Calgary Co-op 2011 Annual Report

Life’s Essentials

Calgary Co-op 2011 Annual Report

Our Vision:To enhance everyday living with life’s essentials.

Our Mission:We deliver great products and exceptional service our communities value.

We Value:Community CommitmentCaring ServiceGreat Quality Life’s Es sentials

Calgary Co-op 2011 Annual Report 1

Contents

Message from the Board 3

Message from the CEO 4

Board Governance 6

Meet the Executive Leadership Team 10

Report on Operations 11

Member Refund and Reports 17

Officers’ Report 18

Independent Auditors’ Report 19

Audited Financial Statements 20

Locations 33

Life’s Es sentials

Back row L-R:

Randy Kott

Front row L-R:

Stuart Cantrill (Chair)

Terry Geib (Vice Chair)

Rick Smith

Lisa Wise (Board Secretary)

Roy Goodall Peggy LeSueur Myra D’Souza Kormann Johanna Bates


Message from the Board

On behalf of the board of directors, I am pleased to report that for the 2011 financial year that ended on October 29, 2011, Calgary Co-op member-owners will share $30 million in member refunds. This represents $20.7 million paid in cash and $9.3 million in share equity. Your board undertook a number of initiatives in 2011 including a reassessment of Calgary Co-op’s Vision, Mission and Values and a re-evaluation of the board’s committees. As your representatives within Calgary Co-op, the first priority of the board of directors is to ensure our member-owners have a voice within the company. The review of our current committees revealed alternate ways to engage our membership and invite our member-owners to actively participate in Calgary Co-op initiatives. A summary of these exciting initiatives and the board’s achievements over the past year can be found on pages 6-9 of the Annual Report.

In the past year we celebrated Calgary Co-op’s 55th Anniversary. The endurance of this association is a direct result of the support and loyalty of our valued member-owners. As we look towards the future, our

challenge will be to continue to offer the products and services our communities value, while adapting to a new retail environment. We are confident that the new operating strategies that have been put into place and the large capital projects we are undertaking will help drive Calgary Co-op forward.

Your board is honoured to represent the over 440,000 member-owners of Calgary Co-op, and remains committed to representing your collective best interests in the years ahead.

On behalf of the board of directors,

Stuart Cantrill, Board Chair

440,423Calgary Co-op Member-Owners

Calgary Co-op 2011 Annual Report4

Message from the CEO

If we have learned anything from the past 55 years as one of the most successful co-operatives in North America, it’s that Calgary Co-op must stay true to our heritage. The longevity of our organization is directly related to the loyalty and support of our member-owners. Time and time again we have heard that our commitment to providing great products and the exceptional service our communities value is important to our member-owners and the reason they continue to support Calgary Co-op.

As the retail environment changes, Calgary Co-op is now faced with a new challenge – staying competitive in a market that has significantly changed from what we have experienced in the past. With more and more retailers entering the market, Calgary Co-op has to focus on what differentiates our organization from our competitors and what services our member-owners value.

Throughout the years, Calgary Co-op has been committed to our community and worked hard to provide the caring service and great quality products that our member-owners have come to expect. Our standards are high and we have every intention to provide greater everyday pricing and value for our member-owners.

In an effort to clearly identify and refocus our entire organization on Calgary Co-op’s plan to move forward, we recently introduced a new Vision, Mission and Values.

Vision

To enhance everyday living with life’s essentials.

Mission

We deliver great products and exceptional service our communities value.

We Value

Community Commitment Caring Service Great Quality

The Calgary Co-op you have enjoyed in the past will continue to be the Calgary Co-op you see today. In 2011, our commitment to community investment resulted in over $3 million in donations to local not-for-profit and charitable organizations. We have also made a concentrated effort to support local growers including Paradise Hill Farm in Nanton, Shirley’s Greenhouses


in Airdrie, All Seasons Mushrooms of Crossfield, Grozone Greenhouse in Mazeppa and Rosedale and Fairlane Colonies. We also exclusively offer products from Calgary favourites including Simple Simon Pies and Peppino’s Gelato and Sorbet. As a locally-owned and operated co-operative, we believe we have to meet the needs of our community first.

And while Calgary Co-op plans to stay true to our heritage, there are new challenges ahead. One exciting venture is the new look we are planning to introduce at many of our centres including our High River food centre opening in the summer. The new design and layout will better reflect the needs of our member-owners and enhance your shopping experience.

We are excited about the future of Calgary Co-op and ready for the next 55 years.

N. Deane Collinson, Chief Executive Officer

1956 First Calgary Co-op location opened.


Stuart Cantrill, Chair

Terry Geib, Vice Chair

Lisa Wise, Board Secretary

Johanna Bates

Roy Goodall

Myra D’Souza Kormann

Randy Kott

Peggy LeSueur

Rick Smith

Deane Collinson, Officer

Barry Heinrich, Officer

Board Governance

Each year, following the conclusion of the Annual General Meeting in March, the board of directors appoints its board officers and committee representatives for the coming year. The following pages contain a summary of each committee’s key accomplishments throughout the past year.

In 2011, the board of directors held a board-only planning session, a planning session with executive management, seven regular meetings and six in-camera meetings. At the planning meeting, the existing Vision, Mission and Values were deemed to be no longer relevant. Calgary Co-op, with the help of a researcher, held focus groups with members and employees regarding the Vision, Mission and Values. The board, in its September meeting, approved a new Vision, Mission and Values for Calgary Co-op, which you will find highlighted in the Annual Report. The board also approved operating strategies and budget for the current year, as well as various large capital projects throughout the year. The following sections include summaries of each of the board’s standing committee’s key accomplishments over the past year.

2011 Board of Directors and Officers Audit Committee

Board committee members: Roy Goodall, Chair; Randy Kott; Rick Smith; Lisa Wise.

Ex officio: Stuart Cantrill, Deane Collinson.

Management resource: Barry Heinrich; Terry Anderson, Internal Audit Director; Llyle Toews, Corporate Controller. The external auditors may also attend meetings of the committee.

Audit committee members are independent and have, as a minimum, a basic understanding of financial statements, internal control and risk management. Of the four Audit Committee members, each has previous Audit Committee experience and skill, with Roy Goodall as the new Audit Chair. Committee members avail themselves of opportunities to improve their understanding of financial reporting and related issues and strive to maintain a current understanding of emerging issues, such as private enterprise generally accepted accounting principles.

This committee assists the board in ensuring that risk management and internal control systems are in place and operating effectively. In addition, the committee monitors the quality and integrity of financial and management reporting processes; oversees the independence, qualifications and performance of the external auditor and the Internal Audit Director; ensures that environmental management policy and systems are in place and effective; and examines compliance with all legislation and regulation. The committee also ensures that a code of conduct and conflict of interest


guidelines are in place, analyzes their effectiveness and provides an avenue of communication among the external auditors, management, the Internal Audit Department, members and the board.

