New Image Annual Report 2012 concept.indd - NZX

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Notes to and forming part of the financial statements (continued) For the year ended 30 June 2012 28 Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years. Deferred tax is provided on all temporary differences at the reporting date between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: When the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. When the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that is has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. Additional taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. Goods and Services Tax (GST) The financial statements have been prepared so that all components are stated exclusive of GST except where the GST is not recoverable from the Inland Revenue Department (IRD). In these circumstances the GST component is recognised as part of the underlying item. Trade and other receivables and payables are stated GST inclusive. The net amount of GST recoverable from or payable to the IRD is included within these categories. V Operating Segments Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed by the executive management team (the chief operating decision makers) in assessing performance and determining the allocation of resources. The operating segments are identified by management based on the nature of the activities undertaken and the manner in which the product is sold, whether direct or retail sales. Discrete financial information about each of these operating segments is reported to the executive management team on at least a monthly basis. Reportable segments Direct Sales The direct sales operations are the most significant operating segment of the Group. Direct sales are as much about the marketing plan and lifestyle offered by it, as they are about the products presented as part of the plan offerings. Members sell the plan and buy the products. Major products include nutritional supplements (including colostrum based products) and weight loss packages, with the marketing mix of products and services varying from country to country. Due to the size of the Malaysia and Taiwan operations and their revenue and profitability, they are shown separately as individual segments, and also as part of a direct sales channel total. Retail Sales NIH (Col+) This operating segment relates to the production of the Col+ branded colostrum drink, which is sold to wholesale customers for resale through retail channels. Retail Sales Other The remaining non-direct sales operations of the Group are reported as one operating segment. The majority of products sold in this segment are infant formula, nutritional supplements and skin care products for resale through retail channels. The majority of the dairy and colostrum-based products included in this segment are sold under the customer’s own brand names. FCL Manufacturing This operating segment manufactures and supplies the majority of products for the direct sales and other non-direct sales segments. In addition some manufacture for third parties is undertaken to recover overheads in manufacturing operations. Head Office This operating segment provides support shared services and management oversight for the other segments. This segment is the balance of the entity’s activity. Revenues include Group management fees and services, product sold to Group entities at Group transfer prices, and a small amount of third party manufacturing revenue. Expenditure is for cost of sales, shared services, and other operational support which is not readily allocatable to other segments. We consider allocation of overhead from this segment to other operating segments to be inappropriate, and may confuse operating results. Accounting policies and inter-segment transactions The accounting policies used by the Group in reporting segments internally are the same as those contained in the notes to the financial statements for the entity. However, particular policies applicable to segment reporting are as follows: Sales Revenue Revenue from the sale of goods is attributed to each country based upon the location of the entity originating the sale. 29 NEW IMAGE GROUP ANNUAL REPORT NEW IMAGE GROUP ANNUAL REPORT
Notes to and forming part of the financial statements (continued) For the year ended 30 June 2012 30 Inter-entity sales Inter-entity sales are recognised based on an internally set transfer price as set from time to time. This pricing aims to reflect what the business operation could achieve if they sold their output and services to external parties at arm’s length. Segment assets and liabilities Segment assets and liabilities are shown net of intra-group balances, as these are a function of operational cash management and funding arrangements intra-group, and are not regarded as a part of each segment’s operational balances, even though they may form part of a particular geographical entity’s financial position. Inter-segment reconciliations to Group totals For the Group, the total for all operating segments, adjusted by any inter-segment eliminations, equals the total reported for the entity. Inter-segment eliminations include intragroup sales, cost of sales, commissions, management services fees, and profit on