FY22 Full Year Result
Blis Technologies Limited: Ground Floor, 442 Moray Place, Dunedin Central 9016, PO Box 2208, Dunedin 9044, New Zealand
T:+64 3 474 0988 E: info@blis.co.nz W: www.blis.co.nz
31 May 2022
Foundations for attractive future prospects
Blis Technologies Limited (NZX:BLT) (Blis, the Company) has today reported its results for the 12
months to 31 March 2022. Blis has delivered revenue of $9.0 million and EBITDA loss of $2.1 million.
Revenue is at the upper end of market guidance provided earlier in the year, and the EBITDA loss is
slightly more favourable than the guidance range.
Key highlights for FY22 are:
• $9.0m Trading Revenue
• $2.1m EBITDA Loss
• $2.7m Net deficit
• Finished product revenue growth 41%
• eCommerce sales growth 47%
• Retail sales growth 27%
• Probi AB strategic partnership
• Cash share issue to Probi $9.2m
• Launched BLIS PROBIOTICS™ range in Canada
• Unconditional Skincare Co. – Live Probiotic Hydration Serum eCommerce sales
• Commercial supply of Dairy Free BLIS K12™
“While the 2022 financial year was challenging and the financial results were disappointing, Blis
Technologies continues to have attractive future prospects. We are particularly enthusiastic about
the long-term strategic partnership we have entered with Probi AB representing a growth driver for
Blis and an opportunity to collaborate on innovation leveraging each other's expertise.” said Blis
Chairman, Geoff Plunket
“We have continued our investment in new revenue streams related to our finished product
portfolio. While this has delivered growth it has not offset a disappointing result for our ingredient
business that has declined in the face of uncertain market conditions and changed ordering patterns
for USA based customers.” added Blis CEO, Brian Watson.
Key initiatives during FY22 to deliver long term revenue streams have included the long-term
strategic partnership with Probi, launching the BLIS PROBIOTICS™ range into the Canada market and
the launch of our innovative skincare product under the Unconditional Skincare Co brand.
Although we have navigated the Covid-19 pandemic well and have maintained momentum across a
number of initiatives, our international market development has been impacted by not being able to
travel and engage with our partners and customers in these new markets.
Outlook:
We remain positive regarding the new revenue streams we have established and the long-term
growth prospects they represent. Our priorities will be the Canada market, our eCommerce sales
activity and resetting our Skincare strategy to capitalise on this breakthrough innovation.
The Probi strategic partnership represents a long-term revenue driver and has the potential to
deliver additional innovation through R&D collaboration. This relationship has started positively, and
we will look to build momentum through the new financial year.
Despite ongoing market challenges globally including the Covid-19 pandemic and the war in Ukraine,
we believe the ingredients business will return to growth, this will be delivered through a stabilisation
of our existing customer base and the acquisition of new customers tapping into the ongoing growth
potential of the probiotics market.
We are excited by the opportunities our innovative pipeline represents. Commercialisation models for
these innovations will focus on partnerships to deliver scale, complementing our current core market
activities.
Ends
For further information, please contact:
Brian Watson
CEO
+64 27 705 9133
About Blis Technologies Ltd
Delivering proven health benefits through evidence-based, advanced probiotics
Blis Technologies is an NZX-listed manufacturer of advanced probiotic strains that go beyond the gut.
Combining innovation with evidence-based research and the highest quality production controls enables
the delivery of probiotic solutions for specific health targets including throat health, halitosis (bad breath),
immune support, teeth and gum health and skin health. BLIS
®
products are sold throughout New Zealand
and in Australia, Asia, Europe and the USA. More information about Blis Technologies Ltd can be found at
www.blis.co.nz.
Website: www.blis.co.nz www.unconditionalskin.com
Instagram: @blisprobiotics #blisk12 #blism18 @unconditionalskin #blisq24
Facebook: @BLISProbiotics @unconditionalskin
---
Results announcement
Results for announcement to the market
Name of issuer Blis Technologies Limited
Reporting Period 12 months to 31 March 2022
Previous Reporting Period 12 months to 31 March 2021
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$8,965 (16%)
Total Revenue $8,965 (16%)
Net profit/(loss) from
continuing operations
($2,707) (580%)
Total net profit/(loss) ($2,707) (580%)
Interim/Final Dividend
Amount per Quoted Equity
Security
It is not proposed to pay a dividend for the 12 months to 31
March 2022.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.0078 $0.0031
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please see attached result announcement for commentary on
the result.
Authority for this announcement
Name of person
authorised
to make this announcement
Richard Wingham
Contact person for this
announcement
Richard Wingham
Contact phone number +64 21 284 0446
Contact email address richard.wingham@blis.co.nz
Date of release through MAP
31/05/2022
Audited financial statements accompany this announcement.
---
For the Year Ended 31 March 2022
2022 Annual Report22022 Annual Report2
In the 12 months to
31 March 2022 we continue
to build the foundations with
attractive future prospects. These
foundations include the long term
strategic partnership with Probi,
growth in our branded finished
product sales and a strong
product development pipeline.
Blis Technologies Limited3Blis Technologies Limited3
Contents
FY22 Summary 4
Probiotic Supplements Market Overview 5
Our Year 6
Chairman’s Report 8
Chief Executive’s Report 10
Spotlight On Probi 14
Sustainability 15
Reconnecting to the World 17
Board Of Directors 19
Executive Team 22
Statement Of Corporate Governance 23
Directors’ Interests 34
Directors’ Responsibility Statement 36
5 Year Trend 37
Consolidated Statement of Comprehensive Income 39
Consolidated Statement of Changes In Equity 40
Consolidated Balance Sheet 41
Consolidated Statement of Cashflows 42
Notes to and Forming Part of the Consolidated Financial Statements 43
Additional Stock Exchange Information 62
Independent Auditors Report 64
Company Directory 67
Capability build
Key new hires:
2022 Annual Report4
FY22 Summary.
Ingredients revenue
-29
%
Net Deficit
$
2.7m
Probi strategic partnership
• Royalty stream based on licensing of
Blis probiotic strains
• R&D collaboration
• Cash issue of $9.2m for new shares
New market activity
• Canada Retail – Pharmacies and natural health
stores launch
• Unconditional Skincare Co. – Live Probiotic
Hydration Serum eCommerce sales in NZ
Ingredient supply
• Commercial supply of Dairy Free BLIS K12™
EBITDA Loss
$
2.1m
$
9.0m
Trading Revenue
-16
%
on prior year
Patent Filings
• Provisional BLIS K12™ filing new use against
respiratory viral infections
• New oral composition (BLIS M18™) and new
topical composition (BLIS Q24™) patents
progressed to PCT application
Retail Sales
Manager
Global Ingredients
Account Manager
Science Manager
for Research
(filled vacancy)
Finished product
revenue growth
47
%
eCommerce
sales growth
27
%
retail sales
growth
41
%
Blis Technologies Limited5
Probiotic supplements
market overview.
Summary
• The probiotic supplements category remains
the largest subcategory of the dietary
supplements market. Global retail revenue of
US$7 B, forecast CAGR* 3.7%
• North America represents 34% of global sales
but declined at –1% in 2021.
»The USA remains the largest market
globally at US$2.3 B
• Asia Pacific market represents 36% of the
global market and grew by 22% in 2021.
»China is the second largest probiotic
supplement market at US$0.9 B
• Europe represents 25% of the global market,
2021 was flat compared with prior year.
»Italy is the 3rd largest market globally
at US$0.7 B. Italy also has the highest
consumption of probiotic supplements
per capita globally
*Forecast CAGR: Forecast Compound Annual Growth Rate (2021 – 2026)
Global Probiotic
Supplements Market 2021
Blis Technologies
Sales 2022
Based on a Euromonitor International custom report for the International Probiotics
Association (IPA) Dec 2021.
4.8
%
Asia
Pacific
Asia
Pacific
North
America
North
America
Europe
Europe
ROW
35.6
%
33.1
%
35.1
%
31.8
%
34.4
%
25.2
%
Forecast CAGR
(2021 – 2026)
North America-1%
Asia Pacific10%
Europe3%
Total Global Market3.7%
2022 Annual Report6
Our year.
Jul
2021
Mar
2021
Apr
2021
Probi AB strategic
partnership
Tom Rönnlund
(Probi CEO) joins
board of directors
Unconditional
Skincare Co.
website live
and prelaunch
activity initiated
BLIS K12™ and
BLIS M18
™
approval
in India
BLIS PROBIOTICS™
portfolio launched
on Amazon
Canada platform
Blis Technologies Limited7
Sep
2021
Oct
2021
Mar
2022
Apr
2022
Canada media
campaign launch
New director
appointment
Aimee McCammon
Probi confirms first
commercial scale
production of Dairy
Free BLIS K12™
Sacco System
contract supply
of Dairy Free BLIS
K12™ and BLIS
M18™ for sale
Blis sales
team resumes
international travel –
Canada market visit
2022 Annual Report8
Dear shareholder,
While the 2022 financial year was challenging and the financial
results were disappointing, Blis Technologies achieved
important partner and pipeline milestones and continues to
have attractive prospects. The Board are pleased to be able to
update shareholders on future plans and strategies.
Total revenue for the 2022 financial year (FY22) was down on
the prior year by $1.7m or 16% to $9.0m, resulting in an EBITDA
loss of $2.1m. This compares with an EBITDA surplus of $1.0m
in the prior year. Covid restrictions, stock build at the start
of the pandemic by some of our US customers and a higher
investment in the Unconditional Skincare Co. product had a
more significant impact on the financial result than forecast at
the start of FY22. A key highlight is the 47% increase in revenue
from our eCommerce business compared to the prior year. The
CEO Review provides a more detailed overview of this year’s
trading performance.
Firstly, I would like to acknowledge and thank all of our staff
for their commitment and contribution over the year. It has
been a challenging year for staff as they continue to adjust to
the changing covid environment. It has necessitated new ways
of working and connecting with customers. Throughout the
pandemic, the well being of staff has been a primary focus.
Blis has a proud science heritage, building on the ground
breaking research of Professor John Tagg. Based on his work
and continued research and innovation we are experts in
probiotics for oral health. Our research and development
capabilities and product innovation continue to be a core
strength of the Company. Commercialising in a global market
from a NZ base remains a key focus.
To be successful, the Board recognises that we need to
work with partners who can represent our Blis products and
innovation in key offshore markets. Our strategic partnership,
announced in July 2021 with Probi is a key part of this
strategy. During FY22 Probi have concentrated on establishing
production of BLIS K12™ and BLIS M18™ at their Redmond
facility in the US. We expect revenue from this relationship to
start during the 2023 financial year (FY23). While we expect
revenue to be under $0.5m in the FY23 we expect significant
revenue growth in the longer term.
Probi is well represented across key North American, European
and Asia Pacific markets and will have a wider customer reach
than Blis can achieve by itself.
Over FY23 our main marketing focus for the BLIS PROBIOTICS™
branded finished product range will be in the NZ and Canadian
markets and onselling through the Amazon platform in the US.
Our strategy is to build on the launch into the Canadian market
during FY22, progressively improving our sales performance.
Unconditional Skincare Co. – while the new Live Probiotic
Hydration Serum was launched during FY22 the first year’s
results were below expectations. The net cost of continued
product development and marketing costs were $0.8m.
We have a unique offering in the skincare market in that it is
the only product in the market providing improved skincare
benefits from a live probotic that naturally occurs on the skin.
Feedback from customers and product reviews have been
excellent. We have experienced issues with bottle performance
due to the formulation which has required active management.
At this stage we have only launched Unconditional Skincare
Co. as a direct to consumer model in NZ. We have however yet
to achieve the level of market success expected. As a result the
Board is currently reviewing the commercialisation strategy of
this unique and innovative product.
Directors
Tony Offen joined the Board in 2009. He retires by rotation at
the 2022 Annual Shareholders Meeting. Tony has decided not
to seek re-election and he will retire from the Board at the
conclusion of the ASM. Tony has held a number of leadership
roles including being Chair, Deputy Chair and Chair of the
Audit and Risk Committee. Tony has played a key role in the
growth and development of the Company over the past 13
years. On behalf of the Board I would like to thank Tony for his
outstanding contribution.
Chairman’s
Report.
Blis Technologies Limited9
Two new Directors were appointed during the year. In
July 2021 Tom Rönnlund, CEO of Probi AB joined the
Board. Tom brings a global perspective of probiotic
markets to the Board.
Following a search process Aimee McCammon joined the
Board in October 2021. Aimee brings extensive marketing
and governance experience. Aimee is currently CEO at
Augusto Group, an independently owned hybrid creative
and production company. Aimee’s current governance
roles include being an independent director at Flick
Electric and on the Advisory Board for Pic’s Peanut Butter.
Outlook
Our key focus is on managing the investment in research
and development and new product development, such as
our innovative skincare product, while at the same time
returning to revenue growth and an EBITDA surplus as
quickly as possible.
Thank you for your support during the year and we look
forward to keeping shareholders informed on progress
during the coming year.
Geoff Plunket
Chairman
2022 Annual Report10
Chief Executive’s
Report.
We have continued our investment in new
revenue streams related to our finished product
portfolio. While this has delivered growth it
has not offset a disappointing result for our
ingredient business that has declined in the face
of uncertain market conditions and changed
ordering patterns for key USA based customers.
Operational performance
Key initiatives delivered in FY22:
• Established a strategic partnership with Probi AB
• Launched BLIS PROBIOTICS™ range in Canada
• eCommerce channel growth
• Launched the Live Probiotic Hydration Serum (LPHS)
under the new Unconditional Skincare Co. brand (USC)
Through FY22 we have continued our focus on developing
new revenue streams that will deliver long term growth for the
company. Key initiatives have included the long-term strategic
partnership with Probi, launching the BLIS PROBIOTICS™
range into the Canada market and the launch of our innovative
skincare product under the Unconditional Skincare Co brand.
Although we have navigated the Covid-19 pandemic well
and maintained momentum across a number of initiatives,
our international market development has been impacted
by not being able to travel and engage with our partners and
customers in these new markets. It also clear that through
the initial stages of the Covid-19 pandemic several of our
customers actively built inventory beyond sustained demand
which resulted in a particularly poor first half year. We also saw
customers tightly manage stock holdings and shift to just in
time ordering patterns in response to ongoing uncertainty in the
market.
R&D remains a priority, we are a company with a strong heritage
of scientific innovation, and we have a promising pipeline of
genuine probiotic innovation. We have made solid progress
across several pipeline initiatives and in strengthening our
evidence base and IP status.
Key initiatives in more detail:
Probi AB
A key highlight for the year was the formation of a long-term
strategic partnership with Probi AB (PROB.STOE), a global probiotic
specialist company based in Sweden, which is expected to deliver
significant future growth opportunities for Blis. The relationship
with Probi includes an in-depth partnership through a licensing
and manufacturing agreement allowing us to increase our global
market exposure by leveraging the Probi network of customers.
Since the formation of the partnership we have worked intensively
on the transfer of our technology for the production of BLIS K12™
and BLIS M18™ which will underpin Probi’s selling activity moving
forward. During the final quarter of the year, Probi reached a
major step in the technological transfer of the Blis strains, with
the successful completion of a first commercial scale batch of BLIS
K12™. Probi now expects to see additional new business from our
Blis strains, produced at their own facility, from the second quarter
of this financial year (FY23).
Additionally, we have started collaboration on R&D initiatives to
combine existing technology from each company to fast track new
product solutions for consumers.
Canada
We launched onto Amazon Canada platform in March 2021, then
rolled out launch activity within the Canada retail channel through
calendar year 2021, with above the line promotional activity
kicking off in September 2021.
We experienced strong support early from retailers and banner
groups for ranging our product in pharmacies and health stores,
with store listings progressing ahead of our original plans. These
increased listings require us to accelerate activity to drive “sell
through” in stores, which is the key focus of activity for the new
financial year (FY23).
Covid-19 travel restrictions prevented us from having staff in
market and providing full support to our partner and retailer base
through this listing phase. Fortunately, with the opening of the NZ
borders from March 2022 we have been able to attend the Canada
Health Foods Association (CHFA) trade show in Vancouver and
directly engage with customer and distribution partners in Canada
to facilitate the planning process for the next phase of our activity
in this attractive market.
Blis Technologies Limited11
Skincare
FY22 has been the launch year for our new breakthrough
skincare product under the Unconditional Skincare Co. brand.
The Live Probiotic Hydration Serum has been selling to NZ
based consumers exclusively on our own eCommerce platform
www.unconditionalskin.com. We have used the NZ market as
our test market to validate our product offer and marketing
activity.
While the Covid-19 pandemic has proven not to be the ideal
time to launch this product – original launch activity had
included several trade and face to face events which were
impacted by Covid restrictions – we look forward to greater
opportunities to connect with consumers and influencers
moving into the new financial year with several events planned
to support the ongoing launch activity.
The product formulation and the BLIS Q24™ active ingredient
have been well received by consumers, with positive reviews
and feedback from a building customer base. This is a unique
product at the forefront of innovation, and we are seeing
increasing interest and awareness of the role the microbiome
can play in skin health. We are encouraged by the opportunity
to leverage this interest.
The bottle which is a cutting edge airless dual chamber format
has been problematic with a portion of bottles proving to
be unreliable which has impacted market development.
In response to this we have increased our quality control
assessments prior to product dispatch which has reduced
issues experienced by customers. Our customer service team is
providing immediate replacement of product should customers
experience issues. Our focus in the coming year is to launch a
serum only offer in an improved bottle to support the product
range and reviewing our marketing strategy.
eCommerce (blis.co.nz, Amazon USA and Amazon Canada)
We continue to see growth in this channel with exposure
domestically with the Blis.co.nz site and the Amazon platform
in both the USA and Canada, and our USC sites. Overall, our
eCommerce sales grew by 47% compared to the prior year.
Moving forward we will continue building our capability both
internally and through external partnerships to tap into a highly
specialised channel.
China Cross Border eCommerce (CBEC)
We have recently undertaken a review of our Alibaba Tmall
selling performance and our business model targeting the
Chinese consumer along with the market conditions for this
channel. Over time, the Tmall channel has become increasingly
competitive with a proliferation of international brands fighting
for market share and consumer attention. It has been our
conclusion that the investment and constant resourcing this
channel requires to compete is too great for us at this time and
that there are alternatives to generate attractive sales through
re-seller activity who utilise other platforms outside of Tmall.
Moving into the new financial year we are closing our Blis Tmall
site and have ended our agency relationship with RooLife and
will focus on supporting selected resellers actively servicing
Chinese consumers.
Ingredients
After a strong FY21 for ingredient sales, with a clear pandemic-
related increase in demand, FY22 was a weaker year with a
29% decline in ingredient sales. This overall year decline was
predominantly driven by the first half year decline in the US
market. In the second half of the year, we have seen the market
normalized to some extent and a return to a similar sales level
compared with the same period in FY21.
