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Report
of the
Armed
Forces
Canteen
Council
For the
year ended
31 March
2009
Presented to the House of
Representatives Pursuant
to Section 13 of the Armed
Forces Canteens Act 1948
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Contents
Directory 2
Introduction 3
KeyPointsoftheYear 4
PerformanceComparisons 4
KeyIndicators 5
ReportonOperations 5
FinancialReview 7
HumanResourcesandTraining 7
DistributionofSurplus 8
Acknowledgments 8
Financial Statements
StatementofResponsibility 9
StatementofAccountingPolicies 10
IncomeStatement 12
StatementofChangesinEquity 12
BalanceSheet 13
CashFlowStatement 14
NotestotheFinancialStatements 15
AuditReport 20
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Directory
Council Minister of Defence (Chairman) Hon. Dr Wayne Mapp Vice Chief of Defence Force (Deputy Chairman) Rear Admiral Jack Steer ONZM Deputy Chief of Navy Commodore Bruce Pepperell Deputy Chief of Army Brigadier Phil Gibbons Chief of Air Force Air Commodore Steve Moore Financial and Commercial Adviser Mr. P Nankivell BCA, CA Chief Executive Mr. A Jina BCA, CA
Head Office Level 11 Tourism and Travel House 79 Boulcott Street PO Box 11 246 Wellington Telephone: (04) 496 6230 Fax: (04) 496 6239 Email: [email protected]
Solicitors Tripe Matthews & Feist, Wellington
Auditors Audit New Zealand, Wellington
Bankers Bank of New Zealand, 50 Manners Street, Wellington
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Directory
Council Minister of Defence (Chairman) Hon. Dr Wayne Mapp Vice Chief of Defence Force (Deputy Chairman) Rear Admiral Jack Steer ONZM Deputy Chief of Navy Commodore Bruce Pepperell Deputy Chief of Army Brigadier Phil Gibbons Chief of Air Force Air Commodore Steve Moore Financial and Commercial Adviser Mr. P Nankivell BCA, CA Chief Executive Mr. A Jina BCA, CA
Head Office Level 11 Tourism and Travel House 79 Boulcott Street PO Box 11 246 Wellington Telephone: (04) 496 6230 Fax: (04) 496 6239 Email: [email protected]
Solicitors Tripe Matthews & Feist, Wellington
Auditors Audit New Zealand, Wellington
Bankers Bank of New Zealand, 50 Manners Street, Wellington
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Introduction
Mission The mission of the Armed Forces Canteen Council (AFCC) is:
“To provide a first class Canteen Service to meet the needs of the people of the New Zealand Defence Force”
Vision
“To be the first choice provider of Quality Canteen Services to the New Zealand Defence Force”
History Following the outbreak of the Second World War, it became apparent some form of canteen service was required to cater for the large intake of troops. The Canteen Board was set up under the Defence Canteen Emergency Regulations on 15 November 1939. After the war, the Government decided the Defence Canteen Emergency Regulations should remain in force and on 26 November 1948, Parliament passed the Armed Forces Canteens Act 1948. Initial funding was £106,833, an 11.6 percent share of the assets of the Canteen Board. Equity and the distribution of profits to the Services have increased over the years, reflecting the expansion of canteen and shop facilities at New Zealand Defence Force establishments and sound financial management. AFCC equity is currently $8.65m. The Council celebrated its 60th Anniversary on 26 November 2008. Over the years, the AFCC has provided a full range of commercial services to keep pace with new demands, or to anticipate them. Trading outlets include grocery supermarkets, variety and duty free stores, cafeterias, canteens for field exercises and a wholesale service for military groups. The AFCC has also maintained services at some military establishments after the withdrawal, in recent years, of commercial retailers. The AFCC has outlets at camps and bases throughout New Zealand operating under the trading name of Hot Shots. The AFCC continues to provide canteen services to personnel of the New Zealand Defence Force (NZDF) and Antarctica New Zealand serving at Scott Base, Antarctica (for part of the year, New Zealand’s southernmost retail outlet).
Governance Members of the Council decided at a meeting on the 5 June 2008 to recommend the disestablishment of the AFCC Board of Management, to streamline the governance of the AFCC. The former Chairman agreed with the recommendation on 24 June 2008. The Council continues to be chaired by the Minister of Defence with other members being the Vice Chief of Defence Force (Deputy Chairman), the three Service Deputy Chiefs, a Financial and Commercial Adviser and the Chief Executive of the AFCC.
Trading Locations The Council has trading outlets at all major NZDF camps and bases from Auckland to Burnham and, seasonally, at Scott Base. The AFCC also supports field exercises and provides services on the frigates.
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Introduction
Mission
ThemissionoftheArmedForcesCanteenCouncil(AFCC)is:
“ToprovideafirstclassCanteenServicetomeettheneedsofthepeopleofthe
NewZealandDefenceForce”
Vision
“TobethefirstchoiceproviderofQualityCanteenServicestothe
NewZealandDefenceForce”
History
FollowingtheoutbreakoftheSecondWorldWar,itbecameapparentsomeformofcanteenservicewasrequiredtocaterforthelargeintakeoftroops.TheCanteenBoardwassetupundertheDefenceCanteenEmergencyRegulationson15November1939.Afterthewar,theGovernmentdecidedtheDefenceCanteenEmergencyRegulationsshouldremaininforceandon26November1948,ParliamentpassedtheArmedForcesCanteensAct1948.Initialfundingwas£106,833,an11.6percentshareoftheassetsoftheCanteenBoard.EquityandthedistributionofprofitstotheServiceshaveincreasedovertheyears,reflectingtheexpansionofcanteenandshopfacilitiesatNewZealandDefenceForceestablishmentsandsoundfinancialmanagement.AFCCequityiscurrently$8.65m.TheCouncilcelebratedits60thAnniversaryon26November2008.Overtheyears,theAFCChasprovidedafullrangeofcommercialservicestokeeppacewithnewdemands,ortoanticipatethem.Tradingoutletsincludegrocerysupermarkets,varietyanddutyfreestores,cafeterias,canteensforfieldexercisesandawholesaleserviceformilitarygroups.TheAFCChasalsomaintainedservicesatsomemilitaryestablishmentsafterthewithdrawal,inrecentyears,ofcommercialretailers.TheAFCChasoutletsatcampsandbasesthroughoutNewZealandoperatingunderthetradingnameof‘HotShots’.TheAFCCcontinuestoprovidecanteenservicestopersonneloftheNewZealandDefenceForce(NZDF)andAntarcticaNewZealandservingatScottBase,Antarctica(forpartoftheyear,NewZealand’ssouthernmostretailoutlet).
Governance
MembersoftheCouncildecidedatameetingonthe5June2008torecommendthedisestablishmentoftheAFCCBoardofManagement,tostreamlinethegovernanceoftheAFCC.TheformerChairmanagreedwiththerecommendationon24June2008.TheCouncilcontinuestobechairedbytheMinisterofDefencewithothermembersbeingtheViceChiefofDefenceForce(DeputyChairman),thethreeServiceDeputyChiefs,aFinancialandCommercialAdviserandtheChiefExecutiveoftheAFCC.
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Key Points of the Year
Total sales increased by $2.15m (13.38%) to $18.2m.
Gross profit increased by $544k. The gross profit percentage was maintained.
Total expenditure increases were minimised, at 2.41% ($86k), compared with the 13.38% increase in sales.
Net surplus increased by $500k (49.11%), to $1.52m.
Distribution of surplus to the Services’ welfare funds increased by 36.8% ($262k), to a total
of $975k for the year.
The AFCC celebrated its 60th anniversary with promotional and other activities between 1 July and 31 December 2008.
Performance Comparisons
2009 2008 2007 2006
Turnover (Sales) $18.21m $16.06m $15.76m $15.80m Cash $9.59m $8.35m $8.51m $8.50m Pay Plan $5.24m $4.48m $4.04m $4.25m Wholesale $3.38m $3.23m $3.21m $3.05m Gross Profit $4.42m $3.88m $3.57m $3.69m Other Income $0.76m $0.71m $0.67m $0.58m Staff Remuneration $2.73m $2.66m $2.61m $2.54m Property Charges $0.41m $0.41m $0.49m $0.54m Other Overheads $0.52m $0.50m $0.51m $0.47m Total Overheads $3.66m $3.57m $3.61m $3.55m Net Surplus $1.52m $1.02m $0.63m $0.72m Distribution $0.97m $0.71m $0.38m $0.43m
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TradingLocations
TheCouncilhastradingoutletsatallmajorNZDFcampsandbasesfromAucklandtoBurnhamand,seasonally,atScottBase.TheAFCCalsosupportsfieldexercisesandprovidesservicesonthefrigates.
Key Points of the Year
Totalsalesincreasedby$2.15m(13.38%)to$18.2m.
Grossprofitincreasedby$544k.Thegrossprofitpercentagewasmaintained.
Totalexpenditureincreaseswereminimised,at2.41%($86k),comparedwiththe13.38%increaseinsales.
Netsurplusincreasedby$500k(49.11%),to$1.52m.
