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Army and Air Force Canteen Service (AAFCANS)—Report for 2019-20, incorporating the annual reports on the monitoring of the equal employment opportunity (EEO) management plan and of work health and safety arrangements and statistics


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Table of Contents FROM THE CHAIR …......................................................…..………3

Our Purpose, Mission & Vision……………………………..………...5

Our Stakeholders……………………………………………………….5

REPORT OF OPERATIONS……………………………………….……..6

Year in Review…………………………………………………6

Financial Overview………………………………………......6

Where We Operate……………….………………………….6

Annual Performance Statements……………………...….7

Activities in 2019-20……………………………………….….9

CORPORATE GOVERNANCE………………………………………..14

The Board of Management………………………………..16

Committees…………………………….………………..…...19

Accountability…………………………………………..…...20

FINANCIAL STATEMENTS……………………………………………….24

APPENDICES………………………………………………………....…47

Appendix 1: Report on the Monitoring of the EEO Management Plan……………...……………………..47

Appendix 2: Annual Report of WHS Arrangements and Statistics………...……………..………51

Appendix 3: Location of Outlets…………………..………53

Appendix 4: Terms and Abbreviations…………..……....54

Appendix 5: Compliance Index…………………...……...55

TABLE OF CHARTS, IMAGES & TABLES

Chart 1: Disbursements chart……………………………….….…....13

Chart 2: Organisational structure ……………………..…….….....14

Chart 3: Employees by gender…………………………….……......48

Chart 4: All injuries chart……………………………….…………......52

Image 1: Outlet count ……………………………………..….……….6

Image 2: AAFCANS amenities container Greenbank …....…...11

Image 3: Gallipoli Barracks open day event……….…....….…...11

Image 4: AAFCANS new food offer…….....….……...............…..12

Image 5: RAAF Williamtown refurbishments…………………..…13

Image 6: Holsworthy Barracks refurbishment………...….....……15

Image 7: AAFCANS media……………………….………….….…..22

Image 8: AAFCANS healthy choices…………..……………….....22

Image 9: Deployable amenities 2020……………………………...23

Image 10: AAFCANS food safe program…………………….......52

Image 11: Extract ‘Comparative pricing survey - coffee’…....55

Image 12: AAFCANS DPN website…..........…………………….....56

Image 13: AAFCANS new app…................…………………….....56

Table 1: Director meeting attendance…………………….…...…18

Table 2: Audit Committee meeting attendance…………......…19

Table 3: People and Culture meeting attendance……….........19

Table 4: Governance & Risk attendance……………..……..…....20

Table 5: Advertising and market research expenditure………...23

Table 6: Staff as at 30 June ………………..…………….…….….....47

Table 7: Gender breakdown as at 30 June……………………….47

Table 8: Total staff employed by location………….……….........48

Table 9: Target group members by classification as at 30 June …….….……….………...…………….…......49

Table 10: Target group members ‘women’……..………….……..49

Table 11: Target group members ‘indigenous’……..……….…...49

Table 12: Work health and safety performance…………….......51

09 September 2020

The Hon Darren Chester MP

Minister for Veterans Affairs and Defence Personnel

Parliament House

CANBERRA ACT 2600

Dear Minister

On behalf of the directors of the Army and Air Force Canteen Service, I have pleasure in submitting our annual report for the year ending 30 June 2020.

The directors are responsible under section 46 of the Public Governance, Performance and Accountability Act 2013 for the preparation and content of the report of operations in accordance with the Finance Minister’s rule made under that Act.

The report of operations was made in accordance with a resolution of the directors on 9 September 2020.

Leonie Taylor

Chair

AAFCANS applied for inclusion in the JobKeeper Program however we were deemed ineligible as a Commonwealth agency despite also being a welfare organisation. Whilst awaiting Treasury’s determination, the Board resolved to pay JobKeeper during April and May to ensure facilities remained open and trading for Defence personnel remaining on base. The additional payments to team members above hours worked totalled $257,000.

For the first nine months our food and coffee business grew compared to the prior year. As we look to the future, we plan to position ourselves as the chosen provider on base for coffee and convenience food.

Our Investment in the Future

During the 2019-20 financial year AAFCANS invested a total of $1.1 million in infrastructure and technology improvements, again underpinning our commitment to improving facilities and product and services.

Key investments in our facilities and services were undertaken or are in the planning phase as follows:

• The main canteen at Gallipoli Barracks, (stage 1) commenced at the end of the 2019 financial year. Stage 2 plans an extension to the existing facility which will encompass all day dining and extended trading hours including evenings and weekends. It is expected stage 2 will commence mid 2020-21.

• The Holsworthy canteen was completed in January 2020. The upgraded facility was welcomed by our base population with turnover increasing more than 30% year on year.

• A new kiosk facility was provided at RAAF Edinburgh - the Sea Lion Cafe.

• The Latchford Barracks canteen is planned for refurbishment this coming financial year. This will proceed once movement restrictions lift.

• Two purpose-designed two-wheel drive mobile amenities vehicles are being built to replace vehicles from the ageing fleet.

• An integrated loyalty app to improve access to amenities on base has been developed incorporating online ordering for select bases. The online and app-driven ordering will be initially trialled at Gallipoli Barracks during 2020-21 and then implemented on further key bases.

• A range of environmental and waste management initiatives including the transition to eco-packaging and reusable cups were implemented. We are also a proud participant of the RAAF Williamtown ‘War on Waste project’. With the onset of the pandemic, the reusable cups initiative has been placed on hold.

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

From The Chair

Our Performance

AAFCANS continues to strongly focus on our purpose of providing convenient access for Defence members to quality food, beverage and retail.

Our business was heavily impacted in the last quarter of the financial year due to the COVID-19 pandemic. Defence personnel were instructed to work from home and incoming US troop visits were delayed until July 2020. As a result, our revenues dropped by $2.7 million and net profit was impacted by $900,000. Our EBITDA dropped $1 million from an earlier forecast of $2.1 million to $1.1 million.

Leonie Taylor, Chair

Pending cash flow, the Board in consultation with Defence base leadership, will continue our strategy to re-energise the business, refurbish old facilities and replace the aged mobile food vans, albeit at a level that is commensurate with the new norm and our trading position.

Our Thanks

Giving back is a prime objective of the business, with AAFCANS returning to Defence $545,000 from the vending program and free coffees to customers to the value of $336,000 whilst maintaining low retail selling prices. This reinforces our commitment to be recognised as a key contributor to Defence’s people capability.

The renewal of the Defence-AAFCANS Agreement that supports our operations, communication and reporting within the Defence community was pushed back a year to enable Defence to undertake a non-public money account and ecosystem review. It is expected the outcome will align services that support base welfare. This is welcomed by AAFCANS.

Finally, on behalf of the board we take this opportunity to acknowledge essential support from the following:

• Defence, particularly the Chiefs and Deputy Chiefs of Army and Air Force, the Commanders and Heads of Resident Units;

• Our loyal customer base;

• The AAFCANS team members across the country without whom none of this is possible.

We particularly thank our board of directors in light of their considerable contribution during a difficult year, specifically in the last four months.

We look forward to continuing to implement the strategic plan in what will be an uncertain yet progressive year ahead.

Leonie Taylor

Chair

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AAFCANS Annual Report 2020

Our Purpose, Mission & Values

To provide Defence members with access to quality food, beverage and retail items and support base welfare.

Our Stakeholders

AAFCANS is a self-sustaining ‘not for profit’ statutory organisation administered under the Army and Air Force Canteen Regulation 2016 and the Public Governance, Performance and Accountability Act 2013. AAFCANS is required to operate on a commercial and self-supporting basis with surplus funds either reinvested into the business by way of improvements to facilities or disbursed to welfare and trust funds for the benefit of Army and Air Force members and their families.

Services provided by AAFCANS are designed to enhance the living conditions and social environment of Army and Air Force members, their dependants and other persons employed in or in connection with Army and Air Force installations.

The Army and Air Force Canteen Service (AAFCANS) is a Commonwealth statutory authority formed to provide goods, facilities and services to or for the entertainment and recreation of designated members of the Defence community.

The Commonwealth Government owns AAFCANS through the responsible Minister.

Our key stakeholders include:

OUR PURPOSE

OUR MISSION

OUR VALUES

OUR VISION

To contribute to Defence capability by enhancing personnel morale and well-being.

Honesty Integrity Safety Respect Service

To be recognised as a key contributor to Defence capability.

ADF members and their families, and Defence civilians and contractors

The Chief of the Defence Force, the Chief of Army and the Chief of Air Force

• AAFCANS team • Suppliers • Amenity and welfare funds

DEFENCE CUSTOMERS OTHER

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

REPORT OF OPERATIONS.

Year in Review

For the year ended 30 June 2020, AAFCANS recorded revenues of $30 million and a net operating surplus of $126,406.

Key developments during the year in review:

• Upgrade to our electronic point of sale technology systems across all sites in readiness for the integrated app;

• Completion of Gallipoli Barracks canteen refurbishment, Holsworthy Barracks canteen refurbishment and addition of their new cafe, fit-out of RAAF Williamtown new canteen facility;

• Opening of a new kiosk facility for RAAF Edinburgh Sea Lion café, RAAF Amberley Heritage Centre and undertake a trial of Gallipoli Barracks after hours bistro menu;

• Implementation of the ‘Retail Electronic Food Safety System’ and core range menus;

• Development of a new loyalty platform and app and implemented across all sites;

• Development of an online ordering concept for a future trial.

Financial Overview

The financial statements for the financial year 2020 recorded a net surplus of $126,406. AAFCANS’ cash at bank increased by $1,684,694.

Key factors included in the financial results are:

• A net decrease in sales of goods of $70,806, with the 2020 results reflecting a sales decline of 0.25% for the year. The impact of the COVID-19 pandemic was felt in the last quarter with sales falling by $2.7 million behind budget by June 30.

• Gross profit percentage remained relatively stable over last year, being only 0.05% lower. Decreased sales in more profitable catego -ries caused the difference.

• Labour costs as a percentage of sales increased by 1.7% compared to 2019, from 34.2% to 35.9%. This included JobKeeper payments of $257,000 in excess of normal hours worked for which AAFCANS did not receive funding.

• $1,074,836 was invested in assets including

Where we operate

As at June 2020, AAFCANS or its agents operated food services on 31 Army and Air Force bases and joint ADF facilities throughout Australia. The service was provided from direct operations on 27 bases and the remaining four locations under subcontract agreements with independent operators.

At the end of June 2020, AAFCANS delivered services through a variety of facilities including canteens, kiosks, mobile food vans and convenience outlets such as a bistro, post office and convenience store. Additional services covering banks, barbers, dry cleaners, mechanical workshops, post offices and clothing retailers were provided at various bases through Licence to Trade agreements. These locations are detailed in Appendix 3.

Image 1: Outlet Count

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AAFCANS Annual Report 2020

outlet refurbishments, computer hardware and plant and equipment.

• AAFCANS’ other expenses were 7.2% of sales, a decrease of 0.1% on the previous year.

