Sustained profitable growth
28 May 2020
BLIS DELIVERS SUSTAINED PROFITABLE GROWTH
FY20 Highlights:
• EBITDA $2.1m, up 130%
• Revenue $10.6m, up 29%
• Strong sales growth on the Amazon US online platform
• Launch of UltraBLIS™
• Regulatory approvals received in Canada and US
• Production capacity increased to meet COVID-19 driven demand
Blis Technologies Limited (NZX:BLT) (Blis, Company) has today reported its results for the 12 months
to 31 March 2020. In line with the market guidance provided on 9 April, the Company has delivered
revenue of $10.6 million, 29% growth on FY19 and EBITDA of $2.1m, an increase of 130% on last
year. Following the maiden net profit in FY19, Blis has delivered 320% growth in net profit to $1.6
million.
“We have made pleasing progress building on the momentum of recent years to once again deliver
on our financial objective of sustained profitable growth.” said Blis Chair, Tony Offen.
“During FY20 we further built strong foundations for future growth, we have continued to build the
BLIS
®
Probiotics brand, strengthened our R&D pipeline while enhancing our IP position, delivered
greater supply capacity and alternate sourcing, and overall our financial resilience has continued to
build”.
Regional performance
Revenue (NZ$m) FY20 FY19 Change %
Asia Pacific 3.7 4.0 -8
Europe/ Middle East 4.0 3.0 +33
North America 3.0 1.2 +142
“We have further strengthened our revenue base establishing new customers and markets for both
our BLIS branded ingredients and our BLIS
®
finished products”. said CEO Brian Watson
“Our on-line sales presence and the distribution network we have built up over the last few years
has meant we have been well placed to respond to anticipated changes in consumer purchasing
behaviours driven by the COVID-19 pandemic”.
Asia Pacific
Overall revenue for this region declined by 8%, however the previous year comparison is skewed by
the one-off pipeline fill to support the Australia launch in FY19. In FY20 Australia sales were in line
with expectation at approximately half of the volume recorded in FY19. Following the launch, iNova
has provided an excellent platform to ensure ongoing success in this important growth market.
Excluding Australia, the revenue for the rest of the region grew by 31%. New Zealand revenues grew
by 39% in FY20 to $1.7m. The BLIS® portfolio continues to perform well in New Zealand pharmacies
with ThroatGuard Pro maintaining its position as the number one selling throat lozenge in pharmacy.
Japan also continued to experience solid growth.
Europe/ Middle East
It has been a satisfying year for this region, based on steady growth in existing markets as well as
newer markets showing strong sales. The 33% increase in revenue from this important market
continues to deliver a solid return. Our distribution partner in Europe and the Middle East,
Bluestone Pharma (BSP), continues to successfully implement a strategy focused on launching
consistent value propositions to health professionals ensuring a broad acceptance and recognition
within the medical community.
North America
Branded ingredient sales to North America have performed well. Our distribution partner, Stratum
Nutrition, has continued to expand the customer base through new customer launches and the
utilisation of a range of sales channels including retail, direct selling and on-line.
In FY20 sales through the Amazon platform have grown almost five-fold. In particular, the
ThroatHealth™ and Teeth&Gums™ products have sold well. We are continuing to optimise our
operations on this platform, refining our knowledge of how to maximise future growth
opportunities.
BLIS® branded finished goods and ingredient revenue
Revenue (NZ$m) FY20 FY19 Change %
BLIS branded finished products 3.1 3.1 0
BLIS branded ingredients 7.3 5.0 +46
Revenue for our BLIS® branded finished products segment was $3.1m. Although year on year growth
was flat, the heavy loading of the pipeline fill to support the Australia launch in FY19 has masked the
growth achieved in New Zealand and Amazon US sales. Overall, the underlying strength seen across
the markets selling our BLIS® branded products has been encouraging.
At the same time, we were able to continue the growth in our BLIS
®
ingredient revenue which
increased by 46% to $7.3m, up from $5.0m a year ago. Of note is the growth achieved in ingredient
sales to North America, Japan and Europe.
Regulatory approvals
Regulatory approvals achieved during 2020 included BLIS M18™ being granted a US Food and Drug
Administration “Letter of No Objection” in April 2019. BLIS M18™ was approved by Health Canada
with specific and substantial claims and the BLIS K12™ dossier was extended to include younger
children and improved claims.
Research and development
New product research and development (R&D) is an important aspect of Blis’ operations. We have
continued to invest in the R&D programme to deliver a robust new product pipeline. Integral to this
has been the creation of two new Science Manager roles, one each for research and for
development. The development role was filled internally and a PhD qualified scientist has been
secured to support our research endeavours.
In February we launched UltraBLIS, a next generation probiotic supplement targeted at those
wanting to optimise their microbiome and strengthen overall immunity.
Our novel probiotic strain BLIS Q24™ for skin applications has moved into late stage development. A
finished product prototype is ready for market research and testing. Having already completed
safety evaluations, we have now validated viability in a novel product format for topical application.
We believe this product offer will be an attractive addition to the BLIS® portfolio and provide growth
opportunities within the booming cosmetic category where probiotic offers are an emerging
subcategory.
Outlook
The COVID-19 environment represents an increase in both risk and opportunity for the company.
Our current view is, whilst managing the risk, we have a real opportunity to strengthen the company
building an even stronger brand and accelerating our market presence based on consumer interest
in solutions to maintain health and wellbeing. Utilising our on-line sales presence and capability built
up over the last few years, Blis is well placed to respond to anticipated changes to consumer
purchasing behaviours towards this channel.
There remains significant international growth potential for our products. We will continue to
pursue the Company’s profitable growth objective through developing our relationships with
partners capable of driving international scale for the business. Key new growth opportunities for
the company in FY21 include Canada, China cross border e-commerce and Daigou markets. We will
also prioritise growth opportunities with our existing distribution partners and our on-line channels.
Our overall objective of delivering sustained profitable growth remains.
A further update will be provided at the Annual Meeting.
Ends
For further information, please contact:
Brian Watson
CEO
+64 27 705 9133
About Blis Technologies Ltd
Delivering proven health benefits through evidence-based, advanced probiotics
Blis is an NZX-listed manufacturer of advanced probiotic strains that go beyond the gut. Combining innovation
with evidence-based research and the highest quality production controls enables the delivery of probiotic
solutions for specific health targets including throat health, halitosis (bad breath), immune support and teeth and
gum health. BLIS® products are sold throughout New Zealand, Australia, Asia, Europe and North America.
Products can be bought online at www.blis.co.nz and by searching for Blis probiotics at www.amazon.com.
More information about Blis Technologies Ltd can be found at www.blis.co.nz.
About UltraBLIS™
UltraBLIS™ is a next generation probiotic supplement targeted at those wanting to optimise their microbiome
and strengthen overall immunity. BLIS K12™ has strong evidence in the oral microbiome, and it has been
combined in a lozenge format with Bifidobacterium lactis HN019 (HOWARU®), and Lactobacillus acidophilus La-
14: 2 strains from Dupont® that have strong evidence bases in immunity. More information about UltraBLIS™ can
be found at www.blis.co.nz/pages/ultrablis
---
Results announcement
Results for announcement to the market
Name of issuer Blis Technologies Limited
Reporting Period 12 months to 31 March 2020
Previous Reporting Period 12 months to 31 March 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$10,642 29%
Total Revenue $10,642 29%
Net profit/(loss) from
continuing operations
$1,602 320%
Total net profit/(loss) $1,602 320%
Interim/Final Dividend
Amount per Quoted Equity
Security
It is not proposed to pay a dividend for the 12 months to 31
March 2020.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.0039 $0.0026
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please see attached result announcement for commentary on
the result.
Authority for this announcement
Name of person
authorised
to make this announcement
Richard Wingham
Contact person for this
announcement
Richard Wingham
Contact phone number +64 21 284 0446
Contact email address richard.wingham@blis.co.nz
Date of release through MAP
28/05/2020
Audited financial statements accompany this announcement.
---
R ESULTS
For the 12 months
to 31 March 2020
The 2020 financial
year saw Blis continue
to deliver on its objective of
sustainable profitable growth.
We have continued to strengthen our
revenue base with solid growth across
our existing markets and consolidation
of key new markets for our
BLIS
®
finished product range in
Australia and on the Amazon
USA online platform.
ElitePRO™: Developed in collaboration with High
Performance Sport NZ, ElitePRO™ is based on the
science behind TravelProtect and goes through an
additional step of being tested for banned substances.
ElitePRO™ is certified by Informed Sport as safe for
athletes. During 2019 ElitePRO™ has become part of the
health and wellbeing regime of many of New Zealand’s
national sports teams. Most notably the Highlanders
are utilising BLIS Probiotics to support their immunity
(including during lockdown) and recently the Ascot Park
Southern Steel netball team have embraced ElitePRO™
as part of their wellbeing program.
DailyDefence™ & DailyDefence Junior™: Everyday
immunity support for the entire family from six months onwards.
Preparing the immune system for winter.
TravelProtect™: Specific dosing of BLIS K12™
to help boost your immunity and help defend your
immune system against airborne ailments when
travelling.
BLIS K12™ is well known for its ability to support the immune system
by helping protect the gateway to the body, but to deliver a broader
immunity proposition we have combined BLIS K12™ with gut probiotic
strains that had strong evidence in immunity. The Dupont strains
Bifidobacterium lactis HOWARU® Bifido HN019 and Lactobacillus
acidophilus La-14® have been included into the BLIS probiotics lozenge
format for their ability to provide immune support in the gut.
UltraBLIS™ is focussed on optimising the microbiome in the gut as
well as in the oral cavity providing unique immunity support.
New Product Launch:
UltraBLIS™: Probiotic Immune Support
for Optimal Performance
Soaring interest in
immunity products.
Our portfolio of products are well positioned to provide
immune support through periods of high need including:
Winter Travel
Intensive sport and exercise Back to school
Busy and stressful lifestyles
Validation of
alternative
second supplier
of probiotics
ingredient
Key regulatory approvals
BLIS M18™ US GRAS
No Objection status
BLIS M18™ Health
Canada approval
BLIS K12™ Health
Canada expanded
approval
Covid-19
Response
Find out more at
Covid19.govt.nz
Be kind. Check-in on the
elderly or vulnerable.
Make a difference by:
• checking-in on any elderly or vulnerable people you know
• dropping supplies to those at home sick.
• Free product provided
to Pharmacy and GP
frontline staff
• Essential Business
supplying the
Pharmacy channel
• Increased production
to meet demand
New senior management
appointments
Commercial
Director
Science Manager
– Research
Senior Science
Manager
- Development
FY20 Operational Highlights.
Continued strong sales
growth on the Amazon US
online platform
Launch of UltraBLIS™
up 320
%
Reported profit
for the year
$
1.6m
EBITDA
$
2.1m
up 13 0
%
Revenue
$
10.6m
up 29
%
Working capital
at year end
$
4.1m
up
$
1.8m
FY20 Financial Performance.
FY19 FY20 Change Change
($000) ($000) ($000) %
Revenue 8,239 10,642 2,402 +29%
Net Surplus before interest expense, tax,
depreciation and amortization (EBITDA) 922 2,119 1,197 +130%
Net Surplus 381 1,602 1,221 +320%
5 Year
Growth Trend.
FY16
NZ$ Millions
12
10
8
6
4
2
0
F Y17F Y18F Y19FY20
$
5.6m
$
6.5m
$
5.3m
$
8.2m
$
10.6m
5 Year CAGR +33%
Revenue
FY16
NZ$ Millions
F Y17FY18F Y19FY20
EBITDA
$
-0.3m
$
-0.4m
$
0.6m
$
0.9m
$
2.1m
FY16
NZ$ Millions
F Y17FY18F Y19FY20
Net Profit
$-
1.0m
$-
0.02m
$
0.4m
$
1.6m
$
-0.8m
Balance Sheet and
Working Capital Position.
2020 2019
($000) ($000)
As at 31 March
Current assets 5,746 3,966
Current liabilities 1,642 1,651
Working capital 4,104 2,315
Non-current assets 1,312 1,235
Non-current liabilities 360 129
Net assets 5,056 3,421
Share capital 37,424 37,380
Share option equity reserve 26 37
Retained earnings/ (deficits) (32,394) (33,996)
Total equity 5,056 3,421
(FY19 $2.3m)
(FY19 $0.6m outflow)
(FY19 $0.9m)
(FY19 $0.8m)
Increase
in working
capital to
Operating
cash inflow
of
Cash and short-
term deposits held
at 31 March 2020
Total borrowings of
$
4.1m
$
3.2m
$
3.2m
$
0.1m
FY20 Regional
Sales Performance.
$
3.0m
+14 2
%
North
America
• Strong growth of BLIS branded ingredient
sales to North America
• Distribution partner, Stratum Nutrition
continued to expand the customer base
through new customer launches
• Customers cover a range of sales channels
including retail, direct selling and on-line
• Amazon platform delivered five-fold sales
growth in FY20.
• Continued refinement of knowledge on how
to maximise future growth opportunities
within this channel
• Steady growth in existing markets
• Newer markets showing strong sales
• Year on year growth delivers a solid return
• Bluestone Pharma (BSP) strategy continues
to focus on launching consistent value
propositions to health professionals
FY20 Regional
Sales Performance.
$
4.0m
+33
%
Europe/
Middle East
• Revenue declined by 8%. Excluding Australia, revenue up 31%
• Prior year comparison skewed by one-off pipeline fill to
support the Australia launch at very end of FY19.
• FY20 Australia sales in line with expectation
• iNova driving ongoing success in Australian market
• New Zealand revenue up 39% to $1.7m
• In NZ, ThroatGuard Pro ™ continues to be best selling throat
lozenge in pharmacy.
• Japan also continued to experience solid growth.
FY20 Regional
Sales Performance.
$
3.7m
-8
%
Asia
Pacific
FY19 Product
Revenue $8.1m
FY20 Product
Revenue $10.4m
BLIS Ingredient Revenue
$
7. 3m
$
5.0m
$
3.1m
$
3.1m
Strong performance of both BLIS
branded finished goods and ingredients.
BLIS Finished Goods Revenue
Outlook
• COVID-19 environment presents both risk and opportunity for the company
• Current plan is to build a stronger brand through acceleration of our market
presence to tap into consumer interest in solutions to maintain health and
wellbeing
• Our on-line sales presence and capability will be utilised to respond to anticipated
changes to consumer purchasing behaviours
• Significant international growth potential for Blis products will be addressed
through further development of relationships with partners capable of resourcing
and driving international scale
• Key new growth opportunities for the company in FY21 include Canada and the
China cross border e-commerce market
• Growth opportunities with our existing distribution partners will be prioritised
together with our on-line channels.
• Our objective of sustained profitable growth remains
• A further update will be given at the AGM
Information
The information in this presentation is an overview and
does not contain all information necessary to make an
investment decision. It is intended to constitute a summary
of certain information relating to the performance of
BlisTechnologies Limited ("Company" or "Blis"). The
information in this presentation is of a general nature and
does not purport to be complete. This presentation should
be read in conjunction with the Company's other periodic
and continuous disclosure announcements, which are
available at nzx.com.
Not financial product advice
This presentation is for information purposes only and is
not financial or investment advice or a recommendation
to acquire Blissecurities, and has been prepared without
taking into account the objectives, financial situation
or needs of individuals. The Company, its directors and
employees do notgive or make any recommendation or
opinion in relation to acquiring or disposing of shares. In
making an investment decision, investors must rely on their
own examination of the Company, including the merits and
risks involved. Investors should consult with their own legal,
tax, business and/or financial advisors in connection with
any acquisition of securities.
Future performance
This presentation may contain certain 'forward-looking
statements', for example statements concerning the
development and commercialisation of new products,
regulatory approvals, customer adoption and results of
future clinical studies. Forward-looking statements can
generally be identified by the use of forward-looking
words such as, 'expect', 'anticipate', 'likely', 'intend', 'could',
'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast',
'estimate', 'target', 'outlook', 'guidance' and other similar
expressions. The forward-looking statements contained in
this presentation are not guarantees or predictions of future
performance and involve known and unknown risks and
uncertainties and other factors, many of which are beyond
the control of the Company and may involve significant
elements of subjective judgement and assumptions as to
future events which may or may not be correct. There can
be no assurance that actual outcomes will not materially
differ fromthese forward-looking statements. A number of
important factors could cause actual results or performance
to differ materially from the forward-looking statements.
The forward-looking statements are based on information
available to the Company as at the date of this presentation.
Except as required by law or regulation (including theNZX
Main Board Listing Rules), the Company undertakes no
obligation to provide any additional or updated information
whether as a result of new information, future events or
results or otherwise.
No representation
This presentation may contain information from third-
parties believed to be reliable, however, no representations
or warranties are made as to the accuracy or completeness
of such information.
Disclaimer.
---
Blis Technologies Limited1
REPORT
2020
ANNUAL
For the Year Ended
31 March 2020
2020 Annual Report22020 Annual Report2
The 2020 financial year
saw Blis continue to deliver
on its objective of sustainable
profitable growth. We have
further strengthened our revenue
base with solid growth across our
existing markets having established
key new markets for our BLIS
®
finished product range in
Australia and on the Amazon
USA online platform.
Blis Technologies Limited3Blis Technologies Limited3
Contents
Highlights 4
Our Year 6
Chair & Chief Executive’s Report 8
Spotlight On Immunity 16
Our Approach to Sustainability 18
Board of Directors 21
Executive Team 23
Statement of Corporate Governance 24
Directors’ Interests 34
Directors’ Responsibility Statement 36
5 Year Trend 37
Consolidated Statement of Comprehensive Income 39
Consolidated Statement of Changes in Equity 40
Consolidated Balance Sheet 41
Consolidated Statement of Cashflows 42
Notes to and Forming Part of the Consolidated Financial Statements 43
Additional Stock Exchange Information 62
Auditor’s Report 64
Company Directory 67
One of BLIS K12™’s core value propositions, supported with clinical evidence,
is the ability to stimulate natural immunity. BLIS K12™ acts in the oral cavity
protecting the gateway to the body. In the fourth quarter of FY20 we have seen
a sharp increase in sales of our BLIS® probiotic brands through pharmacies
and online channels. While the increase is across the entire BLIS® range,
it is particularly evident for our products with an immune boosting value
proposition and therefore likely related to COVID-19. BLIS TravelProtect™,
DailyDefence™, ThroatGuard PRO™, ElitePRO™ and UltraBLIS™, a unique
combination of oral and gut probiotics.
2020 Annual Report4
Key achievements.
up 320
%
Reported profit
for the year
$
1.6m
5 Year compound
annual revenue
growth rate
33
%
Validation of alternative
second supplier of
probiotics ingredient
EBITDA
$
2.1m
up 13 0
%
Revenue
$
10.6m
up 29
%
Working capital
at year end
$
4.1m
up
$
1.8m
Key regulatory approvals
FY20 HIGHLIGHTS
BLIS M18™ US GRAS
No Objection status
BLIS M18™ Health
Canada approval
BLIS K12™ Health
Canada expanded
approval
Covid-19 Response
Find out more at
Covid19.govt.nz
Be kind. Check-in on the
elderly or vulnerable.
Make a difference by:
• checking-in on any elderly or vulnerable people you know
• dropping supplies to those at home sick.
• Free product provided to Pharmacy
and GP frontline staff
• Essential Business supplying the
Pharmacy channel
• Increased production to meet demand
New senior management
appointments
Commercial
Director
Science Manager
– Research
Senior Science
Manager -
Development
Blis Technologies Limited5
Strategy.
Company vision
Delivering health benefits to global consumers by unlocking
the potential of the microbiome.
Value proposition
Blis Technologies is a leader in the manufacture of advanced probiotic strains that
go beyond the gut. We combine innovation with a strong evidence base and the
highest quality controls to deliver probiotic solutions for specific health targets.
Our strategic priorities
Our objective
Blis Technologies will continue to focus on capturing the benefits of vertical
integration by controlling our intellectual property, delivering product innovation
and ensuring the highest quality standards throughout the manufacturing
processes and supply chain.
Our current core internal functions include:
• Probiotic strain development (discovery work)
• Manufacturing of finished good solutions for selected markets
• Scientific and technical product support
• Marketing and sales channel development
Our addressable markets
Probiotics for human health beyond the gut, targeting a leadership position in:
• ENT (Ear, nose and throat)
• Immunity
• Dental (Teeth, gums, halitosis)
• Dermatology
Our focus is on human health supplements based on our strengths today. However,
we recognise the potential for licensing opportunities beyond this including:
• Realising untapped therapeutic potential
• BLIS® containing functional food solutions
• BLIS® containing pet applications and animal health solutions
PEOPLE
AND
PERFORMANCE
Build internal
capability and
a high-performance
culture
PIPELINE
Optimise value
from our IP
SUPPLY
CHAIN
Ensure quality, capacity
and IP protection within
our supply chain
POSITIONING
Deliver strong value
propositions and
strengthen the BLIS®
probiotics brand
2020 Annual Report6
It’s been a big year.
Apr
2019
May
2019
Aug
2019
Sept
2019
Blis exhibits at
AliExpo and debuts
the BLIS® mascots.
Blis M18™ US FDA
“No Objection”
status.
Blis becomes
Official Wellness
Partner to The
Highlanders.
Blis is profiled for
a feature on Fox
Business News.
Blis M18™ Health
Canada approval.
Inaugural
Dental Health
Advisory Group
Meeting.
