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Coca-Cola Holdings NZ
Annual Report
For the year ended 31 December 2016
Coca-Cola Holdings NZ Limited
Annual Report
For the year ended 31 December 2016
Contents
Company Directory
Auditors Report
Directors Review
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Page
2
3
5
6
7
8
9
10
Coca-Cola Holdings NZ Limited
Company directory
As at 31 December 2016
Registered Office
Directors
Bankers
Business Location
The Oasis
Oasis Road
Mount Wellington
AUCKLAND
Caroline Beaumont
Christopher Litchfield
Bank of New Zealand
Westpac Banking Corporation
Australia & New Zealand Banking Group
The Oasis
Oasis Road
Mount Wellington
AUCKLAND
2
A member firm of Ernst & Young Global Limited
Chartered Accountants
Independent Auditor’s Report to the Shareholder of Coca-Cola Holdings NZ Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Coca-Cola Holdings NZ Limited (“the Company”) and its subsidiaries (together “the Group”) on pages 6 to 29, which comprise the consolidated statement of financial position of the Group as at 31 December 2016, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended of the Group, and the notes to the consolidated financial statements including a summary of significant accounting policies.
In our opinion, the consolidated financial statements on pages 6 to 29 present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2016 and its consolidated financial performance and cash flows for the year then ended in accordance with New Zealand equivalents to International Financial Reporting Standards Reduced Disclosure Regime.
This report is made solely to the Company’s shareholder. Our audit has been undertaken so that we might state to the Company’s shareholder those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholder, for our audit work, for this report, or for the opinions we have formed.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We provide consultancy and audit services to the Group. We have no other relationship with, or interest in, the Group. Partners and employees of our firm may deal with the Group on normal terms within the ordinary course of trading activities of the business of the Group.
Information Other than the Financial Statements and Auditor’s Report
The directors of the Company are responsible for the Annual Report, which includes information other than the consolidated financial statements and auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.
If, based upon the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibilities for the Financial Statements
The directors are responsible, on behalf of the entity, for the preparation and fair presentation of the consolidated financial statements in accordance with New Zealand equivalents to International Financial Reporting Standards Reduced Disclosure Regime, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
A member firm of Ernst & Young Global Limited
Chartered Accountants
In preparing the consolidated financial statements, the directors are responsible for assessing on behalf of the entity the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (New Zealand) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at the
External Reporting Board website: https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities. This description forms part of our auditor’s report
Auckland
23 August 2017
Coca-Cola Holdings NZ Limited
Directors Review
For the year ended 31 December 2016
The Directors of Coca-Cola Holdings NZ Limited present this Annual Report,
being the financial statements of the Group for the financial year ended 31
December 2016 and the auditor's report thereon.
The shareholder of the Group has exercised its right under section 211(3) of the
Companies Act 1993 and agreed that this Annual Report need not comply with
any of paragraphs (a), and (e) to (j) of section 211(1) and section 211(2) of the
Act.
For and on behalf of the Board, who authorised these financial statements for
issue on 23 August 2017
-') � { � ...... i& .... �� ................... Director
2 1 . � _ 2..a \, ..................................................... Date
5
Coca-Cola Holdings NZ Limited
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
Note 2016 2015
S'000's S'000's
Trading Revenue 632,204 531,708
Other income 3 11,065 8,367
643,269 540,075
Cost of goods sold 356,254 276,079
Selling and Marketing 87,407 81,267
Warehouse and Distribution 50,961 45,078
Administrative & Other 38,131 32,988
Total Expenses 4a 532,753 435,412
Profit before interest and income
tax 110,516 104,663
Net Finance Cost 4b 11,781 10,910
Income Tax Expense 13a 27,870 26,634
Net Profit for the year 70,865 67,119
Other Comprehensive Income
Cash flow Hedges: Gain / (loss)
taken to reserves (3,938) (1,872) Income tax on items of other
comprehensive income 1,103 524
Other Comprehensive Income for
the year net of tax (2,835) (1,348)
Total Comprehensive Income for
the year 68,030 65,771
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes
EV 6
Coca-Cola Holdings NZ Limited
Consolidated Statement of changes in Equity
For the year ended 31 December 2016
GROLi'
At 1 January 2016 (Restated)'
Profit for the period
Other comprehensive income
Total income and expense for the period
Equit) Transactions:
Shareholder equity contribution
At 31 December 2016
At 1 January 2015 (Restated)'
Profit for the period
Other comprehensive income
Total income and expense for the period
Equity Transactions:
Shareholder equity contribution
Finalisation of VMSL restructuring
Dividends paid
At 31 December 2015 (Restated)'
