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Nurturing Our Communities FOODSTUFFS SOUTH ISLAND LIMITED ANNUAL REPORT

2013


Contents Directors and Executive Team .....................................................

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

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

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

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Retail Review ................................................................................ 14 Food for Thought ......................................................................... 18 Foodstuffs (South Island) Community Trust ................................ 19 National Annual Progress Report ................................................ 20 Executive Team ............................................................................ 24 The Network ................................................................................. 26 Independent Auditor’s Report ..................................................... 28 Foodstuffs South Island Limited Group Financial Statements .................................................................... 29

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

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LEFT TO RIGHT

Philip Lemon, General Manager Trents Wholesale Limited | Malcolm Wratt, General Manager Finance | Stephen Boock, PAK’nSAVE Northlands | Alan Malcolmson, General Manager Retail Operations | John Mullins, General Manager Supply Chain | John Niles, Four Square Owaka | Roy Bridgman, New World Rolleston Roger Davidson, General Manager Property & Retail Development

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FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

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Directors & Executive Team Kevin Ryan, New World Alexandra | Steve Anderson, Chief Executive Officer | Marcel Gray, PAK’nSAVE Wainoni (Deputy Chairman) Kim DeGarnham, General Manager Administration & Members’ Services, Company Secretary | Chris McDonald, PAK’nSAVE Dunedin | Russell McKenzie, New World St Martins | Phil Wright, General Manager Information Technology | Robin Brown New World Rangiora (Chairman)

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

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

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The co-operative is principally 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 cooperative and paid for by deferring the physical payout of the year-end rebate of profits until each tranche of shares is redeemed.

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 house-branded product.

Our membership generally falls into two categories; independent grocers trading as members of one of our banner groups:

Currently, Foodstuffs South Island Limited has a membership of 582 banner group, independent grocer or foodservice members.

or members who trade independently of these groups in the convenience grocery or foodservice industries.

These members recognise that shareholding in the co-operative confers on its members the right to enjoy the benefits of the co-operative and the shares are not held as a form of investment in equity shares. As such, our members are caretakers of the co-operative and its assets. They have a responsibility to hand them on to enable future generations of grocers to trade.

Over recent years, the foodservice industry and the number of customers/members involved in that industry have grown dramatically. These people trade with our whollyowned subsidiary, Trents Wholesale Limited. This subsidiary was specifically created to service this sector of the South Island economy and now has a strong South Island-

• • • • • •

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PAK’nSAVE New World Four Square Raeward Fresh On the Spot Henry’s Beer, Wine and Spirits

wide customer base. Trents trade via five Cash’nCarry sites throughout the South Island or through one of our Trents distribution partners. Many of our grocery members lease their supermarket or shop premises from the co-operative which, in turn, is the registered proprietor or holds the head lease of the property concerned. The co-operative offers a substantial degree of assistance to its members as well as its core activity as a wholesale merchant. These ancillary activities include the marketing of their business and products, industryrelated training and education, food safety programmes, business services, merchant guarantee funding arrangements with major banks, and, at-call deposit facilities for trading members, former members and related parties.


Annual General Meeting The 25th Annual General Meeting of Shareholders of Foodstuffs South Island Limited will be held on Tuesday, 16 July 2013 at the Christchurch Office of the Company, 167 Main North Road, Christchurch at 5.00pm.

Ordinary Business 1. To receive, consider and adopt the Director’s Report, Group Income Statements, Statements of Comprehensive Income, Statements of Changes in Shareholders’ Equity, Balance Sheets and Audit Report for the year ended 28 February 2013. 2. To receive the results of the postal ballot conducted to elect one director. 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 2014. 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 4th day of June 2013. By order of the Board

K N DeGarnham Company Secretary

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This growth was only achievable due to management and staff working as one identifying opportunities, developing efficient solutions and having good cost control measures in place. PG 8

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


Chairman’s Review On behalf of the Board of Directors of Foodstuffs South Island Ltd (FSSI), I present to you the 25th Annual Report detailing our activities, highlights, challenges and financial performance for the year ended 28 February 2013. The New Zealand economy took a positive step forward over the last few months of the financial year as the Canterbury rebuild continued to gain strength and consumer confidence slowly returned in our marketplace, albeit at a slow pace.

There should be no doubt that there are still formidable challenges ahead with our high exchange rate, the flow-on impact of the recent draught and booming construction in Christchurch and Auckland which may create further inflationary pressures that could ultimately lead to higher interest rates and a downturn in the housing market. The performances of our banner groups are fundamental to our growth and there are many reasons why Foodstuffs South Island will continue to trade well in the future. Our experience through the last recession, further exacerbated by the earthquakes, has helped us prepare for future challenges. It taught us how to trade successfully under often demanding conditions and embedded a passion in our Company to continue to look at ways to enhance our performance as we set our sights on upping our competitive advantage in 2013/14.

It is therefore critical that we tap into this renewed consumer confidence to retain and increase our leadership position. Thus throughout the reported year Foodstuffs South Island Ltd have put our focus on: • staying at the cutting edge of developments, • applying the most advanced information systems to monitor changes in consumer preferences and behaviours, • staying at the forefront of store designs and layouts, • developing new brands within the Foodstuffs environment, • constantly investing in areas of growth, and • tightly managing our costs. These were achieved through ongoing research, analysing global trends, aligning and streamlining our various processes and spending wisely. Our impact on the environment is receiving increased attention under the guidance of a dedicated

Foodstuffs Sustainable Business Steering Committee. Foodstuffs South Island Ltd is committed to actively making a change especially with the cost of energy and fuel on the rise. We are continually investigating ways for better waste management and how to improve our energy usage and fuel efficiency in order to reduce our carbon footprint. Foodstuffs South Island Ltd has achieved a solid financial result amidst a tough trading year. Revenues were up, an excellent result considering the drop in the food price inflation (FPI), the sluggish start to the year and difficult trading conditions with some of our stores still closed due to earthquake damage. This growth was only achievable due to management and staff working as one identifying opportunities, developing efficient solutions and having good cost control measures in place.