Blis wins the Health/
Beauty category at the
TVNZ marketing awards
for ThroatGuard PRO.
Blis Technologies Limited7
BLIS K12™ –
Health Canada
expanded
approval.
Dec
2019
Nov
2019
Feb
2020
Mar
2020
Australian Product
of the year award –
Probiotics category
ElitePRO™ gets its
own campaign with
The Highlanders
as the face of
the product.
UltraBLIS™
launches with
prominent
outdoor
campaign and
sampling.
BLIS® Probiotics are
showcased at the
Canadian Health
Foods Association
(CHFA) Trade
show in Toronto
in with Dr John
Hale presenting.
Blis becomes the
official Wellbeing
Partner to The
Ascot Park
Southern Steel.
Free BLIS® product
provided to frontline
Pharmacy and
General Practice
staff in response to
COVID-19 pandemic.
Completed
a validation
of a second
supplier for
probiotic
ingredient.
2020 Annual Report8
Continuing to deliver
on expectations
On behalf of the Board, we are
delighted to present the Annual
Report for the Blis Technologies
Group
1
(The Company, the
Group, Blis Technologies, or
Blis) for the financial year ended
31 March 2020 (FY20), a year
in which we have continued
to deliver on our objective of
achieving sustained profitable
growth. We have recorded on
the prior pages the numerous
highlights that the Blis team have
collectively worked so hard to
deliver.
Financially, the Group benefitted from revenue growth, maintaining
margins and leveraging fixed overheads. Reported revenue was $10.6
million, a 29% increase on 2019 in line with latest guidance. Earnings
before interest, tax, depreciation and amortisation (EBITDA) increased
130% to $2.1m and a strong result of net profit after tax of $1.6 million,
320% up on the previous financial year (FY19).
Operationally, it has been incredibly satisfying to have our products
receive further overseas regulatory approvals together with marketing
awards. The US FDA GRAS granting of a “No Objection” status for BLIS
M18™ and Health Canada’s approval of BLIS M18™ and expanded
approval for BLIS K12™ has strengthened our position as a trusted
product in both markets. Our winning of the Health and Beauty sector
award at TVNZ National Marketing awards and Product of the Year
– Probiotics section at the Australian Marketing awards were true
highlights for the entire Blis team and our distributor partners.
Financial overview
The result for FY20 was driven by revenue growth of 29% to $10.6m, up
from $8.2m in FY19. Other income, which includes interest income and
Callaghan Growth Grant quarterly rebates rose by 30% to $0.2m.
The 130% increase in EBITDA, which rose to $2.1m compared to
$0.9m in FY19, reflects turnover scale, robust margins and stable fixed
overheads.
Operating costs have increased by 25% to $6.4m over FY19, reflecting
our investment in growing new revenue streams and investing in R&D.
Operating costs as a percentage of revenue has decreased from 62% in
FY19 to 60% in FY20. We have also balanced our ongoing investment
in developing new markets and pipeline to ensure we deliver on our
objective of sustainable profitable growth. Our ongoing marketing
investment has been directed toward revenue growth initiatives.
With increased scale we are also delivering efficiencies from our
production facility.
Net profit after tax was $1.6m, up 320% on last year’s $0.4m maiden
profit. There was no provision for tax payable after recognising $0.5m
of tax losses during the year (FY19 $0.1m).
Chair & Chief Executive’s Report
Sustained
profitable growth.
1. Blis Technologies Group consists of parent company Blis
Technologies Limited and wholly-owned subsidiary Blis
Functional Foods Limited.
Blis Technologies Limited9
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
Regional performance
The 29% revenue growth recorded in FY20 has been achieved
on the back of growth within our existing partnerships with key
market players. Selection of key partners and then supporting
their initiatives in market for BLIS® products is fundamental
to delivering continued profitable growth opportunities
while operating with a modest capital base. Additionally, we
continue to take a disciplined approach to balancing business
development investment levels with the need to achieve
earnings growth.
Asia Pacific
Revenue decline of 8% to $3.7m in FY20, revenue
(excluding Australia) growth of 31%
FY19 Asia Pacific revenue significantly increased on the back of
signing a distribution agreement with iNova Pharmaceuticals
(Singapore) Pty Limited (iNova) for the Australian market.
A substantial volume of product was supplied in the fourth
quarter of FY19 to support the Australian Pharmacy channel
launch in quarter one FY20. Sales to iNova in FY20 were in
line with expectation at approximately half of that recorded
in FY19 as a result of the early pipeline fill. iNova’s pharmacy
ranging capability, education of pharmacy staff and building of
consumer brand awareness has provided an excellent platform
for ongoing success in this important growth market.
Asia Pacific excluding Australia had 31% growth in revenue.
New Zealand revenues grew by 39% in FY20 to $1.7m. The BLIS®
portfolio continues to perform well in New Zealand pharmacies
with ThroatGuard Pro maintaining its position as the number
one selling throat lozenge in pharmacy. Japan also continued to
experience solid growth.
Our strategy for the China market has seen a broadening in
focus from establishing a China domestic presence, to also
building support for “cross border eCommerce” (CBEC) and
Daigou channels. The CBEC and Daigou channels will be more
actively targeted in the 2021 financial year (FY21) by building
on our success with early sales in the CBEC channel and the
initiation of brand building activity together with the support of
established resellers.
In February and March 2020, as awareness of COVID-19 became
widespread, we saw a significant lift in sales of our immunity
targeted products. Pleasingly we were quickly able to step up
production to meet the increased demand and have seen the
higher demand levels maintained in the new financial year.
Europe/ Middle East/ Africa
Revenue growth of 33% to $4.0m in FY20
It has been a satisfying year for this region based on steady
growth in existing markets as well as newer markets showing
strong sales. Year on year growth in this important market
continues to deliver a solid return. Our distribution partner
in Europe and the Middle East, Bluestone Pharma (BSP),
continues to successfully implement a strategy focused on
launching consistent value propositions to health professionals
ensuring a broad acceptance and recognition within the medical
community. In line with this strategy BSP has expanded Key
Opinion Leader programmes across the region with their
customer base. During the year, over 100 educational congress
have been held with medical professionals in the region.
Poland remains a key market for the region. Sales growth has
been underpinned by a television campaign launched in the
Revenue Growth Trend
+
33
%
+
142
%
-
8
%
Asia PacificNorth America
$
3.7m
$
4.0m
$
3.0m
Europe/
Middle East/
Africa
FY16
NZ$ Millions
12
10
8
6
4
2
0
F Y17FY18FY19FY20
5 Year CAGR +33%
2020 Annual Report10
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
At the same time, we were able to continue the growth in our
BLIS® ingredient revenue which increased by 46% to $7.3m,
up from $5.0m a year ago. Of note is the growth achieved in
ingredient sales to North America, Japan and Europe.
Balance sheet
The strong trading result for FY20 has contributed to an
improved net working capital position of $4.1m, up from $2.3m
in FY19. Operating cash flows of $3.2m were applied against
capital purchases of $0.2m and $0.7m repayment of the BNZ
trade credit facility, utilised at the end of FY19 to support supply
of product for the Australian launch. Cash on hand of $3.2m
provides necessary liquidity to provide resilience to periodic
fluctuations in trading levels in these challenging times and the
capacity to invest in R&D and business development.
While we are very pleased with the financial progress made
to date and have been encouraged by the early results from a
number of new market launch initiatives, we remain cognisant
of the ongoing challenges within our industry. These challenges
include overcoming delays in new regulatory approvals, dealing
with long lead times to progress new customer initiatives and
managing growth opportunities on a limited budget.
The recent disruption and economic downturn related to
the COVID-19 pandemic also represents an opportunity to
position our products as research-backed solutions to boosting
immunity. The downside risks include disruptions to raw
material supply, reduced freight capacity to and from overseas
markets and a reduction in consumers’ discretionary spend. We
are closely monitoring these risks.
Our team of staff and distribution partners has enabled us to
mature systems and processes to address these obstacles and
this will continue to be an important area of focus as we strive to
further build on the momentum achieved in the past two years.
78
%
fall of 2019 by our distributor’s customer Maspex. We also saw a
return to growth in Italy driven by further clinical trial support as
well as increased rates of healthcare professional detailing.
Newer markets drove growth including Russia, Belgium and
Switzerland.
New launches included powder forms of BLIS K12™ based
products for kids in the Ukraine and Romanian markets
North America
Revenue growth of 142% to $3.0m in FY20
Branded ingredient sales to North America have performed
well. Our distribution partner, Stratum Nutrition has continued
to expand the customer base through new customer launches
and the utilisation of a range of sales channels including retail,
direct selling and on-line. In the final quarter of the year we saw
a significant increase in order volume and frequency from the
existing customer base as brands responded to the increased
demand based on COVID-19 needs. Feedback from our
distributors and customers anticipates this demand remaining.
Steady sales growth continues to be delivered on the Amazon
platform since the launch in June 2018, in particular, the
ThroatHealth™ and Teeth&Gums™ products. In FY20 we have
grown this channel almost five-fold. We continue to optimise
our operations on this platform, and refining our knowledge of
how to maximise future growth opportunities.
Branded finished product
FY20 revenue split BLIS® branded finished products
compared with BLIS® Ingredient compared with FY19 split
(Absolute and percentage)
Revenue for our BLIS® branded finished products segment
was $3.1m compared with $3.1m in FY19. Although year on
year growth was flat, the heavy loading of the pipeline fill to
support the Australia launch in FY19 has masked the growth
achieved in New Zealand and Amazon US sales. Overall, the
underlying strength across our BLIS® branded markets has been
encouraging.
FY19
$ 8 .1m
FY20
$10.4m
Branded GoodsIngredient
70
%
62
%
38
%
30
%
$
5.0m
$
7. 3m
$
3.1m
$
3.1m
Net Working
Capital Position
Increase
on FY19
$
4.1m
Blis Technologies Limited11
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
Progress against strategic priorities
Positioning – deliver strong value propositions and development of
the BLIS PROBIOTICS™ brand
Focus on being a supplier of BLIS® branded finished goods (including prominent co-branding) to ensure Blis is
recognized as the manufacturer allowing future-proofing of the business by developing a relationship of trust
with customers and consumers.
• TVNZ Marketing award – Health and Beauty Sector
• Australian Product of the year – Probiotic category
• Launched UltraBLIS™ a unique combination of Oral and Gut probiotics
• Continued growth of BLIS® branded products on Amazon USA platform
• Growth NZ Pharmacy and BLIS® on-line
• CBEC Platform development
• Canadian Launch preparation
Supply chain – ensure quality, capacity and IP protection
within our supply chain
Be the core source of knowledge about BLIS® products by having internal expertise and control of processes
throughout the supply chain (from the organism to fermentation to formulation to end-products, including
regulatory and clinical efficacy right through to the consumer).
• Offshore ingredient supply including a Dairy Free option
• Actioned continuous improvement initiatives within Blis manufacturing
• Capacity increases to meet increased demand as a result of COVID-19
R&D Pipeline – optimise value from our IP
Utilise the library of defined organisms as the core resource that underpins the future of the Company including
new product and formulation initiatives to meet consumer needs.
• Health Canada approval BLIS M18™ and expanded BLIS K12™ approval
• BLIS Q24™ finished product prototype developed for further testing
• Ongoing Callaghan Innovation Growth Grant
• Supported joint University research projects: Food application
People and Performance – build internal capability and a
high-performance culture
Build a high-performance culture to ensure internal capability is maintained and process excellence
supports our growth goals.
• Employed a Commercial Director
• Employed a Science Manager for Research
• Overall increase in staffing to 25 FTE
• Director succession planning and recruitment
ongoing
ongoing
ongoing
ongoing
2020 Annual Report12
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
Positioning
We see the potential for considerable growth being delivered by
strategically prioritising investment in BLIS® branded finished
goods. This was demonstrated in FY20 by increased sales growth
through our Amazon USA channel, New Zealand pharmacy and
online sales and a successful product launch in the Australia market.
With the progression of COVID-19 and a noticeable shift from
retail to online shopping we are well placed to fulfil consumers’
changing purchasing patterns.
The second year of our relationship with iNova in Australia will
see a focus on building greater consumer awareness and demand
for the new and unique Blis propositions. The 2020 winter will
see iNova building on the early successes it achieved including
winning the Australian Probiotic Product of the Year award for
ThroatGuard™.
In the second half of FY20 we initiated an intensive market
validation exercise in Canada to assess the benefits of prioritising
this market for the launch of our BLIS® probiotic range. The
exercise has given us good insights into the market and validated
our plans to launch during FY21. Ahead of the launch we are
in negotiations with a potential distribution partner and are
progressing launch planning and preparation.
Throughout FY20 we have had positive feedback from industry
groups regarding the marketing and value proposition of our
finished products. Winning the TVNZ national marketing award
and the Australian product of the year award strongly affirmed our
product credibility and market positioning.
In February we launched UltraBLIS™, a unique combination of oral
and gut probiotics, on our Blis New Zealand e-commerce site. The
product has been an immediate success and will be launched into
Pharmacy retail and on to the Amazon US website early in FY21.
Supply Chain
In the last quarter of FY20 we increased staffing at our Dunedin
manufacturing site to meet the sales growth across the Blis
web site, Amazon US and to support stock building for winter
promotions into the New Zealand Pharmacy channel. Additionally,
we saw a significant lift in demand as the COVID-19 pandemic
intensified. We increased production through February and
March to meet this demand, maintaining production through
March and into FY21 in our capacity as an “essential business”
during Level 4 lockdown. COVID-19 has introduced significant
challenge to maintaining normal business operations, notably
through maintaining physical distancing, increased lead times
from suppliers and delays in securing international freight. To date
these issues are being successfully managed to minimise their
impact on our business. We also continue to work with contract
manufacturers with the right capability to produce high quality
finished products on an as needed basis.
Good progress has been made in FY20 to future-proof our
ingredient supply chain to meet expected long term growth.
The transfer of technology and know-how for future production
of both BLIS K12™ and BLIS M18™ to an offshore fermentation
supplier was undertaken. This supply came on stream late in
FY20 and will represent a key part of our ingredient supply base
in future years providing supply closer to key international
markets, adding additional capacity to support our growth
plans and providing an important risk mitigation in the event of
a failure with a supplier.
Research & Development
New product research and development is an important aspect
of Blis’ operations. We have continued to invest in research and
development to deliver a robust pipeline. The Callaghan Growth
Grant which provides a 20% rebate on qualifying research and
development over a three year period to 31 March 2021 helps
underpin this investment. In line with this we have created
two new Science Manager roles, one each for research and for
development. The development role was filled internally and
another PhD qualified scientist has been secured to support our
research endeavours.
In February we launched UltraBLIS™, a next generation
probiotic supplement targeted at those wanting to optimise
their microbiome and strengthen overall immunity. BLIS K12™
has strong evidence in the oral microbiome, and it has been
combined in a lozenge format with Bifidobacterium lactis
HN019 (HOWARU®), and Lactobacillus acidophilus La-14:
2 strains from Dupont® that have strong evidence bases in
immunity. The product will initially be available exclusively
online from www.ultrablis.co.nz with planning for a New
Zealand retail launch underway.
We have moved our novel probiotic strain BLIS Q24™ for skin
applications into late stage development and have produced
a finished product prototype ready for market research and
testing. Having already completed safety evaluations we
have now validated viability in a novel product format for
topical application. We believe this product offer will be an
attractive addition to the BLIS® portfolio and provide growth
opportunities within the booming cosmetic category where
probiotic offers are an emerging subcategory.
In August, we held an inaugural Dental Health Scientific
Advisory Group meeting. The purpose was to ensure that our
R&D programs, as well as our commercial activities in dental
health were sound and to provide guidance on how we can
continue to improve.
R&D continues to develop probiotic platforms generating a
base of understanding of potential probiotic strains, functional
ingredients and delivery formats and formulations. Updates
from this work include:
Blis Technologies Limited13
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
• establishing significant capability in the formulation
of both novel probiotic liquid formats to complement
our lozenge and powder formats. Work will continue to
progress these formats towards commercialisation.
• continued evaluation of our extensive library of strains
collected by Professor John Tagg over his career
for commercially viable candidates with a number
progressing through the assessment pipeline.
Joint Blis-Callaghan Innovation supported research projects
are providing valuable insights that will contribute to future
development activities. A PhD-level research project assessing
food formats for oral probiotics is ongoing. This project is
being undertaken at the University of Otago and we are very
pleased to be able to support and benefit from this important
work. Callaghan Innovation further supported three Research
Experience students. Further, Blis hosted four internal research
interns. All students were valuable additions to our research
endeavours.
We continue to focus on protecting the Company’s intellectual
property rights through a strong emphasis on IP portfolio
management and protection. Our on-going investment in
research and development is supported by patent filings,
development and protection of trade secrets, regulatory
approvals and trademark registrations that all contribute
towards building the long term strength of the BLIS
PROBIOTICS™ brand.
Regulatory approvals achieved during 2020 included BLIS
M18™ being granted a US Food and Drug Administration “Letter
of No Objection” in April 2019. BLIS M18™ was approved by
Health Canada with specific and substantial claims and the
BLIS K12™ dossier was extended to include younger children
and improved claims.
CategoryUpdate
Research
Development of new molecular tool
to assess S. salivarius BLIS K12™ in
samples
Published Reid et al
2
Expanded research collaborations
including:
• University of Otago (Departments of Microbiology and Immunology, Pharmacology,
Food Science, Dentistry & Medicine)
• University of British Columbia, Canada
• South Hampton University, UK
• Utah State University, USA
• Griffith University, Australia
Development
Skin• Progressed topical skin probiotic formulation through to internal trials.
• Commissioning of a finished format contract manufacturer progressed.
• Mechanism of action research progressed.
Oral/ENT • New formulations optimised and developed for delivery of probiotics to the oral
cavity included:
»Combination products
»Food formats
»Launch of UltraBLIS™
Supply
BLIS K12™ and BLIS M18™• Progressed development of second supplier for S. salivarius raw ingredient including
development of hypoallergenic formulations
BLIS Q24™• Progressed supplier of BLIS Q24™ raw ingredient
Operational
Method validation • Completed Enumeration Method Validation of raw ingredient and finished products
External testing laboratory
qualification
• Validated new testing laboratory in the USA to complement existing external testing
capability.
2. A TaqMan™-based quantitative PCR screening assay for the probiotic Streptococcus salivarius K12 based on the specific detection of its megaplasmid-associated salivaricin B locus.
Reid P et al J Microbiol Methods. 2020 Mar;170:105837.
Key R & D Milestones
2020 Annual Report14
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
CategoryUpdate
Clinical trials in progress
• Blis supporting Phase III trial in UBC “Oral Probiotic Supplementation in Pregnancy to
Reduce Group B Streptococcus Colonization”
https://ichgcp.net/clinical-trials-registry/NCT03407157
• Trial of nasal formulation. (University of Otago) https://www.anzctr.org.au/
Trial/Registration/TrialReview.aspx?id=377321&isReview=true. Trial reference:
ACTRN12619000779178p
• Effect of a probiotic on Otitis media (ear infections) and Upper Respiratory Tract
Infections amongst 6-24 month old children. (University of Otago)
https://www.anzctr.org.au/Trial/Registration/TrialReview.aspx?id=374076
• Blis Study: a Feasibility Study Assessing Compliance, Acceptability and Colonisation
With Different Dosing Regimens of the Probiotic Supplement Streptococcus salivarius
K12 in Adults (University of Southampton)
https://www.clinicaltrials.gov/ct2/show/NCT04297878
Regulatory
• USA: BLIS M18™ No Objection GRAS (GRAS notice GRN 807).
• Canada: In the past financial year, Blis has made significant regulatory progress
with both its strains in the Canadian market. Particular highlights included the filing
of technical dossiers for both BLIS K12™ and BLIS M18™. These dossiers, updated
to include recent clinical data, were subsequently used in the Canadian regulatory
system to obtain Health Canada approval of specific health claims.
FY20 Publications
See Blis website.
People And Performance
We are building a high-performance culture, ensuring we have
the right internal capability and processes to support our growth
goals. We will continue to ensure we have access to the skills that
best suit our requirements and allow us to deliver exceptional
results. These skills may be internally or externally sourced.
New internal resourcing and capability that was invested in
during the year includes appointments of a Commercial Director,
a PhD Science Manager-Research focused on early discovery and
research initiatives, a PhD Senior Science Manager-Development
focused on bringing opportunities to market, a New Product
Development role, a Finance Manager, an eCommerce Lead and
new production staff.
We also continue to work with external parties, where appropriate,
to complement our internal capability. This has included working
closely with NZ Trade and Enterprise and external consultants to
review our new international market plans including the launch
plan for the Canadian market and China cross-border e-commerce.
This work continues to validate these new market opportunities as
important drivers of future growth.
Over time we have developed a network of both scientific and
clinical experts and work with them regularly to validate and
challenge our internal R&D efforts. A good example of this is the
advisory board process we have in place. In FY20 we held our
inaugural Dental Health Scientific Advisory Group meeting which
has added significant value to our R&D focus in the Dental Health
area.
R&D capability has been further enhanced during the year
by the hosting of interns from various international tertiary
institutions who have added value through the introduction of new
perspectives and expertise.
Health and Safety
Our approach to health and safety continues to focus on ensuring
all of our processes and procedures are high quality and supported
by a high level of workforce engagement across the Company. All
staff have specific health and safety objectives and our people
managers have personalised health and safety objectives relevant
to their functional responsibility. We continue to work with an
external consultant to ensure our processes and procedures are in
line with regulations and best practice.