Ordinary Shares
$'000
142,419
142,419
Ordinary Shares
$'000
142,419
142,419
Share base payment reserve
S'OOO
426
305
731
Share base payment reserve $'000
130
296
426
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
1 Refer to change in accounting policy note under basis of preparation for further details.
cash Flow Hedge Reserve
$'000
6,108
(2,835)
(2,835)
3,273
Cash Flow Hedge Reserve
$'000
7,456
(1,348)
1,348
6,108
Amalgamation Reserve
$'000
Amalgamation Reserve
$'000
(2,692)
2,692
Retained Earnings
$'000
85,124
70,865
70,865
155,989
Retained Earnings
$'000
120,697
67,119
67,119
(2,692)
(100,000)
85,124
Total
$'000
Total
$'000
EY
234,077
70,865
(2,835t
68,030
305
302,412
268,010
67,119
(1,348)
65,772
296
(100,000)
234,077
7
Coca-Cola Holdings NZ Limited
Consolidated Statement of Financial Position
As at 31 December 2016
Current Assets
Cash and cash equivalents
Prepayments
Trade and other receivables
Inventories
Derivative financial instruments
Total Current Assets
Non-current Assets
Property, Plant and Equipment
Intangible assets
Prepayments
Derivative financial instruments
Total Non-current Assets Total Assets
Current Liabilities
Trade and other payables
Provisions
Derivative financial instruments
Interest bearing borrowings
Deferred income
Income Tax Payable
Total current liabilities
Non-Current Liabilities
Derivative financial instruments
Deferred income
Deferred tax liability
Interest bearing borrowings
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Reserves
Retained earnings
Total Equity
5
6
2016
$'000's
41,738
9,310
131,133
76,400
(Restated)1
2015
$'000's
56,864
7,267
122,728
80,952
100 7 __________________ ___;;;.;:...;;. _____ _
8
9
7
lla
llb
7
12a
7
13c
258,581 267,911
241,652 233,782
244,665 246,593
2,432 1,602
____ ...;;..,.:_.:;;. ___________ ___;;..;.;.:_...;...;;. ______ _
17,717 21,700
506,466 503,677
765,047 771,588
150,987 150,588
3,992
2
34,275
47 153
8,901 8,037
194,210 162,772
13,314 10,930
873
80,012 82,880
12b ___ _,;;;.��----------___;;�c.:...::.c:.__ ____ _ 174,226 280,929
14
15
268,425
462,635
302,412
142,419
4,004
155,989
302,412
374,739
537,511
234,077
142,419
6,534
85,124
234,077
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
1 Refer to change in accounting policy note under basis of preparation for further details.
EV s
Coca-Cola Holdings NZ Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
Operating activities
Profit before Interest and Tax
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of PPE
Amortisation of intangible assets
Changes in adjusted working capital
Changes in deferred income
Non cash share based payments
Changes on disposal of PPE
Changes in prepayments
Changes in provisions
Interest received
Interest paid
Income taxes paid
Other non-cash expenses
Net cash flows from operating activities
Investing activities
Proceeds from
disposal of PPE & SDA
Payments for -
PPE
Software development assets
Net cash flows used in investing activities
Financing activities
Proceeds from borrowings
Borrowings repaid
Dividends paid
Net cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
8
9
Note 2016
$'000's
110,516
25,448
3,184
(3,611)
768
305
529
(2,874)
(3,992)
555
(11,979)
(28,517)
90,332
759
(34,815)
(1,013)
(35,069)
17,719
(88,108)
(70,389)
(15,126)
56,864
41,738
2015
$'000's
104,663
24,594
2,521
13,910
(75)
296
(199)
798
(691)
1,106
(12,315)
(26,111)
690
109,187
597
(26,208)
(355)
(25,966)
110,398
(72,226)
(100,000)
(61,828)
21,393
35,471
56,864
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
E.Y 9
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
1 General information
Coca-Cola Holdings NZ Limited (CCH) is a wholly owned subsidiary of Coca-Cola Amatil Limited Australia (CCA). It is the holding company of
Coca-Cola Amatil (NZ) Limited (CCANZ) and Vending Management Services Limited (VMSL), together known as Group
CCANZ is the largest non-alcoholic beverage company in New Zealand. Its products include soft drinks, juice drinks, water, energy drinks,
sports drinks, dairy drinks, cordials, and coffee products. CCANZ also has a number of alcoholic distribution arrangements consisting of beers,
ciders, spirits and ready to drink beverages.
2 Summary of significant accounting policies
(a) Basis of preparation
The consolidated financial statements comprise the financial statements of CCH and its subsidiaries (the Group). The consolidated financial
statements of the Group comply with New Zealand Equivalents to International Financial Reporting Standards Reduced Disclosure Regime (NZ
IFRS RDR).
The consolidated financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand (NZ
GAAP) and the requirements of the Companies Act 1993. For the purposes of complying with NZ GAAP the Group is a for-profit entity. The
Group is eligible to report in accordance with NZ IFRS RDR on the basis that it does not have public accountability and is not a large for-profit
public sector entity.
The consolidated financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars unless
otherwise stated.
Measurement Base
These consolidated financial statements have been prepared under the historical cost convention, except where mentioned in the accounting
policies.
Comparative Information
Where necessary, comparative figures have been amended to correspond with current year classifications.
Change in Accounting Policy
As a result of the recent International Financial Reporting Standards Interpretation Committee's published agenda decision in relation to the
accounting requirements for deferred tax and specifically clarifying the criteria that entities are required to apply when determining the
recovery through sale or through use basis to determine tax values in relation to indefinite lived intangible assets, we have made the below
mentioned adjustments to our financial statements.
Previously, CCA had assessed that the recovery of the indefinite lived intangible assets would be through sale and therefore used tax bases for
this purpose (for example capital gains tax cost bases) to determine taxable temporary differences. However, as a result of the interpretation,
the deferred tax on CCA's investments in bottler agreement (IBA) assets have been adjusted to reflect recovery through use. The tax base for
the recovery through use approach is zero, in that there are no tax deductions available to the Group. Accordingly, deferred tax liabilities have
increased as a result.
