Sanford 2022 Full Year Results
Sanford Limited
Results announcement
Results for announcement to the market
Name of issuer Sanford Limited
Reporting Period 12 months to 30 September 2022
Previous Reporting Period 12 months to 30 September 2021
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$531,887 8.63%
Total Revenue $531,887 8.63%
Net profit/(loss) from
continuing operations
$55,772 244.53%
Total net profit/(loss) $55,772 244.53%
Final Dividend
Amount per Quoted Equity
Security
$0.10000000
Imputed amount per Quoted
Equity Security
$0.03888889
Record Date 2 December 2022
Dividend Payment Date 9 December 2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.83290023 $1.45723056
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
For an explanation on Sanford’s operational results please refer
to the accompanying NZX announcement, investor presentation
and Integrated Report for the year ended 30 September 2022.
Authority for this announcement
Name of person
authorised
to make this announcement
Roberto Magaraggia
Contact person for this
announcement
Paul Alston
Contact phone number 021 918 033
Contact email address palston@sanford.co.nz
Date of release through MAP
15 November 2022
Audited financial statements accompany this announcement.
---
Sanford Limited
Distribution Notice
Section 1: Issuer information
Name of issuer Sanford Limited
Financial product name/description Ordinary shares
NZX ticker code SAN
ISIN (If unknown, check on NZX
website)
NZSANE0001S0
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 2 December 2022
Ex-Date (one business day before the
Record Date)
1 December 2022
Payment date (and allotment date for
DRP)
9 December 2022
Total monies associated with the
distribution
$9,350,614
Source of distribution (for example,
retained earnings)
Retained earnings
Currency New Zealand Dollars
Section 2: Distribution amounts per financial product
Gross distribution $0.13888889
Gross taxable amount $0.13888889
Total cash distribution $0.10000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.01764706
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed
Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
100%
Imputation tax credits per financial
product
$0.03888889
Resident Withholding Tax per
financial product
$0.00694444
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Roberto Magaraggia
Contact person for this
announcement
Paul Alston
Contact phone number 021 918 033
Contact email address palston@sanford.co.nz
Date of release through MAP
15 November 2022
---
INTEGRATED REPORT 2022
PERSEVERANCE
CARE
At Sanford, we value caring
for the wellbeing of ourselves, the team
around us, our customers and consumers,
key stakeholders and the communities
we work in. Crucially, we care for the
environment we are privileged to work in.
PASSION
We are passionate about our
relationships with our people, customers,
consumers, resources, country and future.
Our passion extends to protecting our
oceans, caring for the environment and
having successful partnerships.
INTEGRITY
We strive to live our values every
day in everything we do. This means
having straight-up conversations,
delivering on the expectations of our key
stakeholders and being respectful, honest,
open and transparent, as we work to
always do the right thing.
ACHIEVING TOGETHER
Guided by the underlying
principle of achieving together, we
encourage, respect and value the
contributions of all team members and
utilise the talents of everyone to deliver
the best outcomes across our business
excellence framework. We actively build
partnerships across the business
and wider stakeholder community.
Lily Heidmann checking salmon eggs
at the Kaitangata hatchery.
WELCOME TO SANFORD’S 2022 INTEGRATED REPORT, ENTITLED
PERSEVERANCE. THE TITLE REFLECTS THE TIMES. OUR VALUE OF
ACHIEVING TOGETHER HAS PROVED ITS WORTH THIS YEAR, AS ALL
OF OUR TEAMS HAVE SHOWN THEIR PERSEVERANCE AND RESOLVE.
THE RESULTS CONTAINED IN THIS REPORT DEMONSTRATE THAT
WE ARE ON COURSE TO DELIVER IMPROVED RESULTS,
PRODUCED WITH CARE, PASSION AND INTEGRITY.
2022 OVERVIEW
02
SANFORD INTEGRATED REPORT 2022
—
INTRODUCING
OUR 2022 REPORT
—
In our fishing and seafood farming operations, we work in some
remote parts of the world. But nowhere was remote enough to escape
the impacts of Covid-19 over the last three years. In 2022, we felt that
the end of the pandemic was in sight, but, as this report shows, the third
year had a sting in the tail. We saw many of our global markets show
serious signs of recovery, but as Covid spread in New Zealand, we felt
the impacts on our people and production in our home communities.
This report tells those stories and details how we managed those
impacts. It also lays out our newly enhanced strategy. Much work
was done on developing and evolving our strategy in 2022. The results
of this can be seen in these pages, including examples of how we are
already delivering on the commitments made and what we intend
to deliver soon. That work is integrated with our performance
outcomes and how we create value across our business. This report
shows the interconnectedness between these areas and what it means
to our stakeholders.