Of note in FY20:
• Comprehensive Board updates including: Monthly
management reports covering lead and lag indicators, good
news stories and achievements, H & S committee minutes.
• Monthly hazard assessments across all divisions of the
business.
Blis Technologies Limited
Chair & Chief Executive’s Report continued
SUSTAINED PROFITABLE GROWTH
• Following the precautionary chemical
incident in July 2019 occurring during a
review of chemical stock at the South Dunedin
manufacturing site, a review of action taken by
staff was undertaken and it was confirmed that
appropriate risk mitigation steps and actions
were completed. A post review plan has been
implemented.
During the early phase of the COVID-19 outbreak,
our H & S team led a project to establish safe
working practices that enabled Blis to operate as an
“essential service” in accordance with Government
and MPI guidelines and ensured manufacturing
and sales to continue with minimal interruption.
Safe working practices were quickly implemented
including workplace segregation, social distancing
and sanitisation protocols, as well as non-critical staff
working from home.
Environment, Social, and
Governance
During the year the Board sought independent
assistance to more fully understand good practice
in regard to environmental, social and governance
disclosures. As a result, an ESG report has been
included in this annual report. It sets out a first report
on the Company’s actions in relation to the United
Nations Sustainable Development Goals. Blis intends
to report each year on progress with the adoption of
these goals and targets for the forthcoming year.
In FY21 we intend to start workstreams to develop:
• An understanding of the material issues for our
key stakeholders as well as for the Company.
By identifying these issues we will be able to
integrate them into our thinking, planning
and strategies in order to deliver value for
our stakeholders and improve the overall
performance of our business.
• A set of measurements that will help the
board and management to understand Blis’
environmental footprint and the level of
employee engagement and its organisational
culture. These measurements will add to those
that are well established in relation to health
and safety and product quality.
• A deeper understanding of the disclosures
recommended by the Task Force on Climate
Related Financial Disclosures.
The report is included at pages 18 to 20 of this report.
Outlook
We have made pleasing progress building on the momentum of
recent years to deliver on our financial objective of delivering
sustained profitable growth. To ensure this we have effectively
delivered revenue growth and balanced our investment to drive
this growth along with supporting pipeline development.
The COVID-19 environment represents an increase in both risk and
opportunity for the company. Our current view is whilst managing the
risk we have a real opportunity to strengthen the Company building
an even stronger brand and accelerating our market presence based
on consumer interest in solutions to maintain health and wellbeing.
Utilising our on-line sales presence and capability built up over the
last few years we are well placed to respond to anticipated changes to
consumer purchasing behaviours towards this channel.
During FY20 we further built strong foundations for future growth,
we have continued to build the BLIS® Probiotics brand, strengthened
our R&D pipeline while enhancing our IP position, delivered greater
supply capacity and alternate sourcing, and overall our financial
resilience has continued to build.
We remain committed to our stated purpose, our value proposition
and our strategic priorities whilst recognising that the environmental
changes based on COVID-19 will continue to represent both
challenges and opportunities that will require close monitoring and
flexibility to respond to these.
There remains significant international growth potential for our
products and we will continue to pursue the Company’s profitable
growth objective through developing our relationships with partners
capable of resourcing international scale for the business. Key new
growth opportunities for the company in FY21 include Canada, China
cross border e-commerce and Daigou markets. Along with this we will
prioritise growth opportunities with our existing distribution partners
and particularly through our on-line channels.
Thank You
The Board and Management would like to take this opportunity
to thank all staff and directors for their enthusiasm and ongoing
commitment to continuous improvement.
Our overall objective remains delivering sustainable profitable growth
and on behalf of everyone at Blis we would like to thank all of our
key partners and stakeholders for their role and continued support in
working with the Company in meeting its goals.
Tony Offen
Chairman
15
Brian Watson
Chief Executive Officer
2020 Annual Report16
A focus on
immunity.
A survey conducted in
Q3 of 2019 found that
66% of consumers
understood that having
a healthy immune
system reduced the
risk of illness
3
.
35% of consumers were willing to purchase products that help
boost their immune system, even when they are not suffering from
specific health problems but 45% of consumers did not take any
steps to improve immunity because “I don’t know how to”.
3
COVID-19 has undoubtedly driven consumer awareness of their
own health and wellbeing to an even greater level. Now more than
ever, consumers are searching for products that can support their
immunity. Globally this is a very crowded market but BLIS K12™
continues to provide a unique proposition for those wishing to
support their immunity.
DailyDefence™ & DailyDefence Junior™: Everyday
immunity support for the entire family from six months onwards.
Preparing the immune system for winter.
TravelProtect™: Specific dosing of BLIS K12™
to help boost your immunity and help defend your
immune system against airborne ailments when
travelling.
3. FMCG Gurus Immunity Survey Q3 2019.
Blis Technologies Limited17
ElitePRO™: Developed in collaboration with High
Performance Sport NZ, ElitePRO™ is based on the
science behind TravelProtect and goes through an
additional step of being tested for banned substances.
ElitePRO™ is certified by Informed Sport as safe for
athletes. During 2019 ElitePRO™ has become part of the
health and wellbeing regime of many of New Zealand’s
national sports teams. Most notably the Highlanders
are utilising BLIS Probiotics to support their immunity
(including during lockdown) and recently the Ascot Park
Southern Steel netball team have embraced ElitePRO™
as part of their wellbeing program.
BLIS K12™ is well known for its ability to support the immune system
by helping protect the gateway to the body, but to deliver a broader
immunity proposition we have combined BLIS K12™ with gut probiotic
strains that had strong evidence in immunity. The Dupont strains
Bifidobacterium lactis HOWARU® Bifido HN019 and Lactobacillus
acidophilus La-14® have been included into the BLIS probiotics lozenge
format for their ability to provide immune support in the gut.
UltraBLIS™ is focussed on optimising the microbiome in the gut as
well as in the oral cavity providing unique immunity support.
A focus on immunity continued
New Product Launch:
UltraBLIS™: Probiotic Immune Support
for Optimal Performance
2020 Annual Report18
Our approach
to sustainability.
Our purpose
“Develop and
commercialise unique
probiotics for health
and wellbeing.”
Our value
proposition
Blis Technologies is a leader in the
manufacture of advanced probiotic
strains that go beyond the gut. We
combine innovation with a strong
evidence base and the highest quality
controls to deliver probiotic solutions
for specific health targets.
Our objective
Blis will become an integrated
company, controlling our intellectual
property and ensuring the highest
quality standards throughout the
supply chain.
We have a clear sense of what Blis Technologies has been
established to do. Our purpose, value proposition and objective
set out our direction of travel to achieve this.
We recognise that long-term, sustainable business success
requires an understanding of the interconnectedness of all of
the moving parts of our business and the impact we have on
our stakeholders. For Blis this includes our people, customers,
community, environment and our shareholders. We understand
that our success will be measured in more than just purely
financial terms, and while our sustainability journey is in its early
days, we are committed to delivering long-term positive outcomes
for all of the stakeholders of our business.
We continue to utilise the United Nations (UN) Sustainable
Development Goals to provide a framework from which we will
formalise our approach to reporting on environmental, social and
governance (ESG) practices.
Blis Technologies Limited19
The UN Sustainable Development Goals present a way for us to see and think about our business beyond
a traditional set of measures that are based on our financial and manufacturing performance. The UN
Sustainable Development Goals that are relevant to Blis are:
Our approach to sustainability continued
• Our research has and will be
responsible for uncovering new
strains of good bacteria to ward
off pathogens, boost immunity
and promote positive health
outcomes.
• The efficacy of our probiotic
therapies leads to improved health
for our customers.
• Within our business, the health,
safety and well-being of our
people is paramount and will
continue to be an important focus.
• Our science is world-leading and
provides research-backed health
solutions.
• We continue to look for ways to
further improve societal health.
• The efficacy of our probiotic
therapies reduces pathogens
(disease-causing bacteria) and
promotes good health.
• The quality of our research will
add to the bank of knowledge on
the health effects of good bacteria
strains on oral and throat health.
• Our support and joint funding
of ongoing research at the
University of Otago and other
research institutions will
provide meaningful academic
opportunities.
• We will continue to provide
training and development
opportunities to our staff.
• We regularly provide intern and
post graduate opportunities for
local and international students.
• Through a sponsorship
programme we will partner
with organisations in our local
community that promote healthy
lifestyles.
• Our people practices recognise
the value of diversity and this is
also reflected in the makeup of our
Board and Management team.
• Our organisational style supports
a vibrant and productive work
environment that encourages
inclusion and engagement.
• As a business we will explore ways
to reduce and recycle waste while
maintaining the quality standards
of our products and packaging.
• Consumption instructions are
shown on all product packaging
and product information sheets.
• Our manufacturing operates
under the principles of “Good
Manufacturing Practice”, and
we are moving toward full
accreditation of our internal
manufacturing facility.
• Our remuneration policies and
practices are based on sound
principles and contribute to our
ability to attract and retain a team of
appropriately skilled people.
• We are committed to paying our staff
a Living Wage – as updated by “Living
Wage Aotearoa”.
• Our financial performance will allow
us to provide ongoing investment
in innovation for better health
and sustainable returns to our
shareholders, the owners of our
business.
• Our contribution to the local
economy through employment and
supplier arrangements and to the
wider New Zealand economy through
payment of tax and generation
of export revenues provides an
economic benefit for New Zealand.
• We are committed to reducing our
environmental impact.
• We will continue to actively
look at ways to improve our
environmental performance.
2020 Annual Report202020 Annual Report20
We look forward
to updating you on
our progress and the
positive ways in which our
business is contributing
to a better future for our
people, our customers
and our community.
Further development of
the ESG framework
Our ESG framework is at an early stage and will see further
development in coming years.
In FY21 we will start workstreams to develop:
• An understanding of the material issues for our key
stakeholders as well as for the Company. By identifying these
issues we will be able to integrate them into our thinking,
planning and strategies in order to deliver value for our
stakeholders and improve the overall performance of our
business.
• A set of measurements that will help the board and
management to understand Blis’ environmental footprint
and the level of employee engagement and its organisational
culture. These measurements will add to those that are well
established in relation to health and safety and product
quality.
• A deeper understanding of the disclosures recommended by
the Task Force on Climate Related Financial Disclosures.
Our approach to sustainability continued
Blis Technologies Limited21
Graeme Boyd
Deputy Chair, Independent
non-executive director
Member of Remuneration Committee
Graeme is based in Tauranga and has
been a director of Blis Technologies
Limited since July 2014. He was
appointed Deputy Chair in August 2018.
Graeme joined ICI New Zealand
Limited in 1971 and for over 26 years
held a variety of positions across the
business, including management of the
Pharmaceuticals Division, culminating
in the role of NZ General Manager from
1990 to 1997. He was appointed CEO
of Comvita in 1998 and developed the
company from a small privately-owned
company to a publicly-listed company
centred on marketing natural health
products internationally. Graeme
left Comvita in 2005 and formed a
management consulting business
specialising in company turnarounds,
growth strategies and international
marketing.
Graeme is a professional director, a
Chartered Member of the Institute of
Directors and holds an MSc (Chemistry)
from University of Canterbury.
Geoffrey Plunket
Independent non-executive director
Chair of Audit and Risk Committee
Geoff is currently a Dunedin based
Professional Director and consultant.
Geoff has been a director of Blis
Technologies Limited since May 2018
and was appointed Audit and Risk
Committee Chair in August 2018.
Geoff worked for Coopers & Lybrand
(now PWC) and KPMG, in Dunedin and
Birmingham, UK through the 1980’s
before joining Port Otago Limited in
1988, as Chief Financial Officer. Geoff
spent the following 29 years with the
Port Otago Group, before retiring in
2017. Geoff worked across the business
in a variety of roles, culminating in
appointment as CEO in 2004, a position
he held until retirement. Geoff brings
significant experience in leading a large
successful organisation with expertise
in logistics, managing international
trading relationships, supply chain,
human resource, health and safety and
risk management.
Geoff is a Fellow of Chartered
Accountants Australia and New
Zealand, and a Member of the Institute
of Directors.
Anthony (Tony) Offen
Chair, Independent non-executive
director
Member of Audit and Remuneration
committees
Tony is Dunedin based and has been
a Director and shareholder of Blis
Technologies Limited since May 2009.
Tony was appointed Board Chair in
August 2017 and has previously served
as Deputy Chair and Chair of the Audit
and Risk Committee.
Through his Dunedin-based investment
company, Tony has been a director
and shareholder of private companies
involved in commercial property,
FMCG business sectors nationally and
internationally and with investment
interests requiring venture and start-up
capital.
Tony holds professional memberships
with the Chartered Accountants
Australia and New Zealand and is a
Chartered Member of the Institute
of Directors. He is an independent
member of the Governance Board of
Brain Research New Zealand, Centre
of Research Excellence (CoRE) and
until December 2019 was an elected
member of the National Council for the
Neurological Foundation of NZ where
he had served as the Council Deputy
Chair and Chair of its Audit and Risk
Management Committee. Tony holds a
BCom (Accounting) and BA (Philosophy)
from University of Otago.
Board of
Directors.
Blis Technologies Limited21
2020 Annual Report22
Dr Alison Stewart
Independent non-executive director
Chair of Remuneration Committee
Alison is Christchurch based and was
appointed to the Board in September
2018.
Alison brings to the board governance
and commercial research and
development experience within
the international biotechnology
industry. Alison has held key executive
leadership roles in New Zealand and
US corporates and understands the
drivers for successful commercialisation
of research. Alison is an experienced
research and innovation leader with
expertise in microbe-based product
development, patents, IP protection,
new product pipeline and development
of strategic partnerships with large
international corporations.
Alison is a Distinguished Emeritus
Professor from Lincoln University, New
Zealand and was elected a Companion
of the NZ Order of Merit in 2011 for her
contributions to biology.
Antony (Tony) Balfour
Independent non-executive director
Tony was appointed to the Board on
9 April 2020. He brings to the board
strong governance experience following
a successful executive career as an
international marketing and brand
management leader building consumer
goods businesses globally.
Tony has a diverse background of
international experience in driving
FMCG through retail channels and
e-commerce from the leadership roles
he held for Nike Inc., Icebreaker, Seek
Limited and Monster Worldwide Inc. He
holds directorships with The Warehouse
Group Limited, Les Mills International
Limited and Wayfare Group Limited
(trading as Real Journeys). Tony has
previously been a director of Silver
Fern Farms Co-operative Limited (and
subsidiaries) and Methven Limited.
Dr Barry Richardson
Independent non-executive director
Member of Audit Committee
Barry is Dunedin based and has been
a director of Blis Technologies Limited
since July 2018.
Barry began his career as a scientist
at the NZ Dairy Research Institute
before joining the NZ Dairy Board
in 1985 as a Business Development
Manager, undertaking roles in several
biotechnology and nutritional Dairy
Board joint venture companies.
Barry joined the Tatua Co-Operative
Dairy Company Limited in 1991 as
General Manager, Tatua Biologics
and was later appointed General
Manager, International and Strategic
Development commercialising value
added dairy ingredients. He was
appointed CEO of Westland Milk
Products when that company elected
to be an independent exporter of dairy
products in late 2001. From 2006 to
2016 Barry was CEO of Blis Technologies
Limited, through the period when the
Company transitioned from a research
company into a commercial entity.
His other professional roles include a
Director of CertusBio and a Director of
CNS Biotechnology.
Barry has a M.Sc. (Hons) in
Biochemistry and a PhD from Massey
University. He is a past Fellow of the NZ
Institute of Management and a Fellow
of the NZ Institute of Food Science and
Technology. He was awarded the JC
Andrews award for distinction in Food
Science and Technology in 2003.
Board of Directors continued
2020 Annual Report22
Blis Technologies Limited23
Richard Wingham
Chief Financial Officer (CFO)
CA, BCom (Accounting)
Richard was appointed to the role
of CFO for Blis Technologies in
November 2017. Richard is a Chartered
Accountant with over 20 years’
experience, including various senior
finance roles across the dairy FMCG,
construction and health sectors. His
skills cross over manufacturing, project
management, information technology
and strategic planning.
Frank Spiewack
Commercial Director
BA
Frank is the newest member of
the executive team. He joined Blis
Technologies in November 2019 and
was confirmed as a member of the
executive team in May 2020. Frank
has a strong background developing
international markets having worked
as Vice President Global Sales and
Marketing for Alchemy Equipment and
Manager Distributor and Emerging
Markets for Icebreaker.
Dr John Hale
Chief Technology Officer (CTO)
PhD
John did his PhD studying bacteriocins
(BLIS) under the supervision of
Professor John Tagg at the Department
of Microbiology, University of Otago.
He carried out post-doctoral research
at the University of British Columbia
(Vancouver, Canada) and Monash
University School of Pharmacy
(Melbourne, Australia) investigating
the modes of action of antimicrobial
peptides. Dr Hale joined Blis
Technologies in 2011 and leads the
Scientific Services team.
Brian Watson
Chief Executive Officer (CEO)
BCom (Marketing), BPhEd
Brian was appointed CEO of Blis
Technologies in February 2016.
He joined Blis following senior
management roles with Fonterra and
within the pharmaceutical industry
in New Zealand and overseas. Brian’s
career has focused on general
management, marketing and sales
across healthcare, nutraceutical and
nutrition industries. Brian has a track
record of successfully launching global
brands into new markets and leading
change within organisations.
Julie Curphey
Chief Marketing Officer (CMO)
MBA, BCApSc (food Science)
Julie joined Blis Technologies in
September 2016 as Chief Marketing
Officer. Prior to this she spent 18
years working internationally in the
FMCG and pharmaceutical industries
in various leadership roles including
market research, marketing, operations
and change management. Julie
returned to New Zealand in 2014 to take
up the CMO role at Dunedin company
ADInstruments.
Executive Team.
2020 Annual Report24
The Board and Management of Blis
Technologies Limited are committed to
ensuring that the Company maintains
corporate governance structures which
ensure that the Company operates
efficiently and effectively and maintains the
highest ethical standards.
This statement of Corporate Governance provides a summary of
the Company’s governance processes and practices.
The Company’s Corporate Governance policies are based
on the principles set out in the NZX Corporate Governance
Code (NZX Code). This statement is structured to follow the
recommendations of the NZX Code.
The Board’s view is that Blis complies with the corporate
governance principles and recommendations set out in the
NZX Code but measurable objectives for diversity are under
development. The Board believes its governance structures are
appropriate and meet the Company’s strategic objectives.
The Company also complies with the corporate governance
requirements of the NZX Listing Rules. The Board regularly
reviews and assesses Blis’ governance structures and processes
to ensure that they are consistent with best practice.
Blis automatically transitioned to the new NZX Listing Rules with
effect from 1 July 2019. The shareholders approved amendments
to the Company’s constitution on 26 July 2019 for the purpose of
ensuring compliance with the new NZX Listing rules.
This Corporate Governance Statement has been prepared in
accordance with the NZX Code that was published on 1 January
2019.
Blis’ key corporate governance documents referred to in this
statement, including charters and policies, can be found at
www.blis.co.nz/investor-centre/charters-policies (the Investor
Centre). The Board operates under a set of guidelines set out
in its Directors’ Operations Manual to assist Directors and
Management in carrying out their duties and responsibilities. The
Directors’ Operations Manual covers such matters as:
• Corporate governance matters;
• Role of the Board and composition of the Board;
• Director responsibilities;
• Appointment of, responsibilities of and remuneration of a
Chief Executive Officer;
• Confidentiality and the safeguarding of company information;
Statement of
Corporate Governance.
• Compliance with laws and regulations;
• Shareholder participation; and
• Code of conduct.
This Corporate Governance Statement was approved by the
Board on 27 May 2020.
PRINCIPLE 1 – Code of Ethical Behaviour
“Directors should set high standards of ethical behaviour, model
this behaviour and hold management accountable for these
standards being followed throughout the organisation.”
Code of Ethics
As part of the Board’s commitment to the highest standard of
conduct, the Company has adopted a Code of Ethics (Code).
Every new Director and employee is provided with a copy of the
Code and must confirm that they have read and understand the
document. The Code is also available at the Investor Centre.
Each Director, and employee is asked to annually confirm that
they continue to comply with the Code of Ethics.
The procedure for advising the Company of a suspected
breach is set out in the Code of Ethics. Blis also has a Protected
Disclosures (Whistleblower) Policy that sets out the process that
serves to protect employees who raise allegations of serious
wrongdoing by the Company.
Conflicts of interest
The Code of Ethics sets out the procedure to be followed
where Directors are faced with a conflict of interest. At all
times, a Director must be able to act in the interests of the
organisation as a whole and in accordance with all relevant laws
and regulations including the NZX Listing Rules. The personal
interests of the Director and their family must not be allowed
to prevail over those of the Company and its shareholders
generally.
No breaches of the Code of Ethics were identified during FY20
and no matters were raised under the Protected Disclosures
(Whistleblower) Policy.
The Code of Ethics is subject to annual review by the Board.
Share trading by Directors and Employees
The Board has implemented formal procedures to handle trading
in the Company’s equity securities by Directors, employees and
advisers of the Company. These are set out in Blis’ Securities
Trading Policy which is available at the Investor Centre. Before
any trading can occur approval is required from the Chair of
the Board, CEO or CFO. The policy provides that shares may
Statement of Corporate Governance continued
Blis Technologies Limited25
not be traded at any time by any individual holding material
information. The fundamental rule in the policy is that insider
trading is prohibited at all times. The requirements of the policy
are separate from, and in addition to, the legal prohibitions on
insider trading in New Zealand.