DistributionofsurplustotheServices’welfarefundsincreasedby36.8%($262k),toatotal
of$975kfortheyear.
TheAFCCcelebratedits60thanniversarywithpromotionalandotheractivitiesbetween1Julyand31December2008.
Performance Comparisons
2009 2008 2007 2006
Turnover(Sales) $18.21m $16.06m $15.76m $15.80m Cash $9.59m $8.35m $8.51m $8.50m
PayPlan $5.24m $4.48m $4.04m $4.25m
Wholesale $3.38m $3.23m $3.21m $3.05m
GrossProfit $4.42m $3.88m $3.57m $3.69m
OtherIncome $0.76m $0.71m $0.67m $0.58m
StaffRemuneration $2.73m $2.66m $2.61m $2.54m
PropertyCharges $0.41m $0.41m $0.49m $0.54m
OtherOverheads $0.52m $0.50m $0.51m $0.47m
TotalOverheads $3.66m $3.57m $3.61m $3.55m
NetSurplus $1.52m $1.02m $0.63m $0.72m
Distribution $0.97m $0.71m $0.38m $0.43m
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Key Points of the Year
Total sales increased by $2.15m (13.38%) to $18.2m.
Gross profit increased by $544k. The gross profit percentage was maintained.
Total expenditure increases were minimised, at 2.41% ($86k), compared with the 13.38% increase in sales.
Net surplus increased by $500k (49.11%), to $1.52m.
Distribution of surplus to the Services’ welfare funds increased by 36.8% ($262k), to a total
of $975k for the year.
The AFCC celebrated its 60th anniversary with promotional and other activities between 1 July and 31 December 2008.
Performance Comparisons
2009 2008 2007 2006
Turnover (Sales) $18.21m $16.06m $15.76m $15.80m Cash $9.59m $8.35m $8.51m $8.50m Pay Plan $5.24m $4.48m $4.04m $4.25m Wholesale $3.38m $3.23m $3.21m $3.05m Gross Profit $4.42m $3.88m $3.57m $3.69m Other Income $0.76m $0.71m $0.67m $0.58m Staff Remuneration $2.73m $2.66m $2.61m $2.54m Property Charges $0.41m $0.41m $0.49m $0.54m Other Overheads $0.52m $0.50m $0.51m $0.47m Total Overheads $3.66m $3.57m $3.61m $3.55m Net Surplus $1.52m $1.02m $0.63m $0.72m Distribution $0.97m $0.71m $0.38m $0.43m
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Key Indicators
2009 2008 2007 2006
Equity $8.65m $8.11m $7.80m $7.55m
Total Assets $10.62m $9.76m $9.34m $9.42m
Working Capital as a ratio to 1 4.81 5.14 5.24 4.21
Quick Assets as a ratio to 1 3.28 3.47 3.53 2.61
Gross Profit as a % of Sales 24.29 24.16 22.64 23.37
Net Surplus as a % of Sales 8.3 6.3 4.0 4.6
Return on Equity - % 17.55 12.55 8.07 9.56
Value of Pay Plan Accounts $3.26m $2.93m $2.58m $2.69m
Distribution of Surplus $0.97m $0.71m $0.38m $0.43m Report on Operations
Business Objectives 2008/09 Financial performance for the year was measured against the following objectives:
Achieve sales of $16.40m Achieve a gross profit margin of 23.11 percent Contain wage and salary costs to 17.25 percent of sales Gain interest income of $560k After meeting overheads and expenses, produce a net surplus of $665k
Sales Annual sales increased by $2,150,128 (13.38 percent) to $18,212,687, compared with last year’s figure of $16,062,559. This was significantly above the 2009 Business Plan objective of $16,400,000. The increase in sales can be attributed to a number of factors, including:
The increase in the size of the AFCC’s customer base, particularly new recruits who have joined the New Zealand Defence Force.
AFCC customers’ higher disposable income, following a decrease in personal income tax and an increase in remuneration.
The decrease in the price of such items as laptops, televisions, audio equipment, camcorders and furniture that followed the strengthening of the New Zealand dollar.
The impact of promotional activities celebrating the AFCC’s 60th Anniversary. All three categories of sales have increased from last year: cash sales increased by $1,238,704 (14.83 percent); Pay Plan (hire purchase) by $754,671 (16.83 percent); and wholesale by $156,753 (4.86 percent). Navy duty free sales increased by $146,864 (83.63 percent), reflecting an increase in deployments. Duty free sales at Air Force locations were similar to last year.
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Key Indicators
2009 2008 2007 2006
Equity $8.65m $8.11m $7.80m $7.55m
Total Assets $10.62m $9.76m $9.34m $9.42m
Working Capital as a ratio to 1 4.81 5.14 5.24 4.21
Quick Assets as a ratio to 1 3.28 3.47 3.53 2.61
Gross Profit as a % of Sales 24.29 24.16 22.64 23.37
Net Surplus as a % of Sales 8.3 6.3 4.0 4.6
Return on Equity - % 17.55 12.55 8.07 9.56
Value of Pay Plan Accounts $3.26m $2.93m $2.58m $2.69m
Distribution of Surplus $0.97m $0.71m $0.38m $0.43m Report on Operations
Business Objectives 2008/09 Financial performance for the year was measured against the following objectives:
Achieve sales of $16.40m Achieve a gross profit margin of 23.11 percent Contain wage and salary costs to 17.25 percent of sales Gain interest income of $560k After meeting overheads and expenses, produce a net surplus of $665k
Sales Annual sales increased by $2,150,128 (13.38 percent) to $18,212,687, compared with last year’s figure of $16,062,559. This was significantly above the 2009 Business Plan objective of $16,400,000. The increase in sales can be attributed to a number of factors, including:
The increase in the size of the AFCC’s customer base, particularly new recruits who have joined the New Zealand Defence Force.
AFCC customers’ higher disposable income, following a decrease in personal income tax and an increase in remuneration.
The decrease in the price of such items as laptops, televisions, audio equipment, camcorders and furniture that followed the strengthening of the New Zealand dollar.
The impact of promotional activities celebrating the AFCC’s 60th Anniversary. All three categories of sales have increased from last year: cash sales increased by $1,238,704 (14.83 percent); Pay Plan (hire purchase) by $754,671 (16.83 percent); and wholesale by $156,753 (4.86 percent). Navy duty free sales increased by $146,864 (83.63 percent), reflecting an increase in deployments. Duty free sales at Air Force locations were similar to last year.
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Sales at the separate Service locations followed the national AFCC trend by increasing their sales over the previous year by percentages in line with overall sales increases. Sales at Scott Base, however, decreased by $41,493 (11.70 percent) because of the lower number of personnel there.
Gross Profit Gross profit increased by $543,586 (14.01 percent) to $4,424,317, compared with last year’s figure of $3,880,731. The 2009 gross profit percentage of sales of 24.29 percent was similar to the 2008 result (24.16 percent), but was above the business objective of 23.11 percent. The reason for the lift in gross profit was better buying opportunities made possible by the AFCC’s excellent cash flow. This combination of factors allowed Hot Shots outlets to price merchandise very competitively even while maintaining good profit margins. There were many opportunities during the year to purchase goods on favourable terms, partly as a result of price reductions for goods from overseas manufacturers and partly because of the strength of the New Zealand dollar. The AFCC’s maintenance of its gross profit percentage at last year’s level should be compared with the performance of those retail businesses that have reduced margins in attempts to retain market share during an economic downturn.
Wage & Salary Costs Wage and salary costs increased by $71,098 (2.67 percent) to $2,732,158, compared with last year’s figure of $2,661,060. This staffing cost is 15.00 percent of sales and is significantly lower than last year’s 16.57 percent and the business objective of 17.25 percent. In addition to the normal annual increases to wage and salaried staff, the AFCC increased hourly rates during the year to ensure that employees were being remunerated fairly. In the first half of the financial year, competition for employees to staff the AFCC’s stores and cafes was strong. Existing staff, however, met the extra demands placed upon them during this period. With the downturn in the economy, recruiting has become easier and the number of vacancies has reduced. The AFCC has been fortunate in that many locations benefited from increased sales without a matching increase in wage and salary costs.
Interest Income Income derived from interest on Pay Plan sales and bank short-term deposits totalled $604,719. This was $22,294 more than in 2008 and $34,719 more than the business objective. The increase in interest income was primarily derived from the careful investment of surplus funds at good bank deposit rates. The increase in the number of interest-bearing hire purchase contracts also contributed to the improved performance. 2009 Hire Purchase interest earned was $389,922, compared with $369,691 in 2008. This result is pleasing despite the continual requirement to offer periods of interest-free hire purchase to remain competitive with other retailers.
Net Surplus The net surplus for 2009 was $1,517,321, or 8.33% of sales. This compares with last year’s net surplus of $1,017,563, or 6.33% of sales. The $499,758 increase in net surplus was the direct result of the year-on-year 13.38 percent sales increase. (The increase in gross profit was $543,586, less the increase in costs of $86,397, plus other income of $42,569.)