Over nearly three years of Covid-19 impacts, we have been kept apart
from many of those stakeholders and from each other. Now, we are
reconnecting and that is reflected in our materiality work, conducted
face-to-face with many of our own people and in detailed conversations
and surveys with external stakeholders. The results are found here and
inform our thinking as we work towards delivering on the goals that
matter to all our stakeholders in 2023 and beyond.
Our theme in 2022 is
PERSEVERANCE and it is a fitting description
of a key trait required to bring you our improved full year results. When
times are testing, we discover our true character, something our people
who work at and with the sea know very well.
Cover image shows the inside of our Precision Seafood
Harvesting (PSH) gear as it is being deployed into the
water from one of our inshore fishing vessels.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
03
SANFORD INTEGRATED REPORT 2022
1. 2022 OVERVIEW
Sanford in numbers04
Chairman review05
CEO review09
6. APPENDICES AND REFERENCE
Appendices183
Our fleet208
Awards and accreditations210
Directory211
2022 Annual meeting212
2. REPORT STRUCTURE & MATERIALITY
Report structure14
Reporting what matters17
3. SANFORD AND OUR OPERATIONS
How we create value22
Highs and lows24
Our global sales footprint
26
NZ footprint28
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
Chapter 1: Enabling Healthy Oceans
and Ecosystems32
Chapter 2: Safe and High
Performing Workplace44
Chapter 3: Trusted Customer
Partner of Choice58
Chapter 4: Highly Valued
Community Partner69
Chapter 5: Operational Excellence
77
CONTENTS
PLEASE NOTE that photos in this report were taken at various points
during the Covid-19 pandemic and at different Alert Levels, so
facemasks are not always worn in these images.
QR CODES
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Use these to access relevant video and
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Hui Ting Ng, processing mussels at the Havelock site.
5. GOVERNANCE AND FINANCIALS
Corporate governance90
Financial statements117
Notes to the financial statements
125
Combined independent auditor’s
and limited assurance report176
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
04
—
SANFORD IN NUMBERS
—
422
INDEPENDENT SHAREFISHERS
2021: 421
1,421
TOTAL WORKFORCE
2021: 1,409
1. Quota ownership based on
New Zealand Annual Catch Entitlement.
2. See Note 3, Appendix A.
109,412
TONNES OF SEAFOOD HARVESTED
2021: 111,844
2
SALES REVENUE
YEAR ENDING SEPTEMBER 30, 2022
$531.9m
(8.6% HIGHER THAN FY21)
ADJUSTED EBIT
$40.2m
(72.5% HIGHER THAN FY21)
REPORTED NPAT
$55.8m
(244% HIGHER THAN FY21)
NET DEBT
$145.5m
2021: $178.6M
SANFORD IS NEW ZEALAND’S
LARGEST QUOTA HOLDER
19.8%
1
2021: 19.8%
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
05
SANFORD INTEGRATED REPORT 2022
Our high-level business model can be
described as very simple. We harvest
wild and farmed seafood, convert it to
a desirable product and send it through
our supply chain to customers nationally
and internationally.
Wherever we can, we increase product
value by improving its sustainability
and quality, or by using science and
innovation to achieve better quality
and productivity.
Before entering the pandemic, we
consistently delivered some $65 million
in adjusted earnings before interest and
taxation (EBIT). Covid-19 interrupted
that, hitting our sector more severely
than most. The impacts were rendered
more transparent in Sanford as the only
listed fishing company in New Zealand.
Two prolonged consequences of the
pandemic in 2022 were the continued
clogging of supply chains and the
tightening of labour markets. We
expected demand to return more quickly
to pre-Covid levels in a classical V
formation. However, these supply chain
and labour constraints slowed that
recovery, particularly in mussels.
PRIORITIES DELIVERED
Our priorities this financial year were
to rebuild mussel profitability, grow
opportunities in wildcatch and retain
salmon profitability while targeting
future growth.
Our strategy pursued the steady financial
rebuild we forecasted in FY21, and we
reported Adjusted EBIT of $40.2m, up
72.5% on the prior year. This has enabled
the Board to resume dividend payments
for our shareholders. With no payment in
the half year, the full year dividend
payment will be 10c per share. Thank you
to our shareholders who have stood by us
during the period when prudence
demanded that dividends be suspended.
Our Adjusted EBIT expectation has been
achieved in what has been our most
challenging year, with 600 of our
1400-strong workforce afflicted with
waves of illness and the need to isolate.
We prioritised safety and productivity,
adopting a vaccine mandate, introducing
rapid antigen testing requirements and
paying special attention to providing safe,
healthy working environments.