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Chairman’s Review continued Retail Despite the low FPI, our banner groups and Trents’ customers managed to achieve a solid growth result. This was accomplished despite the closure of two of our New Worlds with St Martins only re-opening in September 2012. Throughout the year we have carried out extensive work on how best to modernise the internal look and feel of PAK’nSAVE. As a consequence, the new PAK’nSAVE store in Blenheim has a fresh look and feel with new coloured shelving, less yellow on the walls and new signage, with the last now being adopted nationally. Our Four Square Group is in a very good position with improved trading results being generated across most stores. Four Square‘s lift in sales can be attributed to the re-enforcement of their rural supermarket profile combined with a much improved range of packaged meat, fresh produce and bakery products. Henry’s Beer Wine and Spirits is trading well and in the year the group opened another Henry’s Beer Wine & Spirits in Yaldhurst, Christchurch. We are very comfortable where this brand is tracking and continue to search for new opportunities presented to us within the South Island. Foodstuffs recognised an area of growth in the retail marketplace and in April 2012 welcomed a new banner group to the Foodstuffs’ family, namely Raeward Fresh, a farmers’ market style store. We are very excited about growing the brand and look forward to bringing the Raeward Fresh offering to more customers. Our produce supply to members is now well-established. In October last year we introduced the category of greens to the produce distribution and to date it has been extremely successful. We are working towards providing a full range of fruit and vegetables to our members by mid2013. Our members have commented on the improved freshness and quality of produce with us in control. On Monday 17th December

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Foodstuffs fuel supply for the Under Canopy Fuel Sites and the Supermarket Discount Fuel Docket Programme transitioned seamlessly from BP to Mobil. The transition went very well with no significant adverse feedback from customers and no issues with deliveries from our new fuel provider. Trents Wholesale Ltd, our specialist food and beverage sector company, achieved another solid result despite the lingering impacts of the Christchurch earthquakes on their customer base. In 2012 Trents won the Gold Award in the ‘Fly Buys for Business Campaign’ category and was also awarded Silver in ‘Customer Acquisition and Retention’. Group Sales and Profitability The co-operative has recorded solid revenue growth, up 2.0% or $50M for the year. Trading in the second half of the year was much stronger than the first, with revenue growth averaging 3.0% over the last six months of the financial year. Gross Profit grew by 1.4%, reflecting sales growth offset by changes in product mix which lowered the overall Gross Margin % to 11.22% (down from 11.29% in the previous year). The co-operative lifted its Operating Profit by 1.0% or $2.3M to $241.7M. This was partly achieved from the lift in Gross Profit but was also attributable to the tight management of costs throughout the year. Funding costs were reduced by $1.0M as the co-operative benefitted from the lower interest rate environment and made better use of its working capital throughout the year. Included in the financial statements this year are the receipts, expenses and rebates associated with our banner group marketing activities. We believe that the inclusion of these activities gives our members a better view of the total resources used by the co-operative. Distribution to Members Distributions to members from this year’s profits will total $237.4m (this includes $5.7m of imputation credits

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

and $1.7m of dividends which are classified as interest in the financial accounts). Also included for the first time in the co-operative’s financial accounts are the Marketing rebates. These are paid to specific Banner groups. $12.3M of Marketing rebates will be distributed this year. In total, distributions for 2012/13 are $22.0M higher than last year, or alternatively, if the Marketing rebates are excluded, distributions have increased by $9.7M or 4.5%. It should also be noted that included in the financial accounts this year are the 2012 Redeemable Preference Shares and dividends. This distribution relates to the profit generated in the previous financial year, but for accounting purposes could not be recorded until the share issue was declared in April 2012. These shares were distributed in July 2012. 2012/13 Distributions • We have continued our practice of paying monthly rebates, based on bulk and repack purchases and distributing these, together with supplier driven rebates, directly to Members during the year. In total $152.4m has been distributed to Members in this manner. • Next are the distributions of the Loyalty rebates and dividends totalling $56.4m. These will be distributed through a combination of Retained Patronage Shares, cash rebates and dividends. Forty seven million Retained Patronage Shares will be issued, with a fully paid up specified value of $1.00 per share (value $47.0m). A 15.0 cent dividend will be paid on these shares (value $7.05m). This dividend will be paid immediately after these shares are issued, and will be fully imputed. A cash rebate will also be paid (value $2.35m). The cash rebate will be paid at the same time as the dividend payment.

• There will be a further two specific cash rebates paid totalling $3.0m. • The Produce rebate will be


based on ex-warehouse Produce purchases and will be paid at a rate of 3% on qualifying sales (value $1.7m). • An IT Leasing rebate will be paid out of profits made on the IT Leasing scheme and distributed pro-rata based on Members’ IT leasing charges (value $1.3m). • As noted above, included in the financial statements this year are the Marketing rebates. These distributions are banner specific. The total of these distributions is shown in the financial statements this year, $12.3m, of which $3.3m was distributed in October 2012 and the remaining amount of $9.0m will be distributed with the Produce and IT rebate payments. • In addition to the year-end rebates there are $6.5m of dividends on RPS shares which will be paid out fully imputed. The Board has again decided to pay a dividend on the Trading Credit shares held by members. This dividend will be at the same rate as the RPS shares (3.67% fully imputed) and equals $1.1m in total. Rebates and Dividends In summary, this year’s total rebates, dividends and year-end imputation credits to be distributed to members from this year’s profits are; Bulk and Repack rebates Supplier rebates Monthly cash rebates 2013 Retained Patronage Shares, cash rebate and Dividend

$133.6m $18.8m $152.4m $56.4m

Produce rebate

$1.7m

IT Leasing rebate

$1.3m

Banner group marketing rebate Dividends on RPS and Trading Credit shares Total Dividends and Rebates Imputation Credits Total value of Distributions 2013/14 Also shown in the financial statements 2012 Redeemable Preference Shares, rebates, cash and dividend Imputation credits Distributions relating to 2012/13