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Sales at the separate Service locations followed the national AFCC trend by increasing their sales over the previous year by percentages in line with overall sales increases. Sales at Scott Base, however, decreased by $41,493 (11.70 percent) because of the lower number of personnel there.
Gross Profit Gross profit increased by $543,586 (14.01 percent) to $4,424,317, compared with last year’s figure of $3,880,731. The 2009 gross profit percentage of sales of 24.29 percent was similar to the 2008 result (24.16 percent), but was above the business objective of 23.11 percent. The reason for the lift in gross profit was better buying opportunities made possible by the AFCC’s excellent cash flow. This combination of factors allowed Hot Shots outlets to price merchandise very competitively even while maintaining good profit margins. There were many opportunities during the year to purchase goods on favourable terms, partly as a result of price reductions for goods from overseas manufacturers and partly because of the strength of the New Zealand dollar. The AFCC’s maintenance of its gross profit percentage at last year’s level should be compared with the performance of those retail businesses that have reduced margins in attempts to retain market share during an economic downturn.
Wage & Salary Costs Wage and salary costs increased by $71,098 (2.67 percent) to $2,732,158, compared with last year’s figure of $2,661,060. This staffing cost is 15.00 percent of sales and is significantly lower than last year’s 16.57 percent and the business objective of 17.25 percent. In addition to the normal annual increases to wage and salaried staff, the AFCC increased hourly rates during the year to ensure that employees were being remunerated fairly. In the first half of the financial year, competition for employees to staff the AFCC’s stores and cafes was strong. Existing staff, however, met the extra demands placed upon them during this period. With the downturn in the economy, recruiting has become easier and the number of vacancies has reduced. The AFCC has been fortunate in that many locations benefited from increased sales without a matching increase in wage and salary costs.
Interest Income Income derived from interest on Pay Plan sales and bank short-term deposits totalled $604,719. This was $22,294 more than in 2008 and $34,719 more than the business objective. The increase in interest income was primarily derived from the careful investment of surplus funds at good bank deposit rates. The increase in the number of interest-bearing hire purchase contracts also contributed to the improved performance. 2009 Hire Purchase interest earned was $389,922, compared with $369,691 in 2008. This result is pleasing despite the continual requirement to offer periods of interest-free hire purchase to remain competitive with other retailers.
Net Surplus The net surplus for 2009 was $1,517,321, or 8.33% of sales. This compares with last year’s net surplus of $1,017,563, or 6.33% of sales. The $499,758 increase in net surplus was the direct result of the year-on-year 13.38 percent sales increase. (The increase in gross profit was $543,586, less the increase in costs of $86,397, plus other income of $42,569.)
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Cash Flow The cash flow from operating activities produced a net inflow of $564,275. The cash inflow from investing activities totalled $1,046,067. These cash inflows produced a net increase in cash held for the year of $1,610,342. The balance of cash and cash equivalents held at 31 March 2009 was $2,980,571. The AFCC was in a good cash flow position throughout the year and was able to meet its debts as they fell due. Financial Review
As at 31 March 2009, the equity of the Council was $8,648,029, an increase of $542,518. The equity was comprised of total assets of $10,621,634, less total liabilities of $1,973,605. Assets were cash and cash equivalents, accounts receivable, inventory and fixed assets. Bank deposits totalling $2,796,631 covered accounts payable and distributions of surplus when they fell due. Accounts receivable totalled $3,639,345. Of this total, $3,260,789 represented balances in Pay Plan accounts. Inventory increased by $246,614 from last year, to $3,010,266. Fixed assets had a book value of $872,538, which is $120,192 lower than last year. Investments (shares and deposits in grocery and appliance buying groups) increased from $102,963 to $117,628. Total liabilities comprised accounts payable and the distributions of surplus payable. Accounts payable increased by $255,618, and totalled $1,487,605 at the end of the year. The AFCC continues to be in a strong financial position. Human Resources and Training
One of the AFCC’s strengths is its experienced and motivated management team and workforce. The AFCC assists the development of staff by supporting training through the Retailers Association and the Retail Industry Training Organisation, so helping staff to gain recognised NZQA qualifications. Lisa Sweet of Waiouru was selected as the AFCC Manager of the Year at the annual manager’s conference. She produced excellent financial results as well as maintaining a high level of service. The Waiouru Hot Shots store was particularly strong in goods merchandising. There was one management change at Hot Shots locations during the year. Catherine Enright was appointed manager at Trentham in November 2008. Rick Ottaway resigned as Chief Executive in September 2008. Arvin Jina, the AFCC’s Financial Controller, was Acting Chief Executive until May 2009 when he was appointed Chief Executive. As at 31 March 2009, the AFCC had 92 employees, 58 full-time and 34 part-time.
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Distribution of Surplus
An interim distribution of surplus of $488,803 was paid after the first six months of trading. Provision has been made for a final distribution of $486,000, making the total distribution of surplus for the year $974,803. This is an increase of $262,303 over 2008. The AFCC has retained $542,518 to maintain working capital, upgrade trading facilities, undertake a programme of capital investment and sustain its ability to take advantage of business opportunities. Distributions are made to Service Welfare Funds to provide amenities and benefits which facilitate Service recruitment, retention and morale. The payment of distributions of surplus is in keeping with the role of the AFCC and is a tangible reward for NZDF personnel who shop with the organisation. Acknowledgement
I congratulate the management and staff of the AFCC on this year’s results. The success of the AFCC will directly benefit NZDF personnel through the Services’ welfare funds. I also acknowledge the effective governance provided by the Council. Hon. Dr Wayne Mapp Minister of Defence Chairman Armed Forces Canteen Council
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STATEMENT OF RESPONSIBILITY
TheCouncilisresponsibleforensuringthatthefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheArmedForcesCanteenCouncilasat31March2009anditsfinancialperformanceandcashflowsfortheyearendedonthatdate.TheCouncilconsidersthatthefinancialstatementsaspresentedhavebeenpreparedusingtheappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonablejudgmentsandestimatesandthatallrelevantfinancialreportingandaccountingstandardshavebeenfollowed. TheCouncilbelievesthatproperaccountingrecordshavebeenkeptwhichenable,withreasonableaccuracy,thedeterminationofthefinancialpositionoftheCouncilandfacilitatecomplianceofthefinancialstatementswithgenerallyacceptedaccountingpractice.TheCouncilconsiderstheyhavetakenadequatestepstosafeguardtheassetsoftheCouncilandtopreventanddetectfraudandotherirregularities.TheCouncilhaspleasureinpresentingthefinancialstatementsfortheyearended31March2009.ForandonbehalfoftheCouncilHonDrWayneMapp ArvinJinaMinisterofDefence ChiefExecutiveChairmanArmedForcesCanteenCouncil6August2009
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Distribution of Surplus
An interim distribution of surplus of $488,803 was paid after the first six months of trading. Provision has been made for a final distribution of $486,000, making the total distribution of surplus for the year $974,803. This is an increase of $262,303 over 2008. The AFCC has retained $542,518 to maintain working capital, upgrade trading facilities, undertake a programme of capital investment and sustain its ability to take advantage of business opportunities. Distributions are made to Service Welfare Funds to provide amenities and benefits which facilitate Service recruitment, retention and morale. The payment of distributions of surplus is in keeping with the role of the AFCC and is a tangible reward for NZDF personnel who shop with the organisation. Acknowledgement
I congratulate the management and staff of the AFCC on this year’s results. The success of the AFCC will directly benefit NZDF personnel through the Services’ welfare funds. I also acknowledge the effective governance provided by the Council. Hon. Dr Wayne Mapp Minister of Defence Chairman Armed Forces Canteen Council
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STATEMENT OF RESPONSIBILITY
The Council is responsible for ensuring that the financial statements give a true and fair view of the financial position of the Armed Forces Canteen Council as at 31 March 2009 and its financial performance and cash flows for the year ended on that date. The Council considers that the financial statements as presented have been prepared using the appropriate accounting policies, consistently applied and supported by reasonable judgments and estimates and that all relevant financial reporting and accounting standards have been followed. The Council believes that proper accounting records have been kept which enable, with reasonable accuracy, the determination of the financial position of the Council and facilitate compliance of the financial statements with generally accepted accounting practice. The Council considers they have taken adequate steps to safeguard the assets of the Council and to prevent and detect fraud and other irregularities. The Council has pleasure in presenting the financial statements for the year ended 31 March 2009. For and on behalf of the Council Hon Dr Wayne Mapp Arvin Jina Minister of Defence Chief Executive Chairman Armed Forces Canteen Council July 2009
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STATEMENT OF RESPONSIBILITY
TheCouncilisresponsibleforensuringthatthefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheArmedForcesCanteenCouncilasat31March2009anditsfinancialperformanceandcashflowsfortheyearendedonthatdate.TheCouncilconsidersthatthefinancialstatementsaspresentedhavebeenpreparedusingtheappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonablejudgmentsandestimatesandthatallrelevantfinancialreportingandaccountingstandardshavebeenfollowed. TheCouncilbelievesthatproperaccountingrecordshavebeenkeptwhichenable,withreasonableaccuracy,thedeterminationofthefinancialpositionoftheCouncilandfacilitatecomplianceofthefinancialstatementswithgenerallyacceptedaccountingpractice.TheCouncilconsiderstheyhavetakenadequatestepstosafeguardtheassetsoftheCouncilandtopreventanddetectfraudandotherirregularities.TheCouncilhaspleasureinpresentingthefinancialstatementsfortheyearended31March2009.ForandonbehalfoftheCouncilHonDrWayneMapp ArvinJinaMinisterofDefence ChiefExecutiveChairmanArmedForcesCanteenCouncil6August2009