PURPOSE

Provide Defence members with convenient access to quality food, beverage and retail items, and support base welfare.

Measure Source 2019-20 Result

a) Competitive retail selling prices to our customers.

Benchmark retail selling prices (RSP) against external target market to show AAFCANS in the bottom quartile of coffee sales prices and in the middle quartile of snack item sales prices.

2019-20 Corporate Plan

Achieved

b) Target a 10% sales growth on the redesigned MFV for that run against prior period.

Partially Achieved

c) Serve our customers more efficiently through improved technology platforms.

Post implementation: using ADFA canteen, increase transaction volume by 10% between 12.00pm - 2.00pm over base year FY2018 excluding December/January.

Trial an online portal and app called “AAFCANS On-Demand”, supplying customers with products for pickup or delivery. Assess ongoing viability.

Partially Achieved

d) Two facilities established or upgraded. Achieved

e) AAFCANS deploys on request in support of at least 2 of the 3 major exercises (Exercise Pitch Black, Talisman Sabre and Hamel).

Not Achieved as only one major exercise was run

Leonie Taylor, Chair

Annual Performance Statements

AAFCANS operations for 2020 were delivered in line with:

• Our legislative purpose • The 2018-22 Strategic Plan • The 2019-20 Corporate Plan

Introductory statement

On behalf of the directors of the Army and Air Force Canteen Service I, Leonie Taylor, Chair, present the 2019-20 annual performance statements of the Army and Air Force Canteen Service, as required under paragraph 39(1) (a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

In our opinion, these annual performance statements are based on properly maintained records, accurately reflect the performance of AAFCANS, and comply with subsection 39(2) of the PGPA Act.

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

ANALYSIS

a) Competitive retail selling prices:

Coffee and hot drinks are 13-31% below the average street price and placed in the bottom quartile:

AAFCANS Coffee • 12oz $4.00 / 16oz $4.50

MARKET Coffee • 12oz $4.50 / 16oz $5.00

AAFCANS continues to offer one of the most competitive loyalty plans in Australia.

50% of AAFCANS top-selling hot snacks surveyed in the bottom two quartiles (below market pricing).

80% of AAFCANS key breakfast products surveyed in the bottom two quartiles (below market pricing).

Top selling energy drinks and retail showed pricing at median or an average 4-11% below median pricing.

An internal national survey of pricing of retail products was undertaken. 74 different local competitors were surveyed, representing businesses surrounding 25 AAFCANS outlets.

• 130 top-selling food products and 60 top-selling retail product lines were compared with a data set of 1,604 price entries collected. AAFCANS overall retail offer either meets the median pricing or is lower by up to 25% compared to the median price.

• AAFCANS coffee and hot drinks offer surveyed on average between 13-31% below median pricing. 70% of AAFCANS coffee and hot drinks offer, when compared to market, placed in the bottom two quartiles.

• With barista-made coffee products AAFCANS provide a quality offering at some of the lowest retail selling prices in Australia. AAFCANS loyalty offer scores highly with comparable external offers. The coffee menu, loyalty app incentive and ice-drinks menu continue to show growth and form an important connection with customer frequency and overall brand loyalty.

• 20 top-selling hot snacks were bench-marked: - 50% of products were less than median - 20% of products were 45% less than median

• Our retail offer (cold drinks and snacks) bench-marked from the 2nd quartile to the median with some products 4-25% less than Civvy Street prices.

• Data showed the top selling energy drinks were on average 4-11% lower than competitors. Flavoured milks and carbonated drinks were on average equal to market pricing or 5-40% below market.

b) Target a 10% sales growth on the redesigned MFV for that run against prior period.

The 2WD MFV that was initially built in early June 2018 continues to be fine-tuned with rectifications being done to ensure the consistent delivery of AAFCANS offerings. The 4WD MFV has been utilised for exercises and on base activities at Gallipoli Barracks through the year.

No growth comparisons can be made as the new MFVs have not yet replaced specific runs.

c) Post implementation: using ADFA canteen, increase transaction volume by 10% between 12.00pm - 2.00pm over base year FY2018 excluding December/January.

Trial an online portal and app called “AAFCANS On-Demand”, supplying customers with products for pickup or delivery. Assess ongo-ing viability.

The new electronic point-of-sale system increased transactions at ADFA between 12:00pm to 2:00pm from 108,000 to 210,000 during FY19, demonstrating faster process speeds. During FY20 the impact of the COVID-19 pandemic has significantly affected the sales at ADFA. The transactions slowed significantly in the Feb - June period making comparisons on previous years inaccurate and ineffective.

AAFCANS On-Demand webstore development was completed in June 2020. Live trials were undertaken in the first quarter of 2020-21 (outside the year in review).

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AAFCANS Annual Report 2020

ANALYSIS

d) Two facilities established or upgraded. The following facilities were upgraded or established during 2019-20:

• Completion of Gallipoli Barracks canteen refurbishment • Refurbishment of Holsworthy Barracks canteen and the establishment of a new cafe facility • Fit-out of the new canteen at RAAF Williamtown • Opening of the new kiosk facility, RAAF Edinburgh

Sea Lion café • Opening of the new RAAF Amberley Heritage Centre kiosk

e) AAFCANS deploys on request in support of at least 2 of the 3 major exercises (Exercise Pitch Black, Talisman Sabre and Hamel).

AAFCANS participated in the Gallipoli Barracks Open Day, Exercise Hamel and AASAM at Greenbank (Qld). The other exercises did not run due to COVID-19 restrictions.

Our participation in exercises and events are a key element of our business, ensuring that AAFCANS is not only of assistance and service to Defence person-nel but increases our understanding of the Defence environment and improves communication with our stakeholders.

Activities in 2019-2020

People and Culture

Development of our team members is critical to successfully offering exceptional service to our Defence personal.

Our ‘People Strategy’ is underpinned by the key attributes of mutual trust, transparency, accountability, collaboration, inclusion and participation.

AAFCANS understands the importance of focusing on our teams’ health and wellbeing. A systemic approach, using evidence based processes and tools, increases the effective-ness of individual wellbeing and results in high performing teams.

AAFCANS continues to build a diverse and inclusive workplace and we are committed to fostering a supportive workplace culture where our team members are encouraged and assisted to balance work, family and other aspects of personal life.

In the last financial year AAFCANS undertook an Employee Engagement Survey. This survey was well received by our team with over 70% responses. We heard that our team takes pride in AAFCANS and understands their role within our business. They are committed to strong customer service and are confident in the leadership and the environment in which they work. Like all businesses they also identified opportunities including reward and recognition, clarity on long term direction and stronger communication around the changes within the business.

The Board and senior leadership have embraced our teams responses and will continue to listen.

Communications and Marketing AAFCANS featured in six Defence media articles capturing welfare disbursements, exercise support and recycling bottle tops for kids initiative. In addition to the pictorial articles AAFCANS featured in Army and Air Force Peacekeeper Magazines.

Cosy props were added to AAFCANS refurbishment décor projects to convey a welcoming, homely store ambience and highlight AAFCANS fresh food concepts. A new style café theme was developed for Holsworthy Barracks to deliver an on-trend industrial style vibe.

The new AAFCANS loyalty app platform was developed to provide greater functionality. Bespoke app branding, graphic components exclusive app-only promotions and point of sale were created to support the launch.

The branding for AAFCANS On-Demand online ordering portal was designed, extending to the trial delivery vehicle. In tandem, a web menu and web store functionality were developed in readiness for trial at Gallipoli Barracks.

Other marketing activities included:

• Development of in-app channel to extend AAFCANS customer feedback touchpoints;

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

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AAFCANS Annual Report 2020

• A comparative pricing survey was conducted capturing 74 competitor menus, which helped benchmark AAFCANS offer and pricing with comparable offers outside the base;

• Development of AAFCANS new corporate DPN webpage. The webpage provides customers and stakeholders with quick access to key information about AAFCANS governance, reporting, history, improve-ments, and facilities and services by base, including our current promotions and RTF’s response form;

• Tindal quantitative digital and web-based customer survey to obtain customer insights and feedback on our current and future offer;

• AAFCANS partnered with RAAF Williamtown for their War on Waste initiative; AAFCANS implemented a suite of in-store and direct marketing messages to support the campaign.

Operations

Operations focused on enhancing the in-store customer experience to align with the contemporary style refurbishments completed throughout 2019-20. AAFCANS focused on ensuring the food offer continued to evolve by implementing a “core range offer”. The core range facilitates a rotation of menu products with a strategy of offering national menu compliance.

AAFCANS elevated its healthy products offer within our retail range and quick service menu. We expanded the healthy range on key bases with fresh cold-press juices (made daily in-store from fresh fruit and vegetables) along with Acai bowls and portion-controlled healthy meals as a convenient heat and eat option sold in our grab and go retail.

Utilising market data AAFCANS balanced its retail range to keep our offer aligned with customer demand. We expanded the healthy snacking options, protein impulse retail and elevated the visual in-store merchandising to encourage consumer uptake.

A bistro evening meal option was trialled at Gallipoli Barracks, with the aim to support ADF members living on base with an alternate amenity offer. The trial will continue in 2020-21 with the delivery of the Gallipoli Barracks lounge extension post-COVID-19. Following consumer feedback, AAFCANS also implemented a range of evening and family-focused meals at RAAF Tindal.

Weekend and evening trading hours along with core retail, convenience products and driveway services were fine-tuned to meet the local community needs.

Operations implemented a cloud-based ‘Retail, Electronic, Food Safety, System’ (REFSS). This platform enables real-time reporting. The dashboard is monitored and managed by the operations team to ensure support for our base management team and national compliance. Additionally, in support of AAFCANS key strategies, Operational Excellence Program (OEP) audits were implemented, supported by regular national Base Manager teleconference meetings.

AAFCANS continues to use its supply chain network to strengthen the support offered to RTF’s around the country.

Our mobile food van concept is under con-tinual review. Development is in its final stages for a 2020-21 trial.

IT & Security

With a key focus on network security, scal-ability, speed, and customer experience AAFCANS implemented significant changes to facilitate its strategic activities.

IT managed the scope and project design for the new Loyalty app and On-Demand ordering facility. The development included procurement, design, functionality and stringent testing of the platform and server resources. A key focus was to insulate AAFCANS from future security issues whilst maintaining a high level of integrity for users’ personal data. A bespoke helpdesk and feedback channel links directly to AAFCANS ticketing support system ensuring all communication is actioned.

New access points were installed at all outlets to provide ADF with an improved guest WiFi experience. The new hardware provides concise network monitoring and significantly strengthens our security and compliance with the Australian Signals Directorate.

The implementation of network security software and internal server upgrades have strengthened AAFCANS already robust cloud environment. Ongoing improvements and cybersecurity training will flow on into 2020-21.

IT designed and implemented the AAFCANS Virtual Assistant (AVA) support helpdesk which streamlines internal communications and touch-point tasking across our base network. Tickets raised within the centralised system are automatically allocated and actioned by exception.

Exercises

This year AAFCANS supported Defence on the following exercises:

• EX Hamel, Townsville QLD

• AASAM, Greenbank, QLD

• Gallipoli Barracks Open Day, Enoggera QLD

Due to COVID-19 activities and restrictions, the other exercises were not held within the year in review.