These adjustments have been applied as a retrospective change in accounting policy, meaning adjustment to the opening balance sheet
position (1 January 2015) against retained earnings and goodwill, depending on whether the underlying IBA was acquired before or after New
Zealand's transition to International Financial Reporting Standards in 2004. The effect of these adjustments on the financial statements are as
follows:
Deferred tax liability
Retained earnings
1 January 2015
(restated)
$M
84,133
268,010
I January 2015 (as 31 December 2015
reported) (restated)
SM $M
22,830 82,880
329,313 234,077
31/12/2015 (as
reported)
$M
21,577
295,380
EV 10
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
(b) Foreign currency translation
Foreign monetary balances are converted to New Zealand dollars at the rates of exchange ruling at balance date and any unrealised gain or loss
resulting from the conversion is reflected in the consolidated statement of comprehensive income.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the
reporting date. Differences arising on settlement or translation of monetary items are recognised in the profit or loss with the exception of
monetary items that are designated as part of the hedge of the Group's net investment of a foreign operation. These are recognised in OCI until
the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to
exchange differences on those monetary items are also recorded in OCI.
Summary of significant accounting policies (continued)
(c) Basis of consolidation
Subsidiaries are all those entities over which the Group has control.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting
policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses
resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on
which control is transferred out of the Group.
The acquisition of subsidiaries is accounted for using the acquisition method. The acquisition method involves allocating the cost of the
business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition.
Where consideration for an acquisition is in excess of the net assets of the entity at the date of acquisition, and the entity was previously an
entity under common control of the ultimate parent, the excess is recorded in an amalgamation reserve in equity.
(d) Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable net of discounts, allowances and applicable
amounts of value added taxes such as the New Zealand Goods and Services Tax (GST). The following specific recognition criteria must also be
met before revenue is recognised:
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the amount of revenue
can be measured reliably.
(ii) Equipment rental
Revenue from installation and maintenance of equipment is recognised when the services have been performed and the amount can be
measured reliably.
{iii) Interest income
Interest income is recognised as the interest accrues using the effective interest method.
(iv) Rendering of services
Revenue from rendering of services is recognised when the services have been performed and the amount can be measured reliably.
EV 11
Coca-Cola Holdings NZ
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued)
(e) Investment in Bottler's Agreements
Notes to the consolidated financial statements
The Group has a Bottler's Agreement with The Coca-Cola Company (TCCC) which provides CCH with the exclusive rights to manufacture,
distribute, market and sell TCCC branded products in New Zealand, and are subject to certain performance criteria.
The agreements are generally for 10 year terms, and reflect a long and ongoing relationship between the Group and TCCC. No consideration is
payable upon renewal or extension of the agreements. In assessing the useful life of the agreements, consideration is given to the Group's
history of dealings with TCCC since 1939, their established international practices and equity interests in the Group, participation of nominees
of TCCC on CCA's Board of Directors and the ongoing profitability of TCCC brands. Accordingly, no factor can be identified that would result in
the agreements not being renewed or extended and therefore the agreements have been assessed as having indefinite useful lives, which
requires annual impairment testing.
(f) Goodwill
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non
controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed), subsequently, goodwill on
acquisition of business is included in intangible assets. It is carried at cost less any accumulated impairment losses and is tested for indicators
of impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is not amortised.
(g) Other intangible assets
Software development costs
Costs associated with developing or maintaining software programs are recognised as an expense as incurred. Costs that are directly
associated with the production of identifiable and unique software products controlled by CCH or Group and that will generate economic
benefits beyond one year, are recognised as intangible assets. Direct costs include the costs of employees dedicated to software development
and an appropriate portion of relevant overheads. Subsequent software development costs are measured at cost less accumulated
amortisation and impairment. Capitalised costs are amortised over the useful economic life of 2-10 years.
Licensing agreements
Costs associated with licensing agreements are capitalised. Subsequently they are carried at cost less accumulated amortisation and
impairment. They are amortised over the period during which benefits are expected to be received. This period does not exceed 20 years.
Trade Marks I Brand Names
Trademarks and brand names arising from acquisition are carried at cost less impairment and amortised over their useful economic life of 50
years.
(h) Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand, cash at banks and short term deposits with a maturity of one year or less that are
repayable to the Group on demand and are subject to an insignificant risk of changes in value.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods, depending
on the immediate cash requirements of the Group, and earn interest at the respective short term deposit rates.
EV 12
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued)
(i) Trade receivables
Trade and other receivables are recognised initially at fair value and subsequently carried at amortised cost using the effective interest rate
method. Where there is evidence that amounts due may not be fully or partly recoverable, an allowance for doubtful receivables is recognised
in the profit or loss.
(j) Inventories
Inventories are stated at the lower of cost (including fixed and variable factory overheads where applicable) and net realisable value. Cost is
determined on the basis of first-in-first-out, average or standard, whichever is the most appropriate in each case. Net realisable value is the
estimated selling price in the ordinary course of business, less the cost of completion and selling expenses.
(k) Financial assets and liabilities
The Group classifies its financial assets and liabilities as either at amortised cost or fair value through the consolidated statement of
comprehensive income. The classification of financial assets depends on -
• the entity's business model for managing financial assets; and
• the contractual cash flow characteristics of the financial asset.
Financial assets or liabilities recognised initially at fair value are subsequently measured at either fair value or amortised cost using the effective
interest method. In the case of financial assets or liabilities not subsequently measured at fair value, the initial fair value is adjusted for directly
attributable transaction costs.
Recognition and derecognition
All regular purchases and sales of financial assets and liabilities are recognised on the trade date, which is the date the Group commits to
purchase or sell the asset or liability. Financial assets and liabilities are derecognised when the right to receive or pay cash flows has expired or
been transferred.
i) Financial assets and liabilities at fair value through profit or loss.