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STATEMENT OF RESPONSIBILITY
TheCouncilisresponsibleforensuringthatthefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheArmedForcesCanteenCouncilasat31March2009anditsfinancialperformanceandcashflowsfortheyearendedonthatdate.TheCouncilconsidersthatthefinancialstatementsaspresentedhavebeenpreparedusingtheappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonablejudgmentsandestimatesandthatallrelevantfinancialreportingandaccountingstandardshavebeenfollowed. TheCouncilbelievesthatproperaccountingrecordshavebeenkeptwhichenable,withreasonableaccuracy,thedeterminationofthefinancialpositionoftheCouncilandfacilitatecomplianceofthefinancialstatementswithgenerallyacceptedaccountingpractice.TheCouncilconsiderstheyhavetakenadequatestepstosafeguardtheassetsoftheCouncilandtopreventanddetectfraudandotherirregularities.TheCouncilhaspleasureinpresentingthefinancialstatementsfortheyearended31March2009.ForandonbehalfoftheCouncilHonDrWayneMapp ArvinJinaMinisterofDefence ChiefExecutiveChairmanArmedForcesCanteenCouncil6August2009
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STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2009
REPORTING ENTITY The reporting entity is the Armed Forces Canteen Council (AFCC). The AFCC is a Public Benefit Entity established under the Armed Forces Canteens Act 1948 (The Act). These financial statements have been prepared to comply with Section 13 of The Act, Generally Accepted Accounting Practice (NZ GAAP) and the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) MEASUREMENT BASE The measurement base adopted is historical cost. The financial statements are presented in New Zealand currency. The functional currency of the AFCC is New Zealand Dollars. ACCOUNTING POLICIES The following particular accounting policies, which materially affect the measurement of financial results and financial position have been applied. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Financial Instruments The Council is party to financial instruments as part of its normal operations. These financial instruments include cash and cash equivalents, accounts receivable, held to maturity investments, and accounts payable. All financial instruments are recognised in the Balance Sheet and all revenues and expenses in relation to financial instruments are recognised in the Income Statement. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, bank accounts and deposits with a maturity of no more than three months from the date of acquisition. Accounts Receivable Accounts receivable are designated as loans and receivables. They are initially measured at fair value and subsequently measured at their estimated realisable value after providing for a provision for impairment. Impairment is established when there is objective evidence that the Council will not be able to collect amounts due according to the original terms of the agreement. Held to Maturity Investments Held to maturity investments are assets with fixed or determinable payments and fixed maturities that the AFCC has a positive intention and ability to hold to maturity. After initial recognition they are measured at amortised cost. Gains and losses when the asset is impaired or derecognised are recognised in the Income Statement. Investments in this category include short term bank deposits maturing after three months and deposits in Grocery and Appliance Buying Groups. Inventories Inventories consist of goods held for resale and are valued at the lower of cost or net realisable value, on a weighted average basis. Financial Assets at Fair Value Through Equity Financial assets at fair value through equity are those that are not classified in any of the other categories above. This category encompasses shareholdings that the AFCC holds strategic purposes in Grocery and Appliance Buying Groups. These investments are subsequently measured at their fair value. As there is no quoted market price or other method to determine their market value, cost is used to approximate their market value. Fixed Assets (Property, Plant and Equipment) Fixed assets costing more than $200 are capitalised and recorded at cost less accumulated depreciation. All groups of assets forming part of a network which are material in aggregate are capitalised and recorded at cost. Any write-down of an item to its recoverable amount is recognised in the Income Statement.
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STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2009
REPORTING ENTITY The reporting entity is the Armed Forces Canteen Council (AFCC). The AFCC is a Public Benefit Entity established under the Armed Forces Canteens Act 1948 (The Act). These financial statements have been prepared to comply with Section 13 of The Act, Generally Accepted Accounting Practice (NZ GAAP) and the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) MEASUREMENT BASE The measurement base adopted is historical cost. The financial statements are presented in New Zealand currency. The functional currency of the AFCC is New Zealand Dollars. ACCOUNTING POLICIES The following particular accounting policies, which materially affect the measurement of financial results and financial position have been applied. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Financial Instruments The Council is party to financial instruments as part of its normal operations. These financial instruments include cash and cash equivalents, accounts receivable, held to maturity investments, and accounts payable. All financial instruments are recognised in the Balance Sheet and all revenues and expenses in relation to financial instruments are recognised in the Income Statement. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, bank accounts and deposits with a maturity of no more than three months from the date of acquisition. Accounts Receivable Accounts receivable are designated as loans and receivables. They are initially measured at fair value and subsequently measured at their estimated realisable value after providing for a provision for impairment. Impairment is established when there is objective evidence that the Council will not be able to collect amounts due according to the original terms of the agreement. Held to Maturity Investments Held to maturity investments are assets with fixed or determinable payments and fixed maturities that the AFCC has a positive intention and ability to hold to maturity. After initial recognition they are measured at amortised cost. Gains and losses when the asset is impaired or derecognised are recognised in the Income Statement. Investments in this category include short term bank deposits maturing after three months and deposits in Grocery and Appliance Buying Groups. Inventories Inventories consist of goods held for resale and are valued at the lower of cost or net realisable value, on a weighted average basis. Financial Assets at Fair Value Through Equity Financial assets at fair value through equity are those that are not classified in any of the other categories above. This category encompasses shareholdings that the AFCC holds strategic purposes in Grocery and Appliance Buying Groups. These investments are subsequently measured at their fair value. As there is no quoted market price or other method to determine their market value, cost is used to approximate their market value. Fixed Assets (Property, Plant and Equipment) Fixed assets costing more than $200 are capitalised and recorded at cost less accumulated depreciation. All groups of assets forming part of a network which are material in aggregate are capitalised and recorded at cost. Any write-down of an item to its recoverable amount is recognised in the Income Statement.
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STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2009
Depreciation Depreciation is provided on a straight line basis on all fixed assets including leasehold improvements at a rate which will write off the cost of the assets over their estimated useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:
Buildings 40 Years (2.5%) Computer Equipment 3 - 8 Years (12.5-30%) Leasehold Improvements 5 - 10 Years (10-20%) Motor Vehicles 5 Years (20%) Plant and Equipment 5 - 8 Years (12.5-20%) Video and DVD tapes 2 Years (50%)
Intangible Assets Acquired computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software.
Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. The useful life and associated amortisation rate is as follows:
Computer Software 3 - 8 Years (12.5-30%)
Statement of Cash Flows Cash means cash and cash equivalents and bank accounts. Operating activities include cash and interest received from customers and records the cash payments for goods and services to suppliers and employees, net goods and service tax, interest paid to the bank and distribution of surpluses. Investing activities are those activities relating to the acquisition and disposal of non current assets.
Sales Revenue The AFCC derives revenue through the sale of goods and services. Such revenue is recognised and recorded when the sale takes place.
Interest Income Interest earned on hire purchase agreements is calculated on the daily balances and charged to the agreements monthly.
Employee Entitlements Provision is made for annual leave liability which is calculated on an actual entitlement basis at current rates of pay. Sick Leave liability is calculated on the basis of unused entitlement at balance date to the extent that AFCC anticipates it will be used by staff to cover future absences.
Operating Leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease expenses are recognised on a systematic basis over the period of the lease.
Income Tax Income tax is not payable pursuant to Section 16 (1) of the Armed Forces Canteens Act 1948.
Goods and Services Tax (GST) The financial statements have been prepared so that all components are stated exclusive of GST with the exception of receivables and payables which are stated with GST included. The amount of GST owing to the Inland Revenue Department at balance date, being the difference between Output GST and Input GST, is included in Accounts Payable.
CHANGES IN ACCOUNTING POLICIES There have been certain presentational changes to the comparative Balance Sheet and related notes to ensure consistency with current period treatment. These changes, which have been applied retrospectively relate to the reclassification of computer software from Fixed Assets to Intangible Assets.
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INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008
$ $ Sales revenue
18,212,687 16,062,559
Cost of sales
13,788,370 12,181,828
Gross profit
4,424,317 3,880,731
Other income 1 757,062 714,493
Less expenses: Employee remuneration
2,732,158 2,661,060 Property charges 2 409,219 414,062 Interest
3,690 3,885
Other expenses 3 518,991 498,654
Total expenses
3,664,058 3,577,661
Net surplus
1,517,321 1,017,563
Less distributions
974,803 712,500
Net surplus after distributions
542,518 305,063
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
Net surplus after distributions
542,518 305,063
Total income and expense
542,518 305,063
Equity at beginning of year
8,105,511 7,800,448
Equity at end of year
8,648,029 8,105,511 The Statement of Accounting Policies and accompanying Notes form part of these financial statements.