$12.3m $7.6m $231.7m $5.7m

$237.4m

$14.0m $6.0m $20.0m

Information Technology Our SAP system has been a major contributor to improving our operational efficiency and productivity. The benefits are increasingly being experienced by our members who have easy access to data in order to manage their gross margins, expenses and inventories. Whilst the SAP Retail rollout continues, further enhancements to SAP and other initiatives are also being developed. This is reflective of the maturity of SAP in our organisation and the continued demand for IT systems to support the various company initiatives. Project Valentine / SAP The retail rollout has proceeded smoothly throughout the year and the coming year will see the completion of SAP into all New World and PAK’nSAVE stores. At the end of the financial year 41 PAK’nSAVE and New World stores were on full SAP. The rollout of the upgraded Valentine application known as V2 to all remaining Four Square and Henry’s Beer Wine & Spirit stores is almost complete and feedback from these members has been positive. Advanced Replenishment Functionality Recently an Advanced Replenishment System (a new module of SAP that supersedes the existing functionality) was trialled in eight of our stores. This trial was so successful that we are currently rolling it out to other stores. The additional benefits over and above what the existing system provides are: - Improved order proposal quality, especially for Promotional lines. - Reduced time and effort for store staff to submit orders. - Improved management of aisle-ends. - Increased visibility in our Distribution Centres of the retail demand. Overall we had an excellent year for Information Technology based on good performance of key operating systems, progress on strategic

activities and supporting the organisation on the various initiatives that require IT development. Retail Development Foodstuffs (South Island) Properties Limited had a productive year and focussed on completing the rebuilding of New World St Martins and the development of the 10th PAK’nSAVE in the South Island, in Blenheim. New World St Martins re-opened their doors for trading in September 2012 after it and the adjacent shops were damaged beyond repair during the February 2011 earthquake. PAK’nSAVE Blenheim is a greenfield development and a new catchment for this banner group within the Marlborough district. The store, whilst completed at the end of the financial year, opened for trading in the third week of March 2013. This is the first PAK’nSAVE outside of Christchurch since Dunedin in 1997 and the latest since Wainoni in 2006. Whilst the overall format of the PAK’nSAVE remains unchanged the Blenheim development improves the perception and internal look and feel of the PAK’nSAVE brand and will be a contemporary place to shop without losing the PAK’nSAVE price appeal. The other major development which occurred during the year was the refurbishment of New World Windsor in Invercargill. Due to the age of this building and the many different building stages required, this proved to be a very lengthy and complex construction project, but the end result is a new generation store incorporating many new design features. Our customer reaction to the purpose-built cafés in New Worlds Ilam, Northwood and St Martins has been favourable and we will look to incorporate these into larger format New Worlds as redevelopments occur. In smaller New Worlds we will continue with the ‘coffee to go’ option incorporated into the customer kiosk area. Construction of the new ambient warehouse at Hornby was delayed due to redesigning of the structure. During

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Chairman’s Review continued this redesign phase, the earthworks were commenced and completed to allow the construction of the building to get underway in the second quarter of 2013. The year ahead will once again be a busy year for the property team and the challenge for them will be to ensure Foodstuffs remains at the forefront of food retailing. Careful determination of new sites is critical for our Company and by identifying and obtaining the best locations for new stores we ensure a relaxed, though stimulating shopping experience for our customers. Major projects we wish to undertake include; • the rebuild of New World Redcliffs which had to be demolished due to being damaged beyond repair in the February 2011 earthquake, • the rebuild of PAK’nSAVE Wainoni that sustained damage during the earthquakes. The most viable option is to rebuild and the new store will have a fuel site as well, • upgrade of New World Stanmore as well as repairs to their car park, • conversion of Woolston Supervalue into a New World supermarket, • continuation of the 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.

The Supply Chain division investigated various ways by which we can continue to take costs out of our business. Workshops involving Supply Chain staff identified a number of key areas that we could reduce costs such as reduced invoice printing, reverse logistics, rubbish and recycling, staff replacement, redundant stock levels and DC closure on selected statutory days.

Administrative Foodstuffs South Island Ltd received a Tertiary Level Certification from ACC during 2012. This is the second year in a row that we have achieved the Tertiary Level Certification and reflects our commitment to the reduction of work injuries and our dedication to rehabilitation of not only our staff with work injuries but also for non-work and medical related issues.

Transport South Island (TSI) Logistics has had a good year of growth with new Foodstuffs Inbound business. The last year has seen our inbound freight, managed by TSI, increase by nearly 20%. Major changes this year include the purchase of new truck and trailer rigs. This replacement program is scheduled to continue through 2013.

Over the same period, Dunedin DC achieved ‘One Year of No Lost Time due to Injuries’. This outstanding achievement was only obtained through the combined team effort from all Dunedin DC staff and the total commitment of their Health and Safety committee.

Supply Chain The development of our new Hornby Ambient DC is now well underway. Our best estimate on building completion is late 2013 with the Papanui transition to take place February/March 2014. The project team is well advanced in areas of bulk racking and pick module design and costs, material handling equipment provision and key changes within the Warehouse Management System platform. The focus can now move to transition planning around inventory and staffing.

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FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

Summary

We would not have achieved the results we did this past year if it had not been for the support from our suppliers and the concerted efforts of Foodstuffs South Island Ltd’s management and staff.

The last year has been particularly difficult as far as market conditions were concerned. Creative and innovative thinking have brought us through these difficult trading conditions and established us onto a new level of retail excellence. It is with gratitude that I thank the Foodstuffs South Island Ltd Board Members for the assistance they have provided me throughout this year; to the Senior Management Group for ensuring our co-operative’s vision and strategy comes to fruition, all staff who consistently helped to ensure Foodstuffs South Island has another solid year and most importantly, our retailers for their commitment, loyalty and unwavering support during a tough trading year. Robin Brown Chairman


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Retail Review Our retail brands continue to increase their competitiveness by constantly expanding their range of offerings and value added service for our customers.

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FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


PAK’nSAVE The PAK’nSAVE Group had a solid year with modest growth in tough trading conditions. The Group had a major focus on fresh foods which resulted in a number of new initiatives being successfully launched during the year. These initiatives have added value to the offer while keeping with the PAK’nSAVE low price policy. A win / win for customers. Our national promotional strategy using ‘Stickman’ as the voice of the brand continues to engage well with our shoppers. There were a number of new advertisements created in 2012

including Meat Lovers week and Price Gap which received much publicity. Technology continues to play a big part in our brand and is well received by our customers. Our website delivered product and price with Facebook delivering themes and taking feedback from customers.

better inventory control – ensuring product on shelf and available to customers along with internal reporting and analysis. The PAK’nSAVE Group continues to serve the community by offering customers low prices on everyday products along with a strong shelf and promotional pricing programme.