This meant we could keep fishing,
harvesting and processing with no jobs
lost or sites closed. Inventory levels
reduced during the year as many of our
markets began to recover.
REVENUES REFLECT
IMPROVED DEMAND
Group revenue increased by 8.6% from
$489.6 million to $531.9 million. Improving
demand in our recovering global markets
flowed through to improved pricing across
our product categories, particularly
whitefish. Wildcatch and Salmon built
further on the volume and revenue growth
of the first half. With labour shortages
affecting production, Mussel revenues
were down. Our CEO, Peter Reidie
provides a detailed discussion on our
financial performance, beginning on
page 9.
The extremely tight labour market made
for a very challenging year. In particular,
recruitment in deepsea fishing and in
mussel processing has been difficult, even
with higher wages and added benefits such
as subsidised accommodation near our
Havelock-based mussel operations.
Improved national immigration policies
are required.
We had another year of supply chain
constraints to our export markets. Freight,
fuel, feed and labour costs along with tight
shipping capacity were all contributing
factors. These were mitigated by our
supply chain agreement with Kotahi, which
commenced in October 2021 and enabled
us to secure space for our frozen export
product, but vessel schedule reliability
remained sub-optimal.
—
CHAIRMAN
REVIEW
—
Sir Robert McLeod
CHAIRMAN
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
06
SANFORD INTEGRATED REPORT 2022
We expect network disruptions to cause
ongoing constraints within the global
supply chain.
1
Our arrangement with Kotahi
should help mitigate the worst impacts of
supply chain variability in the coming year.
STRATEGY EMPHASISES IMPROVED
PROFITABILITY
We continue to emphasise improved
profitability as the pathway to sustainably
growing shareholder value. This remains a
key focus of our strategy.
Sanford is a multi-product business
across wildcatch, salmon and mussels.
Profitability in each business requires
tailored models. Our Wildcatch and Mussel
divisions have been built on commodity
products, with volume playing a bigger
role than differential unit prices and
margins. Sanford continues to supplement
its commodity business with specialty
products such as mussel powder
supplements where unit prices are more
important to profit than volume.
We have set an ambitious five-year
target range of $85-$105 million in
Adjusted EBIT.
This goal reflects forecasts of growing
demand, particularly for farmed seafood.
The UN FAO (Food and Agriculture
Organisation) anticipates that global
demand for food from the sea will nearly
double by 2050. It is further forecasting
that the average price of internationally
traded fish will increase by 22% by 2030,
relative to 2018. Aquaculture will play a
considerable role in meeting demand
and farmed fish prices are expected to
increase by 24% by 2030.
2
We are building on our steady
developments in aquaculture, setting
ourselves up to meet our growth and
revenue goals, while also maintaining
our wildcatch volumes and returns.
GROWING IN AQUACULTURE
We are growing the size of our salmon
operations, expanding our hatchery and
working on the development of a new
RAS (Recirculating Aquaculture System)
hatchery to support volume growth and
higher returns. We have invested in
technology such as oxygenation, feed
barges and support vessels and the factory
upgrades needed to increase consistency
and quality. We are mindful of the potential
climate change impacts and these
technologies help address those risks.
We also have the environmental systems
in place to support our case for further
expansion of production. Creating the
Big Glory Bay brand, with its unique
New Zealand provenance, has enabled us
to build demand in retail channels as well
as foodservice in the US, and we are also
growing in other markets.
In our mussels business, we stand on
the science of our SPAT
nz breeding and
hatchery, our farming assets and
unique technology, such as automatic
mussel openers. Mussels are an affordable
and climate friendly protein, with one of
the lowest carbon footprints of all animal
proteins. They are also a rich source of
bioactive compounds.
Sanford Bioactives, our innovation
centre, which is now operating in
Blenheim, is increasing our ability to
generate higher returns from our mussels
and other marine resources.
It has immediately doubled our mussel
drying capacity for producing the mussel
powder which ongoing research has
shown provides anti-inflammatory
benefits to joints.
3
The Centre includes an
extractor for mussel oil, which delivers a
super-concentrated form of this product.
INVESTING IN WILDCATCH
Sanford owns 19.8% of total New Zealand
quota. With the fourth largest EEZ in the
world, and a robust Quota Management
ABOVE Sanford’s Big Glory Bay salmon.
1. Sea Intelligence reports on global schedule reliability:
www.sea-intelligence.com.
2. See pages 169 and 170 of this UN FAO document:
https://www.fao.org/3/ca9229en/ca9229en.pdf. Plus
refer to https://www.newscientist.com/
article/2290082-global-demand-for-fish-expected-to-
almost-double-by-2050/ regarding demand for seafood.