During the 2010-2011 financial year, the committee met five times and addressed all of the items on its work plan. Of special note was an initial oversight of the impact the transition to accounting standards for private enterprises would have on the association. The committee also reviewed the structure, function and tasks of the Internal Audit Department.

A copy of the Audit Committee Charter can be found on www.calgarycoop.com (About Us).

Governance Committee

Board committee members: Lisa Wise, Chair; Terry Geib; Myra D’Souza Kormann; Peggy LeSueur; attending member Roy Goodall.

Ex officio: Stuart Cantrill.

Management resource: Deane Collinson.

The committee held five full committee meetings and three smaller working sessions during the year in order to complete work on various assignments, including changes to the Director Election process, addressing the second phase of board succession planning, researching best practices required for a high-performing board,

reviewing and streamlining significant sections of the Directors’ Manual, beginning work on strategic diversity, continuing work on an online board document portal, creating structure for a new co-operative relations committee and recommending a by-law update for consideration at the Annual General Meeting.

Member Relations Committee

Board committee members: Peggy LeSueur, Chair;

Terry Geib; Myra D’Souza Kormann.

Ex officio: Stuart Cantrill; Deane Collinson.

Management resource: Laurie Schild.

The Member Relations Committee’s role in the past was focused in two directions:

To provide Director accessibility and connection with members

To act as an effective recruitment tool in the Board election process

During the previous year, members of the Member Relations Committee (MRC) had commented that the current structure was not effective in delivering on those directives. As a result of that feedback, the Board asked to re-evaluate the committee. The Board and Calgary Co-op employee members of the committee met in July to discuss the future of the MRC.

9Directors on the Calgary Co-op Board


After full discussion, the group recommended that the MRC be replaced with a new committee, the Co-operative Relations Committee (CRC), to focus on increasing the interest of member-owners and others in the community about co-operatives and educating them about Calgary Co-op’s involvement with other co-operatives.

Performance and Compensation Committee

Board committee members: Rick Smith, Chair; Johanna Bates;

Roy Goodall; Lisa Wise.

Ex officio: Stuart Cantrill; Deane Collinson.

Management resource: Lee Gonsalves.

The committee met eight times during the year to review board and employee compensation programs, employee performance and incentive plans, and board training and development programs.

Other Representation

Each year, board members and senior management participate on a number of other committees and/or organizations on behalf of Calgary Co-op. These include:

Calgary Co-op Charitable Trust Fund: Trustees: Roy Goodall, Randy Kott, Rick Smith.

Management Trustees: Barry Heinrich; Llyle Toews, Chair.

The Produce People Board of Directors:

Johanna Bates, Deane Collinson.

The Alberta Community and Co-operative Association: Rick Smith, Director and First Delegate; Terry Geib, Second Delegate.

AGM Management Committee: Myra D’Souza Kormann; Laurie Schild, Chair; Stuart Cantrill, Ex Officio.

Stampede Management Committee: Terry Geib; Karen Allan, Co-Chair; Cindy Drummond, Co-Chair.

Federated Co-operatives Board Representative for District 5:

Randy Kott.

Federated Co-operatives Resolutions Committee: Rick Smith; Roy Goodall (alternate).

Delegates to Federated Co-operatives Limited 83rd Annual General

Meeting: Stuart Cantrill, Terry Geib, Roy Goodall, Peggy LeSueur, Rick Smith. Visitors: Johanna Bates, Myra D’Souza Kormann, Lisa Wise.

Observers to the Canadian Co-operative Association Annual

Meeting – Terry Geib, Myra D’Souza Kormann.

Board Remuneration and Annual Purchases

Board remuneration for the 2011 financial year (November 2010 through October 2011) was based on compensation recommendations approved by members at the March 2010 Annual General Meeting (AGM). At the March 2011 AGM, the members approved a recommendation to the By-Laws to increase the annual purchase requirement of directors from $2,400 per annum to $3,600 per annum.


Director Annual Remuneration Purchases 2011 2010 2010

Barry Ashton2 $ 13,050 $ 35,672 $ N/A4

Johanna Bates 32,831 30,237 8,653

Stuart Cantrill (Chair) 81,590 81,785 7,558

Terry Geib 38,443 37,081 23,637

Roy Goodall 37,335 23,507 9,551

Alexander Ingram1 – 5,180 N/A4

Myra D’Souza Kormann 34,641 37,935 6,249

Peggy LeSueur3 22,762 – 8,066

Randy Kott 33,831 22,548 14,802

Rick Smith 39,193 36,931 11,812

Laura Sullivan1 – 7,027 N/A4

Lisa Wise 38,370 32,902 34,197

Total Remuneration $ 372,046 $ 350,805

Notes:

1. Remuneration for period November 2009 to March 2010. Director’s term ended March 2010.

2. Remuneration for period November 2010 through March 2011. Director’s term ended March 2011.

3. Remuneration for period March 2011 through October 2011. Director’s term commenced March 2011.

4. The 2011 Annual Purchases are only reported for those Directors currently sitting on the Board.

Report on Federated Co-operatives Limited

Calgary Co-op owns approximately eleven percent of the equity in Federated Co-operatives Limited (FCL). FCL is the major grocery and petroleum supplier for Calgary Co-op, in addition to other commodities. The Grocery People (an FCL subsidiary) and Calgary Co-op jointly own The Produce People, which is the major supplier of produce to Calgary Co-op and other co-operatives in southern Alberta. Calgary Co-op elects one director to the FCL board and appoints delegates and observers to its annual meeting and regional fall conference.

FCL sales for its 2010-2011 fiscal year were $8.3 billion; net savings were $839 million. This represents an increase in sales of 16 percent over the previous year and a 68 percent increase in net savings. As reported in the financial statements in this annual report, Calgary Co-op received $47 million in patronage refunds from FCL for 2011.

Cindy Drummond,

Communications

Manager; Stuart Cantrill,

Board Chair and

Lisa Wise, Board

Secretary at the Meet

Your Directors booth

during a Calgary Co-op

Stampede Breakfast.

80 Calgary Co-op locations including food centres, gas bars, home health care centres and wines & spirits stores.

Each board member continues to maintain or surpass the $3,600 requirement in annual purchases at Calgary Co-op to be eligible for election to the board.

The following reflects remuneration paid to directors in the 2011 financial year as noted above.


N. Deane Collinson, Chief Executive Officer

Barry Heinrich, Chief Financial Officer

Jeff Ambrose, Vice President, Operations and Merchandising

Lee Gonsalves, Vice President, Human Resources

Wilf Harms, Vice President, Facilities Development and Real Estate

Laurie Schild, Vice President, Marketing and Member Relations

Meet the Executive Leadership Team


Awards and Accolades

Calgary Co-op strives to provide the great quality products and exceptional service our communities value. In 2011, we were honoured to be awarded Best Grocery Store in the Calgary Herald Readers’ Choice Awards for the 11th consecutive year. We also won best car wash, deli, liquor store and travel agency and were secondary winners in the bakery, drug store and wine store categories. Our Home Health Care Centre was honoured with a 2011 Consumer Choice Award for Business Excellence and we also won multiple awards in the Readers’ Choice Awards by Airdrie City View and the Okotoks Western Wheel Readers’ Choice Awards.

