Comvita Limited (CVT) 2020 Annual Report

ANNUAL REPORT
COMVITA.CO.NZ
OUR
2020

Introduction2
Strategy4
Results at a glance10
Chair + CEO12
Year in review20
Around the world24
Digital strategy34
Sustainability36
People38
Planet44
Partnership46
Outlook50
Board of Directors51
Leadership52
Governance53
Directory60
CONTENTS
Sting
THIS
MAY
A
INTRODUCTION
LITTLE
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ANNUAL REPORT
COMVITA.CO.NZ
2020

As forecast, this was
a year to stabilise,
reset and refocus.
While there’s no
question the results
for the first half
were disappointing,
we saw real progress
and momentum
in the second half.
The last six months
have shown that our
turnaround and
transformation are
on track.
BRETT HEWLETT CHAIR
DAVID BANFIELD CEO
22 SEPTEMBER 2020
We now have a three-part strategy that will
take us through the next three to five years.
Already this year, we have completed substantial
changes to both our business operations and the
company’s structure, which have seen us emerge
more focused and agile. The process of building
a better and more resilient business will take
time – but there is real magic in the Comvita
story that needs to be shared with discerning
consumers around the world.
Established in 1974, we are the global market
leader, with the number one global brand
of Ma ̄nuka honey. Our vertically integrated
business means our Ma ̄nuka honey is traceable
‘from the hive to the shelf’, with integrated
systems covering Ma ̄nuka forest, apiaries,
R&D and data. Our intellectual property in
bee genetics, Ma ̄nuka cultivars and medical
efficacy will enable us to protect and extend
our leadership position. Our wholly owned
subsidiaries in China, North America, UK,
Hong Kong, Japan, South Korea, Australia
and New Zealand mean we can execute
globally at pace and differentiate ourselves
from competitors at point of sale.
Building a better business will see us maximise
these strengths, build revenues, connect
and build affinity with our loyal consumers
around the world, further strengthen our
capital structure and create new, global and
sustainable opportunities. That comeback is
now underway.
INTRODUCTION
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We have streamlined our offering by
discontinuing 30% of our products and
introduced a new honey harvest model
that significantly reduces our risks.
The second half of the year was strong,
with six consecutive profitable months
and a noticeable improvement in revenue,
with $27M in cash flows and EBITDA*
of $13M generated for the second half.
These improvements, combined with
reductions in underlying costs and debt,
mean we are now in a significantly
stronger financial position.
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Protecting
WHAT WE
HAVE
What’s happened?The way forward
The key to our future success lies in
first shifting our focus back to our core
product categories, where we are truly
globally competitive, and redirecting
our sales focus back to our customers’
stores, where we have long-standing
and valuable relationships.
A new honey harvest model will give
us back the supply chain certainty
around quality and availability we need,
while a major investment in business
transformation will ensure we have the
right people and the right organisational
structure to deliver to our potential. We
need to review non-core joint ventures to
remove cost, duplication and low returns.
Finally, resetting our capital structure will
support growth and build our resilience.
—— —— The business has been affected
by a range of setbacks in recent years.
Legislative changes have muddied the
waters on what constitutes our core
product, while poor honey harvests
have resulted in significant losses.
On top of that, our revenues within
some of our individual markets have
varied unexpectedly.
—— —— These macro factors have
added to problems within the business
itself, where over-complication and
unsustainable costs have put undue
pressures on our bottom line and
an entrenched focus on supply has
distracted us from concentrating on
how to best meet the needs of our
loyal customers.
Progress so farKey achievements
18 June
New strategy and five-year
plan agreed
30 June
Review of joint ventures
and structure completed
30 June
New leadership team
appointed
NEXT STRATEGY
STRATEGY
STABILISE
TRANSFORM
CREATE LONG-TERM
RESILIENCE
Strategy one
of our three-part
plan that will take
us through the next
three to five years:
TIMEFRAME:
SIX CONSECUTIVE
PROFITABLE MONTHS
* Earnings before interest, tax, depreciation and amortisation.
FOUNDING PRINCIPLES
“It’s vital that as we transform the
business, we retain and celebrate
what’s made us the global market
leader we are today.”
DAVID BANFIELDCEO
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ANNUAL REPORT
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2020

Regeneration
PLAN
What must change?What we’re doing about it
Our four-part regeneration plan
encompasses putting consumers at the
heart of our thinking, prioritising China
and North America as our growth markets,
generating high growth with a low-to-
no-debt model and shifting to a flatter
management structure.
Our shift from being supply driven to
consumer focused reflects the realities
of the trading conditions we compete in
today. Being clear about our key markets
is about ensuring that we focus our
energies where they will be most effective.
Operating with less debt will give us more
control over our future, and our new
flat structure will bring a new sense of
empowerment to our teams, streamlining
decision making.
—— —— We need to gain a much better
understanding of our consumers and
customers and be more focused in
how we choose to define our markets.
Lifting our digital capabilities will add
much-needed speed to how quickly we
can act and respond. We cannot take
our eye off generating cash flow and
improving business efficiency.
Progress so far Key achievements
There’s been a jump in engagement
with 178,000 new users and digital sales
up by 35%. On top of that, we’ve seen
strong top and bottom line growth in North
America and China. The flatter structure
we need to move forward is now in place,
with the reduction of 90 positions already
announced. Net debt now sits at $15.5M
with a strategic goal of zero long-term debt.
17 June
Simplifying our structure,
resetting our capital structure
30 June
Organisational
restructure completed
Strong growth in China
and North America
STRATEGY
STABILISE
TRANSFORM
CREATE LONG-TERM
RESILIENCE
TIMEFRAME:
OUR
Strategy two
of our three-part
plan that will take
us through the next
three to five years:
NEXT STRATEGY
A NEW FOCUS
Our focus now is on our core products
Ma ̄nuka and Propolis and on having
the right organisational structure.
PRIORITIESUNDERSTOOD
STRONG GROWTH
IN KEY MAKETS
+66%
Revenue
growth
+10.9%
Revenue
growth
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ANNUAL REPORT
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2020

KEEPING OUR PLACE
As the market leader, we continue
to create new quality standards for
our products.
STREAMLININGIMPLEMENTED
Pollinating
OUR
FUTURE
—— —— Our markets are only going to
become more competitive going forward
as digital acceleration opens up market
access for more exporters and the number
of brands proliferates.
—— —— Our core challenges will be driving
penetration into new households at the
same time as we seek to retain existing
consumers in the face of ever-increasing
expectations around quality. Speed of
response to market opportunities and
risks will be critical.
—— —— Alongside these pressures, we
will position Comvita as an employer
of choice to ensure we have access to
the pick of global talent and protect
our environmental footprint so that
it adds credibility to brand reputation
and premium value to our products.
The actions and innovations
we’re putting in place
We’re currently building a clearer
understanding of our brand value
proposition so that we can communicate
this clearly. We’ve also restructured our
business to enable us to invest in telling
the ‘Why Comvita’ story to consumers
to drive Comvita awareness, household
penetration and loyalty.
We are investing in three parts of the
business: science; the capabilities of our
in-market teams in particular; and the
development and strengthening of our
teams overall. Finding the right people,
and bringing out the best in them, will be
critical as we move forward. Our long-term
environmental goal is to be net carbon
positive by 2030.
Why they will help
These changes will bolster our global
position. They will differentiate Comvita
as the brand of choice in our chosen
markets, they will differentiate us
as the global supplier of choice, they
will empower us with the evidence
customers are looking for on how our
products support healthy lives and
they will demonstrate that we take
our guardianship of the planet seriously.
STRATEGY
STABILISE
TRANSFORM
CREATE LONG TERM
RESILIENCE
Strategy three
of our three-part
plan that will take
us through the next
three to five years:
The longer-term pressures
on the business
STREAMLINING
DECISION MAKING
Key achievements
Markets closer to CEO
New Leadership Team structure
China integration
ESG reporting
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ANNUAL REPORT
COMVITA.CO.NZ
2020

HEALTHY GAINS AHEAD
We are confident that we will
see good gains in our two key
markets in coming years.
CHINANORTH AMERICA
RESULTS AT A GLANCE
H1H2Full Year
Revenue$94M$102M$196M
EBITDA$(8.8)M$13.0M$4.2M
Underlying EBITDA*$0.6M$18.4M$19.1M
Non-operating items$6.7M$3.9M$10.6M
One-off costs incurred$2.7M$1.5M$4.2M
Net Debt (OB $88.9M)**+$4.2M-$77.6M$15.5M
* Underlying EBITDA is a non-GAAP measure. We monitor this as a key performance indicator and believe it assists investors in assessing
the performance of the core operations of our business. Please refer page 10 of Investor Presentation released to NZX on 24 August 2020
for a full reconciliation of underlying EBITDA.
** Opening balance.
Stand
W H E R E
WE
RIGHT
NOW
$50M
CAPITAL RAISE COMPLETED
IN JUNE
YEAR-END NET DEBT
$15.5M VERSUS $93M
IN DECEMBER 
REVENUE GROWTH
14.5%
$
27.5M
CASH GENERATED
TO PAY DOWN DEBT 
STRONG TOP AND BOTTOM
LINE GROWTH IN FOCUS GROWTH
MARKETS, CHINA
AND NORTH AMERICA
SIGNIFICANT SIMPLIFICATION OF
TOTAL ORGANISATION
ORGANISATION RESTRUCTURE
COMPLETE (COSTS IN FY20)
REDUCTION
OF RISK
CAPITAL STRUCTURE
RESET
LOW-RISK HONEY HARVEST
MODEL IMPLEMENTED
NEW BANK FACILITIES
AGREED TO JUNE 2022
Key achievements
Focusing on fundamentals
has driven operational
improvements
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COMVITA.CO.NZ
2020
ANNUAL REPORT

Focusing
ON THE FUTURE
Brett, a lot of organisations
talk about downturns as
if they were something
that just happened. But of
course, when one looks more
closely, it’s clear the origins
of what has happened often
stretch back for some time.
What are your perspectives
on the situation Comvita
found itself in this year,
given that you came in as
Executive Director after
the last CEO left?
BRETT: Comvita went through
a phase of rapid expansion and
growth that peaked in 2016.
Historically, we operated in
a highly supply-constrained
environment, so not surprisingly,
the organisation had evolved an
operating culture and directed
resources into building supply
capability for our core raw
materials. Demand appeared
almost insatiable - and the
Comvita brand was trailblazing
its way around the world, building
the Ma ̄nuka honey category in
ways that benefited Comvita
but also the whole New Zealand
honey industry.
To an extent, we came to take
the brand, and its success, for
granted. Several material changes
in our trading environment have
since served as a stark reminder
that those times have passed and
signalled we could not afford to
rest on our laurels.
Changes to the regulatory
environment imposed by the
Ministry for Primary Industries
(MPI) took out the large-volume
distribution of lower-grade
Ma ̄nuka honey. This effectively
eliminated an affordable segment
of the market and left many
apiary operations non-viable.
That led to large-scale dumping
and disruptions to pricing and
competitive behaviour across
the category, most notably in
Australia and New Zealand.
Shortly after, the Chinese
Government imposed tariffs and
new regulations on the daigou
(social shoppers) trade into
mainland China. This too had
a material impact on sales and
margins in Australia and New
Zealand. Our problems were
compounded by several poor
honey harvest seasons in a row.
Comvita’s highly vertically
integrated and increasingly
diverse business model, which
had served us so well during
those pioneering years, had
become complex and slow
to adjust to this new norm.
We also had a cost base that
could not be sustained in this
new trading environment. We
needed to shift focus to better
leverage our extensive presence
in market and fully exploit our
strong brand credentials with
our global consumers. A new
leadership style was needed.
What did the Board see in
David’s background that
you were drawn to? What
previous experiences in
particular have given you
confidence that he can lead
Comvita forward?
BRETT: Our strategic review
identified we needed a CEO
who had pedigree in building
global brands and in developing
relationships with leading
retailers (offline and online),
who had experience of focus
growth development in our target
markets of China and North
America and who understood
how to drive a culture of constant
operational improvement and
bottom line performance. We also
needed someone who was aligned
with our core values and purpose –
something that has been carefully
nurtured for over 45 years.
We needed
to shift focus to
better leverage
our extensive
presence in-
market and
fully exploit our
strong brand
credentials
with our global
consumers.”
CHAIR + CEO
AN INTERVIEW
A LONG READ
Our Chair and CEO share
their views of what’s
happened.
BRETT HEWLETT
DAVID BANFIELD
CHAIR
CEO
LEARNING LESSONS
FROM THE PAST AND
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ANNUAL REPORT
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2020