Facilities In recognition of the unique environment in which AAFCANS operates, the Common-wealth has provided a $400,000 per annum special amenity payment which has been used exclusively to improve the general appearance and atmosphere of AAFCANS’ canteens for its Service patrons.

In FY2020, AAFCANS undertook outlet/facility upgrade projects on the following bases:

• Completion of Gallipoli Barracks canteen refurbishment

• Investment the loyalty platform, app, online ordering portal and supporting equipment

• Holsworthy canteen upgrade and installa-tion of the new coffee lounge

• Fit-out of the new RAAF Williamtown canteen

• RAAF Wagga new temporary facility

• Equipment for RAAF Amberley Heritage Centre kiosk

• Equipment to the fit-out of new RAAF Edin -burgh Sea Lion café

This funding has now ceased.

Image 2: AAFCANS amenities container AASAM, 24 March - 03 April 2020

Greenbank training area

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

Image 3: Gallipoli Barracks Open Day, Oct 12 2019

Image 4: AAFCANS food offer

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Funding & Disbursements

Under the Regulations, AAFCANS is to conduct its operations on a commercial and self-supporting basis, with the aim of providing savings sufficient to permit distribution of surplus funds for the benefit of the members of the Army, the Air Force and their families.

In accordance with a Ministerial directive AAFCANS now reinvests cash surpluses into remodelling and refurbishing canteen facilities, improving products and services and keeping retail selling prices as low as possible.

During the year $545,185 was accrued or paid to SADFOs or base welfare funds under contracts negotiated by AAFCANS for vending on base.

Coffee loyalty returned more than 105,000 free coffees at a retail value of over $386,000 to our customers.

Chart 1: Welfare Disbursements 2020

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Image 5: RAAF Williamtown new canteen facility

OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

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AAFCANS Annual Report 2020

GOVERNANCE.

ORGANISATIONAL STRUCTURE 2020 Chart 2: Organisational structure

The overriding objective of the directors is to increase stakeholder value within an appropriate framework and to protect the rights and interests of stakeholders whilst ensuring that the Army and Air Force Canteen Service is properly managed. The directors are committed to the principles underpinning better practice in corporate governance, applied in a manner that is best suited to the business and to address the directors’ accountability to stakeholders. This is supported by an organisation-wide commitment to high standards of legislative compliance, and financial and ethical behaviour.

Organisational Structure

This chart is a diagrammatic presentation of ‘lines of authority’ that operated during the year. This is not an indication of ‘seniority’ within the corporation.

AAFCANS

Responsible Minister

AAFCANS Board of Management

AAFCANS Managing Director

Head of People

& Culture

Head of Information Technology

Financial Controller

Head of

Operations

Head of

Governance & Risk

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Image 6: Holsworthy Barracks, NSW Gallipoli Barracks, QLD

AAFCANS Annual Report 2020

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Chair

Non-executive director Ministerial appointment 1st October 2015

Non-executive director Chief of Army appointment 3rd August 2018

Other current appointments:

Special duties (AAFCANS)

The Board of Management

Leonie has served on various Boards since 1993. She retired as a Partner from the Chartered Accountants group, Bentleys (Qld) as at 30 June 2018. Leonie undertakes the role of the independent finance professional on the audit and risk committees of two industry superannuation funds and a private capital group.

Leonie was a director and subsequently the Chair of North Qld Bulk Ports from 1993 to 2012.

Leonie is a Chartered Accountant and brings with her extensive professional

experience in corporate strategic planning, business advising and governance.

• Independent Member Audit Committee, Gardior Pty Ltd

• Chair of the Governance & Risk Committee • Member of the People & Culture Committee

Todd, as a military representative, advises AAFCANS and represents the interests of the Army. Todd is currently appointed as Director General Logistics - Army. In this position he is responsible to the Chief of Army for strategic logistic, governance and technical regulatory management in support of Army’s mission and tasks. Todd also has responsibility for developing and implementing Army’s strategic policies related to infrastructure, safety, security, and enterprise risk management. Todd has extensive experience in command, training and operational appointments.

Martin, as a military represent-ative, advises AAFCANS and represents the interests of the Air Force. Martin has held appoint-ments on senior Defence boards and committees including Chief of Air Force Advisory Commit-tee and the Defence Logistics Committee. In recent years Marty served as Director-General Logis-tics - Air Force and Commander of the Combat Support Group. He brings a wealth of experience in command, strategy devel-opment, risk management and operations.

• Member of the Audit Committee

Non-executive director Chief of Air Force appointment 20th February 2020

Air Commodore Martin Smith GAICD

Ms Leonie Taylor FCA FAICD

Brigadier Todd Ashurst CSC MAICD

• Nil Nil

Other current appointments:

Special duties (AAFCANS)

• Member of the Governance & Risk Committee • Chair of the People & Culture Committee

• Member of the Audit Committee • Member of the Governance & Risk Committee

• Chair of the Audit Committee • Member of the People & Culture Committee • Member of the Governance

& Risk Committee

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Managing Director Executive director Board appointment 1st July 2011

Stewart’s background in management encompasses extensive commercial experi-ence in sectors including retail, quick service restaurants/bars, restaurants and leisure clubs in both Australia and the UK. Within Australia, Stewart has held positions as General Manager, Corporate Business with the Compass Group, and National General Manager & General Manager Sydney Opera House.

Having previously worked with Defence in the UK, Stewart has a clear understanding of the nature of the AAFCANS business and the operational require-ments that must be achieved to satisfy not only customers, but also key Defence and Government stakeholders.

Non-executive director Ministerial appointment 30th November 20177

Glenn has over 35 years retailing experience, primarily with Coles Myer Ltd. Glenn held key executive roles in both operations and distribution for Coles Supermarkets and Metcash Convenience. Glenn has a strong history of developing and improving performance across a range of retail, wholesale and warehousing operations.

Glenn brings complete retail oversight and expertise to the AAFCANS board.

Non-executive director Ministerial appointment 1st May 2018

Linda has considerable experience across the private and public sectors where she has held several strategic roles that span very large operational teams in the supermarket business (Coles Myer Ltd), to establishing and leading the People and Capability function in a Victorian water corporation including the legal and governance functions.

Linda holds or has held positions on numerous boards and committees, appointed due to her recognised expertise in retail, strategy, human resources, skills and training.

Mr Glenn Kirk GAICD

Ms Linda Heron GAICD MContempLdship

Mr Stewart McGrow GAICD

OUR BUSINESS AAFCANS Annual Report 2020

GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

• Non-executive Director, Friendly Society Medical Association

Nil Nil

The Board of Management

Period of appointment if not for the full year

Meetings eligible to attend (No.)

Meetings attended (No.)

Former Director

The other director of the corporation during the period covered by this report was:

Air Commodore Ian Pearson (RAAFAR) MAICD • Non-executive director • Chief of Air Force appointment • 1st July 2010 - 19 February 2020

Ian, as a military representative, advised AAFCANS and represented the interests of the Air Force.

Before transferring to the RAAF Active Reserve in March 2010, Ian’s Air Force duties included flying, training, staff and overseas Defence attaché duties. Ian worked tirelessly in AAFCANS and Defence’s best joint interests, contributing enormously to the restructure and development of the organisation over the past decade. AAFCANS’ board of management are deeply grateful for his vast knowledge and commitment.

Board Charter

The Board’s charter is set forth in the Regulations and includes that the: • Minister appoints three members, at least two of whom have had extensive business

or commercial experience, one of whom is appointed non-executive Chair

• Board includes two nominee directors, one each from Army and Air Force

• Managing Director is appointed by the Board as the sole executive director.

Civilian members are appointed by the Minister, based on industry expertise, business acumen and other characteristics that are considered valuable skills for the management of the business. Military Board members are selected from senior officers who have experience in management, personnel and other military requirements.

The Managing Director is appointed by the Board. The performance and remuneration of the sole executive director is reviewed on an annual basis by the Chair acting in accordance with the determination of the Remuneration Tribunal. The Chair then makes a recommendation to the Board through the People and Culture Committee.

The delegation of powers and functions to the Managing Director are documented in the Board delegation policy. Certain matters are reserved for the full Board. The Managing

Meetings of the Board

The number of meetings of the Board held during the reporting period and the number of meetings attended by each member:

L Taylor (Chair)

S McGrow (Managing Director)

I Pearson Retired 19/02/2020

M Smith Appointed 20/02/2020

T Ashurst

G Kirk

L Heron

8

8

4

4

8

8

8

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AAFCANS Annual Report 2020

Table 1: Director meeting attendance

8

8

4

4

7

8

8

Independent Professional Advice

Members of the Board have the right, in connection with their duties and responsibilities, to seek independent professional advice at AAFCANS’ expense. Prior written approval of the Chair is required but will not be unreasonably withheld. This right was not exercised during the year ended 30 June 2020.

Insurance of Officers

AAFCANS paid a premium of $8,702 for the year ended 30 June 2020 for the directors’ and officers’ liability policy.

The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of AAFCANS. No indemnities have been provided to any current or former officers.

Director is responsible for ensuring the responsibilities as delegated are properly discharged by management and for keeping the Board informed on these matters.

The charter is reviewed annually by members of the Governance and Risk Committee.

Audit Committee

Period of appointment if not for the full year

Meetings eligible to attend (No.)

Meetings attended (No.)

The Audit Committee is a standing commit-tee. Two of the members are appointed to the committee for the term of their Ministerial Board appointment. The third member is appointed from our military representatives. The Chair of our Board does not sit on this committee.

The committee operates under the charter approved by the Board, with reports of business given and minutes of meetings provided to the subsequent meeting of the Board. The charter was reviewed and re-adopted during the financial year.

The committee assists the Board in determining and ensuring:

• compliance with the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the PGPA Rule and other relevant Acts

• accounting records are appropriately maintained

• adequate internal controls to safeguard assets

• financial statements and management reports give a true and fair view

• a standard of corporate conduct and actively considering any ethical issues regarding policies and procedures.

People & Culture Committee

Period of appointment if not for the full year

Meetings eligible to attend (No.)

Meetings attended (No.)

L Heron (Chair)

I Pearson Retired 19/02/2020

M Smith Appointed 20/02/2020

G Kirk

In fulfilling its responsibilities the committee maintains open lines of communication and receives regular reports from internal and external auditors.

The external auditor is the Auditor General as prescribed by the Public Governance, Performance and Accountability Act 2013.

People and Culture Committee

The members of the People and Culture Committee, all being non-executive members of the Board, at 30 June 2020 were Glenn Kirk (Chair of the committee), Linda Heron and Leonie Taylor. The Committee has issued a standing invitation to the military members to attend committee meetings.

The number of meetings of the People and Culture Committee held during the reporting period and the number of meetings attended by each member:

The committee operates under a charter approved by the Board, with reports of busi-ness given and minutes of meetings provided to each subsequent meeting of the Board. The charter was reviewed and re-issued dur-ing the financial year.