The implementation of SAP technology in all the PAK’nSAVE stores in 2011 has continued to provide benefits to the stores with

Four Square The Four Square Group achieved sales growth of 1.70% and contributed sales to the co-operative in excess of $205 million. The Group is very pleased with the result as this occurred amidst a very flat market. The stores in tourist areas did not get the visitor numbers of previous years and this was reflected in a slight decrease in customers. The year has been busy for members attending a number of meetings, forums and conferences. Members continue to support these events and the results are clearly reflected in overall store standard improvements and the passion members have for their businesses.

Highlights for the year included: • An excellent South Island member presence at the inaugural National Four Square Conference held at Te-Papa in Wellington. • The Four South Island Forum was held in Dunedin, where the theme was “Health Cheque”. Members were challenged to step back and take a good look at their businesses from a financial point of view as well as taking a good look at their health and well-being. • A fourth St John Health Shuttle was introduced, based in Wakatipu. • 37 Stores live on SAP Module 1.

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New World The New World Group has had a very successful year, with record sales over the Christmas and New Year period.

In September 2012, the Group celebrated the reopening of New World St Martins which was demolished and rebuilt after the events of February 2011 and brings our total to 40 New Worlds in the South Island. Our Owner Operators continue to invest in their

businesses with ongoing refurbishment programmes to their existing stores keeping the brand fresh for our customers. New World continues to be customerfocussed, have innovative store formats and good marketing at regional and national levels. Focus on providing good communication to our customers and following through with in-store execution has been important. Examples of these well executed offerings were the New World Wine Awards and Christmas promotions. Over the course of the year we have welcomed new Owner Operators to New Worlds’ Stanmore and Blenheim. It is always exciting adding new keen

experienced people into the New World family. The Group has also continued the rollout of SAP providing greater insight to the business, and improved stock accuracy and supply, areas critical to any retailer. With knowledge that the retail trading environment will remain competitive, the New World brand is in a very good position to continue to grow while meeting the needs of the local communities that it serves! Everyday a New World.

Raeward Fresh Your Fresh Food People It was an exciting year for Foodstuffs South Island with the Raeward Fresh brand becoming a banner group within the co-operative. This group provides the co-operative with representation in the growing fresh food/farmers’ market retail sector.

Currently we have three Raeward Fresh stores, all individually owned and operated. Each of the stores is on the first stage of SAP with plans in place to implement further modules and systems to assist them with their businesses. In the coming year, stores will undergo

renovations enhancing their offer as a fresh food market place. Keep an eye on this group, with its fresh offering, unique shopping experience and market appeal. This group is bound to grow.

Trents Wholesale Ltd Trents trading performance has reflected signs of improved business confidence within the hospitality sector, especially throughout the latter half of 2012. Trents continue to trade in a highly competitive business segment that has been severely

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impacted by the earthquakes and the economy throughout the South Island. The Christchurch hospitality scene has commenced rebuilding, albeit slowly, and Trents appears to be securing a good share of these new

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

businesses which is pleasing. We are well placed to enjoy the opportunities that the significant investment within Canterbury will present.


Henry’s Beer Wine & Spirits The Henry’s BWS Group had a strong and successful year. In particular, Moorhouse and Barbadoes stores have continued to show very pleasing results as the Christchurch CBD slowly reopens.

Many stores completed refurbishments, upgrades or relays during the year and this ensures that the Group continues to provide a first class shopping experience for its customers.

SAP continues to roll out throughout the Henry’s Group and assist operators with inventory management, pricing and promotions along with improved reporting.

The Group continues to look for expansion opportunities and in February a new store was opened in Yaldhurst, Christchurch. The store is operating very successfully and has exceeded expectations. Further new stores are planned for sites in a number of regions within the South Island.

The Henry’s website, weekly promotions and Fly Buys are strong tools for the Henry’s Group and will be at the forefront of Group activity during 2013, servicing their customers’ requirements.

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Food for thought Foodstuffs, with the support of Pams, offers a FREE nutrition education programme to all Primary Schools in New Zealand. Foodstuffs Food for Thought Education Trust, promotes the delivery of the programme by qualified nutritionists to year 5 and 6 students. Alongside nutrition education, the programme incorporates a range of competencies within the New Zealand Education Curriculum. In 2012, the Food for Thought Education Trust strengthened its association with The National Heart

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Foundation through a Collaborative Agreement. A highlight for the year was the Associate Minister of Health, the Honourable Jo Goodhew, MP for Rangitata, attending a Food for Thought programme at Netherby Primary School in Ashburton. The success and feedback has resulted in the Heart Foundation delivering our Food for Thought programme as one of their core community school health and nutrition programmes in 2013.

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

This year Food for Thought was delivered by the Food for Thought Nutritionists to:

128 schools 451 classes 11,956 students 986 parents


Community Trust I am pleased to report another successful year for the Foodstuffs (South Island) Community Trust Major Sponsorship The Trustees agreed to continue sponsorship of St John for a further 2 year period. The Trustees visited the Communications centre in Christchurch and were most impressed with the structure and professionalism of the organisation. Extending the sponsorship will allow St John to continue to maintain the current 10 services in 7 hospitals, expand their services (looking at Gore and Queenstown) while providing ongoing support and mentoring to their 230 FED volunteers in the South Island.

First Foundation Through the First Foundation we continue to support Karly Martin who is in her first year of Architecture at CPIT Christchurch and Hannah Davidson in her third year of BSc majoring in Chemistry at the University of Otago. It was a highlight to hear Hannah Davidson speak at our 2012 AGM.

Not only has she benefited from assistance with the cost of her education along with being employed by the co-operative through the holidays, but she has also gained personal confidence resulting from the support she has received through the Trust. Her speech highlighted for many of us the reasons why we support this worthwhile organisation.