Contrary to the trend for many
companies in 2020, your second half
year was much better than your first
half. What changed between the first
half and the second half to explain
why they were so different? What drove
the turnaround?
DAVID: We enjoyed strong growth in our
global markets as consumers turned to high-
quality natural health products in the face
of the Covid-19 pandemic. This is actually a
continuation of a longer-term trend that is
seeing consumers around the world turning
to nature and quality natural health products
for answers to the world’s problems.
In the second half, we saw revenue improve,
margins improve and costs decrease, which
meant we turned an EBITDA loss of $8.8M
in the first half to a second half profit of
$13M, bringing the full-year EBITDA result
in at $4.2M profit.
Our apiary team had a great year delivering
record honey yields and a $2.2M profit, and
our olive leaf team delivered record supply to
David, you inherited a trading and
financial position for Comvita that
you have described as challenging.
Was that your key motivation for
accepting the role?
DAVID: I think it’s really important to highlight
the trading and financial position that I
inherited was not unexpected. From my earliest
discussions with Brett and the Board, they
were clear they needed someone to lead a
turnaround and transformation of the business.
They needed someone who had a clear view of
good organisational design and culture, had
significant international experience based on
differing cultural needs, enjoyed change and
was prepared to act decisively to set Comvita
up for long-term success.
The business was really struggling with the shift
from being supply driven to being consumer
and customer focused. This shift requires
fundamentally different perspectives and skills
in order to understand consumer dynamics and
to get the best from our unique market model.
Having said that, it’s also important to
recognise the amazing things integral to
Comvita’s DNA that have been there for many
years. This started with the incredible founding
principles that Alan Bougen and Claude
Stratford built the business on – the investment
in science and technology of natural products
applications that has provided a platform for
high-value-add premium brand positioning –
and the development of a vertically integrated
business model stretching from remote plant
sources all the way to branded direct sales to
end consumers. It’s vital that, as we transform
the business, we retain and celebrate what’s
made us the global market leader we are today.
I love the fact we have just opened our proud
history walk at our Paengaroa site where the
team can now walk around a one-kilometre
track and read about the records and notable
events over the years right up to today. Our
challenge today is to ensure we continue Alan
and Claude’s pioneering spirit.
What were the challenges for you
becoming Chair and turning over daily
management to David?
BRETT: Less of a challenge and probably more
a feeling of immense relief! David was very
quick to gain the confidence of our staff and
the Board. Firstly, he acted with urgency but
also with compassion for those who have been
directly impacted by the changes. He responded
to the crisis of the pandemic with apparent
ease, turned around operating performance
meet increased market demand. Our production
and supply team delivered record productivity
and quality, continuing supply while we were
in lockdown. Finally, our in-market teams
maintained and supported our loyal consumers
around the world to ensure they could find
Comvita products. The remainder of the
Paengaroa team ensured we kept the wheels
turning and increased our focus on doing basic
things really well. A great example of this is the
$27M of net cash surpluses that we generated
in the second half.
What decisions have you made about
joint ventures and partnerships?
DAVID: At the start of the year, we outlined
our strategy to simplify and streamline the
business to allow more focus throughout the
organisation. This also applied to our joint
venture partners. Where we saw limited
long-term strategic value, we have written
down that investment to reflect performance
and strategic fit. We do have some enduring
strategic partnerships that are particularly
important to us, and we will continue to
invest in these in FY21 and beyond.
over the second half of the year and was able to
quickly assimilate the key issues and identify the
focus areas for change, resulting in a strategic
framework for future growth of the company
that has been broadly accepted and understood
by all stakeholders. David has my trust, and that
allows me to focus on my role as Chair.
I am both privileged and excited by the
challenge of serving as Chair of Comvita. I take
inspiration picking up the reins from Neil Craig,
who provided such impassioned leadership and
dedication during his 15 years in the role. While
a change of Chair and CEO is going to represent
an inevitable change of leadership style,
together we hold true to the founding principles
and vision represented by Comvita’s founders
Claude and Alan. This is our Northern Star.
David, you’ve moved fast since becoming
CEO, and early signs are positive. What
were your initial findings and to what
extent do you feel you’ve dealt with the
low-hanging fruit? Is the hard stuff
yet to come or have you tackled some
of that already?
DAVID: My initial findings revealed an
organisation that lacked clarity about roles and
responsibilities, had become slow and complex,
was disconnected from consumers and markets
and had a cost structure it couldn’t afford. The
organisation was (and to some extent still is)
data rich but information poor, meaning access
to insight was limited.
We’ve made some significant changes since
I joined in January, and I’m really proud of the
way the team has responded to the challenges
that have come our way. The biggest change
ahead will be to ensure our business model
allows us to invest in our brand and tell our
incredible story to consumers around the world.
To do this, we need to free up cash to reinvest
into our brand and our team, so we have to be
relentless in simplifying the business and driving
operational efficiencies to grow margins. We
also need to ensure we have the right long-term
cost structure allowing us to invest and deliver
returns to our shareholders.
The other major change is around speed of
decision making and acting. The biggest
difference between our business model and
our exporting competitors is the fact we have
people on the ground who can execute at speed.
In the new digitally enabled world, we need to be
agile enough to support speed of actions from
our Market Support Centre in Paengaroa. This
means we need to empower the team to act.
CHAIR + CEO
The biggest
difference between our business
model and our exporting
competitors is that we have
people on the ground who can
execute at speed.”
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CHAIR + CEO
What kinds of assets did you write
down this year and why? Were these
bad original decisions?
DAVID: The main write-downs were those
related to supply of raw materials, and those
decisions were made because we felt they
offered limited long-term strategic value
given our renewed focus. Again, I think it’s
important when looking at these write-downs
to understand the supply-constrained world
we were operating in when we made these
decisions. They weren’t bad decisions given the
circumstances – but now the circumstances
themselves have changed.
You’ve just been through a significant
organisational review that has seen
a lot of people leave the business.
DAVID: It’s been very tough for the 90 people
who have already or will soon leave the
business. I do want to pay tribute to the way
people who were affected reacted – many
recognising that, despite the personal impact
to them, the changes were necessary to put
Comvita on a pathway to a better future.
Our global transformation plan started
with a clear view of roles and responsibilities
between markets and Paengaroa. We sought
to do three things:
• Ensure increased focus on markets, with
market/regional leaders becoming direct
reports of the CEO to ensure consumer and
market focus and prioritisation throughout
the organisation.
• Achieve clarity on the primacy of markets
and consumers in our decision making.
• Flatten the structure to ensure more
responsibility and more action to make us
more agile and responsive to market needs.
What parts of the business did the 90
people who were retrenched come from
and what skillsets/value-add roles have
you lost in the process? How will you
adjust for that? What specific skills have
you added to the leadership team and
elsewhere to ensure the transformation
is successful?
DAVID: Around 50 of the roles removed were in
New Zealand. These were spread across several
areas including airport and tourism-focused
sectors and were unavoidable given the impact
of Covid-19 on travel and retail.
Outside New Zealand, most of the 40 role
changes came from closing down non-
customer-facing roles in market to bring
them back to New Zealand where we could
gain economies of scale.
Even with the enormous change, our customer-
facing roles actually increased from 38%
of total staff count in FY19 to 52% in FY20,
showing our renewed commitment to
consumers and customers in market.
Finally, we flattened the overall structure,
removing management layers to bring added
focus and responsibility to key roles and
functions. We believe this focus is vital to
bring speed and added capability to the team.
You’re rebuilding Comvita at a time
when the product itself is surging
globally and there’s a corresponding
proliferation of brands eager to cash
in on the longer-term trend you’ve
just described. How do you see your
competitive advantage going forward?
DAVID: I come back again to why our business
model is fundamentally different to our
exporter competitors. We have invested in a
quality consumer and customer-focused team
in market. These experts are there to ensure
we understand and connect actions that
drive our three important metrics: household
penetration, frequency of use and brand loyalty.
This year’s results reflect our renewed focus on
core Ma ̄nuka and Propolis products and the sort
of operating leverage in our model that we can
generate going forwards.
What are the highlight results for you?
What do they signify? Equally, what
were the disappointments and how
concerning are they?
DAVID: The highlights for me were around
how the team responded to both the Covid-19
impacts but also the significant change
that we brought to the organisation. We’ve
introduced new thinking and have acted
to ensure a clear link between results and
rewards. We’ve also embraced some of the
great things the company already did and
that made Comvita global market leaders
in Ma ̄nuka in the first place. I would also like
to recognise the Board, who asked me to
bring transformation and challenge to the
business and have been hugely supportive of
the changes we are making (both in substance
and speed of action). It’s this combination
of joined-up thinking as well as celebrating
and embracing the many positives while
challenging the things that hold us back that
will ultimately set us up for long-term success.
At the start of the year, we set out our new
strategy based on focused growth markets
of China and North America and focused core
product categories of Ma ̄nuka and Propolis.
Both markets achieved very strong results, with
North America revenue improving by 66% and
net contribution by 196% and revenue in China
lifting 10.9% and contribution by 60%. We
outperformed in both markets with Ma ̄nuka and
Propolis products supporting margin expansion.
On the other hand, results in our home
markets of New Zealand and Australia have
been the most disappointing. Our original
FY20 plan focused on stabilising the daigou
and tourism channels. Ultimately, both were
hugely impacted by Covid-19. We have now
reset our expectations and our long-term
strategic goals for these markets, focusing on
building a national market plan enabling Kiwi
and Australian consumers to gain more access
and benefit from great Comvita products.
Brett, at the Annual Shareholders’
Meeting, you described this as a year
for reset. Have you made the progress
that you expected?
BRETT: Yes and no. For our shareholders,
I know that a turnaround can never come
quickly enough, but the strategic review
made it clear there would be no quick fix or
silver bullets. Disappointingly, we have had to
announce another loss for the year, and this
weighs heavily on the Board and management.
However, we have dealt with some of the big
items with urgency, and that’s resulted in the
leadership changes and asset impairments that
were announced at last year’s ASM and at the
half year. Our objective was to take a more
considered approach under a new CEO and
leadership team to making changes that would
set the company up well for a rebound in FY21
and beyond. In this regard, I am comfortable
with the progress we have made and where
we now stand.
Given the big improvements in the
second half, are you satisfied that you
have stemmed the losses – or is it still
too early to tell?
DAVID: We expect to return to profitability in
FY21 whilst increasing investment in our brand.
At the same time, it’s important for us to be
laying long-term foundations to really set
Comvita up for success for the next 50 years.
David Banfield

CEO
Brett Hewlett

Chair
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CHAIR + CEO
Now that you have agreed a five-year
plan, how do you see the process going
forward? What will be the significant
outcomes that signal things are on track?
DAVID: We have already communicated our
plan with our shareholders to deliver a 20%
EBITDA margin by FY25, and we’ll share more
about our journey to that FY25 goal in due
course. Having made some tough decisions
regarding our operating and capital structure,
the most important immediate thing is to
deliver a sustainable and profitable FY21 result
that will give all our stakeholders confidence
we are on track.
What role will the Board play in
facilitating and driving change?
BRETT: The Board’s key role will be in balancing
support and accountability for management
as we journey down the path of change. We
need a return on capital that demonstrates
we have deployed capital well. We need to see
sustainable EBITDA growth, healthy earnings
per share and total shareholder returns.
Ultimately, the Board will be held accountable
for delivering sustainable financial returns to our
shareholders. Hence, the Board is committed to
a process of ongoing performance review and
evolution of the Board. We will ensure we have
the right skills at the table that are relevant
for the future direction and the challenges and
opportunities that have been identified.
Is your debt position on track? Did the
$50M capital raising all go towards
replacing debt with equity?
DAVID: We finished the year with net debt at
$15.5M, down from $93M in December 2019.
This $77.5M reduction was a result of the
successful $50M capital raising and generating
$27M of cash, including reducing inventory by
$20M. We have also set out our longer-term
goal of zero long-term debt.
BRETT: Historically, when the company was
enjoying compound annual growth rates of
20%+, funding growth was crucial. Going
forward, our focus must be on driving
brand value and improving margins. This
means we will be less capital intensive in our
approach. We can also start to generate
strong positive cash flows. Our philosophy
now is one of better before bigger. Our eye
is on quality of earnings, and that requires a
more conservative capital structure to give
us greater control over what happens.
We have tried to be explicit about what
constitutes a bad and a good harvest and
what the financial impact will be with our
recent disclosures. Our new harvest model
launched for FY21 means our apiary division
makes a zero contribution to group profits
if we have a bad harvest (rather than
recording a loss), but its contribution can be
accretive to group profits by 40–50% should
we have an equivalent harvest to FY20.
We believe that this will help us significantly
increase predictability of our results going
forward and ensure our attention is more
focused on our market performance from
both a sell-in and sell-out perspective.
When do you expect to reinstate dividends?
BRETT: The Board is retaining its current
dividend policy where there is an objective to
distribute 25-30% of the company’s operating
profit after tax as a dividend. We’re confident
our strategy is reliable and sustainable. This
year, we have positioned the company to deliver
strong net positive operating cash flows, and
our much-improved net debt position means
we are much more comfortably placed than we
were a year ago. Assuming we continue to see
improvement in operating performance and we
return to a net positive earnings result in FY21,
we should also be able to reinstate dividends in
line with our policy.
BRETT HEWLETT CHAIR
DAVID BANFIELD CEO
We have completed
substantial changes to the business
and the business structure,
we emerge more focused,
more agile and more resilient.
We are in the process of
Building a Better Business.”
You booked a strong revenue increase in
the second half that you’ve attributed to
recent integrations in the China market
and growth in North America. How do
you see these growing in the medium
term and what investment will be needed
to make that happen?
DAVID: We talked earlier about building long-
term resilience and growth through focused
markets (China and North America) and
focused product categories (Ma ̄nuka and
Propolis) as well as focused channels where we
have sustainable competitive advantage. We’ll
increase our marketing investment by $6M in
these two markets in the next year to ensure
we tell our Comvita story better to consumers.
We will also invest in digital capability to drive
revenue and brand loyalty through that channel.
We are currently working to redefine the
reasons why consumers should choose Comvita
and look forward to sharing these outputs with
our stakeholders around the world in the very
near future. We believe the founding principles
that were embodied in the business that Alan
and Claude founded in 1975 are even more
relevant today and will be a true differentiator
for Comvita.
In the case of the US, you had one major
retail chain support your revenue.
As you look to rebuild growth in that
market, are you still as vulnerable to
individual customers’ concentration?
DAVID: We are making great progress in building
our total distribution in North America. We
added 1,000 new stores in FY20, and we’ll have
a further 1,500 in FY21. We will also accelerate
our digital sales through all channels to further
build our potential and, in the process, learn
more about our true consumer needs. We
are generating fascinating insights about our
consumers and how their choice of high-quality
natural health products can help them improve
the quality of their lives. This know-how will
enable us to accelerate our digital revenue
and delight consumers.
How important is the new honey harvest
model that you have launched for FY21
in reducing your risks going forward?
DAVID: One of the criticisms from shareholders
when I joined was the lack of predictability of
results given the disproportionate impact poor
harvests have had on the business historically.
N
O
.
18N
O
.
19
ANNUAL REPORT
COMVITA.CO.NZ
2020

