NSLC Annual Report 2006-2007

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NSLC Annual Report 2006-2007 2006–2007 ANNUAL REPORT ALL Nova Scotians PROFIT FROM NSLC EARNINGS OF TABLE OF CONTENTS Chairman’s Report 2 President’s Report 4 $188.2 The Right Stores in the Right Market 6 Management Discussion and Analysis 38 Management’s Responsibility for Financial Reporting 44 MILLION Auditors’ Report 45 Balance Sheet 46 2006/2007 $188.2M Statement of Earnings and Retained Earnings 47 Statement of Cash Flows 48 Notes to the Financial Statements 49 The 77th NSLC Annual Report 2006–2007 was produced by the Nova Scotia Liquor 2005/2006 $181.2M Sales by Stores 51 Corporation and submitted to the Honourable Len Goucher, Minister Responsible for the Administration of the NSLC, for the fiscal year ended March 31, 2007. Financial Performance 56 Head Office Chairman Layout and Design Five-Year History 57 2004/2005 $170.0M 93 Chain Lake Drive Peter McCreath Pavonis Limited Halifax, Nova Scotia Source of Gross Sales Revenue 58 President and CEO Contributing Writers Canada B3S 1A3 Bret Mitchell Mark DeWolf Canadian and Imported Sales 59 Telephone Independent Auditors Photography 902.450.6752 Five-Year Sales Comparison 60 2003/2004 $166.8M Grant Thornton LLP Perry Jackson Photography Customer Service Five-Year Volume Comparison 61 1.800.567.5874 Board of Directors 62 Website 2002/2003 $157.9M www.thenslc.com Cover photograph: Mic Mac Mall Store, Dartmouth, Nova Scotia. Executive Officers 64 Inside Cover: Elmsdale Store interior, Elmsdale, Nova Scotia. Awards and Recognition 66 CHAIRMAN’S REPORT On behalf of the Board of Directors, I shopping experience eliciting the pride and and as an employer with the safety and Studies supported during the past year have On behalf of the NSLC, I would like wish to thank all the members of the Board would like to express our pleasure and enthusiasm of Nova Scotians.” As Chairman, well-being of all our employees foremost shown that our Province has a great future to thank the Government of Nova for their commitment and hard work. satisfaction with the tremendous success I receive feedback frequently and regularly in our minds. For 76 years since the as one of Canada’s premier wine producing Scotia for its continuing support, I have no doubt that fiscal 2007–08 will enjoyed by the NSLC during Fiscal 2006–07. from our customers, our stakeholders and establishment of the NSLC, the NSLC has regions. We congratulate the Nova Scotian and in particular, thank our former be another successful year for the NSLC. The President has clearly outlined the our shareholder, the government of Nova been mandated to promote the socially wineries that are winning medals in Minister, the Honourable Carolyn We will continue to pursue the goals and elements and parameters of this success in Scotia through our Minister. I am pleased to responsible use of our products. In recent prestigious national and international Bolivar Getson, who, not withstanding commitments of our strategic plan. We will his report. That success is due primarily to report that that feedback has been highly years, we have made a considerable increase competitions. The NSLC is proud to work her other important responsibilities in continue to place customers at the centre the members of our staff, their dedication positive about our staff, our new look stores, in the resources devoted to this important cooperatively with our beverage alcohol government, has always shown her of our business planning, including Nova 2 and commitment to the Corporation and our broadened product selection, and about part of our legislated mandate. I commend producers, our wineries, our breweries commitment, support, diligence and Scotia’s licensees who are major customers to welcoming and serving our customers. our showcase events, led by our highly and compliment our staff and partners who and our single malt distillery – the only friendship in fulfilling her responsibilities of the NSLC. We will continue to work to It is due to the strong leadership of our successful series of Port of Wines Festivals have delivered outstanding and successful one of its kind in North America. These as Minister Responsible for the NSLC. achieve the financial goals established President, Bret Mitchell, and our strong and our regional and product festivals. campaigns in this regard, campaigns that industries not only have a very positive This past year saw the departure of two in our business plan. We will continue executive team. It is due to the on-going These events are only possible because have brought distinction to our Province economic development impact, but they original members of the Board of the NSLC, to support the development of the local support, cooperation of our many suppliers of the excellent work of our staff and through gold level awards at both the significantly enhance our tourism offer Bob Curley of New Glasgow and Brian beverage alcohol industry. And we will from around the globe. And, it is due to volunteer teams and the vital support of national and international levels from such to visitors from at home and abroad. Butler of Fall