Comvita Limited (CVT) 2021 Annual Report
2021
ANNUAL REPORT
COMVITA.CO.NZ
This year, we made
good gains with our
plans to strengthen the
business. There’s still
a way to go of course,
but the stabilising and
focusing work of last
year is now largely
behind us. Overall,
we’re happy with where
we’ve landed.
—— ——
Our two major markets shifted
up a gear, we did more business through
our digital channels and we focused
on the products that bring us the
most margin. By truly investing in
our brand and the service we deliver
to our customers, we reframed
Comvita as a company that is about
so much more than what’s in the jar.
Introduction 1 — Strategy 6 — Results at a glance 16 — Chair + CEO 18 — Year in Review 26
Focus on our Markets 30 — Around the world 32 — Digital Strategy 42 — Bees, People, Sustainability
and Partnerships 44 — Leadership 62 — Governance 64 — Directory 70
CONTENTS
SO FAR —
SO GOOD
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ANNUAL REPORT
COMVITA.CO.NZ
2021
PROVENANCE
“You have come too far not to go further, you have
done too much not to do more”
In this year’s report, we report back on the progress
we have made as a company and the results we
generated through pursuing our strategy. As we
have indicated previously, Comvita is on a journey
to redefine its long-term prospects. This report
examines the progress we have made across the
three parts of that journey – Stabilise, Transform
and Build long-term resilience and growth. We also
report on the many advances we have made across
the business to build a resilient, socially conscious,
well-branded entity that trades globally, both in
market and digitally. Thanks for taking the time to
read more about our progress.
OF MĀNUKA
Kua tawhiti ke- to- haerenga mai kia
kore e haere tonu. He nui rawa o-
mahi kia kore e mahi tonu.”
THE
TĀ HIMI HĒNARE
(SIR JAMES HĒNARE)
NGATI HINE ELDER
& LEADER
2021
ANNUAL REPORT
COMVITA.CO.NZ
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SAN FRANCISCOSHANGHAI
This stuff is the best of the best. First discovered it on a trip to New Zealand.
I've tried many Ma
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nuka brands, but Comvita 20+ is the only one that has
really helped with GI issues and staying healthy. A bit pricey for sure, but
100% worth it. Thank you Comvita!”
COMVITA CUSTOMER IN NORTH AMERICA
SOUGHT OUT INASKED FOR IN
The Comvita Ma
-
nuka UMF 10+ honey is very amazing.
Smells rich and mellow texture. If you never try this before,
try it because the product is really good. Very nice gifts.”
TMALL CUSTOMER IN CHINA
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ANNUAL REPORT
COMVITA.CO.NZ
2021
S
T
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T
R
A
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F
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M
—— —— Our total focus across the business
is on the delivery of our three-part plan
to stabilise performance, transform the
organisation and build long-term resilience
and growth. Our results are gaining
momentum. While we are pleased with
progress so far, we recognise there is
significant room for further improvement.
At this point, we are 18 months into a five-
year chapter. Our goal is to systematically
build the foundations for long-term growth
and, in the process, build stakeholder trust.
OUR
FOR BUILDING A BETTER BUSINESS
STRATEGY
B
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G
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M
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S
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G
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W
T
H
01
STRATEGY
02
STRATEGY
03
STRATEGY
This strategy is about
building long-term
resilience and growth.
Our status on this
strategy is amber.
Our goal is to stabilise underlying group
performance. We achieved EBITDA of
$25.5M – a +511% improvement vs pcp.
While we are encouraged by results at the
top end of guidance and we are making
good progress on a number of other key
strategic goals, the key here will be to
ensure profitable growth in Australia and
New Zealand (ANZ) in line with our goal
to win at home.
With our organisational review and
simplification now complete, we are
bedding in a performance-driven
culture at Comvita with the emphasis
on performance and culture. The main
transformation focus is on digitisation of
the entire business to improve efficiency,
agility and insight. Through this, we will
de-risk the business as we systemise
learnings and enhance end-to-end
thinking. Ownership of consumer data
and associated insights is key to long-
term growth.
The focus of this strategy is on
enhancing our markets, channels
and product categories.
We are making good progress on
delivering double-digit growth in our
focus growth markets, in Mānuka and
in our digital channels. True digital
transformation, delivering a unique world
class digital experience, will take about
another 18 months. The net impact will
see Comvita recognised as a high-value
premium FMCG lifestyle brand.
02.
01.
03.
Focus
This strategy
focuses on stabilising
performance.
Our status on this
strategy is amber.
This strategy
aims to achieve
a transformed
organisation.
Our status on this
strategy is amber.
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2021
STRATEGY
Double-digit top and
bottom-line growth:
China, North America,
Mānuka, Propolis, OLE
—
Digital to 38%
of Group sales
—
Experiential store
launched China
—
Stabilisation of ANZ
performance
Profitable growth
in EMEA
—
SKU numbers
reduced by 20%
—
Inventory reduced
—
Double-digit EPS
growth
—— —— There were many achievements throughout the year that
confirmed for management and the Board that our strategies are
working and that we are reaping the rewards of pursuing a clear
and robust plan. Good progress financially was accompanied by
a number of milestones that point to the importance of pursuing
a holistic approach.
Strong Q1
performance.
Double-digit
revenue growth.
Increased brand
investment.
Appointment of
key leadership
team in China
market.
—
1,600 stores
added to US
distribution.
Record
11/11 results
and strong
Black Friday
performance.
Sales in Korea
improved +30%
year on year.
Strong half-
year earnings
were in line
with guidance.
In particular,
we saw good
management
of cash and
inventory.
Launch of
experiential
Wellness Lab
in Auckland.
—
Production
transformation
project
delivered IRR
of 41%.
Launch of
premium UMF
25+ Mānuka
honey on
International
Women’s Day.
—— —— Event / Programme
—— —— Impact and progress
New harvest
model proves to
be successful.
Inaugural
gathering of
apiary team in
Paengaroa.
Record 6/18
results in China
market. We
are the only
international
brand in the
top 10 of the
Healthy Foods
category.
Breakeven
business model
proven in EMEA.
(Apr-June):
Australia/
NZ +17 % vs
pcp and +33%
vs previous
quarter.
FY21 EBITDA
result at the top
end of guidance.
Dividends
resume.
Q1OctoberNovemberDecemberHalf year resultsFebruaryMarchAprilMayJuneQ4
Full Year
SIGNIFICANT
PROGRESS
A YEAR OF
FORWARD
TO FY22
SO GOOD:
SO FAR:
LOOKING
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ANNUAL REPORT
COMVITA.CO.NZ
2021
STRATEGY
Solid
BASIS
What we said What we have achieved
This was our first full year as a new team
to focus on delivery of results in order to
start the process of building long-term
stakeholder value. We have delivered results
at the top end of guidance and proven that
our new harvest model de-risks the business
so that we can focus on where we generate
our earnings – in markets with discerning
consumers. Our joint venture review is now
complete, and as part of that, we have taken
a close review of any underperforming assets.
Our reset capital structure and cash focus
has seen good operating cash flows, allowing
us to pay down debt.
—— —— 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.
Key milestones
Half-year earnings
reflecting true
business seasonality
—
Full-year earnings
at $25.5M
—
Q4 performance in
ANZ +17%
—
Net debt $4.6M
—
Dividends resumed
NEXT STRATEGY
STRATEGY
STABILISE
TRANSFORM
BUILD LONG-TERM
RESILIENCE AND GROWTH
Strategy one
of our three-part
plan that will take
us through the next
three to five years:
A
Single-digit growth in ANZ
—
Earnings in line with
guidance
—
Improvement in team NPS
—
Double-digit EPS growth
Looking forward
DELIVERING
“It was important to deliver results in line
with our revised higher guidance to help
build stakeholder trust.”
BRETT HEWLETT INDEPENDENT CHAIR
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2021
Fa st
FORWARD
What we said What we have achieved
Winning in our focus growth markets and
in our focus categories is key to us achieving
our 2025 goals. We are pleased to report
that, during this period, we delivered double-
digit top and bottom-line growth in China,
North America, Mānuka and digital channels.
Our China performance is the standout
result, with us achieving record results in
the key 11/11 and 6/18 festivals and a record
annual result for mainland China. Hong Kong
SAR, while suffering for top-line growth,
delivered improved profitability as we again
leveraged our leadership team in Shenzhen.
Our transformation plan is on track, with
investment to date of $1.2M delivering over
$12M of improvement in this result. We’ve
also seen underlying cost reduction of
$5.7M to date and a 730 basis points (bps)
improvement in gross profit. Net debt finished
the year at $4.6M with good management
of working capital over the period, including
reducing inventory by $11.7M.
—— —— 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
ensures 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.
Key milestones
Double-digit top and
bottom-line growth in
China and North America
—
Digital revenue +17%
to 34% of total Group
—
Breakeven in EMEA
—
Net debt of $4.6M
NEXT STRATEGY
STRATEGY
STABILISE
TRANSFORM
BUILD LONGftTERM
RESILIENCE AND GROWTH
Strategy two of our
three-part plan that will
take us through the next
three to five years:
Looking forward
Double-digit growth in
China and North America
—
Digital sales to at
least 38% of total
at accretive margins
—
Underling net debt
reduction (before
reinvestment)
—
Double-digit EPS growth
DELIVERING
“Our excellent progress in focus growth
markets supports our belief that discerning
consumers are demanding Comvita.”
DAVID BANFIELD CEO
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2021
DELIVERING
“Gaining dual IANZ and MPI accreditation is
an industry first and testament to the
investment we have put into laboratory
capability and our unrelenting focus on
higher-quality standards.”
DR JACKIE EVANSCHIEF SCIENCE OFFICER
Ye a r s
TO COME
What we said What we have achieved
Over the course of this year, we have defined and
shared our future state business model that is
designed to build long-term stakeholder value.
Our 60:15:20 model sets out the aim to deliver
a GP of at least 60% by 2025, invest 15% in
marketing to build brand affinity and deliver 20%
EBITDA returns. We have made good progress
this year, improving gross profit by 730 bps and
increasing our EBITDA percentage to 13.3% of
sales. We expect further improvements in FY22.
We have an absolute focus on ensuring that
health and safety is in line with the best
standards around the world and our team return
home safely at the end of any work day. We are
pleased to see further improvement in this year’s
results, with total recordable injury frequency
rate (TRIFR) reduced by 9%.
In addition, we share our first carbon footprint
measurement in this report (Scope 1 and 2
and limited Scope 3) as we look to deliver our
carbon neutral plan by 2025 and carbon positive
by 2030. It’s encouraging to note that we are
removing nearly twice as much carbon as we are
emitting (limited Scope 3). We also share our
2030 Harmony plan, which sets out our broader
ambition as an organisation.
—— —— 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 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.
Key milestones
730 bps increase in GP
—
$8.7M (56%) increase
in brand investment
—
Flat structure driving
performance
—
First carbon footprint
report net +1,900 tonnes
of CO
2
e
—
TRIFR -9%
STRATEGY
STABILISE
TRANSFORM
BUILD LONGftTERM
RESILIENCE AND GROWTH
Strategy three of our
three-part plan that
will take us through the
next three to five years:
Looking forwards
150 bps improvement in GP
(second half weighted)
—
B Corp certified
—
Incremental investment
in science, with new
patents filed to showcase
our industry-leading
capability and category
understanding
FOR
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2021
Results
+31%
CHINA GROWTH
IN LOCAL CURRENCY
9%
REDUCTION
IN TRIFR
4CPS
FULLY IMPUTED
DIVIDEND DECLARED
+730BPS
GROSS
PROFIT
$8.7M
MARKETING
INVESTMENT +$8.7M
OR +56 %
$4.6M
NET DEBT,
INVENTORY REDUCTION
$11.7M, OPERATING CASH
INFLOW $24.8M
AT A GLANCE
+23%
NORTH AMERICA GROWTH
IN LOCAL CURRENCY
+17%
DIGITAL CHANNEL GROWTH
+10%
MĀNUKA REVENUE
$9.5M
REPORTED
NPAT $9.5M VS.
($9.7M) IN PCP
$25.5M
+ $21.3M VS. JUNE 2020
OR +511%
TRANSFORMATION
PLAN
ON
TRACK
INCOME STATEMENT
For the year ended
NZD 000's
FY2021
$'000
FY2020
$'000
Variance
$
Variance
%
Revenue (Reported Currency)191,734195,912(4,178)(2.1%)
Revenue (Constant Currency)*198,832195,9122,9201.5%
Marketing24,21615,5068,71056.2%
EBITDA*25,5234,17921,344510.8%
Net Profit after Tax9,479(9,701)19,180197.7%
BALANCE SHEET
As at
NZD 000's
30 June
2021
$'000
30 June
2020
$'000
Variance
$
Variance
%
Net Debt4,58315,520(10,937)(70.5%)
Inventory101,008112,679(11,671)(10.4%)
* EBTIDA and constant currency revenue are non-GAAP measures. We monitor these as key performance indicators and believe they assist investors in
assessing the performance of the core operations of our business.
REPORTED EBITDA
SO FAR —
SO GOOD
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2021
RESULTS AT A GLANCE
Global
BENCHMARK
RESULTS
You must be pleased with this year’s results?
BRETT: We’ve continued progressing towards the
kind of financial performance the Board believes
this company is capable of. We’re not there yet, but
this year’s solid earnings are at the top end of our
guidance and well above the expectations set this
time last year. David and the new management
team have had to carefully guide the company
through unprecedented change and uncertainty.
This result speaks volumes to both their leadership
capability and resilience and reinforces the
confidence we have in the value of our premium
brand and the fundamentals of our global
business model. Well done to everyone involved.
DAVID: Naturally I’m pleased that we’ve
delivered an EBITDA earnings result at the
top end of guidance and reduced net debt to
$4.6M. I would like to thank the whole team
who have worked incredibly hard to deliver this
result and deserve the opportunity to celebrate
and reflect on their individual and collective
contributions to return Comvita to profitability.
I would also like to thank Brett and the Board
for their support and guidance throughout
the year – this has been a big team effort.
It says a lot that we have been able to deliver
these results despite significant headwinds in
Australia, New Zealand, Hong Kong SAR and the
UK. Having said that, our business model needs
to demonstrate that level of resilience if we are
to continue building trust with all stakeholders.
Our energy, passion and attention now turns to
deliver our FY22 guidance and continuing the
process to rebuild stakeholder trust. We still have
a long way to go to deliver the true potential of
Comvita as captured in our five-year plan. Our aim
is to deliver our 60:15:20 model by 2025 – 60% GP,
15% marketing to sales and 20% EBITDA.
Your business model is also quite different
from others. Why have you chosen to shift
from sell-in to sell-through?
DAVID: Our business model is absolutely unique.
We truly operate from end to end. We own
and operate Mānuka forests planted with our
unique Mānuka cultivars, with hives cared for by
our own beekeeping team and honey extracted
at our own facilities. We have a high-quality
production facility powered by photovoltaic cells
with our own independently verified laboratory
on site – the only one in the industry. We also
have our own teams on the ground around the
world, whereas most of our competitors rely
on third parties to execute their plans on the
ground, in market. All of that means we’re better
connected to consumers’ changing needs.
AN INTERVIEW
SETTING
THE
Better to act your way
to a new way of thinking, than think
your way to a new way of acting”
OUR CHAIR AND CEO
SHARE THEIR VIEWS OF OUR PROGRESS
THIS YEAR.
BRETT HEWLETT — CHAIR
DAVID BANFIELD — CEO
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ANNUAL REPORT
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CHAIR + CEO
Our focus on sell-out is designed to ensure that
we understand drivers of performance at an
individual customer level and tailor our activity
accordingly. This also ensures that we have a clear
line of sight of trade stocks with the intention of
ensuring we understand any one-off impacts on
our performance (positive or negative) and avoid
peaks and troughs related to one-off stocking
events. We aim to be their best partner by helping
our customers manage supply, demand and,
ultimately, cash. Our focus is on delivering long-
term, profitable growth rather than just to ‘get
orders’, and in the medium term, we believe this will
be reflected in our customers designating Comvita
as their brand of choice.
You had what could be considered a
very ‘poor’ harvest this year at only 370
metric tonnes yet achieved a breakeven
performance on your apiary business.
Historically, a poor harvest would
have carried through to a poor result.
What’s changed?
DAVID: When I first joined Comvita, shareholders
highlighted the impact that poor weather
conditions could have on harvest and consequently
on Group performance. This also directly impacted
how the investment community valued Comvita
(due to perceived agri-risk). We implemented a new
plan in 2020 to ensure that, in poor weather years,
we achieved a breakeven in our apiary division (i.e.
no profit contribution to Group profits from apiary)
and a contribution of around $2–3M in good
weather years – this was based on an average
‘poor’ harvest being around 410 tonnes. This year’s
breakeven was achieved despite being 10% below
our base case. The apiary team did a great job to
manage costs and quality of yields. We expect
that, in time, this reduced risk and recognition
of Comvita as a premium FMCG brand will
enable Comvita to be re-rated. We retain strong
relationships and supply from our Supply Partner
Group (long-standing, high-quality, independent,
exclusive suppliers) to allow us to mitigate seasonal
variability in harvest yields and maintain service
levels to our markets and customers.
STRATEGY, MAJOR ACHIEVEMENTS
FOR THE YEAR
Turning to your long-term plans – last
year, you talked about your three-part
strategy to stabilise, transform and build
long-term resilience and growth. Where
are you on that journey?
BRETT: The journey itself is ongoing. For now,
I feel very comfortable that the company is on a
stable footing. We have a solid balance sheet with
minimal debt, strongly trending growth in sales
in the key focus growth markets of China and
North America, a highly capable and motivated
global management team and a clear and focused
strategy to guide us. However, we also can’t lose
sight of the fact that disruption can come from
anywhere at any time. We must remain diligent
watching for threats and continue to build
underlying long-term resilience in our business
and operational models. We also remain diligent
looking out for strategic growth opportunities and
aim to be well positioned to move on these as and
when they present themselves. For those reasons,
the transformation process never really ends, so
we must be agile and all the time challenging how
we do things.
DAVID: We’re making good progress. Progressing
all three elements at the same time has its
challenges but is a must if we want to set Comvita
up to win in the medium to long term. A year
ago, we set out our plan to focus on key product
categories (Mānuka and Propolis), key markets
(China and North America), key channels (digital)
and also on business fundamentals to generate
cash and pay down debt.
This year, we’ve delivered double-digit top and
bottom-line growth in the world’s biggest honey
market – China – with record revenue at 337M
RMB. We also achieved double-digit top and
bottom-line growth in North America, the Mānuka
product category and our Digital channel, plus
we grew our gross profit by over 730 bps while
reducing fixed costs and investing more in our
brand. In addition, we reduced our inventory
levels by nearly $12M and our SKU (product)
count by 30%, helping us generate cash and pay
down debt. These are all examples of us doing
what we said we would do and starting to build
long-term resilience and growth. In terms of
stabilisation, our ANZ market still needs work
but has been severely impacted by the loss of the
daigou channel and tourism. Also, having gained
traction in our digital channels, we now need to
build momentum and accelerate engagement
and transition of consumers to our owned
direct-to-consumer platforms.
What’s going on with your various joint
ventures? How do they fit into your plans?
DAVID: We have exited from any non-performing
or non-strategic joint ventures. There are now
three remaining: Makino, Apiter and Medibee
Australia. Makino is a long-standing, high-quality
Mānuka forest partnership and is performing
very well, and we see long-term alignment and
opportunity here. Apiter supplies us with high-
quality Propolis from Uruguay. Apiter and Propolis
are very much part of our long-term plans. We’re
actually the global leader in Propolis, and our view
is that there is significant untapped potential in the
category. We do have too much inventory but we’re
reviewing that, and this will be reflected in our
long-term category plans.
Medibee Australia is different. We no longer have
a long-term strategic need for this JV. The only
reason it’s retained is because of a bank facility
guarantee that’s in place of AUD$4.5M. The
business, while recovering from the damage of
devastating fires in 2019, generates cash, so we’ll
focus on that and reducing the bank facility to zero
and then we’ll plan to exit.
Are there any other significant issues that
you feel still need addressing?
BRETT: At Group level, what’s top of mind for me is
that the current share price appears to undervalue
the intrinsic and long-term sustainable value of the
Comvita brand. At the operational level, we believe
that the big issues have largely been addressed.
The focus now turns to driving the fundamentals:
growing demand (reflected in sustainable sales
growth); growing brand value (reflected in
premium margin); optimising the sustainable costs
of doing business through a process of continuous
improvement (reflected in growth of net operating
earnings); and investing capital wisely (reflected in
sustainable ROCE).