Under direction from the committee, AAFCANS conducts a baseline survey of employee satisfaction biennially, with actions resulting from that survey being allocated to our people and culture department for implementation.

The main responsibility of the committee is to assist the Board in fulfilling its responsibilities for maintaining sound managerial control over all employment and industrial activities within the organisation, reviewing all significant people and culture practices and reporting of the organisation. The committee provides feedback on the salary packages of the senior executives.

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GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS Table 2: Audit committee meeting attendance

4

2

2

4

4

2

2

4

Table 3: People & Culture committee meeting attendance

G Kirk (Chair)

L Heron

L Taylor

4

4

4

4

4

4

Committees

Audit Committee

The members of the Audit Committee, all being non-executive members of the Board, at 30 June 2020 were Linda Heron (Chair of the committee), Glenn Kirk and Marty Smith. The committee has issued a standing invitation to the remaining military member to attend committee meetings.

The number of meetings of the Audit Committee held during the reporting period and the number of meetings attended by each member:

L Taylor (Chair)

G Kirk

L Heron

S McGrow

4 4

4 4

4 4

4 4

Table 4: Governance & Risk committee meeting attendance

Governance & Risk Committee

Period of appointment if not for the full year

Meetings eligible to attend (No.)

Meetings attended (No.)

AAFCANS Annual Report 2020

20

Governance and Risk Committee

The members of the Governance and Risk Committee, all being directors, 30 June 2020 were Leonie Taylor (Chair of the committee), Glenn Kirk, Linda Heron and Stewart McGrow. The committee has issued a standing invitation to the military directors to attend committee meetings.

The number of meetings of the Governance and Risk Committee held during the reporting period and the number of meetings attended by each member:

The committee operates under a charter approved by the Board, with reports of busi-ness given and minutes of meetings provided to each subsequent meeting of the Board. The committee reviewed and re-adopted the Board charter and the Governance and Risk Committee charter during financial year.

The main responsibilities of the committee are to assist the Board in maintaining sound corporate governance and managing risk over all activities within the organisation. The committee specifically uses the ASX Corporate Governance Principles and Recommenda-tions as the foundation of its governance program.

The charter and the employee code of conduct require all directors and employees to act with the utmost integrity and objectivity in their dealings with each other, competitors, customers, suppliers, the organisation and the community. Expectations on issues such as avoiding conflicts of interest, compliance with all laws, compliance with all policies and procedures, stewardship of assets and confidentiality of information are detailed therein.

Risk Management

As a standing agenda item at each Governance and Risk Committee meeting, the members review operational, financial, stakeholder, legal, cultural and other strategic risk factors. The risk register is amended as appropriate. AAFCANS’ full risk management framework was reviewed for completeness during the year.

The Board discusses new strategic and operational risk factors at each meeting and reviews AAFCANS’ top risks.

Food safety and work health and safety (WHS) are integral parts of the AAFCANS service. Oversight of these functions are managed by the People and Culture Committee. Our internal auditor, an internal appointment, conducts random audits for compliance under these two programs. In addition, AAFCANS has contracted an externally entity to audit a small number of outlets, ensuring the internal audit program is effective and meets audit and safety standards. Outlets are also audited random-ly for WHS and food safety by Army and Air Force accredited officials.

The Board insures for a wide range of com-mercial risks including general liability, business interruption, directors’ and officers’ liability, travel and property loss, destruction or damage.

ACCOUNTABILITY.

Legislation

The Army and Air Force Canteen Service was established by Regulations under the Defence Act 1903. The latest version of the regulations is The Army and Air Force (Canteen) Regulation 2016.

The purpose of the canteen service is to supply goods, facilities and services to, or for the entertainment and recreation of:

• members of the Army or Air Force

• persons employed in, or in connection with, Army or Air Force installations

• dependants of those members or persons

• visitors to Army or Air Force installations

• members of the ADF Cadets.

The Board shall conduct the canteen service in accordance with the following policy guidelines:

The committee, after consultation with the Chair, also reviews and makes recommenda-tions on the performance and remuneration of the Managing Director.

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GOVERNANCE FINANCE APPENDICES

REPORT OF OPERATIONS

• to enhance the living conditions and social environment of the intended recipients

• the operations shall be conducted on a commercial and self-supporting basis with the aim of achieving savings sufficient to allow surplus funds to be distributed for the benefit of members of the Army or Air Force

• Ministerial directives as advised from time to time.

Responsible Minister

During the financial year, the Army and Air Force Canteen Service was accounta-ble to the Minister for Veterans’ Affairs and Defence Personnel and through our Minister to Parliament. The Minister at reporting date is The Hon Darren Chester MP.

Ministerial Directions

Dividend & Royalty Distributions

The responsible Minister directed on 19 June 2006 that distributions to stakeholders be discontinued until further notice. Accordingly, no distributions were paid from AAFCANS during the 2020 financial year.

Borrowings

The Minister on 31 August 1995 approved borrowings by way of overdraft for working capital purposes. This option is not utilised.

Reporting

In accordance with the PGPA Act and PGPA Rule requirements, AAFCANS submits its annual Corporate plan to our responsible Minister and the Minister for Finance prior to its publication on the AAFCANS website by 31 August each year.

Quarterly financial performance reports are submitted to various stakeholders.

AAFCANS prepares budget estimates for inclu-sion in the Department of Finance’s whole of Government reporting.

The agreement for services between Defence and AAFCANS that was applicable during the 2020 financial year required that the entity sub-mit to the AAFCANS Advisory Committee the following reports:

• an annual corporate plan

• an annual performance report

• quarterly operational and financial reports.

All ministerial and legislative reporting requirements for the past financial year have been met.

In accordance with the PGPA Act 2013 section 19(1)(e) and the PGPA Rule 2014 17BE, no issues of non-compliance with finance law and no significant issues were reported to the responsible Minister during the past financial year.

Other

The Commonwealth has notified AAFCANS under section 28 of the CAC Act (supersed-ed by section 22 of the PGPA Act) that the following policies apply to the corporation:

• Australian Government Property Ownership Framework

• Protective Security Manual 2005 (PSM).

Monitoring of the Equal Employment Opportunity Management Plan

The report made in accordance with section 9(1) Equal Employment Opportunity (Commonwealth Authorities) Act 1987 is included at Appendix 1.

Work Health and Safety (WHS)

The Army and Air Force Canteen Service is subject to the requirements of the Work Health and Safety Act 2011. The report is made in accordance with Schedule 2, part 4 of the Act and is included at Appendix 2.

Judicial Decisions and Reviews by Outside Bodies

The Army and Air Force Canteen Service was not subject to any judicial or administrative tribunal decisions or to reports on the operations of the authority by the Auditor-General, a Parliamentary committee or the Commonwealth Ombudsman.

Freedom of Information

No applications for information were received under the Freedom of Information Act 1982 (FOI Act) in the reporting period.

The following information on AAFCANS is provided as required by the FOI Act:

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AAFCANS Annual Report 2020

• the organisation consults directly and widely to help meet the needs of key stakeholder

• access to information on our structure, functions, appointments, annual reports, consultation arrangements, FOI officer, information we routinely release following FOI requests and information we routinely provide to Parliament is published on our website.

Access to Documents

Access to documents under Freedom of Information legislation can be obtained by making a request in writing to the Managing Director, AAFCANS, Building E11, Lavarack Parade, Enoggera, Queensland, 4051.

Information Publications Scheme Statement

Entities subject to the FOI Act are required to publish their plan showing information published in accordance with the scheme’s requirements. Further information is available at www.aafcans.gov.au/information-publica-tion-scheme-ips-plan

Legal Services Expenditure

The Army and Air Force Canteen Service is required to report legal services expenditure as contained in the Legal Services Direction 2005 issued by the Attorney-General. Accord-ingly, during the financial year, the Army and Air Force Canteen Service paid professional fees and related reimbursements to legal entities of $66,099 excluding GST and including the direct and indirect costs of our in-house legal counsel (2019: $20,704).

Fraud Control

Although AAFCANS is not technically required to comply with the Commonwealth Fraud Control Guidelines, AAFCANS has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures that meet the required standard.

Ecological Sustainable Development

The report is made in accordance with section 516A(6)(a) of the Environment Protection and Biodiversity Conservation Act 1999. The activities of the Army and Air Force Canteen Service are not relevant to ecological sustain-able development in terms of the principles identified in the Environment Protection and Biodiversity Conservation Act.

Disability Discrimination

AAFCANS’ policies, programs and services are accessible to people with disabilities and meet its obligations under the Disability Discrimination Act 1992. AAFCANS is not aware of any instance where a person with a disability has experienced difficulty in accessing any policy, program or service offered.

Privacy Policy

Our privacy policy is published on our website. The policy addresses the requirements under the Australian Privacy Principles and advises how AAFCANS handles, uses and manages personal information.

Image 7: AAFCANS Defence Media

Image 8: AAFCANS healthy choices

Type and organisation 2019-20

Expenditure Purpose

Advertising -

Market research -

Polling -

Direct mail -

Media advertising staff recruitment:

- Defence Media $2,525 Supplier sponsored advertising

Total $2,525

Advertising and Market Research

During the 2019-20 AAFCANS conducted advertising for recruitment of staff and tenders for licenced traders.

Image 9: Deployable amenities

Table 5: Advertising and Market Research

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AAFCANS Annual Report 2020

AAFCANS - FINANCIAL STATEMENTS.

Table of Contents

AAFCANS - FINANCIAL STATEMENTS ………………………………………………………………....…..….....24

Independent Audit Report ……………………………………………………………………………........…....25

Statement by the Directors, Acting CEO and Financial Controller ……………………....…..….....…....27

Statement of Comprehensive Income ……………………………………………………………..….....…...28

Statement of Financial Position ……………………………………………………………………..…......…....29

Statement of Changes in Equity ……………………………………………………………………...….....…..30

Cash Flow Statement ………………………………………………………………………………..………........31

Note 1 Overview ……………………………………………………………………………..………........32

Note 2 Events After the Reporting Period ………………………………………………..…......….....35

Note 3 Financial Performance ………………………………………………………………..….....…..35

Note 4 Own-Source Revenue and Gains …………………………………………………..…...........37

Note 5 Financial Position ……………………………………………………………………….........…...38

Note 6 Fair Value Measurements ……………………………………………………………........…....42

Note 7 Payables …………………………………………………………………………………….....…..42

Note 8 People and Relationships ……………………………………………………………..…..........43

Note 9 Key Management Personnel Remuneration …….………………………………….....…...44

Note 10 Financial Instruments …………………....…………………………….…………………..........44

Note 11 Related Party Disclosures ………………...............................…….………………...........…..46

Note 12 Managing Uncertainties.…………………………………………….…………………......…...46

Note 13 Aggregate Assets and Liabilities...………………………………….…………….....…….......46

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AAFCANS Annual Report 2020

Independent Audit Report

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

INDEPENDENT AUDITOR’S REPORT

To the Minister for Defence Personnel

Opinion

In my opinion, the financial statements of the Army and Air Force Canteen Service (the Entity) for the year ended 30 June 2020:

(a) comply with Australian Accounting Standards and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Entity as at 30 June 2020 and its financial performance and cash flows for the year then ended.

