2012 Annual Summary Report for Foodstuffs South Island Ltd

is in the detail...SUMMARY REPORT 2012Foodstuffs South Island Limited

CONTENTSDirectors 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 1

SOUND

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

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 MullinsGeneral Manager Supply Chain

Phil WrightGeneral Manager Information Technology

Malcolm WrattGeneral Manager Finance

Roger DavidsonGeneral Manager Property & Retail Development

Philip LemonGeneral Manager Trents Wholesale Limited

LEADERSHIP

3Foodstuffs South Island Limited | Annual Report 2012

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.

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

banner Group, independent grocer

or foodservice members.

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.

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 co-

operative and paid for by deferring

the physical payout of the year-end

rebate of profits until each tranche

of shares is redeemed.

Our membership generally falls

in two categories; independent

grocers trading as members of one

of our banner groups:

• PAK’nSAVEfoodwarehouses

• NewWorldsupermarkets

• FourSquaresupermarkets

• OntheSpotconveniencestores

• Henry’sBeer,WineandSpirits;

or members who trade

independently of these groups

in the convenience grocery or

foodservice industries.

Over recent years, the foodservice

industry and the number of

customers/members involved

in that industry have grown

dramatically. These people trade

with our wholly-owned 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-wide customer

base. Trents trade via seven

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 Company which, in turn,

is the registered proprietor or holds

the head lease of the property

concerned.

The Company 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, industry-related

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.

ABOUT US

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 Business1. 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

ANNUAL GENERAL MEETING


A HELPING HAND

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.

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.

Consequently, in the year under review the co-operative strived to dedicate time, effort and energy to: • rebuildingourearthquake

damaged properties whilst dealing with the on-going insurance issues,

• supportingourmemberswhohave been adversely affected by the earthquakes in areas such as supply, water, insurance, etc.

• ensuringourcommercialbuildings

in Christchurch adhere to the new

building code,

• deliveringoneachbannerGroup’s

brand promise,

• renewingfocusonthein-store

shopping experience,

• theintroductionofinvoicescanning

and workflow to manage members’

charge through invoice matching.

(This new technology has eliminated

the manual entry of thousands of

invoices each month),

• streamliningtherolloutofSAP

into stores,

• refurbishmentandexpansionsof

several retail properties, and

• activelyplanningandpreparing

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

throughout New Zealand.

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

stores both experienced lift in trade.

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

CHAIRMAN’S REVIEW


PRODUCT RANGE

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 ProfitabilityThe 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

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 MembersTotal 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,therewilltheLoyaltyrebate 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,therewillbethepaymentof 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

CHAIRMAN’S REVIEW continued


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

• Thirdly,therewillbespecial$10.0mTrading 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 ex-members 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

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 DividendsIn summary, this year’s total rebates and dividends to members are;

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:• Selfcheckout• GS1netandeCommerce

enablement• EssentialITinfrastructureupgrades• Websiteandonlinepresence• Produce• Invoicescanning

Project Valentine/SAPThe 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 complianceThe 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 DevelopmentThe 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

Bulk and Repack rebates $132.2m

Supplier rebates $16.6m

Monthly cash rebates $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 $6.2m

Total Dividends and Rebates $224.0m

Imputation Credits $10.8m

Total value of distributions to Members $234.8m

CHAIRMAN’S REVIEW continued

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; • therebuildofNewWorldStMartins

and Redcliffs which both had to be demolished due to being damaged beyond repair in the February 2011 earthquake,

• thebuildingofour10thnew

PAK’nSAVE in Blenheim, • therefurbishmentofNewWorld

Windsor, • extensiontoPAK’nSAVEDunedin,

and • mostimportantly,thebuildingof

our new state-of the art distribution centre covering 38,000 square metres in Hornby.

Supply ChainOver 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 three-stage 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.

AdministrativeIn 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.

SummaryI 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


RETAIL EXPERIENCE


PAK’nSAVEeveryday low prices at

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 short-term 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.