If we continue to make good progress on these
business fundamentals, I’m confident that,
ultimately, this will be reflected in the value
of our shares.
Does transformation extend to the
Board table?
BRETT: Yes, it’s essential that we continually review
and evolve to ensure alignment with the current
and future needs of the business. It was important
during the earlier stages of the changes, when
we appointed a new CEO, that we did not rush
to make wholesale changes at the Board level as
well. There exists a great deal of institutional and
industry knowledge at the governance level, and
stability was critical while David was engineering
transformation of the wider organisation.
Shareholders will see further evolutions to the
Board over the next one to two years, both in
composition and the mix of Directors as well as
how we report as we embrace ESG and integrated
reporting practices. I am extremely grateful for the
support that my fellow Directors have provided
through this period of change and have been
impressed by their resolve to always act in the
best interests of the organisation as a whole.
You mentioned the digital strategy before.
How’s that progressing and what’s the
timeframe for that?
DAVID: While our overall digital performance was
good this year (+17% in constant currency) and our
share of digital grew from 24% to 34% of the total
Group, we still believe that we can get significantly
Our business model
is absolutely unique in
the industry”
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ANNUAL REPORT
COMVITA.CO.NZ
2021
CHAIR + CEO
better. Our digital transformation project will take
another 18–24 months or so to really show us the
true potential of this channel, but we see it as a
crucial component to building affinity with our
loyal consumers around the world. We’re on track
for our 2025 plan predictions for digital sales to
be 50% of the total business at accretive margins.
Every 10% increase in digital share of total
improves total Group profit by 100 bps. In line with
our plans to build digital capability, I’m delighted
that Nicola O’Rourke has joined us as Chief Digital
Officer from Lewis Road Creamery and adds real
capability to this area.
You announced a second transformation
aspiration to achieve a further 400–500
bps improvement in gross profit, targeting
a gross profit percentage of 60% by 2025.
Can you talk through that in a little more
detail please?
DAVID: This will be delivered by a combination of
factors: increasing Mānuka and Propolis share of
the total revenue; increasing digital share to 50%;
increased share of revenue and earnings from
higher margin country segment (Asia); improving
production efficiencies; improving overhead
recovery in production; and finally, an additional
benefit of our new apiary strategy is limiting
collection and extraction of non-Mānuka honey
that is margin dilutive.
You’ve invested $3.8M in your Ma
-
nuka
forest strategy and $2.6M in projects to
improve productivity this year. Why is
this important and how do you measure
productivity/return on investment?
What are the anticipated benefits and
returns of your reforestation strategy?
BRETT: The Board keeps a very sharp eye on the
IRR on all investments. The $6.4M invested this
past year has mostly been targeted at projects
optimising operational efficiencies and productivity
at our Paengaroa and apiary manufacturing
facilities. In some cases, the payback has been
less than 12 months, so benefits are already partly
reflected in this year’s results – with more to come
over the next one to two years. At the Group
level, we have targeted an overall ROCE of >12.5%
or 500 bps over WACC within the 2025 plan.
We believe that this long-run minimum rate of
return on invested capital is both sustainable and
appropriate for a company like Comvita.
DAVID: In order to get product of the highest
possible standards, we need to ensure that we can
manage the environment around our hives. Having
large-scale Mānuka forests in remote areas allows
us to create a perfect environment for bees and for
Mānuka to flourish and an environment where we
manage the impact of pesticides and other non-
desirable substances near or on our land. We are
delighted that we’ve seen the return of kiwi and
whio (blue duck) to our restored land in one forest.
Additionally, this strategy has a strong correlation
with our kaitiakitanga values and our broader
commitment to become carbon neutral by 2025
and carbon positive by 2030.
What we’re seeing from this year’s results is that
our core forest business model is working, and this
will give us higher yields, higher quality of yield and
also lower costs due to proximity and scale. Our
hypothesis is that we will be able to increase yield
by 40% in our forests, increase quality of yield
by 60% and decrease costs by 20%. For me, the
question is when we accelerate this reforestation
strategy rather than if.
In terms of productivity, we aim to be the highest-
quality, lowest-cost producer of Mānuka and
Propolis. We can only achieve this goal if we have
an absolute focus on automation, continuous
improvement through our production facilities and
also the returns that we get from all SKUs that we
manufacture. This financial year, we reduced our
SKU count by 30% as we deleted SKUs that didn’t
meet our expected returns. In the year ahead, we
will reduce our SKU count by a further 20%.
PERFORMANCE BY MARKET
This year, China and the United States
have done very well, but other markets
– notably New Zealand and Australia
– have languished. Why has there been
such disparity?
DAVID: During the interim results presentation
in February, I categorised the performance and
segmentation of our markets as either narrow
or balanced distribution countries. In all cases
where we have a balanced distribution model,
we have performed strongly, whereas when our
distribution, digital capability/focus and sales and
marketing activity have had a narrow focus, we
have struggled. In the case of Australia and New
Zealand, this was the case due to us focusing on
Asian health/daigou and travel retail. Naturally,
with these channels not operating effectively,
neither has the market. I do want to highlight
though that, in Q4, our ANZ sales grew by 17% year
on year, potentially highlighting we’ve reached the
bottom here and now have a base to build from.
In China itself, many companies
exporting there have been devastated
by the Covid-affected daigou channel.
How have you managed to come through
comparatively unscathed?
DAVID: The reality is that we don’t see ourselves
as an exporter. It comes back to the difference
between our business model and other companies
that rely on daigou/Asian health/CBEC for
performance. In China, we have nearly 200 people
on the ground who helped us deliver 31% revenue
growth and 25% net contribution growth while
investing an extra $6.6M in our brand. This team
is there to ensure that we understand customer
and consumer needs and are highly responsive
to changing needs in the most dynamic market
in the world.
Andy Chen (Comvita’s regional CEO in Asia) has
put together a very talented in-market leadership
team, funded by some of the efficiencies we
have delivered across the Group. In the last year,
we’ve appointed in-market GM Sales, CMO, CFO,
People and Transformation Lead and also a new
head of Hong Kong SAR/Macau and Southeast
Asia. This team have all come from bigger FMCG
or global businesses. They believe in our huge
potential in China and across Asia and want to
be part of the exciting chapter ahead of us.
Do you still consider Comvita a
New Zealand brand? What’s happening
at home?
DAVID: Before I talk about that, I want to touch
on something that affects our whole industry
when selling Mānuka honey in New Zealand.
We need to start by having a national standard
for honey in New Zealand that at least matches
the international standard. It’s a nonsense to
me that New Zealand consumers must accept
lower regulatory standards than we have set for
consumers in markets around the world. This does
not make sense to us, and we have chosen to only
sell product in New Zealand that meets or exceeds
the international standard. We invite others in the
industry to follow our lead.
In terms of Comvita, we are a very proud
New Zealand brand and company, but we are
also the global leader and we need to be present
and active around the world. In total, we employ
around 550 people with 350 in-market and
200 in New Zealand. We were co-founded by
Kiwi’s Alan Bougen and Claude Stratford in
1974/75. Alan is still very active in the company
today and is a brilliant ambassador and face
of Comvita’s authenticity around the world. He
has unbelievable knowledge about the healing
properties of Mānuka and products of the hive
and is most at home in the presence of our
friends the bees – the way he interacts with them
really is a sight to behold. We are also investing
in reforestation of New Zealand and, in the
process, allowing indigenous wildlife to thrive.
This year alone we planted over 2 million trees.
WIDER PERSPECTIVES
In this year’s report, you’ve introduced
what you’re calling your Harmony plan.
What’s that about?
BRETT: While the Board’s primary accountability
is to the company and to our shareholders, we
operate in a world of multiple stakeholders. If
consumers are unhappy with a brand’s stance on
social or environmental issues, they will think twice
before buying. In this competitive employment
environment, we also need to be aware that
workers increasingly consider an organisation’s
social, cultural and environmental stance when
making employment decisions. We also know that
government (local, national and even international)
can intervene if they feel the business community
is not aligned with their agenda. We have an
intention to operate in accordance with Te Tiriti
o Waitangi to work in partnership with tangata
whenua. Collectively, we need to take direction
from our purpose and values and, on that basis,
make balanced choices that meet the needs of all
stakeholders. Comvita’s Harmony plan provides
transparency and a framework for how we are
making those balanced choices.
DAVID: Quite simply, we believe we have a bigger
role to play and a bigger opportunity to evidence
the type of business we aim to be. We’re blessed to
work with bees and nature, and we want to invite
people to join our movement of creating a world
where bees, people and nature thrive in harmony.
We are on track
for digital sales to be 50% of the
total business at accretive margins
by 2025 as we forecast”
N
O
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22N
O
.
23
ANNUAL REPORT
COMVITA.CO.NZ
2021
CHAIR + CEO
Our 2030 Harmony plan is part of our aim to be
recognised by all stakeholders as a business that
thinks way beyond pure shareholder value. I also
believe that we can learn a lot from indigenous
people around the world and that specifically
Māori and Pasifika can teach us a lot about how we
care for our place, our whānau and our community.
You have just released your carbon
footprint for the first time – how do these
actions benefit all Comvita stakeholders?
DAVID: Last year, we set out our plan to be carbon
neutral by 2025 and carbon positive by 2030. I
believe the movement to reduce and/or offset
greenhouse gas emissions is one that is going to
rise in importance over the next five years, and we
aim to make sure that we are a leader in this field.
We’re making great progress here. We’ve planted
another 2 million trees this year, and our 2030
Harmony plan sets out our broader organisational
goals. We will also start our B Corp registration
process in FY22. B Corp is the leading global
standard for organisations setting the highest
standards. In the process of doing the right thing
by registering for B Corp, we will also be able
to attract new investment from organisations
looking to invest in sustainable enterprises.
PEOPLE/LEADERSHIP CHANGES
Your leadership team is virtually all new in
the last 18 months. New blood can be a very
good thing, but where’s the institutional
knowledge and the accompanying IP?
How are you ensuring you have the right
industry and brand knowledge going
forward?
BRETT: This is a challenge for any organisation that
has identified the need to change: how to keep the
good parts while introducing some much-needed
new inputs. Fortunately, we have depth within the
organisation of over 500 people globally, and we
continue to invest in secure operating systems that
supersede reliance on individuals’ recollection of
historical events. As mentioned before, we have
not rushed in to change the Board composition
too quickly while we bed in the new management
team. As a Board, we’ve also reached out to seek
support and guidance from our co-founder Alan
Bougen here in New Zealand and our largest
shareholder and founder of Comvita’s business in
China, Mr Zhu Guangping. Finally, we take direction
and are anchored by the company purpose, values
and long-term goals.
DAVID: Despite the significant transformation
that we have undertaken, our average tenure has
marginally decreased from 5.44 years to 5.26 years.
We have been able to retain great knowledge
and skills within the business that we regularly
lean on to learn lessons from the past and have
supplemented these skills with new thinking from
around the world. Our apiary team have massive
global knowledge that will ensure our core product
and practices continue to improve. We are also very
fortunate to have significant knowledge with Alan
and Brett who are always happy to support when
guidance is needed. Finally, we have a working test
and learn philosophy that ensures we are testing
anything new in a controlled environment. The new
leadership team are, in many cases, new to honey,
but they’ve all been active in either primary goods
or global consumerism – or both – throughout their
careers and therefore bring extremely relevant
broad leadership skills.
You’ve said you want Comvita to be
New Zealand’s best employer and
for the whole team to be shareholders.
When do you expect this to happen?
DAVID: There is a lot of work to be done to
become New Zealand’s best employer, but we are
absolutely committed to this journey. It will take
some time to really turn this goal into reality, but
it’s definitely the aim by 2025 at the latest. We
have made some good progress recently with
us being a living wage employer and a gender
pay parity employer and recently kicking off our
apprentice scheme to encourage people to learn
the art of beekeeping (this scheme targets 75%
being women, Māori or Pasifika). We surpassed
our goal for 40% of senior leaders to be female,
finishing the year at 50%. In addition, we aim
to continually enhance our health and safety
practices to make health and safety a key part
of our value proposition. Finally, we believe that
the best interests of all shareholders are served
if our team are shareholders, and we are working
on plans to deliver this desired outcome.
STOCK PERFORMANCE AND DIVIDEND
Comvita stock has historically been
categorised as agri/primary industry
from an earnings multiple point of view.
Would you like to see a revaluation towards
premium FMCG/CPG at some point?
BRETT: There have been two main reasons for how
we have been historically valued. On the demand
side, our month-to-month, quarter-to-quarter
and half-to-half sales have been volatile and very
difficult to forecast, due largely to an over-reliance
on a few large global retail customers. On the
supply side, we were vulnerable to the vagaries of
weather and honey harvest conditions, which had a
significant impact on our cost of goods and hence
net operating earnings. An overexposure to large
retail customers coupled with harvest uncertainties
are typical of primary industry companies from
New Zealand. Hence, this has been reflected in
how we were rated by business analysts. That’s
why we have worked to bring about much greater
stability on both fronts. You will have already seen
that our sales and earnings guidance has been
much more stable and reliable than in the past.
Provided we continue to deliver to guidance in this
more reliable way and remain focused on growing
consumer demand for our premium value brand,
I believe we will be re-rated accordingly.
DAVID: The vast majority of our cash flows are
generated in our markets by discerning consumers
who have made Comvita their brand of choice.
Our new model very firmly sets us up as a premium
FMCG or luxury good, and I fully expect that, as
we deliver performance and prove our ability to
deliver our 60:15:20 model (which is more aligned
to premium consumer goods), we expect to see
some reassessment over time. Our focus, however,
remains on ensuring we have the right products
in the right markets in the right channels and
systematically deepening our relationships with
consumers. Our new harvest model systematically
reduces risks associated with harvests/primary
industries, and this change should also enable more
focus from investors on consumers and markets.
Comvita shareholders will be pleased to
see a resumption of dividend payments.
What is the company’s dividend policy
going forward?
BRETT: This year’s dividend of four cents per
share represents 30% of net operating earnings.
This was set by the Board after assessing the
cash needs of the business for the next 12 months
and taking into consideration a residual level of
uncertainty in the markets.
We are currently in the process of building long-
term resilience and growth, which is why we believe
the best use of cash at present is to prioritise
value-accretive growth-based initiatives. However,
my clear message to shareholders is it’s not our
policy to accumulate large reserves of cash, and
within the bounds of good capital management
and fiscal responsibility, we aim to maintain an
annual dividend payment.
LOOKING AHEAD
In terms of guidance, you are forecasting
an EBITDA range of $27–30M for FY22,
double-digit earnings growth next year,
but very strong EPS growth.
DAVID: FY22 is going to be another important
year as we continue to invest in our brand and our
team in order to deliver sustainable returns for all
stakeholders. We know that we have to deliver
again in FY22 in order to build real trust and belief
and are absolutely focused on delivering our plan.
We also continue to put in place foundations that
will enable us to deliver our 2025 plan and, most
importantly, deliver long-term profitable growth
at Comvita. We are on a journey to extend our
global leadership, invest in telling our incredible
brand story and have a business model capable
of delivering 20% EBITDA by 2025.
So a year from now, what will be the key
elements that will show that you are on
track to deliver your 2025 plan?
BRETT: David and the team have shown that
continuous focus on business fundamentals drives
improvements in operating performance. Our
increasing investment in brand as well as in-market
delivery capability is also expected to build sales
growth momentum in our target growth markets
and channels. So a steady improvement in both top
and bottom-line growth is what we can anticipate
in FY22, building the bridge towards our 2025 plan.
DAVID: 2022 will be a year of more of the same
focus that served us well in FY21. We will look to
deliver double-digit top and bottom-line growth
in China and North America. We will also continue
our focus on growing Mānuka and Propolis, and we
expect digital channels to represent around 38% of
our revenue. Our brand investment model should
bring us closer to our 60:15:20 model, and as we
continue our focus on cash, we will look to reduce
underlying inventory and reduce our SKU count by
a further 20%.
BRETT HEWLETT — CHAIR
DAVID BANFIELD — CEO
N
O
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24N
O
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25
ANNUAL REPORT
COMVITA.CO.NZ
2021
CHAIR + CEO
CHIEF FINANCIAL OFFICER REVIEW
For the first time in a number of
reporting periods, Comvita does
not have any significant non-
operating items to disclose to
the investment community. It is
pleasing that no additional non-
operating costs were incurred
during the period other than costs
directly related to transforming
the business. The company has
completed its review of its non-
performing assets, and we have
made significant changes to simplify
and improve our business model.
Year
OUR
IN
REVIEW
Since starting with Comvita in September 2020, it’s
evident that Comvita is on a transformational journey
to sustainable profitable growth and that FY21 is the
first year of delivery. Despite Covid-19 interruptions
still impacting some parts of the business, the
company has delivered an EBITDA of $25.5M at
the top end of guidance and a net profit after tax
of $9.5M. This is a significant turnaround from the
net loss after tax of $9.7M in the prior period.
The transformation that the company has made
throughout the last 12–18 months to enable us
to deliver this result in FY21 is one that we have
embedded into the business, and therefore we
believe it to be sustainable and provide a solid base
for the company to continue to grow our profitability
into the future towards our stated objective of in
excess of $50.0M EBITDA by FY25, representing
a target of 20% EBITDA to sales.
Following the $50.0M capital raising undertaken
in June 2020, the company has continued to
generate strong positive operating cash flows
and, as noted below, further reduced our net debt
position by year end. This sets up the company well
to enable future investment and growth.
2020 — 21
N
O
.
26N
O
.
27
ANNUAL REPORT
COMVITA.CO.NZ
2021
YEAR IN REVIEW
INVENTORY
Inventory on hand has reduced by $11.7M from
the prior year to $101M. This movement has been
driven by a decrease in raw materials of $16.6M,
offset by an increase in finished goods of $4.7M.
The company has decreased its honey purchases
from third parties in the current year, reducing
raw materials on hand. We have also sold excess
holdings of non-Mānuka honey as bulk sales
throughout the year. These non-Mānuka bulk
sales are margin dilutive and will be decreased
over time as an additional benefit of our 2020
harvest strategy. Finished goods inventory holdings
in markets have been increased to ensure supply is
not impacted by current Covid-19 and congestion-
related port and shipping delays.
TRADE RECEIVABLES
At $23.5M, trade receivables increased by $5.8M
on FY20 – primarily in the China market and due to
the very successful 6/18 promotion. Sales were 31%
above last year.
TOTAL NET DEBT
Total net debt at year end including term debt
facilities less cash on hand was $4.6M. This
decrease of $10.9M over the FY20 balance of
$15.5M is attributable to positive operating
cash flow.
Current term debt facilities expire on 1 July 2022.
A review of our banking facilities will be undertaken
in the first half of FY22 with appropriate facilities
maintained and extended.
Comvita has complied with all banking covenants
during the period.
TRADE AND OTHER PAYABLES
Trade and other payables decreased by $3.8M to
$18.9M, primarily due to reduced honey purchases
resulting in lower trade creditors.
OPERATING CASH FLOWS
We generated a positive operating cashflow
this year of $24.8M, consistent with EBITDA of
$25.5M. The FY20 operating cash flow of $39.3M
was largely the result of positive working capital
movements due to very high FY19 trade debtors
and inventory balances.
FINANCIAL PERFORMANCE
Reported revenue for the period declined 2.1% to $192M, due to unfavourable
year-on-year currency movements. On a constant currency basis, revenue
increased by 1.5%, notwithstanding challenges in the ANZ and EMEA markets.
As previously indicated, bulk honey sales dilute margin, which is why we are
targeting to reduce these to a maximum of $5.0M annually (related to our
medihoney sales). Total FY21 bulk honey sales were $11.0M (compared with
$15.3M in FY20), so we are making progress in this direction. Also, reducing
our SKUs by 30% was estimated to have a $1.65M impact on our FY21 sales.
If we were to adjust our constant currency sales in both years for the impact
of excess bulk honey sales and the reduced SKUs impact, our year-on-year
revenue would have increased by 5.4%.
Our significant improvement in gross profit percentage of 730 bps is
attributable to several factors. There has been strong performance in our
growth markets – Greater China and North America – which more than offset
the Covid-related headwinds in the ANZ market. Digital sales have increased
by 17% vs the prior year to 34% of total sales, which has also contributed
to the increase in the gross profit percentage as these sales are margin
accretive. Productivity gains in the manufacturing process have also impacted
positively on our gross profit. These positive factors were partially offset by
the weather-related poor harvest in our apiary operation. However, it still
achieved a breakeven position this year, reinforcing our new harvest model
and also significantly de-risking Comvita.