The financial statements of the Entity, which I have audited, comprise the following statements as at 30 June 2020 and for the year then ended:

• Statement by the Directors, Acting CEO and Financial Controller; • Statement of Comprehensive Income; • Statement of Financial Position; • Statement of Changes in Equity; • Cash Flow Statement; • Notes to the financial statements, comprising a Summary of Significant Accounting Policies and other

explanatory information.

Basis for opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independ -ent of the Entity in accordance with the relevant ethical requirements for financial statement audits conduct -ed by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) to the extent that they are not in conflict with the Auditor- General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Accountable Authority’s responsibility for the financial statements

As the Accountable Authority of the Entity, the Directors are responsible under the Public Governance, Performance and Accountability Act 2013 (the Act) for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards and the rules made under the Act. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the ability of the Entity to continue as a going concern, taking into account whether the Entity’s operations will cease as a result of an administrative restructure or for any other reason. The Directors are also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

GPO Box 707 CANBERRA ACT 2601 38 Sydney Avenue FORREST ACT 2603 Phone (02) 6203 7300 Fax (02) 6203 7777

Garry Sutherland

Delegate of the Auditor-General

Canberra

9 September 2020

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AAFCANS Annual Report 2020

Auditor’s responsibilities for the audit of the financial statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtain an understanding of internal control relevant to the audit 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;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority; • conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of account-ing and, based on the audit evidence obtained, whether a material uncertainty exists related to events or

conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and • evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Accountable Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Australian National Audit Office

Statement by the Directors, Acting CEO and Financial Controller

In our opinion, the attached financial statements for the year ended 30 June 2020 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the Army and Air Force Canteen Service will be able to pay its debts as and when they fall due.

This statement is made in accordance with a resolution of the directors.

L L Taylor L M Heron T G Manic J F Darlington

Chair Director Acting CEO Financial Controller

09 September 2020 09 September 2020 09 September 2020 09 September 2020

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Statement of Comprehensive Income

for the period ended 30 June 2020

Notes 2020 2019

$ $

NET COST OF SERVICES

Expenses

Employee benefits 3A 10,092,429 9,602,795

Suppliers 3B 17,114,444 17,258,692

Depreciation and amortisation 5C 1,066,161 930,674

Asset write off 5C 24,940 11,864

Licenced facilities on base 3C 515,569 587,552

Other expenses 3D 2,002,056 1,976,142

Total expenses 30,815,599 30,367,719

Own-Source income

Own-source revenue

Sale of goods and rendering of services 4A 28,856,241 28,984,030

Interest 4C 80,525 117,421

Other revenue 4B 1,605,239 1,540,221

Total own-source revenue 30,542,005 30,641,672

Total own-source revenue 30,542,005 30,641,672

Net (cost of) contribution by services (273,594) 273,953

Revenue from Government 4D 400,000 400,000

Surplus attributable to the Australian Government 126,406 673,953

Total comprehensive income attributable to the Australian Government 126,406 673,953

The above statement should be read in conjunction with the accompanying notes.

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AAFCANS Annual Report 2020

Statement of Financial Position

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FINANCE APPENDICES

REPORT OF OPERATIONS

as at 30 June 2020

Notes 2020 2019

$ $

ASSETS

Financial assets

Cash and cash equivalents 5A 7,595,613 5,910,919

Trade and other receivables 5B 322,502 613,275

Total financial assets 7,918,115 6,524,194

Non-financial assets

Leasehold improvements 5C 2,204,144 1,886,302

Plant and equipment 5C 1,937,794 2,048,553

Intangibles 5C 412,765 894,034

Inventories 5D 1,790,717 1,868,230

Other non-financial assets 5E 452,474 269,287

Total non-financial assets 6,797,894 6,966,406

Total assets 14,716,009 13,490,601

LIABILITIES

Payables

Suppliers 7A 1,765,254 1,537,287

Other payables 7B 1,645,659 913,066

Total payables 3,410,913 2,450,353

Provisions

Employee provisions 8A 978,618 840,174

Total provisions 978,618 840,174

Total liabilities 4,389,531 3,290,527

Net assets 10,326,478 10,200,074

EQUITY

Contributed equity 1,328,804 1,328,804

Asset revaluation surplus 283,312 283,312

Retained earnings 8,714,362 8,587,958

Total equity 10,326,478 10,200,074

The above statement should be read in conjunction with the accompanying notes.

1. Right of use assets are included in the following line items [Plant & equipment]

Statement of Changes in Equity

AAFCANS - FINANCIAL STATEMENTS

30

AAFCANS Annual Report 2020

for the period ended 30 June 2020

Retained earnings Asset revaluation Contributed Total equity

surplus equity

2020 2019 2020 2019 2020 2019 2020 2019

$ $ $ $ $ $ $ $

Opening balance

Balance carried forward from previous

period 8,587,958 7,914,005 283,312 283,312 1,328,804 1,328,804 10,200,074 9,526,121

Adjustment for errors -2 - - - - - -2 -

Adjusted opening balance 8,587,956 7,914,005 283,312 283,312 1,328,804 1,328,804 10,200,072 9,526,121

Comprehensive income

Surplus for the period 126,406 673,953 - - - - 126,406 673,953

Other comprehensive income - - - - - - - -

Total comprehensive income 126,406 673,953 - - - - 126,406 673,953

Closing balance as at 30 June 8,714,362 8,587,958 283,312 283,312 1,328,804 1,328,804 10,326,478 10,200,074

The above statement should be read in conjunction with the accompanying notes.

for the period ended 30 June 2020

Notes 2020 2019

$ $

OPERATING ACTIVITIES

Cash received

Receipts from Government 400,000 400,000

Sale of goods and rendering of services 32,971,770 32,523,933

Interest 80,525 117,421

Total cash received 33,452,296 33,041,354

Cash used

Employees (10,092,429) (9,602,795)

Suppliers (19,425,133) (20,787,523)

Net GST paid (1,475,337) (1,364,854)

Total cash used (30,992,900) (31,755,173)

Net cash from operating activities 2,459,396 1,286,180

Cash used

Purchase of plant and equipment (774,702) (1,183,307)

Total cash used (774,702) (1,183,307)

Net cash used by investing activities (774,702) (1,183,307)

Net increase (decrease) in cash held 1,684,694 102,873

Cash and cash equivalents at the beginning of the reporting period 5A 5,910,919 5,808,046

Cash and cash equivalents at the end of the reporting period 5A 7,595,613 5,910,919

The above statement should be read in conjunction with the accompanying notes.

Cash Flow Statement

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FINANCE APPENDICES

REPORT OF OPERATIONS

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AAFCANS Annual Report 2020

Note 1 Overview

1.1 Objectives of the Army and Air Force Canteen Service

The Army and Air Force Canteen Service is an Australian Government controlled entity. It is a not-for-profit entity. The objective and structure of the Army and Air Force Canteen Service is to provide goods and services to or for the entertainment and recreation of designated members of the ‘Defence family’.

The continued existence of the Army and Air Force Canteen Service in its present form and with its present program is dependent upon the Chiefs of Army and Air Force requiring the provision of canteen services on specified bases and providing space to operate the canteens free of charge.

1.2 Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and

b) Australian Accounting Standards and Interpretations and Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

1.3 Significant Accounting Judgements and Estimates

The most significant estimates and assumptions made in the preparation of the financial state -ments related to the fair value and depreciation of property, plant and equipment. The valuation of property, plant and equipment necessarily involves estimation uncertainty with the potential to materially impact on the carrying amount of such assets in the next reporting period.

Other issues including, depreciation and amortisation, impairment, long service leave and calculation of licensed facilities on base have estimates in their calculations. Please refer to their individual note disclosures.

1.4 Taxation

The Army and Air Force Canteen Service is exempt from all forms of taxation except Fringe Benefits Tax (FBT), Wine Equalisation Tax (WET) and the Goods and Services Tax (GST).

Revenues, expenses, liabilities and assets are recognised net of GST except:

a) Where the amount of GST incurred is not recoverable from the Australian Taxation office; and

b) For receivables and payables.

1.5 New Australian Accounting Standards

No accounting standard has been adopted earlier than the application date as stated in the standard.

None of the new standards, revised standards, interpretations and amendments to standards that were issued prior to the signing of the Statement by Directors, Acting CEO and Financial Controller and were applicable to the current reporting period had a material effect on the financial statements.

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FINANCE APPENDICES

REPORT OF OPERATIONS

Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not-For-Profit Entities

The Entity adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.

Under the new income recognition model, the Entity shall first determine whether an enforcea -ble agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the Entity applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the Entity shall consider whether AASB 1058 applies.

In relation to AASB 15, the Entity elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The Entity is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.

In terms of AASB 1058, the Entity is required to recognise volunteer services at fair value if those services would have been purchased if not provided voluntarily, and the fair value of those services can be measured reliably.

The application of AASB 15 / AASB105 has had a nil effect on AAFCANS.

Application of AASB 16 Leases

The Entity adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

The Entity elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Entity applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:

• Apply a single discount rate to a portfolio of leases with reasonably similar characteristics

• Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application for leases where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date;

• Reliance on previous assessments on whether leases are onerous as opposed to preparing an impairment review under AASB 136 Impairment of assets as at the date of initial application; and

• Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.

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AAFCANS Annual Report 2020

As a lessee, the Entity previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of owner-ship. Under AASB 16, the Entity recognises right-of-use assets and lease liabilities for most leases. However, the Entity has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

On adoption of AASB 16, the Entity recognised right-of-use assets and lease liabilities in relation to leases of office space, heavy equipment and automobiles, which had previously been classified as operating leases. The lease liabilities were measured at the present value of the remaining lease payments, discounted using the Entity’s incremental borrowing rate as at 1 July 2019. The Entity’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 6.5%.

The right-of-use assets were measured as follows:

a) Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

b) All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above. Impact on transition On transition to AASB 16, the Entity recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below:

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Note 2 Events After the Reporting Period

AAFCANS have and will continue to monitor and address effects on its operations from the Coronavirus pandemic. The Senior Leadership Team meet on a regular basis to review the status of the operations and implement cost reduction measures where possible. AAFCANS have cash reserves that will be sufficient to meet the ongoing administrative and other expenses in the foreseeable 12 months from the date of signing of these financial statements.

Note 3 Financial Performance

Accounting Policy

Superannuation

The staff of the Army and Air Force Canteen Service are members of self-selected superannuation funds. The Army and Air Force Canteen Service makes employer contributions to the employees’ superannuation schemes at rates determined by legislation. The Army and Air Force Canteen Service accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final month of the year. Refer to Note 7B.