LOCAL
Alazae has been with Comvita
since late 2018 when she started
in our café. She is a Paengaroa
local, a hobbyist beekeeper and
super passionate about all things
‘bee’. She is currently expanding
her skills through working in our
production facility.
PAENGAROANEW ZEALAND
YEAR IN REVIEW
Year
OUR
IN
REVIEW
N
O
.
20N
O
.
21
ANNUAL REPORT
COMVITA.CO.NZ
2020

YEAR IN REVIEW
30 June
2020
$’000
30 June
2019
$’000
vs
Last Year
vs
Last Year
%
Revenue195,912171,10424,80814.5%
Gross margin49.0%37.3%11.7%1170bps
Operating expenses96,39873,54822,85031.1%
Operating expenses excl. China72,03471,4236110.9%
Underlying EBITDA*19,086019,086100.0%
Net loss after tax (9,701)(27,717)18,016-65.0%
Net debt15,52088,936(73,416)-82.5%
Operating cash flow39,29721,08618,21186.4%
Inventory112,679132,192(19,513)-14.8%
* Underlying EBITDA is a non-GAAP measure. We monitor this as a key performance indicator and believe it assists investors in assessing the
performance of the core operations of our business. Please refer page 10 of Investor Presentation released to NZX on 24 August 2020 for a
full reconciliation of underlying EBITDA.
Revenue increased to a record $196M,
an improvement of 14.5% on the previous
corresponding period (PCP).
Second half EBITDA of $13M was particularly
encouraging, reflecting the success of
the company’s new strategy to focus
on core Ma ̄nuka and Propolis products
in growth markets.
In China, where Comvita took full control
of its former joint venture in May 2019,
revenue grew (like for like) by 10.9% while
net contribution improved by 60%, despite
increasing marketing investment by $1.9M.
Similarly, in North America, revenue lifted
by 66% and net contribution by 196%, again
despite increasing long-term marketing
and team investment.
Allowing for the negative impact of one-
off non-operating items and one-off costs,
underlying EBITDA increased by $19.1M,
an improvement of $19.1M on the PCP.
The company saw 3.8% like-for-like revenue
growth (despite a $11M negative Covid-19
headwind in Australia and New Zealand),
a 1170 basis point improvement in gross
margin (12ppts) and a $1.9M reduction in
operating expenses. Second half underlying
EBITDA performance was particularly strong
at $18.4M.
The final result for the year was a reported
net loss after tax of $9.7M as we continued
our strategy to simplify and focus the business.
In this period there was a one-off $9.3M loss
in non-operating items.
In order to increase organisational resilience
and strengthen its balance sheet, Comvita
completed a $50M gross capital raising in June
2020 with strong support from both retail and
institutional investors. Net debt at year end is
$15.5M because of the capital raising and due
to good internal management of cash flows and
working capital (inventory reduced by $19.5M
versus June 2019).
During FY20, we refined our category focus and investment
to Ma ̄nuka honey and Propolis. We also expanded our entry-level
Ma ̄nuka honey offering in key markets.
FINANCIAL SUMMARY
2 0 1 9 ————— 2 0
There was a significant
reduction in our net debt,
which we are pleased about.
+
27%37%10%
MA
̄
NUKA 10+ REVENUE
GROWTH +27% YOY
PROPOLIS
REVENUE +37%
OLIVE LEAF EXTRACT
REVENUE +10%
SHARE OF REVENUE BY
PRODUCT CATEGORY
We saw healthy sales growth in
the key products we have chosen
to focus on.
FY20 share of reported salesFY19 share of reported sales
M a ̄ n u k a
honey
Other
honey
M a ̄ n u k a
honey
products
Propolis
products
Olive
leaf
Medical
honey and
products
Other
products
63.3%
2.2%
5.0%
8.6%
9.5%
6.2%
5.2%
63.8%
3.2%
5.2%
7.2%
10.0%
3.1%
7.4%
N
O
.
22N
O
.
23
ANNUAL REPORT
COMVITA.CO.NZ
2020

AROUND THE WORLD
Market
MARKET
TO
Our unique model sees us positioning teams
in our core markets. Here’s what they achieved
t h i s ye a r.
AN OVERVIEW
11%
STRONG GROWTH IN THE
WORLD’S BIGGEST HONEY
MARKET FOR CHINA
FASTEST-GROWING
MA
̄
NUKA HONEY BRAND
IN NORTH AMERICA
66%
540
Our people on
the ground
CHINA —— P.26
NORTH AMERICA —— P.28
FY20 segment revenue shareFY19 segment revenue share
40.7%
27.0%
7.4%
8.1%
11.3%7.8%
3.5%
3.6%
10.5%
9.8%
40.3%
30.1%
AU/NZ
Greater ChinaRest of AsiaEMEANorth AmericaOther
USA —— UK —— EMEA —— CHINA —— JAPAN —— KOREA —— HONG KONG —— AUSTRALIA —— NEW ZEALAND
55—2013307824194
N
O
.
24N
O
.
25
ANNUAL REPORT
COMVITA.CO.NZ
2020

Greater ChinaFull Year
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales79,02251,44227,58053.6%
Net contribution11,1545,0836,071119.4%
Net contribution %14.1%9.9%4.2%423 bps
ChinaFull Year Like-for-Like Sales
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales57,63251,9475,68510.9%
Net contribution9,5865,9883,59860.1%
Net contribution %16.6%11.5%5.1%511 bps
China is the world’s biggest honey market
with the total market valued at 8.3BN RMB
(NZ$1.8bn). Therefore, it’s strategically
imperative we continue to win here.
In FY20, we successfully integrated our
former joint venture in China into the Group,
which brought the reported full-year revenue
of the Greater China segment up by 53.6%
(this segment includes Hong Kong) .
We doubled net contribution through
cost-down efforts during the integration,
validating the huge value of simplification
under the new leadership focus since January
2020. Exponential top and bottom line
growth reinforced our market leadership
and re-engaged both internal and external
stakeholders into our Comvita growth journey.
When looking at the China market in isolation
and on a like-for-like basis (as if we had owned
the China joint venture in FY19), we saw revenue
growth of 10.9% and net contribution growth
of 60% as our simplification and focused digital
growth model delivered results.
C H I N A
——
It’s vital we build long-term resilience and growth in China
by leveraging our market-leading position in both online
and offline channels. We have real confidence in our ability
to deliver strong growth in China because we are leading
in digitalisation. Digital sales account for over 50% of total
sales in China, which gives us strategic advantages of
agility and flexibility.
LOOKING FORWARD ————
LONG-TERM RESILIENCEDIGITALISATION
02. New packaging launch
for the China market.
CHN
AROUND THE WORLD
01. Welcoming the China
team to the Comvita
wha ̄nau by gifting a
pikorua twist pounamu.
N
O
.
26N
O
.
27
ANNUAL REPORT
COMVITA.CO.NZ
2020

LOOKING FORWARD ————
North AmericaFull Year
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales22,13713,3618,77665.7%
Net contribution4,3921,4842,908196.0%
Net contribution %19.8%11.1%8.7%873 bps
This was an excellent year for Comvita
North America with 66% growth in
revenues and 196% in net contribution.
Wholesale/retail revenues grew 88% and
eCommerce by 44%. Both channels experienced
elevated demand due to Covid-19, particularly
in the first two months. Approximately $3.1M
of the elevated revenue came from pipeline
fill of new and existing customers in Q4.
Distribution expansion also helped our growth,
including 475 placements across 275 stores for
Ma ̄nuka honey and 1,450 placements across
690 stores for the new Comvita Kids line.
From a media and consumer perspective,
we won several key product awards and
garnered 650M media impressions in FY20
for Comvita. Ma ̄nuka honey continues to
gain popularity among celebrities and elite
athletes. Katy Perry, Ariana Grande and Phil
Mickelson are among the latest to discover
and share its benefits.
Mobile
62.3%
↑56.0%
Pageviews
+33.18%
Unique pageviews
+35.86%
Desktop
32.6%
↑36.1%
Tablet
5.0%
↓14.5%
NORTH AMERICA
——
Commitments from two national retailers, replenishment
orders from our largest customer, plus excellent momentum
from Comvita.com form a strong start for FY21. The last
52-week sell-out data for the Ma ̄nuka honey category supports
our North America strategy, showing double-digit growth
across both natural and conventional retail channels. We are
the fastest-growing Ma ̄nuka brand in a competitive category.
To help capitalise on these opportunities and as part of a
longer-term growth strategy in a large and prominent health
and wellness market, we are increasing marketing to grow
education, awareness, demand and availability across new
and existing channels.
COMMITMENTLONG-TERM GROWTH
01. Comvita Kids category
refresh delivered +78%
YOY revenue growth
as well as winning awards
in the US.
USA
AROUND THE WORLD
COMPETITIVE
“We are the fastest-growing Ma ̄nuka
brand in a competitive category.”
NORTH AMERICAGROWTH
02. Winning awards in
North America.
N
O
.
28N
O
.
29
ANNUAL REPORT
COMVITA.CO.NZ
2020

LOOKING FORWARD ————
ANZFull Year
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales52,80269,562(16,760)-24.1%
Net contribution16,26523,151(6,886)-29.7%
Net contribution %30.8%33.3%-2.5%-248 bps
It was a year of unprecedented challenge
for the ANZ business, with MPI definition
changes in New Zealand restricting our
daigou customers’ exporting orders and
devastating fires in Australia impacting
the first half.
The second half was dominated by the
challenges of Covid-19 where the region was
impacted more than other countries due to
the double lockdown – the China lockdown
challenged our daigou customers getting their
orders into China, followed by the domestic
lockdowns in New Zealand and Australia.
Total revenue finished the year at $52.8M, down
by $16.8M, and contribution at 16.3M, down by
$6.9M, as the sales impacts flowed through to
impact net contribution.
While these Covid-19 challenges impacted our
performance we also maximised opportunities,
delivering a record sales year for our olive leaf
extract, up 20% on PCP as consumers looked
for high-quality natural health products.
Propolis also had a strong year, delivering
15% growth on PCP.
comvita.co.nz FY19 vs FY20
AUSTRALIA +
NEW ZEALAND
——
Our focus in the second half of FY20 and for FY21 is to
build a stronger, more resilient and more stable business
with an increased focus on domestic and digital channels,
which have started delivering strong signs for growth.
We have expanded our grocery and pharmacy distribution
with >3,000 stores across honey, Propolis and olive leaf
extract categories, with more to come.
Our digital business is performing ahead of our goals,
with revenue up 85% in New Zealand and by 168% in
Australia with strong metrics and improved engagement,
transactions and conversion.
FOCUSLONG-TERM STABILITY
Mobile
50.0%
↑39.3%
Pageviews
+27.18%
Unique pageviews
+21.70%
Desktop
45.0%
13.0%
Tablet
5.0%
↓12. 3%
comvita.com.au FY19 vs FY20
Mobile
56.7%
↑38.7%
Pageviews
+41.39%
Unique pageviews
+34.77%
Desktop
31.6%
↑23.2%
Tablet
11.7%
↑90.5%
A U S // N Z L
AROUND THE WORLD
N
O
.
30N
O
.
31
ANNUAL REPORT
COMVITA.CO.NZ
2020

LOOKING FORWARD ————
Rest of AsiaFull Year
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales20,53316,7223,81122.8%
Net contribution4,1992,2341,96588%
Net contribution %20.5%13.4%7.1%709 bps
EMEAFull Year
NZD 000sActualLast Year
vs
Last Year
vs
Last Year %
Sales6,9166,21170511.4%
Net contribution(511)(463)(48)10.4%
Net contribution %-7.4%-7.5%0.1%6 bps
FY20 was a very encouraging year for us in
Korea, Japan and Southeast Asia, recording
22.8% revenue growth and net contribution
up by 88%.
We attribute this to our new strategic focus
of building a business focused on Ma ̄nuka and
Propolis and generating operating leverage.
We recorded 45% digital growth across the
total segment compared with the previous
year, with extremely high growth of 95%
in South Korea, thanks to an extraordinary
1,352% increase in online reselling. Another
exciting success was our own website sales,
which continued to grow rapidly – up 46% on
the previous year.
Channel efficiency and product performance
both improved, paving the way for sustainable
growth into more emerging (new) markets.
Alongside continual sales growth, our relentless
cost-down efforts extended to all markets
big and small. Net contribution improved by
a pleasing 20.5%, which was 709 bps above
the previous year in the rest of Asia.
This year marked an important step towards
the Comvita EMEA business turnaround,
achieving 11.4% revenue growth.
We absorbed a negative net contribution
due to the clearance of substantial historical
residual stock ($700K) and an internal
process error that meant airfreight costs
of $300K in the year.
Our top line progress provides a healthy
foundation for future growth. Focusing
on fewer and larger customers combined with
complexity reduction has allowed us to build
strong retailer relationships and plans as well
as deliver growth with our key customers.
One new customer grew at 28% in FY20 to
10% of total EMEA. This was complemented
by the continuous growth of our Comvita.co.uk
business, which grew at 78%.
REST OF ASIA
——
EMEA
——
The new year allows a clean start without the burden of
residual stock. Based on the dramatic shift to eCommerce,
we will fast track our digital acceleration plans, simplify
and focus the business on channels that can support our
long-term profitable growth objectives.
RESILIENCEENGAGEMENT
Our simplification and focus strategy is working well,
enabling us to seed distribution in new markets without
distracting our focus in the primary markets. We are now
building an investment case for ASEAN countries based on
the successful learnings from Japan and Korea.
LOOKING FORWARD
ONLINEPERFORMANCE
Mobile
60.8%
↑35.5%
Pageviews
+80.43%
Unique pageviews
+30.80%
Desktop
30.8%
6.0%
Tablet
8.4%
↓12.4%
↑ 95% Korea eCommerce YOY
↑ 78% eCommerce YOY↑ 29% total transactions YOY↓ -1.76% ATV YOY
↑ 43% Korea transactions YOY
↑ 27% KR new member registration YOY↑ 29% Japan eCommerce YOY
↑ 3% KR ATV YOY
LOOKING FORWARD ————
ROA
EMEA
AROUND THE WORLD
N
O
.
32N
O
.
33
ANNUAL REPORT
COMVITA.CO.NZ
2020