Food

In 2011, Calgary Co-op broke ground for our highly anticipated food centre in High River. Our 35,000 square foot store is expected to open in the summer of 2012.

Our fresh meat program continues to be very popular among our members and was rated the best in the Calgary market by members and consumers who shop at our competitors. We carry the best, freshest cuts of aged AA and AAA 100% Canadian beef and the freshest and largest varieties of Canadian pork and poultry items. Our meat experts help you chose the right cut, and will also tell you how to prepare it.

In the produce section, we continued to focus on Canadian growers and producers. We sold tomatoes grown without pesticide from Paradise Hill Farm in Nanton, Alberta exclusively at our centres. We bought and sold almost the entire garlic crop grown by Oxley Garlic in Claresholm, Alberta and sold truckloads of sweet, tasty peaches and cream corn from Schrimer Family Farms in Manitoba.

Report on Operations

Locally owned and operated, Calgary Co-op is one of the largest retail co-operatives in North America and has been a member of the Calgary community for over 55 years. With over 440,000 members, 3,400 employees, assets of $441.4 million and annual sales of $1billion, Calgary Co-op, Calgary’s local fresh market, is committed to lead in food, petroleum, pharmacy, home health care, travel and wines & spirits. Investing over $3 million into the Calgary and area community, Calgary Co-op supports numerous local not-for-profit and charitable organizations.Calgary Co-op currently has 23 food centres and pharmacies, 27 gas bars, 22 car washes, 2 home health care centres, 7 travel offices

and 21 wines & spirits locations, including 3 tasting centres, in Calgary and surrounding area.

8 Calgary Herald Readers’ Choice Awards

18,273New members of Calgary Co-op in 2011


We also had a great year in promoting fresh organic produce. We increased our base listings and implemented a weekly advertising program where we advertised three organic produce items at a great retail price. Through these efforts, we improved our position in the marketplace to selling 30% of Calgary’s organics (Nielsen data).

Using the results of the Bakery Study conducted in 2010, a complete rollout was started in May 2011 and has had a positive impact on overall bakery operations. We have introduced new organic products, new cake and bread products and continue to source new product offerings to better suit our members and reduce costs.

Our deli offerings now include over 400 types of cheese and a cheese of the month program which highlights a new selection each month. Wok N Grill Asian bowls are available at all locations and we continue to offer fresh new sushi products.

In grocery, we continue to monitor our pricing strategies to be current in today’s marketplace. We have introduced Price Drop programs to provide quality products with competitive pricing during key seasonal periods in the year including barbecue season, back to school and recently, baby essentials for growing families. We continue to source “good for you” products including organics and gluten-free to enhance the food offering on our shelves.

Calgary Co-op recognizes the changing demographics with the market and is currently enhancing our offering of ethnic food products to serve the needs of all members. Our first pilot project is our Taradale location and upon completion of this centre, we will be moving on to our Hamptons location. Following the implementation of

these products at both locations, we will continue to look for additional opportunities to expand these ethnic food offerings to other locations.

Petroleum

This past year was filled with multiple projects for the Petroleum division. Construction continued on our newest gas bar in Panorama Hills which opened in November 2011 and features 8 pumps with 16 fueling positions, a 3,000 square foot convenience store and a single bay touchless car wash. We also upgraded our Hamptons location by doubling the size of the convenience store, adding diesel and an additional two pumps to the location, and expanding the car wash to a double bay touchless car wash. Our Village Square location now offers diesel as well and received upgrades to the fuel storage tank, two additional pumps and a double bay touchless car wash. Additional upgrades were completed at our North Hill and Oakridge locations. Planning continues for upgrades to our Deer Valley, Forest Lawn, Richmond Road and Taradale gas bars while construction continues on our new High River gas bar which is expected to be completed in spring 2012.

335million Litres of fuel pumped from Calgary Co-op gas bars in 2011.


Travel

Our travel division continued to face challenges in 2011, but we move forward exploring new markets, offering new products/services, investigating emerging destinations and adapting to change with innovative marketing approaches and new technologies.

The economic recovery has been erratic, but there are signs that the travel industry is recovering in its own way, regaining optimism and tradition of innovation and adaptation.

In these times of change, we are proud to have a team of travel professionals that sense the mood of travellers and travel buyers. They are committed to delivering what our members want and sharing their travel experience and knowledge.

Pharmacy

In 2011, our pharmacies continued to focus on the many health and wellness needs of our patients with in-store clinics on heart health, osteoporosis, flu shots and diabetes management. We have pharmacists who are certified in diabetes, respiratory, geriatrics, anticoagulation and injections services. Our compounding lab prepares specialty products and our compliance packaging centre provides individualized packaging to meet each member’s needs.

Home Health Care

We continued to focus on expanding our equipment sales in 2011 and have introduced several lines of walkers, scooters and power chairs, some of which are presently exclusive to Calgary Co-op Home Health Care. We also began working with a new home builder that is developing homes designed to meet the needs of

people that have mobility issues. We have become the manufacturer preferred vendor for Ram Lift products in Southern Alberta and will take over their service contracts as well as the promotion of their Crystal elevator and Trus T porch lifts. In addition, we renovated our Macleod Trail location to improve customer privacy and service in the Ostomy and rental areas.

Wines & Spirits

A number of new locations opened in 2011 including Crowfoot, North Hill, Oakridge and Okotoks. Our Beddington location also completed a renovation that doubled its previous size. Our spring and fall Grape Escapes continue to be extremely popular and sell out on a regular basis as do our dinner events which are held at various restaurants across the city throughout the year. Our three new “Tasting Centre” locations in Beddington, Crowfoot and Oakridge have received an incredible response with our Tasting Rooms being booked most nights for tastings or private functions. We are currently in the planning stages to open a 10,000 square foot larger format wines & spirits store in Edmonton in 2012.

10,000 The size in square feet of our new Wines & Spirits Tasting Centres in Beddington, Crowfoot and Oakridge

Crowfoot Tasting Room


Community Commitment

As a locally owned and operated co-operative, Calgary Co-op remains committed to our community. In 2011, we donated more than $3 million to local not-for-profits and charitable organizations. Our 2011 Charity Golf Classic raised over $310,000 – our highest total yet. Proceeds were donated to The Calgary Zoo, Meals on Wheels, the YWCA, Children’s Cottage, Horizon Housing and more. In addition, Calgary Co-op partnered with Calgary Transit and XL103 for Stuff a Bus which raised almost $150,000 for the Calgary Food Bank. We also joined the Calgary Firefighters in the

Project Warmth campaign to collect gently used winter outerwear that could be donated to those in need. Our Bags to Riches shopping bag recycling program raised over $45,000 in 2011 which was donated to the Calgary Humane Society, STARS, the Heart & Stroke Foundation, the Tom Baker Cancer Centre, Wheatland County Food Bank, Airdrie Food Bank and more.