2020 2019

Note 3A: Employee Benefits $ $

Wages and salaries 8,396,456 8,155,487

Superannuation - defined contribution plans 813,113 795,330

Leave and other entitlements 851,069 507,660

Separation and redundancies 31,791 144,318

Total employee benefits 10,092,429 9,602,795

$

1-Jul-19

Right-of-use assets - property, plant and equipment 70,060

Lease liabilities (75,976)

Retained earnings 5,916

The following table reconciles the Departmental minimum lease commitments disclosed in the entity’s 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

Minimum operating lease commitment at 30 June 2019 212,135

Less: Short Term leases not recognised (12,805)

Less : Low Value Leases not recognised

Plus : effect of extension options reasonable certain to be exercised

Undiscounted lease payments 199,330

Less : effect of discounting using the incremental borrowing rate as at the date of initial application (5,916)

Lease liabilities recognised at 1 July 2019 193,414

The Board of AAFCANS resolved to pay Jobkeeper during the 3 months to June to ensure facilities remained open and trading for Defence personnel remaining on base. The additional payments to staff totalled $257,000. Treasury declined AAFCANS application for Jobkeeper and no funding was received to offset the additional payments.

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AAFCANS Annual Report 2020

Note 3C: Licenced Facilities on Base 2020 2019

$ $

Licenced facilities on base 515,569 587,552

Total licenced facilities on base 515,569 587,552

Licensed facilities on base was the cost of the rent and utilities that were used by licenced traders on base. The AAFCANS headquarters on base was estimated on the cost of renting a similar space in the area. These facilities were provided free of charge by the Department of Defence. The revenue in relation to the provision of these facilities is disclosed in Note 4B.

Note 3D: Other Expenses 2020 2019

$ $

Computer support and expenses 536,271 537,264

Bank fees 339,009 326,919

Selling, stationery, postage and courier 169,893 194,967

Vehicle running costs 193,919 193,919

Sundry expense 148,752 161,794

Travel 224,410 156,009

Recruitment fees and agency staff 54,319 111,485

Support office facilities 105,709 93,400

Insurance 78,348 64,152

Professional services 84,914 44,775

External audit fees 23,701 38,000

Telephone and internet communications 30,139 36,755

Legal fees 12,788 16,229

Fringe benefits tax - 472

Internal audit fees 3,343 -

Total other expenses 2,002,056 1,976,142

Note 3B: Suppliers 2020 2019

$ $

Goods and services supplied or rendered

Cost of goods sold 16,944,942 17,002,540

Total goods and services supplied or rendered 16,944,942 17,002,540

Other suppliers

Workers compensation expenses 114,685 153,497

Total other suppliers 169,502 256,151

Total suppliers 17,114,444 17,258,692

Note 4 Own-Source Revenue and Gains

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Accounting Policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined, and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Revenue from the sale of goods is recognised when: a) the risk and rewards of ownership have been transferred to the buyer; b) the entity retains no managerial involvement or effective control over the goods; c) the revenue and transaction costs incurred can be reliably measured; and d) it is probable that the economic benefits associated with the transaction will flow to the Army and Air Force Canteen Service.

Receivables for goods, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Note 4A: 2020 2019

$ $

Sale of goods 28,457,735 28,528,541

Total sale of goods 28,457,735 28,528,541

Rendering of services 398,505 455,489

Total rendering of services 398,505 455,489

Total sale of goods and rendering of services 28,856,241 28,984,030

Note 4B: Other Revenue 2020 2019

$ $

Marketing revenue and commissions 1,000,342 909,415

Resources received free of charge - Defence facilities 515,569 587,552

Sundry income 89,328 43,254

Total other revenue 1,605,239 1,540,221

Sales were impacted heavily in the last quarter of FY20 due to the COVID-19 pandemic. Revenues dropped to $2.7M behind budget.

Note 4C: Interest 2020 2019

$ $

Deposits 80,525 117,421

Total interest 80,525 117,421

Accounting Policy

Interest revenue is recognised using the effective interest method.

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AAFCANS Annual Report 2020

Note 4D: Revenue from Government 2020 2019

$ $

Grant Funding 400,000 400,000

Total revenue from Government 400,000 400,000

Accounting Policy

Revenue from Government

Revenue from Government is recognised when AAFCANS obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to AAFCANS and the amount of the grant can be reliably measured. If conditions are attached to the grant which must be satisfied before it is eligible to receive the contribution, the recognition of the grant will be deferred until those conditions are satisfied.

Note 5A: Cash and cash equivalents 2020 2019

$ $

Cash on hand or on deposit 7,595,613 5,910,919

Total cash and cash equivalents 7,595,613 5,910,919

Accounting Policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes: a) cash on hand; b) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; and c) cash in special accounts.

Note 5B: Trade and other receivables 2020 2019

Goods and services receivables $ $

Goods and services 346,110 639,044

Total goods and services receivables 346,110 639,044

Total trade and other receivables (gross) 346,110 639,044

Less impairment loss allowance (23,608) (25,769)

Total trade and other receivables (net) 322,502 613,275

Accounting Policy

Financial assets Trade receivables, loans and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at be -low-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Note 5 Financial Position

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Note 5C: Reconciliation of the Opening and Closing Balances of Leasehold Improvements, Plant and Equipment, Computer Hardware and Computer Software

Leasehold Plant & Computer Computer Work

improvements equipment hardware software In Progress Total

$ $ $ $ $ $

As at 1 July 2019

Gross book value 3,071,977 4,507,620 1,201,567 1,061,927 539,635 10,382,726

Accumulated depreciation and impairment (1,185,674) (2,703,966) (956,668) (707,528) - (5,553,837)

Total as at 1 July 2019 1,886,302 1,803,654 244,899 354,399 539,635 4,828,889

Recognition of right of use asset on initial application of AASB 16 70,060 70,060

Adjusted total as at 1 July 2019 1,886,302 1,873,714 244,899 354,399 539,635 4,898,949

Additions

By purchase 661,929 128,502 270,849 13,554 - 1,074,836

Right-of-use assets -

Impairments recognised in net cost of services - - - - - -

Depreciation and Amortisation expense (363,027) (355,098) (149,830) (166,844) - (1,034,799)

Depreciation on right-of-use assets (31,362) (31,362)

Other movements (327,980) (327,980)

Disposals -

Other 18,940 (29,360) (14,521) - (24,940)

Total as at 30 June 2020 2,204,144 1,586,396 351,398 201,110 211,655 4,554,703

Gross book value 3,713,855 4,436,867 1,028,397 1,036,466 211,655 10,427,240

Accumulated depreciation and impairment (1,509,711) (2,850,471) (677,000) (835,357) - (5,872,538)

Total as at 30 June 2020 2,204,144 1,586,396 351,398 201,110 211,655 4,554,703

Carrying amount of right-of-use assets - 38,698 - - - 38,698

Revaluations of non-financial assets - All revaluations were conducted in accordance with the revaluation policy stated at Note 6A. - During 2016 - 2017 an independent valuer conducted revaluations.

- No items of plant and equipment are expected to be sold or disposed of within the next 12 months. - No indicators of impairment were found for plant and equipment - The carrying amount of computer software included $201,110 purchased software. - No leasehold improvements are expected to be disposed of within the next 12 months.

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AAFCANS Annual Report 2020

Accounting Policy

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair value at the reporting date. The regularity of independent valua-tions depended upon the volatility of movements in market value for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity using, in all cases the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2020 2019

Leasehold Improvements 10 years 10 years

Plant and Equipment 3 to 10 years 3 to 10 years

Computer Hardware 3 to 5 years 3 to 5 years

Impairment

All assets were assessed for impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated, and an impairment adjustment made if the as-set’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Accounting Policy

Inventories held for sale are valued at the lower of cost and net realisable value. Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:

a) raw materials and stores - purchase cost on a first-in-first-out basis; and b) finished goods - cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

De-recognition

An item of property, plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.

Intangibles

The entity’s intangibles comprise software purchased for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the entity’s software are 2 to 3 years (2019: 2 to 3 years).

All software assets were assessed for indications of impairment as at 30 June 2020.

Assets acquired at no cost, or for nominal consideration are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

2020 2019

Note 5D: Inventories $ $

Inventories held for sale

Finished goods 1,790,717 1,868,230

Total inventories held for sale 1,790,717 1,868,230

Total inventories 1,790,717 1,868,230

During 2020, nil inventory held for sale was recognised as an expense (2019: nil).

No items of inventory are recognised at fair value less cost to sell.

All inventories are expected to be sold in the next 12 months.

2020 2019

Note 5E: Other non-financial assets $ $

Accrued Income 408,370 198,540

Prepayments 44,104 70,747

Total other non-financial assets 452,474 269,287

Other non-financial assets expected to be recovered

No more than 12 months 452,474 269,287

More than 12 months - -

Total other non-financial assets 452,474 269,287

No indicators of impairment were found for other non-financial assets.

Note 6 Fair Value Measurements

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AAFCANS Annual Report 2020

Note 7 Payables

Note 7A: Suppliers 2020 2019

$ $

Trade creditors and accruals 1,765,254 1,537,287

Total suppliers 1,765,254 1,537,287

All suppliers are non-related entities and are expected to be settled within 12 months.

Settlement was usually made net of 30 days.

Note 6A Fair Value Measurements

Fair value measurements at the end of the reporting period

2020 2019

$ $

Financial assets

Leasehold improvements 2,204,144 1,886,302

Other property, plant & equipment 2,350,559 2,942,587

Total fair value measurements of assets in the statement of financial position 4,554,703 4,828,889

AAFCANS did not measure any non-financial assets at fair value on a non recurring basis as at 30 June 2020

Note 7B: Other Payables 2020 2019

$ $

Wages and salaries 952,750 347,824

Superannuation 67,417 18,552

GST payable 295,086 323,361

Vending commissions - (46)

Other 330,406 223,375

Total other payables 1,645,659 913,066

Note 8 People and Relationships

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Accounting Policy

Liabilities for ‘short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts. Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

Separation and Redundancy Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation The entity’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

Superannuation contributions are made according to statutory requirements, the liability for superannua-tion recognised as at 30 June represents outstanding contributions.

2020 2019

Note 8A: Employee Provisions $ $

Annual leave 362,856 261,387

Long service leave 615,762 578,786

Total employee provisions 978,618 840,174

Employee provisions are expected to be settled

No more than 12 months 549,015 477,625

More than 12 months 429,603 362,549

Total employee provisions 978,618 840,174

Note 9 Key Management Personnel Remuneration

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AAFCANS Annual Report 2020

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The entity has determined the key management personnel to be the Director/Chief Executive/Secretary and Directors/Executive Officers/General Managers/Deputy Secretaries. Key management personnel remuneration is reported in the table below:

Note 10 Financial Instruments

2020 2019

Note 10A: Categories of Financial Instruments $ $

Financial assets at amortised cost

Cash and cash equivalents 7,595,613 5,910,919

Trade and other receivables 303,589 740,443

Total financial assets at amortised cost 7,899,202 6,651,361

Total financial assets 7,899,202 6,651,361

Financial liabilities at amortised cost

Trade creditors 1,765,254 1,537,287

Total financial liabilities measured at amortised cost 1,765,254 1,537,287

Carrying amount of financial liabilities 1,765,254 1,537,287

2020 2019

Note 9A: Key Management Personnel Remuneration $ $

Short-term employee benefits

Salary 848,299 760,885

Annual leave 72,734 57,026

Performance bonuses 29,748

Total short-term employee benefits 921,033 847,659

Post-employment benefits

Superannuation 83,698 72,341

Total short-term employee benefits 83,698 72,341

Other long-term employee benefits

Long service leave 21,109 15,601

Total other long-term benefits 21,109 15,601

Termination Benefits

Redundancy 46,888 -

Total Termination Benefits 46,888 -

Total key management personnel remuneration expenses 1,072,728 935,600

The total number of senior management personnel that are included in the above table are 5 individuals (2019:5 individuals).