Financial assets or liabilities at fair value through profit or loss are derivatives or financial assets or liabilities designated as at fair value through
profit and loss. The effective portion of the fair value gain or loss on derivative instruments designated in cash flow hedge relationships is
recognised directly in equity. The Group's accounting policy in this regard is explained in Note 7.
ii) Financial assets and liabilities at amortised cost
A financial asset or liability is classified at amortised cost if it is acquired by the Group where the objective is to collect or pay contractual cash
flows on specified dates for payments of principal and interest.
Financial assets and financial liabilities at amortised cost include trade and other receivables and payables, bonds, loans, and bank overdrafts.
Hedge accounting is applied to certain interest bearing liabilities (refer to Note 7). In such instances, the resulting fair value adjustments mean
that the carrying value differs from amortised cost.
The fair value of all financial assets and liabilities are based on an active market price. If the market for a financial asset is not active, the Group
establishes fair value by using valuation techniques such as discounted cash flow analysis and option pricing models. These include reference to
the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same.
E.Y 13
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued)
(I) Derivative Financial Instruments
Offsetting of derivative financial assets and derivative financial liabilities
The Group presents all its derivative financial assets and derivative financial liabilities arising from fair value measurement on a gross basis. The
net movements on the derivative financial assets and derivative financial liabilities are disclosed under Note 7.
(ml Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of any new shares are shown in equity as a
deduction, net of tax.
(n) Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation and impairment. Land and buildings are measured at deemed cost, as of the
date of transition to NZ IFRS, less depreciation on buildings and less any impairment losses.
For accounting purposes, the depreciation of property, plant and equipment other than land is provided for on a straight line basis over their
estimated economic lives. Estimated economic lives are as follows:
Buildings
Plant & equipment
Finance leases
50 years
5-15 years
2-20 years
Useful lives and depreciation methods are reviewed at the end of every financial year.
Capital work in progress is not depreciated as assets are not yet in the location and condition necessary to be capable of operating in the
manner intended.
For taxation purposes, the maximum rates of depreciation allowable are used.
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its
use.
Any gain or loss arising on derecognition of the asset (cal cu lated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the profit or loss in the year the asset is de recognised.
EV 14
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued) (o) Trade and Other PayablesTrade and other payables are recognised initially at fair value and subsequently carried at amortised cost using the effective interest rate
method. Liabilities are brought to account for amounts payable in relation to goods received and services rendered, whether or not billed at
reporting date.
(Pl Borrowing costs Interest expense is recognised on an accrual basis. Borrowing costs are capitalised when they are directly attributable to the acquisition,
construction or production of a qualifying asset. A qualifying asset is an asset that takes a substantial period of time to get ready for its
intended use or sale. Specific and general borrowing costs are capitalised. Amounts capitalised in any period do not exceed the borrowing
costs incurred during the period, and the resulting carrying amount of the qualifying asset will not exceed its recoverable amount.
Capitalisation commences when expenditures and borrowings are being incurred for the asset and when activities that are necessary to
prepare the asset for its intended use or sale are in progress.
(q) Income tax
(i) Current tax
Current tax liability or asset represents amounts payable or receivable in relation to income taxes attributable to taxable profits of the current
or prior financial years, less instalments of income tax paid. The tax rates and tax laws used to compute the amount are those that are enacted
or substantially enacted by the Statement of Financial Position date.
(ii)Deferred tax
Deferred tax is provided for using the liability method for all temporary differences arising between the tax bases of assets and liabilities and
their carrying value for financial reporting purposes. Tax rates enacted or substantively enacted at the Statement of Financial Position date are
used to determine deferred tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which temporary
differences can be utilised.
Deferred tax liabilities are recognised for all taxable temporary differences, except where the deferred tax liability arises from the initial
recognition of an asset or liability in a transaction, other than a business combination, and at the time of the transaction affect neither
accounting profit nor taxable profit or loss.
Deferred tax is provided on temporary differences arising on investments in controlled entities, except where the timing of the reversal of
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset only when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
EV 1s
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued)
Current and deferred taxes relating to transactions recorded in equity are recorded in the matching class of equity.
(iii) Other taxes
Revenue, expenses and assets are recognised net of the amount of GST except:
· When the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
· Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance
sheet.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to the taxation authority.
(r) Leases
Operating leases are those where the lessor effectively retains substantially all the risks and benefits incident to ownership of the leased
property. Operating lease payments are charged to the profit or loss on a straight line basis over the lease term. Lease income from operating
leases is recognised in the profit or loss on a straight line basis over the lease term.
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at
the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments
are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognised in finance costs in profit or loss.
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date, whether
fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if
that right is not explicitly specified in an arrangement.
EV 16
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Summary of significant accounting policies (continued)
(s) Employee entitlements
(i) Wages, salaries, annual leave, long service leave, sick leave and other benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to balance date including related on-costs.
The benefits include wages and salaries, annual leave, long service leave, incentives, compensated absences, and other benefits, which are
charged against profits in their respective expense categories when services are provided or benefits vest with the employee. The provision for
employee benefits is measured at the remuneration rates expected to be paid when the liability is settled. The liability for employee
entitlements is carried at the present value of the estimated future cash flows.
(ii)Equity compensation plans
Certain employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as
consideration for equity instruments of CCA.