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BALANCE SHEET AS AT 31 MARCH 2009
NOTE 2009 2008
$ $
EQUITY
8,648,029 8,105,511
Represented by:
CURRENT ASSETS
Cash and cash equivalents 4 2,980,571 1,370,229
Short term bank deposits 5 0 1,195,314
Accounts receivable 6 3,490,321 3,183,324
Inventory
3,010,266 2,763,652
Investments 7 8,670 6,360
9,489,828 8,518,879
NON-CURRENT ASSETS
Accounts receivable 6 149,024 150,069
Investments 7 108,958 96,603
Fixed assets 8 872,538 992,730
Intangible assets 9 1,286 5,517
TOTAL ASSETS
10,621,634 9,763,798
CURRENT LIABILITIES
Accounts payable 10 1,487,605 1,231,987
Distribution of surplus payable 11 486,000 426,300
TOTAL LIABILITIES
1,973,605 1,658,287
NET ASSETS
8,648,029 8,105,511
The Statement of Accounting Policies and accompanying notes form part of these financial statements.
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INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008
$ $ Sales revenue
18,212,687 16,062,559
Cost of sales
13,788,370 12,181,828
Gross profit
4,424,317 3,880,731
Other income 1 757,062 714,493
Less expenses: Employee remuneration
2,732,158 2,661,060 Property charges 2 409,219 414,062 Interest
3,690 3,885
Other expenses 3 518,991 498,654
Total expenses
3,664,058 3,577,661
Net surplus
1,517,321 1,017,563
Less distributions
974,803 712,500
Net surplus after distributions
542,518 305,063
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
Net surplus after distributions
542,518 305,063
Total income and expense
542,518 305,063
Equity at beginning of year
8,105,511 7,800,448
Equity at end of year
8,648,029 8,105,511 The Statement of Accounting Policies and accompanying Notes form part of these financial statements.
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BALANCE SHEET AS AT 31 MARCH 2009
NOTE 2009 2008
$ $
EQUITY
8,648,029 8,105,511
Represented by:
CURRENT ASSETS
Cash and cash equivalents 4 2,980,571 1,370,229
Short term bank deposits 5 0 1,195,314
Accounts receivable 6 3,490,321 3,183,324
Inventory
3,010,266 2,763,652
Investments 7 8,670 6,360
9,489,828 8,518,879
NON-CURRENT ASSETS
Accounts receivable 6 149,024 150,069
Investments 7 108,958 96,603
Fixed assets 8 872,538 992,730
Intangible assets 9 1,286 5,517
TOTAL ASSETS
10,621,634 9,763,798
CURRENT LIABILITIES
Accounts payable 10 1,487,605 1,231,987
Distribution of surplus payable 11 486,000 426,300
TOTAL LIABILITIES
1,973,605 1,658,287
NET ASSETS
8,648,029 8,105,511
The Statement of Accounting Policies and accompanying notes form part of these financial statements.
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BALANCE SHEET AS AT 31 MARCH 2009
NOTE 2009 2008
$ $
EQUITY
8,648,029 8,105,511
Represented by:
CURRENT ASSETS
Cash and cash equivalents 4 2,980,571 1,370,229
Short term bank deposits 5 0 1,195,314
Accounts receivable 6 3,490,321 3,183,324
Inventory
3,010,266 2,763,652
Investments 7 8,670 6,360
9,489,828 8,518,879
NON-CURRENT ASSETS
Accounts receivable 6 149,024 150,069
Investments 7 108,958 96,603
Fixed assets 8 872,538 992,730
Intangible assets 9 1,286 5,517
TOTAL ASSETS
10,621,634 9,763,798
CURRENT LIABILITIES
Accounts payable 10 1,487,605 1,231,987
Distribution of surplus payable 11 486,000 426,300
TOTAL LIABILITIES
1,973,605 1,658,287
NET ASSETS
8,648,029 8,105,511
The Statement of Accounting Policies and accompanying notes form part of these financial statements.
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BALANCE SHEET AS AT 31 MARCH 2009
NOTE 2009 2008
$ $
EQUITY
8,648,029 8,105,511
Represented by:
CURRENT ASSETS
Cash and cash equivalents 4 2,980,571 1,370,229
Short term bank deposits 5 0 1,195,314
Accounts receivable 6 3,490,321 3,183,324
Inventory
3,010,266 2,763,652
Investments 7 8,670 6,360
9,489,828 8,518,879
NON-CURRENT ASSETS
Accounts receivable 6 149,024 150,069
Investments 7 108,958 96,603
Fixed assets 8 872,538 992,730
Intangible assets 9 1,286 5,517
TOTAL ASSETS
10,621,634 9,763,798
CURRENT LIABILITIES
Accounts payable 10 1,487,605 1,231,987
Distribution of surplus payable 11 486,000 426,300
TOTAL LIABILITIES
1,973,605 1,658,287
NET ASSETS
8,648,029 8,105,511
The Statement of Accounting Policies and accompanying notes form part of these financial statements.
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008
$ $
Cash flows from operating activities Cash was provided from: Receipts from customers
18,059,082 15,766,979 Interest received
604,719 583,787
18,663,801 16,350,766
Cash was disbursed to: Payment to suppliers
(14,121,496) (12,704,968) Payment to employees
(2,705,146) (2,606,905)
Distribution of surplus
(915,103) (664,100) Net goods and service tax
(354,091) (262,253)
Interest paid
(3,690) (3,885)
(18,099,526) (16,242,111)
Net cash inflow from operating activities 12 564,275 108,655
Cash flows from investing activities Cash was provided from: Proceeds from sale of fixed assets
30,577 80,529 Net proceeds from term deposit maturities
1,195,314 729,686
1,225,891 810,215
Cash was disbursed to: Purchase of fixed assets
(165,159) (347,197) Purchase of intangible assets
0 (1,095)
Purchase of investments
(14,665) (13,523)
(179,824) (361,815)
Net cash inflow from investing activities
1,046,067 448,400
Net increase in cash held
1,610,342 557,055
Opening cash brought forward
1,370,229 813,174
Ending cash carried forward
2,980,571 1,370,229
This is represented by:
Cash and cash equivalents 4 2,980,571 1,370,229 The Net goods and services tax component of operating activities reflects the net GST paid to and received from the Inland Revenue Department. The Net proceeds from term deposit maturities component of investing activities reflects the net term deposits paid to and from financial institutions. These have been presented on a net basis as the gross amounts do not provide meaningful information for financial statement purposes. The Statement of Accounting Policies and accompanying notes form part of these financial statements.
14
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008 $ $Cashflowsfromoperatingactivities
Cashwasprovidedfrom:
Receiptsfromcustomers 18,059,082 15,766,979Interestreceived 604,719 583,787
18,663,801 16,350,766Cashwasdisbursedto:
Paymenttosuppliers (14,121,496) (12,704,968)Paymenttoemployees (2,705,146) (2,606,905)Distributionofsurplus (915,103) (664,100)Netgoodsandservicetax (354,091) (262,253)Interestpaid (3,690) (3,885)
(18,099,526) (16,242,111)
Netcashinflowfromoperatingactivities 12 564,275 108,655
Cashflowsfrominvestingactivities Cashwasprovidedfrom:
Proceedsfromsaleoffixedassets 30,577 80,529Netproceedsfromtermdepositmaturities 1,195,314 729,686
1,225,891 810,215Cashwasdisbursedto:
Purchaseoffixedassets (165,159) (347,197)Purchaseofintangibleassets 0 (1,095)Purchaseofinvestments (14,665) (13,523)
(179,824) (361,815)
Netcashinflowfrominvestingactivities 1,046,067 448,400
Netincreaseincashheld 1,610,342 557,055 Openingcashbroughtforward 1,370,229 813,174
Endingcashcarriedforward 2,980,571 1,370,229
Thisisrepresentedby:
Cashandcashequivalents 4 2,980,571 1,370,229
TheNetgoodsandservicestaxcomponentofoperatingactivitiesreflectsthenetGSTpaidtoandreceivedfromtheInlandRevenueDepartment.Thenetproceedsfromtermdepositmaturitiescomponentofinvestingactivitiesreflectsthenettermdepositspaidtoandfromfinancialinstitutions.Thesehavebeenpresentedonanetbasisasthegrossamountsdonotprovidemeaningfulinformationforfinancialstatementpurposes.TheStatementofAccountingPoliciesandaccompanyingnotesformpartofthesefinancialstatements.