NEW WORLDIn 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.

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 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.

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.

every day a

FRESH FOODS


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

FOUR SQUAREWe 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 Mid-Canterbury 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.

Highlights for the year included:• sixnewTVcommercialswere

produced and rolled out,• participationinstorewiththetheme

of Rugby World Cup,• asuccessfulSAPpilotforfive

stores with module 1,• afive-yearstrategicplanwas

approved and presented to the members,

• thelaunchofanationalFourSquare web site, and

• sponsorshipofthreenewStJohnHealth Shuttles to the value of $345,000.


HENRY’S

TRENTS

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.

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: • Thekeyhighlightwasthepurchase

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.

• TherebrandingofourOntheSpot 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.

• ThesuccessfulintegrationoftheNational Prisoner Ration supply initiative throughout the country.

beers, wines & spirits

Wholesale Ltd

A FRIENDLY SMILE


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.

FOOD for thought

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

Major SponsorshipThe 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,HospitalFriends–aservice

that is provided in smaller hospitals where volunteers chat and give assistance to patients and relatives in nominated wards,

• HospitalHosts–wherevolunteersare 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 FoundationThis 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.

MilestoneThe 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!

GrantsThis year, the following grants were distributed to groups and individuals in the South Island community:Educational Grants $70,900Community Grants $360,732

The Trustees continue to monitor the Canterbury region to assist community groups starting up after the settling down period of earthquakes.

SponsorshipAt 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 SupportersJohn & Jane MullinsArron PerriamRoger & Heather Davidson

New Sponsors• DS & CM Howard Limited

– PAK’nSAVE Richmond• SC & JD McDonald Limited

– PAK’nSAVE Riccarton

• 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

ResignationsOn 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.

TrusteesJan 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

COMMUNITY TRUSTFoodstuffs (South Island)


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

NATIONAL PROGRESS REPORT


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.

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.

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.

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.

Foodstuffs (Wellington) Co-operative

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

is scheduled to launch in early 2013.

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

New Zealand. It is scheduled to be

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 talked-about 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 co-ordinate 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

NATIONAL PROGRESS REPORT continued

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 Smoke-free 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.

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

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


PAK’nSAVE EXECUTIVE COMMITTEE Steven McDonald [Chairman] PAK’nSAVE Riccarton

Stephen Boock PAK’nSAVE Northlands

Bryan Dobson PAK’nSAVE Invercargill

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 COMMITTEEChris Griffin [Chairman] New World Gore

Phill Blackburn New World Ilam

Nigel Bond New World South City

Kathy Frampton New World Northwood

Warren McKenzie New World Windsor

Craig Nieper New World Centre City

FOUR SQUARE EXECUTIVE COMMITTEEGraeme Neilson [Chairman] Ascot Four Square

Paddy Breen Mackenzie Four Square

Pat Carroll (joined Feb 2012) Culverden Four Square

Lynette Eddington (resigned Dec 2011) Top Notch Four Square

Rick Haaima Palmerston Four Square

Cushla Jones Fern Grove Four Square

John McDonald Pleasant Point Four Square

John Niles Owaka Four Square

Ian Steele Hanmer Springs Four Square

HENRY’S BWS EXECUTIVE COMMITTEECarl Wild [Chairman]Keith Miles

Henry’s CityHenry’s RollestonHenry’s New BrightonHenry’s RangioraHenry’s HornbyHenry’s WoolstonHenry’s BishopdaleHenry’s Tower JunctionHenry’s FerrymeadHenry’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

CORPORATE EXECUTIVESSteve Anderson Chief Executive Officer

Yvonne Botha Executive Assistant

Roger Davidson General Manager Property & Retail Development

Kim DeGarnham General Manager Administration & Members Services / Company Secretary