DIGITAL STRATEGY
Winning in digital has been a key focus and
driver of success for Comvita this year. Overall
eCommerce sales, through our own Comvita
sites and digital partners, grew 35% YOY.
In our key growth markets of North America
and China, a significant part of our business
is now generated through eCommerce – with
digital sales accounting for 53% of total China
and 30% of total US sales for FY20. Revenue
growth through digital channels grew 32% in
China and 51% in North America respectively.
eCommerce growth in the Greater China
market was very encouraging since we already
had a significant share of digital sales there.
Comvita is on all major eCommerce platforms
across China, and we continue using that
presence to reinforce our market leadership
in terms of both Ma ̄nuka honey and Propolis
revenue and brand awareness.
Our owned Comvita sites allow us to
communicate and engage directly with
consumers to grow brand affinity and loyalty.
Revenue through our own eCommerce sites
has grown 63% YOY, with total transactions
up 61% YOY, average transaction value up 8%,
and new registrations up 42%. Visitors to the
US site more than doubled – for both returning
and new visitors. By device, mobile interaction
grew by 56% and desktop by 36% in this period.
We are also starting to build momentum
in our home market in New Zealand, with
revenue through Comvita.co.nz up 85%,
total transactions up 65% and average
transaction value up 15% YOY.
ACCELERATING OUR
DIGITAL LEADERSHIP
——
The FY21 opportunity for us in China will be to convert
all or most of the 112% traffic growth into real
purchases. We have set aside focused budget and
resources in order to win in China.
TRAFFIC GROWTHPURCHASES
+
35%
TOTAL eCOMMERCE
GROWTH
NORTH AMERICA
DIGITAL SHARE:
NORTH AMERICA
DIGITAL GROWTH:
TOTAL
COMVITA.COM
SITES:
HOME MARKET:
COMVITA.CO.NZ
↑ 42%
New
registrations
YOY
TOTAL VISITORS TO
COMVITA.COM (US)
↑ 51%
Repeat users:
411,787 YOY
+
33%
MAINLAND CHINA
eCOMMERCE
KEY INDEX AS
INDICATIVE
SUCCESS METRICS
CHINA/HONG KONG
DIGITAL SHARE
30%
of US revenue
through eCommerce
↑ 51%
US eCommerce
revenue YOY
↑ 63%
Revenue
growth
YOY
↑ 61%
Total
transactions
YOY
↑ 8%
ATV
YOY
↑ 85%
Revenue
growth
YOY
↑ 65%
Total
transactions
YOY
↑ 15%
ATV YOY
↑ 57%
New users:
418,169 YOY
53%
of China revenue
through eCommerce
↑ 33%
Mainland China
eCommerce growth
YOY
↑ 48%
HK eCommerce YOY
↑ 25%
Transactions
↑ 9%
ATV
↑ 18%
No. of customers YOY
LOOKING FORWARD ————
CHN
N
O
.
34N
O
.
35
ANNUAL REPORT
COMVITA.CO.NZ
2020

Bees
A
W O R L D I N
WHICH
THRIVE
KAITIAKITANGA
SUSTAINABILITY
PEOPLE
38
P
 
PLANET
44
P
 
PARTNERSHIP
48
P
 
N
O
.
36N
O
.
37
ANNUAL REPORT
COMVITA.CO.NZ
2020

We are
committed
to playing
our part in
fostering a
world that
balances
people,
profits
and planet.
PEOPLE
Marko Carapic
Apiary Supervisor,
three years with Comvita
The Comvita team are
proud to contribute to
a cause serving future
generations, and we take
every opportunity to share
our love for bees with
the world.
To the delight of the
teaching staff and
students at Kerikeri
Primary School, Marko
(pictured) presented
an introduction of the
biology of bees, their vital
role in the ecosystem
and the magic of natural
bee products.
Noelani Waters Breeding Programme Manager, one year with Comvita
Noe was introduced to beekeeping in the
first year of her bachelor’s degree in Tropical
Agriculture and instantly fell in love. Noelani
joined the Comvita team in 2019 from Hawaii
and is located in the far north at our Queen
Breeding Unit where the environment is
perfect for a selective breeding program.
Noe is collecting and validating data on our
queen breeding programme so that we can
be sure our specialist techniques are producing
top performing queens.

“We work to ensure optimal queen mating and
I love that my work perfectly combines the art
of farming and applied science. New Zealand
is a sort of mecca in the beekeeping world. The
quality and value of Ma ̄nuka honey produced
here has created a very unique beekeeping
industry that drives innovation, science, ethics,
and an unmatched standard. It’s very exciting
to be part of such a respected and professional
agricultural endeavour in one of the most
beautiful places on the planet.”
N
O
.
38N
O
.
39
ANNUAL REPORT
COMVITA.CO.NZ
2020

PEOPLE
This year, we have sought to simplify and
flatten our structure to improve our agility
and consumer-centricity. At year end, there are
540 Comvita full-time equivalent employees
in the Comvita Group, compared with 630 at
the same time last year. Our average tenure is
currently five years, and our engagement this
year was steady at 64% (up 1% on last year).
Our Head Office has been renamed the Market
Support Centre, and customer-facing roles
(sales, marketing and in-market logistics)
now account for 52% of positions versus 38%
a year ago.
Our stand on diversity and inclusion
Our intention is to sustain a diverse workforce
and to build an inclusive environment that
respects and shows care for all our people.
We remunerate all staff in New Zealand at
or above the living wage, and we offer equal
pay for equal work in like-for-like roles.
Women make up the majority of our workforce,
and we believe a more diverse workforce will
help us perform better. We aim for women to
occupy at least 40% of leadership positions
(currently 33%). In the past 12 months, 50%
of executive recruits were female.
0
100
200
300
400
500
600
700
ALLNZUKUSAAUSKORJPNHKCHN
FY19
FY20
Cultural capability is equally important.
Our leadership team has a strong international
pedigree – something we deliberately target
in our talent attraction strategies. In coming
months, we will be expanding our vocational
training programmes. Our goal is for 75% of
participants in our programmes to be Ma ̄ori,
Pasifika or female to encourage them into the
industry and a life-long love for caring for bees.
We want at least 20% of our New Zealand-
based senior leaders to be ethnically diverse
(non-Pa ̄keha ̄) and, reflecting our global
ambitions, for more than 80% of senior
leadership roles to be held by executives
with international careers.
Our next chapter will be capability led
Being part of the solution in an evolving
global landscape requires competent and
empowered people working safely together.
All people at Comvita are expected to lead,
irrespective of title. We are strengthening
our performance culture with an emphasis
on: capacity – freeing people up to focus
on the stuff that’s really important; pace –
accelerating our insight to action cycles; and
course correction – being able to test and learn,
whilst measuring progress, to enhance agility.
To guide us towards even stronger performance,
we have introduced a refreshed set of values
to determine the behaviours that will unite us
together and are in line with our purpose:
They are:
———— We All Lead
———— Togetherness
———— We Love to Learn
———— Kaitiakitanga.
The behaviours that support our four values are
reflected in our performance review and reward
frameworks.
All in it together
Like every other business, we have been affected
by Covid-19, particularly in our Australian and
New Zealand operations. Within 24 hours of
activating our Pandemic Response Plan on
16 March, we seamlessly transitioned more
than 300 people into full remote working
around the world. We have subsequently
maintained this mode of working (excluding
site-specific work) because we believe it
promotes mental wellbeing and productivity.
Since March, we have gifted more than 3,000
Comvita wellbeing packages to staff, their
families and the wider community.
OUR TEAM AT
COMVITA
——
LOOKING
FORWARD
——
52%
TEAM NUMBERS GLOBALLY
SPLIT BY MARKET
CUSTOMER-FACING
ROLES
(FROM 38% IN FY19)
AVERAGE
SERVICE
ENGAGEMENT
63% +1PPT 
MALE 167 / FEMALE 373
5YRS
64%
>3,000 WELLBEING
PACKAGES 
100%
OF NEW ZEALAND-BASED
EMPLOYEES PAID AT LIVING
WAGE RATE OR ABOVE
EQUAL PAY FOR EQUAL
WORK IN ALL EMPLOYING
LOCATIONS
OF NEW ZEALAND-BASED
SENIOR LEADERS ETHNICALLY
DIVERSE (NON-PA
̄
KEHA
̄
)
OF SENIOR LEADERSHIP
ROLES HELD BY EXECUTIVES
WITH INTERNATIONAL
CAREERS
OF SENIOR LEADERSHIP
POSITIONS OCCUPIED
BY WOMEN
OF PARTICIPANTS
IN VOCATIONAL TRAINING
PROGRAMMES ARE WOMEN
OR MA
̄
ORI/PASIFIKA
>
40%
>
20%
>
80%
>
75%
N
O
.
40N
O
.
41
ANNUAL REPORT
COMVITA.CO.NZ
2020

PEOPLE
Improved visibility of safety performance
This year, we moved to TRIFR* because it offers
a higher threshold and level of transparency
for reporting. Our FY20 baseline TRIFR is 5.8.
Total injuries across all teams decreased by 13%.
We’ve also established four key safety pillars
that enable a clear roadmap to achieve our
long-term focus of strong industry leadership
in health and safety - aligning our efforts and
remaining focused on our highest areas of risk.
01. Whanganui and
Wairarapa apiary
teams completing off-
road vehicle training
IMPROVED VISIBILITY
OF SAFETY PERFORMANCE
——
5.8
-
13%
TRIFRTOTAL INJURIES
370+ MOTOR VEHICLE
SAFETY CHECKS
COMPLETED
TOTAL NUMBER OF
SKILLS-BASED SESSIONS
FOR DRIVER TRAINING
DELIVERED
-
27%
MOTOR VEHICLE
INCIDENTS
Over the past 12 months, we
have relentlessly focused on our
number one critical risk, which
is driving vehicles on and off
roads. Underpinned by bowtie
methodology, the number of motor
vehicle incidents in FY20 decreased
by 27% versus the year prior.
This year, we completed more than
370 motor vehicle safety checks
and delivered 149 sessions of skills-
based driver training.
* TRIFR = total recordable injury frequency rate per 200,000 hours
worked globally.
Recordable injuries include injuries requiring medical treatment or
lost time combined.
Several labour hour assumptions made and injury frequency rate
has not been independently verified.
149
LEADERSHIP
Active and meaningful
health and safety
leadership
RISK
Focus on what
matters and target
high-consequence risks
that have the greatest
potential to affect
our people
ENGAGEMENT
A just learning culture 
built on empowerment
and proactive
engagement
RESOURCES
Quality resources
that build capability
and enable our
people to do the
right thing everyday
N
O
.
42N
O
.
43
ANNUAL REPORT
COMVITA.CO.NZ
2020

Carbon management
An assessment of our carbon footprint* at
our Paengaroa site shows our total emissions
have been dropping steadily. We estimate our
emissions have reduced by approximately 30%
over four years.
Working towards our overall goal of being
carbon positive, we are now designing and
implementing a formal Carbon Management
Plan. This plan will expand the scope of
our footprint measurements to include
all global business units and facilities
and validate our carbon emission and
sequestration measurements.
This will include our continual focus on
packaging innovation and improvements,
heading towards our packaging commitment
of being 100% recyclable, reusable or
compostable by 2025.
PLANET
* Carbon footprint data boundaries
Only relates to the footprint of the Paengaroa site (our central
market services, production and warehousing facility). Scope 1
and 2 emissions included. Some Scope 3 data used (air travel,
accommodation, purchased packaging, freight). Scope,
methodology and data has not been independently verified,
and results are preliminary
AIMING FOR THE COMVITA TEAM TO
BE CARBON POSITIVE BY 2030
——
30%27%
CARBON POSITIVE
2030
REDUCTION IN PAENGAROA
CARBON FOOTPRINT OVER
FOUR YEARS
(FROM MATERIALS AND
WAYS OF WORKING)
OF PAENGAROA SITE
POWER FROM RENEWABLE
SOLAR ENERGY
6.4M trees planted and 3,285
tonnes of CO2 sequestered through
Ma ̄nuka regeneration
Our investment in Ma ̄nuka forests
supports biodiversity as well as
the removal of carbon from the
atmosphere – enabling our bees to
collect the highest-quality nectar
and Comvita to be the world leader
in quality.
Every tree we plant helps make a
greener New Zealand. By the end
of our planting season in 2019, we
had planted more than 6.4 million
trees, putting us in second place on
the New Zealand Trees That Count
leaderboard. In the past four years,
we estimate our Ma ̄nuka forests
have removed 3,285 tonnes of CO2,
which is well in excess of our annual
carbon emissions for Paengaroa
(estimated at 2,235 t CO2e for FY20).
6.4MC0
2
TREES PLANTED3,300 TONNES OF CO2
REMOVED DUE TO
MA
̄
NUKA FORESTS
Renewable solar energy
A year ago, we installed our photovoltaic solar
system. Since then, it has generated 26.6%
of our Paengaroa site’s total power use. This
equates to 40 tonnes of avoided CO2 emissions
or enough electricity for 58 houses for one year.
The amount of CO2 we have saved equates
to what 8 hectares of regenerating natural
New Zealand forest would remove from the
atmosphere in one year.
Ma ̄nuka forest carbon sequestering/removals
Calculations based on MPI carbon lookup tables
for indigenous New Zealand forest. Estimated
carbon removals across all Ma ̄nuka forests invested
in and managed. An overestimate is likely given as
Ma ̄nuka is not as carbon dense as other indigenous
forest species.
(Source: Measuring Emissions: A Guide for Organisations, published
by MfE, 2019)
N
O
.
44N
O
.
45
ANNUAL REPORT
COMVITA.CO.NZ
2020