Grants This year the following grants were distributed to groups and individuals in the South Island community;

Educational Grants totalling Community Grants totalling

$82,841 $260,231

It is sometimes very humbling to read the stories behind the requests for funds and the genuine thanks we receive from the applicants. The Trust is making a difference for these individuals and community organisations in the South Island. Sponsors During the year, we welcomed three new sponsors and one supporter. New Supporters Tim & Hilary Donaldson New Sponsors AM & ME Shore Limited – New World Blenheim Purcell Supermarkets Limited – New World Stanmore Oakwood 2010 Limited – PAK’nSAVE Blenheim which will open on 19 March 2013 (previously a supporter as New World Blenheim) Resignations On behalf of the Trust, I would like to thank Ian Wilde (New World Stanmore) for his past financial contributions and wish him well in future endeavours.

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

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National Annual Progress Report 2013 Sales For the year ending February 2013, the Foodstuffs group saw a robust performance in a flat market with combined revenues of $8.60 billion, up $272 million, or 3.26%. Store Developments The year was another busy one from a property development perspective, with a number of new stores opening as well as a number of store refurbishments. At the end of February 2013, Foodstuffs co-operative Members operated 49 PAK’nSAVEs, 137 New Worlds, 276 Four Squares, 138 On The Spot Convenience stores, 19 Henry’s Beer Wine, and Spirits, three Raeward Fresh stores (new banner group), 8 Gilmours, 4 Toops stores, 5 Trents Cash’n Carry and 44 Fuel Sites. New markets and extensions to existing markets provided an additional gross retail floor area of 23,657square metres, an increase of 6.6 percent nationally. New store developments The following new stores were opened during the last financial year: • Foodstuffs Auckland; PAK’nSAVE Silverdale, Four Square Panmure • Foodstuffs Wellington; New World Newlands, New World Tawa, Four Square Frimley • Foodstuffs South Island; New World St Martins, Henry’s Beer Wine and Spirits Yaldhurst, and the new banner group, Raewood Fresh, consisting of three stores namely Raeward Fresh Tower Junction, Raeward Fresh Richmond, Raeward Fresh Harewood Store refurbishments, replacement stores and extensions Foodstuffs is committed to constantly updating our offer to ensure customers get the best possible supermarket experience. Refurbishments and extensions

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undertaken throughout the country included: • Foodstuffs Auckland; New World Opotiki, New World Devonport, New World Eastridge, PAK’nSAVE Mt Albert • Foodstuffs Wellington; New World Carterton, New World Waitara • Foodstuffs South Island; New World Windsor and cosmetic upgrades to New World Hokitika and New World Ashburton. Retail Innovations The companies continue to review and fine-tune their store formats by introducing a number of innovations to ensure that our brand offers remain relevant to customers. Foodstuffs Wellington has been testing the initiative Made2Go since August last year. This initiative offers customers the opportunity to order platters, cakes and gifts online. Response has been positive from customers and there are currently 20 New Worlds and two PAK’nSAVEs in the Wellington region offering the service. Foodstuffs Wellington is also progressing well on establishing an online shopping solution for New World which is expected to pilot later this year. Foodstuffs South Island purchased the Raeward Fresh Brand, a specialty meat and produce outlet. This offering represents an area of growth and South Island will be looking to develop the brand in key centres throughout the South Island. The three stores will continue to be individually owned and operated and allow customers to enjoy speciality food experiences with a focus on New Zealand grown.

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

Regional Initiatives 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. The Foodstuffs Auckland IMS team is in the process of implementing a strategic technology roadmap to ensure Foodstuffs Auckland is best placed to support the new systems and processes Programme Lightning will bring. Programme Lightning is Foodstuffs Auckland’s key initiative and the project team is tasked with creating the future retail platform for the business. While the technology team has been creating the foundations to support Programme Lightning, the Lightning project team has been designing and developing the future processes for Foodstuffs Auckland to provide a better shopping experience for customers. This year, Foodstuffs Wellington has set up an office in Shanghai, China as part of the Global Buying Office initiative. This office is a valuable extension to the already successful buying groups established within the group and gives Foodstuffs greater access to the growing Asian market. The new global office continues to deliver substantial savings on both retail and not-for-sale items. An upgrade of the Wellington soft drink plant is underway in order to increase production and improve plant reliability. We expect completion date will be the middle of 2013.


Foodstuffs South Island’s new Hornby ambient distribution centre (DC) is now well underway with the site cleared and contractors ready to go. The building completion date is estimated to be late 2013 with transition from the current Papanui DC scheduled to take place February/March 2014. There is continued focus at Foodstuffs South Island to increase visibility of food production areas within the stores. Emphasis where possible is placed on establishing serve-over butcheries and displaying the working bakery environments as existing stores are refurbished and new supermarkets built. Nationally, CanTeen is Foodstuffs nominated charity and as we move forward with our 10 year partnership the three Foodstuffs co-operatives have

raised more than $400,000 in support of this worthwhile charity. National Advocacy Foodstuffs NZ continues to coordinate national submissions and advocacy on public policy issues which are relevant to our business interests. Legislative reforms around alcohol, tobacco, consumer law, financial reporting, and resource management law, have been the primary focus during the last twelve months. Following the tabling of the Justice Select Committee’s report on the Alcohol Reform Bill, Foodstuffs successfully advocated for changes to the Committee’s recommended “single liquor area requirement” to reduce compliance costs. In response,

the Government made late changes to the Bill via a Supplementary Order Paper to improve the Bill’s drafting and to introduce transitional provisions to reduce transition costs. The changes provide greater certainty about what is required, greater flexibility around the location of the single area, and more time for stores to make any necessary layout changes. Foodstuffs NZ continues to pride itself on the responsible sale of alcohol and other restricted products. Foodstuffs was also successful in persuading the Government not to proceed with mandatory financial auditing for all large businesses. Mandatory auditing would have had a cost impact on our Members with no added benefit. Instead the Financial Reporting Bill introduces

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 21


National Annual Progress Report 2013 continued more pragmatic rules based on the size of the business, the level of separation between management and governance, and shareholder needs and requirements. In 2012, national submissions were prepared for; the Ministry of Health’s consultation on regulations supporting the tobacco display ban, the Consumer Law Reform Bill, the Ministry of Transport’s consultation on changes to road user charges, the Ministry of Primary Industries’ review of folic acid fortification, and the Ministry of Education’s Industry Training Review. In the first few months of 2013 the Government consulted on a raft of policy proposals which have potential implications for Foodstuffs property operations. Submissions have been filed on the Resource Management Amendment Bill, the Department of Building and Housing’s consultation on proposals for building earthquake strengthening, the Department of Internal Affairs’ consultation on development contributions, and the Ministry for the Environment’s discussion paper on further changes to the Resource Management Act. Legislative changes to resource management law, food regulation, and employment law are expected in the coming year and Foodstuffs will continue to monitor these developments and provide advocacy as required for the three Companies and their Members.