Philip Lemon General Manager Trents Wholesale Limited

Alan Malcolmson General Manager Retail Operations

John Mullins General Manager Supply Chain

Malcolm Wratt General Manager Finance

Philip Wright General Manager Information Technology

SENIOR EXECUTIVEFinance

Simon Hughes Group Finance Manager

Murray Trim Decision Support Manager

Andrew Wight Internal Audit Manager

Administration & Members Services

Ron Bitschkat Administration & Employee Services Manager

Chris Dorward Manager Members Services

Information Technology

Chris Cameron Online Media Manager

Ana Connor eCommerce Manager

Gary Cowens IT Operation Services Manager

Gordon McCoy Business Systems Manager

Philip Smith Project Delivery Manager

Retail OperationsRetail Brands

Tim Donaldson Retail Brands Manager

Danny Halligan Henry’s BWS Group Manager

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

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

EXECUTIVE TEAM

ARCHITECTURE

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


INDEPENDENT AUDITOR’S REPORTon 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 statementsThe Directors are responsible for the preparation of a summary of the audited financial statements, in accordance with FRS-43 Summary Financial Statements.

Auditor’s responsibilityOur 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.

OpinionIn 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 FRS-43 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 2012Christchurch


FINANCIAL STATEMENTS

Foodstuffs South Island Limited Group Financial Statements

Income Statements 32

Statements of Comprehensive Income 33

Statements of Changes in Shareholders’ Equity 33

BalanceSheets 34

Consolidated Statement of Cash Flows 35


GROUP PARENT2012 2011 2012 2011

$000 $000 $000 $000

Revenue from sale of goods 2,431,653 2,339,141 2,221,039 2,139,841

Other income 127,904 120,901 84,579 91,823

Total revenue and other income 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)

Rebates to members ( 198,629) ( 196,112) ( 198,474) ( 195,987)

Share of profit/(loss) from associates ( 3) 140 ( 33) -

Profit/(Loss) before tax 34,410 15,302 23,783 ( 3,109)

Income tax expense:

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) - -

Effect of change in tax rate - 413 - ( 88)

Total income tax (expense)/benefit ( 10,092) ( 39,163) 2,576 3,941

Net Profit/(Loss) for the year after tax 24,318 ( 23,861) 26,359 832

Attributable to:

Shareholders of the parent company 24,318 ( 23,861) 26,359 832

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.

FOR THE YEAR ENDED 29 FEBRUARY 2012INCOME STATEMENTS

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

GROUP PARENT2012 2011 2012 2011

$000 $000 $000 $000

Net Profit/(Loss) for the year 24,318 ( 23,861) 26,359 832

Other comprehensive income:

Movement in other non-distributable reserves (not taxable) 948 482 55 122

Movement in investments FVTOCI reserve (not taxable) ( 9,168) ( 3,296) - -

Movement in cash flow hedge reserve (not taxable) 640 - 640 -

Total comprehensive income for the year 16,738 ( 26,675) 27,054 954

Attributable to:

Shareholders of the parent company 16,738 ( 26,675) 27,054 954

GROUP PARENT2012 2011 2012 2011

$000 $000 $000 $000

At 1 March 2011 208,011 203,190 65,544 33,094

Total comprehensive income 16,738 ( 26,675) 27,054 954

Dividends payable ( 9,410) ( 11,778) ( 9,410) ( 11,778)

Total recognised income and expenses 7,328 ( 38,453) 17,644 ( 10,824)

Share issue 33,000 43,274 33,000 43,274

At 29 February 2012 248,339 208,011 116,188 65,544

Basis of preparationThese 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.


FOR THE YEAR ENDED 29 FEBRUARY 2012STATEMENTS OF COMPREHENSIVE INCOME

On behalf of the Board24 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.