PARTNERSHIP
Responding to nature in need –
the Australian bush fires
When the Australian bushfires affected our
wider-reach communities, we came together
to offer our support in a range of ways. Our
teams across Australia and New Zealand made
personal donations to WIRES/Red Cross, with
these donations matched by Comvita. Our
Australian teams used their Helping Hands
Day to help cater for local firefighters tackling
the Ravensbourne fire in Queensland. We also
donated medical honey to the Wildlife Rescue,
Rehabilitation and Education Association at
Murphy’s Creek to help animals in need.
Comvita also donated around 1,500 units of
medical-grade Ma ̄nuka honey Medihoney®
Antibacterial Wound Gel™ products to rescue
groups across Australia’s affected areas.
Saving the Wild Director Jamie Joseph
travelled around Australia distributing these
products to wildlife centres caring for injured
and burnt survivors. This Ma ̄nuka honey, often
used in hospitals, was used to treat burns and
wounds on a range of wildlife.
01. Melissa Webb, Site
and Administration
Manager helping out
at the Wildlife Rescue
rehab centre.
SUPPORTING NATURE +
BIODIVERSITY
SAVING
THE WILD
RED CROSS –
AUSTRALIAN BUSH FIRES
SUPPORTING THE
ENVIRONMENT
+ WILDLIFE
——
PLEASE VISIT COMVITA.CO.NZ
TO FIND OUT MORE ABOUT OUR
PARTNERSHIPS
Our value of kaitiakitanga meaning
guardianship of the land, has been integral to our
thinking since Comvita was founded.”
N
O
.
46N
O
.
47
ANNUAL REPORT
COMVITA.CO.NZ
2020

PARTNERSHIP
Comvita forms a powerful partnership
to help save the wild
In July 2020, we joined forces with Saving the
Wild, creating a partnership to care for nature
in need by protecting natural habitats and
supporting guardianship of the land by local
communities. This partnership is grounded
in Comvita’s founding principles, built on
respect for nature and humankind.
Saving the Wild is a New Zealand registered
charity founded in 2014 by Jamie Joseph.
Its mission is to protect endangered African
wildlife and ultimately the priceless biodiversity
of the planet.
The first major project earmarked for the
new partnership will see Jamie taking
Comvita’s beekeeping expertise to Kenya,
where local tribes will be trained in beekeeping
and honey production. This programme will
support both environmental biodiversity
and the local community through social
enterprise development.
Jamie describes how this new major partnership
will go beyond funding to connect nature and
people in a harmonious way. “Bees are an
essential part of the ecosystem, but more
knowledge of how they increase, and support
biodiversity will empower the people,” she says.
“We will work with Comvita to bring beekeeping
skills to Kenya and provide training for local
communities to increase jobs and ultimately
support the local economy. What’s more,
elephants fear bees, so with managed bees in
the area, elephants are less likely to encroach
on the communities, ultimately reducing
the potential for trampling or danger to the
animals. It is circular in this way: to save the
wild, we must first save the people.”
At year end, Jamie returned to the Kimana
eco-corridor in Kenya where she is actively
caring for and protecting the local tusker
elephant population and seeking to initiate
a beekeeping project with the local community.
02. The Saving the Wild
team is actively caring
for and protecting the
local tusker elephant
population and seeking
to initiate a beekeeping
project with the local
community.
By forming this long-term partnership
with Jamie and the Saving the Wild team, we can truly
bring our shared values of caring for nature in need
to life in sustained and tangible ways.”
01. Tolstoy in the
Kimana eco-corridor,
Kenya, Africa.
DAVID BANFIELD
—
CEO
BEES TO BRING HARMONY FOR
ELEPHANTS AND PEOPLE IN AFRICA
——
N
O
.
48N
O
.
49
ANNUAL REPORT
COMVITA.CO.NZ
2020

OUTLOOKBOARD OF DIRECTORS
HEWLETT
—
NON-EXECUTIVE CHAIR
Brett
KENNEDY
—
CHAIR OF SAFETY AND
PERFORMANCE COMMITTEE
Sarah
REID
—
INDEPENDENT DIRECTOR
Paul
DAYONG
—
DIRECTOR
Cheng
KEEPING US
FOCUSED
——
MAJOR
—
INDEPENDENT DIRECTOR
Bob
BUNT
—
CHAIR OF AUDIT AND
RISK COMMITTEE
Luke
GUANGPING
—
DIRECTOR
Zhu
CRAIG
—
NON-EXECUTIVE CHAIR*
Neil
$4M
UNDERLYING FIXED COST
REDUCTION OF $4M BEFORE
TRANSFORMATION COSTS
OF $1.5M
TARGETING 150BPS
IMPROVEMENT IN GP
150BPS
MATERIAL INCREASE
IN MARKETING INVESTMENT
IN NORTH AMERICA AND
CHINA C$6M
TARGETING MID-SINGLE DIGIT
REVENUE GROWTH IN FY21 (20%
EBITDA BENEFIT)
BUILDING A BETTER
BUSINESS
Bright
A
FUTURE
*(retired as Chair January 2020,
retired as Independent Director
30 June 2020)
N
O
.
50N
O
.
51
ANNUAL REPORT
COMVITA.CO.NZ
2020

GOVERNANCE
The Board’s Charter sets out the governance
principles, authority, responsibilities, membership and
operation of the Board of Directors. This governance
statement outlines the main corporate governance
practices as at 31 August 2020. The full statement is
available to view at www.comvita.co.nz.
COMPLIANCE
The Board has adopted codes and policies relating
to the conduct of all Directors, executives and staff,
taking guidance from the NZX Main Board Listing
Rules relating to corporate governance and the
NZX Corporate Governance Code.
For the purpose of Listing Rule 3.8.1, the Board
considers that, as at 31 August 2020, the governance
structures, principles, policies and practices it has
adopted are in compliance with the NZX Corporate
Governance Code dated 1 January 2019 (NZX Code)
except to the extent set out in the following pages.
The Company’s Constitution, the Board and Committee
Charters, codes and policies referred to in this section
are available to view at www.comvita.co.nz.
GOVERNANCE PRINCIPLES
AND GUIDELINES
Principle 1 – Code of Ethical Behaviour
Directors set, observe and foster high ethical standards.
The company expects its Directors, officers, and
employees to act legally, to maintain high ethical
standards and to act with integrity consistent with
Comvita’s policies, guiding principles and values.
A Director-specific Code of Ethics sets out these
standards for all Directors and can be found in the
Appendix to the Board Charter on the company’s
website. Further, the company has adopted a new
Code of Ethics applicable to all Directors, officers and
employees in accordance with Recommendation 1.1
of the NZX Code, a copy of which is available on the
website. Training on ethical behaviour is incorporated
within the Company’s induction programme, with
refresher training provided periodically.
Company rules, which all employees and officers
are expected to adhere to, provide clear guidance
across a range of ethical and legal matters to
ensure high standards of performance and behaviour
are maintained when dealing with the company’s
customers, suppliers, shareholders and staff.
Specific policies are also available on the company’s
website as noted below.
Mechanisms are provided within the company-wide
Code of Ethics and general company rules for the
safe reporting of breaches of ethical standards
or other policies or laws, and the consequences
of non-compliance are made explicit.
Trading in Comvita securities
Directors, officers and employees are restricted in
their trading of Comvita securities and must comply
with the company’s Financial Products Dealing Policy,
which is available on the company’s website. The policy
provides guidance on insider trading rules and outlines
process and approval requirements for dealing in
Comvita securities.
Comvita makes the documents listed below available
on its website.
Constitution/ChartersCodes/Policies
Constitution Code of Ethics
Board Charter Continuous
Disclosure Policy
Safety and
Performance
Committee Charter
(previously called
the Remuneration,
People and Culture
and Nominations
Committee Charter)
Financial Product
Dealing Policy
Audit and Risk
Committee Charter
Diversity Policy
Director and Officer
Remuneration Policy
The primary objective of the Board is to
build long-term shareholder value with
due regard to other stakeholder interests.
It does this by guiding strategic direction
and context and focusing on issues
critical for its successful execution.
BANFIELD
—
CHIEF EXECUTIVE
OFFICER
LEADERSHIPGOVERNANACE
David
McNAMEE
—
CHIEF CUSTOMER
OFFICER
Saada
BASKIN
—
CHIEF OPERATING OFFICER
SUPPLY
Colin
BROWN
—
CHIEF SUPPLY
CHAIN OFFICER
Tracy
CHEN
—
REGIONAL CHIEF EXECUTIVE
OFFICER ASIA
Andy
EVANS
—
CHIEF SCIENCE OFFICER
(COMMENCED 1 JULY 2020)
Dr Jackie
BROWN
—
CHIEF PURPOSE &
TRANSFORMATION OFFICER
Holly
BARR
—
CHIEF FINANCIAL OFFICER
(ACTING)
Adrian
PLEASE VISIT COMVITA.CO.NZ
FOR BIOGRAPHIES OF OUR
BOARD AND LEADERSHIP
BUILDING OUR
BUSINESS
——
N
O
.
52N
O
.
53
ANNUAL REPORT
COMVITA.CO.NZ
2020