The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE

FINANCE APPENDICES

REPORT OF OPERATIONS

Accounting Policy

Financial assets With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories: financial assets at fair value through profit or loss; financial assets at fair value through other comprehensive income; and financial assets measured at amortised cost. The classification depends on both the entity’s business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. Comparatives have not been restated on initial application.

Financial Assets at Amortised Cost Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount. Amortised cost is determined using the effective interest method.

Effective Interest Method Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI) Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test. Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

Financial Assets at Fair Value Through Profit or Loss (FVTPL) Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either doesn’t meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased. The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses. A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Fair Value Through Profit or Loss Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Financial Liabilities at Amortised Cost Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis. Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Superannuation contributions are made according to statutory requirements, the liability for superannuation recognised as at 30 June represents outstanding contributions.

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AAFCANS Annual Report 2020

Note 11 Related Party Disclosures

Related party relationships:

AAFCANS is an Australian Government controlled entity. Related parties to this entity are Directors, Key Management Personnel including Portfolio Minister and Cabinet Ministers and other Australian Government entities.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

There were no transactions with related parties in 2020.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Note 12 Managing Uncertainties

Note 12A: Contingent Assets and Liabilities:

As at 30 June 2020 No contingent assets and liabilities have been determined (2019: nil)

2020 2019

Note 10B: Net gains or losses on financial assets $ $

Financial assets at amortised cost

Interest revenue 80,525 117,421

Net gains/(losses) on financial assets at amortised cost 80,525 117,421

Net gains on financial assets 80,525 117,421

The net income from financial assets not at fair value through profit or loss is $80,525 (2019: $117,421)

2020 2019

$ $

Assets expected to be recovered in:

No more than 12 months 10,161,306 8,661,712

More than 12 months 4,554,703 4,828,889

Total assets 14,716,009 13,490,601

Liabilities expected to be settled in:

No more than 12 months 3,932,986 2,927,979

More than 12 months 456,545 362,548

Total liabilities 4,389,531 3,290,527

Note 13 Aggregate Assets and Liabilities

Table 7: Gender breakdown as at 30 June

Category Male Female

2020 2019 2020 2019

Full time 23 20 44 48

Part time 0 0 11 7

Casual 16 19 153 150

Total 39 39 208 205

Category FTE Total

2020 2019 2020 2019

Full time 64 68 67 68

Part time 6 6 11 8

Casual 78 114 167 168

Total 148 188 247 244

APPENDIX 1: ANNUAL REPORT ON THE MONITORING OF THE EEO MANAGEMENT PLAN

Overview

AAFCANS domestic retail operations include convenience stores, cafés, petrol stations, mobile food vans and the provision of “Class 6” products to major military exercises. Licenced traders provide additional retail and non-core services e.g. fast food shops, hairdressers, mechanics, barbers, banks and postal services, utilising their own employees.

AAFCANS remains geographically dispersed with small staff numbers at each individual site. Casual and part time employees account for 72% (72% - 2019) of all staff. A profile of staff in terms of designated (target) group member classification appears at Table 9, highlighting that women constitute:

• 84% (2019 84%) of all staff • 63% (2019 71%) of manager-level staff • 69% (2019 57%) of executive-level staff

The organisation’s employment profile consists of predominantly casual staff and is subject to significant fluctuation on a local basis. During 2019-20 spouses or dependents of Defence personnel filled 12% (14% - 2019) of all positions, in large part due to the on-base location of our stores.

Table 6 provides a profile of staffing by category. Total staff numbers increased to 247 as at 30 June 2020 (244 - 2019). The Full Time Equivalent (FTE) statistic decreased to 148 compared to 188 in the prior year. The general staffing profile reflects trading patterns that can significantly fluctuate in line with Australian Defence Force training, exercises and operations activity and the narrowly defined customer base to which AAFCANS has direct access. In particular, outlets at bases where troops are drawn for operational deployment overseas experience significant fluctuations in trade, product mix and casual staff numbers.

General Management of the EEO Plan The success of continuing to achieve the objectives of the EEO management plan is dependent upon:

• Management commitment • The allocation of responsibility and resources for implementation • The awareness, participation and training

of staff

• Effective monitoring and evaluation. AAFCANS continues to:

• Ensure all staff are aware of senior management’s commitment to the EEO program

• Allocate adequate resources to the development and management of the EEO plan

• Encourage and promote non-discrimina-tion policies e.g. reissue the code of conduct to all employees (attached to each contract of employment)

• Develop our policy and procedures manual, and train staff on those policies which includes a policy addressing human rights and equal opportunity

• Promote skill and potential-based recruitment and selection process. This is achieved by providing specific training support to all managers, appropriate policies on recruitment, selection, termination, performance appraisal, secondment and training, and guidelines to assist development of selection and interview criteria.

People Engaged in Providing Retail Services as at 30 June 2020

Total number of staff employed at 30 June 2020 was 247 (2019 - 244) equating to 148 (2019 - 188) full time equivalent (FTE) staff employed throughout the period.

Table 6: Staff as at 30 June

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OUR BUSINESS AAFCANS Annual Report 2020 GOVERNANCE FINANCE

APPENDICES

REPORT OF OPERATIONS

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AAFCANS Annual Report 2020

Chart 3: Employees by gender as at 30 June

All Workers

Male Female Other

By State Full

Time

Part Time

Total Male

Full Time

Part Time

Total Female

Full Time

Part Time

Total Other

NSW 3 2 5 5 36 41 0 0 0

Qld 12 5 17 26 49 75 0 0 0

SA 0 1 1 2 14 16 0 0 0

Tas 0 0 0 0 0 0 0 0 0

Vic 6 3 9 5 30 35 0 0 0

WA 0 0 0 0 0 0 0 0 0

ACT 1 2 3 2 3 5 0 0 0

NT 1 3 4 4 32 36 0 0 0

External Territories 0 0 0 0 0 0 0 0 0

Overseas 0 0 0 0 0 0 0 0 0

Total 23 16 39 44 164 208 0 0 0

Table 8: Total number of staff employed by location as at 30 June

Target Group Members ((TGMs) are well represented in all employment categories, including at the executive/professional levels. There are two nominated TGMs on the governing Board (67% representation).

During 2019-20 there were no employees who identified as indigenous (2019 - 0.004%)

Table 9: Target Group Members by Classification as at 30 June

Table 10: Target Group Members by Classification ‘Women’ as at 30 June

Recruitment and Selection For consistency and regard for EEO and other staff policy, all terminations are only initiated and managed by senior management. A grievance process is well established and is accessible to all staff.

The recruitment and selection policy has been developed within a framework of merit-based fair and equitable staff selection. This policy:

• Covers ethics in recruitment as they relate to internal use and ensure all external recruitment consultants also maintain our standards

• Continues to apply EEO principles of assisting and developing existing staff to enhance their ability to compete for available positions

• Details standard recruitment tools for use by managers

• Incorporates a formal feedback mechanism for both internal and external applicants

• Incorporates a detailed induction process.

In evaluating prospective staff, emphasis is placed on the inherent requirements of the job skills and potential rather than detailed local knowledge and experience. If a person with a disability can perform the inherent requirements of the job with some alteration or adjustments these adjustments are made unless this imposes unjustifiable hardship.

Table 11: Target Group Members by Classification ‘Indigenous’ as at 30 June

All Workers

All Staff No Employment

Classification

All TGM as a % of all Staff

2020 2019 2020 2019

187 186 Sales Assistants Salary: $37,518-$55,000 99 80

27 28 ManagersSalary: $42,699-$72,100 93 71

17 20 Clerical Salary $29,380-$120,000 76 70

13 7 Executive Salary: $75,000-$245,117 76 57

3 3 OtherSalary: $38,650-$60,980 100 66

247 244 TOTAL 84 84

TGM

All Staff No.

Employment Classification

Women as a % of all staff

All Women No.

Women Workers

2020 2019 2020 2019 2020 2019

187 186 Sales Assistants 89 80 168 165

27 28 Managers 63 71 17 20

17 20 Clerical 71 70 12 14

13 7 Executive 69 57 9 4

3 3 Other 67 66 2 2

247 244 TOTAL 84 84 208 205

Indigenous Australian Workers

2020 2019 2020 2019 2020 2019

187 186

Sales Assistants 0 0.004 0 1

27 28 Managers 0 0 0 0

17 20 Clerical 0 0 0 0

13 7 Executive 0 0 0 0

3 3 Other 0 0 0 0

247 244 TOTAL 0 0.004 0 1

TGM All Staff No.

Employment Classification

Indigenous Australians as a % of all staff

Indigenous Australian Workers

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TGMs are made aware of their rights, entitle-ments and conditions of employment by our base managers as well as through the provision of policy and procedure manuals and delivery of a standard induction program. A plain English summary of the terms and conditions of employment is provided in the general induction module.

There have been no requests for EEO material to be prepared in languages other than English or requests for interpreters to be made available for any reason.

Training and Staff Development

Management strives to deliver appropriate staff training and development opportunities through both internal and external training programs.

AAFCANS provides formal training covering areas such as WHS, food safety, customer ser-vice, merchandising, leadership and comput-er skills. The training and development plan is reviewed each year to ensure the matching of current staff skills against the organisation-al competency framework and to develop targeted training programs to meet those competency shortfalls.

All training modules are reviewed every two years to ensure content is current and each module has been revised to provide ease of access for employees who have literacy difficulties.

Conditions of Employment

AAFCANS employs staff under appropriate terms and conditions subject to direction from the Fair Work Commission and the Minister for Employment.

AAFCANS responds to three awards. If an employee is not in a classification covered by these awards or does not have a specific matter dealt with by an individual contract of employment, management applies the terms and conditions of employment as exists for other AAFCANS employees.

Details of the staff profile in classification and salary terms appear at Table 9.

The code of conduct was approved by the Board and executive of AAFCANS in 2013 and is reviewed annually since that time.

The code of conduct defines and standard -ises expectations for all staff at AAFCANS. It guides the behaviour of all employees in terms of individual representation, relations with customers, and relations with fellow em-ployees. This document sets the framework for AAFCANS’ culture.

A company policy and procedures manual are maintained that consolidates the major terms and conditions of employment. Updates are posted to the AAFCANS intranet and distributed both in hard copy and via the weekly bulletin throughout the year as procedures are improved and new policies are implemented. Significant changes are also advised and explained during management telephone conferences and at outlet staff meetings.