The gross profit improvement has enabled us to significantly increase our
marketing investment in the current year to $24.2M or 12.6% of revenue, which
is 56% above last year’s investment. Our selling, distribution, administration
and other operating expenses decreased by $6.0 m to 36.6% of sales, down
from 38.9% last year.
Transformation expenditure of $1.2M is included within the current year spend.
EBITDA
Earnings before interest, tax depreciation and amortisation (EBITDA)
at $25.5M increased 511% on the previous year. This includes the
transformational spend of $1.2M. The result itself illustrates the focus
on transforming the business to profitable growth.
In millions of
New Zealand dollars
30 June
2021
30 June
2020
Profit before tax13.4(10.3)
Add back: net finance cost2.04.1
EBIT15.4(6.2)
Add back: depreciation and amortisation10.110.4
EBITDA25.54.2
The net financing cost has reduced by $2.1M due to a reduction in net debt
following the successful capital raising at the end of FY20 and a year of
profitable growth driving operating cash flow.
FOREIGN EXCHANGE
A foreign exchange gain of $2.2M has partially offset the negative impact of
foreign currency movements on revenue. Management of foreign exchange
risk is important to smooth volatility of earnings in foreign currencies. This is
particularly relevant for our growth markets where we have exposure to the
United States dollar and Chinese yuan renminbi. We are active in managing
these risks to a prescribed Board-approved treasury policy.
SHARE OF PROFIT FROM EQUITY
ACCOUNTED INVESTEES
Total share of profit for FY21 was $1.0M, with
$0.6M from Gan Supply Limited and $0.2M from
both Apiter S.A. and Makino Station Limited.
This compares to a loss last year of $0.2M.
EARNINGS PER SHARE
Earnings per share (EPS) for FY21 was 13.61c.
Diluted EPS was 13.59c
DIVIDEND
With the return to sustainable profitable growth,
the Board has approved a fully imputed final
dividend of four cents per share.
FINANCIAL POSITION
Property, plant and equipment and Leased Assets
Property, plant and equipment at $63M
increased by $6.5M in the current year. This
increase comprised $11.2M of additions, offset
by $4.4M depreciation. The additions largely
consisted of three significant capital projects:
$3.8M investment in Mānuka forests; $2.2M in
the Auckland Wellness Lab and virtual store; and
$2.3M in manufacturing process improvements.
Leased assets increased by $1.6M, with
additions and modifications totalling $6.4M,
offset by depreciation of $4.5M. The two largest
additions relate to long-term agreements
with landowners, which form part of our
Mānuka forest developments.
GOODWILL
The goodwill balance of $27.6M is largely
made up of $25.8M related to Greater China
and $1.8M to apiaries, with no change in the
current year except for a small foreign exchange
movement. The annual impairment testing did
not highlight any impairment risk and is consistent
with the profitable performance of the Greater
China segment.
INVESTMENTS
Makino Station Limited is performing well and
on track to receive its first meaningful Mānuka
forest harvest in FY22. Apiter S.A. investment
is facing short-term Covid-19 impacts, but its
long-term strategy and return to profitability
remains sound. Putake Group Holdings Limited
was divested in June 2021 with no financial impact
in the current year. The Gan Supply relationship
is changing from a joint venture to a long-term
supply agreement arrangement. A dividend of
$363,000 was received from Gan Supply in the
current year, and all shareholder loans were repaid
following a successful FY20 honey crop. The joint
venture will be wound up by February 2022 with
full recovery of our investment expected.
NIGEL GREENWOOD — CFO
N
O
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28N
O
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29
ANNUAL REPORT
COMVITA.CO.NZ
2021
YEAR IN REVIEW
Markets
+31%
CHINA GROWTH IN
LOCAL CURRENCY
DIGITAL CHANNEL
GROWTH
+17%
+511%
EBITDA IMPROVEMENT
FOR THE GROUP
A FOCUS ON OUR
SECTOR
—— —— Our focus growth markets showed
strong top and bottom-line growth
with record sales in China and Comvita
becoming the fastest-growing Mānuka
brand in North America.
The Comvita Mānuka
honey taste very nice.
It’s essential in our
daily life.”
JD Customer,
China
China
We generated record revenue in mainland
China of 337M RMB and an increase of
31% in local currency. Our EDLC model
meant that efficiencies generated in
Hong Kong SAR enabled us to reinvest
in our in-market leadership team.
Comvita Mānuka is
far and away superior
in quality than any
of the other brands
I have tried.”
Amazon Customer,
North America
North America
Strong double-digit growth delivered in
North America with revenue +23% vs FY20
in local currency and net contribution +18%.
For the second successive period, we were
the fastest-growing Mānuka brand.
We have been
buying Comvita
Olive Leaf Extract
for many years and
love the product
and the service.”
Comvita Customer,
Western Australia
Australia and New Zealand
ANZ performance has been materially
impacted by the disruption to the cross-
border and daigou markets this year.
While this created significant headwinds
for the Group, we took this opportunity to
redefine our cross-border model to ensure
that we optimise both returns and brand
investment. This sets us up for a more
holistic model that will enable Group-
wide long-term profitable growth. It was
encouraging that Q4 was +17% vs pcp and
+33% vs Q3.
N
O
.
30N
O
.
31
ANNUAL REPORT
COMVITA.CO.NZ
2021
F O C U S O N
OUR MARKETS
Market
Our unique model includes positioning teams
in our core markets. Here’s what they achieved
t h i s ye a r.
OVERVIEW
—— —— Our whānau now totals
552, of which 343 are in seven
markets outside New Zealand.
FY21 segment revenue shareFY20 segment revenue share
49%44%
5%
9%
3%
4%
17%
22%
13%
10%
13%
11%
Greater
China
North
America
Rest of
Asia
ANZEMEAOther
–30%+10%+14%
SKU COUNT MĀNUKA REVENUEUMF 10+
FY21 sales by categoryFY20 sales by category
UMF
Honey
Honey
PropolisOliveMedihoneyLozengesOther
61%
9%
4%
5%
8%
6%
7%
66%
6%
4%
4%
7%
7%
6%
CHINA
191
HKSAR
74
KOREA
33
JAPAN
5
EMEA
6
27
ANZ + OLA
209
MARKET
SUPPORT
CENTRE
7
USA
MARKET
TO
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ANNUAL REPORT
COMVITA.CO.NZ
2021
AROUND THE WORLD
02. We
reinforced
Comvita market
leadership with
the launch of
our UMF 25+
Mānuka honey.
03. China Team
Hive Gathering in
April 2021.
01. Collaboration
with celebrity Ning
Chang, known for
her healthy and
positive lifestyle
in China.
GREATER CHINA
Reporting Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales93,07686,9456,1317%
Net contribution19,90818,2031,7059%
Net contribution %21%21%0%
MAINLAND CHINA
Reporting Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales73,15157,61015,54127%
Net contribution15,28212,6262,65621%
Net contribution %21%22%(1%)
Local Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales337,150258,33078,82031%
Net contribution70,37756,51413,86325%
Net contribution %21%22%(1%)
China is the world’s biggest honey market, valued
at around 8.3B RMB overall, with fast-growing
adjacent categories as well. Therefore, it’s
strategically imperative we continue to win here.
We successfully integrated total sales in China,
including cross-border ecommerce. Greater China
revenue, which includes Mainland China, Hong
Kong SAR, cross-border and ecommerce, grew by
7.1%. We achieved a 9% net contribution growth
through implementing cost efficiencies during
the Covid-19 pandemic. Having a new leadership
team onboard from this fiscal year revealed huge
opportunities for simplification. In addition, we
significantly increased investment in our brand
to reinforce our market leadership in honey
through various branding campaigns and the
leading brand spokesperson Ning Chang.
Brand investment increased by $5.65M in
this period. This is the start of our brand
transformation in China as we look to be
recognised as a true lifestyle brand. Additional
activity to build the brand equity in the China
market is under way, and this will enable Comvita
to achieve sustainable growth in coming years.
Looking at the Mainland China market alone,
growth was even faster (+31%), supporting
our 2025 strategic plan.
C H I N A
——
We are looking to extend our market leadership in Mainland
China and are forecasting strong double-digit top and bottom-
line growth in FY22.
LOOKING FORWARD ————
GROW T.A.MBUILD CAPABILITY
CHN
ReachConvertEngage
China digital performance
FY20 vs FY21 % difference
New customer
acquisition (email
sign-up)
+58.2%
Sessions
N/A
Revenue41%
Total customers
purchased
10%
ATV
26.5%
Conversions
-76 bps
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ANNUAL REPORT
2021
AROUND THE WORLD
02.
Partnering
with
Gwyneth
Paltrow’s
wellness
platform
goop to
drive brand
awareness.
Reporting Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales24,73522,1372,59812%
Net contribution4,7334,3803538%
Net contribution %19%20%(1%)
Local Currency BasisFull Year
USD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales17,24714,0193,22823%
Net contribution3,2372,74449318%
Net contribution %19%20%(1%)
FY21 was another double-digit growth year for
Comvita North America, with 23% growth in
revenues and 18% growth in net contribution
in local currency.
This year-on-year growth includes a comparison
with our March-June FY20 Covid-related pantry
loading activity.
Our digital focus and investment in digital
marketing allowed us to capitalise on the change
in consumer purchasing behaviour experienced
during FY21, accelerated by Covid-19. Comvita.
com metrics demonstrate how successfully we
are growing our brand, with users increasing
by 31% and transactions increasing by 25%.
Our November Black Friday campaign saw a
62% increase in revenue, with a 77% increase
in number of transactions and a 22% increase
in our ecommerce conversion rate.
From an earned media perspective, we were able
to garner 1,254 million impressions, up from 722
million in FY20. Highlights included coverage from
Forbes.com, which showcased our commitment to
working with independent beekeepers across the
US to save 5 million bees.
The last 52-week sell-out data demonstrates that
we are the fastest-growing brand in the Mānuka
honey category, excluding brands with a low sales
base (less than NZ$50K).
NORTH AMERICA
——
LOOKING FORWARD ————
Our key focus is on delivering a more balanced distribution model
with continued digital growth, wholesale/retail expansion and
refining our customer experience. With the North America consumer
prioritising health and wellness, our marketing plan is focused on
educating the market on the superior quality and unique attributes
of Comvita and continuing to cultivate our loyal brand following.
BALANCED DISTRIBUTIONLONG-TERM GROWTH
USA
01. Launching our gift
box set to promote
our partnership with
Saving the Wild, with
100% of proceeds
from net profits being
donated back to
Saving the Wild.
03. Celebrating
World Bee Day
with our bee
rescue campaign.
ReachConvertEngage
USA digital performance
FY20 vs FY21 % difference
New customer
acquisition (email
sign-up)
+51.1%
Sessions
20.4%
Revenue
28.2%
Total customers
purchased
28.3%
Total transactions
25.0%
ATV
-7.6%
Conversions
+9 bps
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ANNUAL REPORT
COMVITA.CO.NZ
2021
AROUND THE WORLD
ReachConvertEngage
ReachConvertEngage
LOOKING FORWARD ————
Our focus for FY22 is on growing our domestic and digital businesses
along with improving our Asian health business. A greater connection
between our China and ANZ Asian health businesses is vital to enable
us to amplify our brand capability and proposition. In addition,
our stronger focus on the domestic part of the business provides
opportunities for growth in key channels (grocery and digital).
PROFITABLE GROWTHBALANCED DISTRIBUTION
A U S ftft N Z L
Reported CurrencyFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales32,44444,069(11,625)(26%)
Net contribution10,21813,943(3,725)(27%)
Net contribution %31%32%0%
Constant CurrencyFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales32,11044,069(11,959)(27%)
Net contribution10,13213,943(3,811)(27%)
Net contribution %32%32%0%
The year was another challenging one for the
ANZ team with multiple lockdowns affecting both
domestic markets and border closures affecting
tourism revenue. Exports through daigou channels
were significantly impacted with students (a key
participant in the daigou channel) unable to travel.
Total revenue finished the year at $32.4M, down
by $11.6M, and contribution of $10.2M down by
$3.7M. This reflects the lower sales impacting
on contribution. However, it was partially offset
by cost reductions and improved gross profit
percentage. We also celebrated the opening of
our Wellness Lab in Auckland and the launch
of our virtual store, enabling us to tell our unique
Comvita story in a compelling way.
We currently have a narrow distribution model in
ANZ and are looking to move towards a balanced
model in FY22.
Despite this challenging environment and
disappointing results, we see positive signs
of a return to growth, with Q4 growing 17%
vs pcp and +33% vs the previous quarter. Our
focus remains on winning at home, and as such,
we are encouraged by recent distribution gains
in grocery in both Australia and New Zealand.
AUSTRALIA +
NEW ZEALAND
——
01. + 02. Our world-class
experiential space – the
Comvita Wellness Lab
in Auckland.
03.
Launching
our new
3D virtual
store.
Australia digital performance
FY20 vs FY21 % difference
New Zealand digital performance
FY20 vs FY21 % difference
New customer
acquisition (email
sign-up)
+23.9%
Sessions
-8.6%
Revenue
-6%
Total customers
purchased
-18.1%
Total transactions
-12%
ATV
5.3%
Conversions
-2 bps
New customer
acquisition (email
sign-up)
+25.8%
Sessions
-59.6%
Revenue
-18%
Total customers
purchased
-32.8%
Total transactions
-28.8%
ATV
7.2%
Conversions
+26 bps
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ANNUAL REPORT
COMVITA.CO.NZ
2021
AROUND THE WORLD
ReachConvertEngage
ReachConvertEngage
LOOKING FORWARD ————
Reported Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales5,0606,917(1,857)(27%)
Net contribution35(547)582106%
Net contribution %1%(8%)9%
Local Currency BasisFull Year
GBP 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales2,6133,464(851)(25%)
Net contribution15(305)320105%
Net contribution %1%(9%)9%
Despite Brexit difficulties, we were able to deliver
a breakeven performance in FY21. The context is
important because Brexit issues meant we were
unable to export any product to Europe in the
six months from 1 January to 30 June 2021.
Our digital sales increased to 39% of total sales
in FY21, again proving the opportunity to deliver
incremental revenue through this channel.
EMEA
——
We will focus on delivering self-funding profitable growth across
the whole region and move to a balanced distribution model.
PROFITABLE GROWTHBALANCED DISTRIBUTION
EMEA
Reported Currency BasisFull Year
NZD 000s
This Year
June 2021
Last Year
June 2020
vs
Last Year
vs
Last Year %
Sales25,34620,5334,81323%
Net contribution6,3674,1962,17152%
Net contribution %25%20%5%
In Korea, Japan and Southeast Asia, we delivered
significant growth in FY22, with 23% revenue
growth and 52% net contribution growth in
reported currency.
We attribute this to our new strategic focus of
building a business on Mānuka and Propolis and
generating operating leverage. We recorded 25%
digital growth across the total segment compared
with the prior year, with the highest growth in
the region of +156% in Southeast Asia, thanks
to our transformed business model (country
channel category focus). Channel efficiency
and product performance both improved, paving
the way for sustainable growth into emerging
markets. Alongside continuing sales growth,
our relentless cost-down efforts extended to
all markets, enabling net contribution to double.
Our simplification and focus philosophy was
once again shown to be well founded.
REST OF ASIA
——
We see further opportunity to take an omni-channel approach
to reaching our consumers in this region, with a strong emphasis
on digital. Consumers have never been easier to reach in these
markets, and Comvita is well poised to connect directly with them
through telling our brand story through our digital platforms.
LOOKING FORWARD
GROW T.A.MDIGITISATION
LOOKING FORWARD ————
ROA
Korea digital performance
FY20 vs FY21 % difference
EMEA digital performance
FY20 vs FY21 % difference
New customer
acquisition (email
sign-up)
+9.8%
Sessions
5.1%
Revenue
26%
Total customers
purchased
28%
Total transactions
20.9%
ATV
-0.7%
Conversions
+42 bps
New customer
acquisition (email
sign-up)
+39.7%
Sessions
17.4%
Revenue
24%
Total customers
purchased
19.1%
Total transactions
20.4%
ATV
-0.3%
Conversions
+14 bps
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ANNUAL REPORT
COMVITA.CO.NZ
2021
AROUND THE WORLD
Digital share of total revenue increased from
24% to 34%
In FY21, we took the first steps to building
consumer intimacy through our global D2C
business. The focus has been on customer
acquisition as we continue to build a one-
to-one relationship with consumers. Direct
consumer communication continues to be the
most effective form of marketing, with 34%
of all D2C sales resulting from our consumer
relationship marketing. As we acquire new
users, it allows us to deepen relationships
to gain better insights to their needs and
purchase behaviours, increasing the likelihood
of purchase and ultimately loyalty over time.
We achieved significant growth, with total digital
sales growing 17% or $9.5M at accretive margins.
This growth was driven by our focus markets
China (up 41%) and USA (up 37%). Digital sales
now account for 57% of sales in China (vs 53%
in pcp) and 36% in North America (vs 30% in pcp).
Growth in China continued to be strong despite
having a market-leading presence in the market.
This growth was aided by winning in our key
selling seasons, including 6/18 in which we were
the number one selling honey brand and being
the number six selling healthy food brand on
Tmall – an outstanding performance.
Comvita-owned digital also saw considerable
growth, with a 46% increase year on year,
transactions up 10%, registrations up 25% and
average cart value up 5.3%. North America was key
to this growth, with registrations to our database
up 51.1%. Our digital performance in Australia and
New Zealand was disappointing, with New Zealand
declining 5.8% and Australia 12% vs pcp. Despite
this, consumer registrations were up 12% year on
year, providing a foundation for future growth.
+41%
MAINLAND CHINA
eCOMMERCE
DIGITAL
TRANSFORMATION
——
+17%
TOTAL eCOMMERCE
GROWTH
NORTH AMERICA
DIGITAL SHARE:
36%
of US revenue through
eCommerce
CHINA
DIGITAL SHARE:
57%
of China revenue
through eCommerce
NORTH AMERICA
DIGITAL GROWTH:
37%
US eCommerce
revenue YOY
CHINA
DIGITAL GROWTH:
41%
China eCommerce
revenue YOY
Looking ahead into FY22, we will be implementing phase 1 of
our global digital growth plan for world-class digital engagement.
This will involve consolidation of our major direct to consumer
platforms, best-practice performance marketing technology
and refreshed global content programmes.
The business will move to enhance consumer intimacy delivering
real-time marketing optimisation, behavioural insight and
innovation – a significant step forward in our consumer journey.
# NEW USERS#ATV
LOOKING FORWARD ————
CHN
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ANNUAL REPORT
COMVITA.CO.NZ
2021
DIGITAL STRATEGY
Kaitiakitanga (guardianship) has been integral
to Comvita’s thinking since our inception. As
guardians of Mānuka, we nourish the land, care
for the environment and tend to our forests –
working in harmony with bees to harvest the
most pure and potent Mānuka honey.
The Mānuka tree, Mānuka honey and other
nutrients from the hive hold incomparable power
to protect and heal. We feel it is our responsibility
to nurture these gifts for the benefit of all.
We take our environmental, social and governance
responsibilities seriously. We advocate for a future
where people, bees and nature thrive in harmony.
Kaitiakitanga underpins all parts of our business
and our decision making. It influences:
• the quality and efficacy of our products
• the health, safety and wellbeing of our people
– embracing diversity and offering equal
opportunities for all in our workplace
• our commitment to positive outcomes for
humanity and nature, with programmes
spanning from Aotearoa to Africa
• the way we do business – protecting and healing
the environment for future generations and
confirming our intention to be certified carbon
neutral by 2025 and carbon positive by 2030.
At Comvita:
• our hero is the bee
• the taonga is Mānuka
• we are passionate about sharing our findings
• we aim to leave our hive, and the world, in a
better place.
SUPPORTING NATURE IN NEED
We want to do our part to help rebuild and protect
precious flora and fauna in Aotearoa New Zealand.
We were excited to discover kiwi at Comvita’s
Makino Station property in the Ruapehu region and
have been inspired to do what we can to protect
these vulnerable birds and hopefully help them to
safely restablish in greater numbers.
This includes partnering with The Kiwi Trust to
develop a kiwi protection programme at Makino.
We are hoping to increase the number of breeding
pairs and ultimately support population growth in
line with the national initiative in New Zealand to
boost our kiwi numbers by 2% every year.
Work began with a baseline population survey,
which identified more than 22 kiwi across the 1,671
hectare station. Our next step is to protect and
enhance the natural habitat of these special birds
through the roll-out of a predator control plan,
enabling kiwi to flourish for generations to come.
Additional research programmes are under
way at Makino to identify terrestrial and
aquatic biodiversity.