CCA shares are awarded to employees of the Group in accordance with the requirements of three share plans, being:
i) CCA Long Term Incentive Plan
ii) CCA Employees Share Plan; and
iii) CCA Executive Post Tax Share Purchase Plan
Further details in relation to these plans are covered in Note 16.
Employer contributions to the CCA Employees Share Plan are charged as an expense over the vesting period. Any amounts of unvested shares
held by the related trust are controlled by the Group until they vest and are recorded at cost in CCA's statement of financial position within
equity as shares held by equity compensation plans until they vest.
Summary of significant accounting policies (continued)
(t) Comparative information
Where necessary, comparative information is reclassified to achieve consistency in disclosure with the current financial amounts and other
disclosures.
(u) Restructuring Provision
Restructuring provisions are only recognised when general recognition criteria are fulfilled. The Group needs to follow a detailed formal plan
regarding the business (or part of the business) concerned, i.e. the location, the number of employees effected, a detailed estimate of
associated costs and general time frames. The employees affected must have a valid expectation that restructuring is being carried out and/or
that the implementation has been initiated.
(v) Impairment
Non-financial assets
Non-financial assets, except for inventory and deferred tax, are assessed annually for any indication of impairment.
Impairment losses are recognised in the profit or loss under administrative and other expenses.
Goodwill
Impairment is determined by assessing the recoverable amount of the cash-generating unit, to which·the goodwill relates. An asset's
recoverable amount is the higher of an asset's or CGU's fair value less costs of disposal and its fair value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that are largely dependent of those from other assets or
groups of assets. When the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.
When the goodwill forms part of a cash-generating unit and an operation within that unit is disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash
generating unit retained. Impairment losses recognised for goodwill are not subsequently reversed.
E.V 17
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
GROUP
2016 2015
$'000 $'000
3 Other Income
Equipment Rental 246 490
Royalties Received 41 209
Rendering services 10,426 7,473
Management fees 352 195
Total Other Revenue 11,065 8,367
GROUP
2016 2015
$'000 $'000
4 Expenses
(a) Total expenses include:
Depreciation and Amortisation expense
Buildings 1,427 1,429
Plant and Equipment 24,021 23,165
Amortisation of Software 2,745 2,281
Amortisation of trademarks/brand names 439 239
Total depreciation & amortisation expense 28,632 27,114
Employee entitlements
Wages and salaries 84,415 79,333
Defined contribution superannuation plan 2,880 2,701
Share based payment expense 1,098 1,078
Other Employee Benefits 4,397 3,624
Total employee entitlements 92,790 86,736
Lease Payments
Minimum lease payments-operating 6,946 6,722
6,946 6,722
Other Expenses
Management Fees 28 66
28 66
(bl Financing cost
Bank loans and overdraft interest 11,461 11,262
Guarantee fees 875 754
Total Interest cost 12,336 12,016
Interest received-external parties 555 1,106
Total interest received 555 1,106
Net financing cost 11,781 10,910
EV 18
Coca-Cola Holdings NZ
Annual Report for the year ended 31 December 2016
5 Trade and other receivables
Trade Debtors Impairment Provision Owing by related parties Other Receivables Total Trade and other receivables
2016
$'000
126,523 (758)
2,168 3,200
131,133
Terms and conditions of related party receivables are disclosed in note 20.
6 Inventories
Raw materials
Finished goods Other Inventories Total inventories
2016
$'000
22,646 49,123
4,631 76,400
Notes to the consolidated financial statements
GROUP
GROUP
2015
$'000
119,032 (371) 774
3,293 122,728
2015
$'000
26,850 49,989
4,113 80,952
Other inventories include work in progress, spare parts (manufacturing and cold drink equipment) and fountain stock (post mix products)
7 Derivative financial instruments
All derivative financial instruments are in hedging relationships. The fair value of the derivatives are as follows:
Current Assets Non- Current assets
Current liabilities Non- Current liabilities
2016
$'000
17,717
13,314
The notional amounts of the instruments relating to the above fair values are as follows
Notional amounts
Interest rate swaps Cross currency swaps
2016
$'000
55,000 118,653
GROUP
2015
$'000 100
21,700 2
10,930
2015
$'000
50,000 118,653
EV 19
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
7 Derivative financial instruments (continued)
Recognition and measurement
Derivative financial instruments are used to manage exposures to certain financial risks and are recognised initially at fair value. On subsequent
revaluation, for example, from trade date, derivatives are carried as assets when their fair value is positive and as liabilities when their fair
value is negative.
The Group designates its derivatives as hedges for either:
• hedges for the fair values of certain liabilities (fair value hedges)
• hedges for the cash flows associated with assets and liabilities and highly probable forecast transactions (cash flow hedges)
Derivatives - debt related
Debt related derivatives apply solely to hedging of the foreign currency principal amounts and fair values of borrowings. During the financial
year, the Group held cross currency swaps to mitigate exposures to changes in the fair value of foreign currency denominated debt from
fluctuations in foreign currency and interest rates. The hedged items designated were a portion of the Group's foreign currency denominated
borrowings. The changes in fair values of the hedged items resulting from movements in exchange rates and interest rates are offset against
the changes in the value of the cross currency swaps. The objective of this hedging is to convert foreign currency borrowings to local currency
borrowings. Hence, at inception, no significant portion of the change in fair value of the cross currency swap is expected to be ineffective.
Ineffectiveness may arise from credit valuation adjustments and is recognised in the income statement as finance costs.