AAFCANS ensures employees are not subjected to any form of discrimination or harassment in the workplace by:

• Distributing and displaying material aimed at raising awareness of the nature and incidence of discrimination or sexual and racial harassment

• Ensuring the working environment is free of material which may be offensive to TGMs and other employees

• Continuing to maintain a register of grievances (no issues were reported to Fair Work Australia in the year under review)

• Reiterating EEO principles in management training programs and in designated work group meetings, i.e. at the local trading outlet level

• Incorporating EEO awareness in the formal induction program for all new staff

• Incorporating a detailed harassment and bullying policy and whistleblowers/public interest disclosure policy in the company policy and procedures manual which operate in tandem with the EEO policy to ensure staff have numerous reporting avenues for inappropriate conduct.

Personnel policies, procedures and related correspondence have been reviewed and are free of any gender, cultural or racial bias.

As at 30 June 2020, 78 (2019 - 75) staff members were employed on individual employment contracts, including all full and part-time salaried staff.

APPENDIX 2: ANNUAL REPORT OF WHS ARRANGEMENTS AND STATISTICS This report is provided pursuant to Schedule 2, Part 4 of the Work Health and Safety Act 2011 and covers the period from 1 July 2019 to 30 June 2020.

Overview

The Army and Air Force Canteen Service maintains:

• A national safety committee

• Safety representatives for all designated work groups

• Documented health and safety management arrangements

• An extensive range of WHS policies

• A WHS audit and reporting system, including both internal audits and third-party external audits.

Occupational Health and Safety

Food Safety AAFCANS have employed a qualified business partner with an excess of seventeen years food audit experience to conduct audits across AAFCANS premises. These audits now include licensed traders. Audits are conducted yearly with further audits undertaken when deemed necessary. This provides management and the Board with assurance that our facilities and processes meet the highest safety standards.

The results from these audits are addressed in conjunction with the Defence Estate and Infrastructure Group to ensure that all AAFCANS premises comply with the relevant legislation and continue to provide a safe and healthy environment for staff and customers.

AAFCANS web-based food safety induction training was updated to align with revised food safety policies and procedures. This program ensures that all employees receive the required training in food safety and ensures they attain the required skills and knowledge in order to maintain safe food practices in the workplace. The provision of good quality, safe food is a priority with AAFCANS.

Work Health and Safety Our processes to ensure compliance with

WHS and food safety programs continue to improve and remain current. Updates were distributed throughout the year via the AAFCANS intranet, electronically through the weekly bulletin emailed to outlet managers and reinforced in team and base manage-ment meetings. Each outlet is audited at least annually with those issues identified reported to either the Defence Estate & Infra-structure Group or AAFCANS management for resolution.

The agency’s policy statement was reviewed and updated in March 2019 and approved by the Managing Director. The policy is reviewed annually to meet legislative requirements.

There were no dangerous occurrences in the reporting period. Whilst the process of outlet audits is continuous with practice improve-ments occurring at a local level, the issues in relation to major facility works remain the responsibility of Defence.

Note 1 Inclusive of annual leave, long service leave and sick leave hours taken

Note 2 Frequency rate: Number of lost time injuries per thousand hours worked

Note 3 Severity rate: Number of lost days per thousand hours worked

Note 4 Absenteeism for sick leave, not being workers compensation, permanent payroll only - excludes casual wages paid.

During the 12 months from July 2019 to June 2020 three new claim was submitted to Comcare. Time lost due to workplace injuries totalled 1240 hours. The number of injuries reported in the financial year remained stable at 43. AAFCANS continues to manage existing long-term claims and resolves minor claims through early intervention outside the Comcare system.

Table 12: Work Health & Safety Performance for year ended 30 June

WHS Performance 2020 2019 2018 2017

Employees at period end

247 244 235 259

Average Number of FTE Employees throughout the period

148 188 192 237

Hours of Labour (‘000’s)1 277 277 294 298

All injuries (year of review) 43 43 57 59

Lost time Injuries 4 1 4 6

Hours Lost (year of review) 1240 469 281 311

Frequency Rate 2 14.44 3.6 13.6 20.1

Severity Rate 3 0.5889 0.2220 0.1257 0.1373

Absenteeism (% Wages) 4

1.14% 2.00% 2.27% 2.34%

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Workers Compensation

Insurance cover for workers compensation is maintained as follows:

• Claims established prior to 1 July 1989 are determined under the Commonwealth Employees Rehabilitation and Compensation Act 1988; however, payments as directed by Comcare are the responsibility of the Army and Air Force Canteen Service.

• Claims established from 1 July 1989 are managed, by government direction, in conjunction with Comcare under the provisions of the Safety, Rehabilitation and Compensation Act 1988.

During the year we have had three claims, all involved injuries to body parts. There were no systematic issues identified and controls were put in place to ensure the risk is minimised. We will continue to monitor the workplace through inspection reports and hazard identification forms to keep the number of incidents in the workplace to an absolute minimum, striving for a reduction of injuries.

Absenteeism for sick leave, not being for workers compensation, was at a rate of 1.14% of non-casual wages for the period (2019 - 2.00%).

Future focus will be on increasing the skills and abilities of staff at all levels to assist in the identification and notification of hazards in the workplace. AAFCANS will continue to communicate with staff regularly, ensuring safety remains a clear priority throughout the working day. AAFCANS also aims to build on current levels of compliance and strive toward best practice in WHS.

Chart 4: All injuries chart for the year ended 30 June Image 10: AAFCANS ‘REFSS’ food safe program

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Queensland • RAAF Townsville • Lavarack Barracks, Townsville • RAAF Amberley, Ipswich • Gallipoli Barracks, Enoggera • Oakey Aviation Centre • Kokoda Barracks, Canungra

Northern Territory • RAAF Darwin • Robertson Barracks, Darwin

• RAAF Tindal, Katherine

New South Wales • RAAF Williamtown • RAAF Richmond • RAAF Wagga Wagga • Holsworthy Barracks, Liverpool • Joint Logistics Unit East, Moorebank • SOI Lone Pine Barracks, Singleton • ARTC Kapooka • Victoria Barracks, Sydney

ACT • ADFA, Canberra

Victoria • Gaza Ridge Barracks, Bandiana • Latchford Barracks, Bonegilla • RAAF Laverton • RAAF Point Cook, Laverton • Victoria Barracks , Melbourne • Simpson Barracks, Watsonia • Puckapunyal MA • RAAF East Sale

South Australia • RAAF Edinburgh

APPENDIX 3:

DIRECTLY OPERATED AAFCANS OUTLET LOCATIONS

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APPENDIX 3: LOCATION OF LICENCED TRADERS

Licenced Traded Services by Location QTY

QUEENSLAND

Gallipoli Barracks

Barber / Hairdresser 1

Banking Services 2

Retail Services (Military Gear) 1

Kokoda Barracks

Barber / Hairdresser 1

RAAF Amberley

Barber / Hairdresser 1

Banking Services 1

Standalone ATM 1

Lavarack Barracks

Barber / Hairdresser 1

Retail Services (Military Gear) 1

NORTHERN TERRITORY

Robertson Barracks

Barber / Hairdresser 2

Banking Services 2

NEW SOUTH WALES

Holsworthy Barracks

Barber / Hairdresser 1

Banking Services 2

Retail Services (Military Gear) 1

RAAF Richmond

Barber / Hairdresser 1

Banking Services 1

Mechanical Services 1

RAAF Williamtown

Barber / Hairdresser 1

Banking Services 1

Dry Cleaning Services 1

Lone Pine Barracks, Singleton

Barber / Hairdresser 1

Banking Services 1

RAAF Wagga Wagga

Barber / Hairdresser 1

Banking Services 1

ARTC Kapooka, Blamey Barracks

Barber / Hairdresser 1

Photography Services 1

Mechanical Services 1

ACT

Royal Military College, Duntroon

Barber / Hairdresser 1

Banking Services 2

Take Aways Food Outlet 1

VICTORIA

Puckapunyal

Barber / Hairdresser 2

Banking Services 1

Retail Services (Military Gear) 1

Post Office 1

Take Away Food Outlets 3

RAAF East Sale

Barber / Hairdresser 1

Post Office 1

Simpson Barracks, Watsonia

Barber / Hairdresser 1

Standalone ATM 1

Latchford Barracks, Bandiana

Barber / Hairdresser 1

SOUTH AUSTRALIA

RAAF Edinburgh

Barber / Hairdresser 1

Keswick Barracks

Barber / Hairdresser 1

Food Outlet 1

Woodside Barracks

Food Outlet 1

WESTERN AUSTRALIA

RAAF Pearce

Food Outlet 1

APPENDIX 4: TERMS AND ABBREVIATIONS

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Term / Acronym Description / Definition

24/7 Twenty-four hours a day, seven days a week

AAFCANS Army and Air Force Canteen Service

AASAM Australian Army Skills at Arms Meet

ADF Australian Defence Force

App Application - software program downloaded to mobile phone

Board Army and Air Force Canteen Service Board of Management

CAC Act Commonwealth Authorities and Companies Act 1997

Direct Operations Cafes & other retail facilities directly operated and staffed by AAFCANS

DPN Defence Private Network

EEO Equal Employment Opportunity

EPOS or POS Electronic point-of-sale

FOI Freedom of Information

FTE Full Time Equivalent

FY Financial year

GST Goods and Services Tax

ARTC Kapooka Army Recruit Training Centre

MFV Mobile Food Vans

NFP Not For Profit

PGPA Act Public Governance, Performance and Accountability Act 2013

RAAF Royal Australian Air Force

REFSS Retail Electronic Food Safety System

TGM Target Group Member

WHS Work Health and Safety

Data shows 70% of AAFCANS coffee and hot drinks offer, is on average, 13 - 31% below comparable menu prices from establishments outside the gate.

Image 11: Extract from AAFCANS comparative pricing survey FY20

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AAFCANS Annual Report 2020

APPENDIX 5:

Advertising and Market Research………… 24 Approval by Directors………………………. 2 Audit Committee………………………..…… 18 Board of Management…………………….. 16 Corporate Governance Statement……… 14 Disability Strategy…………………………….. 22 Ecological Sustainability……………............ 22 Enabling Legislation…………………............ 20 Equal Employment Opportunity Plan........ 21 Financial Statements………………………… 25 Fraud Control…………………………………. 22 Freedom of Information………………......... 21 General Policy Orders………………............ 21 Indemnities and Insurance Premiums for Officers……………………………………... 18

Independent Professional Advice………… 18 Judicial Decisions and Reviews……………. 21 Legal Services Expenditure…………………. 22 Location of Outlets…………………………… 53 Meeting Attendance………………………... 18 Meetings Held………………………………… 18 Members of Committees…………………… 18 Ministerial Directions…………………………. 21 Organisational Structure……………............ 14 Performance Statements…………….......... 7 Responsible Minister…………………............ 21 Report of Operations………………………… 6 Stakeholders…………………………………… 5 Work Health and Safety…………………….. 21

Compliance as required under the Public Governance Performance and Accountability Rule and other Legislative or Reporting Requirements

COMPLIANCE INDEX

Image 12: AAFCANS DPN web landing page and news landing page on AAFCANS website

Image 13: AAFCANS new app