GROUP PARENT2012 2011 2012 2011

$000 $000 $000 $000

ASSETS

Non-current assets

Property, plant and equipment 451,647 435,978 22,573 25,712

Intangible assets 15,075 17,457 14,969 17,167

Investments in subsidiaries - - 301,949 276,156

Investments in associates 5,483 5,035 5,299 4,881

Investments held at fair value:

Investments in listed companies 26,690 35,611 - -

Investments in other related companies 13,242 11,896 13,242 11,896

Derivative financial instruments 640 - 640 -

Total non-current assets 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

EQUITY

Capital and reserves attributable to equity holders

Share capital 120,158 87,158 120,158 87,158

Other reserves 69,605 85,462 1,186 496

Retained earnings 58,576 35,391 ( 5,155) ( 22,110)

TOTAL EQUITY 248,339 208,011 116,188 65,544

Liabilities

Non-current liabilities

Borrowings 68,079 74,037 68,079 74,037

Retirement benefit obligations 2,328 1,902 2,328 1,902

Deferred income tax liability 45,257 42,013 2,232 3,084

Provisions 616 752 616 752

Total non-current liabilities 116,280 118,704 73,255 79,775

Current liabilities

Trade and other payables 236,868 205,179 232,860 202,289

Borrowings 182,165 174,952 182,165 174,952

Provisions 1,400 - - -

Rebates payable 70,888 71,054 70,873 71,034

Current income tax payable 2,638 1,042 7 ( 10,179)

Total current liabilities 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

AS AT 29 FEBRUARY 2012BALANCE SHEETS

GROUP PARENT2012 2011 2012 2011

$000 $000 $000 $000

Cash flows from operating activitiesCash 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

Cash was applied to:

Purchases, wages and expenses 2,270,883 2,201,938 2,055,603 2,011,449

Members rebates 198,801 185,558 198,642 185,412

Interest paid 7,558 8,266 7,651 592

Member Trading accounts - - - -

Income tax paid 4,404 2,250 3,396 ( 224)

2,481,646 2,398,012 2,265,292 2,197,229

Net cash flow from operating activities 30,427 80,993 2,162 57,662

Cash flows from investing activities

Cash was provided from:

Advances from other related parties 5,285 6,670 - 4,514

Dividends 2,230 3,475 13,055 10,382

Insurance proceeds received for replacement Property, Plant, & Equipment 10,648 9,778 107 1,040

Sale of property plant and equipment 3,047 3,439 293 354

21,210 23,362 13,455 16,290


Purchase of intangibles 2,896 3,489 3,530 3,440

Purchase of property plant and equipment 51,243 40,139 5,542 9,784

Purchase of listed investments 247 - - -

Advances to related parties 1,468 1,517 10,762 1,518

55,854 45,145 19,834 14,742

Net cash flow from investing activities ( 34,644) ( 21,783) ( 6,379) 1,548

Cash flows from financing activities

Cash was provided from:

Share capital raised 33,000 43,274 33,000 43,274

33,000 43,274 33,000 43,274


Interest paid on Redeemable Preference Shares 1,815 1,804 1,815 1,804

Dividends paid on Retained Patronage Shares 11,768 12,683 11,768 12,683

Long term borrowings 5,958 38,858 5,958 38,858

19,541 53,345 19,541 53,345

Net cash flow from financing activities 13,459 ( 10,071) 13,459 ( 10,071)

Net increase/(decrease) in cash held 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

Represented by:

Bank 51,017 41,304 51,017 41,304

Overseas currency accounts ( 4) 467 ( 4) 467

Cash on hand 12 12 12 12

51,025 41,783 51,025 41,783


FOR THE YEAR ENDED 29 FEBRUARY 2012STATEMENTS OF CASH FLOWS

The network

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

Nelson 1Christchurch 5Dunedin 1Timaru 1Invercargill 1

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

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

Kaikoura 1Greymouth 1Rangiora 1Christchurch 9Timaru 1Dunedin 2Alexandra 1Queenstown 1

NEW WORLD

PAK’nSAVE

FOUR SQUAREON THE SPOT

HENRY’S BWS


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2012 Annual Summary Report for Foodstuffs South Island Ltd

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