PG 22

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


Sustainability Progress At Foodstuffs Foodstuffs’ commitment to making progress in the sustainability area has been reinforced through the appointment of a National Sustainability Manager in 2012. Current areas of focus include energy, waste, refrigerant gases and packaging. Throughout 2012, Foodstuffs’ focus has been on reducing energy usage and improving reporting. The submetering installation programme which is currently being rolled out will radically improve the business’ ability to monitor energy usage and help identify areas for future savings. This may mean changes in the way the business operates, or the adoption of new technologies such as LED lighting solutions.

This technology has the potential to significantly reduce refrigerant related greenhouse gas emissions and the business is watching the new installations with interest to ascertain the long-term benefits to the business and the environment. Regarding packaging, Foodstuffs has sent guidance to stores to help ensure appropriate packaging choices are made. We are actively evaluating the sustainability credentials of a number of different packaging options and will continue to trial more sustainable packaging as we look for the right long-term solutions for our business.

Waste is another priority area for Foodstuffs. Despite much of what goes out the ‘back of store’ being recycled already, we are constantly striving to further minimise the volume of waste going to landfill. In 2013, Foodstuffs will be working with waste service providers to implement a national store waste minimisation plan with improved reporting.

National Marketing It’s important to have a distinctive market position for our retail brands which enables customers to come to their own conclusions as to where they want to shop.

Foodstuffs commitment to finding more climate-friendly refrigerant gases for our stores has been recently demonstrated through the installation of the latest ‘transcritical’ refrigeration systems in stores in Auckland and Wellington.

Foodstuffs strongly believe in the business value of taking a sustainable approach to retailing and we continue to make progress across the various work streams of our business.

Throughout 2012 strong momentum has been re-built into the New World brand. We know that in order to grow we need great staff, a great in-store experience, a strong relationship with the local community and suppliers, and the ability to constantly inspire and motivate consumers. With this in mind the multiple layers of the New World campaign were designed to complement each other. The harderhitting retail work highlights the savings available every day; the brand campaign celebrates the relationship customers have with their local New World while internal campaigns and store support are designed to amplify our existing strengths.

PAK’nSAVE Stickman and the brand’s key campaigns continue to support strong retail results with highlights including the ‘Meat Week’ promotions which even managed to get the vegetarians talking. Partnerships have been critical to both brands success throughout 2012 with highlights including Fonterra’s ‘Celebration of the Great Kiwi Cow’ with members embracing the promotion and doing everything from cow themed decorations to having real live cows in-store during the campaign. Customers couldn’t fail to notice there was a great event underway and sales reflected this. Moving into 2013, continuing to enhance and build on these trade partnerships remains critical as we look for new ways to activate major national events across the key banners, create excitement instore and bring great deals to our customers. As Chairman, I would like to thank my fellow Directors, Executive and staff of the respective Foodstuffs Companies for the commitment to the organisation ensuring we progress, develop and enjoy success.

Peter Anderson – Chairman Foodstuffs (NZ) Limited

PAK’nSAVE firmly owns the position of lowest supermarket prices and for the 12th year running has come out on top in the Consumer Supermarket Prices Survey. But lowest prices still need a voice and personality.

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 23


Executive Team PAK’nSAVE EXECUTIVE COMMITTEE PAK’nSAVE Riccarton

Justin Blackler

Raeward Fresh Richmond

Stephen Boock

PAK’nSAVE Northlands

Brent Thomas

Raeward Fresh Harewood

Bryan Dobson

PAK’nSAVE Invercargill

Simon Turnbull

Raeward Fresh Tower Junction

Marcel Gray

PAK’nSAVE Wainoni

Andrew Howard

PAK’nSAVE Richmond

John Lee

PAK’nSAVE Hornby

Chris and William McDonald

PAK’nSAVE Dunedin

Brad Spence

PAK’nSAVE Moorhouse

Jason Williams

PAK’nSAVE Timaru

NEW WORLD EXECUTIVE COMMITTEE

CORPORATE EXECUTIVES Steve Anderson

Chief Executive Officer

Yvonne Botha

Executive Assistant

Alan Malcolmson

General Manager Retail Operations

Roger Davidson

General Manager Property & Retail Development

Kim DeGarnham

General Manager Administration & Members Services / Company Secretary

Philip Lemon

General Manager Trents Wholesale Limited

Chris Griffin [Chairman]

New World Gore

Phil Blackburn

New World Ilam

Nigel Bond [resigned Feb 2013]

New World South City

John Mullins

General Manager Supply Chain

Kathy Frampton

New World Northwood

Malcolm Wratt

General Manager Finance

Warren McKenzie

New World Windsor

Philip Wright

General Manager Information Technology

Craig Nieper

New World Centre City

Justin Vaudrey [elected Feb 2013]

New World Westport

FOUR SQUARE EXECUTIVE COMMITTEE

SENIOR EXECUTIVE Finance Simon Hughes

Group Finance Manager

Graeme Neilson [Chairman]

Ascot Four Square

Murray Trim

Head of Decision Support

Paddy Breen

Mackenzie Four Square

Andrew Wight

Internal Audit Manager

Pat Carroll [resigned Dec 2012]

Culverden Four Square

Rick Haaima [resigned Feb 2013]

Palmerston Four Square

Administration & Members Services

Stuart Hore [elected Dec 2012]

Wakefield Four Square

Ron Bitschkat

Cushla Jones

Fern Grove Four Square

Administration & Employee Services Manager

John McDonald

Pleasant Point Four Square

Chris Dorward

Manager Membership Services

John Niles

Owaka Four Square

Information Technology

Julia Spence [joined April 2012]

Akaroa Four Square

Ana Connor

eCommerce Manager

Ian Steele [resigned March 2012]