3million Donated by Calgary Co-op to local not-for-profits and charitable organizations in 2011.

Stampede Breakfasts Elmo’s Healthy Heroes

Charity Golf Classic


Member Refund and Reports

Member Refunds on a Comparative Basis

Since 1956, Calgary Co-op member-owners have received $669 million in member refunds.

2.5% member refund paid in cash and shares to members based on retail purchases other than petroleum, home health care and travel.

1.0% member refund paid in cash and shares to members

based on travel purchases.

1.0% member refund paid in cash and shares to members based on home health care purchases.

5.0¢ per litre member refund paid in cash and shares to members based on petroleum purchases.

RETAiL

TRAVEL

PETROLEuM

2011

2010

2009

2008

2007

0 100 200 300 400 500 600 700

639

669

610

566

515

2011

2010

2009

2008

2007

0 10 20 30 40 50 60

20.3 9.3

20.7 9.3

29.9 14.5

32.8 17.7

31.7 20.2

2011

2010

2009

2008

2007

0 302010 40 50 60 70 80

29.6 6.4

44.4 6.2

50.5 10.2

51.9 11.1

1.9

7.1 22.1

2.0

3.6

4.2

30

Member Refund HistoryCumulative totals since 1957. Five year comparison 2007 – 2011

Member RefundsFive year comparison 2007 – 2011

How Earnings are Allocated

Member Refund Income Tax Retained Earnings

Cash Shares

(millions)

(millions)

(millions)

HOME HEALTH CARE

Calgary Co-op is pleased to offer our member-owners the same patronage levels for the 2011 Annual Member Refund, as the rates that were paid in 2010. This year we have also included a 1% member refund on Home Health Care purchases. Overall, Calgary Co-op members will receive $30 million in member refunds. Of this, $9.3 million was paid in share equity and $20.7 million was paid in cash.

In the face of increasing competitive market pressure, significant capital investment is required in the food and other lines of business to further differentiate and solidify our organization. We have made significant progress on many initiatives and now are ready to invest capital to position our stores for the future. The prudent option is to increase our retained earnings which will allow Calgary Co-op to invest while minimizing debt financing and still provide strong member refunds to our member-owners.


Officers’ Report

Preparing the accompanying financial statements and ensuring that all information in this annual report is consistent with these

statements is the responsibility of Calgary Co-op management. This responsibility includes selecting appropriate accounting policies

and making judgments and estimates consistent with Canadian generally accepted accounting principles.

Management has developed and maintains an extensive system of internal controls that provide reasonable assurance that all

transactions are accurately recorded, that the financial statements realistically report the Association’s operating and financial

results, and that the Association’s assets are safeguarded against unauthorized use or disposition. The Audit Committee reviews

and evaluates the adequacy of, and compliance with, the Association’s internal controls. It is the policy of the Association to

maintain the highest ethical standard in all activities, and the Chief Executive Officer and the Chief Financial Officer have signed

a Management Compliance Letter stipulating the Association’s compliance with all regulatory requirements. Management of

Calgary Co-op have also signed a Letter of Representation to KPMG acknowledging that it is responsible for the fair presentation

in the financial statements of the Association’s financial position and that all accounting, financial records and related data have

been made available.

The Association’s Board of Directors has approved the information contained in the financial statements based on the

recommendation of the Audit Committee following its detailed review with the external auditor and management.

At each Annual General Meeting, the Association’s members appoint an independent auditor to provide a professional opinion on

the fairness with which the financial statements are presented. The members’ auditor has full access to the Board of Directors and

all of the Association’s records.

Stuart Cantrill, Board Chair N. Deane Collinson, Chief Executive Officer

January 24, 2012 January 24, 2012


Independent Auditors’ Report

To the Members of Calgary Co-operative Association Limited

We have audited the accompanying consolidated financial statements of Calgary Co-operative Association Limited, which comprise

the consolidated balance sheet as at October 29, 2011, the consolidated statements of earnings, comprehensive income and

retained earnings and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and

other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with

Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable

the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our

audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial

statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of

the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control

relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of

Calgary Co-operative Association Limited as at October 29, 2011, and its consolidated results of operations and its consolidated

cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants

January 24, 2012

Calgary, Canada


Consolidated Balance SheetOctober 29, 2011, with comparative figures as at October 30, 2010

(in thousands of dollars)

2011 2010

Assets

Current Assets:

Cash and short-term investments (note 1(i)) $ 11,704 $ 11,290

Accounts receivable (note 2(b)) 46,022 36,236

Income taxes receivable – 274

Inventories (note 1(e) and 7) 62,293 57,451

Prepaid expenses and deposits 3,839 3,370

Total Current Assets 123,858 108,621

Investments (notes 2(b) and 3) 105,706 96,279

Property and equipment (notes 1(f) and 4) 203,852 200,198

Goodwill (notes 1(g) and 5) 6,775 6,775

Future income taxes (note 8) 1,240 1,523

Total Assets $ 441,431 $ 413,396

Liabilities, Members’ Shares and Retained Earnings

Current Liabilities:

Accounts payable and accrued liabilities (notes 2(a) and 6) $ 100,579 $ 103,065

Current portion of long-term debt (note 9(b)) 5,795 2,225

Income taxes payable 1,700 –

Future income taxes (note 8) 11,869 8,918

Total Current Liabilities 119,943 114,208

Long-term debt (note 9(b)) 3,068 9,751

Other liabilities (note 1(h)) 1,233 1,071

Members’ shares (note 10) 166,885 162,193

Retained earnings 150,302 126,173

Commitments and guarantees (notes 4 and 13)

Total Liabilities, Members’ Shares and Retained Earnings $ 441,431 $ 413,396

See accompanying notes to financial statements.

Approved on Behalf of the Board:

Director Director


Consolidated Statement of Earnings, Comprehensive Income and Retained EarningsYear ended October 29, 2011, with comparative figures for the year ended October 30, 2010


2011 2010

Sales (note 14) $ 1,096,813 $ 1,022,702

Expenses:

Cost of sales, selling and administrative (note 7) (1,073,727) (1,006,618)

Amortization (16,683) (17,193)

Patronage refunds (note 2(b)) 47,010 33,328

Other income (expenses):

Rental income 9,015 8,885

Rental expense (2,584) (2,550)

Loss on disposal and write off of property and equipment (note 4) (830) (713)

Write-down of goodwill (note 5) – (75)

Interest income 370 243

Interest expense (159) (125)

Earnings before patronage returns and income taxes 59,225 37,884

Patronage returns (note 6) 30,000 29,620

Income tax expense (reduction) (note 8):

Current 3,863 2,488

Future 3,234 (606)

7,097 1,882

Net earnings and comprehensive income 22,128 6,382

Retained earnings, beginning of year 126,173 118,073

Inactive members’ shares transferred to retained earnings 2,001 1,718

Retained earnings, end of year $ 150,302 $ 126,173



Consolidated Statement of Cash FlowsYear ended October 29, 2011, with comparative figures for the year ended October 30, 2010