Gains or losses from remeasuring the fair value of the hedge instruments are recognised within net finance costs in the income statement and
are offset with the gains and losses from the hedged item where those gains or losses relate to the hedged risks. The hedge relationship is
designed to be highly effective because the notional amount of the cross currency swaps is the same as that of the underlying debt and all cash
flow and reset dates coincide between the borrowing and the swaps.
The effectiveness of the hedging relationship is tested at inception and at regular intervals thereafter by means of cumulative dollar offset
effectiveness calculations. The primary objective is to determine if changes to the hedged item and the derivative are highly correlated and
thus support the assertion that there will be a high degree of offset in fair values achieved by the hedge.
Derivatives - non-debt related
Non-debt derivatives relate to all other derivatives other than those that are debt related (being foreign currency, commodity and interest rate
because they do not impact the calculation of net debt). Cash flow hedges are used to hedge future cash flows or a probable transaction that
could affect the income statement. Any gain or loss on effective portions of the hedging instrument is recognised directly in equity, while the
ineffective portion is recognised in the income statement as finance costs. Amounts recognised in equity are transferred to the income
statement as and when the asset is consumed. If the forecast transaction is revoked or no longer expected to occur, amounts previously
recognised in equity are transferred to the income statement over the life of the underlying exposure. Derivatives financial instruments in a
hedge relationship are initially recognised in equity. Any gain or loss is reclassified to the income statement when the Group exercises,
terminates, or revokes designation of the hedge relationship. Ineffectiveness may arise from credit valuation adjustments and is recognised in
the income statement as finance costs.
Interest bearing loans of the Group currently bear an average variable interest rate of 3.4% (2015: 3. 7%). The Group has entered into Interest
Rate Swap and Cross Currency Swap contracts under which it has a right to receive interest at variable rates and to pay interest at fixed rates
ranging between 4.5% and 6.5%_ (2015: 4.4% and 6.5%). Swap contracts are in place to cover 56.5% (2015: 60%) of the outstanding borrowings.
EV 20
Coca-Cola Holdings NZ
Annual Report for the year ended 31 December 2016
8 Property, plant and equipment
Cost or valuation
At 1 January 2015
Additions
Disposals/ write offs
Transfers
At 31 December 2015
Additions
Disposals/ write offs
Transfers
At 31 December 2016
Depreciation
At 1 January 2015
Depreciation charge for the year
Disposals/ write offs
At 31 December 2015
Depreciation charge for the year
Disposals/ write offs
At 31 December 2016
Net book value
At 31 December 2016
At 31 December 2015
Land and Construction
Buildings in progress
$'000 $'000
85,375 7,597
164 25,365
1,027 (1,360)
86,566 31,602
178 6,652
(43)
12 (30,818)
86,713 7,436
11,801
1,429
13,230
1,427
(72)
14,585
72,128 7,436
73,336 31,602
Notes to the consolidated financial statements
Plant and Total
Equipment
$'000 $'000
360,990 453,962
4,390 29,920
(3,844) (3,844)
637 304
362,173 480,341
27,913 34,743
(17,800) (17,843)
30,565 (242)
402,851 496,999
212,887 224,688
23,165 24,595
(2,724) (2,724)
233,329 246,559
24,021 25,448
(16,588) (16,660)
240,762 255,347
162,089 241,652
128,844 233,782
EV 21
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
9 Intangible Assets
Bottlers Goodwill
1 Computer
Agreement Software
$'000 $'000 $'000 Cost
At 1 January 2015 218,939 9,462 23,425
Additions 654 Disposals/ write offs (299)
Transfers (304) At 31 December 2015 218,939 9,462 23,476
Additions 1,013 Disposals/ write offs
Transfers 242 At 31 December 2016 218,939 9,462 24,731
Amortisation or impairment
At 1 January 2015 8,903
Amortisation 2,281 Disposals/ write offs (108)
At 31 December 2015 11,076
Amortisation 2,745 Disposals/ write offs
At 31 December 2016 13,821
Net book value
At 31 December 2016 218,939 9,462 10,911
At 31 December 2015 218,939 9,462 12,400
1 Goodwill relates to the purchase of the Cafe Direct business from Amatil Beverages NZ limited in 2007
2 Trade marks/Brand names relates to the purchase of the Baker Halls Brand in 2009
Trademarks/
Brand Names2
$'000
11,974
11,974
11,974
5,942
239
6,181
439
6,621
5,353
5,793
Total
$'000
263,800
654
(299)
(304) 263,851
1,013
242 265,106
14,845
2,521
(108) 17,258
3,184
20,442
244,665
246,594
EV 22
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
10 Investment in subsidiary
The consolidated financial statements include the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 2(c)
Name of entity
Coca-Cola Amatil (N.Z.) Limited
Vending Management Services Limited1
1 Company deregistered on 23 June 2016
lla Trade and other payables
Creditors and Borrowings Owing to related parties Employee entitlements Accrued expenses Total trade and other payables
llb Provisions
Provision - Current Total Provisions
Principal activity
Manufacture and distribution of beverages
Hardware and software design for the vending industry
GROUP
2016
$'000
77,404 14,770
9,821 48,992
150,987
GROUP
2016
$'000
Provisions in 2015 relate to relocation and redundancy costs associated with the new Keri juice plant.