Hanmer Springs Four Square

Gary Cowens

IT Operation Services Manager

Gordon McCoy

Business Systems Manager

Philip Smith

Project Delivery Manager

HENRY’S BWS EXECUTIVE COMMITTEE Gerry Breen [Chairman]

Henry’s Queenstown

Victoria Boyes

Henry’s Greymouth

Jennifer Pitcaithly

Henry’s Centre City

Kevin Ryan

Henry’s Alexandra

Brad Spence

Henry’s Moorhouse

Craig Smith Tracy Catanach

Henry’s Kaikoura

Howard Smith Carl Wild Keith Miles

PG 24

RAEWARD FRESH EXECUTIVE COMMITTEE

Steven McDonald [Chairman]

Retail Operations - Retail Brands Tim Donaldson

Retail Brands Manager

John Dawber

Raeward Fresh Group Manager

Danny Halligan

Henry’s BWS Group Manager

Stefan Hance

SAP Operations Manager

Annie Hay

Retail Merchandise Manager – Fresh

David MacKenzie

Retail Merchandise Manager – Packaged

Henry’s Timaru

Kent Mahon

New World Group Manager

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

Alan Smith

Four Square Group Manager

David Wise

PAK’nSAVE Group Manager

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

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

Property & Retail Development Rebecca Parish

Property Development Manager

Clayton Young

Property Manager

Trents Wholesale Michael Arlidge

Foodservices Sales Manager

Philip Olsen

Cash’nCarry Operations Manager

Alan Wicks

Promotions and Merchandise Manager

Trents Cash’nCarry Antony Haslam

Manager, Greymouth

Philip Jones

Manager, Dunedin

Allan McKenzie

Manager, Tuam Street, Christchurch

John Warren

Manager, Invercargill

Paul Witty

Manager, Nelson

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 25


NEW WORLD

The network HENRY’S BWS Kaikoura 1 Greymouth 1 Rangiora 1 Christchurch 10 Timaru 1 Dunedin 1 Alexandra 1 Queenstown 1 FOUR SQUARE Nelson 7 Blenheim 5 West Coast 5 Canterbury 11 Ashburton 4 Timaru 3 Central Otago 20 Dunedin 8 Southland 12 Stewart Island 1

PG 26

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

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

ON THE SPOT AND ON THE SPOT EXPRESS Nelson 17 Blenheim 4 Kaikoura 1 West Coast 17 Canterbury 39 Ashburton 4 Timaru 6 Dunedin 19 Central Otago 4 Invercargill 20

Nelson 2 Motueka 1 Blenheim 1 Kaikoura 1 Greymouth 1 Westport 1 Hokitika 1 Rangiora 1 Kaiapoi 1 Christchurch 8 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

RAEWARD FRESH Nelson 1 Christchurch 2


FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 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 30 to 33, which comprise the summary balance sheets as at 28 February 2013 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 28 February 2013. We expressed an unmodified audit opinion on those financial statements in our report dated 23 April 2013.

the audited financial statements, in accordance with FRS-43 Summary Financial Statements.

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.

Opinion In our opinion, the summary financial statements, derived from the audited financial statements of Foodstuffs South Island Limited for the year ended 28 February 2013, are a fair summary of those financial statements, in accordance with FRS43 Summary Financial Statements.

Directors’ responsibility for the consolidated financial statements The Directors are responsible for the preparation of a summary of

PG 28

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.

23 April 2013 Christchurch

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


Financial Statements Foodstuffs South Island Limited Group Financial Statements

Income Statements

30

Statements of Comprehensive Income

31

Statements of Changes in Shareholders’ Equity

31

Balance Sheets

32

Statement of Cash Flows

33

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 29


FINANCIAL STATEMENTS

INCOME STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2013

GROUP

PARENT

2013

2012

2013

2012

$000

$000

$000

$000

Revenue from sale of goods

2,481,199

2,431,653

2,263,724

2,221,039

Cost of sales

2,202,932

2,157,097

2,009,092

1,969,641

Gross profit

278,267

274,556

254,632

251,398

Other income

141,219

127,904

101,185

84,579

Operating expenses

177,729

163,037

139,552

119,656

Operating profit

241,757

239,423

216,265

216,321

5,405

6,381

( 8,616)

( 5,969)

217,188

198,629

217,188

198,474

Net finance costs/(income) Rebates to members Share of profit/(loss) from associates Profit/(Loss) before tax Income Tax Expense/(credit) Net Profit/(Loss) for the year after tax

1,411

( 3)

1,411

( 33)

20,575

34,410

9,104

23,783

4,975

10,092

( 1,185)

( 2,576)

15,600

24,318

10,289

26,359

15,600

24,318

10,289

26,359

Attributable to: Shareholders of the parent company

The profit attributable to Shareholders of the parent company is before dividend distributions of $26,968,000 (2012 $9,410,000), which are disclosed in the Statement of Changes to Shareholder’s Equity.

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

PG 30

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


FINANCIAL STATEMENTS

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2013

GROUP

Net Profit/(Loss) for the year

PARENT

2013

2012

2013

2012

$000

$000

$000

$000

15,600

24,318

10,289

26,359

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

288

-

288

-

8,268

( 9,168)

-

-

( 1,668)

640

( 1,668)

640

62

948

64

55

22,550

16,738

8,973

27,054

22,550

16,738

8,973

27,054

Total comprehensive income attributable to: Shareholders of the parent company

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 28 FEBRUARY 2013

GROUP

At 1 March 2012 Total comprehensive income Dividends payable Total recognised income and expenses Share issue At 28 February 2013

PARENT

2013

2012

2013

2012

$000

$000

$000

$000

248,339

208,011

116,188

65,544

22,550

16,738

8,973

27,054

( 26,968)

( 9,410)

( 26,968)

( 9,410)

( 4,418)

7,328

( 17,995)

17,644

40,001

33,000

40,001

33,000

283,922

248,339

138,194

116,188

Basis of preparation These summary financial statements on pages 1 to 4, 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 28 February 2013, authorised for issue and signed on 23 April 2013 have been audited by KPMG and given an unqualified 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 2013 ANNUAL REPORT