PRINCIPLE 2 – Board Composition &
Performance
“To ensure an effective board, there should be a balance of
independence, skills, knowledge, experience and perspectives.”
Responsibilities of the Board
The role of the Board is to act in the best interests of the
Company and to promote the interests of the Company and
its stakeholders. Directors are elected by the shareholders to
govern the Company. The Board is the overall and final body of
responsibility for all decision making within the Company.
The Directors have a diverse range of expertise and experience,
and are committed to using this to benefit the Company. The
Board is responsible to shareholders for charting the direction
of the Company by participating in the setting of objectives,
strategy and key policy areas. The Board is then responsible for
monitoring Management’s running of the business to ensure
implementation is in accordance with the agreed framework.
The Board delegates the conduct of the day-to-day affairs of the
Company to the CEO within this framework.
The primary responsibilities of the Board include:
• Ensuring that the Company purpose and goals are clearly
established, and with appropriate strategies;
• Establishing policies for strengthening the performance of
the Company including ensuring that Management is pro-
actively seeking to build the business through innovation,
initiative, technology, new products and the development of
its business capital;
• Monitoring the performance of Management, including
the review and monitoring of compliance with delegated
authorities, and of regulatory compliance;
• Monitoring strategic, financial, social and environmental
performance;
• Appointing the CEO, setting the terms of the CEO’s
employment contract, including position description,
reviewing succession planning and where necessary,
terminating the CEO’s employment with the Company;
• Deciding on whatever steps are necessary to protect the
Company’s financial position and the ability to meet its debts
and other obligations when they fall due, and ensuring that
such steps are taken;
• Ensuring that the Company’s financial statements are true and
fair and otherwise conform with law;
• Ensuring that information of sufficient content, quality and
timeliness, as the Board considers necessary to enable it to
discharge its duties, is provided by Management;
• Ensuring that the Company adheres to high standards of
ethical and corporate behaviour;
• Ensuring that the Company has appropriate management
processes for defining risks and analysing options to minimise,
mitigate and manage risks;
• Ensuring an appropriate capital structure such that it supports
the business strategy; and
• Ensuring that the Company communicates with its
shareholders and stakeholders in a timely manner.
The Board uses committees to address certain issues that require
detailed consideration by members of the Board who have
specialist knowledge and experience. The Board retains ultimate
responsibility for the functions of its committees and determines
their responsibilities.
The Board has a statutory obligation to reserve responsibility
for certain matters. It deals directly with issues relating to the
Company’s mission, appointments to the Board, strategy,
business and financial plans.
The Directors appoint a Chair and Deputy Chair from amongst
the non-executive members. The Board supports the separation
of the role of Chair and CEO. The Chair’s role is to provide
leadership and to manage the Board effectively. The Chair has
responsibility for:
• ensuring the integrity and effectiveness of the governance
process of the Board;
• representing the Board to the shareholders;
• maintaining regular dialogue with the CEO over all operational
matters; and
• for overseeing the annual work programme
The Chief Executive Officer is not a Director.
The Board regularly meet without the CEO being present and
has a practice of holding Director-only meetings either prior to or
following each Board meeting.
The Board receives reports from Management and has access to
all of the information necessary for it to effectively discharge its
duties.
Director nomination and appointment
The Board as a whole is involved with recommending candidates
to act as Directors to shareholders. When considering candidates
2020 Annual Report26
Statement of Corporate Governance continued
for nomination, the Board will consider, amongst other things, the
individual’s experience, qualifications and skills in comparison to
the experience, qualifications and skills of other Directors, whether
that individual is “independent” and whether that individual
would be able to work effectively with other Directors. A thorough
check of the candidate and his or her background is undertaken
and shareholders are provided with all material information that is
relevant to the decision on whether to elect or re-elect a Director.
The Board has the ability to appoint an individual to fill a
casual vacancy on the Board until the Company’s next Annual
Shareholder Meeting.
The procedures for the appointment and removal of Directors
are governed by the Company’s constitution and the NZX Listing
Rules.
The Board has determined that based on the Company’s current
size and stage of development that an optimal number of directors
is five. Each year as part of the board’s annual review process the
capability mix is assessed to evolve in line with Company’s future
development and international growth plan requirements.
The Board has determined that to operate effectively and to
meet its responsibilities it requires competencies in disciplines
including executive leadership and strategy, governance,
biotechnology IP development and protection, international sales
and marketing, international supply chain and quality control, risk
and compliance, finance and capital markets.
The current mix of skills and experience is considered appropriate
for the responsibilities and requirements of governing Blis. The
Board looks to strengthen its oversight of issues in all disciplines,
as required, via expert advice.
As at 31 March 2020 2020, all Directors on the Board are
independent. Director independence is considered on a case-
by-case basis (in accordance with the NZX Listing Rules) and is
monitored on an ongoing basis.
Letter of appointment
All new directors enter into a written agreement with Blis setting
out the terms of their appointment. A copy of the appointment
letter is available at the Investor Centre (www.blis.co.nz/investor-
centre)
Board of Directors
Director profiles are shown at pages 21 – 22 of this report. The
profiles include information on the year of appointment, skills,
experience and background of each Director.
All five Directors as at 31 March 2020 are non-executive and
independent members of the Board. Tony Offen is the Chair of
Blis. Graeme Boyd is Deputy Chair. Geoff Plunket is the Chair of
the Audit and Risk Committee. Alison Stewart is the Chair of the
Remuneration Committee. Dr Barry Richardson and Tony Balfour
are also directors. Tony Balfour was appointed as a director from
9 April 2020 and will be offering himself for election at the Annual
Shareholders Meeting to be held in July 2020.
The roles of Board Chair, Audit and Risk Committee Chair and CEO
are not held by the same person.
The Board determines annually on a case-by-case basis who, in
its view, are Independent Directors. The Board will consider all
relevant circumstances when determining independence. Under
the NZX Listing Rules, a Director is “Independent” when they are
not an employee of the Company and do not have a ‘Disqualifying
Relationship’ (as defined in the NZX Listing Rules).
The Company does not require Directors to hold shares in the
Company but actively encourages them to do so. Directors’ share
interests are disclosed at page 34.
The Board does not have a tenure policy however it recognises that
a regular refreshment programme leads to the introduction of new
perspectives, skills, attributes and experience. Directors retire by
rotation in accordance with the NZX Listing Rules but are eligible for
re-election on retirement by rotation.
Director period of appointment
0-3 3-9 9 +
years years years
Number of Directors 4 1 1
Interest Register
The Board maintains an interest register for the Company. Any
Director who is interested in a transaction with the Company must
immediately disclose to the Board the nature, monetary value and
extent of the interest. A Director who is interested in a transaction
may attend and participate at a Board meeting at which the
transaction is discussed but may not be counted in the quorum for
that meeting or vote in respect of the transaction, unless it is one in
respect of which Directors are expressly required by the Companies
Act 1993 to sign a certificate.
Entries made in the interest register of the Company for the year
ended 31 March 2020 are included in the Director Disclosures
section on pages 34 - 35.
Diversity
Blis Technologies is committed to achieving a diverse workforce
and inclusive workplace practices in order to harness the business
benefits of diversity, further social justice and comply with
legislation. A Diversity and Inclusion Policy has been adopted by the
Board and is available at the Investor Centre.
Responsibility for workplace diversity and the setting of measurable
objectives is held by the Board. Appropriate measurable diversity
objectives are under development.
The gender composition of Blis’ directors, senior managers and
workforce was as follows:
Statement of Corporate Governance continued
Blis Technologies Limited27
31 March 2020 31 March 2019
Position Female Male Female Male
Director* 1 (20%) 4 (80%) 2 (33%) 4 (67%)
Executives** 1 (20%) 4 (80%) 1 (25%) 3 (75%)
Employees*** 12 (48%) 13 (52%) 11 (52%) 10 (48%)
*Not including Tony Balfour who was appointed 9 April 2020.
**CEO and Direct Reports to the CEO
***Includes executives.
Director Training
The Board ensures that there is appropriate training available
to all Directors to enable them to remain current on how best
to discharge their responsibilities and keep up to date on
changes and trends in areas relevant to their work. Directors are
regularly provided with industry information and receive copies
of appropriate Company documents to enable them to perform
their role.
The Board also ensures that new Directors are appropriately
introduced to management and the business.
Board Performance Evaluation
The Board annually assesses its effectiveness in carrying out
its functions and responsibilities. The Chair of the Board leads
the review which considers the performance of the Board as
a whole, and of each of the Board Committees, against their
respective charters.
The Chair, on behalf of the Board, is responsible for assessing
the performance and contribution of individual Directors. The
assessment is undertaken annually.
PRINCIPLE 3 - Board Committees
“The Board should use committees where this will enhance
its effectiveness in key areas, while still retaining board
responsibility.”
Board Committees
The Board has two formally constituted committees – the
Audit and Risk Committee and the Remuneration Committee.
Committee membership is reviewed annually.
Each Committee has a written charter that is approved by the
Board and sets out its mandate. The charters are reviewed
annually with any proposed changes recommended to the
Board for approval.
Each Committee has an agreed annual work programme that
sets out matters to be addressed over the following twelve
month period. The Committees each review their performance
on an annual basis against the Committee charter and work
programme and report their findings to the Board.
Blis also has a Scientific Advisory Group (SAG) which is
established as required provide an independent source of
advice to the Board and Management. SAG members are
selected based on significant contribution to their chosen field
and have complementary skillsets to those involved in the
Company’s research and development endeavours. In FY20
the first SAG meeting was held and focused on dental health,
providing significant input and guidance for our R & D efforts
relating to a broad range of dental health needs.
Attendance at meetings
The table below sets out Director attendance at Board and
Committee meetings during the year ended 31 March 2020.
Board Audit & Risk Remuneration
Committee Committee
G Boyd 10 - 3
A Offen 10 10 3
G Plunket 10 10 -
Dr B Richardson 10 10 -
Dr A Stewart 10 - 2
V Aris* 4 - 1
*V Aris retired on 26 July 2019
Audit & Risk Committee
The Board has overall responsibility for the Company’s system
of internal financial control, risk management, for liaising
with the Company’s external auditors, and for ensuring the
integrity of the Company’s financial reporting. The Board
constantly monitors the operational and financial aspects of
the Company’s activities and has established procedures and
policies that are designed to provide effective internal financial
control. Annual budgets and business plans are prepared
and agreed by the Board. Monthly management accounts
are prepared by Management and reviewed by the Board
throughout the year to monitor performance against budget.
The Board has established an Audit and Risk Committee to
assist the Board in discharging its responsibilities relative to
financial reporting, related regulatory conformance and liaising
with the external auditors. The terms of reference for the Audit
and Risk Committee are set out in its charter which is available
in the Investor Centre.
The Audit and Risk Committee is appointed by the Board and
must comprise three Directors, the majority of whom are to be
independent. The Chair of Audit and Risk Committee must be
an Independent Director and not the Chair of the Board. The
current members of the Audit and Risk Committee are Geoffrey
Plunket (Chair), Tony Offen (Board Chair) and Barry Richardson.
All members are independent directors. Geoffrey Plunket is a
Fellow of Chartered Accountants Australia and New Zealand and
a Member of the Institute of Directors.
The Board considers the recommendations of the Audit and
Risk Committee and advice of external auditors and other
Statement of Corporate Governance continued
2020 Annual Report28
external advisors on the operational and financial risks that face
the Company. The Board ensures that recommendations made by
the Audit and Risk Committee, external auditors and other external
advisers are investigated and, where considered necessary, action
is taken to ensure that the Company has an appropriate internal
control environment in place to manage the key risks identified.
In addition, the Board investigates ways of enhancing existing
risk management strategies, including appropriate segregation of
duties and the employment and training of suitably qualified and
experienced personnel.
Given the size of the Company, an internal audit function is not
considered necessary.
The Audit and Risk Committee met on 10 occasions during FY20.
The agenda items for each meeting generally relate to financial
governance, external financial reporting, external audit, internal
control review, risk management, compliance and insurance.
Meeting Attendance
The CEO and CFO are regularly invited to attend Audit and Risk
Committee meetings as observers, when appropriate.
Remuneration Committee
The Board has established a Remuneration Committee which has
responsibility for, amongst other things, setting the remuneration
policy for the CEO, CFO, Chief Marketing Officer, Chief Scientific/
Technical Officer (Executive), and recommending and monitoring
the level and structure of remuneration for senior management.
The terms of reference for this committee are set out in its charter
which is available in the Investor Centre (www.blis.co.nz/investor-
centre/charters-policies).
The Remuneration Committee is appointed by the Board and
must comprise three Directors, the majority of whom shall be
independent. The Chair of the Board may serve on the committee.
Members of the Remuneration Committee are Graeme Boyd
(Chair), Alison Stewart and Tony Offen. All committee members are
independent Directors.
The Board ensures that the recommendations made by
the Remuneration Committee are considered and acted on
accordingly.
The Remuneration Committee met three times during the year.
Nomination Committee
Given the size and composition of the Board, Directors believe that
there are no significant benefits in delegating matters in relation
to Board nominations and all appointments are managed by the
whole Board.
Committees
The Board has no Committees other than an Audit and Risk
Committee and Remuneration Committee. The Scientific Advisory
Group is not a Board committee.
Takeover Protocols
The Board has adopted a set of protocols to be followed in the
event of a takeover offer being made.
In the event of a takeover offer, a committee of Independent
Directors would be formed and would have responsibility for
managing the takeover in accordance with the Board protocols
and applicable laws, including the New Zealand Takeovers Code.
PRINCIPLE 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-
financial reporting, and in the timeliness and balance of
corporate disclosure.”
Shareholder Communications and Market Disclosure
The Board is committed to keeping the financial products
markets informed of material information relating to the
Company and its shares and promoting investor confidence by
ensuring that trading of its equity securities takes place in an
efficient, well-informed market at all times.
The Company has in place a Continuous Disclosure Policy and
a Communications Policy designed to ensure this occurs. The
policies include procedures intended to ensure that:
• the Company complies with its continuous disclosure
obligations; and
• timely, accurate and complete information is provided to all
shareholders and other market participants.
The policies also outline mandatory requirements and
responsibilities in relation to the identification, reporting,
review and disclosure of material information relevant to the
Company.
Accountability for compliance with disclosure obligations is the
responsibility of the CEO and CFO. The CFO has been designated
as the Disclosure Officer and has overall management
responsibility for ensuring all material information is lodged
with NZX.
All non-promotional information intended to be made public,
whether or not it is believed to be material information, must
be reviewed by the CEO and Chair prior to release. In the case of
financial information, the Audit and Risk Committee Chair, must
also review the information prior to issue.
Directors consider at each Board meeting whether there is any
material information which should be disclosed to the market.
Governance Policies and Charters
Key corporate governance documents, including charters and
policies, can be found at the Investor Centre (www.blis.co.nz/
investor-centre/charters-policies).
Financial and Non-Financial Reporting
Blis is committed to ensuring integrity and timeliness in its
financial reporting and in providing information to the market
Statement of Corporate Governance continued
Blis Technologies Limited29
and shareholders which reflects a considered view on its
present and future prospects.
The Audit and Risk Committee oversees the quality and
integrity of external financial reporting, including the accuracy,
completeness, balance and timeliness of financial statements.
It reviews the Company’s full and half-year financial statements
and makes recommendations to the Board concerning
accounting policies, areas of judgement, compliance with
accounting standards, NZX and legal requirements, and
the results of the external audit. All matters required to be
addressed and for which the Audit and Risk Committee has
responsibility were addressed during FY20.
Blis has published its full and half-year financial statements that
were prepared in accordance with relevant financial standards.
The full year financial statements are set out on pages 39 to 61.
The CEO and CFO have confirmed in writing to the Board that
the Company’s external financial reports present a true and fair
view in all material aspects. These representations are given
on the basis that a sound system of internal controls and risk
management is operating effectively in all material respects in
relation to financial reporting.
In addition to releasing the full and half-year results
Blis provides an update on financial and non—financial
performance for the first and third quarters. Revenue and
EBITDA for the quarter and year to date, general commentary on
market conditions and an update on guidance is given.
The Board does not believe that the Company has any material
exposure to economic, environmental or social sustainability
risks that are not appropriately managed. The material risks
which may impact the Company’s ability to achieve its strategic
objectives and secure its future financial prospects, are
managed through the strategic planning process.
Work continues on suitable sustainability-reporting framework.
The project remains in its early stages and will involve preparing
a series of financial and non-financial targets for reporting
on regularly. This will ensure that non-financial reporting is
informative, includes forward looking assessments and aligns
with key strategies and metrics monitored by the Board. An
overview of the Company’s sustainability programme is set out
at pages 18 to 20.
PRINCIPLE 5 - Remuneration
“The remuneration of directors and executives should be
transparent, fair and reasonable.”
Remuneration Report
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies and
packages for Directors as well as the Executives.
The Company’s remuneration philosophy is aimed at attracting,
retaining and motivating employees of the highest quality at
all levels of the organisation. It is based on practical, guiding
principles and a framework that provides consistency, fairness
and transparency while having regard to the risk appetite of the
Company and alignment to its long-term strategic goals.
All remuneration packages are reviewed annually in the context
of individual and Company performance, market movements
and expert advice.
Non-executive Directors
The structure of non-executive Director remuneration is
separate and distinct from the remuneration of the CEO and
other executives.
The Board seeks to set aggregate remuneration for non-
executive Directors at a level which provides the Company with
the ability to attract and retain Directors of the highest calibre,
whilst incurring a cost which is acceptable to shareholders. No
remuneration is payable to Directors unless it is approved by the
Company’s shareholders, or permitted under the NZX Listing
Rules in the event of an increase in the total number of Directors.
The NZX Listing Rules specify that shareholders can approve a
per Director remuneration amount or an aggregate Directors’
fee pool. The Board has adopted a remuneration pool approach,
as referred to in NZX Guidance Note - Governance. Shareholders
approved an aggregate remuneration pool for non-executive
Directors of $265,000 per annum in 2017. Subject to external
review, an increase of the director fee pool will likely be
proposed at the 2020 Annual Shareholders Meeting.
Within the fee pool available, the Board reviews its fees annually
to ensure the Company’s non-executive Directors are fairly
remunerated for their services, recognising the level of skill
and experience required to fulfil the role, and to enable the
Company to attract and retain talented non-executive Directors.
The process involves benchmarking against a group of peer
companies.
In addition, the Board reviews the Remuneration Committee
structure and appropriate level of resourcing required to make
an on-going contribution to long term value creation. Non-
executive Directors have no entitlement to any performance-
based remuneration or participation in any share-based
incentive schemes.
Each non-executive Director receives a fee for services as a
Director of the Company and an additional fee is also paid to the
Chair, and each Chair of the Board Committees to recognise the
additional time commitment required for that role. All Directors
are entitled to be reimbursed for reasonable costs associated
with carrying out their duties.
Statement of Corporate Governance continued
2020 Annual Report30
For the period 1 April 2019 to 31 March 2020 the allocation of the
fee pool was as follows:
Board Audit & Risk Remuneration
Committee Committee
Chair $66,000 $10,000 $4,000
Deputy Chair $45,000 N/A N/A
Member $35,000 $5,000 N/A
Non-executive Directors are encouraged to be shareholders, but
are not required to hold shares in the Company.
Fees payable to the non-executive Directors of the Company for
the period 1 April 2019 to 31 March 2020 were as follows:
Board Audit Remuneration
Committee Committee Total
G Boyd $45,000 - - $45,000
A Offen $66,000 $3,333 - $69,333
G Plunket $35,000 $10,000 - $45,000
Dr B Richardson $35,000 $3,333 - $38,333
Dr A Stewart $35,000 - $2,667 $37,667
V Aris* $11,667 - $1,333 $13,000
*Veronica Aris retired on 26 July 2019
Remuneration of the CEO and Employees
The Company is committed to providing a remuneration
framework that promotes a high-performance culture
and aligns rewards to the creation of sustainable value for
shareholders. The underlying principle is to reward employees
for Company and business unit performance against targets set
by reference to appropriate benchmarks and key performance
indicators and to:
• Align their interests with those of shareholders; and
• Ensure total remuneration is competitive by market
standards.
Total remuneration is made up of fixed remuneration and a
short term incentive (STI). The STI performance incentive is
“at-risk” and is directly linked to both the performance of the
Company and to each individual’s performance while promoting
the Company’s long-term success.
Fixed remuneration includes all benefits, allowances and
deductions.
(i) Fixed annual remuneration
Remuneration levels are reviewed annually to ensure that
they are appropriate for the responsibility, qualifications and
experience of the Executives and are competitive with the
market.
Remuneration of the CEO and Employees
The Executives receive their fixed annual remuneration in
cash and a limited range of prescribed fringe benefits such as
superannuation, motor vehicle and health insurance. The total
employment cost of any remuneration package, including fringe
benefit tax, is taken into account in determining an employee’s
fixed annual remuneration.
For the financial year ended 31 March 2020, the CEO received
$302,654 (2019: $286,007) in fixed annual remuneration.
(ii) Variable remuneration – STI Scheme
The objective of the STI Scheme is to link the achievement
of the annual financial and operational targets with the
remuneration received by the Executives charged with meeting
those targets. The total potential remuneration under the STI
Scheme is set at a level so as to provide sufficient incentive to
the executive to achieve the targets such that the cost to the
Company is flexible and in line with the trading outcome for the
year.