River. Bob and Brian served the continue our leadership in seeking to ensure the support of our customers who are the our suppliers, all of whom, I wish to thank. prestigious organizations as the Retail During 2006–07, for the first time, the NSLC with dedication and commitment for the safe, responsible use of our products. As central focus of our business strategy. Council of Canada and the International I am particularly pleased to note that 2006– NSLC had sales in excess of $500 million. It six years. They have made their mark and our slogan says: ‘make it a social occasion,’ Association of Business Communicators. Over the past few years, the NSLC has 2007 was not only a financially successful would be a wonderful accomplishment if we thank them for their contribution. At the but make it a safe, healthy social occasion. These awards are not just a tribute to undergone a profound transition to a year, but an award winning year for the during the 2007–08 fiscal year, for the first beginning of the year, three new members those individuals who have delivered the Kindest Regards, customer-focused, retail organization. Nova Scotia Liquor Corporation. Not only time we can deliver a dividend in excess joined the Board: Joe Macdonald of winning programs, but to our customers, Our vision, as outlined in our strategic did we return a record profit, but we were of $200 million to our Shareholder the Antigonish, John Biddle of Bridgewater and primarily Nova Scotians who have bought plan has been to “be recognized as a recognized on the national and international Government of Nova Scotians – money Peter Green of Bedford. Already, they have The Honourable Peter L. McCreath, PC, MA, in to the key messages that the NSLC and superb retailer - known for our business stage as a dynamic and inventive retailer, a that can contribute to fulfilling the demonstrated the strong contribution they DCL, FRSA others have sought to deliver with respect performance, customer focus and vibrant leader in social responsibility messaging, important priorities of Nova Scotians. have to make to our work. As Chairman, I Chairman, NSLC Board of Directors to social and corporate responsibility. Peter McCreath at NSLC’s Store of the Year, Portland Street, Dartmouth As President of the NSLC, I have a great appreciation for the It’s been a pleasure to be part of this journey of change. I Occasions the largest circulation magazine in Atlantic dedication of all NSLC employees. Our whole team, from retail can say unequivocally that the NSLC no longer responds Canada. This will improve its quality and effectiveness store clerks to distribution center workers and management to trends; it leads them. With this new mentality it has at informing consumers and increasing sales. have all contributed to our amazing achievements over this become imperative for us to take a more disciplined Our focus on operating expenses will continue. Last past year. I am glad to report that we exceeded our year approach to category management. In the last fiscal year, year, our ratio was 14.7%, which was slightly under our financial goals, showing a record profit of $188.2 million we succeeded in creating a more refined process of product budgeted 14.8%. In effort to become a more cohesive and PRESIdent’S REPORT on sales of $504.7 million. These both represented close to selection based on consumer analysis to ensure every new effective unit at all levels, with the end goal of improving a 4% increase as compared to the previous fiscal year and item works in conjunction with our sales focus. A greater our Gross Margin even further, we implemented an in excess of almost $4 million in profit above our budget. emphasis was placed on the profitability of each product Enterprise Resource Planning system with the use of SAP in the system, a Return on Investment (ROI) hurdle rate Walk into our stores, and it’s not hard to understand why we technology – the world’s largest provider of integrated model for prioritizing capital expenditures was created. have had such a successful year. Our stores are vibrant, alive business software. This new system, which went live just Exit strategies were developed for under-performing items with energy and create a culture of discovery for our ever before the end of the fiscal year, integrated all our data to ensure a minimum of unproductive inventory in both developing customer base. While on face value, we could and merges all our processes under a single unified system. our store network and at our Distribution Centre. Our pat ourselves on the back for creating these highly engaging The system was launched on time and on budget and is category management team in co-operation with our retail environments, of which every Nova Scotian can be proud, expected to greatly improve our efficiency and ultimately our supply chain and suppliers has also developed effective there is an intelligence and thoughtfulness to the design profitability.T his implementation has been heralded as one replenishment strategies to ensure we are working at our that transcends merely the decorative elements.
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