GOVERNANACE
Principle 2 – Board Composition
and Performance
The Board operates in accordance with the Board
Charter, which sets out the roles and responsibilities
of the Board. A copy of the charter is available on
the company’s website.
There is a balance of independence, skills, knowledge,
experience and perspective among Directors that
allows the Board to work effectively. The Directors
have each signed a written agreement with the
company in accordance with Recommendation
2.3 of the NZX Code.
Responsibility for the day-to-day operations and
administration of the company is delegated by
the Board to the Chief Executive Officer and
the leadership team.
Nominations and appointments
The nomination of candidates for appointment to
the Board is overseen by the Safety and Performance
Committee* and the procedure for nomination
and appointment is detailed in the Safety and
Performance Committee Charter. Such procedure
includes processes to be followed to ensure proper
checks are carried out on all candidates and key
information is obtained to enable the Board and
shareholders to make an informed decision about
whether to elect or re-elect a candidate. It also
provides for an assessment of independence.
Board size and composition
The Board is comprised of Directors with a mix of
qualifications, skills and experience appropriate to
the company’s business. The number of Directors and
rotation requirements are determined in accordance
with the company’s Constitution and the NZX Main
Board Listing Rules. The Constitution provides for
the Directors annually to elect one of their number
as Chair of the Board, and the Board Charter provides
that the Chair should be an independent Director
unless otherwise approved by all Directors. For the
year ended 30 June 2020, the company complied
with the Listing Rules dated 1 January 2019 with
regard to the composition of the Board and the
appointment and rotation of Directors.
Director profiles, ownership interests
and meeting attendance
Profiles of each Director with details of their
experience, length of service and independence
are available on the company’s website.
Director ownership interests (including beneficial
ownership) as at 30 June 2020 are detailed on
page 47-50 of the Financial Statements 2020.
Board and Committee meeting attendance for
the year ended 30 June 2020 is set out below:
Board MemberBoard
Conference Calls &
Special MeetingsAudit and Risk
Safety and
Performance
EligibleAttendedEligibleAttendedEligibleAttendedEligibleAttended
Neil Craig111112123311
Luke Bunt1110121233––
Brett Hewlett111112123344
Sarah Kennedy111112111133
Paul Reid11101293311
Murray Denyer
1
22––––11
Robert Major
2
99108––33
Cheng Dayong
3
7687––––
Zhu Guangping
4
7280––––
Comvita undertook a capital raising in FY20, and as
such, a Due Diligence Committee (DDC) was formed.
Brett Hewlett, Luke Bunt and Neil Craig were Director
representatives on the DDC. Seven DDC meetings
were held, with Directors’ attendance as follows:
Board MemberDDC
EligibleAttended
Neil Craig77
Luke Bunt77
Brett Hewlett77
Gender composition of Directors and officers
The company is committed to diversity (race, gender,
sexuality etc.) in its employment of individuals at all
levels in the organisation. As at 30 June 2020, the
Board had one female Director out of a total of eight
Directors and three female officers and one Kiwi
Chinese executive out of a total of nine officers (2019:
one female Director out of a total of six Directors and
two female Officers out of a total of six Officers).
Diversity Policy
The company’s commitment to diversity has been
reflected in its ongoing appointments at all levels
of suitably qualified women and others with diverse
experiences and perspectives that contribute
importantly to ongoing innovation throughout the
organisation. This commitment is reflected in the
company values and behaviours. The Safety and
Performance Committee is monitoring gender pay
equality, is positive about current progress and has
strategies in place to achieve equality on a scheduled
approach. The company has a Diversity Policy in
accordance with Recommendation 2.5 of the NZX
Code, which is available on the company’s website.
The Safety and Performance Committee has set
measurable targets for achieving greater diversity
within the company. The company is tracking well
against its diversity objectives and targets.
Director training and performance
Board members are encouraged to regularly
participate in learning and self-development
opportunities provided by the Institute of
Directors or other professional groups to
ensure they remain current on how best to
perform their duties as a Director.
The company has a procedure to assess Director,
Board and Committee performance, which is set
out in the Board Charter. In particular, each year,
the Board undertakes a self-assessment of its
performance, processes and procedures.
* Mr Zhu Guangping and Mr Cheng Dayong are not considered
independent as they are associated with substantial product
holders. Zhu Guangping is associated with Li Wang, the largest
shareholder in the company with a shareholding of greater than
5%. Cheng Dayong is associated with China Resources, which
also has a shareholding of greater than 5%. Mr Brett Hewlett
acted in a temporary capacity as an Executive Director during
the interim period between the resignation of the former Chief
Executive Officer in August 2019 and the appointment of the
current Chief Executive Officer in January 2020. Therefore, for
this period only, he was considered non-independent.
Independence of Directors
The majority of the Board are independent Directors.
The Chair is also independent.
For a Director to be considered to be independent, the
fundamental consideration in the opinion of the Board
is that the Director be independent of the Executive
and not have any direct or indirect interest, position,
association or relationship that could or could be
perceived to influence in a material way the Director’s
capacity to bring an independent view to decisions,
to act in the best interests of the company and to
represent the interests of shareholders generally.
In accordance with the NZX Corporate Governance
Code, any Director who is or who is associated with
a substantial product holder is considered by the
Board to not be independent.
Having considered these matters and the
composition of the Board, the company
considers the Directors hold an appropriate
mix of skills, expertise and independence.
The Board has reviewed which of its Directors are
deemed to be independent in terms of the NZX
Listing Rules and has determined that six of the eight
Directors as at 30 June 2020 were independent.*
It is viewed that the Chairs of the Audit and Risk
and the Safety and Performance Committees
are independent, as are the Committee members.
Principle 3 – Board Committees
The Board uses Committees where this enhances
the effectiveness in key areas while retaining Board
responsibility. The Board operates two Committees
to assist in the execution of the Board’s duties: the
Safety and Performance Committee and the Audit
and Risk Committee. Each Committee has a specific
Charter, which can be viewed at the company’s
website www.comvita.co.nz. Committee members
are appointed from members of the Board, and
membership is reviewed on an annual basis.
All matters determined by Committees are submitted
to the full Board as recommendations for Board
decision. Staff members attending those Committees
are at the invitation of the specific Committee.
The Board did not consider it necessary to have any
other Committees for the reporting period as a
standing board Committee.
1. Murray Denyer resigned on 16 August 2019.
2. Robert Major was appointed on 1 September 2019.
3. Cheng Dayong was appointed on 17 October 2019.
4. Zhu Guangping was appointed on 17 October 2019. He was
subsequently granted a leave of absence in accordance with the
Constitution for the period 1 February to 30 June 2020.
* The Remuneration, People and Culture and Nominations
Committee was renamed the Safety and Performance
Committee in August 2020.
N
O
.
54N
O
.
55
ANNUAL REPORT
COMVITA.CO.NZ
2020

GOVERNANACE
Takeover protocols
The Board has established experience in respect
of the various NZX and statutory requirements in
the event of a takeover approach for the company.
The key requirements of the Takeover Code are well
understood by the Board.
Further, the company has established formal protocols
that set out the procedure to be followed if there is a
takeover offer in accordance with Recommendation
3.6 of the NZX Code.
Principle 4 – Reporting and Disclosure
The Board demands integrity both in financial
reporting and in the timeliness and balance of
disclosure on entity affairs.
The company is committed to ensuring integrity and
timeliness in its financial reporting and in providing
information to the market and shareholders that
reflects a considered view on the present and future
prospects of the company.
Financial reporting
The Audit and Risk Committee oversees the quality
and integrity of external financial reporting including
the accuracy, completeness and timeliness of
financial statements. It reviews half-year and annual
financial statements and makes recommendations
to the Board concerning accounting policies,
areas of judgement, compliance with accounting
standards, stock exchange and legal requirements
and the results of the external audit. Management
accountability for the integrity of the company’s
financial reporting is reinforced by the certification
from the Chief Executive Officer and Chief Financial
Officer in writing that the company’s financial
statements are fairly stated in all material aspects.
Timely and balanced disclosure
Continuous disclosure obligations of NZX require all
listed companies to advise the market about any
material events and developments as soon as the
company becomes aware of them. The company
has policies and monitoring in place to ensure that
it complies with these obligations. In particular, the
company has a Continuous Disclosure Policy applicable
to all Directors, officers and employees that is
available on the company’s website.
Non-financial reporting
The company is committed to financial reporting that
is balanced, clear and objective. Broader reporting of
environmental, economic and sustainability factors is
contained in the body of the Annual Report.
Principle 5 – Remuneration
The remuneration of Directors and senior executives
is transparent, fair and reasonable. Making sure
team members and Directors get the rewards
they deserve is the responsibility of the Safety
and Performance Committee.
Non-Executive Directors’ remuneration
The fees payable to the Non-Executive Directors
are determined by the Board within the aggregate
amount approved by shareholders. The Board
considers external information of peer companies
in terms of scale and complexity when setting
remuneration levels. The current Directors’ fee
pool limit is $610,000 approved at the 2016 Annual
Shareholders’ Meeting. Information on payments
to each Director is set out on page 47 of the
Financial Statements 2020.
Chief Executive Officer remuneration
The Chief Executive’s base salary for the FY20 year
was $520,000. Subject to Board approval, for FY20,
the Chief Executive Officer was also entitled to a
short-term incentive if he met agreed financial and
non-financial goals (of up to 25% of base salary) and
a long-term incentive in the form of Performance
Share Rights in reflection of on-boarding and second-
half performance requirements, (with on-target
earnings of $115,000).
Senior executive remuneration
For FY20, senior executive remuneration was
made up of: base or fixed remuneration, an at-risk
component based around individual myscorecard
performance in the year and a share of a bonus pool
if shareholder earnings targets are achieved, subject
to Board approval. In addition, 40 executives currently
participate in a partly paid executive share scheme.
For FY21, senior executive remuneration will be made
up of base or fixed remuneration, an employee bonus
plan and a performance share rights plan.
Staff remuneration
All permanent staff are eligible to participate in a
short-term incentive scheme. Bonus payments are
contingent upon achievement of company targets
for the year (as approved by the Board), as well as
assessment of individual delivery against objectives
cascaded through the organisation and individual
behaviour in line with core values.
In addition, all staff have the opportunity to
participate in a share purchase scheme and the
company provides a non-interest-bearing loan of up
to $2,340 to assist staff to purchase Comvita shares.
Policy
The company has a Remuneration Policy for Directors
and officers in accordance with Recommendation 5.2
of the NZX Code, a copy of which is available on the
company’s website.
Principle 6 – Risk Management
The Board regularly verifies that the entity has
appropriate processes that identify and manage
potential and relevant risks through monthly
Board reporting of the risk register. Further, the
Audit and Risk Committee monitors on a regular
basis the risk management framework to ensure it
remains appropriate. Further detail on the role and
responsibilities of the Audit and Risk Committee in
relation to risk management is set out in the Audit
and Risk Committee Charter.
Business risks
The Chief Executive Officer and leadership team
are required to regularly identify the major risks
affecting the business. These major risks are
included in a risk management register. Strategies
are consistently being developed to mitigate these
risks. Significant risks are discussed at each Board
meeting or as required. The company maintains
insurance policies that it considers adequate to
meet the insurable risks of the Group. Exposure to
any foreign exchange risk is managed in accordance
with policies laid down by the Directors.
As risk assessment is a dynamic environment and
often commercially sensitive, the company reports
on the most significant of these under its continuous
disclosure obligations to the NZX market and in the
Annual Report.
Health and safety
The company employs a Head of Safety and
Sustainability with oversight of health and safety
matters sitting with the recently renamed Safety
and Performance Committee. The health and safety
functions of the Committee include undertaking
due diligence in the identification and monitoring
of workplace hazards, as well as the monitoring
and review of the company’s compliance with
documented occupational health and safety policies
and procedures. Health and safety review reports
are a priority agenda item at all Board meetings,
and specific reviews are sought as required. The Board
undertakes ongoing health and safety education and
visits key operational sites on a scheduled basis.
Safety and Performance Committee
The Safety and Performance Committee (previously
called the Remuneration, People and Culture and
Nominations Committee) comprised of Murray Denyer
(Chair), Neil Craig, Brett Hewlett and Paul Reid for the
period 1 July 2019 – 16 August 2019. Following the
retirement of Murray Denyer from the Board on 16
August 2019, the Committee was reconstituted with
Sarah Kennedy (Chair), Brett Hewlett and Bob Major.
The Committee met four times during the period.
For the FY20 year, all Committee members were
independent Directors with the exception that Brett
Hewlett was not considered independent during the
period August 2019 to January 2020 while he was
temporarily acting in the role of Executive Director.
The Committee recommends the remuneration policies
and packages, including performance incentives for
the Chief Executive Officer and the leadership team.
Additionally, it reviews the performance targets of the
Chief Executive Officer, succession planning for the
leadership team and the Board, risk and compliance
monitoring in relation to the company’s human resources
and operational health and safety oversight, the
company’s performance in respect of responsible
governance and remuneration policies and guidelines
for Directors.
The Committee also carries out the functions of a
nominations Committee, recommending new Director
appointments to the full Board. Further detail on the
Committee’s roles and responsibilities is set out in the
Committee Charter.
Audit and Risk Committee
The Audit and Risk Committee currently comprises
Luke Bunt (Chair), Neil Craig and Paul Reid and
met three times during the period.* For the FY20
year, all Committee members were independent
Directors. The Committee reviews the annual
audit process, the financial and operational
information provided to stakeholders and others,
the management of business risks facing the
organisation and the framework of internal control
and governance that the leadership team and
the Board have established. The Chief Executive
Officer, Chief Financial Officer and General Manager
Finance regularly attend meetings by invitation.
The company’s external auditors attend Committee
meetings as deemed necessary by the Committee.
Further detail on the Committee’s roles and
responsibilities is set out in the Committee Charter.
* Sarah Kennedy was a member of the Audit and Risk Committee
until 16 August 2019 when she assumed the role of Chair of the
Remuneration, People and Culture and Nominations Committee
(now called the Safety and Performance Committee).
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2020

GOVERNANACE
Chief Executive Officer and Chief Financial
Officer assurance
The Chief Executive Officer and Chief Financial Officer
have provided the Board with written confirmation
that the Company’s 2020 financial statements are
founded on a sound system of risk management and
internal compliance and control and that all such
systems are operating efficiently and effectively
in all material respects.
Risk monitoring
The Audit and Risk Committee reviews the company’s
risk management policies and processes, and the
leadership team provides an updated risk assessment
profile to each meeting of the Board.
The Safety and Performance Committee reviews
human resource management risks.
Principle 7 – Auditors
The Board ensures the quality and independence of the
external audit process. A framework for the company’s
relationship with its external auditors is overseen by
the Audit and Risk Committee. Further detail on that
framework and the role and responsibilities of the
Audit and Risk Committee in relation to the external
audit framework is set out in the Audit and Risk
Committee Charter.
Independence
To ensure the independence of the company’s external
auditor is maintained, the Board has agreed the
external auditor should not provide any services
not permitted under International Federation of
Accountants regulations. This is monitored by the
Audit and Risk Committee.
External auditor
Comvita’s external auditor is KPMG. KPMG was
reappointed by shareholders at the 2019 Annual
Shareholders’ Meeting in accordance with the
provisions of the Companies Act 1993. KPMG was
first appointed as auditors in 1998. KPMG has been
invited to attend this year’s Annual Shareholders’
Meeting and will be available to answer questions
about the audit process, Comvita’s accounting
policies and the independence of the auditor.
Internal audit
Comvita currently does not have an internal audit
function. The Audit and Risk Committee is responsible
for reviewing and monitoring the company’s risk
management and internal control framework and
has open communication with external auditors,
financial and senior management and the Board.
The Committee is empowered to investigate any
matter brought to its attention with full access to
all books, records and facilities and personnel of the
company and the power to retain outside counsel
or other experts for this purpose. In addition, the
Board seeks reports on specific areas of potential
concern or to evaluate business performance on a
post-investment basis. The reviews are completed by
appropriate internal staff and/or with external input.
Principle 8 – Shareholder Rights and Relations
The Board fosters constructive relationships with
shareholders, which encourages them to engage
with the company.
The Board aims to ensure shareholders are provided
with all information necessary to assess the company’s
strategic direction and performance. It does this
through a communication strategy that includes:
• periodic and continuous disclosure to NZX
• information provided to media and briefings
to major shareholders
• half-year and annual reports
• the company’s website with an investor
relations section
• future direction presentation at the Annual
Shareholders’ Meeting, which is conducted in
a very open manner, and a range of questions
are considered.
The company aims to ensure the process of
communication with investors is easy and
uses a variety of channels and technologies
to keep its shareholders informed, including
by providing and encouraging investors to
receive communications electronically.
To encourage shareholder participation in meetings,
the Board looks to ensure notices of annual or special
meetings of shareholders are posted on the company’s
website at least 20 working days prior to the meeting.
Major decisions
All major decisions that may result in a change in
the nature of the company’s business are subject
to shareholder approval in accordance with the
Company’s Constitution, the Companies Act 1993
and the NZX Listing Rules. No major decisions required
shareholder approval in the reporting period.
Capital raising
When considering any raising of additional capital,
the Board considers the interests of all shareholders
when assessing its options to raise capital. Where
considered appropriate, the Board will look to raise
additional equity capital from existing shareholders
on a pro-rata basis.
In FY20, Comvita undertook a $50M capital raising,
comprising of a $20M institutional placement and
a $30M pro-rata accelerated non-renounceable
entitlement offer.
Stakeholder interests
The Board respects the interests of stakeholders
within the context of the company’s ownership
type and its fundamental purpose. Comvita aims to
manage its business in a way that will produce positive
outcomes for all stakeholders including the public,
customers, employees, shareholders and suppliers.
The company is strongly committed to acting in
a socially responsible manner with all stakeholders,
including the wider community.
Further detail
Further detail as required by the NZX Listing
Rules and Companies Act 1993 is included in the
financial statements supplied with, and as part
of, the Annual Report.
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ANNUAL REPORT
COMVITA.CO.NZ
2020