Joanna Wang,
Senior Experience
Ambassador
Bees & People
A WORLD WHERE
THRIVE IN HARMONY
22+
OUR MAKINO KIWI
POPULATION
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
LEADERSHIPIMPACT
LOOKING FORWARD ————
Our purpose is to work in harmony with bees
and nature in New Zealand to heal and protect
the world.
It is well known that bee populations are
under threat globally. Loss of habitat due to
urbanisation, climate change, industrial agriculture
and monoculture, parasites, pathogens and
pesticides have all contributed to a heavy decline
in the world’s pollinators. Bee populations now
depend on human intervention for their survival.
Our mission is to help restore and strengthen the
delicate interdependence and balance between
humans and nature whilst generating positive
social outcomes in our global communities.
To deliver on our aspiration, we have established
a new set of parameters that we hold ourselves
accountable to and that form the basis for how
we measure success. Our Comvita Harmony plan
is forged from a determination to leave the world
in a better place.
We have set aspirational targets for 2030 based
on three key principles:
1. Treading lightly: Forging a new leadership
path in sustainability and circularity
(net positive by 2030).
2. Embracing the science of nature: Comvita’s
whakapapa (our lineage and identity from the
beginning) is sharing the power of nature and
the hive. We seek to do business in a way which
honors both ancient wisdom and our scientific
learnings, whilst showing respect and care
for our heritage and our place and restoring
balance in nature.
3. Strengthening our global hive:
• Protecting bees since 1974 and supporting
native forest regeneration in New Zealand.
• Aspiring to be best employer nationally
and abroad, with safety and wellbeing at
the centre and progressive reinvestment in
our people.
• Investing 1% of EBITDA in community
partnerships and initiatives to support
better social outcomes.
We believe in and stand for the seemingly
impossible – a world where bees and
people thrive together in harmony.”
DAVID BANFIELD,
CHIEF EXECUTIVE
Biodiversity
research in support
of whio (blue duck)
and kiwi protection
projects
Industry leadership:
introduction of a
bee welfare code
Materiality
Assessment with
key stakeholders
OUR HARMONY PLAN
——
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O
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
26
GLOBAL
ETHNICITIES
REPRESENTED IN
OUR WORLDWIDE
TEAM
100%
LIVING WAGES
MET FOR
NZ-BASED
EMPLOYEES
FY21 TARGET 100%
100%
EQUAL PAY
FOR EQUAL
WORK GLOBALLY
2
FY21 TARGET 100%
50%
OF EXECUTIVES
REPORTING TO THE
CEO GLOBALLY ARE
WOMEN
FY21 TARGET 40%
55%
OF NZ VOCATIONAL
DEVELOPMENT
SUPPORTED
WOMEN, MĀORI AND
PASIFIKA
FY21 TARGET 75%
5+YRS
COMVITA AVERAGE
SERVICE GLOBALLY
40+%
OF NZ-BASED WHĀNAU
ARE CURRENTLY
SHAREHOLDERS
71%
FEMALE
552
FULL TIME
EQUIVALENT ROLES
IN OUR GLOBAL
WHĀNAU
1
9%
VOLUNTARY LABOUR
TURNOVER
(VS. 11% PCP),
EXCLUDING 12 ROLES
RESTRUCTURED
60%
OF ROLES
ARE CUSTOMER
FACING
A CAPABILITY-LED CHAPTER
Ensuring that we attract, retain and develop the right organisational
capability and talent will be a core requirement for our next chapter to 2025
as we target digitally enabled productivity gains, intimate connection with
our loyal consumers around the world and improved responsiveness in a
Covid (and hopefully post-Covid) world.
In FY21, we laid the foundations for our three-part transformation plan –
filling more than 80 positions worldwide with a third of those appointments
being internal. 100% of senior sales and supply chain hires have brought
international FMCG experience to their roles. Voluntary labour turnover
declined globally year on year to 9% (from 11%).
The drive for focus and performance across the business has supported an
improvement in speed to act as well as clarity for the team for our 2025 goals.
FY21 also saw the continuation of our fully flexible mode of working, with
many Comvita whānau electing to working from home on a regular basis,
role permitting.
Together, these factors have accelerated our sense of momentum and driven
internal change. While change at pace can be difficult, we are working hard
to increase engagement and open dialogue globally. We are establishing
our eNPS baseline in FY22 through a global employee survey to support
our aspiration to be best employer by 2025.
OUR PEOPLE
——
1. FTE calculation excludes
contractors
2. Equal pay for like-for-like roles
applies regardless of gender,
race or any other diversity
definition
Frances (Frankie) Huia,
Apprentice Beekeeper
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
OHORERE BENNETT,
PRODUCTION SUPERVISOR,
11 YEARS WITH COMVITA
“My year has been exciting. We’ve been very
focused on improvements in production, and I love
all of the changes. Soon we’re going to remove
walls, move people around, the whole layout in
production will change to create more efficiency in
output. Half of us have been here for over 7 years,
so this will mean a freshen up for all of us. With the
changes, we get to redecorate and we’ve all agreed
on the biggest quote for our wall: “Production,
where the magic happens!”
You have been with Comvita for a long
time. What brought you here?
SONYA: I joined Comvita after 13 years in kiwifruit,
I wanted a job indoors so I could pay my mortgage.
I didn’t realise it would turn into the long relationship
it has! With my respect for Alan and passion for
the work we were doing came ownership – I really
wanted to do a good job. I started with Comvita
in the original factory across the road, putting top
seals on lids by hand. Back then, filling 5,000 pots
was an exceptional day. Of course, these days we
can fill more than three times that amount in just
one production room.
What different roles have you held so far?
SONYA: When we outgrew the old factory,
we moved to our current site. The walls were
pretty stark, and it took some getting used to.
I remember once we were making a premium
Propolis honey for Japan. I was upset the labels
weren’t on properly and made my feelings known.
Shortly afterwards, I was moved to the label room.
At first, I thought I was being punished for having
strong opinions, but someone told me it was my
eye for detail that made me a perfect fit for the
role! From there, I moved into the warehouse
picking orders and was promoted to Warehouse
Manager – a role I held for four years before
moving into Purchasing. In all of my roles, I feel
like I help people too, even just by making them
smile and laugh.
How would you describe your current
connection to Comvita?
SONYA: We are making some great changes –
some of them I have been harping on about for
ages. When Tracy Brown, our new Chief Operating
Officer, shares her common-sense approach,
I sometimes think “Hallelujah!” I am excited for
the future and want to see Comvita be successful.
The business must make a profit or there’s no
point. But it has been a big year of change and
hard seeing some of my workmates leave this
place. Sure, there are days when I feel snowed
under or frustrated, but I am still full of ideas and
enthusiastic about my job. My heart’s still here.
I love this place, and I feel like I belong here.
How can Comvita become a best employer?
SONYA: It’s the little things – and the big things.
I liked it when we repaid the wage subsidy [related
to Covid]. To me, that showed huge integrity.
Same thing when Comvita announced it would be
providing life and trauma cover for its permanent
employees. That also meant a lot. Not everyone
can afford that you know. It shows the company
is determined to do the right things for its people
as well as make the tough calls.
“With my respect for Alan
and passion for the work we
were doing came ownership
– I really wanted to do a
good job.”
AN INTERVIEW
We needed to change, but it
hasn’t been easy”
TALKING TO SONYA
LOOKING FORWARD ————
DIVERSITYBEST EMPLOYER
Aspiring for
a global eNPS
score of +7
(vs. current at 0)
Reinvesting
in our employee
experience and
Value Proposition
All Comvita
Whānau as
shareholders
SONYA ALDRIDGE,
24 YEARS WITH COMVITA SINCE 27 FEBRUARY 1997.
CURRENT ROLE: PURCHASING COORDINATOR.
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
This year, we introduced a new internal
programme “Hive to Home” to connect our
global team with Comvita’s cause, vision,
strategy and values. This included two events
in Paengaroa, where our Support Centre
Team and our 70+ community of beekeepers
physically gathered, as well as in Shenzhen
China to celebrate Comvita’s proud history
and set out the exciting road ahead. Interactive
sessions brought our people together, gave
life to our purpose and helped us forge
a strong connection with consumers.
Cade Maxwell,
18, Apprentice
Beekeeper greets
David Banfield
Mihi Whakatau
welcoming
Beekeepers
on site
13
REGIONAL BEEKEEPING
APPRENTICESHIPS
CREATED ACROSS THE
NORTH ISLAND
600K+
NUMBER OF BEES ABLE TO
BE RESCUED AND REHOMED
THANKS TO PHYSICAL HIVES
WE’VE BUILT AND DONATED
500+
HIVE TO HOME “DAYS”
(WITH MORE THAN 300
PEOPLE PARTICIPATING IN
NEW ZEALAND AND CHINA)
150+
APIARY AND CUSTOMER
EXPERIENCE DAYS (AWAY
FROM NORMAL JOB)
TARGETED ACROSS THE
TEAM IN FY22 TO CONNECT
OUR PEOPLE WITH
END-TO-END
ft —fiĀĒ()flff 2(ff)/ā–-
ft —fiĀĒ()flff 2(ff)/ā–ffi
Ē (ffĀ(
)
)
((
(
ftĀ
(
)(ff(
Ē)— Ā(
-–
-
ffi
–
HIVE TO HOME
CONNECTION
——
COMVITA GROUP
Average length of service – permanent employees, at 30 June 2021
N
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
–
9%
TRIFR 5.3
1
FY21 TARGET -20%
–
45%
MVIFR 1.7
2
NEW MEASURE
+171%
NEAR MISS REPORTS
FY21 TARGET +100%
–
54%
MOTOR VEHICLE
INCIDENTS
FY21 TARGET -20%
–
24%
REPORTABLE
INJURIES
3,4
FY21 TARGET -20%
7 SAFETY DISCLOSURES
During the year, we escalated seven disclosures
for actual or potential events (we included some
near misses) where high-risk hurdles were met.
This helped bring focus and urgency to address
such events and to share learnings across all teams.
BOW-TIE RISK REVIEWS
Following an independent and external review of
our critical risk safety management procedures,
our continual focus has been on strengthening risk
assessments. This has included the refresh of clear,
non-negotiable controls (particularly in the vehicle
safety space) to ensure risk management is
embedded into our daily work.
We saw the benefits of this through the positive
downward trend of motor vehicle incidents by 54%.
1. TRIFR = total recordable
injury frequency rate per
200,000 hours worked globally
(excludes contracted hours).
2. MVIFR = motor vehicle incident
frequency rate that occurred in
New Zealand per 200,000km
travelled.
3. Recordable injuries include
injuries requiring medical
treatment or lost time
combined.
4. Some labour hour assumptions
made, on expected hours
worked rather than actual
hours worked. Injury
frequency rates have not been
independently verified.
“The Strong Work Programme has really
benefited us this season – it even helped the
guys with the most experience. No one was
complaining with back issues as much this
season, so I see it as a great contribution to
helping us work more safely. We’ve got more to
do to ensure people are constantly reminded
about the correct techniques. That’s our focus
this year – to keep it front of mind so we
practise it every day.”
CRITICAL RISK
SPOTLIGHT –
NEW ZEALAND
APIARY OPERATIONS
+11%
EARLY DETECTION
OF INJURIES
RELATED TO
MANUAL HANDLING
–
25%
MANUAL HANDLING
INJURIES
REQUIRING MEDICAL
INTERVENTION
STRONG WORK PROGRAMME
Our manual handling prevention
programme was delivered across
all apiary teams, with the intention
of tackling our largest injury category
caused through manual handling
and forceful movements, and led
by employee learning teams honed
in on a definition of ‘strong work’
to reduce physical handling risks
every day.
During the year, there was an
increase in the number of injuries
reported in relation to manual
handling tasks (+11% vs pcp).
However, we also saw a positive
downward shift in the severity of
injuries and injuries requiring medical
intervention (-25% vs pcp). This trend
reflects better early reporting of pain
and discomfort and quick response to
minor niggles.
In FY22, we will provide another layer
of intervention and protection with
the roll-out in Aotearoa of our newly
launched Fit for Life programme,
designed to systematically support
team readiness for the physical
demands of their roles.
The programme includes a physio/
medical assessment and mental
wellbeing check.
TAKING SAFETY AND
WELLBEING TO THE
NEXT LEVEL
SAFER HIVE FORUM
This year, we launched a new safety management platform, moving away
from traditional H&S committee structures.
Designed to build health and safety capability, the Safer Hive Team is in effect
a learning cohort of business representatives. So far, the team have completed
five learning modules and have led risk reviews from various parts of the
organisation. In its foundational year, the Safer Hive platform provides an
exciting platform to build on for FY22.
OUR SAFETY MATURITY INDEX
+0.5 vs PCP
We have focused on progressive improvement in our safety culture through
a bespoke safety culture maturity programme across all our ANZ operational
teams. The framework enables teams to track and own their safety culture
maturity plans, resulting in a +0.5 gain in self-assessed safety maturity.
The top two category improvements were risk awareness and systems.
AWARDING SAFETY INNOVATION
The first Apiary Safety Initiative Award was presented to Carl Humphries,
Operations & Logistics Leader, pictured with CEO David Banfield. Carl’s award
recognised his systematic and collaborative approach and contribution to
lowering risk during large movements of hives.
RELENTLESS FOCUS ON
SAFETY PRIORITIES
——
ROBBIE O’BRIEN
APIARY SUPERVISOR
WHANGANUI
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
To support our strategy to become carbon
positive by 2030, we have been working in
partnership with thinkstep-anz this year to
develop a comprehensive GHG inventory for
all our New Zealand-based operations. The
review captured Scope 1 and Scope 2 emission
sources within our value chain, as well as an
initial estimate of material Scope 3 emissions
(which are estimated to be more than 90% of
the overall total emissions).
Comvita’s Scope 1 and 2 emissions contribute 5.6%
and 1.2% respectively to our initial GHG inventory.
Despite their relatively small overall impact, they
are important to us, and we continue to focus
on our carbon reduction efforts in these areas
because they come under our direct control
and influence.
Our combined Scope 1 and 2 emissions for FY21
were 1,005 tCO
2
e. By contrast, the Mānuka
forests we have planted and currently manage
sequestered 4,085 tCO
2
e in the same period.
Our data is not yet assured against GHG Protocols
and ISO 14064 standards. However, we are
confident we are on track with our baseline
exercise and that we have a clear carbon positive
stance for Scope 1 and 2 emissions in New Zealand
in FY21.
Comvita’s Mānuka forests sequester carbon
dioxide as they grow. Taking into account all
the Mānuka forests where we have operational
control, we have sequestered more than 4,000
tCO
2
e in FY21 – four times greater than our
Scope 1 and Scope 2 emissions in New Zealand
for the same period.
By the end of this planting season, we will
have planted more than 10 million Mānuka
seedlings since the beginning of our reforestation
programme and generated more than 9,146 tCO
2
e
of carbon removals.
PROUDLY HEADING
TOWARDS CARBON
POSITIVE
——
TRANSPARENCYIMPACT
LOOKING FORWARD ————
Scope 3:
Value chain data
validation and
action planning
Life cycle
Assessment
for core honey
products
Aiming for carbon
positive comvita
team by 2030
NZ Operations
Carbon Emissions
(S1, S2)
1,005 tCO2e
NZ Operations
Carbon Emissions
(S1, S2 Limited S3)
2,146 tCO2e
Comvita
Mānuka Forests
Carbon Removals
- 4,085 tCO2e
NZ Operations
Net Position
(S1, S2)
- 3,080 tCO2e
NZ Operations
Net Position
(S1, S2 Limited S3)
- 1,939 tCO2e
S1 = Scope 1 — S2 = Scope 2 — S3 = Scope 3
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
FY21 GHG INVENTORY BASELINE AND
ASSESSMENT OF SCOPE 3 IMPACT
We undertook an assessment of our value chain
for our New Zealand operations during FY21 to
assess the relevance of those activities to our
carbon footprint. The review was guided by the
15 Scope 3 categories outlined in the Greenhouse
Gas Protocol – Corporate Value Chain (Scope 3)
Accounting and Reporting Standard.
The initial assessment suggested that most
upstream Scope 3 categories could be relevant.
Accordingly, we collected available activity data,
including spend data, to support calculation and
estimation of emissions for each category. This
will help us to understand the materiality of each
activity and to prioritise improvements in the way
we collect data for future inventories.
As with most Scope 3 inventories, there were
pockets of uncertainty in some of the Scope 3
category data. A large proportion of our Scope 3
activities relate to purchased goods and services
(74%), and these represent the greatest levels of
data uncertainty. Based on this, we have removed
this emission category from this year’s calculation
but intend to reinclude them once our data is
more reliable.
Only those activities for which Comvita has
good-quality data are included in our GHG FY21
inventory and form Comvita’s baseline for the
declared categories.
Our FY21 inventory methodology will form the
basis for future reporting for our New Zealand
operations and act as a base year to ensure
consistency and comparison over time. We
plan on expanding the GHG inventory to our
international operations next year and to
prepare our New Zealand GHG inventory for
data assurance against GHG Protocols and
international standards.
Scope/Category(t CO
2
e)(t CO
2
e)
Scope 1829
Scope 2176
Scope 31,141
C3 Energy and fuel related emissions233
C4 Upstream transport and distribution866
C5 Waste31
C6 Business travel11
Total2,146
tCO
2
e removals by Mānuka Forests-4,085
Net position NZ Operations-1,939
THINKSTEP-ANZ
WWW.THINKSTEP-ANZ.COM
We have partnered with thinkstep-anz on
our sustainability journey, and in FY21, we
have undertaken numerous baseline projects
including sustainability maturity assessment,
strategy alignment with the UN Sustainable
Development Goals and GHG inventory
alignment with GHG Protocols.
All data has been prepared in line with
ISO 14064-1:2018 and the GHG Protocol
standards and guidance.
We acknowledge that our data is not yet externally
validated in full. However, an external data quality
assessment has been completed for our FY21 GHG
inventory data with recommendations on how
we can achieve full assurance against the above
standards. Our intention is that all Comvita GHG
inventory in New Zealand will be fully assured
from FY22.
With a clear baseline in place, we can
now move towards science-based targets
and focused actions in our material
carbon-impacting areas.”
HEATHER JOHNSTON
HEAD OF SAFETY AND SUSTAINABILITY
1. Our GHG emissions inventory has been calculated based on the following standards and guidance:
• ISO 14064-1:2018 Greenhouse gases
• Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard
• Greenhouse Gas Protocol – Corporate Value Chain (Scope 3) Accounting and Reporting Standard
• Greenhouse Gas Protocol – Scope 2 Guidance
• Greenhouse Gas Protocol – Scope 3 Calculation Guidance
• Ministry for the Environment – Guidance for voluntary greenhouse gas reporting
2. FY21 GHG inventory and net position (Scope 1 and 2 and limited Scope 3)
• Scope 3 categories included within the GHG inventory for categories that are material and
where good-quality data is available:
• C3 – Fuel and energy-related emissions (upstream of Scope 1 and 2)
• C4 – Upstream transport and distribution (freight)
• C5 – Waste
• C6 – Business travel
3. Mānuka forest carbon removals – calculated using emissions factors for indigenous forest from
MPI’s Carbon Look-up Tables for Forestry in the Emissions Trading Scheme.
4. The total amount of CO
2
e stored in Mānuka forest since establishment (excluding Makino).
Solar panels on
our 23 Wilson
Road South
Paengaroa hive.
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
Our commitment to our purpose continued to drive
our community and partnership engagements
through the year. Key to our efforts was a
partnership with Saving the Wild. In addition,
we have been raising funds for our partner
charities including For the Love of Bees.
This year, we placed 185 hives in the Kimana
Wildlife Corridor in Kenya and began our first
harvest of honey with our partners Saving the
Wild and Big Life Foundation. This partnership
was established to protect the corridor from
encroachment for land use and to protect the
land for the migration of elephants. Beekeeping
treads lightly on the environment and is an
opportunity to provide the local population with
alternative revenue streams. All profits will be
invested into an education fund for the children
of the Maasai villages.
Throughout the year, Carlos Zevallos (our
Whanganui Branch Manager) has been mentoring
James and Johnathon, our beekeepers on the
ground in Kenya, providing expert knowledge
on beekeeping, queen bee rearing and hive
productivity. Our team in New Zealand was also
involved in developing the label for the packaging
of the honey, and we look forward to selling the
honey in Kenya.
We launched a special edition of our Mānuka
honey this year – a premium UMF 25+. 1% of
revenue from this range will be donated together
with a $20 donation that our customers make to
experience our immersive honey tasting experience
in our Auckland Wellness Lab. Through these
activities, we have raised $75k for charity.