2011 2010

Cash provided by (used in):Operations: Net earnings and comprehensive income $ 22,128 $ 6,382 Items not involving cash Amortization 16,683 17,193 Patronage returns to be paid in shares 9,300 9,350 Patronage refunds to be received in FCL shares (11,349) (8,454) Future income tax (reduction) 3,234 (606) Write-down of goodwill (note 5) – 75 Loss on disposal and write off of property and equipment (note 4) 830 713 Lease inducement amortization (note 1(h)) (126) (133) Accrued future rents (note 1(h)) 288 –

40,988 24,520Change in non-cash operating working capital (note 11) (23,137) 5,504

17,851 30,024

Financing: Repayment of long-term debt (3,993) (2,425) Shares redeemed for cash (2,625) (2,136) Shares issued for cash 18 20

(6,600) (4,541)

Investments: Expenditures on property and equipment (note 2(c)) (20,300) (19,339) Proceeds on disposal of property and equipment 13 72 FCL shares redeemed for cash 1,924 1,791 Other investments (2) (2) Leasehold inducement proceeds – 75 Change in non-cash working capital (note 11) 7,528 (8,294)

(10,837) (25,697)

Change in cash and short-term investments 414 (214)Cash and short-term investments, beginning of year 11,290 11,504Cash and short-term investments, end of year $ 11,704 $ 11,290

Interest paid $ 162 $ 124Income taxes paid 2,729 6,797



Notes to the Consolidated Financial Statements(tabular amounts in thousands of dollars)

Calgary Co-operative Association Limited (the “Association”) is incorporated under the Cooperatives Act of Alberta. The primary business of the Association is operating retail food, pharmaceutical, petroleum, travel, home health care and liquor outlets in Calgary and area for the benefit of its member. As a percentage, 86% (2010 – 87%) of sales are to member-owners.

1. Summary of accounting policies:

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include the valuation of accounts receivable, the carrying value of property and equipment and its estimated useful life, the valuation of inventory, valuation of goodwill and the valuation of future taxes. Actual results could differ from these estimates.

(a) Basis of presentation: The financial statements include the accounts of the Association and its proportionate share (50%) of the assets, liabilities, sales and expenses of The Produce People (“TPP”). TPP is a joint venture between the Association and The Grocery People, a wholly owned subsidiary of Federated Co-operatives Limited (“FCL”).

(b) Definition of financial year: The Association’s financial year ends on the Saturday closest to October 31. Accordingly, the years ended October 29, 2011 and October 30, 2010 consist of 52 weeks of operations each.

(c) Financial instruments: All financial assets are classified as one of the following: held for trading, available for sale, held to maturity or loans and receivables. Financial liabilities are classified as either held for trading or other liabilities.

The Association designates its cash and short term investments and investments as available for sale. These are measured at fair value with gains and losses, net of tax, being recognized in other comprehensive income until the asset is sold or there is a permanent impairment in value. Investments for which no fair market value can be determined have been measured at cost (note 3). Accounts receivable are designated as loans and receivables. Accounts payable, accrued liabilities and long-term debt are designated as other financial liabilities. Other financial liabilities and loans and receivables are measured at amortized cost and all transaction costs related to those assets or liabilities are recognized in net income when incurred.

An embedded derivative is a component of a contract that also includes a non-derivative host contract, with the effect that some of the cash flows from the combined instrument vary in a way similar to a stand alone derivative. Embedded derivatives are separated from the host contract and recognized at fair value in the balance sheet if certain predetermined conditions are met. The Association has evaluated and determined that it has no contracts with embedded derivatives.

Management has elected to treat utility service contracts as executory contracts, and thus are not required to be recognized at fair value in the balance sheet.

(d) Comprehensive income: Unrealized gains and losses on financial instruments that are held as available for sale are recognized in other comprehensive income and accumulated other comprehensive income, net of tax, until recognized in net income.

The Association had no other comprehensive income in the year ended October 29, 2011 and no opening balance for accumulated other comprehensive income.


1. Summary of accounting policies (continued):

(e) inventories: Inventories are recorded at the lower of cost and net realizable value. Cost is determined using the retail method by discounting the

retail value by normal profit margins.

(f ) Property and equipment: Property and equipment are stated at cost net of grant funds received. Amortization is provided over the estimated useful lives of the

assets using the following methods and rates:

Buildings and parking lots Declining Balance 4-8% Fixtures and equipment Declining Balance 20-100% Computer equipment Straight Line 33%

Leasehold improvements and buildings on leased land are amortized on a straight-line basis over the shorter of the lease term and their estimated useful lives.

Renovations to existing buildings and car wash equipment are amortized on a straight-line basis over ten years.

Management assesses the carrying value of property and equipment on a periodic basis for indications of impairment. When an indication of impairment is present, a test for impairment is carried out by comparing the carrying value of the asset to its fair value.

(g) Goodwill: Goodwill resulting from business combinations represents the portion of the purchase price that was in excess of the fair value of

the net identifiable assets acquired. Goodwill is recorded at cost and is not subject to amortization. The carrying value of goodwill is subject to an impairment test annually, or more frequently if events or circumstances indicate impairment. If the carrying value of the reporting unit to which goodwill has been assigned exceeds its fair value, then, with respect to the reporting unit’s goodwill, any excess of its carrying value over its fair value is expensed.

(h) Other liabilities: Deferred lease inducements: Deferred lease inducements, representing the benefit of cash inducements, are amortized over the remaining term of the related lease.

Accrued future rents: The Association uses the straight-line method of recognizing its lease expense, whereby the total of cash rents due over the term of a

lease is recognized evenly over the life of the lease. The difference between the amount recognized as lease expense and cash paid is included in other liabilities.

(i) Cash and short-term investments: Cash and short-term investments are defined as cash and investments with an initial maturity of less than three months.

(j) Revenue recognition: Sales include revenue from member-owners and other customers through stores operated by the Association. These sales are

recognized at the point-of-sale.

(k) Store opening expenses: Store opening costs of new stores are expensed as incurred.

(l) income taxes: The Association follows the liability method whereby income taxes reflect the expected future consequences of temporary differences

between the carrying amounts of assets and liabilities and their tax bases. Future income tax assets and liabilities are determined for each temporary difference based on the tax rates which are expected to be in effect when the underlying items of income and expense are expected to be realized.


1. Summary of accounting policies (continued):

(m) Future accounting pronouncement: On December 15, 2009, Canada’s Accounting Standards Board (“AcSB”) issued new Accounting Standards for Private Enterprises

(“ASPE”). Previously, the AcSB had announced that International Financial Reporting Standards (“IFRS”) will be required for Canada’s publicly accountable enterprises and would be optional for private enterprises. Both sets of standards are effective for fiscal years commencing on or after January 1, 2011 with earlier adoption permitted.

The Association has determined that it is not a publicly accountable enterprise and will be adopting ASPE effective for the year commencing October 30, 2011. The impact of the adoption of this standard is not expected to create any material differences in the financial statements prepared under the pre-changeover accounting standards.