Actual STI Scheme payments granted to the CEO and each
nominated Executive depend on the extent to which specific
targets, set at the beginning of each year, are met. The
targets may include a weighted combination of Company,
Departmental, Financial and Non-Financial.
In determining the amount to be allocated the Remuneration
Committee considers the performance against the targets.
For the financial year ended 31 March 2020 there were four
nominated executives in the STI scheme (31 March 2019: one).
STI Scheme payments relating to the financial year ended
31 March 2020 are delivered as a taxable cash bonus and
are payable on completion of the annual audited financial
statements. The total accrual for FY20 for all nominated
executives in the STI Scheme is $172,000 being 100% of the total
pool for the year. The actual amount paid for FY19 was $85,605.
In addition to the STI Scheme, the Board reserves the ability
to pay ad hoc bonus payments to any employee, again directly
related with the trading outcome.
CEO remuneration
Salary Taxable Benefits* Sub-total STI Total
FY20
302,654 11,647 314,301 85,605 399,906
FY19
286,008 6,864 292,872 - 292,872
*Includes the value of benefits including health care, superannuation,
vehicle and low interest loan.
Statement of Corporate Governance continued
Blis Technologies Limited31
Total remuneration paid is fixed remuneration and any
STI Scheme payment physically received during the year.
Performance based payments are paid in the following year.
The CEO’s STI scheme payment for FY20 comprises several
financial and non-financial performance measures. Overall, the
STI is set at 30% of fixed remuneration. A breakdown of the STI
components follows:
Performance Measures Percent Achieved
50% based on financial
revenue and profitability targets Achieved
50% based on non-financial targets Achieved
Employee remuneration
The number of employees of the Company (including former
employees) who received remuneration and other benefits in
excess of $100,000 in the period 1 April 2019 to 31 March 2020
are shown below:
FY20
Remuneration Banding Employees
100,001 – 110,000 2
170,001 – 180,000 1
180,001 – 190,000 1
190,000 – 200,000 1
390,001 – 400,000 1
FY19
Remuneration Banding Employees
150,001 – 160,000 1
180,001 – 190,000 2
280,001 – 290,000 1
Principle 6 – Risk Management
“Directors should have a sound understanding of the material
risks faced by the issuer and how to manage them. The board
should regularly verify that the issuer has appropriate processes
that identify and manage potential and material risks.”
Risk Management Framework
Blis operates in an environment that contains operational
and strategic risks. Risks are actively managed to ensure
Blis operates a safe workplace and is able to sustain the
achievement of its business objectives while at the same
time accepting an appropriate level of commercial risk that is
consistent with desired profitability.
The Board is responsible for ensuring that key business and
financial risks are identified, and that appropriate controls and
procedures are in place to effectively manage those risks.
The Audit and Risk Committee has overall responsibility
for ensuring that Company’s risk management framework
is appropriate and that risks are identified, considered and
managed. Risk management is a standing item on the agenda
for Audit and Risk Committee meetings, with detailed reports
provided by management.
A Risk Management Policy provides guidance on the Board’s
approach to risk management. The objectives of the Risk
Management Policy are:
• To allow Blis to pursue opportunities that involve risk in
an informed manner, so as to meet the expectations of
stakeholders;
• To enable full and due consideration to be given to the
balance of risk and reward in pursuing the achievement of
Blis’ business objectives;
• To apply risk management practices to enhance strategic,
tactical and operational decision making; and
• To ensure that Blis operates in a sustainable manner.
The policy is available at the Investor Centre.
Insurance
In managing the Company’s business risks, the Board approves
and monitors policy and procedures in areas such as treasury
management, financial performance, taxation and delegated
authorities. Blis has insurance policies in place covering most
areas where risk to its assets and business can be insured at a
reasonable cost.
Product Quality and Safety
Ensuring the safety and quality of our products is a key priority.
We establish processes that effectively manage risk and drive
continuous improvement in product quality throughout the
product production cycle.
We have introduced proactive quality control mechanisms
within our manufacturing operations. Through the use of data
collection and statistical analysis, we are improving the control
of our manufacturing processes, with the aim of being able to
intervene and correct a process prior to product quality being
compromised. This approach provides further assurance that
our customers receive high quality products that are safe and
effective.
Health, Safety and Wellbeing
Overall responsibility for health and safety, specifically for
the setting of high-level strategy and policy, resides with the
Board which is committed to continuous improvement and
progressively higher standards of work health and safety for the
benefit of all employees and others who work in, use or visit the
Company’s workplace.
Statement of Corporate Governance continued
2020 Annual Report32
The principles of the health and safety framework are to:
• Understand and comply with all applicable health and safety
legislation and regulations;
• Establish objectives and management systems consistent
with health and safety best practice; and
• Ensure all officers and workers engage in creating a positive
workplace culture to support health, safety and wellbeing.
The Executive are responsible for implementation of the health
and safety framework and will:
• Determine and implement business and action plans to give
effect to Board strategy;
• Acquire and maintain good understanding of health, safety
and wellbeing matters;
• Be responsible and accountable for health and safety
compliance;
• Promote and role-model high standards of workplace health,
safety and wellbeing; and
• Ensure business objectives are complementary to health,
safety and wellbeing objectives.
Management reports on a monthly basis to the Board which
consists of the following lead and lag indicators - H&S
Committee minutes, monthly hazard assessment, incidents and
accidents (including near miss incidents), good news stories,
achievements and training activities.
No lost time injuries (LTI) have occured over the last two years
(LTI - workers unable to perform normal duties at next shift).
Material business risks mitigation
After completing the risk management processes outlined on the previous page, the following key business and financial risks have been
identified:
Area Principal risk Strategies to mitigate
Product quality and
customer safety
Customer harm caused as a
result of using Blis products
Our production facility operates under a Food Control Plan which requires
high standards and procedures to ensure quality and safety from our
production. We work with our suppliers and contract manufacturers to
ensure high standards are adhered to. Our company values also include a
focus on high quality standards across our business.
Market accessLoss of regulatory approval to
market and sell Blis products
in certain countries
Blis has robust regulatory affairs processes for obtaining and maintaining
product licenses, as well as a quality management system that ensures
compliance with applicable regulatory requirements.
Health and safety Work related injuriesPractices and processes are reviewed annually by an accredited
Workplace Health and Safety independent expert.
Health, safety and wellbeing metrics are reported regularly to the Board.
Intellectual Property Third parties assert IP rights
against us
A comprehensive patent portfolio across our products is held and
maintained. Market searches undertaken in the product development
phase of product design. Competitor patent filings are actively monitored.
Business continuityLoss of continuity and quality
of supply
We actively monitor the quality of raw materials, end products,
production processes and systems. Business impact analysis is used to
identify, understand and quantify the impact of a material disruption to a
key facility, location, supplier or business process.
Technology and know-how for future production of both BLIS K12™ and
BLIS M18™ is transferred to an offshore fermentation supplier which
ensures production can be continued in the event of a failure at the
Dunedin plant.
Cyber security and
data protection
Cyber security attack results
in disruption to operations
and data breach.
Independent reviews of control mechanisms are undertaken.
Statement of Corporate Governance continued
Blis Technologies Limited33
Principle 7 - Auditors
“The board should ensure the quality and independence of the
external audit process.”
External Auditor
Oversight of the Company’s external audit arrangements to
safeguard the integrity of financial reporting is the responsibility of
the Audit and Risk Committee.
Blis maintains an Auditor Independence Policy to ensure that
audit independence is maintained, both in fact and appearance.
The quality of the audit opinion is considered to be paramount.
Accordingly, any compromises to auditor objectivity and
independence that are considered to exist require appropriate
safeguards to eliminate or reduce the risk of compromise to an
acceptable level.
Blis has adopted the following requirements in relation to auditor
independence:
• the Blis auditor is required to comply with relevant
independence requirements promulgated by the Financial
Markets Authority and other governing bodies;
• the Audit and Risk Committee must approve the appointment of
the auditor to provide any non-audit services to the Company or
its subsidiaries;
• the auditor is required to report to the Audit and Risk Committee
annually on matters pertaining to their independence; and
• the Blis auditor will be required to rotate the lead audit partner
in accordance with accepted governance standards.
The Auditor Independence Policy is available in the Investor
Centre.
The effectiveness, performance and independence of the external
auditors is reviewed by the Audit and Risk Committee. The auditor
is regularly invited to meet with the Committee including without
Management present.
Deloitte Limited is the Company’s current external auditor. Heidi
Rautjoki has been the audit engagement partner since 2018.
Fees paid to Deloitte Limited are included in Note 4 of the Notes
to the financial statements. A total of $76,000 was paid to Deloitte
Limited for audit-related services. All non-audit services require
approval by the Audit and Risk Committee.
The auditor is invited to attend the Annual Shareholders’ Meeting
and will be available to answer shareholder questions in relation to
the audit.
Internal audit
The Company does not have a formal internal audit function,
however it does have internal processes and controls that are
considered to be appropriate for the size and complexity of the
organisation. The Audit and Risk Committee carefully considers the
auditor’s management report which lists its key findings and
recommendations about significant matters arising from the
audit.
Principle 8 – Shareholder Relations
“The board should respect the rights of shareholders and foster
relationships with shareholders that encourage them to engage
with the issuer.”
Shareholder Rights and Relations
The Company is committed to regularly communicating with
shareholders and other stakeholders in a timely, accurate and
clear manner with respect to both procedural matters and
major issues affecting the Company.
To achieve this, the Company communicates through a range
of forums and publications. Annual reports, NZX releases,
governance policies and charters, and a variety of corporate
information is available at the Investor Centre.
Each shareholder is entitled to receive a hard copy of each
annual report on request.
Documents relating to annual shareholder meetings are
available at the Investor Centre.
Annual shareholder meetings to date have been held at a venue
in Dunedin, reflecting the head office location for the Company.
The speeches and slides are lodged with NZX prior to the start of
the meeting. Shareholders may raise matters for discussion at
the annual shareholder meeting either in person or by emailing
the Company with a question to be asked.
Electronic Communications
Shareholders have the option of receiving their communications
electronically. Contact details for the Company’s head office are
available on the Blis website.
Major Decisions
Directors’ commitment to timely and balanced disclosure is set
out in its Continuous Disclosure Policy and Communications
Policy. The commitments include advising shareholders on
any major decisions. Where voting on a matter is required, the
Board encourages investors to attend the meeting or to send in
a proxy vote.
Equity Issues
In the event of a capital raising, the Board will carefully consider
and, where practical, will favour an offer of shares to existing
shareholders on a pro-rata basis and on no less favourable
terms before offering shares to other investors.
Notice of Meeting
The Notice of Meeting will be lodged with NZX at least 20
working days prior to the annual shareholder meeting and will
be available in the Investor Centre.
2020 Annual Report34
Directors’ Shareholdings
The following table sets out, for the purposes of the disclosures required under Listing Rule 3.7.1 (d) of the NZX Listing Rules, the relevant
interests of Directors and associated persons of the Directors in equity securities of the Company as at 31 March 2020:
Name of Director Number of Equity Securities in which a relevant interest is held by a director
G Boyd Ordinary 800,000 (a)
A Offen Ordinary 31,157,388 (b)
G Plunket Ordinary 800,000 (c)
Dr B Richardson Ordinary 17,903,625 (d)
Dr A Stewart Ordinary 350,000 (e)
Note that particular shareholdings can appear under more than one director.
(a) The number of equity securities in which Mr G Boyd holds a relevant interest includes 800,000 ordinary shares held by Mr G Boyd
and Denise Boyd personally.
(b) The number of equity securities in which Mr A P Offen holds a relevant interest includes 31,157,388 ordinary shares, held by
Edinburgh Securities Limited, BJ Offen and Mr A P Offen, BJ Offen and Downie Stewart Trustee Limited. Mr A P Offen is a director
and beneficial shareholder of Edinburgh Securities Limited.
(c) The number of equity securities in which Mr G Plunket holds a relevant interest includes 800,000 ordinary shares held by
Mr G Plunket personally.
(d) The number of equity securities in which Dr B Richardson holds a relevant interest includes 17,903,625 ordinary shares held by Dr B
Richardson and JV Richardson personally.
(e) The number of equity securities in which Dr A Stewart holds a relevant interest includes 350,000 ordinary shares held by Custodial
Services Limited.
Director’s Share Dealings
The following Directors (or associated entities in which the Directors have relevant interests) acquired or disposed of equity securities in
the Group during the year ended 31 March 2020 as entered in the interests register of the Company:
Name of Director Transaction No. of Shares Price per Date of
share Acquisition /Disposal
A Offen Sale by Edinburgh Equity Limited to
A P Offen, B J Offen and Downie
Stewart Trustee Limited 11,157,388 6.2 cents 9 March 2020
Sale to B J Offen 10,000,000 6.2 cents 9 March 2020
Sale to Edinburgh Securities Limited 10,000,000 6.2 cents 9 March 2020
G Plunket Share purchases 320,000 2.3 cents 8 April 2019
480,000 2.4 cents 11 April 2019
Dr A Stewart Share purchases 200,000 2.6 cents 4 April 2019
150,000 5.2 cents 4 March 2020
Directors’
interests.
Blis Technologies Limited35
Directors’ Interests continued
Disclosures of Interest by Directors
As at 31 March 2020, the following Directors had made general disclosures in the interests register of the Company.
Name of Director Organisation Active Interests
G Boyd Boyd Insight Limited Director
A Offen Blis Functional Foods Limited Director
Closing Capital Limited Director
Edinburgh Equity Limited Director
Edinburgh Securities Limited Director/Shareholder
Mill Park Estate 60 Limited Director/Shareholder
Mill Park Estate 92 Limited Director/Shareholder
Maidston Land & Buildings Limited Shareholder
Offen Nominee Limited Director/Shareholder
Plaza Funds Management Limited Director
Taieri Investments Limited Director/Shareholder
Taieri Property Limited Director/Shareholder
G Plunket North Otago Irrigation Company Limited Director
Orokonui Ecosanctuary Limited Director
Dr B Richardson CertusBio Limited Director/Shareholder
CNS Biotechnology Limited Director
Otago Classic Spares Limited Director/Shareholder
Zircon Services Limited Director/Shareholder
Dr A Stewart Arable Food Industry Council Executive committee member
Foundation for Arable Research Chief Executive
Foundation for Arable Research Australia Director
Good Farming Practice Governance Group Member
MBIE Programme “Maximising the value of irrigation” Industry Advisory Group Chair
MfE Measure and Manage diffused nutrient losses from arable crops Governance Council Chair
MPI Pea Weevil Management Governance Council member
Pastoral Industry Forage Strategy Implementation Group member
Seed Industry Research Centre Advisory Board member
2020 Annual Report36
Use of Company information
There were no notices from Directors regarding the use of
Company information.
Indemnities and Insurance
Pursuant to s162 of the Companies Act 1993 and the
Company’s Constitution, the Company has entered into deeds
of access, insurance and indemnity, with the directors of the
Group to indemnify them to the maximum extent permitted
by law, against all liabilities which they may incur in the
performance of their duties as directors of any company within
the Group. Insurance cover extends to directors and officers for
the expenses of defending legal proceedings and the cost of
damages incurred. Specifically excluded are proven criminal
liability and fines and penalties other than those pecuniary
penalties which are legally insurable. In accordance with
commercial practice, the insurance contract prohibits further
disclosure of the terms of the policy. All Directors who voted
in favour of authorising the insurance certified that in their
opinion, the cost of the insurance is fair to the Company.
Donations
There were no donations made by the Company during the
year ended 31 March 2020 (2019: Nil).
Directors’ Interests continued
Directors’
Responsibility
Statement.
The Directors of Blis Technologies Limited are pleased to
present to shareholders the financial statements for the Group
for the year ended 31 March 2020.
The Directors are responsible for presenting financial
statements in accordance with New Zealand law and generally
accepted accounting practice, which fairly presents the
financial position of the Group as at 31 March 2020 and the
results of its operations and cash flows for the year ended on
that date.
The Directors consider the financial statements of the Group
have been prepared using accounting policies which have been
consistently applied and supported by reasonable judgements
and estimates and that all relevant financial reporting and
accounting standards have been followed.
The Directors believe that proper accounting records have been
kept which enable with reasonable accuracy, the determination
of the financial position of the Group and facilitate compliance
of the financial statements with the Financial Reporting Act
2013 and the Financial Markets Conduct Act 2013.
The Directors consider that they have taken adequate steps to
safeguard the assets of the Group, and to prevent and detect
fraud and other irregularities. Internal control procedures
are also considered to be sufficient to provide a reasonable
assurance as to the integrity and reliability of the financial
statements.
The Financial Statements are signed on behalf of the Board by:
Tony Offen Graeme Boyd
Chairman Director
27 May 2020 27 May 2020
Blis Technologies Limited37
5 Year Trend.
2020 2019 2018 2017 2016
($000) ($000) ($000) ($000) ($000)
Revenue 10,642 8,239 5,285 6,543 5,628
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 2,119 922 (427) 580 (293)
Depreciation and amortisation 513 525 610 608 556
Net interest expense 4 16 5 (4) (33)
Net profit after tax (NPAT) 1,602 381 (1,042) (24) (816)
Net debt 128 829 290 - -
Shareholder’s Equity 5,056 3,421 3,007 4,017 3,987
Total assets 7,058 5,201 3,888 4,500 4,860
Current assets 5,746 3,966 2,260 2,736 2,800
Current liabilities 1,642 1,651 712 483 873
Working capital 4,104 2,315 1,548 1,253 1,927
Net tangible assets (NTA) 4,311 2,856 2,164 2,899 2,644
Cash generated from operations 3,197 (583) 118 244 (511)
Number of shares on issue (‘000) 1,107,654 1,107,654 1,107,654 1,107,654 1,102,154
Earnings per share (EPS) – basic (cents) 0.14 0.03 (0.09) (0.00) (0.07)
Share price at 31 March 0.06 0.02 0.02 0.04 0.03
NTA per share (cents) 0.39 0.26 0.20 0.26 0.24
Cash conversion ratio
1
150.9% (63.2%) (27.6%) 42.1% 174.4%
Return on shareholders’ equity
2
31.7% 11.1% (34.7%) (0.6%) (28.6%)
Return on assets
3
23.2% 8.7% (24.7%) (0.6%) (16.8%)
Gearing ratio
4
2.5% 19.5% 8.8% - -
EBIT to revenue ratio 15.1% 4.7% (19.6%) (0.4%) (15.1%)
Current assets to current liabilities (times) 3.5 2.4 3.2 5.7 3.2
% CHANGE ON PRIOR YEAR
Revenue 29.2% 55.9% (19.2%) 16.3% 123.1%
EBITDA 129.8% 315.9% (173.6%) 298.0 % 68.2%
NPAT 320.5% 136.6% (4,241.7%) 97.1% 40.6%
EPS 320.5% 136.6% (4,241.7%) 97.1% 40.6%
1. Calculated as cash generated from operations divided by EBITDA.
2. Calculated as net profit after tax divided by closing shareholders’ equity.
3. Calculated as EBIT divided by average total assets.
4. Gearing ratio is calculated as net debt divided by the sum of net debt and shareholders’ equity.
2020 Annual Report382020 Annual Report38
Financial
Statements
2020
Blis Technologies Limited39
Consolidated Statement of
Comprehensive Income.
For the year ended 31 March 2020
Note 2020 2019
($000) ($000)
REVENUES
Revenue 2 (a) 10,642 8,239
Other income 2 (b) 217 167
Total Revenue and Other Income 10,859 8,406
EXPENSES
Distribution expenses 160 120
Marketing expenses 1,642 787
Occupancy expenses 85 164
Employee benefits 2,558 2,074
Raw materials and consumables 2,229 2,305
Operating expenses 2,553 2,553
Finance expenses 30 22
Total Expenses 2 (c) 9,257 8,025
SURPLUS / (DEFICIT) BEFORE TAX 2, 4, 5 1,602 381
Income tax expense 3 - -
SURPLUS / (DEFICIT) FOR THE YEAR 1,602 381
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME/(DEFICIT) FOR THE YEAR 1,602 381
Surplus /(deficit) for the year is attributable to:
Equity holders of the parent 1,602 381
Comprehensive income for the year is attributable to:
Equity holders of the parent 1,602 381
Earnings / (deficit) per Share:
Basic (cents per ordinary share) 15 0.14 0.03
Diluted (cents per ordinary share) 15 0.14 0.03
Net tangible assets per Share:
Basic (cents per share) 15 0.39 0.26
Diluted (cents per share) 15 0.39 0.26
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
2020 Annual Report40
Consolidated Statement of
Changes in Equity.
For the year ended 31 March 2020
Notes Share Retained Share option Total
Capital earnings/ Equity attributable
deficit reserve to Group
($000) ($000) ($000) ($000)
OPENING EQUITY – 1 APRIL 2018 37,338 (34,377) 46 3,007
Surplus / (deficit) for the year - 381 - 381
Other comprehensive income - - - -
Total comprehensive Income - 381 - 381
Equity contributions and distributions - - - -
Share option equity reserve 15 42 - (9) 33
42 - (9) 33
CLOSING EQUITY – 31 MARCH 2019 37,380 (33,996) 37 3,421
OPENING EQUITY – 1 APRIL 2019 37,380 (33,996) 37 3,421
Surplus / (deficit) for the year - 1,602 - 1,602
Other comprehensive income - - - -
Total comprehensive Income - 1,602 - 1,602
Equity contributions and distributions
Share option equity reserve 15 44 - (11) 33
44 - (11) 33
CLOSING EQUITY – 31 MARCH 2020 37,424 (32,394) 26 5,056
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
Blis Technologies Limited41
Consolidated
Balance Sheet.