GROUP
2016
$'000 12 Interest bearing borrowings
(a) Current
Loan Facility -current1 33,000 Lease Liability - current 1,275
34,275
(b) Non current
Loan Facility- non-current1
Bonds-non-current2 168,515 Lease Liability - non current 5,711
174,226
1. The loan facility matures in October 20172. The bonds are in 3 tranches. The maturity dates are detailed below.
2016
Face Value Tranche
(NZD) (OOO's) Maturity
Tranche 1 - NZD 50,000 Aug-18 Tranche 2 - AUD 46,676 Jul-21 Tranche 3 - USO 71,839 Sep-23
168,515
2016
100%
2015
$'000
95,169 14,203
8,501 32,715
150,588
2015
$'000
3,992 3,992
2015
$'000
110,000
170,929
280,929
2015
Face Value (NZD) (OOO's)
50,000 47,830 73,099
170,929
2015
100%
100%
Maturity
Aug-18 Jul-21
Sep-23
EV 23
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
13 Income Taxation
(a) Reconciliation of effective tax rate
Net Profit before taxation Prima Facie tax at 28% Tax effect of permanent differences: Other non-allowable expenses Adjustment in respect of Prior year Income tax expense
(b) Components of income tax expense
Current income tax expense Deferred tax expense Adjustments in respect of prior years Income tax expense reported in statement of comprehensive income
(c) Deferred tax assets (liabilities)
(i) Deferred taxes
Deferred tax liabilities
2016
$'000
98,735 27,646
370 (146)
27 870
27,980 36
(146)
27,870
80,012
(ii) Movement in Net Deferred tax assets/(liabilities) for the financial year
GROUP (Restated) 1
2015
$'000
93,753 26,251
226 157
26 634
27,202 (725) 157
26,634
82 880
Opening Balance (82,880) (84,133) Deferred tax expense (36) 725 Recognised against equity 1,103 524 Adjustment in respect of prior year ---�1,_8_0 _1 _________________ 4 ______ _ Net deferred tax liability (80,012} (82,880)
==::::::!::::===::::::::::::!::::::=============================
(iii) Components of deferred tax liabilities
Gross taxable temporary differences: Provision for employee benefits Provision for current assets Property, plant and equipment and intangibles Recognised in equity Other Total
Deferred tax liability at 28%
3,706 1,041
(286,373) (4,167)
35 (285,758}
(80,012)
1 Refer to change in accounting policy note under basis of preparation for further details.
5,453 841
(293,484) (8,705)
(106) (296,001}
(82,880)
EV 24
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
14 Contributed equity
Ordinary shares -1,015
Total contributed equity
2016
$'000
142,419
142,419
GROUP
2015
$'000
142,419
142,419
All ordinary shares are issued and fully paid up. The shares have equal voting rights and share equally in dividends and surplus on winding up.
Employee Equity Compensation Plan reflects shares awarded to employees of the Group; refer to note 16 for further details.
15 Reserves
Sharebased Payment Reserve
Cash Flow Hedge Reserve
Total Reserves
16 Long Term Incentive Plans (LTIP)
2016
$'000
731
3,273
4,004
GROUP
2015
$'000
426
6,108
6,534
Under CCA's LTIP, senior executives (upon approval by the Board) have the opportunity to be rewarded with fully paid ordinary shares,
providing the LTIP meets minimum pre-determined hurdles covering a three year period, as set by the People Committee. These shares are
purchased on market or issued to the trustee once the LTIP vests. In prior years, half of the grant was subject to a Relative Total Shareholder
Return (T5R) performance condition and the other half was subject to an Earnings per Share (EPS) performance condition. Employees remain
subject to service conditions as determined by the Board in its absolute discretion.
Commencing with the LTIP 2015-2017, there are now three performance conditions namely Relative TSR, Absolute TSR and EPS.
Dividends are payable to participants of the LTIP 2016-2018 only once the rights vest into shares.
The fair value of shares offered in the LTIP 2016-2018 is determined by an independent external valuer using an option pricing model with the
following inputs:
Grant date
Grant date share price
Volatility
Dividend yield
Risk free rate
18 May 2016
$8.99
21.0%
5.1%
1.6%
During the financial year, the number of share rights offered to executives of the Group under the Plan, and which are subject to performance
hurdles, was 51,920 (2015: 52,404), with a weighted average fair value of NZD $4.83 / AUD $4.66 (2015: NZD $6.48 / AUD $6.08).
The amount expensed in relation to the LTIP is $304,506 (2015: $296,761).
EV 2s
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
Employees Share Plan (ESP)
The ESP provides all full time and part time permanent employees with an opportunity to contribute up to 3% of their base salary to acquire
shares in CCA. The ESP is administered by a trustee which acquires and holds shares for the benefit of the participants. These shares have been
purchased on market at the prevailing market price. Shares that have been forfeited under the terms of the ESP are also utilised. For every
share acquired with amounts contributed by each participant, a matching share is acquired by the trustee, which under normal circumstances
vests with the employee after a period of two years from their date of issue (acquisition or utilisation) and are acquired with contributions
made by the employing entities. There are no performance conditions. Members of the ESP receive dividends on both vested and unvested
shares held on their behalf by the trustee.
The amount expensed in relation to the Employee Share Plan is $789,703 (2015: $772,414).
Executive Post-tax Share Purchase Plan
All senior executives are required to have a portion of their short term incentives deferred as restricted shares. The shares are purchased on
market and trading of these shares is restricted for 12 months for 50% of the shares, with the remaining 50% restricted for 24 months.
Dividends are payable to the participants of the Plan.
The amount expensed in relation to the Executive Post-tax Share Purchase Plan for the Group was $372,142 (2015: $276,930).