2. Related party transactions:

(a) Purchases: During financial year 2011, the Association made purchases from FCL in the amount of $672,489,000 (2010 – $616,385,000). These

purchases represented 77% (2010 – 77%) of the Association’s total purchases and were transacted in the normal course of operations and were recorded at their exchange amount. Included in accounts payable and accrued liabilities are amounts owed to FCL of $43,517,000 at October 29, 2011 (2010 – $45,461,000).

During financial year 2011, the Association earned interest income at prime less 1.5% (2010 – prime less 1.50%) of $224,000 (2010 – $76,000) as a result of early payments on normal trade payable balances to FCL. The average early payment balance with FCL amounted to $14,899,000 (2010 – $9,638,000).

(b) Patronage refund: Subsequent to October 29, 2011, the FCL Board approved the payment of a patronage refund to the Association in the amount of

$47,006,000 (2010 – $33,325,000). The portion of the patronage refund to be received in cash in the amount of $35,657,000 (2010 – $24,871,000) is included in accounts receivable and the portion to be received in FCL shares in the amount of $11,349,000 (2010 – $8,454,000) is included in investments.

(c) Capital grants and interest-free loans: The Association receives interest-free loans and capital grants from FCL to assist in the construction of gas bars and related facilities.

During financial year 2011, the Association received interest-free loans of $880,000 (2010 – $6,476,000) and capital grants of $5,655,000 (2010 – $7,359,000) from FCL for this purpose. See also note 9(b).

Included in property and equipment additions for the year is $1,790,000 (2010 – $19,110,000) which FCL paid on the Association’s behalf to assist in the construction of gas bars and related facilities.

(d) Short-term investments: During financial year 2011, the Association’s short-term investment with FCL earned interest revenue of $22,000 (2010 – $32,000),

calculated at prime less 1.5% (2010 – prime less 1.5%). The balance of these investments was $nil at October 29, 2011 (2010 – $nil).

(e) Leases: The Association has operating lease agreements in place with FCL for certain facilities which require payments of approximately

$1,000,000 per year to October 2024 and $400,000 per year from November 2025 to October 2027. This commitment is disclosed as part of note 13(a).

The Association has capital leases with FCL for fixtures and equipment which require payments on November 1 of each year as follows. See also notes 4 and 9(b).

2012 $ 558


3. investments:

2011 2010

Federated Co-operatives Limited $ 105,628 $ 96,203Other 78 76 $ 105,706 $ 96,279

As there is no ready market for the Association’s 11% (2010 – 11%) investment in FCL shares and the fair value cannot be determined, they have been measured at cost. The FCL shares are redeemable, at cost, at the option of FCL or, over a maximum period of five years, upon the Association terminating its membership with FCL.

4. Property and equipment: 2011 2010 Accumulated Net Book Net Book Cost Amortization Value Value

Land $ 48,970 $ – $ 48,970 $ 48,357Buildings and parking lots 184,163 72,393 111,770 105,304Fixtures and equipment 113,754 79,456 34,298 36,342Leasehold improvements 10,869 5,686 5,183 6,073Joint venture leasehold improvements and equipment 1,111 1,098 13 18Assets under construction 3,618 – 3,618 4,104 $ 362,485 $ 158,633 $ 203,852 $ 200,198

Included in fixtures and equipment are assets held under capital lease with an original cost of $2,636,000 (2010 – $2,636,000) and a net book value of $881,000 (2010 – $1,105,000).

As at October 29, 2011, the Association had contractual commitments to spend approximately $11,039,000 (2010 – $10,916,000) on capital expansion projects.

The loss on disposal and write-off of property and equipment for the year ended October 29, 2011 comprises the disposal of equipment and the write-down of obsolete assets in renovated shopping centres, liquor stores and gas bars.

5. Goodwill: 2011 2010

Balance, beginning of year $ 6,775 $ 6,850Write-down of goodwill – (75)Balance, end of year $ 6,775 $ 6,775


6. Patronage returns:

Subsequent to October 29, 2011, the Board of Directors approved the payment of patronage returns in the amount of $30,000,000 (2010 – $29,620,000), which are to be paid subsequent to year end. The portion of the patronage returns to be paid in cash in the amount of $20,700,000 (2010 – $20,270,000) is included in accounts payable and accrued liabilities and the portion to be paid in shares in the amount of $9,300,000 (2010 – $9,350,000) is included in members’ shares.

7. inventories:The cost of inventories recognized as an expense during the year ended October 29, 2011 was $863,769,000 (2010 – $797,436,000). The Association recorded $nil (2010 – $nil) as an expense for the write-down of inventories below cost to net realizable value for inventories recorded as at October 29, 2011. There was no reversal of inventories written down previously that are no longer estimated to sell below cost.

8. income taxes:Income tax expense differs from the expected expense at the statutory tax rate as follows:

2011 2010

Statutory rate 26.76% 28.17%

Expected expense at statutory rate $ 7,821 $ 2,328Difference resulting from: Reduction of future tax balances due to enacted tax rate reductions (703) (472) Other (21) 26Income tax expense $ 7,097 $ 1,882

The tax effects of temporary differences that give rise to future tax assets and future tax liabilities are presented below:

2011 2010

Future tax assets: Deferred lease inducements – difference between accounting and tax base $ 268 $ 302 Accrued future rents – difference between accounting and tax base 72 – Property and equipment – differences in net book value and undepreciated capital cost 900 917 Loss carry forwards – 304 $ 1,240 $ 1,523

Future tax liabilities: Patronage refund receivable $ 11,869 $ 8,918


9. Debt:

(a) Operating loan: The Association has available a $10,000,000 evergreen loan of which $nil had been drawn at October 29, 2011 (2010 – $nil), with

interest charged at lender’s prime less 0.25%, with security as disclosed for the Credit Union Central facility, below. In addition, the Association has a $8,000,000 line of credit available, with interest charged at lender’s prime. The Association has provided letters of credit in the amount of $1,021,000 (2010 – $230,000) to support the purchase of certain inventory and capital items. These letters of credit are charged against the $8,000,000 line of credit. Security for the line of credit is a general assignment of book debts.

(b) Long-term debt: 2011 2010

Credit Union Central facility bearing interest at lender’s prime less 0.25% and is secured by a fixed charge debenture on certain shopping centres and a floating charge on the remainder of the Association’s assets, repayable in annual installments on November 1 of each year in the amount of $933,

with a due date of November 1, 2015 $ 3,708 $ 4,641

Federated Co-operatives Limited unsecured interest-free loans, each payable in three equal annual payments with due dates to March 31, 2013 4,597 6,235

Obligation under capital lease is non-interest bearing and is repayable in annual installments ending November 1, 2012 558 1,100 8,863 11,976 Current portion of long-term debt 5,795 2,225 $ 3,068 $ 9,751

Aggregate principal repayments of long-term debt for each of the Association’s next four financial years are as follows:

2012 $ 5,795 2013 1,227 2014 933 2015 908

10. Members’ shares:

The Association is authorized to issue an unlimited number of shares with a par value of $1. Upon application to the Board of Directors, the par value of the member’s shares becomes payable when the member reaches age 65 or moves out of the trading area, or, at the request of the member’s estate, upon the member’s death.