PG 31


FINANCIAL STATEMENTS

BALANCE SHEETS AS AT 28 FEBRUARY 2013

GROUP

PARENT

2013

2012

2013

2012

$000

$000

$000

$000

483,002

451,647

21,084

22,573

15,477

15,075

15,448

14,969

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

-

-

319,001

301,949

395

5,483

285

5,299

Investments in listed companies

34,958

26,690

-

-

Investments in other related companies

13,678

13,242

13,678

13,242

547,510

512,137

369,496

358,032

Investments in associates Investments held at fair value:

Total non-current assets Current assets Cash and cash equivalents

73,387

51,025

73,386

51,025

Trade and other receivables

208,590

205,106

188,307

179,955

85,439

89,670

82,083

85,696

6,072

-

6,072

-

Total current assets

373,488

345,801

349,848

316,676

TOTAL ASSETS

920,998

857,938

719,344

674,708

120,158

Inventories Investment held for sale

EQUITY Capital and reserves attributable to equity holders Share capital

160,159

120,158

160,159

Other reserves

74,171

69,605

( 424)

1,186

Retained earnings

49,592

58,576

( 21,541)

( 5,156)

283,922

248,339

138,194

116,188

91,213

68,079

91,213

68,079

788

2,328

788

2,328

41,249

45,257

1,500

2,232

641

616

641

616

133,891

116,280

94,142

73,255

Trade and other payables

240,003

236,868

233,135

232,860

Borrowings

175,570

182,165

175,570

182,165

1,710

1,400

-

-

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

Provisions Investments held at fair value: Derivative financial instruments Rebates payable Current income tax payable

( 640)

1,028

( 640)

70,888

81,142

70,873

3,708

2,638

( 3,867)

7

Total current liabilities

503,185

493,319

487,008

485,265

TOTAL LIABILITIES

637,076

609,599

581,150

558,520

TOTAL EQUITY AND LIABILITIES

920,998

857,938

719,344

674,708

On behalf of the Board 23 April 2013

PG 32

1,028 81,166

Robin Brown, Director

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

Roy Bridgman, Director


FINANCIAL STATEMENTS

STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 28 FEBRUARY 2013

GROUP

PARENT

2013

2012

2013

2012

$000

$000

$000

$000

2,236,080

Cash flows from operating activities Cash was provided from: Customers

2,594,272

2,495,028

2,348,191

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

1,028

7,411

22

7,411

Interest received

4,070

2,281

19,683

15,978

Member trading accounts

-

8,005

-

8,005

2,599,370

2,512,073

2,367,896

2,267,454

2,358,225

2,270,883

2,144,474

2,055,603

204,441

198,801

204,448

198,642

Interest paid

7,390

8,210

8,139

7,671

Member Trading accounts

6,595

-

6,595

-

Income tax paid

7,625

4,404

3,133

3,396

2,584,276

2,481,646

2,366,789

2,265,292

15,094

30,427

1,107

2,162

Advances from other related parties

6,668

5,285

665

-

Dividends

1,992

2,230

12,414

13,055

16,981

10,648

-

107

7,101

3,047

449

293

32,742

21,210

13,528

13,455

Cash was applied to: Purchases, wages and expenses Members rebates

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

5,663

2,896

5,649

3,530

57,190

51,243

6,486

5,542

-

247

-

-

440

1,468

17,958

10,762

63,293

55,854

30,093

19,834

( 30,551)

( 34,644)

( 16,565)

( 6,379)

Share capital raised

40,001

33,000

40,001

33,000

Long term borrowings

23,134

-

23,134

-

63,135

33,000

63,135

33,000

Net cash flow from investing activities Cash flows from financing activities Cash was provided from:

Cash was applied to: Interest paid on Redeemable Preference Shares Dividends paid on Retained Patronage Shares

1,019

1,815

1,019

1,815

23,501

11,768

23,501

11,768

Trading Credit Shares

796

-

796

-

Long term borrowings

-

5,958

-

5,958

25,316

19,541

25,316

19,541

Net cash flow from financing activities

37,819

13,459

37,819

13,459

Net increase/(decrease) in cash held

22,362

9,242

22,361

9,242

Opening cash brought forward

51,025

41,783

51,025

41,783

Ending Cash carried forward

73,387

51,025

73,386

51,025

73,223

51,017

73,223

51,017

152

( 4)

152

( 4)

12

12

11

12

73,387

51,025

73,386

51,025

Represented by: Bank Overseas currency accounts Cash on hand

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 33


Barbecued Salmon with Brown Sugar and Mustard Glaze Grilling salmon on a piece of aluminum foil eliminates any chance of it sticking to the grate. In fact, you can close the lid on the barbecue knowing you don’t even need to flip the fish. Once the sweet and sour glaze has caramelised on the fish, simply slide a spatula between the skin and flesh and serve. BARBECUE OVER INDIRECT / MEDIUM HEAT 1 tablespoon brown sugar 1 teaspoon honey 2 teaspoons unsalted butter 2 tablespoons Dijon mustard 1 tablespoon soy sauce 1 tablespoon olive oil 2 teaspoons grated fresh ginger 1 whole salmon fillet, skin on, about 1kg and 2.5cm thick In a small sautÊ pan over medium heat, melt the brown sugar with the honey and butter. Remove from the heat and whisk in the mustard, soy sauce, olive oil, and ginger. Allow to cool.

PG 34

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT


Place the salmon, skin side down, on a large sheet of aluminum foil. Trim the foil to leave a border of 1cm around the edge of the salmon. Coat the flesh of the salmon with the brown sugar mixture. Grill the salmon indirectly over medium heat until the edges begin to brown and the inside is opaque, 25 to 30 minutes. The internal temperature should be about 50ËšC. Turn off the heat and serve fish directly from the grill or, using a large baking sheet, carefully transfer the salmon with the foil to a cutting board. Cut the salmon crosswise into 6 to 8 pieces, but do not cut through the skin. Slide a spatula between the skin and flesh and remove the salmon pieces to a serving platter or individual plates. Serve immediately.

FOODSTUFFS SOUTH ISLAND LIMITED 2013 ANNUAL REPORT

PG 35


Foodstuffs SI Annual Report 2013 Summary  
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