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008 $ $Cashflowsfromoperatingactivities
Cashwasprovidedfrom:
Receiptsfromcustomers 18,059,082 15,766,979Interestreceived 604,719 583,787
18,663,801 16,350,766Cashwasdisbursedto:
Paymenttosuppliers (14,121,496) (12,704,968)Paymenttoemployees (2,705,146) (2,606,905)Distributionofsurplus (915,103) (664,100)Netgoodsandservicetax (354,091) (262,253)Interestpaid (3,690) (3,885)
(18,099,526) (16,242,111)
Netcashinflowfromoperatingactivities 12 564,275 108,655
Cashflowsfrominvestingactivities Cashwasprovidedfrom:
Proceedsfromsaleoffixedassets 30,577 80,529Netproceedsfromtermdepositmaturities 1,195,314 729,686
1,225,891 810,215Cashwasdisbursedto:
Purchaseoffixedassets (165,159) (347,197)Purchaseofintangibleassets 0 (1,095)Purchaseofinvestments (14,665) (13,523)
(179,824) (361,815)
Netcashinflowfrominvestingactivities 1,046,067 448,400
Netincreaseincashheld 1,610,342 557,055 Openingcashbroughtforward 1,370,229 813,174
Endingcashcarriedforward 2,980,571 1,370,229
Thisisrepresentedby:
Cashandcashequivalents 4 2,980,571 1,370,229
TheNetgoodsandservicestaxcomponentofoperatingactivitiesreflectsthenetGSTpaidtoandreceivedfromtheInlandRevenueDepartment.Thenetproceedsfromtermdepositmaturitiescomponentofinvestingactivitiesreflectsthenettermdepositspaidtoandfromfinancialinstitutions.Thesehavebeenpresentedonanetbasisasthegrossamountsdonotprovidemeaningfulinformationforfinancialstatementpurposes.TheStatementofAccountingPoliciesandaccompanyingnotesformpartofthesefinancialstatements.
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008 $ $Cashflowsfromoperatingactivities
Cashwasprovidedfrom:
Receiptsfromcustomers 18,059,082 15,766,979Interestreceived 604,719 583,787
18,663,801 16,350,766Cashwasdisbursedto:
Paymenttosuppliers (14,121,496) (12,704,968)Paymenttoemployees (2,705,146) (2,606,905)Distributionofsurplus (915,103) (664,100)Netgoodsandservicetax (354,091) (262,253)Interestpaid (3,690) (3,885)
(18,099,526) (16,242,111)
Netcashinflowfromoperatingactivities 12 564,275 108,655
Cashflowsfrominvestingactivities Cashwasprovidedfrom:
Proceedsfromsaleoffixedassets 30,577 80,529Netproceedsfromtermdepositmaturities 1,195,314 729,686
1,225,891 810,215Cashwasdisbursedto:
Purchaseoffixedassets (165,159) (347,197)Purchaseofintangibleassets 0 (1,095)Purchaseofinvestments (14,665) (13,523)
(179,824) (361,815)
Netcashinflowfrominvestingactivities 1,046,067 448,400
Netincreaseincashheld 1,610,342 557,055 Openingcashbroughtforward 1,370,229 813,174
Endingcashcarriedforward 2,980,571 1,370,229
Thisisrepresentedby:
Cashandcashequivalents 4 2,980,571 1,370,229
TheNetgoodsandservicestaxcomponentofoperatingactivitiesreflectsthenetGSTpaidtoandreceivedfromtheInlandRevenueDepartment.Thenetproceedsfromtermdepositmaturitiescomponentofinvestingactivitiesreflectsthenettermdepositspaidtoandfromfinancialinstitutions.Thesehavebeenpresentedonanetbasisasthegrossamountsdonotprovidemeaningfulinformationforfinancialstatementpurposes.TheStatementofAccountingPoliciesandaccompanyingnotesformpartofthesefinancialstatements.
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008 $ $Cashflowsfromoperatingactivities
Cashwasprovidedfrom:
Receiptsfromcustomers 18,059,082 15,766,979Interestreceived 604,719 583,787
18,663,801 16,350,766Cashwasdisbursedto:
Paymenttosuppliers (14,121,496) (12,704,968)Paymenttoemployees (2,705,146) (2,606,905)Distributionofsurplus (915,103) (664,100)Netgoodsandservicetax (354,091) (262,253)Interestpaid (3,690) (3,885)
(18,099,526) (16,242,111)
Netcashinflowfromoperatingactivities 12 564,275 108,655
Cashflowsfrominvestingactivities Cashwasprovidedfrom:
Proceedsfromsaleoffixedassets 30,577 80,529Netproceedsfromtermdepositmaturities 1,195,314 729,686
1,225,891 810,215Cashwasdisbursedto:
Purchaseoffixedassets (165,159) (347,197)Purchaseofintangibleassets 0 (1,095)Purchaseofinvestments (14,665) (13,523)
(179,824) (361,815)
Netcashinflowfrominvestingactivities 1,046,067 448,400
Netincreaseincashheld 1,610,342 557,055 Openingcashbroughtforward 1,370,229 813,174
Endingcashcarriedforward 2,980,571 1,370,229
Thisisrepresentedby:
Cashandcashequivalents 4 2,980,571 1,370,229
TheNetgoodsandservicestaxcomponentofoperatingactivitiesreflectsthenetGSTpaidtoandreceivedfromtheInlandRevenueDepartment.Thenetproceedsfromtermdepositmaturitiescomponentofinvestingactivitiesreflectsthenettermdepositspaidtoandfromfinancialinstitutions.Thesehavebeenpresentedonanetbasisasthegrossamountsdonotprovidemeaningfulinformationforfinancialstatementpurposes.TheStatementofAccountingPoliciesandaccompanyingnotesformpartofthesefinancialstatements.
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
NOTE 2009 2008
$ $
Cash flows from operating activities Cash was provided from: Receipts from customers
18,059,082 15,766,979 Interest received
604,719 583,787
18,663,801 16,350,766
Cash was disbursed to: Payment to suppliers
(14,121,496) (12,704,968) Payment to employees
(2,705,146) (2,606,905)
Distribution of surplus
(915,103) (664,100) Net goods and service tax
(354,091) (262,253)
Interest paid
(3,690) (3,885)
(18,099,526) (16,242,111)
Net cash inflow from operating activities 12 564,275 108,655
Cash flows from investing activities Cash was provided from: Proceeds from sale of fixed assets
30,577 80,529 Net proceeds from term deposit maturities
1,195,314 729,686
1,225,891 810,215
Cash was disbursed to: Purchase of fixed assets
(165,159) (347,197) Purchase of intangible assets
0 (1,095)
Purchase of investments
(14,665) (13,523)
(179,824) (361,815)
Net cash inflow from investing activities
1,046,067 448,400
Net increase in cash held
1,610,342 557,055
Opening cash brought forward
1,370,229 813,174
Ending cash carried forward
2,980,571 1,370,229
This is represented by:
Cash and cash equivalents 4 2,980,571 1,370,229 The Net goods and services tax component of operating activities reflects the net GST paid to and received from the Inland Revenue Department. The Net proceeds from term deposit maturities component of investing activities reflects the net term deposits paid to and from financial institutions. These have been presented on a net basis as the gross amounts do not provide meaningful information for financial statement purposes. The Statement of Accounting Policies and accompanying notes form part of these financial statements.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
1. Other Income Interest income
604,719 582,425 Commission
33,361 34,101
Rental from houses
32,479 36,427 Pay plan fees
68,244 59,397
Dividend received
18,259 2,143
757,062 714,493
2. Property Charges Depreciation and amortisation
259,005 256,741 Rental, concession fees and power
70,804 66,952
Repairs and maintenance
28,677 37,043 Motor vehicle expenses
50,733 53,326
409,219 414,062
3. Other Expenses Audit fees for financial statements
30,850 30,060 Audit fees for NZIFRS transition
1,034 7,391
Bad debt written off
36,567 15,176 Change in provision for impairment
37,747 58,985
Operating leases
49,306 47,695 Sundry
363,487 339,347
518,991 498,654
4. Cash and Cash Equivalents Cash
67,479 65,731 Bank
113,841 88,226
Deposits with Grocery Groups
2,620 7,610 Deposit with the Bank
2,796,631 1,208,662
2,980,571 1,370,229
5. Short Term Bank Deposits Deposits placed with the Bank of New Zealand on short term
periods of greater than three months pending working capital and capital expenditure. Interest earned on these deposits are at the prevailing market rates.
0 1,195,314
6. Accounts Receivable Trade receivables
3,633,284 3,321,945 Other receivables
6,061 11,448
3,639,345 3,333,393
This is made up of: Current portion
3,427,463 3,178,721 Overdue
401,288 306,331
Impaired
(189,406) (151,659)
3,639,345 3,333,393
Accounts receivable due within one year
3,490,321 3,183,324 Accounts receivable due after one year
149,024 150,069
3,639,345 3,333,393
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
6. Accounts Receivable ~ continued Provision for impairment of receivables. Opening Balance
151,659 92,674
Additional provisions made during the year
74,314 74,161 Receivables written off during the period
(36,567) (15,176)
Closing Balance
189,406 151,659
7. Investments Shares and deposits in grocery and appliance buying groups
- Deposits maturing within one year
8,670 6,360
- Trading Shares fully paid
46,494 36,539 - Deposits maturing after one year
62,464 60,064
Total term portion.