In May, we held our apiary hive gathering in
Paengaroa. This was an excellent opportunity to
bring all our beekeepers together for training and
team building. As part of this event, we donated
$5 for every beekeeper to the Himalayan Trust,
a non-profit humanitarian organisation working
in the Everest region of Nepal, which was founded
by Sir Edmund Hillary. Sir Edmund Hillary was also
a beekeeper and features on the New Zealand
$5 note, and this provided our beekeeping team
an opportunity to also be part of our efforts to
heal and protect the world.
East Kalimantan in Indonesia is currently
experiencing forest loss, displacing and injuring
Borneo orangutans in the process. Our partner
Borneo Orangutan Survival Foundation rescues
and rehabilitates orphaned orangutans who are
affected by this environmental damage. During
2021, we provided medihoney and Propolis to aid
in their rehabilitation process.
Beekeeper James
Njuguna and Saving
the Wild founder
Jamie Joseph tend
to the hives during
the honey harvest,
Kimana Wildlife
Corridor, Kenya.
Jamie Joseph,
Founder of
Saving the
Wild, and
elephant-proof
beehives in the
Kimana Wildlife
Corridor, near
Mt Kilimanjaro,
Kenya.
Launching our special
reserve UMF 25+ Mānuka
honey, with 1% of revenue
from this range donated
to charity.
Hive placement,
Kimana Wildlife
Corridor, Kenya.
Our apiary team at the
inaugural hive gathering
at our Market Support
Centre in Paengaroa,
holding up their $5 notes
that were donated to the
Himalayan Trust.
PARTNERSHIPS
——
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ANNUAL REPORT
COMVITA.CO.NZ
2021
BEES, PEOPLE,
SUSTAINABILITY AND
PARTNERSHIPS
BUILDING OUR
BUSINESS
——
Brett
HEWLETT
—
INDEPENDENT CHAIR
David
BANFIELD
—
CHIEF EXECUTIVE
OFFICER
Tracy
BROWN
—
CHIEF SUPPLY
CHAIN OFFICER
Holly
BROWN
—
CHIEF PURPOSE &
TRANSFORMATION OFFICER
Paul
REID
—
INDEPENDENT DIRECTOR
Zhu
GUANGPING
—
DIRECTOR
Bob
MAJOR
—
INDEPENDENT DIRECTOR
Nigel
GREENWOOD
—
CHIEF FINANCIAL
OFFICER
Nicola
O’ROURKE
—
CHIEF DIGITAL
OFFICER
Adrian
BARR
—
CHIEF BUSINESS
DEVELOPMENT OFFICER
Sarah
KENNEDY
—
CHAIR OF SAFETY AND
PERFORMANCE COMMITTEE
Luke
BUNT
—
CHAIR OF AUDIT AND
RISK COMMITTEE
Andy
CHEN
—
REGIONAL CHIEF EXECUTIVE
OFFICER ASIA
Dr Jackie
EVANS
—
CHIEF SCIENCE
OFFICER
Corey
BLICK
—
GENERAL MANAGER –
NORTH AMERICA
Cheng
DAYONG
—
DIRECTOR
KEEPING US
FOCUSED
——
PLEASE VISIT COMVITA.CO.NZ
FOR BIOGRAPHIES OF OUR
BOARD AND LEADERSHIP
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COMVITA.CO.NZ
2021
BOARD OF DIRECTORSLEADERSHIP
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,
the Board Charter and the NZX Main Board
Listing Rules. The Constitution provides for the
Directors 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. To
encourage the process of constant evolution of
the Board and succession of key roles within the
Board, the Board Charter states that Directors
are discouraged from standing for re-election a
second time (i.e. after serving six years) unless by
unanimous support from the whole Board. For the
year ended 30 June 2021, the company complied
with the Listing Rules dated 10 December 2020
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 and/or
in this Annual Report.
Director ownership interests (including beneficial
ownership) as at 30 June 2021 are detailed in the
statutory information section at the back of the
2021 Financial Statements.
Board and Committee meeting attendance for the year ended 30 June 2021 is set out below:
Board MemberBoard
Audit and Risk
Committee
Safety and Performance
Committee
EligibleAttendedEligible
1
AttendedEligibleAttended
Lucas Bunt111133––
Brett Hewlett11113366
Sarah Kennedy1111––66
Robert Major1111--66
Paul Reid111132––
Cheng Dayong118
2
––––
Zhu Guangping118
3
––––
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 25 August
2021. 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 25 August 2021, the
governance structures, principles, policies and
practices it has adopted are in compliance with
the NZX Corporate Governance Code dated
10 December 2020 (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 a 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
ConstitutionCode of Ethics
Board CharterContinuous Disclosure
Policy
Safety and
Performance
Committee Charter
Financial Product
Dealing Policy
Audit and Risk
Committee Charter
Diversity Policy
Director and Officer
Remuneration Policy
Comvita Limited is committed to taking
a holistic view of how it creates long-term
value and the impact of its decisions on
all stakeholders – including shareholders,
employees, customers, suppliers, community
and the environment.
1. Four Audit and Risk Committee meetings were scheduled for FY21. However, the meeting scheduled for June was postponed to early July, and all
three directors attended.
2. Cheng Dayong joined these meetings in the afternoon, due to the time zone differences.
3. Zhu Guangping joined these meetings in the afternoon, due to the time zone differences.
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COMVITA.CO.NZ
2021
GOVERNANCE
culture that meets or exceeds the company’s
obligations under legislation and best-practice
standards. The Committee also 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 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), Brett Hewlett and Paul Reid and
met three times during the period.
5
For the FY21
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 Committee also
reviews and monitors the Company’s insurance
programme in conjunction with management and
recommends changes when deemed appropriate.
The Chief Executive Officer, Chief Financial Officer
and Group Financial Controller 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.
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. Comvita has engaged an
independent third party to align its non-financial
reporting to the reporting practices of the Global
Reporting Initiative framework and is on a road
map to having fully integrated reporting by FY23.
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
Diversity and Inclusion Policy of Directors
and Officers
The company is committed to diversity
(gender, ethnicity, age, sexual orientation,
education, religious and cultural beliefs etc.) in
its employment of individuals at all levels in the
organisation. As at 30 June 2021, the Board had
one female Director and two Chinese nationals
out of a total of seven Directors and four female
officers and one NZ Chinese executive out of a
total of nine officers (2020: one female Director
out of a total of eight Directors and three female
officers and one NZ Chinese executive out of
a total of nine officers).
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
maintain 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 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, the Board
periodically undertakes a self-assessment of its
performance, processes and procedures.
Independence of Directors
The majority of the Board are independent
Directors. The Chair is also independent.
For a Director to be considered to 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 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.
4
The Board has reviewed which of its Directors
are deemed to be independent in terms of the
NZX Listing Rules and has determined that
five of the seven Directors as at 30 June 2021
were independent.
It is viewed that the Chairs of the Audit and Risk
Committee and the Safety and Performance
Committee 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 for
an initial two-year term, with reappointment
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.
Safety and Performance Committee
The Safety and Performance Committee
comprised of Sarah Kennedy (Chair), Brett
Hewlett and Bob Major. The Committee met
six times during the period.
For the FY21 year, all Committee members were
independent Directors. The Committee provides
oversight to health and safety by ensuring the
business maintains a strong health and safety
4. 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%.
5. Four meetings were scheduled for FY21. However, the meeting
scheduled for June was postponed to early July, and all three
Directors attended.
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GOVERNANCE
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
The Audit and Risk Committee actively engage
the company’s external auditors in a dialogue with
respect to any disclosed relationships or services
that may impact the objectivity and independence
of such auditors and recommend to the Board
appropriate action to ensure its independence.
External auditor
Comvita’s external auditor is KPMG. KPMG was
reappointed by shareholders at the 2020 Annual
Shareholders’ Meeting in accordance with the
provisions of the Companies Act 1993. KPMG was
first appointed as auditor 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. However, the Audit and Risk Committee
approves management’s internal audit plan
annually. This programme of work includes internal
and external reviews of specific risk areas and
includes a review of one offshore subsidiary per
year. 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. The company
has engaged a communications agency to assist
with its investor relations programme.
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.
Stakeholder interests
The Board respects the interests of stakeholders
within the context of the company’s ownership
type and its fundamental purpose. The
company is committed to taking a holistic
view of how it creates long-term value for
all stakeholders and considering the impact
of its decisions on all stakeholders, including
shareholders, employees, customers, suppliers,
community and the environment.
The company is strongly committed to acting in a
socially responsible manner with all stakeholders,
including the wider community, whilst having an
overall positive impact on the environment.
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.
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 in the
statutory information section at the back of
the 2021 Financial Statements.
Chief Executive Officer remuneration
The Chief Executive’s base salary for the FY21
year was $520,000. Subject to Board approval,
for FY21, the Chief Executive Officer was also
entitled to a short-term incentive if he met
agreed financial and non-financial goals (with
on-target earnings of 35% of base salary and
the ability to achieve up to 44.8% of salary for
overdelivery against Board-approved targets).
Subject to Board approval and achievement of
agreed Group performance targets, for FY21,
the Chief Executive was also entitled to a long-
term incentive in the form of Performance Share
Rights (with on-target earnings of $130,000).
In relation to Performance Share Rights
achievements in FY20, 11,831 shares vested to
the Chief Executive Officer in FY21, being one-third
of the long-term incentive granted by the Board.
Senior executive remuneration
For FY21, senior executive remuneration was made
up of base or fixed remuneration, an employee
bonus plan and a performance share rights plan,
subject to Board approval.
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.
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 company has carried out a robust risk
assessment process, described in the following
paragraphs. 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 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 Safety and Performance
Committee. The health and safety functions of
the Committee include undertaking due diligence
in the identification and monitoring of critical
workplace, heath, safety and wellbeing as well
as the monitoring and review of the company’s
compliance with documented 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
external health and safety governance training
and undertakes safety walks in key operational
sites on a scheduled basis.
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 2021 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 Board 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.
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COMVITA.CO.NZ
2021
GOVERNANCE
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
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.
Placeholder, not for Printing
Logo use must be
approved by
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Min Size 12mm Height
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|
COM004
OUR OFFICES
——
Directors
COMVITA BOARD OF DIRECTORS
—
Brett Hewlett
Bob Major
Luke Bunt
Paul Reid
Sarah Kennedy
Cheng Dayong
Zhu Guangping
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 30
PwC Tower
15 Customs Street West
Auckland 1010
MORE DETAILS
——
Australia
COMVITA AUSTRALIA
PTY LIMITED
—
10 Edmondstone Street
South Brisbane
Queensland 4101 | Australia
Phone +61 7 3845 1400
Freephone 1800 466 392
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
Europe
COMVITA EUROPE BV
—
Prof. J.H. Bavincklaan 7
1183 AT Amstelveen
The Netherlands
Phone: +31 682065359
info.europe@comvita.com
North America
COMVITA USA, INC.
—
506 Chapala Street
Santa Barbara | CA 93101
USA
Phone +1 855 449 2201
hello@comvita.com
Hong Kong SAR
COMVITA HK LIMITED
—
Suite 1320-1322, 13/F
Leighton Centre,
77 Leighton Road
Causeway Bay
Hong Kong SAR
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
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ANNUAL REPORT
COMVITA.CO.NZ
2021
DIRECTORY
ANNUAL REPORT
COMVITA.CO.NZ
BUILDING A
BETTER BUSINESS
---
FOR THE YEAR ENDED 30 JUNE 2021
COMVITA LIMITED
Image TBC
FINANCIAL STATEMENTS 2021
FOR THE YEAR ENDED 30 JUNE 2021
—
COMVITA LIMITED
Comvita Financial Statements 2021Comvita Financial Statements 2021 - P1
2
3
4
5
6
7
8
41
45
51
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 2021 - P2Comvita Financial Statements 2021- P3
DIRECTORS’ DECL A R ATIONCONSOLIDATED
INCOME STATEMENT
For the year ended
In thousands of New Zealand dollars
30 June 202130 June 2020
Note
Revenue5191,734
195,912
Cost of sales(88,310)
(104,601)
Gross profit103,424
91,311
Other income63,220
2,209
Marketing expenses(24,216)
(15,506)
Selling and distribution expenses(44,597)
(50,562)
Administrative and other operating expenses9(25,648)
(25,698)
Operating profit before financing costs12,183
1,754
Finance income72,473
307
Finance expenses7(2,247)
(6,217)
Net finance income/(costs)226
(5,910)
Share of profit of equity accounted investees17b992
(174)
Impairment of equity accounted investees-
(5,928)
Profit/(loss) before income tax13,401
(10,258)
Income tax (expense)/benefit10(3,922)
557
Profit/(loss) for the year9,479
(9,701)
Earnings per share
Basic earnings per share (NZ cents)2413.61(19.10)
Diluted earnings per share (NZ cents)2413.59(19.10)
EBITDA3125,5234,179
*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. A reconciliation of EBITDA to net profit/(loss) before
tax is provided in note 31.
The notes on pages 8 to 40 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
40:
• comply with New Zealand generally accepted accounting practice and fairly reflect the financial
position of the Group as at 30 June 2021 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 2021.
For and on behalf of the Board of Directors:
Brett Hewlett Luke Bunt
25 August 2021 25 August 2021
Comvita Financial Statements 2021 - P4Comvita Financial Statements 2021- P5
For the year ended 30 June 2021
In thousands of New Zealand dollars
Share
capital
Foreign
currency
translation
reserve
Hedging
reserve
Fair
value
reserve
Retained
earningsTotal
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 ----329329
Acquisition of treasury stock(572)----(572)
Issue of treasury stock
- Supplier share scheme
502---(43)459
- Issued to CEO 915---(265)650
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
Total comprehensive income for the year
Profit for the year----9,4799,479
Other comprehensive income (net of tax):
Foreign currency translation differences for equity accounted
investees (note 17b)
-(49)---(49)
Foreign currency translation differences for foreign operations- (1,004)--- (1,004)
Financial asset – fair value movement ---396-396
Disposal of equity instruments---2,244(2,244)-
Effective portion of changes in fair value of cash flow hedges--(684)--(684)
Total other comprehensive income-(1,053)(684)2,640(2,244)(1,341)
Total comprehensive income for the year-(1,053)(684)2,6407,2358,138
Transactions with owners, recorded directly in equity
Share based payment ----221221
Acquisition of treasury stock (1,239)----(1,239)
Issue of ordinary shares - Supplier share scheme 486----486
Issue of ordinary shares - Share purchase and loan scheme
(note 27)
1,269----1,269
Issue of treasury stock - Share purchase and loan scheme
(note 27)
1,239---381,277
Redemption of ordinary shares related to share schemes(20)----(20)
Total transactions with owners1,735---2591,994
Balance at 30 June 2021201,839(4,862)(1,211)-26,114221,880
The notes on pages 8 to 40 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 40 are an integral part of these financial statements
For the year ended
In thousands of New Zealand dollars
30 June 202130 June 2020
Note
Profit/(loss) for the year9,479 (9,701)
Items that are or may be reclassified subsequently to the income
statement
Foreign currency translation differences for foreign operations (1,067)1,431
Foreign currency translation differences for equity accounted investees(49)(467)
Effective portion of changes in fair value of cash flow hedges(950) 1,658
Fair value movement – financial asset396 (2,640)
Income tax on these items 10328(768)
Income and expense recognised directly in other comprehensive income(1,342)(786)
Total comprehensive income/(loss) for the year8,137 (10,487)
Comvita Financial Statements 2021 - P6Comvita Financial Statements 2021- P7
As at 30 June
20212020
In thousands of New Zealand dollars
Note
Assets
Property, plant and equipment
12
63,34556,829
Intangible assets and goodwill
13
38,04639,467
Right of use assets
14
13,03511,447
Biological assets
16
3,8143,795
Investment
17
6,8496,269
Deferred tax asset
11
7,2098,043
Total non-current assets132,298125,850
Inventory
18
101,008112,679
Trade receivables
19
23,52317,726
Sundry receivables
20
13,46312,349
Cash and cash equivalents
25
16,26716,680
Tax receivable50366
Assets held for sale-773
Total current assets154,311160,573
Total assets286,609286,423
Equity
Issued capital201,839200,104
Retained earnings26,11418,620
Reserves
(6,073)
(6,976)
Total equity221,880211,748
Liabilities
Loans and borrowings
25
20,85032,200
Employee benefits
21
539414
Lease liability9,9507,891
Deferred tax liability
11
1,9622,194
Total non-current liabilities33,30142,699
Trade and other payables
22
18,86922,707
Lease liability3,6313,744
Employee benefits
21
5,5143,653
Tax payable1,7661,158
Derivatives
28
1,648714
Total current liabilities31,42831,976
Total liabilities64,72974,675
Total equity and liabilities286,609286,423
For the year ended 30 June
In thousands of New Zealand dollars
20212020
Note
Receipts from customers190,739207,143
Payments to suppliers and employees(161,711)(161,394)
Interest received4234
Interest paid(2,247)(4,421)
Taxation paid(1,998)(2,065)
Net cash flows from operating activities2624,82539,297
Consideration paid for business combination-(4,505)
Receipt from disposal of investment396-
Loans to equity accounted investees(150)(1,621)
Interest from equity accounted investees19-
Receipt of dividend from equity accounted investee363-
Loans to related parties567-
Interest from related parties2336
Payment for the purchase of property, plant and equipment(10,601)(5,206)
Receipt for the disposal of property, plant and equipment4682,336
Receipt from sale of intangibles226
Payment for the purchase of intangibles(366)(496)
Payment for derivative settlement-(263)
Net cash flows from investing activities(9,279)(9,693)
Proceeds from the issue of share capital (20)48,213
Purchase of treasury stock(1,239)(572)
Repayment of lease liabilities(3,560)(3,862)
Repayment of loans and borrowings(11,350)(67,050)
Net cash flows from financing activities(16,169)(23,271)
Net increase in cash and cash equivalents(623)6,333
Cash and cash equivalents at the beginning of the year16,68010,314
Effect of exchange rate fluctuations on cash held21033
Cash and cash equivalents at the end of the year16,26716,680
Represented as:
Cash and cash equivalents2516,26716,680
Total16,26716,680
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CASH FLOWS
The notes on pages 8 to 40 are an integral part of these financial statementsThe notes on pages 8 to 40 are an integral part of these financial statements
Comvita Financial Statements 2021 - P8Comvita Financial Statements 2021- 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 2021 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 25 August 2021.
(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 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 reporting period in which the estimate
is revised and in any future reporting 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
("CGUs")
Impairment reviews are performed by management
annually to assess the carrying value of CGUs containing
goodwill. The recoverable amounts of CGUs have been
determined based on value-in-use calculations. These
calculations require the use of estimates. Refer to note 13.
(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.
(iv) Deferred consideration
The valuation of the deferred consideration on the Group’s
business combinations and joint ventures 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.
(v) 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.
(vi) 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.
(vii) 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, except
for entities under common control, which are accounted
for using the pooling of interest method.
(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.
(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
("FVOCI"), or through profit or loss ("FVPL"), 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 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 interest.
Debt instruments
Subsequent measurement of debt instruments depends
on the Group 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 a 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 other comprehensive income ("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.
• 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 loss 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).
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P10Comvita Financial Statements 2021- P11
3. SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(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.
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
Items 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.
.
3. SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(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 -17 years
• Office equipment, furniture and fittings 2 - 50 years
• Bearer plants 100 years
Depreciation methods, useful lives and residual values are
reassessed at the reporting date.
(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 2 – 25 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 carrying amounts of 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.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P12Comvita Financial Statements 2021- P13
3. SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(ii) Non-financial assets
An impairment loss is recognised if the carrying amount
of an asset or its CGUs 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 profit or loss.
The recoverable amount of an asset or CGUs 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.
(k) Employee benefits
Share-based payment transactions
The grant date fair value of entitlements granted to
employees is recognised as an employee expense, with
a corresponding increase in equity, over the period in
which the employees become unconditionally entitled
to the entitlements. The amount recognised as an
expense is adjusted to reflect the actual number of share
entitlements that vest.
(l) Revenue
Revenue from the sale of goods is measured at the fair
value of the consideration received or receivable, net
of returns and allowances, trade discounts and volume
rebates. Revenue is recognised at the point of time
performance obligations are satisfied by transferring
control of goods to the customer. For wholesale sales,
control passes to the customer in accordance with the
individual terms of the contract of sale – for domestic
sales this is ordinarily on delivery to the customer’s
premises and acceptance by the customer. For in-store
sales, control passes to the customer at point of sale. For
online sales, the order along with delivery to the customer
are considered to comprise a single performance
obligation, therefore control is considered to pass to the
customer on delivery of the goods.