FY22 revenue split
Finished products compared with Ingredient
(Actual and percentage of total)
FY22FY21
Actual%Actual%
Ingredients
$5,86067%$8,23080%
Finished Products
$2,93733%$2,08420%
2022 Annual Report12
Chief Executive’s Report continued
Covid-19 Pandemic
The past 2 years under the shadow of the Covid-19 pandemic
have created uncertainty and challenges for us and our
customer base. However, as a company, we have weathered this
in good shape and managed to progress many new initiatives
that have been more challenging to implement particularly
given travel restrictions globally and working restrictions
through lockdowns.
The main Covid-19 pandemic related impacts have included:
• Increased air freight costs and challenges securing timely
delivery;
• Customers business models impacted – Retail foot traffic
decline and restrictions on face to face selling activity
• Our staff – Work from home practices, split production
shifts and limitations on lab-based personnel, restricted
travel, no tradeshow presence
Research and Development
We are pleased with the progress of our R & D activity which is
focused on supporting the commercialisation of our product
innovation and delivering a pipeline of future opportunity.
Our new product development priorities have included late-
stage development work on a probiotic toothpaste formulation
and additional skincare products based on BLIS Q24™. Along
with this we continue to characterise new probiotic strain
candidates from our extensive library of strains.
The establishment of an alternative supply partner of our
probiotic strains BLIS K12™ and BLIS M18™ to complement
supply from our long-term partner, Fonterra has been a key
risk management strategy. We are pleased to have finalised a
development programme with Italian probiotic fermentation
supplier Sacco System SRL for supply of Dairy Free BLIS K12™
and BLIS M18™ for commercial supply in FY23. Probi have also
successfully completed their first commercial scale batch of
BLIS K12™ in their USA based facility.
An important part of our pipeline endeavour is the protection
of our IP. We continue to enhance our patent portfolio with four
new patents moving through the process of approval.
New patent activity (Pending):
• BLIS K12™ new use against respiratory infections
• New oral composition (BLIS M18™) and new topical
composition (BLIS Q24™)
Underpinning our strains and product offers is a robust mix
of scientific and clinical evidence. It is this evidence base
covering safety, mechanism of action and clinical efficacy that
differentiates us from other suppliers of probiotics and builds
confidence across our customer and consumer base. Over the
year there has been a broad range of publications from internal
and external sources further building the strong evidence base
for our probiotic strains.
Financial overview
Company revenue in FY22 was $9.0m, a decline on the prior year
of 16%. With an EBITDA loss of $2.1m and a net deficit of $2.7m.
Planned revenue growth for the FY22 year was negatively
impacted by the performance of the ingredients business,
with ingredient revenue of $5.9m down 29% on FY21. Globally
there was pressure on the probiotics market as noted in our
“Probiotic supplements market update” section. This tightening
of the ingredient market was also compounded by an extended
ordering cycle for two key US based customers.
However, our continued focus on growing branded product
revenues delivered 41% growth compared with the previous
year, both eCommerce sales (+47%) and retail sales (+27%)
contributing to this growth. Total revenue for the second half of
FY22 improved with growth of 6% on the prior year and FY22 Q4
revenue grew by 16% delivered by both ingredient recovery and
finished product growth.
Total expenses for FY22 increased over the prior year as a result
of sales and marketing costs for launch activity in Canada and
USC, and the impact of new hires to increase organisation
capability.
Cash and cash equivalents increased during the year by $6.3m
to $8.5m and working capital increased $6.6m to $10.0m.
Operating cash flows of $2.3m deficit were driven by the
ongoing investment in sales and marketing costs for launch
activity in Canada and USC, and a decline in ingredient revenue.
The issue of new shares to Probi AB in July 2021 provided $9.2m
of additional capital.
Overall, the financial result is disappointing and not in line
with our initial expectations at the beginning of FY22. The poor
performance of ingredient sales has had a significant impact on
the financial result for the year, while we continued to invest in
our pipeline and new market opportunities including Canada
and skincare. These initiatives remain important revenue
drivers moving forward.
Regional performance
Asia Pacific (APAC)
FY22FY21
Ingredients
$1,202$1,050
Finished products
$1,763$1,399
Total revenue
$2,965$2,449
Blis Technologies Limited13
Chief Executive’s Report continued
Brian Watson
Chief Executive Officer
Amazon growth and our new market Canada coming on stream
delivered 71% growth in finished product sales in the region.
However, this did not offset the drop in our ingredient sales in
the region that had been particularly strong in FY21.
The major contributor to the ingredient revenue decline was
delayed ordering by two key new customers in the US market. To
date one of these customers is yet to reorder whereas the other
ordered again toward the end of the financial year.
In the second half of FY22, we saw signs of the market
normalising for the ingredient business with sales in line with
the same period in the previous year and overall revenue for the
region up 3%.
Outlook
We remain positive regarding the new revenue streams we
have established and the long-term growth prospects they
represent. Our priorities will be growing the Canada market, our
eCommerce sales activity, and resetting our skincare strategy to
capitalise on this breakthrough innovation.
The Probi strategic partnership represents a long term revenue
driver and has the potential to deliver additional innovation
through R&D collaboration. This relationship has started
positively, and we will look to build momentum during the new
financial year.
Despite ongoing market challenges globally including the
Covid-19 pandemic and the war in Ukraine, we believe the
ingredients business will return to growth, this will be delivered
through a stabilisation of our existing customer base and the
acquisition of new customers tapping into the ongoing growth
potential of the probiotics market.
We are excited by the opportunities our innovative pipeline
represents. Commercialisation models for these innovations
will focus on partnerships to deliver scale, complementing our
current core market activities.
Sales in the APAC region grew by 21% compared with the
prior year. This growth was driven by solid performance of our
branded finished goods sales, which grew by 26% and growth
of our ingredients business in the region of 14% The NZ BLIS
PROBIOTICS™ branded retail sales in NZ grew by 7% and the
ordering for the winter season in FY23 looks to be more like a
normal pattern after a decline during the height of lockdown in
NZ last year.
Looking forward, we are encouraged by the prospects for our
finished products in the region with a retail recovery, good
webstore performance and Daigou opportunities targeting
Chinese consumers.
Along with this we continue to actively target new ingredient
opportunities in China, Japan, India and South East Asia
tapping into the strong interest in probiotics within our region.
Europe together with Middle East and Africa
(EMEA)
FY22FY21
Ingredients
$2,853$3,101
Finished products
$4-
Total revenue
$2,857$3,101
Europe sales revenue, largely made up by ingredient sales
declined by 8% in FY22 compared with the prior year. The
Covid-19 pandemic has continued to create uncertainty in this
region and has impacted the business model of a number of
our established customers who have typically relied heavily on
face-to-face selling with health professionals. As a result, the
customer base and our distributor continue to closely manage
stock levels and rely on just in time ordering to meet demand.
The recent developments with the war in Ukraine are
concerning and through our distribution partner Bluestone
Pharma we do have some exposure to both the Russian and
Ukraine markets.
North America
FY22FY21
Ingredients
$1,805$4,079
Finished products
$1,170$685
Royalties
$168$299
Total Revenue
$3,143$5,063
Overall, this region saw a decline in revenue compared with the
prior year of -38%.
2022 Annual Report14
Spotlight
on Probi.
A key highlight for the year
was the formation of a long-
term strategic partnership with Probi
AB, a global Probiotics specialist company
based in Sweden, which is expected to deliver
significant growth opportunities for Blis.
The relationship with Probi includes an in-depth
partnership through a licensing and manufacturing
agreement, allowing us to increase our global market
exposure by leveraging the Probi network to customers.
Along with this we have started collaboration on
R&D initiatives combining each other’s expertise to
unlock new product opportunities. Initial targets
will focus on combining existing technology
from each company to unlock new product
solutions for customers and consumers.
BLIS CEO Brian Watson
One of Probi’s objectives
is to grow our business through
strong strategic partnerships. In
Blis we found a fantastic match. Blis
represents an innovative and dynamic
company with a high scientific profile and
long history of research. This partnerhip
enables us at Probi to broaden our portfolio
of scientifically validated probiotic concepts
in exciting health areas and work closely
with the Blis Technologies team to make
these great products available to
consumers around the world.
Probi CEO Tom Rönnland
Blis Technologies Limited15
Sustainability.
We continue to operate an Environment, Social and Corporate
Governance (ESG) committee with representation from across the
business to map out and monitor company goals and priorities.
Staff engagement with this process is high.
Four key areas of focus were identified to underpin a meaningful sustainability programme.
• Advance health and wellbeing
• Be a valuable contributor to society
Our Sustainability priorities are linked to the UN Sustainability Goals
Advance Health
& Wellbeing
• Access products
• Focus on quality
• Staff wellbeing
• Economic contribution
• Support of charities and sponsorship
• Staff policies: living wage, diversity, development
• Understanding of footprint
• Areas of greatest relevance - supply chain, packaging
• Leading behaviour change
• World leading science
• Research and academic support
• Innovative product export earnings
Contribution to
Society
Environmental
Impact
Contribute to an
innovation economy
• Reduce our environmental impact
• Contribute to an innovation economy
2022 Annual Report16
Sustainability continued
Advance health and wellbeing improving access to our
product range with the aim of improving the health and
wellbeing of consumers.
• New market activity including the Canada launch and
China Cross Border eCommerce
• A focus on quality and continuous improvement across our
product range and service
• The health, safety and wellbeing of our people including
ongoing provision of a staff and families free counselling
programme for support and guidance to enhance work
performance and improve home and personal wellbeing
yearly health checks and flu vaccinations for staff
• Free BLIS PROBIOTICS™ product seconds for staff
• Health and Safety committee focus on safe working
practices inline with government Covid-19 guidance
Be a valuable contributor to society
• Provision of high quality employment opportunities
• Supporting local businesses where practical and relevant
• We are committed to paying the Living wage
• Supply of BLIS PROBIOTICS™ to High Performance Sport
NZ to support elite athletes
Reduce our environmental impact
• In FY21 Blis was proud to be the first NZ based laboratory
to complete the international My Green Lab certification
process achieving the highest level of certification.
We continue to operate our lab in line with the
recommendations and best practice identified from the
process
• We believe introducing and embedding a sustainability
mindset within the business will be most successful when
behaviour change is visible and encouraged, allowing our
staff to identify and measure the benefit of changes to
processes
• At our production site we strive to reduce waste with KPI’s
focused on waste reduction and a “Right first time” culture
• Recycling initiatives across our sites
Contribute to an innovation economy
• As a business, our science is world leading and provides
researched-backed health solutions
• Our research aims to unlock the potential of the
microbiome in delivering health benefits
• As an exporter of high value innovative products, we
contribute to the New Zealand’s future export earnings
• We actively support academic research and collaboration
• Support of interns and post graduate study
• Research activity with multiple academic units both in New
Zealand and overseas
Our focus areas and key initiatives:
Blis Technologies Limited17
Reconnecting
to the world.
With the opening of
international borders and travel
to and from New Zealand, Myer Rose
and Frank Spiewack took the opportunity
to reconnect to the world. During April 2022
they completed a valuable trip to Canada to
showcase BLIS PROBIOTICS™ at the Canadian
Health Food Association (CHFA) trade show -
one of Canada’s largest natural health food trade
shows. Equally as important, the reinstatement of
face-to-face visits to retail stores has enabled
insights into performance, an understanding
of the Canadian Natural Health retail
market and perhaps most essentially,
the ongoing development of
key relationships.
2022 Annual Report18
Antony (Tony) Balfour
Deputy Chair, Independent
non-executive director
Member of Remuneration committee
Tony was appointed to the Board in
April 2020. He brings to the board
strong governance experience following
a successful executive career as an
international marketing and brand
management leader building consumer
goods businesses globally.
Tony has a diverse background of
international experience in driving
FMCG through retail channels and
e-commerce from the leadership roles
he held for Nike Inc, Icebreaker, Seek.
com and Monster Worldwide. He holds
directorships with The Warehouse
Group Limited, Les Mills International
Limited and Wayfare Limited (trading
as Real Journeys). Tony has previously
been a director of Silver Fern Farms
Co-operative Limited (and subsidiaries)
and Methven Limited.
Geoffrey (Geoff) Plunket
Chair, Independent non-executive director
Member of Audit and Risk Committee and
Remuneration Committee
Geoff is currently a Dunedin based
Professional Director and has been a
director of Blis Technologies Limited since
May 2018 and and took over the role of
Chair in July 2021. He has also previously
held the role of Deputy Chair and Chair of
the Audit and Risk Committee.
Geoff worked for Coopers & Lybrand
(now PWC) and KPMG, in Dunedin and
Birmingham, UK through the 1980’s
before joining Port Otago Limited in 1988,
as Chief Financial Officer. Geoff spent the
following 29 years with the Port Otago
Group, before retiring in 2017. Geoff
worked across the business in a variety
of roles, culminating in appointment
as CEO in 2004, a position he held until
retirement. Geoff is also an independent
Director on the Ports of Auckland and
North Otago Irrigation.
Geoff is a Fellow of Chartered Accountants
Australia and New Zealand, and a Member
of the Institute of Directors.
Board of
Directors.
Amelia (Aimee)
McCammon
Independent non-executive director
Aimee McCammon is CEO NZ of
Augusto Group, an entertainment,
advertising and technology company.
She is an experienced strategist and
brand builder with deep knowledge
of consumer marketing. Her brand
experience spans an array of New
Zealand’s power brands including
Whittaker’s, Toyota, Lotto, Tourism NZ
and 42 Below.
Aimee was General Manager of Peter
Jackson’s Park Road Post Production
for three years, leading a world class
team of Oscar winning creatives
alongside digital and film laboratories.
Over the past decade she has also
held senior management roles at
Assignment Group and Trade Me,
following a successful career with the
Saatchi & Saatchi network that spanned
Wellington, Auckland and New York.
Aimee has a Bachelor of Commerce
from Auckland University, and has
completed leadership training at the
Omnicom University in Shanghai. She
is an independent director of Flick
Electric, and an advisory board member
for Pic’s Peanut Butter.
Blis Technologies Limited19
2022 Annual Report202022 Annual Report20
Dr Barry Richardson
Independent non-executive director
Member of Audit and Risk Committee
Barry is Dunedin based and has been a director of Blis
Technologies Limited since July 2018.
Barry began his career as a scientist at the NZ Dairy Research
Institute before joining the NZ Dairy Board in 1985 as a
Business Development Manager, undertaking roles in
several biotechnology and nutritional Dairy Board joint
venture companies. Barry joined the Tatua Co-Operative
Dairy Company Limited in 1991 as General Manager,
Tatua Biologics and was later appointed General Manager,
International and Strategic Development commercialising
value added dairy ingredients. He was appointed CEO of
Westland Milk Products when that company elected to be an
independent exporter of dairy products in late 2001. From
2006 to 2016 Barry was CEO of Blis Technologies Limited,
through the period when the Company transitioned from a
research company into a commercial entity. He is currently a
director of CertusBio Limited.
Barry has a M.Sc. (Hons) in Biochemistry and a Ph.D. from
Massey University. He is a past Fellow of the NZ Institute of
Management and a Fellow of the NZ Institute of Food Science
and Technology. He was awarded the JC Andrews award for
distinction in Food Science and Technology in 2003.
Anthony (Tony) Offen
Independent non-executive director
Chair of Audit and Risk Committee
Tony is Dunedin based and has been a Director
and shareholder of Blis Technologies Limited
since May 2009. Tony is Chair of the Audit and Risk
Committee and previously served as both Chair
and Deputy Chair of the Board.
Through his Dunedin-based investment company,
Tony has been a director and shareholder of
private companies involved in commercial
property, FMCG business sectors nationally and
internationally and with investment interests
requiring venture and start-up capital.
Tony holds professional memberships with the
Chartered Accountants Australia and New Zealand
and is a Chartered Member of the Institute of
Directors.
Board of
Directors.
Blis Technologies Limited21
Dr Alison Stewart
Independent non-executive director
Chair of Remuneration Committee
Alison is Christchurch based and was appointed
to the Board in September 2018.
Alison brings to the board governance and
commercial research and development
experience within the international
biotechnology industry. Alison has held key
executive leadership roles in New Zealand
and US corporates and understands the
drivers for successful commercialisation of
research. Alison is an experienced research
and innovation leader with expertise in
microbe-based product development, patents,
IP protection, new product pipeline and
development of strategic partnerships with
large international corporations.
Alison is a Distinguished Emeritus Professor
from Lincoln University, New Zealand and was
elected a Companion of the NZ Order of Merit in
2011 for her contributions to biology.
Tom Rönnlund
Non-executive director
Tom Rönnlund is currently the CEO of
Probi AB, a world leading Swedish listed
biotechnology company and substantial
product holder of Blis Technologies. He holds
a Master’s degree in Business Administration
and Economics from Stockholm University.
Before joining Probi AB in January 2019, Tom
served as CEO of Navamedic ASA, a listed
Norwegian pharma and medtech company.
Tom has more than 20 years experience
working in the healthcare industry, and has
held several positions in sales, marketing
and general management at IQVIA and in
international biopharmaceutical companies
such as Bristol-Myers Squibb and Eli Lilly.
Blis Technologies Limited21
2022 Annual Report2222
Richard Wingham
Chief Financial Officer (CFO)
CA, BCom (Accounting)
Richard was appointed to the role
of CFO for Blis Technologies in
November 2017. Richard is a Chartered
Accountant with over 25 years
experience, including various senior
finance roles across the dairy FMCG,
construction and health sectors. His
skills cross over manufacturing, project
management, information technology
and strategic planning.
Dr John Hale
Chief Technology Officer (CTO)
PhD
John did his PhD studying bacteriocins
(BLIS) under the supervision of
Professor John Tagg at the Department
of Microbiology, University of Otago.
He carried out post-doctoral research
at the University of British Columbia
(Vancouver, Canada) and Monash
University School of Pharmacy
(Melbourne, Australia) investigating
the modes of action of antimicrobial
peptides. Dr Hale joined Blis
Technologies in 2011 and leads the
Scientific Services team.
Brian Watson
Chief Executive Officer (CEO)
BCom (Marketing), BPhEd
Brian was appointed CEO of Blis
Technologies in February 2016.
He joined Blis following senior
management roles with Fonterra and
within the pharmaceutical industry
in New Zealand and overseas. Brian’s
career has focused on general
management, marketing and sales
across healthcare, nutraceutical and
nutrition industries. Brian has a track
record of successfully launching global
brands into new markets and leading
change within organisations.
Frank Spiewack
Commercial Director
BA
Frank joined Blis Technologies in
November 2019 and was confirmed
as a member of the executive in May
2020. Frank has a strong background
developing international markets
having worked as Vice President Global
Sales and Marketing for Alchemy
Equipment and Manager Distributor
and Emerging Markets for Icebreaker.
Jennifer Walker
eCommerce and Marketing Director
BA, MBA
Jennifer started in February 2022 having
extensive global marketing experience
within consumer and wellness sectors
in both start-ups and larger corporates.
Jennifer has a strong experience base across
eCommerce, brand and retail marketing,
having worked for international brands such
as Puma and corporates focused on the
health and wellness sector.
Executive Team.
Blis Technologies Limited23
The Board and Management of Blis
Technologies Limited (Blis, the Company)
are committed to ensuring that the
Company maintains corporate governance
structures which ensure that the Company
operates efficiently and effectively and
maintains the highest ethical standards.