108,958 96,603
Total Investments
117,628 102,963
8. Fixed Assets Current year Cost Opening cost Additions Disposals Closing cost
$ $ $ $
Buildings 103,503
103,503 Leasehold improvements 642,451
642,451
Computer equipment 306,756 13,876 7,702 312,930 Motor vbehicle 483,546 103,281 83,968 502,859 Plant and equipment 1,391,805 40,326 58,416 1,373,715 Video and DVD tapes 88,926 7,676 11,545 85,057
3,016,987 165,159 161,631 3,020,515
Accumulated depreciation Opening Acc Depn Depreciation
Depn on Disposals
Closing Acc Depn
$ $ $ $
Buildings 87,229 939
88,168 Leasehold improvements 355,663 62,190
417,853
Computer equipment 281,745 13,508 7,507 287,746 Motor vehicle 240,531 54,784 43,577 251,738 Plant and equipment 980,349 98,773 54,603 1,024,519 Video and DVD tapes 78,740 9,282 10,069 77,953
2,024,257 239,476 115,756 2,147,977
Book value
Opening Book Value
Closing Book Value
$ $
Buildings
16,274 15,335 Leasehold improvements
286,788 224,598
Computer equipment
25,011 25,184 Motor vehicle
243,015 251,121
Plant and equipment
411,456 349,196 Video and DVD tapes
10,186 7,104
992,730 872,538
16
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
6.AccountsReceivable~continued
Provisionforimpairmentofreceivables
OpeningBalance 151,659 92,674
Additionalprovisionsmadeduringtheyear 74,314 74,161
Receivableswrittenoffduringtheperiod (36,567) (15,176)
ClosingBalance 189,406 151,659
7.Investments
Sharesanddepositsingroceryandappliancebuyinggroups
‐Depositsmaturingwithinoneyear 8,670 6,360
‐TradingSharesfullypaid 46,494 36,539
‐Depositsmaturingafteroneyear 62,464 60,064
Totaltermportion. 108,958 96,603
TotalInvestments 117,628 102,963
8.FixedAssets
Currentyear
Cost OpeningCost Additions Disposals ClosingCost
$ $ $ $
Buildings 103,503 103,503
Leaseholdimprovements 642,451 642,451
Computerequipment 306,756 13,876 7,702 312,930
Motorvehicle 483,546 103,281 83,968 502,859
Plantandequipment 1,391,805 40,326 58,416 1,373,715
VideoandDVDtapes 88,926 7,676 11,545 85,057
3,016,987 165,159 161,631 3,020,515
Accumulateddepreciation OpeningAcc
Depn DepreciationDepnonDisposals
ClosingAccDepn
$ $ $ $
Buildings 87,229 939 88,168
Leaseholdimprovements 355,663 62,190 417,853
Computerequipment 281,745 13,508 7,507 287,746
Motorvehicle 240,531 54,784 43,577 251,738
Plantandequipment 980,349 98,773 54,603 1,024,519
VideoandDVDtapes 78,740 9,282 10,069 77,953
2,024,257 239,476 115,756 2,147,977
Bookvalue
Opening
BookValueClosingBook
Value
$ $
Buildings 16,274 15,335
Leaseholdimprovements 286,788 224,598
Computerequipment 25,011 25,184
Motorvehicle 243,015 251,121
Plantandequipment 411,456 349,196
VideoandDVDtapes 10,186 7,104
992,730 872,538
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
6. Accounts Receivable ~ continued Provision for impairment of receivables. Opening Balance
151,659 92,674
Additional provisions made during the year
74,314 74,161 Receivables written off during the period
(36,567) (15,176)
Closing Balance
189,406 151,659
7. Investments Shares and deposits in grocery and appliance buying groups
- Deposits maturing within one year
8,670 6,360
- Trading Shares fully paid
46,494 36,539 - Deposits maturing after one year
62,464 60,064
Total term portion.
108,958 96,603
Total Investments
117,628 102,963
8. Fixed Assets Current year Cost Opening cost Additions Disposals Closing cost
$ $ $ $
Buildings 103,503
103,503 Leasehold improvements 642,451
642,451
Computer equipment 306,756 13,876 7,702 312,930 Motor vbehicle 483,546 103,281 83,968 502,859 Plant and equipment 1,391,805 40,326 58,416 1,373,715 Video and DVD tapes 88,926 7,676 11,545 85,057
3,016,987 165,159 161,631 3,020,515
Accumulated depreciation Opening Acc Depn Depreciation
Depn on Disposals
Closing Acc Depn
$ $ $ $
Buildings 87,229 939
88,168 Leasehold improvements 355,663 62,190
417,853
Computer equipment 281,745 13,508 7,507 287,746 Motor vehicle 240,531 54,784 43,577 251,738 Plant and equipment 980,349 98,773 54,603 1,024,519 Video and DVD tapes 78,740 9,282 10,069 77,953
2,024,257 239,476 115,756 2,147,977
Book value
Opening Book Value
Closing Book Value
$ $
Buildings
16,274 15,335 Leasehold improvements
286,788 224,598
Computer equipment
25,011 25,184 Motor vehicle
243,015 251,121
Plant and equipment
411,456 349,196 Video and DVD tapes
10,186 7,104
992,730 872,538
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
8. Fixed Assets ~ continued Previous year Cost Opening cost Additions Disposals Closing cost
$ $ $ $
Buildings 122,336
18,833 103,503 Leasehold improvements 660,559 11,098 29,206 642,451 Computer equipment 312,489 19,785 25,518 306,756 Motor vehicle 493,398 133,549 143,401 483,546 Plant and equipment 1,320,694 173,347 102,236 1,391,805 Video and DVD tapes 86,382 9,418 6,874 88,926
2,995,858 347,197 326,068 3,016,987
Accumulated depreciation Opening Acc Depn Depreciation
Depn on Disposals
Closing Acc Depn
$ $ $ $
Buildings 94,965 (5,884) 1,852 87,229 Leasehold improvements 335,547 58,970 38,854 355,663 Computer equipment 275,125 33,347 26,727 281,745 Motor vehicle 282,807 28,826 71,102 240,531 Plant and equipment 972,021 108,648 100,320 980,349 Video and DVD tapes 71,053 14,372 6,685 78,740
2,031,518 238,279 245,540 2,024,257
Book value
Opening Book value
Closing Book value
$ $
Buildings
27,371 16,274 Leasehold improvements
325,012 286,788
Computer equipment
37,364 25,011 Motor vehicle
210,591 243,015
Plant and equipment
348,673 411,456 Video and DVD tapes
15,329 10,186
964,340 992,730
9. Intangible Assets Current year Cost Opening
cost Additions Disposals Closing
cost
$ $ $ $
Computer software 201,432
201,432
201,432 0 0 201,432
Accumulated amortisation Opening Acc Amort Amortisation
Amort on Disposals
Closing Acc Amort
$ $ $ $
Computer software 195,915 4,231 0 200,146
195,915 4,231 0 200,146
Carrying value
Opening Carry value
Closing Carry value
$ $
Computer software
5,517 1,286
17
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
8.FixedAssets~continued
Previousyear
Cost OpeningCost Additions Disposals ClosingCost
$ $ $ $
Buildings 122,336 18,833 103,503
Leaseholdimprovements 660,559 11,098 29,206 642,451Computerequipment 312,489 19,785 25,518 306,756
Motorvehicle 493,398 133,549 143,401 483,546
Plantandequipment 1,320,694 173,347 102,236 1,391,805
VideoandDVDtapes 86,382 9,418 6,874 88,926
2,995,858 347,197 326,068 3,016,987
Accumulateddepreciation OpeningAccDepn Depreciation
DepnonDisposals
ClosingAccDepn
$ $ $ $
Buildings 94,965 (5,884) 1,852 87,229
Leaseholdimprovements 335,547 58,970 38,854 355,663
Computerequipment 275,125 33,347 26,727 281,745
Motorvehicle 282,807 28,826 71,102 240,531
Plantandequipment 972,021 108,648 100,320 980,349
VideoandDVDtapes 71,053 14,372 6,685 78,740
2,031,518 238,279 245,540 2,024,257
Bookvalue
Opening
BookValueClosingBook
Value
$ $
Buildings 27,371 16,274
Leaseholdimprovements 325,012 286,788
Computerequipment 37,364 25,011
Motorvehicle 210,591 243,015
Plantandequipment 348,673 411,456
VideoandDVDtapes 15,329 10,186
964,340 992,730
9.IntangibleAssets
Currentyear Cost Opening
Cost Additions DisposalsClosing
Cost
$ $ $ $
Computersoftware 201,432 201,432
201,432 0 0 201,432
Accumulatedamortisation OpeningAcc
Amort AmortisationAmortonDisposals
ClosingAccAmort
$ $ $ $
Computersoftware 195,915 4,231 0 200,146
195,915 4,231 0 200,146
Carryingvalue
Opening
CarryValue
ClosingCarry
Value
$ $
Computersoftware 5,517 1,286
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
9. Intangible Assets ~ continued Previous year Cost Opening cost Additions Disposals Closing cost
$ $ $ $
Computer software 200,337 1,095 201,432
200,337 1,095 0 201,432
Accumulated amortisation Opening Acc Amort Amortisation
Amort on Disposals
Closing Acc Amort
$ $ $ $
Computer software 177,452 18,463 195,915
177,452 18,463 0 195,915
Carrying value
Opening Carry value
Closing Carry value
$ $
Computer software
22,885 5,517
2009 2008
$ $
10. Accounts Payable Trade creditors
1,116,371 882,203 Accrued liabilities
54,441 60,003
Employee entitlements
316,793 289,781
1,487,605 1,231,987
11. Distribution of Surplus Distributions to the NZDF Single Services Welfare Funds pursuant to
section 14 of the Armed Forces Canteens Act 1948. Distributions payable are:
Army Central Welfare Fund
300,316 257,700 RNZ Navy Central Fund
134,617 124,125
RNZ Airforce Central Fund
51,067 44,475
486,000 426,300
12. Reconciliation of reported net surplus with cash flows from operating activities
Net surplus
1,517,321 1,017,563
Add non cash items: Depreciation and amortisation
259,005 256,741
Add / (less) movements in working capital items: (Increase) in receivables
(305,951) (426,286)
(Increase) in inventory
(246,614) (149,156) Increase in payables
255,617 73,893
Net working capital movements
(296,948) (501,549)
Distribution of surplus
(915,103) (664,100)
Net cash inflow from operating activities
564,275 108,655
18
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
9.IntangibleAssets~continued
Previousyear Cost OpeningCost Additions Disposals ClosingCost
$ $ $ $
Computersoftware 200,337 1,095 201,432
200,337 1,095 0 201,432
Accumulatedamortisation OpeningAcc
Amort AmortisationAmortonDisposals
ClosingAccAmort
$ $ $ $
Computersoftware 177,452 18,463 195,915
177,452 18,463 0 195,915
Carryingvalue
Opening
CarryValue
Closing
CarryValue
$ $
Computersoftware 22,885 5,517
2009 2008
$ $
10.AccountsPayable
Tradecreditors 1,116,371 882,203
Accruedliabilities 54,441 60,003
Employeeentitlements 316,793 289,781
1,487,605 1,231,987
11.DistributionofSurplus DistributionstotheNZDFSingleServicesWelfareFundspursuantto
section14oftheArmedForcesCanteensAct1948
Distributionspayableare: ArmyCentralWelfareFund 300,316 257,700
RNZNavyCentralFund 134,617 124,125RNZAirforceCentralFund 51,067 44,475
486,000 426,300
12.Reconciliationofreportednetsurpluswithcashflowsfrom
operatingactivities
Netsurplus 1,517,321 1,017,563
Addnoncashitems: Depreciationandamortisation 259,005 256,741
Add/(less)movementsinworkingcapitalitems:
(Increase)inreceivables (305,951) (426,286)
(Increase)ininventory (246,614) (149,156)Increaseinpayables 255,617 73,893
Networkingcapitalmovements (296,948) (501,549)
Distributionofsurplus (915,103) (664,100)
Netcashinflowfromoperatingactivities 564,275 108,655
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
9. Intangible Assets ~ continued Previous year Cost Opening cost Additions Disposals Closing cost
$ $ $ $
Computer software 200,337 1,095 201,432
200,337 1,095 0 201,432
Accumulated amortisation Opening Acc Amort Amortisation
Amort on Disposals
Closing Acc Amort
$ $ $ $
Computer software 177,452 18,463 195,915
177,452 18,463 0 195,915
Carrying value
Opening Carry value
Closing Carry value
$ $
Computer software
22,885 5,517
2009 2008
$ $
10. Accounts Payable Trade creditors
1,116,371 882,203 Accrued liabilities
54,441 60,003
Employee entitlements
316,793 289,781
1,487,605 1,231,987
11. Distribution of Surplus Distributions to the NZDF Single Services Welfare Funds pursuant to
section 14 of the Armed Forces Canteens Act 1948. Distributions payable are:
Army Central Welfare Fund
300,316 257,700 RNZ Navy Central Fund
134,617 124,125
RNZ Airforce Central Fund
51,067 44,475
486,000 426,300
12. Reconciliation of reported net surplus with cash flows from operating activities
Net surplus
1,517,321 1,017,563
Add non cash items: Depreciation and amortisation
259,005 256,741
Add / (less) movements in working capital items: (Increase) in receivables
(305,951) (426,286)
(Increase) in inventory
(246,614) (149,156) Increase in payables
255,617 73,893
Net working capital movements
(296,948) (501,549)
Distribution of surplus
(915,103) (664,100)
Net cash inflow from operating activities
564,275 108,655
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
$ $
13. Operating Lease Commitment Commitments relating to Head Office and Scott Base premises and Trading
Locations for equipment rentals are as follows Not later than one year
71,178 91,050
Later than one year and not later than five years
15,297 Total Commitment
71,178 106,347
14. Key Management Personnel Compensation and Remuneration of Employees Key management comprises members of Council, Chief Executive and the Financial Controller. Members of the Council are not paid any remuneration
Salary and other short term employee benefits
232,340 248,053
Number of Employees $140,000 - $150,000
1 1
$100,000 - $110,000
1
15. Contingent Liabilities
The Council has no material contingent liabilities (Nil in 2008). 16. Financial Instruments (a) Fair values
Fair values of financial instruments is equivalent to the amount disclosed in the Balance Sheet. This includes instruments such as cash and cash equivalents, short term deposits, investments, accounts receivable and accounts payable.
(b) Credit risk Credit risk is the risk that an third party will not be able to meet its obligations to the Council. In the normal course of its business the Council incurs credit risk from cash and short term deposits with the bank, investments and accounts receivable. The Council places its cash and deposits with its authorised bank which has a high credit rating. Accounts receivable are subject to credit evaluations and collateral where possible. There is no significant concentration of credit risk.
(c) Interest rate risk Interest rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing or lending. The interest rate risk on the Councils borrowings is limited to the corporate rate set by the bank on its overdraft. The interest rate risk on investments and accounts receivable will fluctuate, due to the changes in market interest rates. The Council does not consider there is any significant interest exposure on its borrowing or lending.
17. Related Party Transactions
The New Zealand Defence Force (NZDF) is considered a related party to the AFCC. Senior members of the NZDF serve on the Council as defined under s4 of the Armed Forces Canteens Act 1948. The NZDF provides facilities to the AFCC to conduct its operations in accordance with Defence Force Order 03/2007. During the year members of Council and key management, as part of normal customer relationship, were involved in minor purchases from the AFCC.
19
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008 $ $13.OperatingLeaseCommitment CommitmentsrelatingtoHeadOfficeandScottBasepremisesandTrading
Locationsforequipmentrentalsareasfollows
Notlaterthanoneyear 71,178 91,050Laterthanoneyearandnotlaterthanfiveyears 15,297
TotalCommitment 71,178 106,347
14.KeyManagementPersonnelCompensationandRemunerationofEmployees
KeymanagementcomprisesmembersofCouncil,ChiefExecutiveandtheFinancialController.MembersoftheCouncilarenotpaidanyremuneration
Salaryandothershorttermemployeebenefits 232,340 248,053 NumberofEmployees
$140,000‐$150,000 1 1$100,000‐$110,000 1
15.ContingentLiabilities
TheCouncilhasnomaterialcontingentliabilities(Nilin2008).16.FinancialInstruments(a)Fairvalues
FairvaluesoffinancialinstrumentsisequivalenttotheamountdisclosedintheBalanceSheet.Thisincludesinstrumentssuchascashandcashequivalents,shorttermdeposits,investments,accountsreceivableandaccountspayable.
(b)CreditriskCreditriskistheriskthatanthirdpartywillnotbeabletomeetitsobligationstotheCouncil.InthenormalcourseofitsbusinesstheCouncilincurscreditriskfromcashandshorttermdepositswiththebank,investmentsandaccountsreceivable.TheCouncilplacesitscashanddepositswith
itsauthorisedbankwhichhasahighcreditrating.Accountsreceivablearesubjecttocreditevaluationsandcollateralwherepossible.Thereisnosignificantconcentrationofcreditrisk.
(c)Interestraterisk
Interestrateriskistheriskthatinterestrateswillchange,increasingordecreasingthecostofborrowingorlending.TheinterestrateriskontheCouncilsborrowingsislimitedtothecorporateratesetbythebankonitsoverdraft.Theinterestrateriskoninvestmentsandaccountsreceivable
willfluctuate,duetothechangesinmarketinterestrates.TheCouncildoesnotconsiderthereisanysignificantinterestexposureonitsborrowingorlending.
17.RelatedPartyTransactions
TheNewZealandDefenceForce(NZDF)isconsideredarelatedpartytotheAFCC.SeniormembersoftheNZDFserveontheCouncilasdefinedunders4oftheArmedForcesCanteensAct1948.TheNZDFprovidesfacilitiestotheAFCCtoconductitsoperationsinaccordancewith
DefenceForceOrder03/2007.DuringtheyearmembersofCouncilandkeymanagement,aspartofnormalcustomerrelationship,wereinvolvedinminorpurchasesfromtheAFCC.
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