(m) Finance income and expenses
Finance income comprises interest income on funds
invested, foreign exchange gains, dividend income and
gains on the disposal of FVOCI financial assets that are
recognised in the income statement. Interest income
is recognised as it accrues, using the effective interest
method. Dividend income is recognised on the date that
the Group’s right to receive payment is established, which
in the case of quoted securities is the ex-dividend date.
Finance expenses comprise interest expense on
borrowings, foreign exchange losses, unwinding of the
discount on provisions, impairment losses recognised
on financial assets (except for trade receivables) and
losses on the disposal of FVOCI financial assets that
are recognised in the income statement. All borrowing
costs are recognised in the income statement using the
effective interest method.
(n) Income tax expense
Income tax expense comprises current and deferred tax.
Income tax expense is recognised in the income statement
except to the extent that it relates to items recognised in
other comprehensive income, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable
income for the period, using tax rates enacted or
substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous periods.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the
initial recognition of goodwill, the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit, and differences relating to investments
in subsidiaries to the extent that they probably will
not reverse in the foreseeable future. Deferred tax is
measured at the tax rates that are expected to be applied
to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted
by the reporting date.
A deferred tax asset is recognised to the extent that it
is probable that future taxable profits will be available
against which temporary differences can be utilised.
Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised. Additional
income taxes that arise from the distribution of dividends
are recognised at the same time as the liability to pay the
related dividend is recognised.
(o) Earnings per share
The Group presents basic and diluted earnings per
share ("EPS") data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the
period. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares,
which comprise share entitlements granted to employees.
(p) Segments
Segment results that are reported to the CEO include
costs directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated
items comprise mainly head office expenses.
3. SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(q) Reclassification of freight expenses
From 1 July 2020, the business has changed the
classification of freight expenses from distribution
expenses to cost of goods sold. For consistency,
$4,632,000 of freight expenses have been reclassified
from operating expenses to cost of goods sold for the year
ended 30 June 2020.
(r) New and amended standards adopted by the
group
The accounting policies applied in these consolidated
financial statements are the same as those applied in the
Group’s consolidated financial statements as at and for
the year ended 30 June 2020. There are no new standards
that are not yet effective that would be expected to have
a material impact on the Group, in the current or future
reporting periods, and foreseeable future transactions.
(s) Covid-19 considerations
Comvita is classified as an ‘Essential’ business by the
New Zealand Government, therefore having no impact
on the manufacturing process of the Group. For the year
ended 30 June 2021 the Group has not been significantly
impacted by COVID-19. There has been a strong demand
in sales, in particular in online channels across all
markets. An assessment over the carrying value of assets
and liabilities has been performed and the Group has
recognised provisions where necessary relating to the
impact of COVID-19. The Group continues to operate as a
going concern and Senior Management continue to closely
monitor the situation.
4. SEGMENT REPORTING
A review of operating segments has been completed in the
current year and this has resulted in a change to reported
segments. Previously reported segment information
has been restated in line with the operating segments
described below.
Segment information is presented in the financial
statements in respect of the Group’s contribution
segments which are the primary basis of decision making.
The contribution segment reporting format reflects the
Group’s management and internal reporting structure.
Performance is measured based on contribution which is a
measure of profitability that the segment contributes to
the Group. Contribution is used to measure performance
as management believes that such information is most
relevant in evaluating the results of certain segments.
Inter-segment pricing is determined on an arms-length
basis.
Each segment sells Comvita’s range of products.
Comvita’s range of products primarily include products
with apiary and other natural ingredients.
The Company is organised primarily by geographic
location of its subsidiaries.
The Group has five reportable segments as described
below:
Greater China This segment reports both revenue and
related costs of the China and Hong
Kong markets.
ANZ Australia and New Zealand (ANZ)
segment captures both revenue and
related costs for the ANZ market.
Rest of Asia This segment captures both revenue
and related costs of all of our Asian
operations and customers excluding
Greater China.
North America This segment captures both revenue
and related costs for sales to
customers in North America.
EMEA The Europe, Middle East and Africa
(EMEA) segment captures both
revenue and related costs for the EMEA
markets.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P14Comvita Financial Statements 2021- P15
5. REVENUE
In thousands of New Zealand dollars
20212020
30 June30 June
Sales191,734195,280
Other -632
Total revenue 191,734195,912
6. OTHER INCOME
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Change in fair value of contingent consideration-1,039
Government subsidies734-
Government grants2,052535
Gain on disposal of property, plant and equipment222243
Insurance claims received19565
Change in fair value of biological assets17-
Other -327
Total other income3,2202,209
7. FINANCIAL INCOME AND EXPENSES
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Interest income252298
Dividend income99
Net foreign exchange gain2,212-
Finance income2,473307
Interest expense on financial liabilities measured at amortised cost(2,247)(4,421)
Net foreign exchange loss-(1,340)
Net loss in fair value of derivatives designated at fair value through the income
statement:
- Interest rate swaps-(264)
- SeaDragon options and convertible loan notes-(192)
Finance expense(2,247)(6,217)
Net finance income/(costs)226(5,910)
4. SEGMENT REPORTING (CONTINUED)
For the year ended 30 June
In thousands of New Zealand dollars
Greater ChinaANZRest of AsiaNorth AmericaEMEA
Total
reportable
segments
Other
segmentsTotal
2021202020212020202120202021202020212020202120202021202020212020
Contribution segments
Revenue
93,07686,94532,44444,06925,34620,53324,73522,1375,0606,917180,661180,60111,07315,311191,734195,912
Contribution
19,90818,20310,21813,9436,3674,1964,7334,38035(541)41,26140,181(791)1,82440,47042,005
Non attributable
(other corporate expenses)
(31,506)(34,222)
Comvita China acquisition - release of inventory
-
(8,238)
Other income (note 6)
3,2202,209
Financial income and expenses
(note 7)
226(5,910)
Share of profit of equity accounted investees (note 17b)
992(174)
Impairment of equity accounted investees
- (5,928)
Net profit/(loss) before tax
13,402(10,258)
Geographical segments
30 June 202130 June 2020
In thousands of New Zealand dollars
Revenue
Non-current
assets
Revenue
Non-current
assets
Greater China
94,29937,76684,33641,066
ANZ
25,52588,36044,27483,483
Rest of Asia
31,25250625,510643
North America
32,13515830,840544
EMEA
4,978396,78186
Other Countries
3,5455,4694,17128
Total191,734132,298195,912125,850
Total reportable segment assets
As at 30 June
In thousands of New Zealand dollars
2021
2020
Total assets for reportable segments150,970128,266
Other investments88
Investment in equity accounted investees6,8416,261
Other unallocated assets128,790151,888
Consolidated total assets286,609286,423
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P16Comvita Financial Statements 2021- P17
8. PERSONNEL EXPENSES
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Wages and salaries39,54843,135
KiwiSaver – employer contribution556558
Movement in long-service leave provision 125(33)
Equity settled share based payment transactions694329
Total personnel expenses40,92343,989
9. EXPENSES
Administrative expenses
The following items of expenditure are included in administrative expenses:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Auditors’ remuneration:
To KPMG for audit services (ii)323360
To KPMG for audit related services77
To KPMG for tax services (iii)266112
To Mercer & Hole (UK auditors)3033
Insurance (i)113284
Doubtful debts (recovered)/expense(147)984
Bad debts written off 791,852
Restructure costs7831,768
Change in fair value of biological assets-389
Directors’ fees (iv)573550
Directors – other costs 2017
Other legal & professional expenses540309
Loss on disposal of intangible assets-9
Donations56
(i) Only the portion of this expense which is included in administrative expenses
(ii) Audit services include fees for the annual audit of the financial statements of the group and its foreign
subsidiaries based in China and Hong Kong and the review of the interim financial statements
(iii) Tax services is for tax compliance and advisory work
(iv) Refer to Statutory Information
10. INCOME TAX EXPENSE IN THE INCOME STATEMENT
In thousands of New Zealand dollars
Note2021
30 June
2020
30 June
Current tax expense
Current period3,0092,382
Adjustment for prior periods(16)(60)
Total current income tax expense2,9932,322
Deferred tax expense
Origination and reversal of temporary differences11929(2,879)
Total deferred income tax expense/(benefit)929(2,879)
Total income tax expense/(benefit)3,922(557)
Reconciliation of effective tax expense
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Profit for the period9,479(9,701)
Total income tax expense/(benefit)3,922(557)
Profit/(loss) excluding income tax13,401(10,258)
Income tax using the Company’s domestic tax rate of 28% (2020: 28%)3,752(2,872)
Effect of different tax rates in foreign jurisdictions (614)(354)
Non-deductible expenses1,4973,118
Non-assessable income(817)(714)
Under provided in prior periods104265
Total income expense/(benefit)3,922(557)
Income tax recognised directly in other comprehensive income
In thousands of New Zealand dollars
Note2021
30 June
2020
30 June
Derivatives11(328)465
Other items-303
Total income tax recognised directly in other comprehensive income(328)768
Imputation credit account
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Imputation credits available for use in subsequent reporting periods8,3248,767
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P18Comvita Financial Statements 2021- P19
11. DEFERRED TAX ASSETS AND LIABILITIES
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
In thousands of New
Zealand dollars
AssetsLiabilitiesNet
202120202021202020212020
Property, plant &
equipment
--(1,020)(831)(1,020)(831)
Intangible assets--(1,962)(2,194)(1,962)(2,194)
Biological assets--(56)(50)(56)(50)
Inventories3,2632,973--3,2632,973
Derivatives464199--464199
Investments78105--78105
Other items1,5431,283--1,5431,283
Tax loss carry-forwards2,9374,364--2,9374,364
Tax assets/(liabilities)8,2858,924(3,038)(3,075)5,2475,849
Set-off of tax(1,076)(881)1,076881--
Net tax assets/(liabilities)7,2098,043(1,962)(2,194)5,2475,849
Movement in temporary differences during the year
In thousands of New Zealand
dollars
Balance
1 July 2020
Recognised in the
income statement
Recognised in other
comprehensive
income
Balance
30 June 2021
Property, plant & equipment(831)(189)-(1,020)
Intangible assets(2,194)232-(1,962)
Biological assets(50)(6)-(56)
Inventories2,973290-3,263
Derivatives198(62)328464
Investments105(27)-78
Other items1,284259-1,543
Tax loss carry-forwards4,364(1,427)-2,937
Total5,849(930)3285,247
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
In thousands of New Zealand dollars
2021202120202020
Gross AmountTax EffectGross AmountTax Effect
Tax loss carry-forwards5,3591,3735,2491,350
Intangible assets574172572171
Total5,9331,5455,8211,521
The tax loss carry-forwards do not expire under current tax legislation. They relate to capital losses in Australia, and
losses on acquisition in the United Kingdom.
12. PROPERTY, PLANT & EQUIPMENT
In thousands of New Zealand
dollars
LandBuildingsOwned
plant &
machinery
VehiclesBearer
plants
Office
equipment,
furniture &
fittings
Capital
WIP
Total
Cost
Balance at 30 June 201911,72726,60128,5532,3645,8195,9622,60683,632
Additions/transfers2208041,034159-1,2762,1325,625
Disposals(120)(447)(778)(173)-(843)-(2,361)
Reclassification to assets held
for sale
(420)(328)(388)----(1,136)
Effect of movements in exchange
rates
48286031311361407
Balance at 30 June 202011,45526,65828,4812,3535,9506,5314,73986,167
Additions/transfers-1,5102,050432-2,9184,26911,179
Disposals(8)(663)(954)(176)-(606)- (2,407)
Effect of movements in exchange
rates
10612127(219)(2)(165)
Balance at 30 June 202111,45727,51129,5892,6105,9778,6249,00694,774
Depreciation
Balance at 30 June 2019- (6,586)(13,858)(1,642)(371)(4,254)- (26,711)
Depreciation - (1,098)(2,123)(203)(67)(1,025)-(4,516)
Disposals-254682162-584-1,682
Reclassification to assets held
for sale
-57306----363
Effect of movements in exchange
rates
-(11)(34)(3)(9)(99)-(156)
Balance at 30 June 2020-(7,384)(15,027)(1,686)(447)(4,794)- (29,338)
Depreciation - (1,098)(2,170)(209)(68)(885)- (4,430)
Disposals-630891161-479-2,161
Effect of movements in exchange
rates
-(2)(7)(1)(2)190-178
Balance at 30 June 2021-(7,854)(16,313)(1,735)(517)(5,010)- (31,429)
Carrying amount
At 30 June 201911,72720,01514,6957225,4481,7082,60656,921
At 30 June 202011,45519,27413,4546675,5031,7374,73956,829
At 30 June 202111,45719,65713,2768755,4603,6149,00663,345
Depreciation charge in the income statement
Depreciation is allocated to cost of sales, selling and marketing expenses, distribution expenses, research and
development expenses and administrative expenses.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P20Comvita Financial Statements 2021- P21
13. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Impairment testing for cash-generating units containing goodwill ("CGU")
For the purpose of impairment testing, goodwill is allocated to the Group’s CGUs which represent the lowest level within
the Group at which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to each CGU are as follows:
In thousands of New Zealand dollars
Segment
(Note 4)
2021
30 June
2020
30 June
Greater ChinaGreater China25,76525,902
Apiaries 1,7661,766
Other6868
Total goodwill27,59927,736
Greater China CGU:
Value in use was determined by discounting the future cash flows generated from the continuing use of the unit and were
based on the following key assumptions:
2021
30 June
2020
30 June
Anticipated annual revenue growth included in the cash flow projections for the
combined CGU’s (normalised) for the years 2022 to 2026
6.3% to 19.4%1.5% to 8%
Post tax discount rate 12.5%12.5%
Discount rate based on the average weighted cost of capital which was based on debt
leveraging of:
20%20%
-at a cost of debt rate of:12.3%12.3%
Terminal growth rate applied beyond June 20262.0%2.0%
Cash flows were projected on actual operating results, the 30 June 2022 budget and business plan.
Sensitivity to changes in assumptions
In thousands of New Zealand dollars
2021
30 June
2020
30 June
The recoverable amount of the CGU exceeds its carrying amount by 129,70053,100
If projected earnings before interest and tax ("EBIT") is reduced by 10% year on year,
it changes the amount the recoverable amount exceeds its carrying amount to
103,50041,900
The post tax discount rate for the recoverable amount to equal carrying amount is
calculated at
33.6%22.1%
13. INTANGIBLE ASSETS AND GOODWILL
In thousands of New Zealand dollars
NoteGoodwillIntellectual
property and
other intangible
assets
SoftwareTotal
Cost
Balance at 30 June 201927,84015,90610,02753,773
Additions
-205285490
Disposals
--(538)(538)
Effect of movements in exchange
rates
(104)1451960
Balance at 30 June 2020
27,73616,2569,79353,785
Additions
-204162366
Disposals
--(3)(3)
Effect of movements in exchange
rates
(137)60(16)(93)
Balance at 30 June 2021
27,59916,5209,93654,055
Amortisation
Balance at 30 June 2019-
(4,170)(8,521)(12,691)
Amortisation -
(1,286)(836)(2,122)
Disposals-
-502502
Effect of movements in exchange
rates
-
4(11)(7)
Balance at 30 June 2020-
(5,452)(8,866)(14,318)
Amortisation -(1,226)(453)(1,679)
Disposals-
-11
Effect of movements in exchange
rates
-
(29)16(13)
Balance at 30 June 2021-
(6,707)(9,302)(16,009)
Carrying Amount
At 30 June 201927,84011,7361,50641,082
At 30 June 202027,73610,80492739,467
At 30 June 202127,5999,81363438,046
Amortisation charge in the income statement
Amortisation is allocated to cost of sales, selling and marketing expenses, distribution expenses, research and
development expenses and administrative expenses.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P22Comvita Financial Statements 2021- P23
13. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Apiaries:
Value in use was determined by discounting the future cash flows generated from the continuing use of the unit and
were based on the following key assumptions:
2021
30 June
2020
30 June
Anticipated annual revenue growth included in the cash flow projections for the
combined CGU’s (normalised) for the years 2022 to 2031
0% to 23.2%(16.6)% to
24.7%
Post tax discount rate
10.0%10.0%
Discount rate based on the average weighted cost of capital which was based on
debt leveraging of:
20%20%
-at a cost of debt rate of:4.4%4.4%
Terminal growth rate applied beyond June 2031
2.0%1.5%
Cash flows were projected on actual operating results, the 30 June 2022 budget and business plan.
Sensitivity to changes in assumptions:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
The recoverable amount of the CGU exceeds its carrying amount by
3,18613,300
If projected EBIT is reduced by 10% year on year, it changes the amount the
recoverable amount exceeds its carrying amount to
5759,000
The post tax discount rate for the recoverable amount to equal carrying amount is
calculated at
11%13%
The percentage movement in yields for each mānuka honey grade range (with the
resulting difference being added to non-mānuka) for the recoverable amount to
equal the carrying amount
8.5%9.0%
The increase in forecast hive costs required for the recoverable amount to equal the
carrying amount
13.0%1.6%
14. LEASES
The Group leases warehouses, retail stores, administration premises, vehicles and land used for hive placements referred
to as
mānuka forests in the table below.
Right of use assets
BuildingsVehiclesMānuka
forests
Total
In thousands of New Zealand dollars
Adoption of NZ IFRS 167,1361,6813,48312,300
Additions3,30182-3,383
Disposals(149)--(149)
Depreciation(2,971)(670)(178)(3,819)
Modifications(413)--(413)
Effect of movement in exchange rates1405-145
Balance at 30 June 20207,0441,0983,30511,447
Additions-5872,7663,353
Modifications2,949131-3,080
Depreciation(3,493)(714)(301)(4,508)
Effect of movement in exchange rates(336)(1)-(337)
Balance at 30 June 20216,1641,1015,77013,035
Amounts recognised in the statement of comprehensive income
2021
30 June
2020
30 June
Interest on lease liabilities375421
Variable lease payments not included in the measurement of lease liabilities3,3734,101
Expenses relating to short-term leases887838
Expenses relating to leases of low-value assets, excluding short-term leases of
low-value assets
1538
Lease liabilities
As at 30 June 2021, the weighted average rate applied was 5.1% Total cash outflow for right of use leases for the year
ended 30 June 2021 was $4.4 million (2020: $4.1m).
Maturity analysis - contractual undiscounted cash flow
Non-cancellable lease rentals ae payable as follows:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Less than 1 year
4,4364,820
Between one and five years4,4334,605
Greater than five years
3,6331,817
Total12,50211,242
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P24Comvita Financial Statements 2021- P25
15. CAPITAL COMMITMENTS
The total capital commitment is $2.0 million (2020: $3.1 million over 2 years) and will be paid over the
next year. The capital commitment relates to mānuka forest costs and other capital projects.
16. BIOLOGICAL ASSETS
Total
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Bees3,3053,370
Olive leaf509425
Total biological assets3,8143,795
Bees
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Balance at beginning of the year3,3703,542
Acquisition-665
Fair value increase-161
Net movement in operational hives(65)(998)
Balance at the end of the year3,3053,370
Number of operational hives
Balance at beginning of the year20,12522,628
Acquisition-5,000
Net movement in operational hives(458)(7,503)
Balance at the end of the year19,66720,125
The Group is exposed to some risks related to owning bees, primarily the risk of damage from climatic
changes and diseases. The Group has processes in place aimed at monitoring and mitigating those
risks, through hiring of experienced beekeepers, the intensive maintenance of beehives and disease
prevention programmes.
Fair value hierarchy
The Group’s bees are level 3 on the fair value hierarchy, being calculations for which inputs are not based
on observable market data (unobservable inputs).
As the beehives are continually regenerating the fair value assigned to a hive is on a $ per kg basis,
plus queen and brood. The value attributed to these quantities has been sourced from the Ministry of
Primary Industries. The value per hive is $141 (2020: $141).
17. INVESTMENTS (CONTINUED)
In thousands of New Zealand dollars
Note2021
30 June
2020
30 June
Equity accounted investees17a6,8416,261
Investment in unlisted shares88
Total investments6,8496,269
(a) Investments in Equity Accounted Investees comprises:
Country of
Incorporation
Ownership
Interest Held
Balance
Date
Principal
Activity
Makino Station Limited “Makino”
New Zealand50%30 June
Apiary and land
ownership
Gan Supply JV Limited “Gan Supply”
New Zealand33%30 June
Restructure and Winding
up Agreement signed
4 June 2021
Putake Group Holdings Limited
“Putake”
New Zealand-30 June
Shareholding ceased
10 June 2021
Manuka Research Partnership Limited
New Zealand-30 June
Shareholding ceased
11 August 2020
Medibee Pty Limited “Medibee”
Australia50%30 June Apiary
Apiter S.A “Apiter”
Uruguay20%31 July
Manufacturing, selling
and distribution
Gan Supply
On 4 June 2021 Comvita signed a Restructure and Winding up Implementation Deed agreeing to sell Gan Supply’s
Property, Plant and Equipment to Nga Pi Honey at market value, cease trading from the date the assets are sold, and
enter into a new Supply Agreement.