As at 31 March 2020
Notes 2020 2019
($000) ($000)
ASSETS
Current Assets
Cash and short term deposits 6 3,214 924
Trade and other receivables 7 1,570 2,372
Prepayments 202 220
Inventory 8 685 371
NZX Bond 6 75 75
Foreign exchange contracts 21 (e) - 4
TOTAL CURRENT ASSETS 5,746 3,966
Non current Assets
Property, plant and equipment 9 567 669
Finite life intangible assets 10 404 566
Right-of-use assets 11 341 -
TOTAL NON CURRENT ASSETS 1,312 1,235
TOTAL ASSETS 7,058 5,201
LIABILITIES
Less Current Liabilities
Trade and other payables 12 1,520 929
Contract liability 2 - 22
Current borrowings 13 43 700
Lease liabilities 11 76 -
Foreign exchange contracts 21 (e) 3 -
TOTAL CURRENT LIABILITIES 1,642 1,651
Non Current Liabilities
Non current borrowings 13 85 129
Lease liabilities 11 275 -
TOTAL NON CURRENT LIABILITIES 360 129
TOTAL LIABILITIES 2,002 1,780
NET ASSETS 5,056 3,421
OWNERS EQUITY
Share capital 15 37,424 37,380
Retained earnings / (deficits) (32,394) (33,996)
Share option equity reserve 16 26 37
TOTAL EQUITY 5,056 3,421
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
2020 Annual Report42
Consolidated Statement
of Cashflows.
For the year ended 31 March 2020
Note 2020 2019
($000) ($000)
CASH FLOWS FROM OPERATING ACTIVITES
Cash was provided from / (applied to):
Receipts from customers 11,626 6,771
Interest received 26 6
Payments to suppliers and employees (8,425) (7,338)
Finance costs (30) (22)
Net cash inflow / (outflow) from operating activities 20 3,197 (583)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from / (applied to):
Capitalise intangible costs 10 (94) (55)
Purchase of property, plant and equipment 9 (73) (75)
Net cash inflow / (outflow) from investing activities (167) (130)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from / (applied to):
Drawdown of borrowings - 579
Repayment of borrowings (701) (40)
Repayment of lease liabilities (72) -
Receipt of share option 33 33
Net cash inflow / (outflow) from financing activities (740) 572
Net Increase / (Decrease) in cash held 2,290 (141)
Add cash and short-term deposits at start of period 924 1,059
Foreign exchange differences - 6
Balance at end of period 3,214 924
COMPRISED OF:
Cash and short-term deposits 3,214 924
3,214 924
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
Blis Technologies Limited43
1. BASIS OF REPORTING
Reporting Entity
The consolidated financial statements presented are those of
Blis Technologies Limited (the Company) and its subsidiary Blis
Functional Foods Limited (the Group).
The Group’s principal activity is developing healthcare products
based on strains of bacteria that produce bacteriocin activity for
sale in New Zealand and overseas.
Statutory Base
The Company is a profit-oriented entity, domiciled in New
Zealand, registered under the Companies Act 1993 and listed
on the New Zealand Stock Exchange. The Company is an FMC
reporting entity under the Financial Markets Conduct Act 2013.
The financial statements have been prepared in line with the
requirements of these Acts and the Financial Reporting Act
2013.
Basis of Preparation
The financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice
(NZ GAAP). They comply with the New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and other
applicable financial reporting standards as appropriate for
profit-oriented entities. The financial statements comply with
International Financial Reporting Standards (IFRS).
The Financial Statements were authorised for issue by the
Board of Directors on 27th May 2020.
Basis of Measurement
The financial statements have been prepared on the historical
cost basis, except for the derivative financial instruments that
are measured at fair value at the end of each reporting period as
explained in the relevant accounting policies.
Historical cost is based on the fair values of the consideration
given in exchange for assets.
Accounting policies are selected and applied in a manner which
ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that
the substance of the underlying transactions or other events is
reported.
Unless otherwise stated the accounting policies set out below
have been applied in preparing the consolidated financial
statements for the year ended 31 March 2020 and 31 March
2019.
Notes to and Forming
Part of the Consolidated
Financial Statements.
The financial statements are presented in thousands of
New Zealand dollars. The New Zealand dollar is the Group’s
functional currency.
Critical Judgements, Estimates and Assumptions
In the application of NZ IFRS, the Directors are required to make
judgements, estimates and assumptions about carrying values
of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based
on historical experience and various other factors that are
believed to be reasonable under the circumstance, the results of
which form the basis of making the judgements. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
Judgements made by the Directors in the application of NZ IFRS
that have significant effects on the financial statements and
estimates with a significant risk of material adjustments in the
next year include:
• If the product groupings to which the development
expenditure relate are not economically viable in the future
the development expenditure asset could be overstated.
• The Group determines whether finite life intangibles
are impaired at least on an annual basis. Where there is
an indication of impairment then an estimation of the
recoverable amount of the finite life intangible assets is
required. Determining the recoverable amounts of intangible
assets requires judgement in relation to the effects of
uncertain future events at balance date. Assumptions are
required with respect to future cash flows and discount rates
used. Refer note 10 for sensitivities and assumptions used.
• The determination of separate performance obligations
for the recognition of revenue. Refer to note 2 for further
information
• Tax Losses - The recognition of a deferred tax asset arising
from prior year tax losses and temporary differences is
dependent on generating future taxable profits.
No deferred tax asset has been recognised as at 31 March
2020 but this position will be reviewed in future periods as the
Company demonstrates a consistent track record of profitable
Group results. The Group’s ability to utilise tax losses is
explained in note 3.
2020 Annual Report44
Notes to and Forming Part of the Consolidated Financial Statements continued
Significant Accounting Policies
The principal accounting policies applied in the preparation and
presentation of the financial statements are set out below or in
the notes with the item to which they relate, where policies are
specific to certain transactions or balances.
These policies have been consistently applied unless otherwise
stated.
Basis of Consolidation
The Group financial statements incorporate the financial
statements of the Company and all entities controlled by the
Company (its subsidiaries) that comprise the Group, being Blis
Technologies Limited (the parent entity) and its subsidiary
Blis Functional Foods Limited. Control is obtained when the
Company has power over the investee, is exposed to or has
rights to variable returns from its investment, and has the ability
to use its power to affect returns. Consistent accounting policies
are employed in the preparation and presentation of the group
financial statements.
The results of subsidiaries acquired or disposed of during
the year are included in the Consolidated Statement of
Comprehensive Income from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Foreign Exchange
In the course of normal trading activities, the Group undertakes
transactions denominated in foreign currencies, hence
exposures to exchange rate fluctuations arise. Transactions in
currencies other than the New Zealand dollar are recognised at
the rate of exchange prevailing on the dates of the transactions.
Trade and other receivables, trade and other payables, the
Euro denominated bank account and the United States Dollar
(USD) denominated bank account balances are translated at the
exchange rates prevailing at the end of each reporting period
as sourced from the Reserve Bank of New Zealand. Exchange
differences are recognised in the income statement in the
period in which they occur.
Goods and Services Tax (GST)
All items in the balance sheet are stated exclusive of GST, with
the exception of receivables and payables, which include GST.
All items in the income statement are stated exclusive of GST.
The GST component of cash flows arising from investing and
financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flows.
New NZ IFRS Standards effective in the reporting period
All mandatory new or amended accounting standards were
adopted in the current year. This includes NZ IFRS 16 Leases. As
a result of this adoption, the Group had to change its accounting
policies and make certain adjustments as disclosed below.
Impact of initial application of NZ IFRS 16 Leases
NZ IFRS 16 is effective for annual periods beginning on or after
1 January 2019. The standard removes the distinction between
operating and finance leases as previously required under NZ
IAS 17 Leases (NZ IAS 17) and introduces a single model for
lessees which recognises all leases, except for short-term leases
of 12 months or less and leases of low value assets, on the
balance sheet through a right-of-use (ROU) asset and a liability
for the obligation to make lease payments. Lessor accounting
remains largely unchanged from NZ IAS 17 for the Group.
The Group reviewed leases where the Group is the lessee and
the leases primarily relate to leases for properties and office
equipment.
The Group adopted NZ IFRS 16 using the modified retrospective
approach with the ROU asset being equal to the lease liability as
at commencement date for all existing leases at 1 April 2019.
The Group has made use of the practical expedient available
on transition to NZ IFRS 16 not to reassess whether a contract
is or contains a lease. Accordingly, the definition of a lease in
accordance with NZ IAS 17 will continue to be applied to those
leases entered or modified before 1 April 2019. Comparative
numbers have not been restated.
Impact on Lessee Accounting
Former operating leases
NZ IFRS 16 changes how the group accounts for leases
previously classified as operating leases under NZ IAS 17, which
were off-balance-sheet.
Applying NZ IFRS 16, for all leases (except as noted below), the
Group:
(a) Recognises ROU assets and lease liabilities in the
consolidated balance sheet, initially measured at the
present value of future lease payments;
(b) Recognises depreciation of the ROU assets and interest
on lease liabilities in the consolidated statement of
comprehensive income; and
(c) Separates the total amount of cash paid into a principal
portion (presented within financing activities) and interest
(presented within operating activities) in the consolidated
statement of comprehensive income.
Blis Technologies Limited45
Notes to and Forming Part of the Consolidated Financial Statements continued
Lease incentives are recognised as part of the measurement
of the ROU assets and lease liabilities whereas under NZ IAS
17 they resulted in the recognition of a lease incentive liability,
amortised as a reduction of rental expense on a straight-line
basis.
Under NZ IFRS 16, ROU assets are tested for impairment in
accordance with NZ IAS 36 Impairment. This replaces the
previous requirements to recognise a provision for onerous
lease contracts.
For short-term leases and leases of low-value assets, the Group
has opted to recognise a lease expense on a straight-line
basis as permitted by NZ IFRS 16. This expense is presented
within occupancy costs in the consolidated statement of
comprehensive income.
Financial Impact of adopting NZ IFRS 16
The Group has applied the following practical expedients when
applying NZ IFRS 16 to leases previously classified as operating
leases under NZ IAS 17:
• The use of a single discount rate to a portfolio of leases with
similar characteristics;
• Not recognising ROU assets and liabilities for leases with less
than 12 months of lease term; and
• Not recognising ROU assets and liabilities if the underlying
leased asset is considered a low value asset.
Key judgement areas in applying the new standards are:
• The use of discount rates; and
• The assessment of whether options to extend or terminate a
lease will be exercised.
The discount rates used are the Group’s incremental borrowing
rates (IBR). The Group’s IBR is the expected borrowing rate
obtained from financial institutions as if the Group had
purchased the leased asset, with the term of the borrowing
similar to the lease term. The IBR rate applied to each leased
asset class are:
IBR %
Properties 6.00%
Office Equipment 6.00%
The assessment of whether a lease contract will be extended
or terminated at the end of the lease contract is dependent
on the asset class and type. For property leases, this will be
determined by the Group's intention to exercise a contractual
right of renewal at the end of the initial lease term. There were
no renewal options for office equipment.
Reconciliation of lease commitments to opening lease liability
as at 1 April 2019:
$’000
Operating lease commitments at 31 March 2019 476
Effect of discounting using incremental
borrowing rates at 1 April 2019 (108)
Extension options reasonably certain
to be exercised 55
Lease liabilities recognised at 1 April 2019 423
Analysed as:
Current 93
Non-current 330
The Group as a lessee
The Group assesses whether a contract is or contains a lease
at inception of the contract. The Group recognises a ROU
asset and a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except for short-
term leases and leases of low-value assets where the Group
recognises the lease payments as an other operating expense
on a straight-line basis over the term of the lease.
Lease Liabilities
Lease liabilities are initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate (IBR).
Lease payments included in the measurement of the lease
liability comprise:
• Fixed lease payments, less any lease incentives;
• Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
• The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and • Payments of
penalties for terminating the lease, if the lease term reflects
the exercise of an option to terminate the lease.
Lease liabilities are presented as a separate line in the balance
sheet and are subsequently measured by increasing the
carrying amount to reflect interest on the lease (using the
effective interest method) and reducing the carrying amount to
reflect the lease payments made.
2020 Annual Report46
Notes to and Forming Part of the Consolidated Financial Statements continued
The Group remeasures the lease liability if:
• The lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case
the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate;
• Lease payments changing due to changes in an index or rate,
in which case the lease liability is remeasured by discounting
the revised lease payments using the initial discount rate; or
• A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
ROU assets
ROU assets comprise of the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement date and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation
and impairment losses.
Wherever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised
and measured under NZ IAS 37. The costs are included in the
related ROU asset, unless those costs are incurred to produce
inventories.
ROU assets are depreciated over the shorter period of lease
term and useful life of the underlying asset. The estimated
useful lives of ROU assets are determined on the same basis as
similar owned assets within property, plant and equipment.
Depreciation starts at the commencement date of the lease.
ROU assets are presented as a separate line in the balance
sheet.
The Group applies NZ IAS 36 to determine whether a ROU asset
is impaired and accounts for any identified loss under the same
policy adopted for property, plant and equipment.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and ROU
asset. The related payments are recognised as an expense in
the period in which the event or condition that triggers those
payments occurs and are included in other operating expenses
in the income statement.
New and revised NZ IFRS Standards and Interpretations
Issued but not yet adopted
At the date of authorisation of these financial statements,
certain new standards and interpretations to existing
standards have been published but are not yet effective. The
Group expects to adopt other standards when they become
mandatory. None are expected to materially impact the
Group’s financial statements although may result in changes to
disclosure.
2. SURPLUS / (DEFICIT) FROM OPERATIONS
Policy
Revenue is recognised from the following major sources:
• Sale of goods;
• Right to access; and
• Grants.
Revenue is measured at the fair value of the consideration the
Group expects to be entitled to in accordance with customer
contracts and excludes amounts collected on behalf of third
parties.
Sale of Goods
The Group sells ingredients and finished goods to manufacturer
and wholesale customers. In addition to product sales, the
Group provides sales training and support to its customers. The
Group has determined that the sales training and support is not
a distinct performance obligation.
In addition to selling products to customers, the Group also
arranges delivery of the products to its customers. Where
control of the product passes to the customer on departure the
delivery services represent a separate performance obligation.
The Group is an agent in the performance of the delivery service
and the allocated revenue is recognised net of costs.
Revenue from the sale of goods is recognised when the Group
has transferred control of the goods to the customer, which
is typically at the point goods are dispatched. For some
customers, the customer does not obtain control until the goods
have been delivered to their premises. For these customers,
revenue is recognised at the date the goods are delivered. One
of the Group’s major customers has entered into a consignment
arrangement. Sales to this customer, are not recognised until
the sale is made to the end customer.
Rebates
The Group provides rebates to certain customers based on the
quantity of products purchased during the period. Rebates are
offset against revenue. To estimate the variable consideration
for the expected rebates, the Group applies the expected value
method. The Group recognises a refund liability for the expected
rebates.
Right to access
Right to access agreements with customers provide exclusive
rights to the customer for specified products throughout the
contract period.
Blis Technologies Limited47
Notes to and Forming Part of the Consolidated Financial Statements continued
Revenue from right to access agreements is recognised over
time, on a straight-line basis over the contract term as this
depicts the period of exclusive supply to the customer.
A material right is recognised as a separate performance
obligation where the customer has the right to extend the
access period at a discounted price. In such instances, the Group
recognises revenue when the rights are exercised or expired.
The material right is estimated based on the likelihood of the
customer exercising the option.
Contract liabilities
Revenue is recognised when all associated obligations have
been met. Where consideration has been received but the
associated obligations have not been met, for instance goods
have not yet been provided, it will be recognised as a contract
liability on the balance sheet.
Grant Income
Grant income is recognised when the Group has met all of
the requirements established by the grant. Grant income
that is receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate
financial support to the entity with no future required costs
are recognised as revenue of the period in which it becomes
receivable.
Interest Income
Interest income is accrued on a time basis, by reference to the
principal outstanding and the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset’s net carrying amount.
(a) Revenue
2020 2019
$’000 $’000
Revenue consists of the
following items:
Point in time recognition:
Sale of goods – domestic sales
Finished goods 1,663 1,187
Ingredients 45 39
Sale of goods – export sales
Finished goods 1,445 1,934
Ingredients 7,290 4,953
Over time recognition:
Right to access 199 126
10,642 8,239
The transaction price at 31 March 2020 allocated to unsatisfied
(or partially unsatisfied) performance obligations related to
contracts with a duration beyond one year is set out below:
2020 2019
$’000 $’000
Right to access (contract liability) - 22
Revenue recognised during the period that was included in the
contract liability balance at the beginning of the period was
$22,000 (2019: Nil).
For other revenue streams the original expected duration of
the contract is less than one year and therefore the Group
has elected not to disclose the transaction price allocated to
unsatisfied performance obligations.
(b) Other Income
2020 2019
$’000 $’000
Grant income 181 115
Other income 10 46
Interest income 26 6
217 167
(c) Expenses
2020 2019
$’000 $’000
This includes the following
specific expenses:
Director’s fees 248 259
Other operating expenses 1,778 1,673
Depreciation of property,
plant and equipment (note 9) 156 192
Depreciation of right of use assets
(note 11) 82 -
Amortisation of finite life
intangible assets (note 10) 256 333
Loss on disposal of property,
plant and equipment (note 9) 19 -
Reversal of allowance on
trade receivables (note 21 g) (6) -
Operating lease payments(*) 20 86
(*) Operating lease payments were recognised under NZ IAS 17 in the prior
year.
2020 Annual Report48
Notes to and Forming Part of the Consolidated Financial Statements continued
3. INCOME TAXES
Policy
Current tax
Current tax is calculated by reference to the amount of income
taxes payable or recoverable in respect of the taxable profit
or tax loss for the period. It is calculated using tax rates and
tax laws that have been enacted or substantively enacted by
reporting date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent it is unpaid (or
refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance
sheet liability method in respect of temporary differences
arising from differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding
tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the
extent that it is probable that sufficient taxable amounts will
be available against which deductible temporary differences or
unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised
if the temporary differences giving rise to them arise from the
initial recognition of assets and liabilities (other than as a result
of a business combination) which affects neither taxable income
nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the period when the liability is
settled or the asset is realised based on tax rates that have been
enacted or substantively enacted at reporting date.
Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is
also dealt with in equity.
(a) Income tax recognised in profit or loss
The prima facie income tax expense on pre-tax accounting profit
reconciles to the income tax expense in the financial statements
as follows:
2020 2019
$’000 $’000
Net surplus before tax 1,602 381
Income tax expense calculated at 28% 449 107
Non-deductible items 61 73
Temporary differences excluding
tax losses not recognised 14 (42)
Tax losses (recognised)/not recognised (524) (138)
Income tax expense - -
(b) Income tax recognised directly in equity
There was no current or deferred tax charged/ (credited) directly
to equity during the period.
(c) Deferred tax balances
The Group has an unrecognised deferred tax asset of $4,669,199
(2019: $5,183,474). The unrecognised deferred tax asset arises in
relation to temporary differences of $346,118 (2019: $336,836)
and gross tax losses of $15,439,574 (2019: $17,309,415) with a
tax effect of $4,323,081 (2019:$4,846,638). The tax losses may
be able to be carried forward and offset against future taxable
income (subject to meeting the requirements of the Income Tax
Act 2007). The availability of these tax losses to apply against
future income is contingent upon maintaining a minimum level
of shareholder continuity and is therefore highly uncertain.
4. REMUNERATION OF AUDITORS
2020 2019
$’000 $’000
Audit of the financial statements 70 65
Additional fees relating to 2019 audit 6 -
76 65
The auditor of Blis Technologies Limited is Deloitte Limited.
5. KEY MANAGEMENT PERSONNEL
COMPENSATION
The compensation of the Chief Executive Officer and other
senior management, being the key management personnel of
the entity, is set out below:
2020 2019
$’000 $’000
Short term employee 1,090 902
1,090 902
Blis Technologies Limited49
Notes to and Forming Part of the Consolidated Financial Statements continued
6. CASH AND SHORT-TERM DEPOSITS
Policy
Cash and short-term deposits
Cash and short-term deposits comprise cash on hand, demand
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value. Cash and short-term
deposits are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method.
NZX Bond
A short term deposit is held at Bank of New Zealand as security
for a bond issued to the NZX. These funds do not represent
operating cash reserves.
2020 2019
$’000 $’000
Cash 1,614 924
Short-term deposits 1,600 -
3,214 924
NZX bond 75 75
7. TRADE AND OTHER RECEIVABLES
Policy
Trade and other receivables
Trade and other receivables are initially recognised at fair value
and subsequently measured at amortised cost using the effective
interest method, less any provision for expected credit losses.
The Group applies the simplified approach to measuring
expected credit losses which uses a lifetime expected credit loss
allowance.
The measurement of expected credit losses is a function of the
probability of default, loss given default and the exposure at
default.
The expected credit losses on trade receivables are estimated
using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor’s current financial
position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors
operate and an assessment of both the current as well as the
forecast direction of conditions at the reporting date.