Changes in share capital are as follows:

2011 2010

Balance, beginning of year $ 162,193 $ 156,677Shares redeemed for cash (2,625) (2,136)Inactive members’ shares transferred to retained earnings (2,001) (1,718)Shares issued for cash 18 20 157,585 152,843Current year’s patronage returns to be paid in shares 9,300 9,350Balance, end of year $ 166,885 $ 162,193


11. Change in non-cash working capital: 2011 2010

Operating activities: Accounts receivable $ (9,786) $ (345) Inventories (4,842) (4,968) Prepaid expenses and deposits (469) (800) Accounts payable and accrued liabilities (10,014) 15,927 Income taxes payable/recoverable 1,974 (4,310) $ (23,137) $ 5,504

Investing activities: Accounts payable for capital expenditures $ 7,528 $ (8,294)

12. Pension plans:

The Association participates in a multi-employer defined contribution pension plan whereby the Association and participating employees contribute equal amounts to the maximum allowed under the Income Tax Act. The Association has no unfunded liability under this plan. During the year, the Association recorded $4,038,000 (2010 – $3,845,000) of expense relating to this plan. During the year, there were no significant changes to the rates of employer contributions.

In addition, on January 1, 2003, the Association established a supplemental defined contribution employee retirement plan. For the financial year ended October 29, 2011, an expense of $103,200 (2010 – $84,100) has been recorded relating to this plan. The total liability at October 29, 2011 is $303,300 (2010 – $268,400).

13. Commitments and guarantees:

(a) Lease commitments:The Association is committed to minimum lease payments under operating lease agreements for buildings and equipment over the next five years and beyond, as follows:

2012 $ 12,4082013 12,6632014 12,4812015 11,5732016 10,955Subsequently 85,580 $ 145,660

(b) utility service commitment:The Association has a commitment to purchase electricity at fixed rates per KWH of approximately $3,500,000 for the financial years 2012 to 2014 and of approximately $600,000 for financial year 2015.

The Association has a commitment to purchase natural gas at fixed rates per GJ of approximately $1,000,000 for the financial years 2012 to 2014 and of approximately $700,000 for financial year 2015.

(c) Petroleum product purchase commitment:Under the terms of the agreement with FCL, the Association has committed to purchase petroleum products, at market price, from FCL for gas bar operations over a ten-year period commencing from the date of gas bar completion. Failure to meet this commitment would require the Association to pay outstanding gas bar loan balances owed to FCL plus repay any gas bar grants received, as described in note 2(c), plus interest on the grants, compounded annually at 10% from the grant date. The total outstanding loan balances are disclosed in note 9(b). Total grants received over the prior ten year period amount to approximately $24,100,000 (2010 – $20,400,000).


13. Commitments and guarantees (continued):

(d) Lease revenues:Minimum future revenues from operating leases on commercial real estate rentals are:

2012 $ 5,6592013 4,9432014 3,7112015 2,8342016 1,729

14. Segmented information:

The Association’s business operations are grouped into three business segments, the principal activities of which are as follows:

(a) Food, which consists of the sale and distribution of food and pharmaceutical products.(b) Petroleum, which consists of the sale of petroleum products and convenience store items.(c) Other, which consists of the provision of travel services, liquor products, home health care products and commercial

real estate rentals. 2011 2010

Sales: Food $ 594,439 $ 598,074 Petroleum 396,631 332,338 Other 105,743 92,290 $ 1,096,813 $ 1,022,702

Earnings before patronage returns and income taxes: Food $ 22,160 $ 13,663 Petroleum 26,461 13,545 Other 10,604 10,676 $ 59,225 $ 37,884

All sales are generated in Canada and all property and equipment is attributable to Canadian operations. All sales are to external customers and no single customer accounts for more than 10% of total sales.

15. Financial instruments:

Fair value disclosures:

The following tables provide a comparison of carrying and fair values for each classification of financial instruments as at October 29, 2011 and October 30, 2010: Available Other Total for sale Loans and financial carrying Total fair2011 instruments receivables liabilities amount value

Cash and short-term investments $ 11,704 $ – $ – $ 11,704 $ 11,704Accounts receivable – 46,022 – 46,022 46,022Total financial assets $ 11,704 $ 46,022 $ – $ 57,726 $ 57,726

Accounts payable and accrued liabilities $ – $ – $ 100,579 $ 100,579 $ 100,579Interest bearing long-term debt – – 3,708 3,708 3,708Total financial liabilities $ – $ – $ 104,287 $ 104,287 $ 104,287


15. Financial Instruments (continued):

Available Other Total for sale Loans and financial carrying Total fair2010 instruments receivables liabilities amount value

Cash and short-term investments $ 11,290 $ – $ – $ 11,290 $ 11,290Accounts receivable – 36,236 – 36,236 36,236Total financial assets $ 11,290 $ 36,236 $ – $ 47,526 $ 47,526

Accounts payable and accrued liabilities $ – $ – $ 103,065 $ 103,065 $ 103,065Interest bearing long-term debt – – 4,641 4,641 4,641Total financial liabilities $ – $ – $ 107,706 $ 107,706 $ 107,706

Investments are not included in financial assets in the tables above as there is no ready market for the Association’s investment in FCL shares. Accordingly, the fair value of this investment cannot be determined and therefore has been measured at cost.

Non-interest bearing long-term debt is not included in financial liabilities in the tables above as the fair value of the interest free loans from FCL are not determinable due to the related party nature of the instruments. Accordingly, these debt instruments have been recorded at amortized cost.

As at October 29, 2011, the Association has classified cash and short-term investments as a Level 1 financial instrument. There have been no transfers between levels during the year. All other financial instruments are carried at amortized cost, which approximates the fair value at October 29, 2011.

Risk management:

The Association is exposed to the following risks as a result of holding financial instruments:

(a) Interest rate risk:

The Association’s sensitivity to fluctuations in interest rates is limited to certain of its cash and short-term investments and long-term debt. During the 2011 financial year, if interest rates had been 100 basis points higher relating to the long-term debt, net earnings would have been $46,000 lower (2010 – $55,000).

(b) Credit risk: Management believes the credit risk associated with the FCL patronage refund is negligible based on the nature of the receivable.

Management believes that the credit risk relating to the remaining financial assets is normal for the business and is limited due to the following reasons:

– there is a broad base of customers, and therefore no significant concentration of credit risk exists; – the ratio of bad debt write-offs to total revenue has been less than 0.02% for the last three years; – 82% (2010 – 89%) of trade receivables are current (less than 30 days)

(c) Liquidity risk: Liquidity risk is the risk that the Association will not be able to meet its obligations as they become due. The Association has available

credit facilities at levels sufficient to ensure funds are available to meet its medium term funding requirements.