Putake
On 10 June 2021 all shares in Putake were sold to Casa Base Trustees and $200,000 of loan to Putake already
provided for was forgiven.
Medibee
Medibee Apiaries has a funding arrangement with HSBC and Comvita has signed a several guarantee for its share of
the loan facility, which is AUD $4,500,000 at balance date.
(b) Carrying value of Investments in Equity Accounted Investees
In thousands of New Zealand dollars
20212020
Balance at 1 July 6,2619,755
Share of profit/(loss)
992(174)
Dividends received
(363)-
Impairment
-(2,543)
Transfer share of loss to receivable
-(310)
Foreign exchange movements
(49)(467)
Balance at 30 June
6,8416,261
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P26Comvita Financial Statements 2021- P27
17. INVESTMENTS (CONTINUED)
(c) Loans to Equity Accounted Investees
In thousands of New Zealand dollars
20212020
Loan and interest receivable
Makino
4,1684,199
Apiter
863623
Gan Supply
-212
Balance at 30 June
5,0315,034
Medibee
As at 30 June 2021 there is a loan to Medibee of $2,469,000 which was fully impaired in the previous financial year.
Makino
Interest is accrued on the balance of loan at a rate of 5.34% p.a. (2020: 6.36%). Interest income for the year ended
30 June 2021 was $161,000 (2020: 192,000).
Apiter
The loan is denominated in USD. Interest is accrued on the balance of the loan at a rate of 3.5% p.a. (2020: 3.5%).
Interest income for the year ended 30 June 2021 was $19,000 (2020: $21,000).
All loans to equity accounted investees are repayable on demand.
(d) Transactions with Equity Accounted Investees
In thousands of New Zealand dollars
Sale of goods and servicesPurchases of goods and services
(including prepayments)
Transaction valueBalance due fromTransaction valueBalance owing to
2021
Makino 67
968239
Gan Supply 50
13,171-
Apiter 32
332,944-
2020
Kaimanawa616
-19-
Makino 92
-174-
Gan Supply 80
31,870-
Putake60
-18-
Apiter 19
232,598418
18. INVENTORY
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Raw materials60,76277,334
Work in progress1,049842
Finished goods39,19734,503
Total inventory101,008112,679
Inventory disposed of during the year ended 30 June 2021 has been recognised within cost of goods sold - $900,000
(2020: $827,000).
19. TRADE RECEIVABLES
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Gross receivable23,97118,331
Impairment(448)(605)
Total trade receivables23,52317,726
The status of trade receivables at the reporting date is as follows:
In thousands of New Zealand
dollars
Gross receivable
2021
Impairment
2021
Gross receivable
2020
Impairment
2020
Not past due18,499-11,388(162)
Past due 0-30 days2,929-2,296(69)
Past due 31-60 days569(68)3,269(254)
Past due 61-365 days1,974(380)1,319(87)
Past due > 365 days--59(33)
Total23,971(448)18,331(605)
The Company has not renegotiated the terms of any financial assets which would result in the carrying amount no longer
being past due or avoid a possible past due status.
Credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk
for trade receivables at the reporting date by geographic region was:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Australia4,3392,085
China11,5847,288
New Zealand4,7215,322
United States996392
United Kingdom461529
Hong Kong456733
Other regions9661,377
Total23,52317,726
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P28Comvita Financial Statements 2021- P29
20. SUNDRY RECEIVABLES
In thousands of New Zealand dollars
Note2021
30 June
2020
30 June
Loans to equity accounted investees 17c5,0315,034
Loan receivable – related parties -567
Loan receivable – key management personnel 292,746450
Prepayments 4,3605,307
Other receivables1,326991
Total sundry receivables13,46312,349
21. EMPLOYEE BENEFITS
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Annual leave1,5671,598
Performance accrual 3,3481,796
Accrued wages and salaries599259
Total current employee benefits5,5143,653
Long service leave (non-current)539414
Total employee benefits6,0534,067
22. TRADE AND OTHER PAYABLES
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Trade creditors8,84310,449
Accruals9,79912,020
Contingent consideration – equity accounted investees164179
Due to Directors6359
Total trade and other payables18,86922,707
23. CAPITAL AND RESERVES
Ordinary and partly paid redeemable share capital
In thousands of shares
2021
30 June
2020
30 June
Note
On issue at beginning of the year69,78049,555
Share issue - Leader Share Purchase & Loan scheme27738-
Share issue - CEO-308
Acquisition of treasury stock(370)(217)
Supplier Partnership Group Share Scheme152134
Capital raise – Placement and Rights offer-20,000
Ordinary shares on issue at end of the year70,30069,780
Closing partly paid shares 276181,228
Total shares including part paid at end of the year70,91871,008
23. CAPITAL AND RESERVES (CONTINUED)
Treasury Stock
In thousands of shares
2021
30 June
2020
30 June
Treasury stock at beginning of the year2227
Acquired on market370217
Issued - Leader Share Purchase & Loan scheme(370)-
Issued – CEO-(308)
Supplier Partnership Group Share Scheme-(134)
Total treasury stock at end of the year22
Ordinary shares
All ordinary shares issued are fully paid and have no par value. The holders of ordinary shares are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares
rank equally with regard to the Company’s residual assets.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements
of foreign operations.
Hedging reserve
The hedging reserve comprises the cumulative change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet occurred.
Fair value reserve
The fair value reserve comprises the cumulative change in the fair value of Financial Assets designated as Fair Value
through Other Comprehensive Income.
Capital management
The Group’s capital includes share capital, reserves and retained earnings. The Board’s policy is to maintain a strong
capital base so as to maintain investor, creditor and market confidence and to sustain future development of the
business. The Board of Directors monitors the geographic spread of shareholders, as well as the return on capital.
Public share offerings and private offerings are made, where applicable. This and acquisitions are key to ensuring the
future development of the business.
The Board has an Employee Share Purchase Scheme, an Executive Employee Share Scheme, a Leader Share Purchase
and Loan scheme and a Performance Share Rights Scheme to ensure the employees hold an investment in the Group. The
Board also implemented a Supplier Group Share Scheme to assist in security of raw material honey supply.
Other than the banking requirements, neither the Company nor any of its subsidiaries are subject to externally imposed
capital requirements.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P30Comvita Financial Statements 2021- P31
24. EARNINGS PER SHARE
Basic earnings per share - weighted average number of ordinary shares
In thousands of shares
2021
30 June
2020
30 June
Issued ordinary shares at beginning of year69,78049,555
Effect of shares issued during the year(140)1,231
Weighted average number of ordinary shares at the end of the year69,64050,786
Basic earnings per share (NZ cents)13.61(19.10)
Diluted earnings per share - weighted average number of ordinary shares
(diluted)
In thousands of shares
Weighted average number of ordinary shares (basic)69,64050,786
Effect of share entitlements issued 107-
Weighted average number of diluted shares at end of the year69,74750,786
Diluted earnings per share (NZ cents)13.59(19.10)
25. LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings.
Terms and debt repayment schedule
In thousands of New Zealand
dollars
Facility
Local
Currency
CurrencyNominal
Interest rate
MaturityCarrying
Amount
Carrying
Amount
20212020
Secured bank loan
– Westpac NZ
20,000NZD2.45%July 202220,00020,000
Multi option credit line
– Westpac NZ
60,000NZD1.75%July 202285012,200
Total borrowings80,00020,85032,200
Less current portion of
borrowings
--
Borrowings – non current20,85032,200
Covenants and security
The Group was in compliance with all banking covenants during the year and as at 30 June 2021. All debt with Westpac
New Zealand Limited is secured by way of registered first and exclusive Composite Debentures and a General Security
Agreement, cross collateralised, over all the assets, undertakings and uncalled capital of all Charging Group companies
and an interlocking supported guarantee between all Charging Group companies.
“Charging Group” - Comvita Limited, Comvita New Zealand Limited, Comvita Holdings Pty Limited, Comvita Australia
Pty Limited, Comvita Holdings UK Limited and Comvita UK Limited.
Net debt
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Cash16,26716,680
Less debt - non current(20,850)(32,200)
Net debt(4,583)(15,520)
25. LOANS AND BORROWINGS (CONTINUED)
Interest rate risk
At reporting date the interest rate profile of the Group’s interest-bearing financial instruments is the balances of the
loans above. The Group has a policy of ensuring that its exposure to interest rates for borrowings is managed. Interest
rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposure with the Group’s
policy.
Sensitivity analysis
In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings.
Over the longer-term, however, permanent changes in interest rates will have an impact on profit. At 30 June 2021 it
is estimated that a general increase of one percentage point in interest rates would decrease the Group’s profit before
income tax by approximately $129,000 (30 June 2020: $598,000).
Other Facilities
Overdraft schedule
In thousands of New Zealand dollars
Facility Local
Currency
CurrencyInterest rate
2021
Interest rate
2020
Overdraft facility NZD – Westpac NZ750NZD7.25%7.25%
Overdraft facility GBP – Westpac NZ1,650GBP7.25%7.25%
Overdraft facility YEN – Westpac NZ500JPY7.25%7.25%
The balance drawn on each of these at 30 June 2021 is nil (2020: nil).
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P32Comvita Financial Statements 2021- P33
26. RECONCILIATION OF THE PROFIT FOR THE PERIOD WITH THE NET CASH FROM
OPERATING ACTIVITIES
In thousands of New Zealand dollars
Note
2021
30 June
2020
30 June
Profit/(loss) for the period9,479(9,701)
Adjustments for:
Depreciation8,6708,748
Amortisation 131,6792,122
Share based payments471329
Supplier share scheme – inventory purchase487459
Fair value loss in biological assets 6(17)389
Net loss on fair value of derivatives -456
Wind-up of equity accounted investee-1,070
Share of (profit)/loss equity accounted investees 17b(992)174
Impairment – equity accounted associates-5,928
Profit adjusted for non-cash items19,7779,974
Items relating to investing activities:
Change in trade payables relating to investing activities(128)(209)
Gain on disposal of property, plant & equipment(222)(233)
Interest income(202)(264)
Bad debts50-
Movement in working capital items:
Change in inventories11,67119,513
Change in trade receivables(5,797)13,152
Change in sundry debtors and prepayments824128
Change in trade and other payables(3,837)(2,258)
Change in employee benefits1,986(420)
Change in tax payable924606
Change in deferred tax 602(2,413)
Change in working capital items from foreign currency translation
reserve
(831)1,084
Other movements:
Movement of deferred tax in equity328(768)
Prepayment to equity accounted investee-1,435
Foreign currency reserve(320)(30)
Net cash from operating activities24,82539,297
27. EMPLOYEE SHARE SCHEMES
(a) Leader Share Purchase & Loan scheme
On 25 March 2021 Comvita Limited established a Leader Share Purchase & Loan scheme (“LSPLS”) to retain key
employees and materially align the interests of participants with those of shareholders, by making loans available to
eligible employees for the acquisition of fully paid ordinary shares in Comvita. A summary of the key points of the LSPLS
are as follows:
• The term of the loans will be four years, i.e., delivery of the Comvita Five Year Plan.
• The loan is offered under full recourse conditions and is interest-bearing.
• Any dividends payable will be applied and offset against the loan balance.
• The loan balance must be repaid in full before the shares can be traded by the participant.
• In the event the employee leaves Comvita, the loan is immediately due and payable.
20212020
Employees in the LSPLS8-
Number of shares held738,012-
% of share capital1.04%-
A one-off share based payment expense of $259,000 was recognised in relation to this transaction, refer to note 29.
(b) Performance Share Rights scheme
On 31 July 2020, Comvita Limited implemented a Performance Share Rights (PSR’s) Scheme to incentivise Executives.
The PSR’s are subject to a vesting period of 3 years. Vesting is subject to continued employment and occurs in 3 tranches
(annually). Upon vesting of the PSR’s, shares will be transferred from treasury stock or new shares will be issued in
the capital of the Company on the terms and conditions described in the Comvita Limited Performance Share Rights
Scheme. The shares will be transferred or issued (as applicable) for no consideration and will be credited as fully paid up.
One PSR will convert into one ordinary share upon vesting and will rank equally with all other ordinary shares on issue.
PSRs do not entitle the holder to receive dividends or other distributions, or vote in respect of CVT ordinary shares.
Holders of PSRs cannot transfer or grant security interests over them.
Entitlements on issue at
In thousands
20212020
Number of
entitlements
Number of
entitlements
Entitlements outstanding at beginning of period – July--
Entitlements granted – 25 September 2020122-
Entitlements granted - 4 December 202025-
Entitlements outstanding at end of year147-
A share based payment expense is recognised over the vesting period of these PSRs. It is calculated based on the share
price at grant date, less the present value of estimated dividend payments during the vesting period.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P34Comvita Financial Statements 2021- P35
28. FINANCIAL INSTRUMENTS
Overview
Exposure to credit, liquidity and market risks arises in the normal course of the Company’s business.
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes
for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included throughout
these financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Audit and Risk Committee is designated to develop and monitor the Group’s risk management policies. The committee reports
regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The Group through its training and management standards and
processes aims to develop a disciplined and constructive control environment in which all employees understand their roles and
obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers. As the counterparty of financial instruments is
Westpac New Zealand Limited, it is considered there is minimal credit risk.
The majority of revenue is generated from retailers and consumers and there is some geographical concentration of credit risk in
China. In order to determine which customers are classified as having payment difficulties, the Group applies a mix of duration and
frequency of default. Trade receivables aging are monitored on a monthly basis and the Company does not require collateral in
respect of trade and other receivables, however Personal Guarantees are obtained where the Company considers it is appropriate.
The Board has approved a credit policy under which new customers are analysed individually for credit worthiness before the Group’s
standard payment terms and conditions are offered. The Group’s review includes reviewing references. Customers that fail to meet
the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis.
Where possible, our interest in goods sold are subject to retention of title clauses and a security interest is registered on the Personal
Property Securities Register (PPSR), so that in the event of non-payment the Group may have a secured claim.
The Group’s policy is to provide financial guarantees only to subsidiaries and equity accounted investees.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
Due to the seasonal nature of raw materials supply the Group has credit lines in place to cover timing differences to offset the
mismatch of receipts and payments. The borrowings are by way of overdraft and committed credit facilities.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters while optimising return on risk. The Group buys and sells derivatives, and
also incurs financial liabilities in order to manage market risks. All transactions are carried out within the Treasury Policy guidelines set
by the Board of Directors. Generally the Group seeks to apply hedge accounting in order to manage volatility in the income statement.
Currency risk
The Group is exposed to currency risk on sales that are denominated in a currency other than its functional currency, the New Zealand
Dollar. The currencies in which transactions are primarily denominated are United States Dollars, Japanese Yen, Australian Dollars,
Hong Kong Dollars, British Pounds, Euro and Chinese Yuan.
The Group hedges are based on net foreign currency receipts. At any point in time the Group hedges between 40% to 100% of its
estimated foreign currency exposure in respect of net cash receipts expected to be received over the following 12 months. The Group
uses a mixture of forward exchange contracts, collars and options to hedge its currency risk, most with a maturity of less than one
year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity.
Derivatives – assets and liabilities (hedged) and designated at fair value through the income statement
The Group’s Level 2 fair values for simple over-the-counter derivative financial instruments are based on broker quotes. Those quotes
are tested for reasonableness by discounting expected future cash flows using market interest rate for a similar instrument at the
measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of
the Group entity and counterparty when appropriate.
Financial instruments are all level 2 on the fair value hierarchy, as they include inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). There have been no
transfers between levels in either direction during the period.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
27. EMPLOYEE SHARE SCHEMES (CONTINUED)
(c) Executive share scheme
Comvita Limited has an Executive Employee Share Scheme called the Comvita Limited Partly Paid Share Scheme (“The
ESS”). The ESS was designed to provide key employees with an opportunity to benefit from share price growth. There
will be no new entitlements issued and this scheme is in the process of winding down with the last hurdle date being
8 October 2022.
There are 30 (2020: 40) employees in the ESS. The number of entitlements at 30 June 2021 is 0.87% (30 June 2020: 1.7%)
of total shares.
Entitlements on issue at
In thousands
30 June 202130 June 2020
Number of
entitlements
Weighted
average
exercise price
Number of
entitlements
Weighted
average
exercise price
Entitlements outstanding at beginning of
year
1,2287.052,0287.59
Entitlements forfeited during the year(610)8.00(800)8.52
Entitlements outstanding at end of year6186.111,2287.05
Issue Date 30-Jun-178-Oct-18
Entitlements issued (number)582,500577,500
Entitlements on hand (at 30 June 2021)185,000432,500
Exercise price$5.60$6.33
Forecast share hurdles at 30 June 2021*$7.34 – $7.98$7.56 - $8.06
* The forecast share price hurdle calculation can change based on the WACC percentage used and future dividends paid.
The $5.60 share entitlements did not meet their final share price hurdle at 30 June 2021 and therefore these
entitlements are forfeited and will be cancelled. There are no entitlements exercisable at the end of the year.
(d) Staff share scheme
Employees who have served continuously with the Company for a period of at least 12 months, are given the opportunity
to subscribe for ordinary shares in the Company from time to time. An interest free loan is advanced by the Company
not exceeding $2,340, repayable over three years.
20212020
Employees in the scheme3344
Number of shares held16,40525,184
Unallocated shares6,7165,513
% of share capital0.03%0.03%
Comvita Financial Statements 2021 - P36Comvita Financial Statements 2021- P37
28. FINANCIAL INSTRUMENTS (CONTINUED)
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Derivatives – liabilities (hedging instrument)(1,648)(714)
Total liabilities(1,648)(714)
Liquidity risk
The following table sets out the contractual maturities of financial liabilities including interest payments and derivatives:
In thousands of New Zealand
dollars
Stmt of
financial
position
Contractual
cash flows
6 months or
less
6-12 months1-2 years2-5 years
2021
Non-derivative financial liabilities
Secured bank loans (20,850)(21,355)(252)(252)(20,851)-
Trade and other payables(18,869)(18,869)(18,869)---
Total non-derivative liabilities(39,719)(40,224)(19,121)(252)(20,851)-
Derivatives
Inflow-43,73820,70118,5604,46413
Outflow(1,648)(45,537)(21,197)(19,350)(4,753)(237)
Total derivatives(1,648)(1,799)(496)(790)(289)(224)
2020
Non-derivative financial liabilities
Secured bank loans (32,200)(34,027)(456)(456)(912)(32,203)
Trade and other payables(22,707)(22,707)(22,707)---
Total non-derivative liabilities(54,907)(56,734)(23,163)(456)(912)(32,203)
Derivatives
Inflow-32,75719,19413,4864334
Outflow(714)(33,465)(18,949)(13,375)(616)(525)
Total derivatives(714)(708)245111(573)(491)
28. FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk
In thousands of New Zealand dollars
Group
2021
RMBAUDGBPHKDUSDOther
Trade receivables11,5843,606473 4561,2841,074
Trade and other payables(3,415)(1,512)(675)(721)(1,402)(923)
Gross statement of financial position exposure8,1692,094(202)(265)(118)151
Forward exchange contracts (local currency)66,3002,1501,10022,30012,450269,000
2020
RMBAUDGBPHKDUSDOther
Trade receivables7,2881,8603837331,5861,589
Trade and other payables(1,293)(2,602)(438)(1,024)(1,993)(1,006)
Gross statement of financial position exposure5,995(742)(55)(291)(407)583
Forward exchange contracts (local currency)40,0006,75075012,0006,500126,000
Sensitivity analysis
A 10% strengthening and 10% weakening of the NZD against the following currencies at 30 June would
have changed the asset or liability values in the statement of financial position at 30 June through a
change in equity and the income statement by the amounts shown on the next page. This analysis
assumes that all other variables, in particular interest rates, remain constant. The analysis for 2021
assumes a 10 percent (30 June 2020: 10 percent) strengthening and weakening of the NZD.
2021202120202020
EquityIncome statementEquityIncome statement
+10%-10%+10%-10%+10%-10%+10%-10%
AUD210(257)--656(803)--
GBP198(242)--131(161)--
USD1,623(1,984)--916(1,119)--
HKD375(458)--218(266)--
RMB1,285(1,565)--783(355)--
JPY317(387)--166(202)--
Classification and Fair Values
The carrying amount of all assets and liabilities reflects the fair value. They are classified as follows:
ClassificationAsset or liability
Amortised costTrade and other receivables, cash and cash equivalents, trade and
other payables, loans and borrowings
FVOCIDerivatives
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P38Comvita Financial Statements 2021- P39
29. RELATED PARTIES
Transactions with key management personnel
The key management personnel consists of the Leadership team of Comvita.