This statement of Corporate Governance provides a summary of
the Company’s governance processes and practices.
The Company’s Corporate Governance policies are based
on the principles set out in the NZX Corporate Governance
Code (NZX Code). This statement is structured to follow the
recommendations of the NZX Code.
The Board’s view is that Blis complies with the corporate
governance principles and recommendations set out in the
NZX Code but measurable objectives for diversity are under
development. The Board believes its governance structures are
appropriate and meet the Company’s strategic objectives.
The Company also complies with the corporate governance
requirements of the NZX Listing Rules. The Board regularly
reviews and assesses Blis’ governance structures and processes
to ensure that they are consistent with best practice.
This Corporate Governance Statement has been prepared
in accordance with the NZX Code that was published on 10
December 2020.
Blis’ key corporate governance documents referred to in this
statement, including charters and policies, can be found at
www.blis.co.nz/investor-centre/charters-policies (Investor
Centre). The Board operates under a set of guidelines set out
in its Directors’ Operations Manual to assist Directors and
Management in carrying out their duties and responsibilities.
The Directors’ Operations Manual covers such matters as:
• Corporate governance matters;
• Role of the Board and composition of the Board;
• Director responsibilities;
• Appointment of, responsibilities of and remuneration of a
Chief Executive Officer;
• Confidentiality and the safeguarding of company information;
• Compliance with laws and regulations;
• Shareholder participation; and
• Code of conduct.
This Corporate Governance Statement was approved by the
Board on 30 May 2022.
Statement of
Corporate Governance.
PRINCIPLE 1 – Code of Ethical Behaviour
“Directors should set high standards of ethical behaviour,
model this behaviour and hold management accountable for
these standards being followed throughout the organisation.”
Code of Ethics
As part of the Board’s commitment to the highest standard of
conduct, the Company has adopted a Code of Ethics (Code).
Every new Director and employee is provided with a copy of the
Code and must confirm that they have read and understand the
document. The Code is also available at the Investor Centre.
Each Director, and employee is asked to annually confirm that
they continue to comply with the Code of Ethics.
The procedure for advising the Company of a suspected
breach is set out in the Code of Ethics. Blis also has a Protected
Disclosures (Whistle-Blower) Policy that sets out the process
that serves to protect employees who raise allegations of
serious wrongdoing by the Company.
Conflicts of interest
The Code of Ethics sets out the procedure to be followed where
Directors or employees are faced with a conflict of interest. At
all times, a Director must be able to act in the interests of the
organisation as a whole and in accordance with all relevant
laws and regulations including the NZX Listing Rules. The
personal interests of the Director or employee (as applicable)
and their family must not be allowed to prevail over those of the
Company and its shareholders generally.
Protected Disclosure (Whistle-Blowers) Policy
The Protected Disclosure (Whistle-Blower) policy provides
information and guidelines to protect employees from
retaliatory action where they have raised allegations of serious
wrongdoing or reportable conduct they honestly believe
has been carried out by any Director, employee, consultant,
contractor or third party.
Blis is a small company and the main way to make a report is
through the Chair of the Audit and Risk Committee.
No breaches of the Code of Ethics were identified during FY22
and no matters were raised under the Protected Disclosures
(Whistle-blower) Policy.
The Code of Ethics is subject to annual review by the Board.
Share trading by the Company Directors and Employees
The Board has implemented formal procedures to handle
trading in the Company’s equity securities by Directors,
employees, and advisers of the Company. These are set out in
2022 Annual Report24
Blis’ Securities Trading Policy which is available at the Investor
Centre. Before any trading can occur approval is required to be
obtained from the Chair of the Board, CEO or CFO. The policy
provides that shares may not be traded at any time by any
individual holding material information. The fundamental rule
in the policy is that insider trading is prohibited at all times.
The requirements of the policy are separate from, and in
addition to, the legal prohibitions on insider trading in New
Zealand.
PRINCIPLE 2 – Board Composition &
Performance
“To ensure an effective board, there should be a balance of
independence, skills, knowledge, experience and perspectives.”
Responsibilities of the Board
The role of the Board is to act in the best interests of the
Company and to promote the interests of the Company and
its stakeholders. Directors are elected by the shareholders to
govern the Company. The Board is the overall and final body of
responsibility for all decision making within the Company.
The Directors have a diverse range of expertise and experience
and are committed to using this to benefit the Company. The
Board is responsible to shareholders for charting the direction
of the Company by participating in the setting of objectives,
strategy, and key policy areas. The Board is then responsible for
monitoring Management’s running of the business to ensure
implementation is in accordance with the agreed framework.
The Board delegates the conduct of the day-to-day affairs of the
Company to the CEO within this framework.
The Board operates under a Directors’ Operations Manual which
sets out the roles and responsibilities of the board, and other
matters as summarised on Page 23.
The primary responsibilities of the Board include:
• Ensuring that the Company purpose and goals are clearly
established, and with appropriate strategies;
• Establishing policies for strengthening the performance of
the Company including ensuring that Management is pro-
actively seeking to build the business through innovation,
initiative, technology, new products and the development of
its business capital;
• Monitoring the performance of Management, including
the review and monitoring of compliance with delegated
authorities, and of regulatory compliance;
• Monitoring strategic, financial, social and environmental
performance;
• Appointing the CEO, setting the terms of the CEO’s
employment contract, including position description,
reviewing succession planning and where necessary,
terminating the CEO’s employment with the Company;
• Deciding on whatever steps are necessary to protect the
Company’s financial position and the ability to meet its debts
and other obligations when they fall due, and ensuring that
such steps are taken;
• Ensuring that the Company’s financial statements are true
and fair and otherwise conform with law;
• Ensuring that information of sufficient content, quality and
timeliness, as the Board considers necessary to enable it to
discharge its duties, is provided by Management;
• Ensuring that the Company adheres to high standards of
ethical and corporate behaviour;
• Ensuring that the Company has appropriate management
processes for defining risks and analysing options to
minimise, mitigate and manage risks;
• Ensuring an appropriate capital structure such that it
supports the business strategy; and
• Ensuring that the Company communicates with its
shareholders and stakeholders in a timely manner.
The Board uses committees to address certain issues that
require detailed consideration by members of the Board who
have specialist knowledge and experience. The Board retains
ultimate responsibility for the functions of its committees and
determines their responsibilities.
The Board has a statutory obligation to reserve responsibility
for certain matters. It deals directly with issues relating to the
Company’s mission, appointments to the Board, strategy,
business and financial plans.
The Directors appoint a Chair and Deputy Chair from amongst
the non-executive members. The Board supports the separation
of the role of Chair and CEO. The Chair’s role is to provide
leadership and to manage the Board effectively. The Chair has
responsibility for:
• ensuring the integrity and effectiveness of the governance
process of the Board;
• representing the Board to the shareholders;
• maintaining regular dialogue with the CEO over all
operational matters; and
• for overseeing the annual work programme
The Chief Executive Officer is not a Director.
The Board regularly meet without the CEO being present and
has a practice of holding Director-only meetings either prior to
or following each Board meeting.
The Board receives reports from Management and has access to
all of the information necessary for it to effectively discharge its
duties.
Director nomination and appointment
The Board as a whole is involved with recommending
candidates to act as Directors to shareholders. When
considering candidates for nomination, the Board will consider,
amongst other things, the individual’s experience, qualifications
Statement of Corporate Governance continued
Statement of Corporate Governance continued
Blis Technologies Limited25
and skills in comparison to the experience, qualifications
and skills of other Directors, whether that individual is
“independent” and whether that individual would be able
to work effectively with other Directors. A thorough check of
the candidate and his or her background is undertaken and
shareholders are provided with all material information that
is relevant to the decision on whether to elect or re-elect a
Director.
The Board has the ability to appoint an individual to fill a
casual vacancy on the Board until the Company’s next Annual
Shareholder Meeting.
The procedures for the appointment and removal of Directors
are governed by the Company’s constitution and the NZX Listing
Rules.
The Board has determined that based on the Company’s current
size and stage of development that an optimal number of
directors is six. The number may increase to seven from time to
time to allow for director succession. Each year as part of the
board’s annual review process the capability mix is assessed
to evolve in line with Company’s future development and
international growth plan requirements.
The Board has determined that to operate effectively and to
meet its responsibilities it requires competencies in disciplines
including executive leadership and strategy, governance,
biotechnology IP development and protection, international
sales and marketing, international supply chain and quality
control, risk and compliance, finance and capital markets.
The current mix of skills and experience is considered
appropriate for the responsibilities and requirements of
governing Blis. The Board looks to strengthen its oversight of
issues in all disciplines, as required, via expert advice.
As at 31 March 2022, six of the seven Directors on the Board are
independent. Director independence is considered on a case-
by-case basis (in accordance with the NZX Listing Rules) and is
monitored on an ongoing basis.
Letter of appointment
All new directors enter into a written agreement with Blis setting
out the terms of their appointment. A copy of the appointment
letter is available at the Investor Centre (www.blis.co.nz/
investor-centre)
Board of Directors
Director profiles are shown at pages 19 - 21 of this report. The
profiles include information on the year of appointment, skills,
experience and background of each Director.
As at 31 March 2022 the Board comprises seven directors. Six
are independent Directors and all are non-executive members.
Geoff Plunket is the Chair of Blis and is an independent Director.
Tony Balfour is Deputy Chair. Tony Offen is the Chair of the
Audit and Risk Committee. Alison Stewart is the Chair of the
Remuneration Committee. Aimee McCammon, Barry Richardson
and Tom Rönnlund are also directors.
The roles of Board Chair, Audit and Risk Committee Chair and
CEO are not held by the same person.
The Board determines annually on a case-by-case basis who,
in its view, are Independent Directors. The Board will consider
all relevant circumstances when determining independence.
Under the NZX Listing Rules, a Director is “Independent” when
they are not an employee of the Company and do not have a
‘Disqualifying Relationship’ (as defined in the NZX Listing Rules).
The Company does not require Directors to hold shares in the
Company but actively encourages them to do so. Directors’
share interests are disclosed at pages 34 - 35.
The Board does not have a tenure policy however it recognises
that a regular refreshment programme leads to the introduction
of new perspectives, skills, attributes and experience. Directors
retire by rotation in accordance with the NZX Listing Rules but
are eligible for re-election on retirement by rotation.
Director period of appointment
0-3 3-9 9 +
years years years
Number of Directors 3 3 1
Interest Register
The Board maintains an interest register for the Company. Any
Director who is interested in a transaction with the Company
must immediately disclose to the Board the nature, monetary
value and extent of the interest.
A Director who is interested in a transaction may attend and
participate at a Board meeting at which the transaction is
discussed but may not be counted in the quorum for that
meeting or vote in respect of the transaction, unless it is one
in respect of which Directors are expressly required by the
Companies Act 1993 to sign a certificate.
Entries made in the interest register of the Company for the year
ended 31 March 2022 are included in the Director Disclosures
section on pages 34 - 35.
Diversity
Blis Technologies is committed to achieving a diverse workforce
and inclusive workplace practices in order to harness the
business benefits of diversity, further social justice and comply
with legislation. A Diversity and Inclusion Policy has been
adopted by the Board and is available at the Investor Centre.
Responsibility for workplace diversity and the setting of
measurable objectives is held by the Board. Appropriate
measurable diversity objectives are under development.
2022 Annual Report26
Statement of Corporate Governance continued
The gender composition of Blis’ directors, senior managers and
workforce was as follows:
31 March 2022 31 March 2021
Position Female Male Female Male
Director 2 (29%) 5 (71%) 1 (20%) 4 (80%)
Executives* 1 (20%) 4 (80%) 1 (20%) 4 (80%)
Employees** 15 (43%) 20 (57%) 14 (48%) 15 (52%)
*CEO and leadership team
**Includes Executives
Director Training
The Board ensures that there is appropriate training available
to all Directors to enable them to remain current on how best
to discharge their responsibilities and keep up to date on
changes and trends in areas relevant to their work. Directors are
regularly provided with industry information and receive copies
of appropriate Company documents to enable them to perform
their role.
The Board also ensures that new Directors are appropriately
introduced to management and the business.
Board Performance Evaluation
The Board annually assesses its effectiveness in carrying out
its functions and responsibilities. The Chair of the Board leads
the review which considers the performance of the Board as
a whole, and of each of the Board Committees, against their
respective charters.
The Chair, on behalf of the Board, is responsible for assessing
the performance and contribution of individual Directors. The
assessment is undertaken annually.
Principle 3 - Board Committees
“The board should use committees where this will enhance
its effectiveness in key areas, while still retaining board
responsibility.”
Board Committees
The Board has two formally constituted committees – the
Audit and Risk Committee and the Remuneration Committee.
Committee membership is reviewed annually.
Each Committee has a written charter that is approved by the
Board and sets out its mandate. The charters are reviewed
annually with any proposed changes recommended to the
Board for approval.
Each Committee has an agreed annual work programme that
sets out matters to be addressed over the following twelve
month period. The Committees each review their performance
on an annual basis against the Committee charter and work
programme and report their findings to the Board.
Attendance at meetings
The table below sets out Director attendance at Board and
Committee meetings during the year ended 31 March 2022.
Board Audit & Risk
Committee
G Plunket 11 14
A Balfour 11 -
A McCammon* 6 -
A Offen 11 14
Dr B Richardson 11 14
T Rönnlund** 8 -
Dr A Stewart 11 -
*A McCammon appointed 21 October 2021
**T Rönnlund appointed 22 July 2021
Audit & Risk Committee
The Board has overall responsibility for the Company’s system
of internal financial control, risk management, for liaising
with the Company’s external auditors, and for ensuring the
integrity of the Company’s financial reporting. The Board
constantly monitors the operational and financial aspects of
the Company’s activities and has established procedures and
policies that are designed to provide effective internal financial
control. Annual budgets and business plans are prepared
and agreed by the Board. Monthly management accounts
are prepared by Management and reviewed by the Board
throughout the year to monitor performance against budget.
The Board has established an Audit and Risk Committee to
assist the Board in discharging its responsibilities relative to
financial reporting, related regulatory conformance and liaising
with the external auditors. The terms of reference for the Audit
and Risk Committee are set out in its charter which is available
in the Investor Centre.
The Audit and Risk Committee is appointed by the Board and
must comprise three Directors, the majority of whom are to be
independent. The Chair of Audit and Risk Committee must be
an Independent Director and not the Chair of the Board. The
current members of the Audit and Risk Committee are Tony
Offen (Chair), Geoff Plunket and Barry Richardson. All members
are independent directors. Tony Offen is a member of Chartered
Accountants Australia and New Zealand and is a chartered
member of the Institute of Directors.
The Board considers the recommendations of the Audit and
Risk Committee and advice of external auditors and other
external advisors on the operational and financial risks that
face the Company. The Board ensures that recommendations
made by the Audit and Risk Committee, external auditors and
other external advisers are investigated and, where considered
Statement of Corporate Governance continued
Blis Technologies Limited27
necessary, action is taken to ensure that the Company has an
appropriate internal control environment in place to manage the
key risks identified.
In addition, the Board investigates ways of enhancing existing
risk management strategies, including appropriate segregation
of duties and the employment and training of suitably qualified
and experienced personnel.
Given the size of the Company, an internal audit function is not
considered necessary.
The Audit and Risk Committee met on 14 occasions during FY22.
The agenda items for each meeting generally relate to capital
structure, financial governance, external financial reporting,
external audit, internal control review, risk management,
compliance, and insurance.
Meeting Attendance
The CEO and CFO will normally be invited to attend meetings.
Remuneration Committee
The Board has established a Remuneration Committee which
has responsibility for, amongst other things, setting the
remuneration policy for the CEO, CFO, Chief Technology Officer,
Commercial Director and Marketing and eCommerce Director
(the Executive), and recommending and monitoring the level and
structure of remuneration for senior management.
The terms of reference for this committee are set out in its
charter which is available in the Investor Centre (www.blis.co.nz/
investor-centre/charters-policies).
The Remuneration Committee is appointed by the Board and
must comprise three Directors, the majority of whom shall
be independent. The Chair of the Board may serve on the
committee. Members of the Remuneration Committee are Alison
Stewart (Chair), Tony Balfour and Geoff Plunket. All committee
members are independent Directors.
Management only attends Remuneration Committee meetings
by invitation, as and when appropriate and necessary.
The Board ensures that the recommendations made by
the Remuneration Committee are considered and acted on
accordingly.
From FY23 the Remuneration Committee is to be renamed the
People and Performance Committee, with a wider focus for
performance management than solely remuneration.
Nomination Committee
Given the size and composition of the Board, the Directors
believe that there are no significant benefits in delegating
matters in relation to Board nominations and all appointments
are managed by the whole Board.
Disclosure Committee
The Board has established a Disclosure Committee to oversee
the Company’s compliance with its continuous disclosure
requirements under New Zealand law and the NZX listing Rules.
The Disclosure Committee comprises the Board Chair, Chair of
the Audit and Risk Committee, Chief Executive Officer and Chief
Financial Officer.
Committees
The Board has no Committees other than an Audit and
Risk Committee, Remuneration Committee and Disclosure
Committee.
Takeover Protocols
The Board has adopted a set of protocols to be followed in the
event of a takeover offer being made.
In the event of a takeover offer, a committee of Independent
Directors would be formed and would have responsibility for
managing the takeover in accordance with the Board protocols
and applicable laws, including the New Zealand Takeovers
Code.
Principle 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-
financial reporting, and in the timeliness and balance of
corporate disclosure.”
Shareholder Communications and Market Disclosure
The Board is committed to keeping the financial products
markets informed of material information relating to the
Company and its shares and promoting investor confidence by
ensuring that trading of its equity securities takes place in an
efficient, well-informed market at all times.
The Company has in place both a Market Disclosure Policy and
a Communications Policy designed to ensure this occurs. The
policies include procedures intended to ensure that:
• the Company complies with its continuous disclosure
obligations; and
• timely, accurate and complete information is provided to all
shareholders and other market participants.
The policies also outline mandatory requirements and
responsibilities in relation to the identification, reporting,
review and disclosure of material information relevant to the
Company.
Accountability for compliance with disclosure obligations is the
responsibility of the CEO and CFO. The CFO has been designated
as the Disclosure Officer and has overall management
responsibility for ensuring all material information is lodged
with NZX.
2022 Annual Report28
All non-promotional information intended to be made public,
whether or not it is believed to be material information, must be
reviewed by the Disclosure Committee (comprising the Chair,
Chair of the Audit and Risk Committee, CEO and CFO) prior to
release. The Disclosure Committee also refers certain decisions
to the Board.
Directors consider at each Board meeting (and otherwise as and
when needed) whether there is any material information which
should be disclosed to the market.
Governance Policies and Charters
Key corporate governance documents, including charters and
policies, can be found at the Investor Centre: www.blis.co.nz/
investor-centre/charters-policies.
Financial and Non-Financial Reporting
Blis is committed to ensuring integrity and timeliness in its
financial reporting and in providing information to the market
and shareholders which reflects a considered view on its
present and future prospects.