DIRECTORY
New Zealand
COMVITA NEW ZEALAND LIMITED
—
23 Wilson Road South | Paengaroa
Private Bag 1 | Te Puke 3153
Bay of Plenty | New Zealand
Phone +64 7 533 1426
Freephone 0800 504 959
info@comvita.com
Japan
COMVITA JAPAN K.K.
—
Sangenjaya Horisho Bld 4F
1-12-39 Taishido, Setagaya-Ku
Tokyo 154-0004 | Japan
Phone +81 3 6805 4780
info@comvita-jpn.com
Korea
COMVITA KOREA CO. LIMITED
—
18F Gwanghwamun Building
149 Sejong-daero, Jongno-gu
Seoul (03186) | Korea
Phone +82 2 2631 0041
service.korea@comvita.com
Australia
COMVITA AUSTRALIA PTY LIMITED
—
10 Edmondstone Street
South Brisbane
Queensland 4101 | Australia
Phone +61 7 3845 1400
Freephone 1800 466 392
Customer Service 1300 653 436
info@comvita.com.au
United Kingdom
COMVITA UK LIMITED
—
2nd Floor, 47a High Street
Maidenhead | SL61JT
United Kingdom
Phone +44 1628 779 460
info@comvita.co.uk
North America
COMVITA USA, INC.
—
506 Chapala Street
Santa Barbara | CA 93101 | USA
Phone +1 855 449 2201
usacustomerservice@comvita.com
Hong Kong
COMVITA HK LIMITED
—
Room 1320 – 1322 Leighton Centre
77 Leighton Road
Causeway Bay | Hong Kong
Phone +852 2562 2335
cs@comvita.com.hk
China
COMVITA FOOD (CHINA) LIMITED
—
Room 2501 - 2502, Block A
Xinhao E Du, No 7018
Caitian Road, Furtian District
Shenzhen 518120
Guangdong | China
Phone +86 755 8366 1958
comvita@comvita.com.cn
OUR OFFICES
——
Directors
COMVITA BOARD OF DIRECTORS
—
Brett Hewlett
Bob Major (appointed 1 Sep 2019)
Luke Bunt
Paul Reid
Sarah Kennedy
Cheng Dayong (appointed 17 Oct 2019)
Zhu Guangping (appointed 17 Oct 2019)
Neil Craig (retired 30 June 2020)
Bankers
WESTPAC BANKING CORPORATION
—
Level 8
16 Takutai Square
PO Box 934
Auckland 1140
Registered Office
COMVITA LIMITED
—
23 Wilson Road South, Paengaroa
Private Bag 1, Te Puke 3153
Bay of Plenty, New Zealand
Phone +64 7 533 1426
Fax +64 7 533 1118
Freephone 0800 504 959
Email investor.relations@comvita.com
www.comvita.com
Auditors
KPMG TAURANGA
—
Level 2
247 Cameron Road
PO Box 110
Tauranga 3140
Solicitors
SHARP TUDHOPE
—
Level 4
152 Devonport Road
Private Bag TG12020
Tauranga 3110
Share Registry
LINK MARKET SERVICES LIMITED
—
Level 11
Deloitte House
80 Queen Street
Auckland 1010
MORE DETAILS
——
This document is printed on environmentally responsible papers, produced using Elemental Chlorine Free
(ECF), FSC certified Mixed Source pulp from Responsible Sources, and manufactured under the strict
ISO14001 Environmental Management System. The ink used in the manufacture of this report is 100%
vegetable based, mineral-oil free and manufactured from 100% renewable resources.
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COM003
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ANNUAL REPORT
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ANNUAL REPORT
2020
COMVITA.CO.NZ
COMVITA

—————

ANNUAL REPORT

—————


2020
A HIVE OF ACTIVITY
——

---

FINANCIAL
STATEMENTS

2020
FOR THE YEAR ENDED 30 JUNE 2020
COMVITA LIMITED

Comvita Financial Statements 2020Comvita Financial Statements 2020 - P1
2
3
4
5
6
7
8
43
47
53
CONTENTS
DIRECTORS’ DECLARATION
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
AUDIT REPORT
STATUTORY INFORMATION
COMPANY DIRECTORY

Comvita Financial Statements 2020 - P2Comvita Financial Statements 2020- P3
DIRECTORS’ DECL A R ATIONCONSOLIDATED
INCOME STATEMENT
Brett Hewlett Luke Bunt
24 August 2020 24 August 2020
For the year ended
In thousands of New Zealand dollars
30 June 2020

30 June 2019
Note
Revenue6195,912
171,104
Cost of sales(99,969)
(107,343)
Gross profit95,943
63,761
Other income7 2,209
6,583
Selling and marketing expenses (60,403)
(43,726)
Administrative expenses10 (24,395)
(19,739)
Distribution expenses(10,301)
(8,394)
Research and development expenses(1,299)
(1,689)
Operating profit/(loss) before financing costs 1,754
(3,204)
Finance income8307
524
Finance expenses8(6,217)
(6,667)
Net finance costs(5,910)
(6,143)
Share of (loss)/profit of equity accounted investees17b(174)
448
Impairment of equity accounted investees17c(5,928)
(2,401)
Impairment of goodwill14-
(19,825)
Loss before income tax (10,258)
(31,125)
Income tax benefit11557
3,408
Loss for the year (9,701)
(27,717)
Earnings per share
Basic earnings per share (NZ cents)25(19.10)(61.05)
Diluted earnings per share (NZ cents)25(19.10)(61.05)
The notes on pages 8 to 42 are an integral part of these financial statements
In the opinion of the directors of Comvita Limited, the financial statements and the notes, on pages 3 to 42:
• comply with New Zealand generally accepted accounting practice and fairly reflect the financial position of the
Group as at 30 June 2020 and the results of their operations and cash flows for the year ended on that date
• have been prepared using appropriate accounting policies, which unless otherwise stated have been consistently
applied, and supported by reasonable judgements and estimates
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
reasonable assurance as to the integrity and reliability of the financial statements.
The directors are pleased to present the financial report, incorporating the financial statements of Comvita Limited
for the year ended 30 June 2020.
For and on behalf of the Board of Directors:

Comvita Financial Statements 2020 - P4Comvita Financial Statements 2020- P5
For the year ended 30 June 2020
In thousands of New Zealand dollars
Share
capital
Foreign
currency
translation
reserve
Hedging
reserve
Fair value
reserve
Retained
earningsTotal
Balance at 30 June 2018137,744(1,659)(2,348)-55,955189,692
Total comprehensive income for the year-
(Loss) for the year----(27,717)(27,717)
Other comprehensive income (net of tax):-
Foreign investor tax credits received----1010
Foreign currency translation differences for equity accounted
investees
-(853)---(853)
Foreign currency translation differences for foreign operations-(1,955)---(1,955)
Effective portion of changes in fair value of cash flow hedges--625--625
Total other comprehensive income-(2,808)625-10(2,173)
Total comprehensive income for the year-(2,808)625- (27,707)(29,890)
Transactions with owners, recorded directly in equity
Share based payment (Note 9)----678678
Issue of ordinary shares
- investment in Comvita China12,312----12,312
- executive share scheme530----530
- employee share purchase scheme77----77
Issue of treasury stock – investment in Apiter580---305885
Issue of treasury stock – supplier share scheme2---(13) (11)
Dividend paid----(918)(918)
Total transactions with owners13,501---5213,553
Balance at 30 June 2019151,245(4,467)(1,723)-28,300173,355
Total comprehensive income for the year
(Loss) for the year----(9,701)(9,701)
Other comprehensive income (net of tax):
Foreign currency translation differences for equity accounted
investees (Note 17b)
-(467)---(467)
Foreign currency translation differences for foreign operations- 1,125--- 1,125
Financial asset – fair value movement---(2,640)-(2,640)
Effective portion of changes in fair value of cash flow hedges--1,196--1,196
Total other comprehensive income-6581,196(2,640)-(786)
Total comprehensive income for the year-6581,196(2,640)(9,701)(10,487)
Transactions with owners, recorded directly in equity
Capital Raising – rights offer
50,000----50,000
Issue expenses related to capital raising
(1,950)----(1,950)
Share based payment (Note 9)
----329329
Issue of treasury stock
-
-
Supplier share scheme502---(43)459
- Issued to CEO (Note 30)
915---(265)650
Acquisition of treasury stock
(572)----(572)
Redemption of ordinary shares related to share schemes
(36)----(36)
Total transactions with owners48,859---2148,880
Balance at 30 June 2020200,104(3,809)(527)(2,640)18,620211,748
The notes on pages 8 to 42 are an integral part of these financial statements
CONSOLIDATED STATEMENT
OF COMPREHENSI V E INCOME
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
The notes on pages 8 to 42 are an integral part of these financial statements
For the year ended
In thousands of New Zealand dollars
30 June 2020

30 June 2019
Note
Loss for the year (9,701)
(27,717)
Items that are or may be reclassified subsequently to the income statement
Foreign currency translation differences for foreign operations 1,431
(2,504)
Foreign currency translation differences for equity accounted investees(467)
(853)
Effective portion of changes in fair value of cash flow hedges 1,658
868
Fair value movement – financial asset(2,640)
-
Foreign investor tax credits received-
10
Income tax on these items 11(768)
306
Income and expense recognised directly in other comprehensive income(786)
(2,173)
Total comprehensive income for the year(10,487)
(29,890)

Comvita Financial Statements 2020 - P6Comvita Financial Statements 2020- P7
As at 30 June
20202019
In thousands of New Zealand dollars
Note
Assets
Property, plant and equipment
13
56,82956,921
Intangible assets and goodwill
14
39,46741,082
Right of use assets
15
11,447-
Biological assets
16
3,7954,048
Investment in equity accounted investees
17
6,2619,755
Other investments
17
82,648
Deferred tax asset128,0436,757
Total non-current assets125,850121,211
Inventory
19
112,679132,192
Trade receivables
20
17,72630,878
Sundry receivables
21
12,34916,289
Cash and cash equivalents16,68010,314
Derivatives
18
-192
Tax receivable366553
Assets held for sale137731,414
Total current assets160,573191,832
Total assets286,423313,043
Equity
Issued capital200,104151,245
Retained earnings18,62028,300
Reserves
(6,976)
(6,190)
Total equity24211,748173,355
Liabilities
Loans and borrowings
26
32,20099,250
Employee benefits
22
414446
Lease liability 7,891-
Deferred tax liability
12
2,1943,321
Total non-current liabilities42,699103,017
Trade and other payables
23
22,70729,471
Lease liability3,744-
Employee benefits
22
3,6534,041
Tax payable1,158739
Derivatives
18
7142,420
Total current liabilities31,97636,671
Total liabilities74,675 139,688
Total equity and liabilities286,423313,043
For the year ended 30 June
In thousands of New Zealand dollars
20202019
Note
Receipts from customers207,143191,331
Payments to suppliers and employees(161,394)(163,963)
Interest received344
Interest paid(4,421)(4,782)
Taxation paid(2,065)(1,504)
Net cash flows from operating activities2739,29721,086
Investment in equity accounted investees-(6,512)
(Consideration paid)/cash acquired from business combination(4,505)5,456
Prepayments and loans to equity accounted investees(1,621)(1,307)
Interest from equity accounted investees-268
Receipt of dividend from equity accounted investee-519
Interest from related parties3636
Payment for the purchase of property, plant and equipment(5,206)(16,125)
Receipt for the disposal of property, plant and equipment2,336336
Payment for the purchase of biological assets-148
Receipt from sale of intangibles2622
Payment for the purchase of intangibles(496)(545)
Payment for derivative settlement(263)-
Net cash flows from investing activities(9,693)(17,704)
Proceeds from the issue of share capital 47,641607
Repayment of lease liabilities(3,862)-
(Repayment)/proceeds from loans and borrowings(67,050)2,550
Payment of dividends-(918)
Net cash flows from financing activities(23,271)2,239
Net increase in cash and cash equivalents6,3335,621
Cash and cash equivalents at the beginning of the year10,3144,947
Effect of exchange rate fluctuations on cash held33(254)
Cash and cash equivalents at the end of the year16,68010,314
Represented as:
Cash and cash equivalents2616,68010,314
Total16,68010,314
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CASH FLOWS
The notes on pages 8 to 42 are an integral part of these financial statementsThe notes on pages 8 to 42 are an integral part of these financial statements