Key management and director compensation comprised:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Director fees (note 9)573550
Short term employee benefits4,7782,227
KiwiSaver employer contribution10069
Share based payments 69284
Total6,1432,930
Key management and director loans:
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Loan to CEO 450450
Loan to key management personnel – Leader Share Purchase & Loan
Scheme (note 27a)
2,296-
Total2,746450
At 30 June 2021 Directors and other key management personnel of the Company control 2.37% (2020: 3.72%) of the
voting shares of the Company.
29. RELATED PARTIES (CONTINUED)
Subsidiaries
Country of
Incorporation
Ownership
Interest Held
Balance
Date
Principal Activity
Comvita New Zealand LimitedNew Zealand100%30 JuneManufacturing and
marketing
Medibee LimitedNew Zealand100%30 JuneNot trading
Comvita Taiwan LimitedNew Zealand100%30 JuneNot trading
Bee & Herbal New Zealand LimitedNew Zealand100%30 JuneIP ownership
Apimed Medical Honey LimitedNew Zealand100%30 JuneIP ownership
Comvita Landowner Share Scheme
Trustee Limited
New Zealand100%30 JuneApicultural land owner
share scheme
Kyoto Forests of New Zealand LimitedNew Zealand100%30 JuneNot trading
Comvita Share Scheme Trustee
Limited
New Zealand100%30 JuneExecutive employee
share scheme
Comvita USA, Inc USA100% 30 JuneSelling and distribution
Comvita Japan Company LimitedJapanManagement
control
30 JuneSelling and distribution
Comvita Korea Co Limited Korea100%30 JuneSelling and distribution
Comvita Food (China) LimitedChina100%31 DecemberSelling and distribution
Comvita China LimitedHong Kong100%30 JuneSelling and distribution
Comvita Holdings HK LimitedHong Kong100%30 JuneHolding Company
Greenlife (New Zealand) Product
Limited
Hong Kong100%30 JuneNot trading
Comvita HK LimitedHong Kong100%30 JuneSelling and distribution
Comvita Holdings Pty LimitedAustralia100%30 JuneHolding Company
Comvita Australia Pty Limited Australia100%30 JuneManufacturing, selling &
distribution
Olive Leaf Australia Pty LimitedAustralia100%30 JuneNot trading
Olive Products Australia Pty Limited Australia100%30 JuneProperty ownership
Comvita IP Pty LimitedAustralia100% 30 JuneIP ownership
Comvita Health Pty LimitedAustralia100%30 JuneNot trading
Medihoney Pty LimitedAustralia100%30 JuneNot trading
Medihoney (Europe) LimitedUnited Kingdom100%30 JuneNot trading
Comvita Holdings UK LimitedUnited Kingdom100%30 JuneHolding Company
Comvita UK LimitedUnited Kingdom100%30 JuneSelling and distribution
New Zealand Natural Foods LimitedUnited Kingdom100%30 JuneNot trading
Comvita Europe BVNetherlands100%30 June Selling and distribution
30. SUBSEQUENT EVENTS
Dividends
On 25 August 2021, the Directors approved the payment of a fully imputed final dividend of $2,812,000
(4 cents per share) to be paid on 7 October 2021. As the dividend was declared after balance date it has
not been recognised as a liability in these financial statements.
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
Comvita Financial Statements 2021 - P40Comvita Financial Statements 2021- P41
31. SUPPLEMENTARY NON-GAAP INFORMATION - EBITDA
Earnings before interest, tax, depreciation, and amortisation ("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.
In thousands of New Zealand dollars
2021
30 June
2020
30 June
Profit/(loss) before tax13,401(10,257)
Add back: net finance cost1,9954,123
EBIT15,396(6,134)
Add back: depreciation and amortisation10,12710,313
EBITDA25,5234,179
NOTES TO THE FINANCIAL STATEMENTS
Independent Auditor’s
Report
To the shareholders of Comvita Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated financial
statements of Comvita Limited (the ’C ompany’) and its
subsidiaries (the 'Group') on pages 3 to 40:
— Present fairly in all material respects the Group’s
financial position as at 30 June 2021 and its financial
performance and cash flows for the year ended on
that date; and
— Comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying consolidated
financial statements which comprise:
— The consolidated statement of financial position as
at 30 June 2021;
— The consolidated income statement, statements of
comprehensive income, changes in equity and cash
flows for the year then ended; and
— Notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’) . We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of Ethics for
Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the New Zealand
Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ International Code
of Ethics for Professional Accountants (including International Independence Standards) (‘IESBA Code’), and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities for the audit of the consolidated
financial statements section of our report.
Our firm has also provided other services to the Group in relation to tax services. Subject to certain restrictions, partners
and employees of our firm may also deal with the Group on normal terms within the ordinary course of trading activities of
the business of the Group. These matters have not impaired our independence as auditor of the Group. The firm has no
other relationship with, or interest in, the Group.
Comvita Financial Statements 2021 - P42Comvita Financial Statements 2021- P43
Other information
The Directors, on behalf of the Group, are responsible for the other information included in the entity’s financial
statements and Annual Report. Other information includes the Director’s Declaration, Statutory Information and Company
Directory and the other information included in the Annual Report. Our opinion on the consolidated financial statements
does not cover any other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. The Annual Report is expected to be made available to us after the date of this Independent Auditor's Report and
we will report the matters identified, if any, to those charged with governance.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been undertaken so
that we might state to the shareholders those matters we are required to state to them in the independent auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the shareholders as a body for our audit work, this independent auditor’s report, or any of the opinions
we have formed.
Responsibilities of the Directors for the consolidated financial
statements
The Directors, on behalf of the Company, are responsible for:
— The preparation and fair presentation of the consolidated financial statements in accordance with generally accepted
accounting practice in New Zealand (being New Zealand Equivalents to International Financial Reporting Standards)
and International Financial Reporting Standards;
— Implementing necessary internal control to enable the preparation of a consolidated set of financial statements that is
fairly presented and free from material misstatement, whether due to fraud or error; and
— Assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations,
or have no realistic alternative but to do so.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements in the current period. We summarise below those matters and our key audit procedures
to address those matters in order that the shareholders as a body may better understand the process by which we arrived
at our audit opinion. Our procedures were undertaken in the context of and solely for the purpose of our statutory audit
opinion on the consolidated financial statements as a whole and we do not express discrete opinions on separate elements
of the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
Impairment of Goodwill
Refer to the Notes 3(j)(ii) and 13.
The Group has $27.6m of goodwill
relating to three cash generating units
(CGU’s):
— Greater China;
— Apiaries; and
— Other.
The process of performing an
impairment assessment is inherently
judgemental as it involves the use of
unobservable, forward looking
assumptions and data.
The Group utilises value in use models
to determine the recoverable amount of
each CGU, which are then compared to
the CGU’s net assets. In relation to these
models, particular attention was
required of:
— Projected earnings before interest
and tax (EBIT);
— Post tax discount rates;
— Manuka honey yields and grade;
and
— Forecasted hive costs.
As disclosed in Note 13 of the financial
statements, the recoverable amounts of
each CGU have varying level of
sensitivity to the respective assumptions
applied by the Group.
Our audit procedures included the following, amongst others:
— We assessed Group’s determination of CGU’s based on our
understanding of the nature of the Group, their operations and the
internal reporting of the business;
— We assessed the value in use models (VIU) for each CGU considering the
methodology adopted in the discounted cash flow valuation models
against the requirements of the applicable financial reporting standards;
— We considered the consistency of assumptions in individual VIU models
with the overall Group 5 year strategic plan to ensure appropriate and
consistent cash flows reported. Analysed the future cash flow forecasts
used and determined whether they are reasonable based on the
implementation of the strategic plan and historical achievements;
— We utilised valuation specialists to challenge key judgements, which
included the post tax discount rates applied and terminal growth rates,
through comparison to market data and industry research;
— We performed sensitivity analysis on key cash flow forecast assumptions,
Manuka honey yields and grade, post tax discount rates and terminal
growth, to understand the impact of reasonable possible changes in key
assumptions in various scenarios;
— We performed testing to compare the calculated recoverable values to
the associated carrying amounts, and assessed whether any impairment
expense is to be recognised; and
— We considered and reviewed appropriateness, sufficiency and clarity of
required disclosures included in the Group financial statements.
The procedures performed did not identify any material adjustments to the
impairment expense recognised or the related disclosure.
Comvita Financial Statements 2021 - P44Comvita Financial Statements 2021- P45
Principal activity
The principal activity of the Company is that of manufacturing and marketing quality natural health products.
Dividend
On 25 August 2021, the Directors approved the payment of a fully imputed final dividend of $2,812,000 (4 cents per
share) to be paid on 7 October 2021.
Directors’ remuneration for the year ended 30 June 2021
In thousands of New Zealand dollars
Fee
B Hewlett
129
L.N.E Bunt
88
S.J Kennedy
88
P Reid
67
B Major
67
C. Dayong
67
Z. Guangping
67
Total
573
The maximum total pool of annual Directors’ remuneration is $610,000, as approved by Shareholders in 2016.
INTERESTS REGISTER
Directors have disclosed the following directorships held by them excluding family companies and companies with no
association to their appointment as director of the Company or any companies in the Group:
B. Major
Chairman – Gibb Holdings (Nelson) Ltd
Chairman - High Value Nutrition National Science Challenge
Chairman - Go Global Avocado Primary Growth Partnership
Chairman – Armer Group Advisory Board
Deputy Chairman – Hautupua General Partner Ltd
Deputy Chairman – Miro Trading General Partner Ltd
Managing Director – Sinotearoa Ltd
Director – Comvita Limited
Director – BioVittoria Ltd
Director – BioVittoria Investments Ltd
Director – Dairy Holdings Limited
Member – Oriens Capital Investment Committee
P.R.T Reid
Chairman - Figured Limited
Chairman – Volpara Health Technologies Limited
Chairman – Virsae Group Limited
Director – Comvita Limited
Director – The Equant Company Limited
Director – Christchurch International Airport Limited
L.N.E Bunt
Chairman - Heat Treatments Limited
Director – Comvita Limited
S.J Kennedy
Director - Comvita Limited
Director – SJK Consulting Limited
Director – Lifestream International Limited
Director – Lanaco Limited
Director – Calocurb Ltd
Director – New Zealand Rural Land Co
Director – Final Mile Holdings Limited
B.D Hewlett
Chairman – Comvita Limited
Director – Quayside Holdings Limited
Director – Bluelab Corporation Limited
Director – Quayside Properties Limited
Director - Quayside Securities Limited
Director – Bluelab Holdings Limited
Z. Guangping
*
Director – Comvita Limited
C. Dayong
*
Director – Comvita Limited
Director – China Resources Ng Fung Limited
Director – China Resources Retail (Group) Company Limited
Director –Pacific Coffee (Holdings) Limited
Director –China Resources Snow Breweries Limited
Director – CRE Alliance Fund Management Company Limited
STATUTORY INFORM ATION
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objective is:
— To obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error; and
— To issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at the
External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor's report is Trevor Newland.
For and on behalf of
KPMG
Tauranga
25 August 2021
* 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
greater than 5%. Cheng Dayong is associated with China Resources which also has a shareholding greater than 5%.
Comvita Financial Statements 2021 - P46Comvita Financial Statements 2021- P47
DIRECTORS OF GROUP COMPANIES OTHER THAN SHOWN ABOVE
CompaniesDirectors
Apimed Medical Honey LimitedD Banfield*
Bee & Herbal New Zealand LimitedD Banfield *
Comvita Australia Pty LimitedD Banfield*M Tobin
Comvita China LimitedD Banfield*G ZhuA Chen*
Comvita Food (China) LimitedD Banfield*A Chen*G Zhu
Comvita Health Pty LimitedD Banfield*M Tobin
Comvita HK LimitedD Banfield*A Chen*
Comvita Holdings HK LimitedD Banfield*A Chen*
Comvita Holdings Pty LimitedD Banfield*M Tobin
Comvita Holdings UK LimitedD Banfield*
Comvita IP Pty LimitedD Banfield*M Tobin
Comvita Japan K. K.D Banfield*R Shida*
Comvita Korea Co LimitedD Banfield*J Park*
Comvita Landowner Share Scheme Trustee
LimitedD Banfield*
Comvita New Zealand LimitedD Banfield*A Barr*
Comvita Share Scheme Trustee LimitedS KennedyL Bunt
Comvita Taiwan LimitedD Banfield*
Comvita UK LimitedD Banfield*
Comvita USA, IncD Banfield*A Barr*
Green Life (New Zealand) Product LimitedD Banfield*A Chen*
Kyoto Forests of New Zealand LimitedD Banfield*
Medibee LimitedD Banfield*
Medihoney Europe LtdD Banfield*
Medihoney Pty LtdD Banfield*M Tobin
New Zealand Natural Foods LimitedD Banfield*
Olive Leaf Australia Pty LimitedD Banfield*M Tobin
Olive Products Australia Pty LimitedD Banfield*M Tobin
Comvita Europe B.VD Banfield*N Browne*
* denotes an executive of a Group Company
DIRECTORS OF GROUP COMPANIES (CONTINUED)
Share Dealings of Directors - beneficial
Director
Number of
Shares Sold
Value of
Shares Sold
Number of Shares
Purchased
Value of Shares
Purchased
S.J Kennedy(90)(281)--
B.D Hewlett (41)(134)--
Directors Shareholding
Directors, or entities associated with directors, held the following shareholding in Comvita Limited at 30 June 2021:
DirectorOpening BalanceShares Sold/
Transferred
Shares Purchased/
Transferred
Closing Balance
S.J Kennedy
Beneficial
S.J Kennedy12,865--12,865
Custodial start scheme10,117(90)-10,027
Total22,982(90)-22,892
L.N.E Bunt
L.N.E Bunt and G.E Bunt26,510-43,49070,000
The Bunt Family Trust43,490(43,490)--
Total70,000(43,490)43,49070,000
P.R.T Reid
Beneficial
Craigs KiwiSaver Scheme Account59,314--59,314
Total59,314--59,314
B. Major
Beneficial
Ms S A Parkinson & Mr R M Major27,952--27,952
Total27,952--27,952
B.D Hewlett
Beneficial
Brett Donald Hewlett65,290--65,290
YRW Trustees 2005 Limited319,389-13,247332,636
Brett Donald Hewlett – Start Scheme13,287(13,287)--
Total397,966(13,287)13,247397,926
Beneficial 578,214(56,867)56,737 578,084
Non-beneficial----
Total578,214(56,867)56,737 578,084
STATUTORY INFORM ATIONSTATUTORY INFORM ATION
Comvita Financial Statements 2021 - P48Comvita Financial Statements 2021- P49
Directors Indemnity and Insurance
The Company has insured all its Directors and the Directors of its wholly owned subsidiaries against liabilities to other
parties (except the Company or a related party of the Company) that may arise from their positions as Directors. The
insurance does not cover liabilities arising from criminal actions. The Company has not been required to indemnify its
Directors for any liabilities during the year.
Employees’ remuneration
During the 12-month period to 30 June 2021 the following numbers of employees received remuneration of at least
$100,000.
Number of employees
$100,000 to $110,00011
$110,000 to $120,00012
$120,000 to $130,0009
$130,000 to $140,0006
$140,000 to $150,0008
$150,000 to $160,0004
$160,000 to $170,0005
$170,000 to $180,0005
$180,000 to $190,0002
$190,000 to $200,0002
$200,000 to $210,0001
$210,000 to $220,0005
$230,000 to $240,0001
$240,000 to $250,0003
$280,000 to $290,0001
$380,000 to $390,0001
$400,000 to $410,0001
$430,000 to $440,0001
$480,000 to $490,0001
$510,000 to $520,0002
$680,000 to $690,0001
$840,000 to $850,0001
Note: these bands are New Zealand dollar equivalents and reflect the impact of fluctuations in the foreign exchange
rates for remuneration of overseas based employees. The figures include bonus provisions made during the year which
may have not been paid at period end. It does not include any remuneration or benefit relating to share schemes.
Donations
During the period the Group made cash donations of $5,000 (2020: $6,000). The Company also made donations of
products to charitable organisations.
SHAREHOLDER ANALYSIS
Analysis of shareholder by size as at 1 August 2021
Category
No of shareholdersShares heldPercentage of
shareholders
Percentage of
shares
Up to 1,000 shares1,211605,73136.46%0.86%
1,001 – 5,000 shares1,3293,364,08940.02%4.79%
5,001 – 10,000 shares3632,673,93210.93%3.80%
10,001 – 100,000 shares3699,476,55311.11%13.48%
100,001 shares or more4954,179,5601.48%77.07%
Total3,321*70,299,865100%100%
*This number does not include a number of shareholders within Custodial and Nominee companies
Top 20 shareholders as at 1 August 2021
ShareholderShares heldPercentage of
shares
Li Wang 8,552,736 12.17%
Custodial Services Limited 5,152,828 7.33%
China Resources Ng Fung Limited 4,582,000 6.52%
National Nominees New Zealand Limited 4,491,963 6.39%
Kauri NZ Investments Limited 3,558,077 5.06%
Alan John Bougen & Lynda Ann Bougen & Graeme William Elvin 2,322,550 3.30%
Accident Compensation Corporation 1,976,500 2.81%
Junxian Li 1,856,304 2.64%
Forsyth Barr Custodians Limited 1,804,692 2.57%
Bnp Paribas Nominees NZ Limited Bpss40 1,487,634 2.12%
Pt Booster Investments Nominees Limited 1,475,049 2.10%
Li Sun 1,410,000 2.01%
Robert Bertram Tait & Jane Gibbons Tait & Ian James Craig 1,259,553 1.79%
Maori Investments Limited 1,000,000 1.42%
JBWERE (Nz) Nominees Limited 995,699 1.42%
New Zealand Depository Nominee 801,283 1.14%
Kevin Glen Douglas & Michelle Mckenney Douglas 753,655 1.07%
Citibank Nominees (Nz) Ltd 749,709 1.07%
Masfen Securities Limited 734,010 1.04%
HSBC Nominees (New Zealand) Limited 641,648 0.91%
Other 24,693,975
35.13%
Total Ordinary Shares*69,299,865100.00%
* does not include 617,500 partly paid redeemable share entitlements as detailed in Note 27 to the annual accounts
STATUTORY INFORM ATIONSTATUTORY INFORM ATION
Comvita Financial Statements 2021 - P50
DIRECTORS
Comvita Board Of Directors
Lucas (Luke) Nicholas Elias Bunt
Sarah Jane Kennedy
Paul Robert Thomas Reid
Brett Donald Hewlett
Robert Malcolm Major
Guangping Zhu
Dayong Cheng
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
BANKERS
Westpac Banking Corporation
Level 8
16 Takutai Square
PO Box 934
Auckland 1140
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 30
PwC Tower
15 Customs Street West
Auckland 1010
Substantial security holders as at 1 August 2021
ShareholderShares heldPercentage of shares
Li Wang
8,552,73612.17%
China Resources Ng Fung Limited
4,582,0006.52%
Milford Asset Management Limited
4,491,9636.39%
Kauri NZ Investments Limited
3,558,0775.06%
DIRECTORYSTATUTORY INFORM ATION
NORTH AMERICA
Comvita USA Inc.
Comvita USA Inc.,
506 Chapala Street
Santa Barbara, CA 93101 | USA
Phone +1 855 449 2201
usacustomerservice@comvita.com
UNITED KINGDOM
Comvita UK Limited
2nd Floor, 47a High Street
Maidenhead, SL61JT
United Kingdom
Phone +44 1628 779 460
info@comvita.co.uk
HONG KONG
Comvita Hong Kong Limited
Room 1320 – 1322 Leighton Centre
77 Leighton Road
Causeway Bay | Hong Kong
Phone +852 2562 2335
cs@comvita.com.hk
JAPAN
Comvita Japan Company Limited
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
CHINA
Comvita Food (China) Limited
2501 - 2502, Block A
Xinhao E Du, No 7018
Caitian Road, Furtian District
Shenzhen | China
Phone +86 755 8366 1958
comvita@comvita.com.cn
EUROPE
Comvita Europe B.V.
Professor J.H. Bavincklaan 7
1183 AT Amstelveen
Netherlands
Phone +31682065359
info.europe@comvita.com
Comvita Financial Statements 2020- P52
FOR THE YEAR ENDED 30 JUNE 2021
COMVITA LIMITED
Image TBC
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.