The Audit and Risk Committee oversees the quality and
integrity of external financial reporting, including the accuracy,
completeness, balance and timeliness of financial statements.
It reviews the Company’s full and half-year financial statements
and makes recommendations to the Board concerning
accounting policies, areas of judgement, compliance with
accounting standards, NZX and legal requirements, and
the results of the external audit. All matters required to be
addressed and for which the Audit and Risk Committee has
responsibility were addressed during FY22.
Blis has published its full and half-year financial statements that
were prepared in accordance with relevant financial standards.
The full year financial statements are set out on pages 39 - 61.
The CEO and CFO have confirmed in writing to the Board that
the Company’s external financial reports present a true and fair
view in all material aspects. These representations are given
on the basis that a sound system of internal controls and risk
management is operating effectively in all material respects in
relation to financial reporting.
In addition to releasing the full and half-year results
Blis provides an update on financial and non—financial
performance for the first and third quarters. Revenue and
EBITDA for the quarter and year to date, general commentary on
market conditions and an update on guidance is given.
The Board does not believe that the Company has any material
exposure to economic, environmental or social sustainability
risks that are not appropriately managed. The material risks
which may impact the Company’s ability to achieve its strategic
objectives and secure its future financial prospects, are
managed through the strategic planning process.
Work continues on suitable sustainability-reporting framework.
The project remains in its early stages and will involve preparing
a series of financial and non-financial targets for reporting
on regularly. This will ensure that non-financial reporting is
informative, includes forward looking assessments and aligns
with key strategies and metrics monitored by the Board. An
overview of the Company’s sustainability programme is set out
at pages 15-16.
Principle 5 - Remuneration
“The remuneration of directors and executives should be
transparent, fair and reasonable.”
Remuneration Report
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies and
packages for Directors as well as the Executives.
The Company’s remuneration philosophy is aimed at attracting,
retaining and motivating employees of the highest quality at
all levels of the organisation. It is based on practical, guiding
principles and a framework that provides consistency, fairness
and transparency while having regard to the risk appetite of the
Company and alignment to its long-term strategic goals.
All remuneration packages are reviewed annually in the context
of individual and Company performance, market movements
and expert advice.
Non-executive Directors
The structure of non-executive Director remuneration is
separate and distinct from the remuneration of the CEO and
other executives.
The Board seeks to set aggregate remuneration for non-
executive Directors at a level which provides the Company with
the ability to attract and retain Directors of the highest calibre,
whilst incurring a cost which is acceptable to shareholders.
No remuneration is payable to Directors unless it is approved
by the Company’s shareholders, or permitted under the NZX
Listing Rules in the event of an increase in the total number of
Directors.
The NZX Listing Rules specify that shareholders can approve a
per Director remuneration amount or an aggregate Directors’
fee pool. The Board has adopted a remuneration pool approach,
as referred to in NZX Guidance Note - Governance. Shareholders
approved an aggregate remuneration pool for non-executive
Directors of $309,000 per annum in August 2020. Subject to
external review, an increase of the director fee pool will likely be
proposed at the 2023 Annual Shareholders Meeting.
Within the fee pool available, the Board reviews its fees
annually to ensure the Company’s non-executive Directors are
fairly remunerated for their services, recognising the level of
skill and experience required to fulfil the role, and to enable the
Statement of Corporate Governance continued
Statement of Corporate Governance continued
Blis Technologies Limited29
Company to attract and retain talented non-executive Directors.
The process involves benchmarking against a group of peer
companies.
In addition, the Board reviews the Remuneration Committee
structure and appropriate level of resourcing required to make
an on-going contribution to long term value creation. Non-
executive Directors have no entitlement to any performance-
based remuneration or participation in any share-based
incentive schemes.
Each non-executive Director receives a fee for services as a
Director of the Company and an additional fee is also paid to the
Chair, and members of the Board Committees to recognise the
additional time commitment required for that role. All Directors
are entitled to be reimbursed for reasonable costs associated
with carrying out their duties.
For the period 1 August 2021 to 31 March 2022 the allocation of
the fee pool was as follows:
Board Audit and Risk Remuneration
Committee Committee
Chair $85,000 $10,000 $7,000
Deputy Chair $55,000 N/A N/A
Member $45,000 $7,000 $3,000
For the period 1 April 2021 to 31 July 2021 the allocation of the
fee pool was as follows:
Board Audit and Risk Remuneration
Committee Committee
Chair $90,000 N/A $6,000
Deputy Chair $60,000 N/A N/A
Member $45,000 $7,000 $3,000
Non-executive Directors are encouraged to be shareholders, but
are not required to hold shares in the Company.
Fees payable to the non-executive Directors of the Company for
the period 1 April 2021 to 31 March 2022 were as follows:
Board Audit and Risk Remuneration
Committee Committee Total
G Plunket 76,667 - - 76,667
A Balfour 51,667 - 3,000 54,667
A McCammon* 19,960 - - 19,960
A Offen 60,000 6,667 - 66,667
Dr B Richardson 45,000 7,000 - 52,000
T Rönnlund** 30,000 - - 30,000
Dr A Stewart 45,000 - 6,667 51,667
*A McCammon appointed 21 October 2021
**T Rönnlund appointed 22 July 2021
Remuneration of the CEO and Employees
The Company is committed to providing a remuneration
framework that promotes a high-performance culture
and aligns rewards to the creation of sustainable value for
shareholders. The underlying principle is to reward employees
for Company and business unit performance against targets set
by reference to appropriate benchmarks and key performance
indicators and to:
• Align their interests with those of shareholders; and
• Ensure total remuneration is competitive by market
standards.
Total remuneration is made up of fixed remuneration, a short
term incentive (STI) and a long term incentive (LTI).
Fixed remuneration includes all benefits, allowances and
deductions.
The STI and LTI performance incentives are “at-risk” and are
directly linked to both the performance of the Company and to
each individual’s performance while promoting the Company’s
long-term success.
The total remuneration earned by the Executive is set out in
note 5 to the financial statements.
(i) Fixed annual remuneration
Remuneration levels are reviewed annually to ensure that
they are appropriate for the responsibility, qualifications and
experience of the Executives and are competitive with the
market.
The Executives receive their fixed annual remuneration in
cash and a limited range of prescribed fringe benefits such as
superannuation, motor vehicle and health insurance. The total
employment cost of any remuneration package, including fringe
benefit tax, is taken into account in determining an employee’s
fixed annual remuneration.
For the financial year ended 31 March 2022, the CEO received
$324,158 (2021: $328,944) in fixed annual remuneration.
(ii) Variable remuneration – STI Scheme
The objective of the STI Scheme is to link the achievement
of the annual financial and operational targets with the
remuneration received by the Executives charged with meeting
those targets. The total potential remuneration under the STI
Scheme is set with a maximum of 30% for the CEO and 20% for
other Executives of fixed annual remuneration so as to provide
sufficient incentive to the Executive to achieve the targets such
that the cost of the Company is flexible and in line with the
trading outcome for the year.
2022 Annual Report30
Actual STI Scheme payments granted to the CEO and each
nominated Executive depend on the extent to which specific
targets, set at the beginning of each year, are met. The
targets may include a weighted combination of Company,
Departmental, Financial and Non-Financial.
In determining the amount to be allocated the Board considers
the performance against the targets.
For the financial year ended 31 March 2022 there were four
nominated executives in the STI scheme (31 March 2021: four).
STI Scheme payments relating to the financial year ended
31 March 2022 are delivered as a taxable cash bonus and
are payable on completion of the annual audited financial
statements. The total accrual for FY22 for all nominated
executives in the STI Scheme is $nil (FY21: $125,145). The actual
amount paid for FY22 was $132,200 (FY21: $174,225).
In addition to the STI Scheme, the Board reserves the ability
to pay ad hoc bonus payments to any employee, again directly
related with the trading outcome.
(iii) Variable remuneration – LTI Scheme
The objective of the LTI Scheme is to align the executive with
shareholder interests over the longer term, and provide a longer
term employee retention benefit.
On 10 September 2021, the Company granted performance
share rights (PSRs) to the executive. The previous PSR issue
occurred on 21 December 2020. There were no PSR schemes
prior to this date. Details of the performance criteria are
detailed in note 5 to the financial statements.
CEO remuneration
Taxable
Salary Benefits* Sub-total STI LTI** Total
FY22
324,158 11,181 335,339 48,000 12,404 395,743
FY21
328,944 12,653 341,597 93,000 3,773 438,370
*Includes the value of benefits including health care, superannuation, vehicle
and low interest loan.
**LTI includes PSRs awarded to the CEO during the financial year. In the 2021
financial year 1,023,000 PSRs were granted (2021: 1,033,000). PSRs granted in
2021 will vest, if the performance criteria are met, in the 2024 financial year.
details of the plans and valuation methodology are set out in Note 5 to the
financial statements.
Total remuneration paid is fixed remuneration and any
STI Scheme payment physically received during the year.
Performance based payments are paid in the following year.
The CEO’s STI scheme payment for FY22 comprises several
financial and non-financial performance measures. Overall, the
STI is set at 30% of fixed remuneration. A breakdown of the STI
components follows:
Performance Measures Percent Achieved
50% based on financial revenue
and profitability targets FY21 Not Achieved
50% based on non-financial
targets FY21 Achieved
Employee remuneration
The number of employees of the Company (including former
employees) who received remuneration and other benefits in
excess of $100,000 in the period 1 April 2021 to 31 March 2022
are shown below:
Remuneration Banding Number of Employees
FY22 FY21
100,001 – 110,000 3 2
110,001 – 120,000 1 1
120,001 – 130,000 1 -
130,001 – 140,000 3 -
160,001 – 170,000 - 1
180,001 – 190,000 1 -
200,001 – 210,000 1 -
210,001 – 220,000 - 1
240,001 – 250,000 1 1
380,001 – 390,000 1 -
430,001 – 440,000 - 1
Principle 6 – Risk Management
“Directors should have a sound understanding of the material
risks faced by the issuer and how to manage them. The
board should regularly verify that the issuer has appropriate
processes that identify and manage potential and material
risks.”
Risk Management Framework
Blis operates in an environment that contains operational
and strategic risks. Risks are actively managed to ensure
Blis operates a safe workplace and is able to sustain the
achievement of its business objectives while at the same
time accepting an appropriate level of commercial risk that is
consistent with desired profitability.
Statement of Corporate Governance continued
Statement of Corporate Governance continued
Blis Technologies Limited31
The Board is responsible for ensuring that key business and
financial risks are identified, and that appropriate controls and
procedures are in place to effectively manage those risks.
The Audit and Risk Committee has overall responsibility
for ensuring that Company’s risk management framework
is appropriate and that risks are identified, considered and
managed. Risk management is a standing item on the agenda
for Audit and Risk Committee meetings, with detailed reports
provided by management.
A Risk Management Policy provides guidance on the Board’s
approach to risk management. The objectives of the Risk
Management Policy are:
• To allow Blis to pursue opportunities that involve risk in
an informed manner, so as to meet the expectations of
stakeholders;
• To enable full and due consideration to be given to the
balance of risk and reward in pursuing the achievement of
Blis’ business objectives;
• To apply risk management practices to enhance strategic,
tactical and operational decision making; and
• To ensure that Blis operates in a sustainable manner.
The policy is available at the Investor Centre.
Insurance
In managing the Company’s business risks, the Board approves
and monitors policy and procedures in areas such as treasury
management, financial performance, taxation and delegated
authorities. Blis has insurance policies in place covering most
areas where risk to its assets and business can be insured at a
reasonable cost.
Product Quality and Safety
Ensuring the safety and quality of our products is a key priority.
We establish processes that effectively manage risk and drive
continuous improvement in product quality throughout the
product production cycle.
We have introduced proactive quality control mechanisms
within our manufacturing operations. Through the use of data
collection and statistical analysis, we are improving the control
of our manufacturing processes, with the aim of being able to
intervene and correct a process prior to product quality being
compromised. This approach is providing further assurance that
our customers receive high quality products that are safe and
effective.
Health, Safety and Wellbeing
Overall responsibility for health and safety, specifically for
setting of high-level strategy and policy, resides with the
Board which is committed to continuous improvement and
progressively higher standards of work health and safety for the
benefit of all employees and others who work in, use or visit the
Company’s workplace.
The principles of the health and safety framework are to:
• Understand and comply with all applicable health and safety
legislation and regulations;
• Establish objectives and management systems consistent
with health and safety best practice; and
• Ensure all officers and workers engage in creating a positive
workplace culture to support health, safety and wellbeing.
The Executive are responsible for implementation of the health
and safety framework and will:
• Determine and implement business and action plans to give
effect to Board strategy;
• Acquire and maintain good understating of health, safety and
wellbeing matters;
• Be responsible and accountable for health and safety
compliance;
• Promote and role-model high workplace health, safety and
wellbeing standards; and
• Ensure business objectives are complementary to health,
safety and wellbeing objectives.
Management reports on a monthly basis to the Board which
consists of the following lead and lag indicators - H&S
Committee minutes, monthly hazard assessment, incidents &
accidents (including near miss incidents), good news stories,
achievements and training activities.
No lost time injuries, injuries resulting in workers being unable
to perform normal duties at next shift, have occurred over the
last four years.
2022 Annual Report32
Principle 7 - Auditors
“The board should ensure the quality and independence of the
external audit process.”
External Auditor
Oversight of the Company’s external audit arrangements to
safeguard the integrity of financial reporting is the responsibility
of the Audit and Risk Committee.
Blis maintains an Auditor Independence Policy to ensure that
audit independence is maintained, both in fact and appearance.
The quality of the audit opinion is considered to be paramount.
Accordingly, any compromises to auditor objectivity and
independence that are considered to exist require appropriate
safeguards to eliminate or reduce the risk of compromise to an
acceptable level.
Blis has adopted the following requirements in relation to
auditor independence:
• the Blis auditor is required to comply with relevant
independence requirements promulgated by the Financial
Markets Authority and other governing bodies;
• the Audit and Risk Committee must approve the appointment
of the auditor to provide any non-audit services to the
Company or its subsidiaries;
• the auditor is required to report to the Audit and Risk
Committee annually on matters pertaining to their
independence; and
• the external auditor attends the Company’s annual meeting
each year to answer questions from shareholders in relation
to the audit.
Material business risks mitigation
After completing the risk management processes outlined on the previous page, the following key business and financial risks have been
identified.
Area Principal risk Strategies to mitigate
Product quality
and customer
safety
Customer harm caused as a result of using
Blis products
Our production facility operates under a Food Control Plan which requires
high standards and procedures to ensure quality and safety from our
production. We work with our suppliers and contract manufacturers to
ensure high standards are adhered to. Our company values also include a
focus on high quality standards across our business.
Market access
Loss of regulatory approval to market and
sell Blis products in certain countries
Blis has robust regulatory affairs processes for obtaining and maintaining
product licenses, as well as a quality management system that ensures
compliance with applicable regulatory requirements.
Health and
safety
Work related injuriesPractices and processes are reviewed annually by an accredited Workplace
Health and Safety independent expert.
Health, safety and wellbeing metrics reported regularly to the Board.
Intellectual
Property
Third parties assert IP rights against usA comprehensive patent portfolio across our products is held and
maintained. These are complemented by trademarks, trade secrets and
specialist know how. Market searches undertaken in product development
phase of product design. Competitor patent filings are actively monitored.
Business
continuity
Loss of continuity and quality of supplyWe actively monitor of quality of raw materials, end products, production
processes and systems. Business impact analysis is used to identify,
understand and quantify the impact of a material disruption to a key
facility, location, supplier or business process.
Technology and know-how for future production of both BLIS K12™ and
BLIS M18 ™ is transferred to an offshore fermentation supplier which
ensures production can be continued in the event of a failure at our New
Zealand based supplier.
Cyber security
and data
protection
Cyber security attack results in disruption
to operations and data breach.
Independent review of control mechanisms is undertaken.
Competitor
activity
Increasing demand for probiotics may
see greater pricing competition from
established and new competitors.
Competition may also come from other
products with similar health benefits.
The Company’s market position is based on a reputation for quality and
scientific support for our unique strains. Innovation and development
complement this market position.
Statement of Corporate Governance continued
Statement of Corporate Governance continued
Blis Technologies Limited33
Internal audit
The Company does not have a formal internal audit function,
however it does have internal processes and controls that are
considered to be appropriate for the size and complexity of the
organisation. The Audit and Risk Committee carefully considers
the auditor’s management report which lists its key findings and
recommendations about significant matters arising from the
audit.
Principle 8 – Shareholder Relations
“The board should respect the rights of shareholders and foster
relationships with shareholders that encourage them to engage
with the issuer.”
Shareholder Rights and Relations
The Company is committed to regularly communicating with
shareholders and other stakeholders in a timely, accurate and
clear manner with respect to both procedural matters and
major issues affecting the Company.
To achieve this, the Company communicates through a range
of forums and publications. Annual reports, NZX releases,
governance policies and charters, and a variety of corporate
information is available at the Investor Centre.
Each shareholder is entitled to receive a hard copy of each
annual report on request.
Documents relating to annual shareholder meetings are
available at the Investor Centre.
Annual shareholder meetings to date have been held at a venue
in Dunedin, reflecting the head office location for the Company,
as well as being live streamed to shareholders joining online.
The speeches and slides are lodged with NZX prior to the start of
the meeting. Shareholders may raise matters for discussion at
the annual shareholder meeting either in person or by emailing
the Company with a question to be asked.
Electronic Communications
Shareholders have the option of receiving their communications
electronically. Contact details for the Company’s head office are
available on the Blis website.
Major Decisions
The Directors’ commitment to timely and balanced disclosure is
set out in its Continuous Disclosure Policy and Communications
Policy. The commitments include advising shareholders on
any major decisions. Where voting on a matter is required, the
Board encourages investors to attend the meeting or to send in
a proxy vote.
Equity Issues
In the event of a capital raising, the Board will carefully consider
and, where practical, will favour an offer of shares to existing
shareholders on a pro-rata basis and on no less favourable
terms before offering shares to other investors.
Dividend Policy
Under the current strategy of full reinvestment into growth and
pipeline development, no dividend has been declared.
Notice of Meeting
The Notice of Meeting will be lodged with NZX at least 20
working days prior to the annual shareholder meeting and will
be available in the Investor Centre
2022 Annual Report34
Directors’ Shareholdings
The following table sets out, for the purposes of the disclosures required under Listing Rule 3.7.1 (d) of the NZX Listing Rules, the relevant
interests of Directors and associated persons of the Directors in equity securities of the Company as at 31 March 2022:
Name of Director Number of Equity Securities in which a relevant interest is held by a director
G Plunket Ordinary 800,000 (a)
A Balfour
- -
A McCammon - -
A Offen Ordinary 31,157,388 (b)
Dr B Richardson Ordinary 17,903,624 (c)
T Rönnlund Ordinary 166,148,034 (d)
Dr A Stewart Ordinary 350,000 (e)
Note that particular shareholdings can appear under more than one director.
(a) The number of equity securities in which Mr G Plunket holds a relevant interest includes 800,000 ordinary shares held by Mr Plunket
personally.