In order to reduce liquidity risk, the Association has kept its financial leverage at low levels and maintained financial ratios that are conservative compared to the financial covenants within its credit facilities. As well, the Association has made additional voluntary payments on its outstanding long-term debt over the last several years.


15. Financial Instruments (continued):

The following are the undiscounted contractual maturities of significant financial liabilities as at October 29, 2011 and October 30, 2010:

2011 2012 2013 2014 2015 Total

Accounts payable and accrued liabilities $ 100,579 $ – $ – $ – $ 100,579Long-term debt 5,795 1,227 933 908 8,863 $ 106,374 $ 1,227 $ 933 $ 908 $ 109,442

2010 2011 2012 2013 2014 2015 Total

Accounts payable and accrued liabilities $ 103,065 $ – $ – $ – $ – $ 103,065Long-term debt 2,225 6,977 933 933 908 11,976 $ 105,290 $ 6,977 $ 933 $ 933 $ 908 $ 115,041

16. Capital management:

The Association’s policy is to maintain a strong capital base so as to sustain the future cash requirements of the Association’s operations.

The Association considers its capital structure to include members’ shares, retained earnings and long-term debt. The Association manages its capital and makes adjustments to it in light of the changes in economic conditions and growth opportunities available. In order to facilitate the management of its capital requirements, the Association prepares annual operating and capital expenditure budgets which are approved by the Board of Directors.

The Association uses the following measures to monitor its capital:

2011 2010

Net debt to equity (0.009):1 0.002:1Return on equity 18.1% 13.1%

For purposes of the net debt to equity ratio, net debt is defined as long and short-term debt, less cash and short term investments, and equity is defined as members’ shares and retained earnings. Management uses the net debt to equity ratio to identify the amount of financial leverage employed by the Association, and will use the ratio to help guide future capital management decisions. Return on equity is calculated as earnings before patronage return divided by opening members’ shares and opening retained earnings. Management uses the return on equity measure to gauge the amount of profit earned on each member’s investment.

The Association issues an annual patronage return to its members based on its earnings. The cash and share portions of the annual patronage return are approved by the Board of Directors and may be adjusted in order to maintain the capital structure.

The Association’s capital is not subject to any external restrictions, and there were no significant changes in the Association’s approach to capital management during the year.

CALGARY NORTHWEST

Creekside 106, 11998 Symons Valley Road N.W.

403-299-4493

Crowfoot 39 Crowfoot Way N.W.

403-299-5341

Dalhousie 5505 Shaganappi Trail N.W.

403-299-4333

Hamptons 710, 1000 Hamptons Drive N.W.

403-375-0481

North Hill 336 – 16 Avenue N.W.

403-299-4268

Rocky Ridge 2002, 11595 Rockyvalley Drive N.W.

403-299-5490

CALGARY NORTHEAST

Beddington 8220 Centre Street N.E.

403-299-7764

Taradale 300, 6520 Falconridge Boulevard. N.E.

403-299-4020

CALGARY SOuTHWEST

Midtown Market 1110 – 11 Avenue S.W.

403-299-4233

Oakridge 2570 Southland Drive S.W.

403-299-5444

Richmond Road 4860 Richmond Road S.W.

403-299-5362

West Springs 600, 917 – 85 Street S.W.

403-299-4405

CALGARY SOuTHEAST

Forest Lawn 1A, 3200 – 17 Avenue S.E.

403-299-4372

Heritage Towne Centre 76 Heritage Gate S.E.

403-299-2656

Kingsland 6907 Macleod Trail South

403-252-2447

Macleod Trail 23, 8720 Macleod Trail South

403-299-4288

Quarry Park 305, 163 Quarry Park Boulevard S.E.

403-203-4834

South Trail Crossing 40, 4307 – 130 Avenue S.E.

403-257-7255

AiRDRiE

400, 2700 Main Street

403-912-3708

OKOTOKS

1, 420 Big Rock Lane

403-995-4581

STRATHMORE

215A Second Avenue

403-901-0852

Co-op Wines & Spirits Locations

Calgary Co-op Locations

CALGARY NORTHWEST

Brentwood Centre 4122 Brentwood Road N.W.

403-299-4311

Creekside Centre 12000 Symons Valley Road N.W.

403-299-4491

Crowfoot Centre 35 Crowfoot Way N.W.

403-299-5353

Dalhousie Centre 5505 Shaganappi Trail N.W.

403-299-4331

Hamptons Centre 1000 Hamptons Drive N.W.

403-299-6711

Montgomery Gas Bar 4608 – 16 Avenue N.W.

403-299-2602

Panorama Hills Gas Bar 1111 Panatella Boulevard N.W.

403-299-7775

Rocky Ridge Centre 11595 Rockyvalley Drive N.W.

403-299-5450

CALGARY NORTHEAST

Beddington Centre 8220 Centre Street N.E.

403-299-4445

Monterey Centre 2220 – 68 Street N.E.

403-299-2600

North Hill Centre 540 – 16 Avenue N.E.

403-299-4276

Taradale Centre 6250 Falconridge Boulevard N.E.

403-299-4012

Village Square Centre 2520 – 52 Street N.E.

403-299-5332

CALGARY SOuTHWEST

Kingsland Gas Bar 6905 Macleod Trail South

403-299-4110

Midtown Market 1130 – 11 Avenue S.W.

403-299-4257

Oakridge Centre 2580 Southland Drive S.W.

403-299-4355

Richmond Road Centre 4940 Richmond Road S.W.

403-299-4490

Shawnessy Centre 250 Shawville Boulevard S.W.

403-299-4426

West Springs Centre 917 – 85 Street S.W.

403-299-4151

CALGARY SOuTHEAST

Copperfield Gas Bar 400 –15566 McIvor Boulevard S.E.

403-299-4113

Deer Valley Centre 1221 Canyon Meadows Drive S.E.

403-299-4350

Eastfield Gas Bar 5250 – 50 Avenue S.E.

403-299-4443

Forest Lawn Centre 3330 – 17 Avenue S.E.

403-299-4470

Heritage Towne Centre Gas Bar 6 Heritage Gate S.E

403-299-4341

Macleod Trail Centre 8818 Macleod Trail SE

403-299-4292

Quarry Park Centre 163 Quarry Park Boulevard S.E.

403-203-4825

South Trail Crossing 4307 – 130 Avenue S.E.

403-257-7272

AiRDRiE CENTRE

2700 Main Street

403-912-3700

OKOTOKS

Gas Bar 111 – 31 Southridge Drive

403-995-4573

STRATHMORE CENTRE

Food Centre 320 Second Street

403-934-3121

Gas Bar 715 Wheatland Trail

403-934-3044

HOME HEALTH CARE

9309, Macleod Trail South

403-252-2266

Richmond Road 4938 Richmond Road SW

403-299-448

HEAD OFFiCE

#110, 151 – 86 Avenue SE

403-219-6025

www.calgarycoop.com

Propane Diesel Petroleum Car Wash TravelFood

Calgary Co-op 2011 Annual Report

Documents

Transcript of Calgary Co-op 2011 Annual Report