Comvita Financial Statements 2020 - P8Comvita Financial Statements 2020- P9
1. REPORTING ENTITY
Comvita Limited (the “Company”) is a Company domiciled in New
Zealand, and registered under the Companies Act 1993 and listed
on the New Zealand Stock Exchange (“NZX”). The Company is an
issuer in terms of the Financial Reporting Act 2013 and Financial
Markets Conduct Act 2013. The financial statements of the Group
for the year ended 30 June 2020 comprise the Company and its
subsidiaries (together referred to as the “Group”) and the Group’s
interest in equity accounted investees.
The principal activity of the Group is that of manufacturing and
marketing quality natural health products, apiary ownership and
management.
2. BASIS OF PREPARATION
(a) Statement of compliance
The Company is a FMC reporting entity for the purposes of the
Financial Reporting Act 2013 and under part 7 of the Financial
Markets Conduct Act 2013. These Financial Statements comply
with these Acts and have been prepared in accordance with the
New Zealand Equivalents to International Financial Reporting
Standards and International Financial Reporting Standards as
appropriate for profit-oriented entities.
The financial statements were approved by the Board of Directors
on 24 August 2020.
(b) Basis of measurement
The financial statements have been prepared on the historical
cost basis except for derivative financial instruments, financial
instruments designated as fair value through other comprehensive
income, biological assets and leases which are measured at fair
value.
The methods used to measure fair values are discussed further in
the respective notes.
(c) Functional and presentation currency
These financial statements are presented in New Zealand dollars
($), which is the Company’s functional currency. Amounts have
been rounded to the nearest thousand.
(d) Accounting estimates and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
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 and in any future periods
affected. In particular, information about significant areas
of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the
amount recognised in the financial statements are set out below:
(i) Measurement of recoverability of cash generating units
Impairment reviews are performed by management annually
to assess the carrying value of cash generating units containing
goodwill. The recoverable amounts of cash-generating units
have been determined based on value-in-use calculations. These
calculations require the use of estimates. Refer to Note 14.
(ii) Intangible assets
The estimation of useful lives of intangible assets such as
distribution networks have been based on historical experience.
The useful lives are reviewed at least once per year and
adjustments to useful lives are made when considered necessary.
(iii) Valuation of equity accounted investees
An assessment of the carrying value of investments in equity
accounted investees is performed at least annually and considers
objective evidence for impairment on each investment, taking into
account observable data on the investment, the status or context
of markets, its own view of fair value, and its long term investment
intentions. The assessment also requires judgements about the
expected future performance and cash flows of the investment.
(v) Deferred consideration on business combinations
The valuation of the deferred consideration on the Group’s
business combinations are based on the post-acquisition
performance of the business and the amounts payable shall be
remeasured at their fair value resulting from events or factors that
emerge after the acquisition date, with any resulting gain or loss
recognized in the income statement. Refer note 17.
(vi) Leases
Comvita assesses at lease commencement whether it is
reasonably certain to exercise extension options where included
in the contract, and where it is reasonably certain, the extension
period has been included in the lease liability calculation.
The Group calculates its incremental borrowing rate with reference
to the external borrowing facilities available to the Group. The
incremental borrowing rate is used to measure lease liabilities.
(vii) Recoverability of Deferred Tax Assets
The utilisation of tax loss carry-forwards is dependent on expected
future taxable profits in excess of the profits from the reversal
of existing taxable temporary differences. This recognition is
based on current budgets and financial forecasts completed by
management.
(viii) Valuation of biological assets
The fair value of biological assets is assessed on an annual basis
which involves reviewing the number of operational hives in use as
well as ensuring the value per hive is in line with guidance provided
by the Ministry of Primary Industries, refer note 16.
3. SIGNIFICANT ACCOUNTING
POLICIES
(a) Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists
when the Group has the power to govern the financial and
operating policies of an entity so as to obtain benefits from
its activities. In assessing control, potential voting rights that
presently are exercisable are taken into account. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until
the date that control ceases.
3. SIGNIFICANT ACCOUNTING
POLICIES
(iii) Investments in equity accounted investees
Associates and Joint Ventures are those entities in which
the Group has significant influence, but not control, over the
financial and operating policies. Associates and Joint Ventures
are accounted for using the equity method (equity accounted
investees). The consolidated financial statements include the
Group’s share of the income and expenses of equity accounted
investees, after adjustments to align the accounting policies with
those of the Group, from the date that significant influence or
joint control commences until the date that significant influence
or joint control ceases.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are translated to the functional currency at the exchange rate at
that date.
(ii) Foreign operations
The assets and liabilities of foreign operations with currencies
different to the Company including goodwill and fair value
adjustments arising on acquisition, are translated to New
Zealand dollars at exchange rates at the reporting date. The
income and expenses of such foreign operations are translated
to New Zealand dollars at exchange rates at the dates of the
transactions. Foreign currency differences are recognised in the
foreign currency translation reserve (FCTR).
(c) Financial assets and financial liabilities
(i) Classification
The Group classifies its financial assets in the following
measurement categories:
• those to be measured subsequently at fair value (either
through other comprehensive income, or through profit or
loss), and
• those to be measured at amortised cost.
(ii) Measurement
At initial recognition, the Company measures a financial asset at
its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit
or loss.
Financial assets with embedded derivatives are considered in
their entirety when determining whether their cash flows are
solely payment of principal and interes
t.
Debt instruments
Subsequent measurement of debt instruments depends on the
group’s business model for managing the asset and the cash
flow characteristics of the asset. There are three measurement
categories into which the group classifies its debt instruments:
• Amortised cost: Assets that are held for collection of
contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at
amortised cost. Interest income from these financial assets
is included in finance income using the effective interest
rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as separate line
item in the income statement.
• FVOCI: Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal
and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest income
and foreign exchange gains and losses which are recognised
in profit or loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in
other gains/(losses). Interest income from these financial
assets is included in finance income using the effective
interest rate method. Foreign exchange gains and losses
are presented in other gains/(losses) and impairment
expenses are presented as a separate line item in the
income statement.
• Fair Value through Profit or Loss (FVPL): Assets that do
not meet the criteria for amortised cost or FVOCI are
measured at FVPL. A gain or loss on a debt investment that
is subsequently measured at FVPL is recognised in profit
or loss and presented net within other gains/(losses) in the
period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair
value. Where the group’s management has elected to present
fair value gains and losses on equity investments in OCI, there
is no subsequent reclassification of fair value gains and losses
to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in
profit or loss as other income when the group’s right to receive
payments is established.
Changes in the fair value of financial assets at FVPL are
recognised in other gains/(losses) in the income statement as
applicable. Impairment losses (and reversal of impairment losses)
on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
Accounting for finance income and expense is discussed in Note
3(m).
(d) Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
equity securities, trade and other receivables, cash and cash
equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially
at fair value plus, for instruments not at FVPL, any directly
attributable transaction costs.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS

Comvita Financial Statements 2020 - P10Comvita Financial Statements 2020- P11
3. SIGNIFICANT ACCOUNTING
POLICIES
A financial instrument is recognised if the Group becomes a party
to the contractual provisions of the instrument. Financial assets
are derecognised if the Group’s contractual rights to the cash
flows from the financial assets expire or if the Group transfers
the financial asset to another party without retaining control
or substantially all risks and rewards of the asset. Regular way
purchases and sales of financial assets are accounted for at trade
date, i.e., the date that the Group commits itself to purchase or
sell the asset. Financial liabilities are derecognised if the Group’s
obligations specified in the contract expire or are discharged or
cancelled.
Cash and cash equivalents comprise cash balances and demand
deposits. Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the purpose of the
statement of cash flows.
Accounting for finance income and expense is discussed in Note
3(m).
Instruments at fair value through the income statement
An instrument is classified as at FVPL if it is held for trading or is
designated as such upon initial recognition. Financial instruments
are designated at FVPL if the Group manages such investments
and makes purchase and sale decisions based on their fair value.
Upon initial recognition, attributable transaction costs are
recognised in the income statement when incurred. Subsequent to
initial recognition, financial instruments are measured at fair value,
and changes therein are recognised in the income statement.
(ii) Derivative financial instruments
The Group uses derivative financial instruments to hedge its
exposure to foreign exchange and interest rate risks arising from
operational, financing and investment activities. In accordance
with its treasury policy, the Group does not hold or issue derivative
financial instruments for trading purposes. However, derivatives
that do not qualify for hedge accounting are accounted for as
financial instruments designated at FVPL.
Derivative financial instruments are recognised initially at fair
value and transaction costs are expensed immediately. Subsequent
to initial recognition, derivative financial instruments are stated
at fair value. The gain or loss on remeasurement to fair value
is recognised immediately in the income statement. However,
where derivatives qualify for hedge accounting, recognition of
any resultant gain or loss depends on the nature of the hedging
relationship .
Cash flow hedges
Changes in the fair value of the derivative hedging instrument
designated as a cash flow hedge are recognised in other
comprehensive income and presented in equity in the hedging
reserve to the extent that the hedge is effective. To the extent
that the hedge is ineffective, changes in fair value are recognised in
the income statement.
If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, then hedge
accounting is discontinued prospectively. The cumulative gain or
loss previously recognised in equity remains there until the forecast
transaction occurs. The amount recognised in equity is transferred
to the income statement in the same period that the hedged item
affects the income statement.
(e) Share capital
(i) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share entitlements
are recognised as a deduction from equity.
(ii) Repurchase of share capital
When share capital recognised as equity is repurchased, the
amount of the consideration paid, including directly attributable
costs, is recognised as a deduction from equity. Repurchased
shares are classified as treasury shares and are presented as a
deduction from total equity.
(f) Property, plant and equipment
(i) Recognition and measurement
IItems of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses.
Cost includes expenditures that are directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs
directly attributable to bringing the asset to a working condition
for its intended use, and the costs of dismantling and removing the
items and restoring the site on which they are located. Purchased
software that is integral to the functionality of the related
equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and
equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the
part will flow to the Group and its cost can be measured reliably.
The costs of the day-to-day servicing of property, plant and
equipment are recognised in the income statement as incurred.
(iii) Depreciation
Depreciation is recognised in the income statement on a straight-
line basis over the estimated useful lives of each part of an item of
property, plant and equipment. Land is not depreciated.
The estimated useful lives for the current and comparative periods
are as follows:
• Buildings up to 50 years
• Plant and machinery 2 - 20 years
• Vehicles 4 -10 years
• Office equipment, furniture and fittings 2 -10 years
• Bearer plants 100 years
Depreciation methods, useful lives and residual values are
reassessed at the reporting date.
3. SIGNIFICANT ACCOUNTING
POLICIES
(g) Biological assets
Biological assets are measured at fair value less point-of-sale costs,
with any change therein recognised in the income statement. Point-
of-sale costs include all costs that would be necessary to sell the
assets. Agricultural produce from biological assets is transferred to
inventory at fair value, by reference to market prices for honey, less
estimated point-of-sale costs at the date of harvest.
(h) Intangible assets and goodwill
(i) Goodwill
Goodwill that arises on the acquisition of subsidiaries and other
business combinations is presented within intangible assets.
Goodwill is measured at cost less accumulated impairment losses.
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of
gaining new scientific or technical knowledge and understanding, is
recognised in the income statement when incurred.
Development activities involve a plan or design for the production
of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs
can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and
the Group intends to and has sufficient resources to complete
development and to use or sell the asset. The expenditure
capitalised includes the cost of materials, direct labour and
overhead costs that are directly attributable to preparing the asset
for its intended use. Other development expenditure is recognised
in the income statement when incurred. Capitalised development
expenditure is measured at cost less accumulated amortisation
and accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the
future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally
generated goodwill and brands, is recognised in the income
statement when incurred.
(iv) Amortisation
Amortisation is recognised in the income statement on a straight-
line basis over the estimated useful lives of intangible assets, other
than goodwill, from the date that they are available for use. The
estimated useful lives for the current and comparative periods are
as follows:
• Intellectual property and other intangible assets 3 – 20 years
• Capitalised development costs 2 – 5 years
• Software 3 – 10 years


(i) Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of inventories is based on the weighted average
principle, and includes expenditure incurred in acquiring the
inventories and bringing them to their existing location and
condition. In the case of manufactured inventories and work
in progress, cost includes an appropriate share of production
overheads based on normal operating capacity. Net realisable value
is the estimated selling price in the ordinary course of business, less
the estimated costs of completion and selling expenses.
The cost of items transferred from biological assets is their fair
value less point-of-sale costs at the date of transfer.
(j) Impairment
The Group’s assets are reviewed at each reporting date to
determine whether there is any objective evidence of impairment.
An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. Impairment losses
directly reduce the carrying amounts of assets and are recognised
in the income statement.
(i) Impairment of receivables
The group assesses on a forward-looking basis the expected credit
losses associated with its debt instruments carried at amortised
cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the company applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
The recoverable amount of the Group’s investments in receivables
carried at amortised cost is calculated as the present value of
estimated future cash flows. Impairment losses on an individual
basis are determined by an evaluation of the exposures on an
instrument by instrument basis. All individual instruments that are
considered significant are subject to this approach.
(ii) Non-financial assets
An impairment loss is recognised if the carrying amount of an
asset or its cash-generating unit exceeds its recoverable amount.
A cash-generating unit is the smallest identifiable asset group
that generates cash flows that are largely independent from
other assets and groups. Impairment losses are recognised in the
income statement. Impairment losses recognised in respect of
cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit (group of units)
on a pro rata basis. When an event occurring after the impairment
was recognised causes the amount of the impairment to decrease,
the decrease in impairment loss is reversed through the income
statement.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to sell.
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 of the time value of money
and the risks specific to the asset.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS