAK’nSAVE Richmond

Kim DeGarnham

General Manager Administration & Members Services / Company Secretary

John Lee

PAK’nSAVE Hornby

Philip Lemon

General Manager Trents Wholesale Limited

Chris and William McDonald

PAK’nSAVE Dunedin

Alan Malcolmson

General Manager Retail Operations

Brad Spence

PAK’nSAVE Moorhouse

John Mullins

General Manager Supply Chain

Jason Williams

PAK’nSAVE Timaru

Malcolm Wratt

General Manager Finance

Philip Wright

General Manager Information Technology

NEW WORLD EXECUTIVE COMMITTEE Chris Griffin [Chairman]

New World Gore

SENIOR EXECUTIVE

Phill Blackburn

New World Ilam

Finance

Nigel Bond

New World South City

Simon Hughes

Group Finance Manager

Kathy Frampton

New World Northwood

Murray Trim

Decision Support Manager

Warren McKenzie

New World Windsor

Andrew Wight

Internal Audit Manager

Craig Nieper

New World Centre City

Administration & Members Services Ron Bitschkat

Administration & Employee Services Manager Manager Members Services

FOUR SQUARE EXECUTIVE COMMITTEE Graeme Neilson [Chairman]

Ascot Four Square

Chris Dorward

Paddy Breen

Mackenzie Four Square

Information Technology

Pat Carroll (joined Feb 2012)

Culverden Four Square

Chris Cameron

Online Media Manager

Lynette Eddington (resigned Dec 2011) Top Notch Four Square

Ana Connor

eCommerce Manager

Rick Haaima

Palmerston Four Square

Gary Cowens

IT Operation Services Manager

Cushla Jones

Fern Grove Four Square

Gordon McCoy

Business Systems Manager

John McDonald

Pleasant Point Four Square

Philip Smith

Project Delivery Manager

John Niles

Owaka Four Square

Ian Steele

Hanmer Springs Four Square

Retail Operations Retail Brands Tim Donaldson

Retail Brands Manager

HENRY’S BWS EXECUTIVE COMMITTEE

Danny Halligan

Henry’s BWS Group Manager

Carl Wild [Chairman] Keith Miles

Annie Hay

Retail Merchandise Manager – Fresh

David MacKenzie

Retail Merchandise Manager – Packaged

Kent Mahon

New World Group Manager

Alan Smith

Four Square Group Manager

David Wise

PAK’nSAVE Group Manager

Henry’s City Henry’s Rolleston Henry’s New Brighton Henry’s Rangiora Henry’s Hornby Henry’s Woolston Henry’s Bishopdale Henry’s Tower Junction Henry’s Ferrymead Henry’s Shirley

Victoria Boyes

Henry’s Greymouth

Gerry Breen

Henry’s Queenstown

Marty & Raewyn Hay

Henry’s Centre City Henry’s Foodlands

Kevin Ryan

Henry’s Alexandra

Howard Smith

Henry’s Timaru

Craig Smith & Tracy Catanach

Henry’s Kaikoura

Brad Spence

Henry’s Moorhouse

Support Services Stephanie Feldbrugge

Support Services Manager

Nick Dawson

Group Communications Manager

David Norton

Loss Prevention Manager

Arron Perriam

Training & Development Manager

Murdoch Manufacturing Paul Johnston

General Manager

Supply Chain Kris Lancaster

Logistics Operations Manager

Patrick O’Leary

Article Master Manager

David Pawson

Wholesale Merchandise Manager

Distribution Centres Scott Fairweather

Manager, Hornby, Christchurch

Gareth Weatherston

Manager, Dunedin

Tony Ziolo

Manager, Papanui, Christchurch

Trents Cash’nCarry Phil Olsen

Operations Manager, Christchurch

Anthony Haslam

Manager, Greymouth

Allan McKenzie

Manager, Tuam Street, Christchurch

Paul Stanton

Manager, Blenheim

John Warren

Manager, Invercargill

Grant Watt

Manager, Timaru

Paul Witty

Manager, Nelson

Property & Retail Development Rebecca Parish

Property Development Manager

Clayton Young

Property Manager

Trents Wholesale Michael Arlidge

Foodservice Sales Manager

Alan Wicks

Wholesale Promotions and Merchandise Manager

ARCHITECTURE

Foodstuffs South Island Limited | Annual Report 2012

27

INDEPENDENT AUDITOR’S REPORT on the summary financial statements to the shareholders of Foodstuffs South Island Limited

The accompanying summary financial statements on pages 32 to 35, which comprise the summary balance sheets as at 29 February 2012 and the summary income statements and summary statements of comprehensive income, changes in equity and cash flows for the year then ended and notes, are derived from the audited financial statements of Foodstuffs South Island Limited (“the parent”) and its subsidiaries (‘’the group’’) for the year ended 29 February 2012. We expressed an unmodified audit opinion on those financial statements in our report dated 24 April 2012.

The summary financial statements do not contain all the disclosures required for full financial statements under generally accepted accounting practice in New Zealand. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Foodstuffs South Island Limited.

Directors’ responsibility for the consolidated financial statements The Directors are responsible for the preparation of a summary of the audited financial statements, in accordance with FRS-43 Summary Financial Statements.

Auditor’s responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standards on Auditing (New Zealand) (ISA (NZ)) 810 Engagements to Report on Summary Financial Statements.

Other than in our capacity as auditor we have no relationship with, or interests in, the parent and group.

Opinion In our opinion, the summary financial statements, derived from the audited financial statements of Foodstuffs South Island Limited for the year ended 29 February 2012, are a fair summary of those financial statements, in accordance with FRS43 Summary Financial Statements.

Other matter The financial statements of Foodstuffs South Island Limited, for the year ended 28 February 2011, were audited by another auditor who expressed an unmodified opinion on those statements on 14 April 2011.

24 April 2012 Christchurch

Foodstuffs South Island Limited | Annual Report 2012

29

FINANCIAL STATEMENTS

Foodstuffs South Island Limited Group Financial Statements Income Statements

32

Statements of Comprehensive Income

33

Statements of Changes in Shareholders’ Equity

33

Balance Sheets

34

Consolidated Statement of Cash Flows

35

Foodstuffs South Island Limited | Annual Report 2012

31

INCOME STATEMENTS

FOR THE YEAR ENDED 29 FEBRUARY 2012

GROUP

PARENT

2012

2011

2012

2011

$000

$000

$000

$000

2,431,653

2,339,141

2,221,039

2,139,841

127,904

120,901

84,579

91,823

2,559,557

2,460,042

2,305,618

2,231,664

Operating profit

239,423

219,273

216,321

193,482

Net finance (costs)/income

( 6,381)

( 7,999)

5,969

( 604)

( 198,629)

( 196,112)

( 198,474)

( 195,987)

( 3)

140

( 33)

-

34,410

15,302

23,783

( 3,109)

Income tax before legislative changes

( 4,087)

( 3,300)

2,576

3,853

Income tax on change to tax depreciation on buildings

( 6,005)

( 36,276)

-

-

-

413

-

( 88)

( 10,092)

( 39,163)

2,576

3,941

24,318

( 23,861)

26,359

832

24,318

( 23,861)

26,359

832

Revenue from sale of goods Other income Total revenue and other income

Rebates to members Share of profit/(loss) from associates Profit/(Loss) before tax Income tax expense:

Effect of change in tax rate Total income tax (expense)/benefit Net Profit/(Loss) for the year after tax Attributable to: Shareholders of the parent company

The loss attributable to Shareholders of the parent company is after a one-off tax charge of $6,005,000 (2011:$35,292,000) (note 8) and before dividend distributions of $9,410,000 (2011 $11,778,000), which are disclosed in the Statement of Changes to Shareholder’s Equity.

Rebates and dividends totalling $14,175,000 declared after balance date, to be paid from retained earnings for the year.

The attached notes form part of and are to be read in conjunction with the audited financial statements.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 29 FEBRUARY 2012

GROUP

Net Profit/(Loss) for the year

PARENT

2012

2011

2012

2011

$000

$000

$000

$000

24,318

( 23,861)

26,359

832

Other comprehensive income: Movement in other non-distributable reserves (not taxable) Movement in investments FVTOCI reserve (not taxable) Movement in cash flow hedge reserve (not taxable) Total comprehensive income for the year

948

482

55

122

( 9,168)

( 3,296)

-

-

640

-

640

-

16,738

( 26,675)

27,054

954

16,738

( 26,675)

27,054

954

Attributable to: Shareholders of the parent company

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 29 FEBRUARY 2012

GROUP

At 1 March 2011 Total comprehensive income Dividends payable Total recognised income and expenses Share issue At 29 February 2012

PARENT

2012

2011

2012

2011

$000

$000

$000

$000

208,011

203,190

65,544

33,094

16,738

( 26,675)

27,054

954

( 9,410)

( 11,778)

( 9,410)

( 11,778)

7,328

( 38,453)

17,644

( 10,824)

33,000

43,274

33,000

43,274

248,339

208,011

116,188

65,544

Basis of preparation These summary financial statements on pages 32 to 35, comprising the Income Statements, Statements of Comprehensive Income, Statements of Changes in Shareholders Equity, Balance Sheets, and Consolidated Statement Cash Flows are those of Foodstuffs South Island Limited (the “Parent”) and its subsidiaries (the “Group”). They have been prepared in accordance with Financial Reporting Standard No. 43 “Summary Financial Statements” and have been extracted from full financial statements that have been prepared in accordance with New Zealand Standards that comply with International Financial Reporting Standards. The full financial statements for the year ended 29 February 2012, authorised for issue and signed on 24 April 2012 have been audited by KPMG and given an unmodified opinion. The Group is a profit-oriented entity. For a complete understanding of the financial affairs of the Group, the full financial statements are available to qualifying members on request.

Foodstuffs South Island Limited | Annual Report 2012

33

BALANCE SHEETS AS AT 29 FEBRUARY 2012

GROUP

PARENT

2012

2011

2012

2011

$000

$000

$000

$000

451,647

435,978

22,573

25,712

15,075

17,457

14,969

17,167

ASSETS Non-current assets Property, plant and equipment Intangible assets Investments in subsidiaries

-

-

301,949

276,156

5,483

5,035

5,299

4,881

Investments in listed companies

26,690

35,611

-

-

Investments in other related companies

13,242

11,896

13,242

11,896

Investments in associates Investments held at fair value:

Derivative financial instruments Total non-current assets

640

-

640

-

512,777

505,977

358,672

335,812

Current assets Cash and cash equivalents

51,025

41,783

51,025

41,783

Trade and other receivables

205,106

153,784

179,955

132,301

Inventories

89,670

77,398

85,696

73,519

Total current assets

345,801

272,965

316,676

247,603

TOTAL ASSETS

858,578

778,942

675,348

583,415

87,158

EQUITY Capital and reserves attributable to equity holders Share capital

120,158

87,158

120,158

Other reserves

69,605

85,462

1,186

496

Retained earnings

58,576

35,391

( 5,155)

( 22,110)

248,339

208,011

116,188

65,544

68,079

74,037

68,079

74,037

2,328

1,902

2,328

1,902

45,257

42,013

2,232

3,084

616

752

616

752

116,280

118,704

73,255

79,775

Trade and other payables

236,868

205,179

232,860

202,289

Borrowings

182,165

174,952

182,165

174,952

1,400

-

-

-

70,888

71,054

70,873

71,034 ( 10,179)

TOTAL EQUITY Liabilities Non-current liabilities Borrowings Retirement benefit obligations Deferred income tax liability Provisions Total non-current liabilities Current liabilities

Provisions Rebates payable

2,638

1,042

7

Total current liabilities

Current income tax payable

493,959

452,227

485,905

438,096

TOTAL LIABILITIES

610,239

570,931

559,160

517,871

TOTAL EQUITY AND LIABILITIES

858,578

778,942

675,348

583,415

On behalf of the Board 24 April 2012

Robin Brown, Director

Stephen Boock, Director

The attached notes form part of and are to be read in conjunction with the audited financial statements.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 29 FEBRUARY 2012