(b) The number of equity securities in which Mr A P Offen holds a relevant interest includes 31,157,388 ordinary shares, held by
AP Offen, BJ Offen and Downie Stewart Trustee Limited, BJ Offen and Edinburgh Securities Limited. Mr Offen is a director and
beneficial shareholder of Edinburgh Securities Limited.
(c) The number of equity securities in which Dr B Richardson holds a relevant interest includes 17,903,624 ordinary shares held by Dr B
Richardson and Mrs JV Richardson.
(d) The number of equity securities in which Mr T Rönnlund holds a non-beneficial interest includes 166,148,034 held by Probi AB. Mr T
Rönnlund is the Chief Executive of Probi AB.
(e) The number of equity securities in which Dr A Stewart holds a relevant interest includes 350,000 ordinary shares held by Custodial
Services Limited.
Director’s Share Dealings
The following Directors (or associated entities in which the Directors have relevant interests) acquired or disposed of equity securities in
the Group during the year ended 31 March 2022 as entered in the interests register of the Company:
Name of Director Transaction No. of Shares Price per share Date of acquisition/disposal
T Rönnlund Issue of ordinary shares to Probi AB 166,148,034 5.53 cents 8 July 2021
Disclosures of Interest by Directors
Name of Director Organisation Active Interests
G Plunket North Otago Irrigation Company Limited Director
Orokonui Foundation Trust Trustee
Orokonui Ecosanctuary Limited Director
Otago Natural History Trust Trustee
Ports of Auckland Limited Director
Directors’
interests.
Blis Technologies Limited35
Directors’ Interests continued
A Balfour Bottom Right-Hand Corner Limited Director/Shareholder
Les Mills International Limited Director/Shareholder
Little Stream Water Company Limited Director/Shareholder
Pioneer Energy Limited Director
The Warehouse Group Limited Director
Wakatipu High School Trustee
RealNZ Limited (and its wholly owned subsidiaries) Director
A McCammon Augusto Limited Chief Executive New Zealand
Flick Electric Limited Director
Pic’s Peanut Butter Advisory Board Director
Scarborough Wright Trustee Limited Director
A Offen Blis Functional Foods Limited Director
Bark Avenue Limited Director/Shareholder
Edinburgh Equity Limited Director/Shareholder
Edinburgh Securities Limited Director/Shareholder
Mill Park 60 Limited Director/Shareholder
Mill Park 92 Limited Director/Shareholder
Offen Nominee Limited Director/Shareholder
Plaza Funds Management Limited Director/Shareholder
Taieri Investments Limited Director/Shareholder
Dr B Richardson CertusBio Director/Shareholder
Otago Classic Spares Limited Director/Shareholder
Zircon Services Limited Director/Shareholder
T Rönnlund Bonnier Business Press AB (Sweden) Director
Bonnier Healthcare Sweden AB (Sweden) Director
International ProBiotics Association (Europe) Director
Probi AB Chief Executive
Vital Nutrients Holdings LLC (USA) Director
Dr A Stewart Arable Food Industry Council Executive committee member
Foundation for Arable Research Chief Executive
GIA Brown Marmorate Stink Bug Council Council Member
GIA Plant Biosecurity Council Governance Group Member
Good Farming Practice Governance Group Member
MBIE Tissue Culture Partnership Chair Governance Group
MPI A Lighter Touch PGP Governance Group Member
Seed & Grain Readiness & Response Chair Governance Group
Seed Industry Research Centre Advisory Board member
Vegetable Research & Innovation Governance Group Member
2022 Annual Report36
Use of Company information
There were no notices from Directors regarding the use of
Company information.
Indemnities and Insurance
Pursuant to s162 of the Companies Act 1993 and the
Company’s Constitution, the Company has entered into
deeds of access, insurance and indemnity, with the directors
of the Company to indemnify them to the maximum extent
permitted by law, against all liabilities which they may incur
in the performance of their duties as directors of any company
within the Group (which includes Blis Technologies LImited
and its subsidiary, Blis Functional Foods Limited). Insurance
cover extends to directors and officers for the expenses of
defending legal proceedings and the cost of damages incurred.
Specifically excluded are proven criminal liability and fines
and penalties other than those pecuniary penalties which are
legally insurable. In accordance with commercial practice, the
insurance contract prohibits further disclosure of the terms
of the policy. All Directors who voted in favour of authorising
the insurance certified that in their opinion, the cost of the
insurance is fair to the Company.
Donations
There were no donations made by the Company during the
year ended 31 March 2022 (2021: Nil)
Directors’ Interests continued
Directors’
Responsibility
Statement.
The Directors of Blis Technologies Limited are pleased to
present to shareholders the financial statements for the Group
for the year ended 31 March 2022.
The Directors are responsible for presenting financial
statements in accordance with New Zealand law and generally
accepted accounting practice, which fairly presents the
financial position of the Group as at 31 March 2022 and the
results of its operations and cash flows for the year ended on
that date.
The Directors consider the financial statements of the Group
have been prepared using accounting policies which have been
consistently applied and supported by reasonable judgements
and estimates and that all relevant financial reporting and
accounting standards have been followed.
The Directors believe that proper accounting records have
been kept which enable with reasonable accuracy, the
determination of the financial position of the Group and
facilitate compliance of the financial statements with the
Financial Reporting Act 2013 and the Financial Markets
Conduct Act 2013.
The Directors consider that they have taken adequate steps to
safeguard the assets of the Group, and to prevent and detect
fraud and other irregularities. Internal control procedures
are also considered to be sufficient to provide a reasonable
assurance as to the integrity and reliability of the financial
statements.
The Financial Statements are signed on behalf of the Board by:
Geoff Plunket Tony Offen
Chairman Director
30 May 2022 30 May 2022
Blis Technologies Limited37
5 Year Trend.
2022 2021 2020 2019 2018
($000) ($000) ($000) ($000) ($000)
Revenue 8,965 10,613 10,642 8,239 5,285
Earnings before interest, tax, depreciation
and amortisation (EBITDA) (2,061) 975 2,119 922 (427)
Depreciation and amortisation 654 406 513 525 610
Net interest (revenue)/ expense (8) 5 4 16 5
Net profit after tax (NPAT) (2,707) 564 1,602 381 (1,042)
Net debt 35 83 128 829 290
Shareholder’s Equity 12,149 5,662 5,056 3,421 3,007
Total assets 14,141 7,806 7,058 5,201 3,888
Current assets 11,451 5,146 5,746 3,966 2,260
Current liabilities 1,478 1,812 1,642 1,651 712
Working capital 9,973 3,334 4,104 2,315 1,548
Net tangible assets (NTA)
1
9,999 3,473 4,311 2,856 2,164
Cash generated from operations (2,305) 589 3,197 (583) 118
Number of shares on issue (‘000) 1,273,802 1,107,654 1,107,654 1,107,654 1,107,654
Earnings per share (EPS) – basic (cents) (0.22) 0.05 0.14 0.03 (0.09)
Share price at 31 March 0.04 0.06 0.06 0.02 0.02
NTA per share (cents) 0.78 0.31 0.39 0.26 0.20
Cash conversion ratio
2
111.8% 60.3% 150.9% (63.2%) (27.6%)
Return on shareholders’ equity
3
(22.3%) 10.0% 31.7% 11.1% (34.7%)
Return on assets
4
(24.7%) 7.7% 26.2% 8.7% (24.7%)
Gearing ratio
5
0.3% 1.4% 2.5% 19.5% 8.8%
EBIT to revenue ratio (30.3%) 5.4% 15.1% 4.8% (19.6%)
Current assets to current liabilities (times) 7.7 2.8 3.5 2.4 3.2
% CHANGE ON PRIOR YEAR
Revenue (15.5%) (0.3%) 29.2% 55.9% (19.2%)
EBITDA (311.4%) (54.0%) 129.8% 315.9% (173.6%)
NPAT (580.0%) (64.8%) 320.5% 136.6% (4,241.7%)
EPS (540.2%) (64.8%) 320.5% 136.6% (4,241.7%)
1 . Calculated as Net Assets less right of use assets and finite life intangible assets.
2. Calculated as cash generated from operations divided by EBITDA.
3. Calculated as net profit after tax divided by closing shareholders’ equity.
4. Calculated as EBIT divided by average total assets.
5. Gearing ratio is calculated as net debt divided by the sum of net debt and shareholders’ equity.
2022 Annual Report382022 Annual Report38
Financial
Statements
2022
Blis Technologies Limited39
Consolidated Statement of
Comprehensive Income.
For the year ended 31 March 2022
Notes 2022 2021
($000) ($000)
REVENUES
Revenue 2 (a) 8,965 10,613
Other income 2 (b) 488 226
Total Revenue and Other Income 9,453 10,839
EXPENSES
Distribution expenses 263 257
Marketing expenses 3,436 2,533
Occupancy expenses 70 66
Employee benefits 3,594 2,566
Raw materials and consumables 1,925 1,877
Operating expenses 2,827 2,950
Finance expenses 45 26
Total Expenses 2 (c) 12,160 10,275
SURPLUS / (DEFICIT) BEFORE TAX 2, 4, 5 (2,707) 564
Income tax expense 3 - -
SURPLUS / (DEFICIT) FOR THE PERIOD (2,707) 564
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME (2,707) 564
Earnings / (deficit) per Share:
Basic (cents per ordinary share) 15 (0.22) 0.05
Diluted (cents per ordinary share) 15 (0.22) 0.05
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
2022 Annual Report40
Consolidated Statement of
Changes in Equity.
For the year ended 31 March 2022
Share
Based
Notes Share Retained Payment Total
Capital earnings/ Equity attributable
(deficit) Reserve to Group
($000) ($000) ($000) ($000)
OPENING EQUITY – 1 APRIL 2020 37,424 (32,394) 26 5,056
Surplus / (deficit) for the year - 564 - 564
Other comprehensive income - - - -
Total comprehensive Income - 564 - 564
Equity contributions and distributions
CEO share option equity reserves 15,16 45 - (13) 32
Employee performance rights plan reserve 16 - - 10 10
45 - (3) 42
CLOSING EQUITY – 31 MARCH 2021 37,469 (31,830) 23 5,662
OPENING EQUITY – 1 APRIL 2021 37,469 (31,830) 23 5,662
Surplus / (deficit) for the year - (2,707) - (2,707)
Other comprehensive income - - - -
Total comprehensive Income - (2,707) - (2,707)
Equity contributions and distributions
Share capital issued 9,188 - - 9,188
Capital raising costs paid (54) - - (54)
CEO share option equity reserves 15,16 46 - (13) 33
Employee performance rights plan reserve 16 - - 27 27
9,180 - 14 9,194
CLOSING EQUITY – 31 MARCH 2022 46,649 (34,537) 37 12,149
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61
Blis Technologies Limited41
Consolidated
Balance Sheet.
As at 31 March 2022
Notes 2022 2021
($000) ($000)
ASSETS
CURRENT ASSETS
Cash and short term deposits 6 8,519 2,187
Trade and other receivables 7 1,751 1,572
Prepayments 298 308
Inventory 8 782 1,004
NZX Bond 6 75 75
Foreign exchange contracts 22 (e) 26 -
TOTAL CURRENT ASSETS 11,451 5,146
NON CURRENT ASSETS
Property, plant and equipment 9 540 471
Finite life intangible assets 10 1,455 1,711
Right-of-use assets 11 695 478
TOTAL NON CURRENT ASSETS 2,690 2,660
TOTAL ASSETS 14,141 7,806
LIABILITIES
LESS CURRENT LIABILITIES
Trade and other payables 12 1,238 1,549
Current borrowings 13 35 46
Lease liabilities 11 205 200
Foreign exchange contracts 22 (e) - 17
TOTAL CURRENT LIABILITIES 1,478 1,812
NON CURRENT LIABILITIES
Non current borrowings 13 - 37
Lease liabilities 11 514 295
TOTAL NON CURRENT LIABILITIES 514 332
TOTAL LIABILITIES 1,992 2,144
NET ASSETS 12,149 5,662
OWNERS EQUITY
Share capital 15 46,649 37,469
Retained earnings / (deficits) (34,537) (31,830)
Share based payment equity reserves 16 37 23
TOTAL EQUITY 12,149 5,662
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
2022 Annual Report42
Consolidated Statement
of Cashflows.
For the year ended 31 March 2022
Notes 2022 2021
($000) ($000)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from / (applied to):
Receipts from customers 9,141 10,853
Interest received 53 22
Payments to suppliers and employees (11,454) (10,260)
Finance costs (45) (26)
Net cash inflow / (outflow) from operating activities 21 (2,305) 589
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from / (applied to):
Purchase of intangible assets 10 (49) (1,443)
Purchase of property, plant and equipment 9 (213) (96)
Sale of property, plant and equipment 9 - 56
Net cash inflow / (outflow) from investing activities (262) (1,483)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from / (applied to):
Repayment of borrowings (48) (45)
Repayment of lease liabilities 11 (198) (127)
Proceeds from share capital issued 15 9,188 -
Capital raising costs paid 15 (54) -
Receipt of share option 33 33
Net cash inflow / (outflow) from financing activities 8,921 (139)
Net Increase / (Decrease) in cash held 6,354 (1,033)
Add cash and short-term deposits at start of period 2,187 3,214
Foreign exchange differences (22) 6
Balance at end of period 8,519 2,187
COMPRISED OF:
Cash and short-term deposits 8,519 2,187
8,519 2,187
The above consolidated statements should be read in conjunction with the accompanying notes on pages 43 to 61.
Blis Technologies Limited43
1. BASIS OF REPORTING
Reporting Entity
The consolidated financial statements presented are those of
Blis Technologies Limited (the “Company”) and its subsidiary
Blis Functional Foods Limited (the “Group”).
The Group’s principal activity is developing healthcare products
based on strains of bacteria that produce bacteriocin activity for
sale in New Zealand and overseas.
Statutory Base
The Company is a profit-oriented entity, domiciled in New
Zealand, registered under the Companies Act 1993 and listed
on the New Zealand Stock Exchange. The Company is an FMC
reporting entity under the Financial Markets Conduct Act 2013.
The financial statements have been prepared in line with the
requirements of these Acts and the Financial Reporting Act
2013.
Basis of Preparation
The financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice
(“NZ GAAP”). They comply with the New Zealand Equivalents
to International Financial Reporting Standards (“NZ IFRS”) and
other applicable financial reporting standards as appropriate
for profit-oriented entities. The financial statements comply
with International Financial Reporting Standards (“IFRS”).
The Financial Statements were authorised for issue by the
Board of Directors on 30th May 2022.
Basis of Measurement
The financial statements have been prepared on the historical
cost basis, except for the derivative financial instruments that
are measured at fair value at the end of each reporting period as
explained in the relevant accounting policies.
Historical cost is based on the fair values of the consideration
given in exchange for assets.
Accounting policies are selected and applied in a manner which
ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that
the substance of the underlying transactions or other events is
reported.
Notes to and Forming
Part of the Consolidated
Financial Statements.
Unless otherwise stated the accounting policies set out below
have been applied in preparing the consolidated financial
statements for the year ended 31 March 2022 and 31 March
2021.
The financial statements are presented in thousands of
New Zealand dollars. The New Zealand dollar is the Group’s
functional currency.
Critical Judgements, Estimates and Assumptions
In the application of NZ IFRS, the Directors are required to make
judgements, estimates and assumptions about carrying values
of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based
on historical experience and various other factors that are
believed to be reasonable under the circumstance, the results of
which form the basis of making the judgements. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future
periods.
Judgements made by the Directors in the application of NZ IFRS
that have significant effects on the financial statements and
estimates with a significant risk of material adjustments in the
next year include:
• Assessing the point at which a project has moved from the
research phase to the development phase and which costs
may be capitalised as internally generated intangible assets.
Refer to note 10 for further information.
• The Group determines whether finite life intangibles
are impaired at least on an annual basis. Where there is
an indication of impairment then an estimation of the
recoverable amount of the finite life intangible assets is
required. Determining the recoverable amounts of intangible
assets requires judgement in relation to the effects of
uncertain future events at balance date. Assumptions are
required with respect to future cash flows and discount rates
used. Refer note 10 for sensitivities and assumptions used.
• The determination of separate performance obligations
for the recognition of revenue. Refer to note 2 for further
information.
For the year ended 31 March 2022
2022 Annual Report44
Notes to and Forming Part of the Consolidated Financial Statements continued
• Tax Losses - The recognition of a deferred tax asset arising
from prior year tax losses and temporary differences is
dependent on generating future taxable profits. No deferred
tax asset has been recognised as at 31 March 2022 but this
position will be reviewed in future periods as the Company
demonstrates a consistent track record of profitable Group
results. The Group’s ability to utilise tax losses is explained in
note 3.
Significant Accounting Policies
The principal accounting policies applied in the preparation and
presentation of the financial statements are set out below or in
the notes with the item to which they relate, where policies are
specific to certain transactions or balances.
These policies have been consistently applied unless otherwise
stated.
Basis of Consolidation
The Group financial statements incorporate the financial
statements of the Company and all entities controlled by the
Company (its subsidiaries) that comprise the Group, being Blis
Technologies Limited (the parent entity) and its subsidiary
Blis Functional Foods Limited. Control is obtained when the
Company has power over the investee, is exposed to or has
rights to variable returns from its investment, and has the ability
to use its power to affect returns. Consistent accounting policies
are employed in the preparation and presentation of the group
financial statements.
The results of subsidiaries acquired or disposed of during
the year are included in the Consolidated Statement of
Comprehensive Income from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Foreign Exchange
In the course of normal trading activities, the Group undertakes
transactions denominated in foreign currencies, hence
exposures to exchange rate fluctuations arise. Transactions in
currencies other than the New Zealand dollar are recognised at
the rate of exchange prevailing on the dates of the transactions.
Trade and other receivables, trade and other payables, the
Canadian Dollar (CAD) denominated bank account, the Euro
denominated bank account and the United States Dollar (USD)
denominated bank account balances are translated at the
exchange rates prevailing at the end of each reporting period
as sourced from the Reserve Bank of New Zealand. Exchange
differences are recognised in the statement of comprehensive
income in the period in which they occur.
Goods and Services Tax (GST)
All items in the balance sheet are stated exclusive of GST, with
the exception of receivables and payables, which include GST.
All items in the statement of comprehensive income are stated
exclusive of GST.
The GST component of cash flows arising from investing and
financing activities which is recoverable from, or payable to,
the taxation authority is classified as operating cash flows.
New and revised NZ IFRS Standards and Interpretations
Issued but not yet adopted
All mandatory new and revised standards and interpretations
have been adopted in the current year. None had a material
impact on these financial statements
At the date of authorisation of these financial statements,
certain new standards and interpretations to existing standards
have been published but are not yet effective. The Group
expects to adopt these when they become mandatory. None
are expected to materially impact the Group’s financial
statements.
2. SURPLUS / (DEFICIT) FROM OPERATIONS
Policy
Revenue is recognised from the following major sources:
• Sale of goods;
• Right to access; and
• Grants.
Revenue is measured at the fair value of the consideration the
Group expects to be entitled to in accordance with customer
contracts and excludes amounts collected on behalf of third
parties.
Sale of Goods
The Group sells ingredients and finished goods to
manufacturer and wholesale customers. In addition to product
sales, the Group provides sales training and support to its
customers. The Group has determined that the sales training
and support is not a distinct performance obligation.
In addition to selling products to customers, the Group also
arranges delivery of the products to its customers. Where
control of the product passes to the customer on departure the
delivery services represent a separate performance obligation.
The Group is an agent in the performance of the delivery
service and the allocated revenue is recognised net of costs.
Revenue from the sale of goods is recognised when the
Group has transferred control of the goods to the customer,
which is typically at the point goods are dispatched. For
some customers, the customer does not obtain control until
the goods have been delivered to their premises. For these
customers, revenue is recognised at the date the goods are
delivered. One of the Group’s major customers has entered
Blis Technologies Limited45
Notes to and Forming Part of the Consolidated Financial Statements continued
into a consignment arrangement. Sales to this customer, are
not recognised until the sale is made to the end customer.
Rebates
The Group provides rebates to certain customers based on the
quantity of products purchased during the period. Rebates are
offset against revenue. To estimate the variable consideration
for the expected rebates, the Group applies the expected
value method. The Group recognises a refund liability for the
expected rebates.
Right to access
Right to access agreements with customers provide exclusive
rights to the customer for specified products throughout the
contract period.
Revenue from right to access agreements is recognised over
time, on a straight-line basis over the contract term as this
depicts the period of exclusive supply to the customer.
A material right is recognised as a separate performance
obligation where the customer has the right to extend the
access period at a discounted price. In such instances, the
Group recognises revenue when the rights are exercised or
expired. The material right is estimated based on the likelihood
of the customer exercising the option.
Contract liabilities
Revenue is recognised when all associated obligations have
been met. Where consideration has been received but the
associated obligations have not been met, for instance goods
have not yet been provided, it will be recognised as a contract
liability on the balance sheet.
Grant Income
Grant income is recognised when the Group has met all of
the requirements established by the grant. Grant income
that is receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate
financial support to the entity with no future required costs
are recognised as revenue of the period in which it becomes
receivable.
Interest Income
Interest income is accrued on a time basis, by reference to the
principal outstanding and the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset’s net carrying amount.
2022 2021
(a) Revenue $’000 $’000
Revenue consists of the following items:
Point in time recognition:
Sale of goods – domestic sales
Finished goods 1,596 1,115
Ingredients 84 27
Sale of goods – export sales
Finished goods 1,341 969
Ingredients 5,776 8,203
Over time recognition:
Right to access 168 299
8,965 10,613
(b) Other Income
Grant income 435 201
Other income - 3
Interest income 53 22
488 226
(c) Expenses
This includes the following
specific expenses:
Amortisation of finite life
intangible assets (note 10) 289 122
Depreciation of property,
plant and equipment (note 9) 144 137
Depreciation of right of use assets
(note 11) 205 134
Director’s fees 352 298
Employee benefits 3,468 2,941
Employee benefits capitalised - (469)
Employee performance rights 27 10
(Gain) / loss on disposal of property,
plant and equipment (note 9) - (1)
(Gain) / loss on fair value of derivatives 84 17
Loss on disposal of intangibles (note 10) 16 14
Operating lease payment 1 5
Other operating expenses 1,546 1,799
Post-employment benefits 99 84
Provision for inventory write-off (note 8) 277 -
Research and development expense 191 445
2022 Annual Report46
Notes to and Forming Part of the Consolidated Financial Statements continued
3. INCOME TAXES
Policy
Current tax
Current tax is calculated by reference to the amount of income
taxes payable or recoverable in respect of the taxable profit
or tax loss for the period. It is calculated using tax rates and
tax laws that have been enacted or substantively enacted by
reporting date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent it is unpaid (or
refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance
sheet liability method in respect of temporary differences
arising from differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding
tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the
extent that it is probable that sufficient taxable amounts will
be available against which deductible temporary differences or
unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised
if the temporary differences giving rise to them arise from the
initial recognition of assets and liabilities (other than as a result
of a business combination) which affects neither taxable income
nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the period when the liability is
settled, or the asset is realised based on tax rates that have been
enacted or substantively enacted at reporting date.
Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is
also dealt with in equity.
(a) Income tax recognised in profit or loss
The prima facie income tax expense on pre-tax accounting profit
reconciles to the income tax expense in the financial statements
as follows:
2022 2021
$’000 $’000
Net surplus before tax (2,707) 564
Income tax expense calculated at 28% (758) 158
Non-deductible items 101 86
Temporary differences excluding
tax losses not recognised 57 (46)
Tax losses (recognised)/not recognised 600 (198)
Income tax expense - -
(b) Income tax recognised directly in equity
There was no current or deferred tax charged/ (credited) directly
to equity during the period.
(c) Deferred tax balances
The Group has an unrecognised deferred tax asset of $4,954,677
(2021: $4,302,366). The unrecognised deferred tax asset arises in
relation to temporary differences of $365,522 (2021: $298,930)
and gross tax losses of $16,389,840 (2021: $14,297,985) with a
tax effect of $4,589,155 (2021: $4,003,436). The tax losses may
be able to be carried forward and offset against future taxable
income (subject to meeting the requirements of the Income Tax
Act 2007) and accounting recognition requirements.
4. REMUNERATION OF AUDITORS
2022 2021
$’000 $’000
Audit of the financial statements 100 85
Other assurance 2 1
102 86
The auditor of Blis Technologies Limited is Deloitte Limited.
5. KEY MANAGEMENT PERSONNEL
COMPENSATION
2022 2021
$’000 $’000
Short term employee benefits 1,160 1,234
Long term employee benefits 34 37
Share based payments 27 10
1,221 1,281
Blis Technologies Limited47
Notes to and Forming Part of the Consolidated Financial Statements continued
Equity settled share based payments
The fair value (at grant date) of performance share rights
plan (PSRs) granted to the CEO and certain other senior
management, is recognised in profit or loss within the
Consolidated Statement of Comprehensive Income over the
vesting period with a corresponding increase in the share based
payment reserve. The estimate of the number of PSR’s for which
non market based conditions are expected to be satisfied is
revised at each reporting date, with any cumulative catch-up
adjustment recognised in profit or loss. When any PSRs are
exercised, the amount in the share based equity payment
reserve relating to those instruments is transferred to share
capital as consideration of one option per share. When any PSRs
are cancelled, the amount in the share based payment reserve
relating to those PSRs is also transferred to retained earnings.
Employee share based compensation
From 21 December 2020, the Company grants, PSRs to certain
members of its senior leadership and senior management
teams under the 2020 and 2021 Performance Share Rights
Plan. There were no Employee share based schemes prior to
December 2020.
i) Performance share rights plan
Under the 2020 and 2021 Performance Share Rights Plan, one
share right gives the employee the potential to exercise a share
right for an ordinary share in the Company. Performance share
rights will only become exercisable if the Company meets
certain market-based and performance based requirements set
by the board in respect of its share price and net profit, and the
continuous employment of the relevant holder.
The plan is a three year scheme, with the potential rights to fully
vest on the third anniversary of the grant date if the following
criteria are met:
• 50% of the Performance rights shall vest on the Vesting Date
subject to the average market price of the shares of the
Company from the Grant Date to the Vesting Date increase by
15% per annum.
• 50% of the Performance rights shall vest on the Vesting date
subject to the Company achieving 15% compound annual
growth rate (CAGR) for net profit from 31 March of the most
recent balance date at grant date to the Vesting Date; and
• The holder of the Performance Rights is continuously
employed by the Company during the period from the Grant
Date to the Vesting Date.
Measurement
The fair value of the PSRs was determined using the Black
Scholes option pricing model to value the 50% performance
rights which vest on achieving 15% CAGR for net profit being
non market conditions and a Monte Carlo simulation valuation
methodology for the 50% performance rights with market
based vesting conditions.
The compensation of the key management personnel of the
entity, is set out below:
Movements in the number of PSRs outstanding and their
exercise prices are as follows:
2022 2021
Number of options outstanding
As at beginning of the year 2,674,000 -
Granted during the year 3,270,000 2,674,000
Exercised during the year - -
Lapsed during the year (1,097,000) -
As at end of the year 4,847,000 2,674,000
Exercisable at year end - -
Number of employees 4 4
Weighted average exercise price $0.08 $0.08
Weighted average remaining
contractual life (months) 26 33
Fair value of rights granted
during the year 104,640 106,960
Fair value of rights granted
during the year ($ per share) 0.03 0.04
The Options outstanding at 31 March 2022 had an exercise price
in the range of $0.07 - $0.08 (2021: $0.08).
The weighted average exercise price for options lapsed during
the year was $0.08 (2021: Nil).
Key inputs and assumptions used in fair value of PSRs granted
during the year:
2022 2021
Share price at grant date $0.07 $0.08
Contractual life (years) 4 4
Exercise price $0.07 $0.08
Dividend yield 0% 0%
Expected volatility
(i)
70-75% 70-75%
Risk free rate 1.28% 0.31%
(i) The expected share price volatility is derived by analysing the historical
volatility over the most recent historical period corresponding to the term of
the PSR.
2022 Annual Report48
Notes to and Forming Part of the Consolidated Financial Statements continued
6. CASH AND SHORT-TERM DEPOSITS
Policy
Cash and short-term deposits
Cash and short-term deposits comprise cash on hand, demand
deposits, and other short-term highly liquid investments that
are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value. Cash and
short-term deposits are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest method.
NZX Bond
A short term deposit is held at Bank of New Zealand as security
for a bond issued to the NZX. These funds do not represent
operating cash reserves.
2022 2021
$’000 $’000
Cash 2,519 1,487
Short-term deposits 6,000 700
8,519 2,187
NZX bond 75 75
7. TRADE AND OTHER RECEIVABLES
Policy
Trade and other receivables
Trade and other receivables are initially recognised at fair
value and subsequently measured at amortised cost using the
effective interest method, less any provision for expected credit
losses.
The Group applies the simplified approach to measuring
expected credit losses which uses a lifetime expected credit loss
allowance.
The measurement of expected credit losses is a function of the
probability of default, loss given default and the exposure at
default.
The expected credit losses on trade receivables are estimated
using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor’s current financial
position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the
debtors operate and an assessment of both the current as well
as the forecast direction of conditions at the reporting date.
The allowance recognised is measured as the difference
between the asset’s carrying amount and the present value of
estimated future cash flows discounted at the effective interest
rate computed at initial recognition.
2022 2021
$’000 $’000
Trade receivables 1,689 1,474
Allowance for expected
credit losses (note 22 g) (2) (2)
GST receivable 64 100
1,751 1,572
Trade receivables and other receivables are non-interest bearing
and receipt is normally on 30 to 60 day terms. Therefore,
the carrying value of trade debtors and other receivables
approximates its fair value.
8. INVENTORY
Policy
Inventories are stated at the lower of cost and net realisable
value. Cost is determined using average cost. Net realisable
value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing,
selling and distribution.
2022 2021
$’000 $’000
Raw materials 589 666
Finished goods 470 338
Provision for write off (277) -
782 1,004
At balance date $276,507 (2021: Nil) was recognised as an
expense in respect of write-downs to inventory to net realisable
value.
9. PROPERTY, PLANT AND EQUIPMENT
Policy
All items of Property, Plant and Equipment are stated at cost
less accumulated depreciation, and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the
item. In the event that settlement of all or part of a purchase
consideration is deferred, cost is determined by discounting the
amounts payable in the future to their present value as at the
date of acquisition.
Depreciation is provided on property, plant and equipment.
Depreciation is calculated on a straight-line basis so as to write
off the net cost of the asset over its expected useful life to its
estimated residual value. The following estimates of useful lives
are used in the calculation of depreciation:
Leasehold improvements 1 – 10 years
Furniture and fittings 2 – 15 years
Plant and equipment 3 – 12 years
Blis Technologies Limited49
Notes to and Forming Part of the Consolidated Financial Statements continued
2022 Accumulated Accumulated Accumulated Book
Cost Cost depreciation depreciation depreciation Value
1 April Additions/ 31 March 1 April Depreciation reversed on 31 March 31 March
2021 Transfers Disposals 2022 2021 expense disposal Transfer 2022 2022
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Leasehold improvements 364 - - 364 (320) (5) - - (325) 39
Furniture and fittings 130 48 - 178 (107) (12) - - (119) 59
Plant and equipment 1,518 165 - 1,683 (1,114) (127) - - (1,241) 442
2,012 213 - 2,225 (1,541) (144) - - (1,685) 540
2021 Accumulated Accumulated Accumulated Book
Cost Cost depreciation depreciation depreciation Value
1 April Additions/ 31 March 1 April Depreciation reversed on 31 March 31 March
2020 Transfers Disposals 2021 2020 expense disposal Transfer 2021 2021
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Leasehold improvements 364 - - 364 (314) (6) - - (320) 44
Furniture and fittings 100 30 - 130 (100) (7) - - (107) 23
Plant and equipment 1,601 66 (149) 1,518 (1,084) (124) 94 - (1,114) 404
2,065 96 (149) 2,012 (1,498) (137) 94 - (1,541) 471
10. FINITE LIFE INTANGIBLE ASSETS
Policy
Intangible assets acquired separately are reported at cost
less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful lives, residual
values and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis.
Intellectual Property
The cost of intellectual property is written off until such time as
it becomes clear that future economic benefits attributable to
that expenditure will flow to the Group and there is sufficient
evidence to support the probability of the expenditure
generating sufficient future economic benefits.
Intellectual property including patents, trademarks and licenses
are considered finite life intangibles and are recorded at cost
less accumulated amortisation and impairment. Amortisation is
charged on a straight-line basis over the estimated useful life of
the intangible asset being 10 to 20 years. The estimated useful
life and amortisation method is reviewed at the end of each
annual reporting period.
Website
Following the initial investment, which is recorded at cost and
amortised over 3 years, the cost of further website development
is expensed as incurred.
Internally generated Intangible Assets – Capitalised Product
Development Expenditure
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
An internally generated intangible asset arising from
development (or from the development phase of an internal
project) is recognised if, and only if, all of the following have
been demonstrated:
• the technical feasibility of completing the intangible asset so
that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell
it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future
economic benefits;
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
• the ability to measure reliably the expenditure attributable to
the intangible asset during its development.
2022 Annual Report50
The amount initially recognised for internally generated
intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition
criteria listed above. Where no internally generated intangible
asset can be recognised, development expenditure is charged
to profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same
basis as intangible assets acquired separately. The useful life of
internally generated intangible assets is 8 years.
Impairment of Assets
At each balance sheet date, the Group reviews the carrying
amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the
asset belongs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in profit
or loss immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating
unit) in prior years.
IT, website
Capitalised development
Trademarks Patents development and software Total
2022 $’000 $’000 $’000 $’000 $’000
Gross Carrying Amount
Balance at 1 April 2021 206 1,164 4,169 400 5,939
Additions 6 43 - - 49
Disposals - (16) - - (16)
Balance at 31 March 2022 212 1,191 4,169 400 5,972
Accumulated amortisation and impairment
Balance at 1 April 2021 26 900 3,115 187 4,228
Amortisation expense 21 60 137 71 289
Balance at 31 March 2022 47 960 3,252 258 4,517
Net Book Value at 31 March 2022 165 231 917 142 1,455
Notes to and Forming Part of the Consolidated Financial Statements continued
Blis Technologies Limited51
Notes to and Forming Part of the Consolidated Financial Statements continued
IT, website
Capitalised development
Trademarks Patents development and software Total
2021 $’000 $’000 $’000 $’000 $’000
Gross Carrying Amount
Balance at 1 April 2020 130 1,072 3,115 193 4,510
Additions - acquired 76 106 - - 182
Additions – internally generated (WIP) - - 1,054 207 1,261
Disposals - (14) - - (14)
Balance at 31 March 2021 206 1,164 4,169 400 5,939
Accumulated amortisation and impairment
Balance at 1 April 2020 11 829 3,082 184 4,106
Amortisation expense 15 71 33 3 122
Balance at 31 March 2021 26 900 3,115 187 4,228
Net Book Value at 31 March 2021 180 264 1,054 213 1,711
Trademarks are amortised over their estimate useful lives, which is
on average 10 years.
Patents are amortised over their estimated useful lives, which is on
average 20 years.
The amortisation period for development costs incurred on the
Group’s K12, M18 and Q24 product development is 8 years.
The amortisation period for the development costs incurred on
the Group’s IT, website and software development is 3 years.
No impairment losses have been recorded in the current year
(2021: Nil).
Capitalised product development expenditure relates to
costs incurred in relation to the development of ingredient,
intermediate and food products containing BLIS, and the
associated regulatory approval processes.
Impairment test for Intangible Assets
For the purposes of preparing these accounts, the Board reviewed
the intangible assets and have determined that there is no
impairment of any intangible assets.
The Group is considered to be one cash-generating unit.
The calculation of the recoverable amount has been determined
based on a value-in-use calculation that uses cash flow projections
based on the financial forecasts prepared by management
covering a five-year period.
The recoverable amount calculations are most sensitive to
assumptions regarding sales growth rates.
Annual sales growth rates have increased from previous
assessments reflecting the decline in actual sales in 2022
compared to 2021 due to the impacts of COVID-19, and
assumptions around the post COVID-19 recovery of sales to
existing customers, alongside forecast growth in existing and
emerging markets.
Key assumptions used in the value-in-use calculation are:
• Annual sales growth rate of between 12% - 30% (2021: 15% -
19%)
• Contribution margins of 70% - 83% (2021: 73% – 75%)
• Pre-tax discount rate of 18.36% (2021: 16.45% pre tax)
• Terminal growth rate of 2% (2021: 2%)
The calculation supports the carrying amount of intangible
assets. Excluding costs associated with new growth or
development activities:
• Reducing sales growth for emerging markets and new
customers by 30% would not have resulted in an impairment
loss.
The recoverable amount is sensitive to each of these
assumptions. If sales growth and/or contribution margins fall
short of projections, the recoverable amount of the capitalised
product development and patent expenditure may be less than
the carrying value.
2022 Annual Report52
Notes to and Forming Part of the Consolidated Financial Statements continued
11. LEASES
Policy
The Group as a lessee
The Group leases certain property, plant and equipment. The
Group recognises a right-of-use asset and a corresponding lease
liability with respect to all lease arrangements in which it is
the lessee, except for short-term leases and leases of low value
assets where the Group recognises the lease payments as an
other operating expense on a straight-line basis over the term of
the lease.
Lease Liabilities
Lease liabilities are initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate (IBR).
Lease payments included in the measurement of the lease
liability comprise:
• Fixed lease payments, less any lease incentives;
• Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
• The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
Lease liabilities are presented as a separate line in the balance
sheet and are subsequently measured by increasing the
carrying amount to reflect interest on the lease (using the
effective interest method) and reducing the carrying amount to
reflect the lease payments made.
The Group remeasures the lease liability if:
• The lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case
the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate;
• Lease payments changing due to changes in an index or rate,
in which case the lease liability is remeasured by discounting
the revised lease payments using the initial discount rate; or
• A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
ROU assets
ROU assets comprise of the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement date and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation
and impairment losses.
Wherever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by
the terms and conditions of the lease, a provision is recognised
and measured under NZ IAS 37. The costs are included in the
related ROU asset, unless those costs are incurred to produce
inventories.
ROU assets are depreciated over the shorter period of lease
term and useful life of the underlying asset. The estimated
useful lives of ROU assets are determined on the same basis as
similar owned assets within property, plant and equipment.
Depreciation starts at the commencement date of the lease.
ROU assets are presented as a separate line in the balance
sheet.
The Group applies NZ IAS 36 to determine whether a ROU asset
is impaired and accounts for any identified loss under the same
policy adopted for property, plant and equipment.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and ROU
asset. The related payments are recognised as an expense in
the period in which the event or condition that triggers those
payments occurs and are included in other operating expenses
in the statement of comprehensive income.
Right-of-use assets
Properties Office Equipment Total
2022 $’000 $’000 $’000
As at 1 April 2021 437 41 478
Additions 422 - 422
Terminations - - -
Depreciation expense (195) (10) (205)
Depreciation write back on terminations - - -
Net Book Value as at 31 March 2022 664 31 695
Blis Technologies Limited53
Notes to and Forming Part of the Consolidated Financial Statements continued
Properties Office Equipment Total
2021 $’000 $’000 $’000
As at 1 April 2020 325 16 341
Additions 244 38 282
Terminations - (22) (22)
Depreciation expense (132) (2) (134)
Depreciation write back on terminations - 11 11
Net Book Value as at 31 March 2021 437 41 478
Lease Liabilities – Maturity Analysis 2022 2021
$’000 $’000
Less than one year 205 200
Between one and five years 427 184
More than five years 87 111
719 495
Current 205 200
Non-Current 514 295
Total 719 495
The Group leases various properties and office equipment
under non-cancellable leases expiring within two to ten years.
The leases have varying terms and have no option to purchase
in respect to the leased equipment in the financial year ended
31 March 2022.
2022 2021
$’000 $’000
Amounts Recognised in consolidated
statement of comprehensive income:
Depreciation of right-of-use assets 205 134
Interest expense on lease liabilities 36 23
Expense relating to short-term leases 1 2
Expense relating to low value assets - 3
The total cash outflow for leases in 2022 was $235,254 (2021:
$148,461).
The incremental borrowing rate applied on properties was 6%
(2021: 6%) and office equipment 6% (2021: 6%).
The below table details changes in the group’s lease liabilities from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the group’s
statement of cash flows from financing activities.
2022 Opening Closing
balance at Non-cash Recognised on Non-financing Financing balance at
1 April 2021 changes
(1)
acquisition cash flows cash flow 31 March 2022
$’000 $’000 $’000 $’000 $’000 $’000
Lease liabilities 495 422 - - (198) 719
495 422 - - (198) 719
2021 Opening Closing
balance at Non-cash Recognised on Non-financing Financing balance at
1 April 2020 changes
(1)
acquisition cash flows cash flow 31 March 2021
$’000 $’000 $’000 $’000 $’000 $’000
Lease liabilities 351 271 - - (127) 495
351 271 - - (127) 495
(1) Non-cash changes within lease liabilities relate to new leases entered into during the financial year, interest, lease modifications and reassessments of lease terms.
2022 Annual Report54
Notes to and Forming Part of the Consolidated Financial Statements continued
12. TRADE AND OTHER PAYABLES
Policy
Trade Payables
Trade payables are initially measured at fair value and
subsequently measured at amortised cost using the effective
interest rate method.
Employee Benefits
Provision is made for benefits accruing to employees in respects
of wages and salaries and annual leave when it is probable
that settlement will be required, and they are capable of being
measured reliably. Provisions are initially measured at fair
value and subsequently measured at amortised cost using the
effective interest rate method.
Provisions made in respect of employee benefits expected to
be settled within 12 months, are measured at their nominal
values using the remuneration rate expected to apply at the
time of settlement. Provisions made in respect of employee
benefits which are not expected to be settled within 12 months
are measured at the present value of the estimated future
cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
2022 2021
$’000 $’000
Trade payable 1,053 1,246
Employee entitlements 185 303
1,238 1,549
13. BORROWINGS
Policy
Borrowings are recognised initially at fair value less directly
attributable transaction costs and subsequently measured at
amortised cost using the effective interest method.
2022 2021
$’000 $’000
Asset finance 35 83
Total borrowings 35 83
2022 2021
$’000 $’000
Current borrowings 35 46
Non-current borrowings - 37
Total borrowings 35 83
The Group has an undrawn trade credit loan facility with the
Bank of New Zealand that has a base limit of $550,000. The
effective interest rate of the trade credit loans is between 5.89%
- 6.87% (2021: 5.86% - 6.49%).
Asset Finance loan with the Bank of New Zealand was utilised
to finance the purchase of the Natoli tablet press. The loan has
an effective interest rate of 5.70% (2021: 4.48%). The term of this
loan is over 60 months with the final payment due December
2022. The loan is secured over the Natoli tablet press, purchased
for $293,479.
Security
The banking facilities from Bank of New Zealand are secured by
general security agreement over all present and after acquired
property of Blis Technologies Limited. There is assignment of
Trade Credit Insurance Policy covering export receivables and
specific security (set off and charge) over Term Deposit funds to
secure NZX Bond.
Blis Technologies Limited55
Notes to and Forming Part of the Consolidated Financial Statements continued
14. INVESTMENT IN SUBSIDIARY
Percentage held Balance date Principal activity
2022 2021
Blis Functional Foods Limited 100% 100% 31 March Non-trading
15. SHARE CAPITAL AND EARNINGS PER SHARE
2022 2021
No. of shares $’000 No. of shares $’000
Balance at the beginning of the year (fully paid) 1,107,653,565 37,469 1,107,653,565 37,424
Share capital issued 166,148,034 9,188 - -
Capital raising costs paid - (54) - -
Shares pursuant to the CEO share plan - 46 - 45
Balance at the end of the year 1,273,801,599 46,649 1,107,653,565 37,469
All 1,273,801,559 ordinary shares are issued and carry equal voting rights. All issued shares participate equally in any dividend
distribution or any surplus on winding up of the Company.
On 2 June 2016, 5,500,000 shares were issued to Mr Brian Watson, Chief Executive of the Company. The shares were issued at a price of
$0.0299 per share. Details of this transaction is shown in note 17.
Basic earnings per share
2022 2021
Profit attributable to members of the Company used in calculating basic and diluted EPS ($’000) (2,707) 564
Weighted average number of ordinary shares (‘000) for basic EPS 1,229,982 1,107,654
Effect of dilution due to performance rights - -
Weighted average number of ordinary shares (‘000) for diluted EPS 1,229,982 1,107,654
Earnings per share
Basic EPS (cents) (0.22) 0.05
Diluted EPS (Cents) (0.22) 0.05
Recognition and measurement
Basic EPS is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of ordinary shares outstanding during the financial year. Diluted EPS adjusts basic
EPS for the dilutive effect of employee share rights and options that may be converted into ordinary shares in the Company
2022 Annual Report56
Notes to and Forming Part of the Consolidated Financial Statements continued
16. RESERVES
Nature and purpose of share based payment equity reserves
Share option equity reserve
The Share option equity reserve relates to the CEO share plan
refer note 17.
Employee performance rights plan reserve
The Reserve is used to recognise the fair value of PSRs granted
but not exercised refer to note 5.
2022 2021
$’000 $’000
Balance at the beginning of the year 23 26
Repayment of CEO share option
equity reserve (13) (13)
Expense recognised in relation to
employee performance rights
plan reserve 27 10
Balance at end of the year 37 23
17. RELATED PARTY TRANSACTIONS
During the year, Blis Products were sold to the following related
parties (excluding web sales).
2022 2021
Associate entity Director
Probi AB T Rönnlund $3,900 -
Blis during the year entered into a licence and supply agreement
which grants Probi rights to manufacture and sell BLIS K12™
and BLIS M18™. There were nil transactions during the year
(2021: nil).
Product seconds are made available to the staff and Board
members for personal use at no charge.
CEO Share option and issue of shares to the CEO
The Company entered into a Subscription Agreement and
issued 5,500,000 new ordinary shares to the CEO, Brian Watson,
on 2 June 2016. The shares were issued for cash consideration
of 2.99 cents per share being an aggregate $164,500, which
was satisfied by way of a contemporaneous interest free loan
provided by the Company to the CEO for an aggregate amount
equivalent to the subscription price for the shares.
The loan is secured by a lien on the issued shares and repayable
in equal annual instalments commencing on the 1st of
December 2017 with the final instalment due on 1 December
2021.
The shares were issued at 90% of the volume weighted average
share price for the 5 trading days prior to 1 June 2016. The issue
price was considered by the Directors of the Company to be
equivalent to the price that the tranche of shares would have
been issued to an independent third party at the time of issue.
The Subscription Agreement provides security against the loan
through a charge on the shares. The appropriate approach
consistent with the relevant accounting standard is to treat the
entire arrangement as a share option.
Using the Black Scholes option pricing model for the CEO
Share Plan at an implied volatility of 32% and referenced to the
prevailing share price of 3.32 cents on 2 June 2016 yielded an
aggregate option value of $54,517. This amount was treated as
an expense.
As a result of the charge to the statement of comprehensive
income, a CEO Share Option Reserve was created in the
Consolidated Balance Sheet. Upon receipt of each of the
scheduled loan repayment the notional option value associated
with each tranche transfers from the CEO Share Plan Reserve to
Share Capital and the amount of each loan repayment recorded
to equity to represent the consideration received for each
tranche of shares issued to the CEO.
Consideration of $32,900 was received for the fifth and final
tranche of shares in March 2022 (Fourth instalment November
2020 $32,900, third instalment in November 2019: $32,900,
second instalment in November 2018: $32,900, first instalment
in November 2017 $32,900).
Fair Value of Share Options
The fair value of the share options granted during the 2017
financial year was $54,517. Options were priced using the Black-
Scholes option pricing model. Expected volatility is based on
the historical share price over the past 5 years, consistent with
the options lives, factoring in a step change in the 9 months
prior to grant date.
No allowance for early exercise was incorporated into the fair
value calculation as it was assumed that the CEO would exercise
the options at the latest exercise date.
There are no market or service conditions.
The fair value model is most susceptible to changes in the
expected volatility. Had an expected volatility of 45% been
utilised, the fair value of the share options would have been
$69,000.
Blis Technologies Limited57
Notes to and Forming Part of the Consolidated Financial Statements continued
Inputs to the model:
Option Series 1 2 3 4 5
Grant date weighted average share price $0.0322 $0.0322 $0.0322 $0.0322 $0.0322
Exercise price $0.0299 $0.0299 $0.0299 $0.0299 $0.0299
Expected volatility 31.93% 31.93% 31.93% 31.93% 31.93%
Option life (years) 1.5 2.5 3.5 4.5 5.5
Dividend yield 0% 0% 0% 0% 0%
Risk free interest rate 2.07% 2.01% 2.00% 2.06% 2.02%
Final exercise date 1/12/17 1/12/18 1/12/19 1/12/20 1/12/21
18. COMMITMENTS FOR EXPENDITURE
As at 31 March 2022 there is no capital expenditure
commitments (2021: $nil)
19. CONTINGENT ASSETS AND
CONTINGENT LIABILITIES
There were no material contingent assets or contingent
liabilities at 31 March 2022 (2021: $nil).
20. SEGMENTAL REPORTING
20.1 Operating segments
The Group is internally reported as a single operating segment
to the chief operating decision-maker.
20.2 Revenue from major products and services
2022 2021
$’000 $’000
The Group’s revenues from its major
products and services were as follows:
BLIS products 8,965 10,613
Non-core business 488 226
Total Revenue and Other Income 9,453 10,839
Non-core business includes grant revenue and contract
manufacturing revenue of non-BLIS branded products.
20.3 Information about geographical areas
The Group operates in 3 principal geographical areas, Asia
Pacific, Europe Middle East and Africa (EMEA) and North
America.
The Group’s revenue from external customers and information
about its assets by geographical location (of the customer) are
detailed below:
Revenue from Non-current
external customers assets
2022 2021 2022 2021
$’000 $’000 $’000 $’000
New Zealand 1,539 1,148 2,690 2,660
Asia Pacific
(excl. NZ) 1,426 1,301 - -
EMEA 2,857 3,101 - -
North America 3,143 5,063 - -
Total revenue 8,965 10,613 2,690 2,660
Grant revenue 435 201 - -
Other revenue - 3 - -
Interest revenue 53 22 - -
Total revenue &
other income 9,453 10,839 2,690 2,660
Included in revenue are revenues of $2,822k, $1,775k and $909k
(2021: $4,038k and $3,084k) which arose from sales to the
Group’s three largest customers (2021: two).
Web sales are allocated to the region where the end consumer
is based.
2022 Annual Report58
Notes to and Forming Part of the Consolidated Financial Statements continued
21. RECONCILIATION OF NET SURPLUS /
(DEFICIT) WITH CASHFLOWS FROM
OPERATING ACTIVITIES
Policy
For the purpose of the cash flow statement, cash and cash
equivalents includes cash on hand and in banks and investments
in money market instruments net of outstanding bank overdrafts.
The cash flow statement is prepared exclusive of GST, which is
consistent with the method used in the consolidated statement
of comprehensive income.
Definition of terms used in the cash flow statement:
Operating activities include all transactions and other events
that are not investing or financing activities.
Investing activities are those activities relating to the acquisition
and disposal of current and non-current investments and any
other non-current assets.
Financing activities are those activities relating to changes in
the equity and debt capital structure of the Group and those
activities relating to the cost of servicing the Group’s equity.
2022 2021
$’000 $’000
Net surplus /(Deficit) for the year (2,707) 564
Adjustments for non-cash items:
Amortisation 289 122
Depreciation property,
plant and equipment 144 137
Depreciation right of use assets 205 134
Foreign exchange loss / (gain) (105) (14)
ECL provision - -
PSR Expense 27 10
Loss /(gain) on fair value of
foreign exchange contracts 84 17
Loss on disposal of intangible assets 16 14
Loss /(gain) on disposal of fixed assets - (1)
(2,047) 983
Movements in working capital
Trade and other receivables (179) 2
Prepayments 10 (106)
Inventories 222 (319)
Trade and other payable (311) 29
(258) (394)
Net cash inflow/ (outflow)
from operating activities (2,305) 589
22. FINANCIAL INSTRUMENTS
Policy
Financial Instruments
Financial assets and financial liabilities are recognised on the
Group’s Balance Sheet when the Group becomes a party to the
contractual provisions of the instrument.
All of the Group’s financial assets (excluding derivative financial
assets) are measured at amortised cost. Foreign exchange
contracts are measured at fair value, all of the Group’s other
financial liabilities are measured at amortised cost.
(a) Financial risk management objectives
Exposure to credit, interest rate, foreign currency and liquidity
risks arises in the normal course of the Group’s business.
The Group does not enter into derivative financial instruments
for speculative purposes. The Group utilises forward cover
on confirmed foreign currency transactions. Specific risk
management objectives and policies are set out below.
(b) Capital risk management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern while maximising the return
to stakeholders through the optimisation of debt and equity.
The capital structure of the Group comprises issued capital
reserves, share based payment equity reserves and retained
earnings as disclosed in the Statement of Changes in Equity.
The Group’s Board of Directors reviews the capital structure on
a regular basis.
The Group is not subject to externally imposed capital
requirements.
The Group’s overall strategy remains unchanged from 2021.
(c) Market risk
Market risk is the potential for change in the value of financial
instruments caused by a change in the value, volatility or
relationship between market risks and prices. Market risk
arises from the mismatch between assets and liabilities. The
Group’s activities expose it primarily to market risk associated
with changes in foreign currency rates and interest rates as set
out below. These risks are measured using sensitivity analysis.
The mechanisms for managing these risks are set out below.
The Group enters into foreign exchange contracts to manage its
exposure to foreign currency transactions, there have been no
changes during the year to the Group’s exposure to such risks or
the manner in which the risks are measured and managed.
Blis Technologies Limited59
Notes to and Forming Part of the Consolidated Financial Statements continued
(d) Interest rate risk
The Group is exposed to interest rate risk as from time to time it borrows funds at floating interest rates and also invests cash in short
term deposits at fixed interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to
changes in market interest rates.
Investments and borrowings at fixed interest rates expose the Group to fair value interest rate risk. The Group does not hedge this risk.
Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in market interest
rates. Borrowings issued at variable interest rates expose the Group to cash flow interest rate risk. The Group does not hedge this risk.
(e) Foreign exchange risk
In the course of normal trading activities, the Group undertakes transactions denominated in foreign currencies; hence exposures to
exchange rate fluctuations arise. The Group enters into foreign exchange contacts on certain sales denominated in foreign currencies to
economically hedge the foreign exchange risk associated with the timing between the date of sale and receipt of payment. The Group
has not adopted hedge accounting.
The carrying amount of the Group’s foreign currency denominated monetary assets are as follows:
2022 2021
$’000 $’000
Euro 104 105
United States dollar 114 422
Canadian dollar 7 6
The table below details the notional principal amounts and remaining terms of foreign exchange contracts outstanding at reporting date:
Average contract rate Foreign currency Nominal contract Value Fair value asset
/(liability)
2022 2021 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000
Euro
Less than 1 year 0.5901 - 433 - 458 - 25 -
USD
Less than 1 year - 0.7135 - 718 - 701 - (17)
CAD
Less than 1 year 0.8404 - 23 - 24 - 1 -
456 718 482 701 26 (17)
The above tables express foreign currency amounts in New Zealand dollar equivalents using the exchange rates at 31 March 2022 and 31
March 2021. The rates applied at 31 March 2022 were:
2022 2021
EUR 0.6238 0.5943
USD 0.6963 0.6966
CAD 0.8687 -
The fair value of the foreign exchange contracts is based on a discounted cash flow analysis using observable market data and is a level 2
fair value measurement.
Foreign exchange rate sensitivity
Reasonable fluctuations in foreign exchange rates were determined based on a review of the last two years’ historical movements. A
movement of plus or minus 10% has therefore been applied to the exchange rates to demonstrate the sensitivity to foreign currency risk
of the Group.
2022 Annual Report60
Notes to and Forming Part of the Consolidated Financial Statements continued
The following sensitivity is based on the foreign currency risk
exposures in existence at balance date. The impact of a plus or
minus 10% foreign exchange movement on New Zealand dollars
against all trading currencies, with all other variables held
constant, is illustrated below:
-10% +10%
2022 2021 2022 2021
$’000 $’000 $’000 $’000
Surplus / (deficit)
before tax (23) (97) 85 32
(f) Other price risk
The Group is not exposed to substantial other price risk arising
from financial instruments.
(g) Credit risk
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss to the
Group. Financial instruments which potentially subject the
Group to credit risk, principally consist of bank balances and
trade and other receivables.
In the normal course of business, the Group is exposed to
counterparty credit risk. The maximum exposure to credit
risk is equal to the carrying value of cash and short term
deposits, trade and other receivables and transactions with
financial institutions (derivative financial instruments). The
Group requires payment of deposits prior to production by
high credit risk customers and carries trade credit insurance
for its four largest customers. The Group, as a result of the
markets in which they operate, can be exposed to significant
concentrations of credit risk from trade receivables. They
do not require any collateral or security to support financial
instruments as these represent deposits with, or loans to, banks
and other financial institutions with high credit ratings.
2022 2021
$’000 $’000
Cash and short term deposits 8,519 2,187
NZX bond 75 75
Trade receivables (net of loss allowance) 1,687 1,472
GST receivable 64 100
10,345 3,834
Ageing receivables breakdown
2022 Allowance
Gross for expected
amounts credit Net
receivable losses balance
$’000 $’000 $’000
Current 905 - 905
0 – 30 days (past due) 750 - 750
31 – 60 days (past due) 5 - 5
Greater than 60 days
(past due) 29 (2) 27
Total past due 784 (2) 782
Total trade receivables 1,689 (2) 1,687
Ageing receivables breakdown
2021 Allowance
Gross for expected
amounts credit Net
receivable losses balance
$’000 $’000 $’000
Current 1,402 - 1,402
0 – 30 days (past due) 30 - 30
31 – 60 days (past due) 4 - 4
Greater than 60 days
(past due) 38 (2) 36
Total past due 72 (2) 70
Total trade receivables 1,474 (2) 1,472
At 31 March 2022, trade receivable includes amounts of $266k,
$181k and $860k (2021: $434k, $224k and $381k) due from the
Group’s three largest receivables (2021: three). All of the Group’s
bank accounts are held with Bank of New Zealand. Otherwise
the Group does not have any other concentrations of credit risk.
(h) Liquidity risk management
Ultimate responsibility for liquidity risk management rests
with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of
the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk
by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group also has
approved trade funding facilities with a base limit of up to $550k
which are linked to customer specific limits. As at 31 March
2022 the facility was not drawn down (2021: Nil).
The maturity profiles of the Group’s interest-bearing
investments and borrowings are disclosed later in this note.
Blis Technologies Limited61
Notes to and Forming Part of the Consolidated Financial Statements continued
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for non-derivative financial assets and financial liabilities. The
tables have been drawn up based on the undiscounted contractual cash flows of the financial assets and financial liabilities including
interest that will accrue to those assets or liabilities.
2022 Weighted
average YEARS
effective
interest rate < 1 1 - 2 2 - 3 3 - 4 4 - 5 5 + Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial liabilities at amortised cost
Trade payables - 1,053 - - - - - 1,053
Borrowings 5.70% 36 - - - - - 36
Lease liabilities 6.00% 242 242 177 30 30 95 816
Total 1,331 242 177 30 30 95 1,905
2021 Weighted
average YEARS
effective
interest rate < 1 1 - 2 2 - 3 3 - 4 4 - 5 5 + Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial liabilities at amortised cost
Trade payables - 1,246 - - - - - 1,246
Borrowings 4.48% 49 38 - - - - 87
Lease liabilities 6.00% 224 116 41 38 30 125 574
1,519 154 41 38 30 125 1,907
(i) Fair value of financial instruments
The fair values of financial assets and financial liabilities are
determined as follows:
• the fair value of financial assets and financial liabilities with
standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market
prices; and
• The fair value of other financial assets and financial liabilities
(excluding derivative instruments) are determined in
accordance with generally accepted pricing models based on
discounted cash flow analysis using prices from observable
current market transactions and dealer quotes for similar
instruments.
The Directors consider that the carrying amount of financial
assets and financial liabilities recorded at amortised cost in the
financial statements approximates their fair values.
23. EVENTS AFTER BALANCE DATE
There were no significant events after balance date (2021: nil).
2022 Annual Report62
The Company’s ordinary shares are listed on the NZX Limited Main Board (NZSX).
As at 31 March 2022 the total number of issued ordinary shares in the Company was 1,273,801,599.
1. Substantial product holders
The following substantial product holder information is given pursuant to section 293 of the Financial Markets Conduct Act 2013. These
substantial product holders are shareholders that have a relevant interest in 5% or more of the ordinary shares in the Company. As at 31
March 2022 details of the substantial product holders of the Company and their relevant interests in the ordinary shares of the Company
are as follows:
Name of Substantial product holder Shareholding as at 31 March 2022 % of issued share capital
Leveraged Equities Finance 182,171,130 14.30%
Probi 166,148,034 13.04%
2. Spread of security holders at 31 March 2022 - Ordinary shares
Number of security holders Percentage of security holders Percentage of shares held
1 - 50,000 1,433 51.98% 2.42%
50,001 - 100,000 467 16.94% 2.86%
100,001 - 150,000 184 6.67% 1.85%
150,001 - 200,000 146 5.29% 2.11%
200,001 - 300,000 138 5.01% 2.75%
300,001-500,000 151 5.48% 4.96%
500,001 - 1,000,000 107 3.88% 6.40%
1,000,001 - 5,000,000 98 3.55% 16.99%
5,000,001 and above 33 1.20% 59.66%
2,757 100% 100%
Additional Stock
Exchange Information.
For the year ended 31 March 2022
Blis Technologies Limited63
Additional Stock Exchange Information continued
3. Twenty largest equity security holders
The names of the 20 largest holders of each class of quoted equity security as at 31 March 2022 are listed below.
Top 20 shareholders Number of issued ordinary shares Percentage issued
Leveraged Equities Finance 182,171,130 14.30%
Probi AB 166,148,034 13.04%
New Zealand Depository Nominee 48,342,090 3.80%
Mingchun Qiu 26,895,482 2.11%
Zhaoyi Li 25,000,000 1.96%
Mark Alexander Stevens & Wendy Joanne Stevens & W M C Trustees Limited 24,094,577 1.89%
Asia Pacific Partners Limited 21,850,878 1.72%
New Zealand Central Securities 18,164,563 1.43%
Barry Charles Richardson & Joy Vera Richardson 17,903,625 1.41%
Hui Ai Adriana Tong & Morlan Tong 16,878,179 1.33%
FNZ Custodians Limited 15,659,912 1.23%
Stephen Patrick Ward & Julie Patricia Ward & James Michael Ward 15,307,128 1.20%
Phaben Holdings Limited 15,243,436 1.20%
Custodial Services Limited 14,793,350 1.16%
Caroline Robyn Ball & Christopher John Thomson Bush 11,857,968 0.93%
Jennbring Fruit Ltd 11,800,000 0.93%
Anthony Paul Offen & Bilinda Jane Offen & Downie Stewart Trustee Limited 11,157,388 0.88%
Richard Mark Keenan 10,037,308 0.79%
Bilinda Jane Offen 10,000,000 0.79%
Circada Limited 10,000,000 0.79%
673,305,048 52.86%
4. Credit rating
The Company does not currently have a credit rating.
5. NZX matters
No waivers were granted by NZX (or relied upon) with respect to the Company during the period 1 April 2021 to 31 March 2022 and NZX
did not exercise any powers under listing Rule 9.9.3 during that period.
2022 Annual Report64
Independent Auditor’s Report
To the Shareholders of Blis Technologies Limited
Opinion We have audited the consolidated financial statements of Blis Technologies Limited (the ‘company’)
and its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet as at 31 March
2022, and the consolidated statement of comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 39 to 61, present
fairly, in all material respects, the consolidated financial position of the Group as at 31 March 2022,
and its consolidated financial performance and cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and
International Financial Reporting Standards (‘IFRS’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
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), and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the Company or
any of its subsidiaries, except that partners and employees of our firm deal with the Company and
its subsidiaries on normal terms within the ordinary course of trading activities of the
business of the
Company and its subsidiaries.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced (the ‘quantitative’
materiality). In addition, we also assess whether other matters that come to our attention during
the audit would in our judgement change or influence the decisions of such a person (the
‘qualitative’ materiality). We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the Group’s financial statements as a whole to be $130,000.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs in respect of ingredients for the Group’s
products. These are included in the balance sheet as internally
generated intangible assets.
The total carrying value of intangible assets at 31 March 2022 is
$1.455m as shown in the Consolidated Balance Sheet and note
10, of which $0.917m relates to capitalised internally developed
intangible assets.
The carrying value of intangible assets is particularly judgemental
given its dependency on forecasts of revenue growth.
The impairment of intangible assets is a key audit matter due to
the significant increase in internally developed intangible assets
in the prior year, alongside a decline in operating results in the
current year. This increases the significance and complexity of
audit work required to assess the reasonableness of
management’s judgements and estimates involved in
determining revenue forecasts used by the Group to assess the
recoverable amount of these assets. If the Group is unable to
produce sustainable operating cashflows, this affects the carrying
value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained in
note 10.
Our procedures focused on evaluating the appropriateness of
the significant judgements and assumptions that relate to
revenue forecasts and operating cash flows included in the
impairment model.
Our procedures included, amongst others:
Obtaining the Group’s impairment model and gaining an
understanding of key assumptions and judgements
underlying the model.
Assessing the integrity of the value in use calculation,
including the mathematical accuracy of the underlying
model.
Assessing compliance of the impairment model with the
requirements of NZ IAS 36.
Assessing the impairment model for consistency with
the prior year and determining whether any significant
changes to the model were appropriate.
Challenging the reasonableness of the key assumptions
including those driving the cash flows underpinning the
analysis, by:
o Comparing historical budget forecasts against actual
results.
o Comparing forecast growth to business plans
approved by the Board.
o Engaging an internal valuation expert to assess the
appropriateness of the impairment model and
benchmark the Group’s discount rate by comparing
to an independently developed discount rate using
publicly available market data for similar entities.
Performing sensitivity analysis on the model by varying key
assumptions such as revenue growth and discount rate
assumptions to assess the impact on forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If so, we are required to report that fact. We have nothing to
report in this regard.
Directors’ responsibilities for the
consolidated financial statements
The directors are responsible on behalf of the G
roup for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control
as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Blis Technologies Limited65
Independent Auditor’s Report
To the Shareholders of Blis Technologies Limited
Opinion We have audited the consolidated financial statements of Blis Technologies Limited (the ‘company’)
and its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet as at 31 March
2022, and the consolidated statement of comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 39 to 61, present
fairly, in all material respects, the consolidated financial position of the Group as at 31 March 2022,
and its consolidated financial performance and cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and
International Financial Reporting Standards (‘IFRS’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
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), and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the Company or
any of its subsidiaries, except that partners and employees of our firm deal with the Company and
its subsidiaries on normal terms within the ordinary course of trading activities of the
business of the
Company and its subsidiaries.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced (the ‘quantitative’
materiality). In addition, we also assess whether other matters that come to our attention during
the audit would in our judgement change or influence the decisions of such a person (the
‘qualitative’ materiality). We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the Group’s financial statements as a whole to be $130,000.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs in respect of ingredients for the Group’s
products. These are included in the balance sheet as internally
generated intangible assets.
The total carrying value of intangible assets at 31 March 2022 is
$1.455m as shown in the Consolidated Balance Sheet and note
10, of which $0.917m relates to capitalised internally developed
intangible assets.
The carrying value of intangible assets is particularly judgemental
given its dependency on forecasts of revenue growth.
The impairment of intangible assets is a key audit matter due to
the significant increase in internally developed intangible assets
in the prior year, alongside a decline in operating results in the
current year. This increases the significance and complexity of
audit work required to assess the reasonableness of
management’s judgements and estimates involved in
determining revenue forecasts used by the Group to assess the
recoverable amount of these assets. If the Group is unable to
produce sustainable operating cashflows, this affects the carrying
value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained in
note 10.
Our procedures focused on evaluating the appropriateness of
the significant judgements and assumptions that relate to
revenue forecasts and operating cash flows included in the
impairment model.
Our procedures included, amongst others:
Obtaining the Group’s impairment model and gaining an
understanding of key assumptions and judgements
underlying the model.
Assessing the integrity of the value in use calculation,
including the mathematical accuracy of the underlying
model.
Assessing compliance of the impairment model with the
requirements of NZ IAS 36.
Assessing the impairment model for consistency with
the prior year and determining whether any significant
changes to the model were appropriate.
Challenging the reasonableness of the key assumptions
including those driving the cash flows underpinning the
analysis, by:
o Comparing historical budget forecasts against actual
results.
o Comparing forecast growth to business plans
approved by the Board.
o Engaging an internal valuation expert to assess the
appropriateness of the impairment model and
benchmark the Group’s discount rate by comparing
to an independently developed discount rate using
publicly available market data for similar entities.
Performing sensitivity analysis on the model by varying key
assumptions such as revenue growth and discount rate
assumptions to assess the impact on forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If so, we are required to report that fact. We have nothing to
report in this regard.
Directors’ responsibilities for the
consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control
as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
2022 Annual Report66
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the
audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material missta
tement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs and ISAs (NZ) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so
that we might state to the Company’s shareholders those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company’s shareholders as a body, for our audit work,
for this report, or for the opinions we have formed.
Heidi Rautjoki, Partner
for Deloitte Limited
Dunedin, New Zealand
30 May 2022
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs in respect of ingredients for the Group’s
products. These are included in the balance sheet as internally
generated intangible assets.
The total carrying value of intangible assets at 31 March 2022 is
$1.455m as shown in the Consolidated Balance Sheet and note
10, of which $0.917m relates to capitalised internally developed
intangible assets.
The carrying value of intangible assets is particularly judgemental
given its dependency on forecasts of revenue growth.
The impairment of intangible assets is a key audit matter due to
the significant increase in internally developed intangible assets
in the prior year, alongside a decline in operating results in the
current year. This increases the significance and complexity of
audit work required to assess the reasonableness of
management’s judgements and estimates involved in
determining revenue forecasts used by the Group to assess the
recoverable amount of these assets. If the Group is unable to
produce sustainable operating cashflows, this affects the carrying
value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained in
note 10.
Our procedures focused on evaluating the appropriateness of
the significant judgements and assumptions that relate to
revenue forecasts and operating cash flows included in the
impairment model.
Our procedures included, amongst others:
Obtaining the Group’s impairment model and gaining an
understanding of key assumptions and judgements
underlying the model.
Assessing the integrity of the value in use calculation,
including the mathematical accuracy of the underlying
model.
Assessing compliance of the impairment model with the
requirements of NZ IAS 36.
Assessing the impairment model for consistency with
the prior year and determining whether any significant
changes to the model were appropriate.
Challenging the reasonableness of the key assumptions
including those driving the cash flows underpinning the
analysis, by:
o Comparing historical budget forecasts against actual
results.
o Comparing forecast growth to business plans
approved by the Board.
o Engaging an internal valuation expert to assess the
appropriateness of the impairment model and
benchmark the Group’s discount rate by comparing
to an independently developed discount rate using
publicly available market data for similar entities.
Performing sensitivity analysis on the model by varying key
assumptions such as revenue growth and discount rate
assumptions to assess the impact on forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If so, we are required to report that fact. We have nothing to
report in this regard.
Directors’ responsibilities for the
consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control
as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Blis Technologies Limited67
Company
Directory.
For the year ended 31 March 2022
Company number
1042367
Issued capital
1,273,801,599 Ordinary Shares
Registered office
Blis Technologies Limited
Ground Floor, 442 Moray Place, Dunedin Central
Dunedin 9016
Shareholders
Listed on the NZX
Share registrar
Link Market Services Limited
Deloitte Centre, 80 Queen street
Auckland
Directors
G Plunket
A Balfour
A McCammon (appointed 21 October 2021)
A Offen
Dr B Richardson
T Rönnlund (appointed 22 July 2021)
Dr A Stewart
Chief executive
B Watson
Auditors
Deloitte Limited
PO Box 1245
Dunedin
Bankers
Bank of New Zealand
Dunedin
Solicitors
Anderson Lloyd
Private Bag 1959
Dunedin 9054
Downie Stewart Lawyers
PO Box 1345
Dunedin 9054
Goldsmith Law
PO Box 40
Dunedin 9054
Website
www.blis.co.nz
www.unconditionalskin.com
Facebook
www.facebook.com/BLISProbioticsNZ
www.facebook.com/unconditionalskin
Instagram
www.instagram.com/blisprobiotics
www.instagram.com/unconditionalskin/
Blis Technologies Limited67
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the
audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material missta
tement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs and ISAs (NZ) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so
that we might state to the Company’s shareholders those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company’s shareholders as a body, for our audit work,
for this report, or for the opinions we have formed.
Heidi Rautjoki, Partner
for Deloitte Limited
Dunedin, New Zealand
30 May 2022
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to capitalised
development costs in respect of ingredients for the Group’s
products. These are included in the balance sheet as internally
generated intangible assets.
The total carrying value of intangible assets at 31 March 2022 is
$1.455m as shown in the Consolidated Balance Sheet and note
10, of which $0.917m relates to capitalised internally developed
intangible assets.
The carrying value of intangible assets is particularly judgemental
given its dependency on forecasts of revenue growth.
The impairment of intangible assets is a key audit matter due to
the significant increase in internally developed intangible assets
in the prior year, alongside a decline in operating results in the
current year. This increases the significance and complexity of
audit work required to assess the reasonableness of
management’s judgements and estimates involved in
determining revenue forecasts used by the Group to assess the
recoverable amount of these assets. If the Group is unable to
produce sustainable operating cashflows, this affects the carrying
value of its key intangible assets.
Disclosure of the Group’s impairment assessment is contained in
note 10.
Our procedures focused on evaluating the appropriateness of
the significant judgements and assumptions that relate to
revenue forecasts and operating cash flows included in the
impairment model.
Our procedures included, amongst others:
Obtaining the Group’s impairment model and gaining an
understanding of key assumptions and judgements
underlying the model.
Assessing the integrity of the value in use calculation,
including the mathematical accuracy of the underlying
model.
Assessing compliance of the impairment model with the
requirements of NZ IAS 36.
Assessing the impairment model for consistency with
the prior year and determining whether any significant
changes to the model were appropriate.
Challenging the reasonableness of the key assumptions
including those driving the cash flows underpinning the
analysis, by:
o Comparing historical budget forecasts against actual
results.
o Comparing forecast growth to business plans
approved by the Board.
o Engaging an internal valuation expert to assess the
appropriateness of the impairment model and
benchmark the Group’s discount rate by comparing
to an independently developed discount rate using
publicly available market data for similar entities.
Performing sensitivity analysis on the model by varying key
assumptions such as revenue growth and discount rate
assumptions to assess the impact on forecasted cashflows.
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If so, we are required to report that fact. We have nothing to
report in this regard.
Directors’ responsibilities for the
consolidated financial statements
The directors are responsible on behalf of the G
roup for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control
as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
2022 Annual Report68
Physical Address
Blis Technologies Limited
Ground Floor, 442 Moray Place,
Dunedin Central
Dunedin 9016
Postal Address
PO Box 2208
Dunedin 9044
New Zealand
Email
info@blis.co.nz
Telephone
+64 3 474 0988
www.blis.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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