stock still held at reporting date sold at intra-group transfer prices. Income tax expense Income tax expense is calculated based on the segment operating profit using a notional charge of 28% (2011: 30%), except for Malaysia which is at 25% (2011: 25%). Partial adjustment (shown wholly in the Head Office Segment) is given for taxable or deductible temporary differences as estimates only to get a total Group position. W New Accounting Standards and Interpretations i) Changes in Accounting Policy and Disclosures The accounting policies adopted are consistent with those of the previous financial year except as follows: The Group has adopted the following new and amended New Zealand Equivalents to Financial Reporting Standards and interpretations as of 1 July 2011. NZ IAS 24 – Related Party Disclosures – effective 1 July 2011 NZ IFRS 7 – Financial Instruments Disclosures – effective 1 July 2011 NZ FRS 44 – New Zealand Additional Disclosures – effective 1 July 2011 The Group has not elected to early adopt any new standards or interpretations that are issued but not yet effective. Annual Improvements Project [2009 - 2011]: In 2009 to 2011 various amendments to NZ IFRS were issued as part of the Annual Improvements Project, primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions and application dates for each amendment. The adoption of the amendments resulted in changes to accounting policies but did not have any impact on the financial position or performance of the Group. ii) Accounting Standards and Interpretations Issued but Not Yet Effective At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet effective: NZ IAS 12 – Amendments to Income Taxes – effective for periods on or after 1 January 2012 NZ IAS 1 – Amendments to Presentation of Financial Statements – effective for periods on or after 1 July 2012 NZ IAS 19 – Employee Benefits – effective for periods on or after 1 January 2013 NZ IAS 27 – Separate Financial Statements – effective for periods on or after 1 January 2013 NZ IAS 28 – Investments in Associates and Joint Ventures – effective for periods on or after 1 January 2013 NZ IFRS 7 – Amendments to Financial Instruments: Disclosures – effective for periods on or after 1 January 2013 NZ IFRS 10 – Consolidated Financial Statements – effective for periods on or after 1 January 2013 NZ IFRS 11 – Joint Arrangements – effective for periods on or after 1 January 2013 NZ IFRS 12 – Disclosure of Interests in Other Entities – effective for periods on or after 1 January 2013 NZ IFRS 13 – Fair Value Measurement – effective for periods on or after 1 January 2013 NZ IAS 32 – Amendments to Financial Instruments: Presentation – effective for periods on or after 1 January 2014 NZ IFRS 9 (2010) – Financial Instruments – effective for periods on or after 1 January 2015 The directors expect that the standards and interpretations above may impact the Group in the next financial year. The directors have not yet made an assessment of the impact of these standards and interpretations. These standards and interpretations are likely to affect disclosure rather than measurement of transactions. All standards and interpretations will be adopted at their effective date (except for those Standards and Interpretations that are not applicable to the entity). X Investments in Associates The Group’s investment in its associates is accounted for using the equity method of accounting in the consolidated financial statements and at cost in the parent. The associates are entities over which the Group has significant influence and that are neither subsidiaries nor joint ventures. The Group generally deems it has significant influence if it has over 20% of the voting rights. Under the equity method, investments in associates are carried in the consolidated Statement of Financial Position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in associates. Goodwill included in the carrying amount of the investment in associate is not tested separately, rather the entire carrying amount of the investment is tested for impairment as a single asset. If an impairment is recognised, the amount is not allocated to the goodwill of the associate. The Group’s share of associate’s profits or losses is recognised in the Statement of Comprehensive Income, and its share of movements in other comprehensive income is recognised in Other Comprehensive Income. The cumulative movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parent entity’s Statement of Comprehensive Income as a component of other income. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associate. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the “share of profit of an associate” in the Statement of Comprehensive Income. 31 NEW IMAGE GROUP ANNUAL REPORT NEW IMAGE GROUP ANNUAL REPORT
Page 2 and 3: To enhance the health and well-bein
Page 4 and 5: Executive Chairman’s Review 2012
Page 6 and 7: NEW IMAGE GROUP LIMITED Annual Repo
Page 8 and 9: Statement of Changes in Equity (con
Page 10 and 11: Notes to and forming part of the fi
Page 44 and 45: Audit Report 84 Independent Auditor
Page 46 and 47: Statutory Information (continued) F
Page 48 and 49: Statutory Information (continued) F
Page 50: Company Directory For the year ende

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