Recognition and Measurement
The value of services provided by employees to the Group in return for shares granted under employee ownership plans, is measured by
reference to the fair value of the shares as at the grant date. Fair values are determined as the cost of shares purchased for employer
contributions to the ESP (shares are purchased at grant date), and are determined by an independent external valuer for shares granted under
the LTIP (shares are purchased at vesting date).
The fair value of shares is charged to the income statement over the vesting period, and a matching increase in the share based remuneration
reserve is recognised, representing the obligation to provide these shares on vesting. On vesting, the treasury shares account and this reserve
are reduced.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition,
such as Relative TSR and Absolute TSR or subject to service conditions being fulfilled (as determined by the Board in its absolute discretion).
EV 26
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
17 Remuneration to auditors
During the year the following fees were paid or are payable for the services provided by the auditor of the parent entity and its related
practices firms.
Amounts received or due and receivable by Ernst & Young for:
Audit of the financial reports-Ernst & Young
Advisory Services1
Total remuneration for audit and non-audit services
2016
170
37
207
1. Advisory services provided relate to remuneration benchmarking services.
18 Contingent liabilities
The directors have not identified any contingent liabilities.
19 Commitments
Lease commitments
Not later than one year
Later than one year but not later than five years
Later than 5 years
Total lease commitments
2016
$000
5,330
12,107
24,312
41,749
The above balances are lease commitments under non-Cancellable operating leases.
The amounts in the schedule above are GST inclusive.
Capital Expenditure commitments
Not later than one year
Later than one year but not later than five years
Total capital expenditure commitments
3,484
3,484
GROUP
GROUP
2015
2015
163
24
187
$000
7,986
17,840
25,257
51,083
6,357
4,264
10,621
The above balances have been contracted for the purchase of property, plant and equipment but not provided for.
EV 27
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
20 Related party transactions
Coca-Cola Holdings NZ Limited (CCH) is a wholly owned subsidiary of Coca-Cola Amatil Limited (CCA). It is the holding company of Coca-Cola
Amatil (NZ) Limited (CCANZ) and Vending Management Services Limited (VMSL).
Key management personnel compensation
The key management personnel are all the directors of the Company and the executives with the authority for the strategic direction and
management of the Company. The compensation paid or payable tci key management personnel is $4,099,052 (2015: $3,860,131).
All subsidiaries of CCA are considered to be a related party of The Group. The Coca-Cola Company (TCCC) directly and through its subsidiary,
Coca-Cola Holdings (overseas) Limited holds 29.2% (2015:29.2%) of CCA's fully paid up ordinary shares. Coca-Cola Oceania Ltd (CCO) is also
owned by TCCC.
2016
Sales
$000
Transactions with ultimate parent
Coca-Cola Amatil Limited
Transactions with entities under common control
Coca-Cola Amatil (Fiji) Ltd Coca-Cola Amatil (Aust) Pty Ltd Coca-Cola Amatil (PNG) Ltd PT Coca-Cola Distribution Indonesia Paradise Beverages Ltd
Transactions with Entitles with Significant influence over the Group
3,700 1,275
TCCC and its subsidiaries 400
2015
Transactions with ultimate parent
Coca-Cola Amatil Limited
Transactions with entities under common control
Coca-Cola Amatil (Fiji) Ltd Coca-Cola Amatil (Aust) Pty Ltd
Transactions with Entitles with Significant influence over the Group
TCCC and its subsidiaries
2,799 1,383
514
Purchases
$000
5,176
96
94,660
5,322
85,454
Owed by Owed to related
Other1
related parties parties
$000 $000
(3,165)
1,168 1,622
21
20
6,572
(3,471)
112 1,115
3,412
2,124
22
22
774
$000
2,256
842
96
11,576
1,802
1,312
11,089
1. Other transactions relate to PPE, other revenue, reimbursements, management fees, marketing services and other expenses.
E.Y 28
Coca-Cola Holdings NZ Notes to the consolidated financial statements
Annual Report for the year ended 31 December 2016
CCA charges CCANZ for management services provided, for acting as guarantor of the bank facility owed by CCANZ, and also for expenses
associated with NZ participants of the group Long Term Incentive Share Plans.
Under a series of arrangements, CCANZ participates with CCO under which they jointly contribute to the development of the market in the
territories in which it operates. These arrangements include a regular share marketing expenses program, under which the Group contributes
to certain CCO incurred marketing expenditure and CCO contributes to certain expenditure incurred by CCANZ. CCO provides marketing
support to CCANZ, which is in addition to the usual contribution to shared marketing initiatives. This is designed to assist CCANZ with the
necessary development of certain territories. Amounts received are either accounted for as a credit to revenue or as a reduction to expense, as
appropriate.
CCANZ purchases concentrate and beverage bases from Pacific Refreshment Ltd & Atlantic Industries Ltd, both subsidiaries of TCCC.
CCANZ sells certain finished product and raw materials to CCA and purchases finished product and packaging raw material in return.
CCANZ sells certain finished product and raw materials to Coca-Cola Amatil (Fiji) Ltd (CCAF) and purchases finished product and packaging raw
material in return. CCAF also pays CCA a fee for management services rendered.
CCANZ also sells certain finished products to CCO.
Terms and conditions of transactions with related parties
Outstanding balances at year end are unsecured and settlement occurs in cash.
There have been no guarantees provided or received for any related party receivables. For the financial year ended 31 December 2016, the
company has not raised any provision for doubtful receivables relating to amounts owed by related parties (2015: nil).
21 Events after balance sheet date
There have been no significant events after the balance sheet date.
EV 29
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