The allowance recognised is measured as the difference between
the asset’s carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate
computed at initial recognition.
2020 2019
$’000 $’000
Trade receivables 1,543 2,303
Allowance for expected
credit losses (note 21 g) (2) (8)
GST receivable 29 77
1,570 2,372
Trade receivables and other receivables are non-interest bearing
and receipt is normally on 30 to 60 day terms. Therefore,
the carrying value of trade debtors and other receivables
approximates its fair value.
8. INVENTORIES
Policy
Inventories are stated at the lower of cost and net realisable
value. Cost is determined using average cost. Net realisable
value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing,
selling and distribution.
2020 2019
$’000 $’000
Raw materials 549 277
Finished goods 136 94
685 371
9. PROPERTY, PLANT AND EQUIPMENT
Policy
All items of Property, Plant and Equipment are stated at cost
less accumulated depreciation, and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the
item. In the event that settlement of all or part of a purchase
consideration is deferred, cost is determined by discounting the
amounts payable in the future to their present value as at the
date of acquisition.
Depreciation is provided on property, plant and equipment.
Depreciation is calculated on a straight line basis so as to write
off the net cost of the asset over its expected useful life to its
estimated residual value. The following estimates of useful lives
are used in the calculation of depreciation:
Leasehold improvements 2 – 15 years
Furniture and fittings 2 – 15 years
Plant and equipment 3 – 12 years
2020 Annual Report50
Notes to and Forming Part of the Consolidated Financial Statements continued
2020 Accumulated Accumulated Accumulated Book
Cost Cost depreciation depreciation depreciation Value
1 April Additions/ 31 March 1 April Depreciation reversed on 31 March 31 March
2019 Transfers Disposals 2020 2019 expense disposal Transfer 2020 2020
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Leasehold improvements 367 2 (5) 364 (314) (6) 6 - (314) 50
Furniture and fittings 98 2 - 100 (96) (4) - - (100) -
Plant and equipment 1,667 69 (135) 1,601 (1,053) (146) 115 - (1,084) 517
2,132 73 (140) 2,065 (1,463) (156) 121 - (1,498) 567
2019 Accumulated Accumulated Accumulated Book
Cost Cost depreciation depreciation depreciation Value
1 April Additions/ 31 March 1 April Depreciation reversed on 31 March 31 March
2018 Transfers Disposals 2019 2018 expense disposal Transfer 2019 2019
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Leasehold improvements 343 24 - 367 (304) (10) - - (314) 53
Furniture and fittings 92 6 - 98 (73) (23) - - (96) 2
Plant and equipment 1,622 45 - 1,667 (894) (159) - - (1,053) 614
2,057 75 - 2,132 (1,271) (192) - - (1,463) 669
10. FINITE LIFE INTANGIBLE ASSETS
Policy
Intangible assets acquired separately are reported at cost
less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful lives, residual
values and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis.
Intellectual Property
The cost of intellectual property is written off until such time as
it becomes clear that future economic benefits attributable to
that expenditure will flow to the Group and there is sufficient
evidence to support the probability of the expenditure
generating sufficient future economic benefits.
Intellectual property including patents, trademarks and licenses
are considered finite life intangibles and are recorded at cost
less accumulated amortisation and impairment. Amortisation is
charged on a straight-line basis over the estimated useful life of
the intangible asset being 8 to 20 years. The estimated useful life
and amortisation method is reviewed at the end of each annual
reporting period.
Website
Following the initial investment, which is recorded at cost and
amortised over 3 years, the cost of further website development
is expensed as incurred.
Internally-generated Intangible Assets – Capitalised Product
Development Expenditure
Expenditure on research activities is recognised as an expense in
the period in which it is incurred.
An internally-generated intangible asset arising from
development (or from the development phase of an internal
project) is recognised if, and only if, all of the following have been
demonstrated:
• the technical feasibility of completing the intangible asset so
that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell
it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future
economic benefits
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
• the ability to measure reliably the expenditure attributable to
the intangible asset during its development.
The amount initially recognised for internally-generated
intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria
listed above. Where no internally-generated intangible asset can
be recognised, development expenditure is charged to profit or
loss in the period in which it is incurred.
Blis Technologies Limited51
Notes to and Forming Part of the Consolidated Financial Statements continued
Subsequent to initial recognition, internally-generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same
basis as intangible assets acquired separately. The useful life of
internally-generated intangible assets is 8 years.
Impairment of Assets
At each balance sheet date, the Group reviews the carrying
amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the
asset belongs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
IT, Website
Capitalised development
Trademarks Patents development and software Total
2020 $’000 $’000 $’000 $’000 $’000
Gross Carrying Amount
Balance at 1 April 2019 47 1,072 3,115 182 4,416
Additions 83 - - 11 94
Balance at 31 March 2020 130 1,072 3,115 193 4,510
Accumulated amortisation and impairment
Balance at 1 April 2019 3 689 2,998 160 3,850
Amortisation expense 8 140 84 24 256
Balance at 31 March 2020 11 829 3,082 184 4,106
Net Book Value at 31 March 2020 119 243 33 9 404
IT, Website
Capitalised development
Trademarks Patents development and software Total
2019 $’000 $’000 $’000 $’000 $’000
Gross Carrying Amount
Balance at 1 April 2018 - 1,064 3,115 182 4,361
Additions 47 8 - - 55
Balance at 31 March 2019 47 1,072 3,115 182 4,416
Accumulated amortisation and impairment
Balance at 1 April 2018 - 553 2,849 115 3,519
Amortisation expense 3 136 149 45 333
Balance at 31 March 2019 3 689 2,998 160 3,850
Net Book Value at 31 March 2019 44 383 117 22 566
of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in profit
or loss immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating
unit) in prior years.
The Group has determined that it is inappropriate to capitalise
any further development costs on products that are now in
commercial production or website development costs.
2020 Annual Report52
Notes to and Forming Part of the Consolidated Financial Statements continued
Right-of-use assets
Properties Office Equipment Total
2020 $’000 $’000 $’000
As at 1 April 2019 401 22 423
Additions - - -
Terminations - - -
Depreciation expense (76) (6) (82)
Net Book Value as at 31 March 2020 325 16 341
Lease Liabilities – Maturity Analysis
2020
$’000
Lease Liabilities under NZ IFRS 16
Less than one year 76
Between one and five years 141
More than five years 134
351
Current 76
Non-Current 275
Total 351
Trademarks are amortised over their estimate useful lives, which
is on average 10 years.
Patents are amortised over their estimated useful lives, which is
on average 20 years.
The amortisation period for development costs incurred on the
Group’s K12 and M18 product development is 8 years.
The amortisation period for the development costs incurred on
the Group’s IT, website and software development is 3 years
No impairment losses have been recorded in the current year
(2019: Nil).
Capitalised product development expenditure relates to
costs incurred in relation to the development of ingredient,
intermediate and food products containing BLIS, and the
associated regulatory approval processes.
Impairment test for Intangible Assets
For the purposes of preparing these accounts, the Board
reviewed the intangible assets and have determined that there is
no impairment of any intangible assets.
The Group is considered to be one cash-generating unit.
The calculation of the recoverable amount has been determined
based on a value-in-use calculation that uses cash flow
projections based on the financial forecasts prepared by
management covering a five year period.
The recoverable amount calculations are most sensitive to
assumptions regarding growth rate, contribution margins and
the discount rate. Key assumptions used in the value-in-use
calculation are:
• Annual sales growth rate of between 5% - 12% (2019: 0% - 6%)
• Contribution margins of 61% - 65% (2019: 73%)
• Pre-tax discount rate of 17.4% (2019: 17.4% pre tax)
• Terminal growth rate of 2% (2019: 2.5%)
The calculation supports the carrying amount of intangible
assets. Excluding costs associated with new growth or
development activities:
• a sales growth rate of 0% would not have resulted in an
impairment loss
• a reduction of contribution margins by 5% would not have
resulted in an impairment loss
• a 5% increase in the discount rate would not have resulted in
an impairment loss
The recoverable amount is sensitive to each of these
assumptions. If however sales growth and/or contribution
margins fall short of projections, the recoverable amount of the
capitalised product development and patent expenditure may
be less than the carrying value.
11. LEASES
Policy
The Group as a lessee
The Group leases certain property, plant and equipment. The
Group recognises a right-of-use asset and a corresponding lease
liability with respect to all lease arrangements in which it is
the lessee, except for short-term leases and leases of low value
assets where the Group recognises the lease payments as an
other operating expense on a straight-line basis over the term of
the lease.
Blis Technologies Limited53
Notes to and Forming Part of the Consolidated Financial Statements continued
The Group leases various properties and office equipment
under non-cancellable leases expiring within two to eleven
years. The leases have varying terms and have no option to
purchase in respect to the leased equipment in the financial
year ended 31 March 2020.
2020
$’000
Amounts Recognised in consolidated
statement of comprehensive income:
Depreciation of right-of-use assets 82
Interest expense on lease liabilities 23
Expense relating to short-term leases 17
Expense relating to low value assets 3
The total cash outflow for leases in 2020 was $115,388 (2019:
$94,688)
12. TRADE AND OTHER PAYABLES
Policy
Trade Payable
Trade payable are initially measured at fair value and
subsequently measured at amortised cost using the effective
interest rate method.
Employee Benefits
Provision is made for benefits accruing to employees in respects
of wages and salaries and annual leave when it is probable
that settlement will be required and they are capable of being
measured reliably. Provisions are initially measured at fair
value and subsequently measured at amortised cost using the
effective interest rate method.
Provisions made in respect of employee benefits expected to
be settled within 12 months, are measured at their nominal
values using the remuneration rate expected to apply at the
time of settlement. Provisions made in respect of employee
benefits which are not expected to be settled within 12 months
are measured at the present value of the estimated future
cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
Refund Liabilities
Refund liabilities are initially measured at fair value and
subsequently measured at amortised cost using the effective
interest rate method.
2020 2019
$’000 $’000
Trade payable 1,222 674
Employee entitlements 295 224
Refund liabilities 3 31
1,520 929
13. BORROWINGS
Policy
Borrowings are recognised initially at fair value less directly
attributable transaction costs and subsequently measured at
amortised cost using the effective interest method.
2020 2019
$’000 $’000
Asset finance 128 171
Insurance premium funding - 85
Trade credit loan - 573
Total borrowings 128 829
2020 2019
$’000 $’000
Current borrowings 43 700
Non-current borrowings 85 129
Total borrowings 128 829
Current borrowings include an undrawn trade credit loan facility
with the Bank of New Zealand that has a base limit of $550,000.
The effective interest rate of the trade credit loans is between
6.76% - 7.43% (2019: 6.4% - 7.48%).
Asset Finance loan with the Bank of New Zealand was utilised
to finance the purchase of the Natoli tablet press. The loan has
an effective interest rate of 5.21% (2019: 6.04%). The term of this
loan is over 60 months with the final payment due December
2022. The loan is secured over the Natoli tablet press, purchased
for $293,479.
Security
The banking facilities from Bank of New Zealand are secured by
general security agreement over all present and after acquired
property of Blis Technologies Limited. There is assignment of
Trade Credit Insurance Policy covering export receivables and
specific security (set off and charge) over Term Deposit funds to
secure NZX Bond.
14. INVESTMENT IN SUBSIDIARY
Balance Principal
Percentage held date activity
2020 2019
Blis Functional
Foods Limited 100% 100% 31 March Non-trading
2020 Annual Report54
Notes to and Forming Part of the Consolidated Financial Statements continued
15. SHARE CAPITAL
2020 2019
No. of shares $’000 No. of shares $’000
Balance at the beginning of the year fully paid) 1,107,653,565 37,380 1,107,653,565 37,338
Shares pursuant to the CEO share plan - 44 - 42
Balance at the end of the year 1,107,653,565 37,424 1,107,653,565 37,380
All 1,107,653,565 ordinary shares are issued and carry equal voting rights. All issued shares participate equally in any dividend
distribution or any surplus on winding up of the Company.
On 2 June 2016, 5,500,000 shares were issued to Mr Brian Watson, Chief Executive of the Company. The shares were issued at a price of
$0.0299 per share. Details of this transaction is shown in note 16.
Policy
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received other than in respect to the CEO share plan refer note 16.
2020 2019
Cents Cents
Basic earnings per share per share per share
Basic earnings (deficit) per share 0.14 0.03
The earnings and weighted average number of ordinary outstanding
shares used in the calculation of basic earnings per share are as follows:
2020 2019
$’000 $’000
Net earnings / (deficit) 1,602 381
2020 2019
No. No.
Weighted average number of ordinary shares for the purpose of basic earnings per share 1,107,653,565 1,107,653,565
2020 2019
Cents Cents
Diluted earnings per share per share per share
Diluted earnings (deficit) per share 0.14 0.03
The earnings and weighted average number of outstanding ordinary
shares used in the calculation of diluted earnings per share are as follows:
2020 2019
$’000 $’000
Net earnings / (deficit) 1,602 381
2020 2019
No. No.
Weighted average number of ordinary shares for the purpose of diluted earnings per share 1,107,653,565 1,107,653,565
Blis Technologies Limited55
Notes to and Forming Part of the Consolidated Financial Statements continued
Net tangible assets
2020 2019
Cents Cents
per share per share
Net tangible assets/ (liabilities) per share at year end 0.39 0.26
The net tangible assets and number of outstanding ordinary shares
used in the calculation of net tangible assets per share are as follows:
2020 2019
$’000 $’000
Net tangible assets 4,311 2,856
2020 2019
No. No.
Number of ordinary shares held at 31 March 2020 1,107,653,565 1,107,653,565
As at 31 March 2020 the net tangible asset per share was 0.39 (2019: 0.26 cents).
2020 2019
$’000 $’000
Total assets 7,058 5,202
Less intangible assets (404) (566)
Less ROU asset (341) -
Less total liabilities (2,002) (1,780)
Net tangible assets 4,311 2,856
Number of shares outstanding (‘000) 1,107,654 1,107,654
Net tangible assets per share (cents) 0.39 0.26
16. RELATED PARTY TRANSACTIONS
During the year, BLIS products were sold to the following related
parties (excluding web sales):
Associate Entity Director 2020 2019
P F Fennessy P F Fennessy - $293
Sales to related parties are made at the Group’s usual list prices,
less average discounts of 20%. Product seconds are also made
available to the staff and Board members for personal use at no
charge.
CEO Share option and issue of shares to the CEO
The Company entered into a Subscription Agreement and
issued 5,500,000 new ordinary shares to the CEO, Brian Watson,
on 2 June 2016. The shares were issued for cash consideration
of 2.99 cents per share being an aggregate $164,500, which
was satisfied by way of a contemporaneous interest free loan
provided by the Company to the CEO for an aggregate amount
equivalent to the subscription price for the shares.
The loan is secured by a lien on the issued shares and repayable
in equal annual instalments commencing on the 1st of
December 2017 with the final instalment due on 1 December
2021.
The shares were issued at 90% of the volume weighted average
share price for the 5 trading days prior to 1 June 2016. The issue
price was considered by the Directors of the Company to be
equivalent to the price that the tranche of shares would have
been issued to an independent third party at the time of issue.
The Subscription Agreement provides security against the loan
through a charge on the shares. The appropriate approach
consistent with the relevant accounting standard is to treat the
entire arrangement as a share option.
Using the Black Scholes option pricing model for the CEO
Share Plan at an implied volatility of 32% and referenced to the
prevailing share price of 3.32 cents on 2 June 2016 yielded an
aggregate option value of $54,517. This amount was treated as
an expense.
2020 Annual Report56
Notes to and Forming Part of the Consolidated Financial Statements continued
As a result of the charge to the Income Statement, a CEO Share
Option Reserve was created in the Consolidated Balance Sheet.
Upon receipt of each of the scheduled loan repayment the
notional option value associated with each tranche transfers
from the CEO Share Plan Reserve to Share Capital and the
amount of each loan repayment recorded to equity to represent
the consideration received for each tranche of shares issued to
the CEO.
Consideration of $32,900 was received for the third tranche of
shares in November 2019 (second instalment in November 2018:
$32,900, first instalment in November 2017 $32,900).
Fair Value of Share Options
The fair value of the share options granted during the 2017
financial year was $54,517. Options were priced using the Black-
Inputs to the model:
Option Series 1 2 3 4 5
Grant date weighted average share price $0.0322 $0.0322 $0.0322 $0.0322 $0.0322
Exercise price $0.0299 $0.0299 $0.0299 $0.0299 $0.0299
Expected volatility 31.93% 31.93% 31.93% 31.93% 31.93%
Option life (years) 1.5 2.5 3.5 4.5 5.5
Dividend yield 0% 0% 0% 0% 0%
Risk free interest rate 2.07% 2.01% 2.00% 2.06% 2.02%
Final exercise date 1/12/17 1/12/18 1/12/19 1/12/20 1/12/21
Scholes option pricing model. Expected volatility is based on
the historical share price over the past 5 years, consistent with
the options lives, factoring in a step change in the 9 months
prior to grant date.
No allowance for early exercise was incorporated into the fair
value calculation as it was assumed that the CEO would exercise
the options at the latest exercise date.
There are no market or service conditions.
The fair value model is most susceptible to changes in the
expected volatility. Had an expected volatility of 45% been
utilised, the fair value of the share options would have been
$69,000.
17. COMMITMENTS FOR EXPENDITURE
As at 31 March 2020 there Is no capital expenditure
commitments (2019: $nil)
18. CONTINGENT ASSETS AND
CONTINGENT LIABILITIES
There were no material contingent assets or contingent
liabilities at 31 March 2020 (2019: $Nil).
19. SEGMENTAL REPORTING
19.1 Operating segments
The Group is internally reported as a single operating segment
to the chief operating decision-maker.
19.2 Revenue from major products and services
The Group’s revenues from its major products and services were
as follows:
2020 2019
$’000 $’000
BLIS products 10,642 8,239
Non-core business 217 167
Total Revenue and Other Income 10,859 8,406
Non-core business includes grant revenue and contract
manufacturing revenue of non-BLIS branded products.
19.3 Information about geographical areas
The Group operates in 3 principal geographical areas, Asia
Pacific, Europe Middle East and Africa (EMEA) and North
America.
The Group’s revenue from external customers and information
about its assets by geographical location (of the customer) are
detailed below:
Blis Technologies Limited57
Notes to and Forming Part of the Consolidated Financial Statements continued
19.3 Information about geographical areas continued
Revenue from Non-current
external customers assets
2020 2019 2020 2019
$’000 $’000 $’000 $’000
New Zealand 1,708 1,180 1,312 1,235
Asia Pacific
(excl. NZ) 2,010 2,866 - -
EMEA 3,964 2,971 - -
North America 2,960 1,222 - -
Total revenue 10,642 8,239 1,312 1,235
2020 2019 2020 2019
$’000 $’000 $’000 $’000
Grant revenue 181 115 - -
Other revenue 10 46 - -
Interest revenue 26 6 - -
Total revenue &
other income 10,859 8,406 1,312 1,235
Included in revenue are revenues of $3,923k, $2,190k and 1,034k
(2019: $2,945k, $1,652k and $991k) which arose from sales to
the Group’s three largest customers.
Web sales are allocated to the region where the end consumer
is based.
20. RECONCILIATION OF NET SURPLUS
/(DEFICIT) WITH CASHFLOWS FROM
OPERATING ACTIVITIES
Policy
For the purpose of the cash flow statement, cash and
cash equivalents includes cash on hand and in banks and
investments in money market instruments net of outstanding
bank overdrafts.
The cash flow statement is prepared exclusive of GST, which is
consistent with the method used in the consolidated statement
of comprehensive income.
Definition of terms used in the cash flow statement:
Operating activities include all transactions and other events
that are not investing or financing activities.
Investing activities are those activities relating to the acquisition
and disposal of current and non-current investments and any
other non-current assets.
Financing activities are those activities relating to changes in
the equity and debt capital structure of the Group and those
activities relating to the cost of servicing the Group’s equity.
2020 2019
$’000 $’000
Net surplus /(Deficit) for the year 1,602 381
Adjustments for non-cash items:
Amortisation 256 335
Depreciation property,
plant and equipment 156 192
Depreciation right of use assets 82 -
Foreign exchange loss / (gain) 9 (5)
ECL provision (6) -
Loss /(gain) on fair value of
foreign exchange contracts 3 (4)
Loss on disposal of fixed assets 19 -
2,121 897
Movements in working capital
Trade and other receivables 797 (1,682)
Prepayments 18 (132)
Inventories (308) (28)
Trade payable and contract liability 569 362
1,076 (1,480)
Net cash inflow/ (outflow)
from operating activities 3,197 (583)
21. FINANCIAL INSTRUMENTS
Policy
Financial Instruments
Financial assets and financial liabilities are recognised on the
Group’s Balance Sheet when the Group becomes a party to the
contractual provisions of the instrument.
All of the Group’s financial assets (excluding derivative financial
assets) are measured at amortised cost. Foreign exchange
contracts are measured at fair value, all of the Group’s other
financial liabilities are measured at amortised cost.
(a) Financial risk management objectives
Exposure to credit, interest rate, foreign currency and liquidity
risks arises in the normal course of the Group’s business.
The Group does not enter into derivative financial instruments
for speculative purposes. The Group utilises forward cover
on confirmed foreign currency transactions. Specific risk
management objectives and policies are set out below.
2020 Annual Report58
Notes to and Forming Part of the Consolidated Financial Statements continued
(b) Capital risk management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern while maximising the return
to stakeholders through the optimisation of debt and equity.