GROUP

PARENT

2012

2011

2012

2011

$000

$000

$000

$000

Cash flows from operating activities Cash was provided from: Customers

2,495,028

2,466,497

2,236,080

2,242,384

Insurance proceeds received (excluding Property, Plant, & Equipment)

7,411

5,439

7,411

5,439

Interest received

1,629

2,290

15,958

2,289

Member trading accounts

8,005

4,779

8,005

4,779

2,512,073

2,479,005

2,267,454

2,254,891

2,270,883

2,201,938

2,055,603

2,011,449

198,801

185,558

198,642

185,412

7,558

8,266

7,651

592

-

-

-

-

4,404

2,250

3,396

( 224)

2,481,646

2,398,012

2,265,292

2,197,229

30,427

80,993

2,162

57,662

Advances from other related parties

5,285

6,670

-

4,514

Dividends

2,230

3,475

13,055

10,382

10,648

9,778

107

1,040

3,047

3,439

293

354

21,210

23,362

13,455

16,290

Cash was applied to: Purchases, wages and expenses Members rebates Interest paid Member Trading accounts Income tax paid Net cash flow from operating activities Cash flows from investing activities Cash was provided from:

Insurance proceeds received for replacement Property, Plant, & Equipment Sale of property plant and equipment

Cash was applied to: Purchase of intangibles Purchase of property plant and equipment Purchase of listed investments Advances to related parties Net cash flow from investing activities

2,896

3,489

3,530

3,440

51,243

40,139

5,542

9,784

247

-

-

-

1,468

1,517

10,762

1,518

55,854

45,145

19,834

14,742

( 34,644)

( 21,783)

( 6,379)

1,548

33,000

43,274

33,000

43,274

33,000

43,274

33,000

43,274

Cash flows from financing activities Cash was provided from: Share capital raised Cash was applied to: Interest paid on Redeemable Preference Shares Dividends paid on Retained Patronage Shares Long term borrowings Net cash flow from financing activities Net increase/(decrease) in cash held

1,815

1,804

1,815

1,804

11,768

12,683

11,768

12,683 38,858

5,958

38,858

5,958

19,541

53,345

19,541

53,345

13,459

( 10,071)

13,459

( 10,071)

9,242

49,139

9,242

49,139

Opening cash brought forward

41,783

( 7,356)

41,783

( 7,356)

Ending Cash carried forward

51,025

41,783

51,025

41,783

51,017

41,304

51,017

41,304

( 4)

467

( 4)

467

12

12

12

12

51,025

41,783

51,025

41,783

Represented by: Bank Overseas currency accounts Cash on hand

Foodstuffs South Island Limited | Annual Report 2012

35

The network

NEW WORLD

HENRY’S BWS Kaikoura 1 Greymouth 1 Rangiora 1 Christchurch 9 Timaru 1 Dunedin 2 Alexandra 1 Queenstown 1

ON THE SPOT

FOUR SQUARE

Nelson 22 Blenheim 5 Kaikoura 2 West Coast 18 Canterbury 31 Ashburton 5 Timaru 8 Dunedin 27 Central Otago 7 Invercargill 21

Nelson 7 Blenheim 5 West Coast 5 Canterbury 11 Ashburton 4 Timaru 3 Central Otago 20 Dunedin 8 Southland 12 Stewart Island 1

PAK’nSAVE Nelson 1 Christchurch 5 Dunedin 1 Timaru 1 Invercargill 1

Nelson 2 Motueka 1 Blenheim 1 Kaikoura 1 Greymouth 1 Westport 1 Hokitika 1 Rangiora 1 Kaiapoi 1 Christchurch 7 Lincoln 1 Rolleston 1 Ashburton 1 Temuka 1 Timaru 1 Waimate 1 Oamaru 2 Wanaka 1 Cromwell 1 Alexandra 1 Wakatipu 1 Dunedin 3 Port Chalmers 1 Mosgiel 1 Balclutha 1 Gore 1 Invercargill 2 Winton 1

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