The capital structure of the Group comprises issued capital
reserves, share option equity reserve and retained earnings as
disclosed in the Statement of Changes in Equity.
The Group’s Board of Directors reviews the capital structure on
a regular basis.
The Group is not subject to externally imposed capital
requirements.
The Group’s overall strategy remains unchanged from 2019.
(c) Market risk
Market risk is the potential for change in the value of financial
instruments caused by a change in the value, volatility or
relationship between market risks and prices. Market risk arises
from the mismatch between assets and liabilities. The Group’s
activities expose it primarily to market risk associated with
changes in foreign currency rates and interest rates as set out
below. These risks are measured using sensitivity analysis. The
mechanisms for managing these risks are set out below. The
Group enters into foreign exchange contracts to manage its
exposure to foreign currency transactions, there have been no
changes during the year to the Group’s exposure to such risks or
the manner in which the risks are measured and managed.
(d) Interest rate risk
The Group is exposed to interest rate risk as from time to time
it borrows funds at floating interest rates and also invests cash
in short term deposits at fixed interest rates. Fair value interest
rate risk is the risk that the value of a financial instrument will
fluctuate due to changes in market interest rates.
Investments and borrowings at fixed interest rates expose the
Group to fair value interest rate risk. The Group does not hedge
this risk. Cash flow interest rate risk is the risk that the cash
flows from a financial instrument will fluctuate because of
changes in market interest rates. Borrowings issued at variable
interest rates expose the Group to cash flow interest rate risk.
The Group does not hedge this risk.
(e) Foreign exchange risk
In the course of normal trading activities, the Group undertakes
transactions denominated in foreign currencies; hence exposures
to exchange rate fluctuations arise. The Group enters into foreign
exchange contacts on certain sales denominated in foreign
currencies to economically hedge the foreign exchange risk
associated with the timing between the date of sale and receipt of
payment. The Group has not adopted hedge accounting.
The carrying amount of the Group’s foreign currency
denominated monetary assets are as follows:
2020 2019
$’000 $’000
Euro 1 2
United States dollar 1 2
The table below details the notional principal amounts and remaining terms of foreign exchange contracts outstanding
at reporting date:
Average contract rate Foreign currency Nominal contract Value Fair value asset
/(liability)
2020 2019 2020 2019 2020 2019 2020 2019
$’000 $’000 $’000 $’000 $’000 $’000
Euro
Less than 1 year 0.5297 0.5848 460 3 472 3 12 -
USD
Less than 1 year 0.6324 0.6764 281 537 266 541 (15) 4
741 540 738 544 (3) 4
Blis Technologies Limited59
Notes to and Forming Part of the Consolidated Financial Statements continued
The above tables express foreign currency amounts in New
Zealand dollar equivalents using the exchange rates at 31 March
2020 and 31 March 2019. The rates applied at 31 March 2020
were:
2020 2019
EUR 0.5429 0.6073
USD 0.5987 0.6817
The fair value of the foreign exchange contracts is based on a
discounted cash flow analysis using observable market data and
is a level 2 fair value measurement.
Foreign exchange rate sensitivity
Reasonable fluctuations in foreign exchange rates were
determined based on a review of the last two years’ historical
movements. A movement of plus or minus 10% has therefore
been applied to the exchange rates to demonstrate the
sensitivity to foreign currency risk of the Group.
The following sensitivity is based on the foreign currency risk
exposures in existence at balance date. The impact of a plus or
minus 10% foreign exchange movement on New Zealand dollars
against all trading currencies, with all other variables held
constant, is illustrated below:
-10% +10%
2020 2019 2020 2019
$’000 $’000 $’000 $’000
Surplus / (deficit)
before tax (86) (56) 60 53
(f) Other price risk
The Group is not exposed to substantial other price risk arising
from financial instruments.
(g) Credit risk
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss to the
Group. Financial instruments which potentially subject the
Group to credit risk, principally consist of bank balances and
trade and other receivables.
In the normal course of business, the Group is exposed to
counterparty credit risk. The maximum exposure to credit
risk is equal to the carrying value of cash and short term
deposits, trade and other receivables and transactions with
financial institutions (derivative financial instruments). The
Group requires payment of deposits prior to production by
high credit risk customers and carries trade credit insurance
for its four largest customers. The Group, as a result of the
markets in which they operate, can be exposed to significant
concentrations of credit risk from trade receivables. They
do not require any collateral or security to support financial
instruments as these represent deposits with, or loans to, banks
and other financial institutions with high credit ratings.
2020 2019
$’000 $’000
Cash and short term deposits 3,214 924
NZX bond 75 75
Trade receivables (net of loss allowance) 1,541 2,295
GST receivable 29 77
4,859 3,371
Ageing receivables breakdown
2020 Allowance
Gross for expected
amounts credit Net
receivable losses balance
$’000 $’000 $’000
Current 1,311 - 1,311
0 – 30 days (past due) 97 - 97
31 – 60 days (past due) 78 - 78
Greater than 60 days
(past due) 57 (2) 55
Total past due 232 (2) 230
Total trade receivables 1,543 (2) 1,541
2019 Allowance
Gross for expected
amounts credit Net
receivable losses balance
$’000 $’000 $’000
Current 2,007 - 2,007
0 – 30 days (past due) 141 - 141
31 – 60 days (past due) 73 - 73
Greater than 60 days (past due) 82 (8) 74
Total past due 296 (8) 288
Total trade receivables 2,303 (8) 2,295
At 31 March 2020, trade receivable includes an amount of
$633k (2019: $1,047k) due from one customer and $246k from
another customer (2019: $276k from another customer). All of
the Group’s bank accounts are held with Bank of New Zealand.
Otherwise the Group does not have any other concentrations of
credit risk
(h) Liquidity risk management
Ultimate responsibility for liquidity risk management rests
with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of
the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk
by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows and matching the maturity
2020 Annual Report60
Notes to and Forming Part of the Consolidated Financial Statements continued
profiles of financial assets and liabilities. The Group also has
approved trade funding facilities with a base limit of up to $550k
which are linked to customer specific limits. As at 31 March 2020
the facility was not drawn down (2019: $573k), this is included in
Current Borrowings.
The maturity profiles of the Group’s interest-bearing
investments and borrowings are disclosed later in this note.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual
maturity for non-derivative financial assets and financial
liabilities. The tables have been drawn up based on the
undiscounted contractual cash flow of the financial assets and
financial liabilities including interest that will accrue to those
assets or liabilities.
2020 Weighted
average YEARS
effective
interest rate < 1 1 - 2 2 - 3 3 - 4 4 - 5 5 + Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial assets at amortised cost
Cash and short term deposits 1.32% 3,214 - - - - - 3,214
NZX bond 3.10% 75 - - - - - 75
Trade receivables - 1,541 - - - - - 1,541
GST receivable - 29 - - - - - 29
4,859 - - - - - 4,859
Financial liabilities at amortised cost
Trade payables - 1,222 - - - - - 1,222
Borrowings 5.21% 51 51 38 - - - 140
Lease liabilities 6.00% 95 91 35 30 30 155 436
1,368 142 73 30 30 155 1,798
2019 Weighted YEARS
average effective
interest rate < 1 1 - 2 2 - 3 3 - 4 4 - 5 5 + Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial assets at amortised cost
Cash and short term deposits 0.48% 924 - - - - - 924
NZX bond 2.15% 75 - - - - - 75
Trade receivable - 2,295 - - - - - 2,295
GST receivable - 77 - - - - - 77
Total 3,371 - - - - - 3,371
Financial liabilities at amortised cost
Trade payable - 929 - - - - - 929
Contract liability - 22 - - - - - 22
Borrowings 6.91% 711 51 51 38 - - 851
Total 1,662 51 51 38 - - 1,802
Blis Technologies Limited61
Notes to and Forming Part of the Consolidated Financial Statements continued
(i) Fair value of financial instruments
The fair values of financial assets and financial liabilities are
determined as follows:
• the fair value of financial assets and financial liabilities with
standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market
prices; and
• The fair value of other financial assets and financial liabilities
(excluding derivative instruments) are determined in
accordance with generally accepted pricing models based on
discounted cash flow analysis using prices from observable
current market transactions and dealer quotes for similar
instruments.
The Directors consider that the carrying amount of financial
assets and financial liabilities recorded at amortised cost in the
financial statements approximates their fair values.
22. EVENTS AFTER BALANCE DATE
The outbreak of COVID-19 and the subsequent quarantine
measures imposed by the New Zealand and other governments
as well as the travel and trade restrictions imposed by New
Zealand and other countries in early 2020 have caused
disruption to businesses and economic activity.
The Group’s manufacturing and elements of its scientific
services are considered an essential service and the Group
was able to continue its manufacturing activities and supply
products to New Zealand and international customers
throughout the Level 4 and Level 3 lockdown periods. The
lockdown period began on 26 March 2020 and ran through until
13 May 2020. While research and development activities were
initially paused for the Level 4 lockdown, these were able to
resume from Level 3.
In light of the continuation of the Group’s manufacturing
activities after the reporting date, the Group has been able to
continue to operate largely business as usual and fulfill orders in
line with budget in April and May 2020.
As the situation remains fluid (due to evolving changes in
government policy and evolving business and customer
reactions thereto) as at the date these financial statements are
authorised for issue, the directors considered that the financial
effects of COVID-19 on the Group's consolidated financial
statements cannot be reasonably estimated for future financial
periods.
No other matter or circumstance has occurred subsequent to
year end that has significantly affected, or may significantly
affect, the operations of the Company, the results of those
operations or the state of affairs of the entity in subsequent
financial years. (2019: none).
2020 Annual Report62
The Company’s ordinary shares are listed on the NZX Limited Main Board (NZSX).
As at 31 March 2020 the total number of issued ordinary shares in the Company was 1,107,653,565
1. Substantial product holders
The following substantial product holder information is given pursuant to section 293 of the Financial Markets Conduct Act 2013. As at 31
March 2020 details of the substantial product holders of the Company and their relevant interests in the ordinary shares of the Company
are as follows:
Name of Substantial product holder Shareholding as at 31 March 2020 % of issued share capital
Leveraged Equities Finance Limited 169,674,534 15.32%
Wen Yi (Uob Kay Hian Private Limited) 64,565,824 5.83%
2. Spread of security holders at 31 March 2020 - Ordinary shares
Number of Percentage of Percentage of
financial product holders financial product holders shares held
1 - 50,000 1,066 45.77% 2.34%
50,001 - 100,000 33 18.59% 3.13%
100,001 - 150,000 169 7.26% 1.95%
150,001 - 200,000 135 5.80% 2.22%
200,001 - 300,000 135 5.80% 3.11%
300,001-500,000 138 5.93% 5.07%
500,001 - 1,000,000 101 4.34% 6.38%
1,000,001 - 5,000,000 123 5.28% 22.45%
5,000,001 and above 29 1.25% 53.34%
2,329 100% 100%
Additional Stock
Exchange Information.
For the year ended 31 March 2020
Blis Technologies Limited63
Additional Stock Exchange Information continued
3. Twenty largest equity financial product holders
The names of the 20 largest holders of each class of quoted equity security as at 31 March 2020 are listed below.
Top 20 shareholders Number of issued ordinary shares Percentage issued
Leveraged Equities Finance Limited 169,674,534 15.32%
(Wen Yi) Uob Kay Hian Private Limited 64,565,824 5.83%
Mingchun Qiu 30,000,000 2.71%
Michael Herbert Bird 26,000,000 2.35%
Custodial Services Limited 24,388,928 2.20%
Mark Alexander Stevens & Wendy Joanne Stevens & W M C Trustees Limited 24,094,577 2.18%
Asia Pacific Partners Limited 21,850,878 1.97%
Hui Ai Adriana Tong & Morlan Tong 21,778,179 1.97%
New Zealand Depository Nominee 20,824,697 1.88%
Stephen Patrick Ward & Julie Patricia Ward & James Michael Ward 20,565,344 1.86%
Xuqi Wu & Yaohong Shen 20,322,175 1.83%
Phaben Holdings Limited 15,243,436 1.38%
New Zealand Central Securities 14,536,587 1.31%
Anthony Paul Offen & Bilinda Jane Offen & Downie Stewart Trustee Limited 11,157,388 1.01%
Bilinda Jane Offen 10,000,000 0.90%
Edinburgh Securities Limited 10,000,000 0.90%
Richard Mark Keenan 9,770,308 0.88%
Forsyth Barr Custodians 7,897,889 0.71%
JBWERE (Nz) Nominees Limited 7,650,313 0.69%
Jennbring Fruit Ltd 7,388,712 0.67%
537,709,769 48.54%
4. Credit rating
The Company does not currently have a credit rating.
5. NZX matters
No waivers were granted by NZX with respect to the Company, or relied upon by the Company during the 12 month period from 1 April
2019 to 31 March 2020.
2020 Annual Report64
Independent Auditor’s Report
To the Shareholders of Blis Technologies Limited
Opinion We have audited the consolidated financial statements of Blis Technologies Limited (the
‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet
as at 31 March 2020, and the consolidated statement of comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 39 to 61,
present fairly, in all material respects, the consolidated financial position of the Group as at
31 March 2020, and its consolidated financial performance and cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the
Company or any of its subsidiaries, except that partners and employees of our firm deal with
the Company and its subsidiaries on normal terms within the ordinary course of trading
activities of the business of the Company and its subsidiaries.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to
our attention during the audit would in our judgement change or influence the decisions of
such a person (the ‘qualitative’ materiality). We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $110,000
($2019: $90,000).
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs, trademarks and patents in respect of
ingredients for the Group’s products. These are included in
the balance sheet as intangible assets.
The total carrying value of intangible assets at 31 March 2020
is $0.404m as shown in the Consolidated Balance Sheet and
note 10, of which $0.395m relates to capitalised development
costs, trademarks and patents.
The carrying value of intangible assets is particularly
judgemental given its dependency on forecasts of revenue
growth, contribution margins and a relevant discount rate.
The impairment of intangible assets is a key audit matter due
to the complexity of auditing the judgements and estimates
involved in determining revenue forecasts used by the Group
to assess the recoverable amount of these assets. If the
Group is unable to produce sustainable operating cashflows,
this affects the carrying value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained
in note 10.
Our procedures focused on evaluating the appropriateness
of the significant judgements and assumptions that relate
to revenue forecasts and operating cash flows included in
the impairment model.
Our procedures included, amongst others:
• Obtaining the Group’s impairment model and
gaining an understanding of key assumptions and
judgements underlying the model.
• Assessing the integrity of the value in use
calculation, including the mathematical accuracy of
the underlying model.
• Assessing the impairment model for consistency
with the prior year and determining whether any
significant changes to the model were appropriate.
• Challenging the reasonableness of the key
assumptions including those driving the cash flows
underpinning the analysis, by:
o Comparing historical budget forecasts against
actual results.
o Comparing forecast growth to business plans
approved by the Board, including the Group’s
consideration of any negative impacts of COVID-
19.
o Engaging an internal valuation expert to assess
the appropriateness of the impairment model and
benchmark the Group’s discount rate by
comparing to an independently developed
discount rate using publicly available market data
for similar entities.
• Performing sensitivity analysis on the model by
varying key assumptions such as revenue growth and
discount rate assumptions to assess the impact on
forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the
consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If so, we are required to report that
fact. We have nothing to report in this regard.
Blis Technologies Limited65
Independent Auditor’s Report
To the Shareholders of Blis Technologies Limited
Opinion We have audited the consolidated financial statements of Blis Technologies Limited (the
‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet
as at 31 March 2020, and the consolidated statement of comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 39 to 61,
present fairly, in all material respects, the consolidated financial position of the Group as at
31 March 2020, and its consolidated financial performance and cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the
Company or any of its subsidiaries, except that partners and employees of our firm deal with
the Company and its subsidiaries on normal terms within the ordinary course of trading
activities of the business of the Company and its subsidiaries.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to
our attention during the audit would in our judgement change or influence the decisions of
such a person (the ‘qualitative’ materiality). We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $110,000
($2019: $90,000).
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs, trademarks and patents in respect of
ingredients for the Group’s products. These are included in
the balance sheet as intangible assets.
The total carrying value of intangible assets at 31 March 2020
is $0.404m as shown in the Consolidated Balance Sheet and
note 10, of which $0.395m relates to capitalised development
costs, trademarks and patents.
The carrying value of intangible assets is particularly
judgemental given its dependency on forecasts of revenue
growth, contribution margins and a relevant discount rate.
The impairment of intangible assets is a key audit matter due
to the complexity of auditing the judgements and estimates
involved in determining revenue forecasts used by the Group
to assess the recoverable amount of these assets. If the
Group is unable to produce sustainable operating cashflows,
this affects the carrying value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained
in note 10.
Our procedures focused on evaluating the appropriateness
of the significant judgements and assumptions that relate
to revenue forecasts and operating cash flows included in
the impairment model.
Our procedures included, amongst others:
• Obtaining the Group’s impairment model and
gaining an understanding of key assumptions and
judgements underlying the model.
• Assessing the integrity of the value in use
calculation, including the mathematical accuracy of
the underlying model.
• Assessing the impairment model for consistency
with the prior year and determining whether any
significant changes to the model were appropriate.
• Challenging the reasonableness of the key
assumptions including those driving the cash flows
underpinning the analysis, by:
o
Comparing historical budget forecasts against
actual results.
o
Comparing forecast growth to business plans
approved by the Board, including the Group’s
consideration of any negative impacts of COVID-
19.
o Engaging an internal valuation expert to assess
the appropriateness of the impairment model and
benchmark the Group’s discount rate by
comparing to an independen
tly developed
discount rate using publicly available market data
for similar entities.
• Performing sensitivity analysis
on the model by
varying key assumptions such as revenue growth and
discount rate assumptions to assess the impact on
forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the
consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If so, we are required to report that
fact. We have nothing to report in this regard.
2020 Annual Report66
Key audit matter How our audit addressed the key audit matter
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation
of the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such
internal control as the directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for
the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
and ISAs (NZ) 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for -assurance-practitioners/auditors-
responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company’s shareholders as a body, for our audit work, for this report, or for the opinions
we have formed.
Heidi Rautjoki, Partner
for Deloitte Limited
Dunedin, New Zealand
27 May 2020
This audit report relates to the consolidated financial statements of Blis Technologies Limited (the ‘Company’) for the year ended 31
March 2020 included on the Company’s website. The Directors are responsible for the maintenance and integrity of the Company’s
website. We have not been engaged to report on the integrity of the Company’s website. We accept no responsibility for any changes
that may have occurred to the consolidated financial statements since they were initially presented on the website. The audit report
refers only to the consolidated financial statements named above. It does not provide an opinion on any other information which
may have been hyperlinked to/from these consolidated financial statements. If readers of this report are concerned with the inherent
risks arising from electronic data communication they should refer to the published hard copy of the audited consolidated financial
statements and related audit report dated 27 May 2020 to confirm the information included in the audited consolidated financial
statements presented on this website.
Blis Technologies Limited67
Company
Directory.
For the year ended 31 March 2020
Company number
1042367
Issued capital
1,107,653,565 Ordinary Shares
Registered office
Blis Technologies Limited
81 Glasgow Street, South Dunedin
Dunedin 9012
Shareholders
Listed on the NZX Main Board
Share registrar
Link Market Services Limited
Deloitte Centre, 80 Queen street
Auckland
Directors
A Offen
G Boyd
G Plunket
Dr B Richardson
Dr A Stewart
A Balfour (appointed 9 April 2020)
V Aris (resigned 26 July 2019)
Chief executive
B D Watson
Auditors
Deloitte Limited
PO Box 1245
Dunedin
Bankers
Bank of New Zealand
Dunedin
Solicitors
Anderson Lloyd
Private Bag 1959
Dunedin 9054
Downie Stewart Lawyers
PO Box 1345
Dunedin 9054
Goldsmith Law
PO Box 40
Dunedin 9054
Website
www.blis.co.nz
Facebook
https://www.facebook.com/BLISTechnologiesLtd/
Instagram
https://www.instagram.com/blistechnologies/
Blis Technologies Limited67
Key audit matter How our audit addressed the key audit matter
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation
of the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such
internal control as the directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for
the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
and ISAs (NZ) 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company’s shareholders as a body, for our audit work, for this report, or for the opinions
we have formed.
Heidi Rautjoki, Partner
for Deloitte Limited
Dunedin, New Zealand
27 May 2020
This audit report relates to the consolidated financial statements of Blis Technologies Limited (the ‘Company’) for the year ended 31
March 2020 included on the Company’s website. The Directors are responsible for the maintenance and integrity of the Company’s
website. We have not been engaged to report on the integrity of the Company’s website. We accept no responsibility for any changes
that may have occurred to the consolidated financial statements since they were initially presented on the website. The audit report
refers only to the consolidated financial statements named above. It does not provide an opinion on any other information which
may have been hyperlinked to/from these consolidated financial statements. If readers of this report are concerned with the inherent
risks arising from electronic data communication they should refer to the published hard copy of the audited consolidated financial
statements and related audit report dated 27 May 2020 to confirm the information included in the audited consolidated financial
statements presented on this website.
2020 Annual Report68
Physical Address
Blis Technologies Limited
81 Glasgow Street
Dunedin 9012
Postal Address
PO Box 2208
Dunedin 9044
New Zealand
Email
info@blis.co.nz
Telephone
+64 3 474 0988
www.blis.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.