3. https://www.cawthron.org.nz/research/our-projects/
musseling-up/
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
07
SANFORD INTEGRATED REPORT 2022
System, scientific assessments are
regularly carried out. These show 94.3% of
New Zealand’s assessed wildcatch is from
stocks with no sustainability risks.
4
Growth in returns can be achieved by
operational efficiencies and by targeting
higher value species and seeking to
enhance utilisation of the entire product
harvested. For example, we are intending
to make a $30 million investment in a new
scampi vessel, to target higher catches
and returns in this profitable species.
We also have underused annual catch
entitlements (ACE) for ling, which provides
an opportunity to increase returns from
this species. Ling is a versatile eating fish,
including ling sounds, which are highly
sought after as a health supplement in Asia.
We continued to invest in upgrades to
improve the efficiency and environmental
performance of our deepwater fleet. This
includes higher levels of automation in
processing both at sea and on land, where
efficiency gains help offset rising costs.
ACKNOWLEDGEMENTS
The Board acknowledges the effort put in
by all our people during another demanding
year. We know it has not been easy with
staffing shortages and the waves of Covid,
and we thank you for your tremendous
efforts. It is pleasing to see that our
engagement scores have stayed steady,
despite the impacts of the pandemic and
that they meet industry benchmarks.
Thanks also to GM of Infrastructure and
Assets, Peter Young who capably took on
the role of Acting Chief Operating Officer,
following the departure of Clement Chia.
We welcomed Paul Alston as CFO, who
joined us in October 2021 and is making
a significant contribution. We also
congratulate Louise Wood on her
appointment to the Executive Team as Chief
Supply Chain Officer and Colin Williams
who joins the Executive as GM Fishing.
BOARD CHANGES
At this year’s annual general meeting we
will farewell Peter Kean who is retiring after
eight years of service as an Independent
Non-Executive Director. Peter joined the
Board of Directors in December 2014 and
currently serves on the People, Health and
Safety Committee and the Nominations
Committee. Peter has brought invaluable
management experience and a diverse
governance background to his role. He has
been a dedicated and hard-working director.
His wise head and special interest in people,
sales and strategy will be sorely missed.
Craig Ellison was appointed to the Board
in December 2021 and serves on the
Audit, Finance and Risk Committee and
Nominations Committee. He is the Chief
Executive Officer for Ngāi Tahu Holdings
which acquired a 19.9% shareholding in
Sanford last year.
David Mair was appointed to the Board on
7 November, 2022, replacing Peter Kean.
David has been CEO of NZX listed
Skellerup Holdings Limited since 2011, and
a director since 2006. In accordance with
NZX Listing Rules, David will offer himself
for election at the Sanford Annual Meeting
in December 2022.
OUTLOOK
I am pleased that we are delivering on
our priorities and continuing to pursue
performance improvements. We have set
the business up well to maintain those
improvements in the year ahead. The tide
has not fully turned. Labour shortages
continue to be problematic. As
mentioned, improved immigration
policies are also needed.
My remarks focus on the economic issues
facing Sanford, but as we all know, the
world faces significant uncertainty in
relation to inflation, interest rates and
geo-political conflicts. These are important
risks in our macroeconomic environment,
albeit largely beyond Sanford’s control.
We are seeing a steady recovery in global
demand, particularly as foodservice begins
to benefit from the lift in tourism and travel,
as well as the return of local consumers to
hospitality venues. We believe we have
struck a prudent balance between investing
for growth – such as our scampi vessel –
while maintaining high levels of financial
discipline. Growth remains a priority, which
we are well positioned to achieve.
Sir Robert McLeod
CHAIRMAN
14 November 2022
4. https://www.mpi.govt.nz/dmsdocument/44893-
The-Status-of-New-Zealands-Fisheries-2021
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
08
SANFORD INTEGRATED REPORT 2022
PEOPLE
REGIONS
SUPPLIERS
CUSTOMERS
PARTNERSHIPS
SHAREHOLDERS
WE ARE GRATEFUL
FOR THE PERSEVERANCE OF OUR
IN 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
09
SANFORD INTEGRATED REPORT 2022
—
C E O
REVIEW
—
Peter Reidie
CHIEF EXECUTIVE OFFICER
Welcome to our Integrated Annual
Report for the 2022 Fiscal Year ending
30 September 2022. I want to start
my commentary with a call out to the
considerable effort our Sanford people
have made to contribute to our first steps
in rebuilding Sanford to its pre-Covid
profitability and beyond.
world wants. Our product quality is
excellent, whether that be orange roughy,
hoki, snapper, scampi, mussels or King
salmon. Our challenges are not around
quality or demand, they are around our
current ability to process that product
and the management of the supply chain.
Fortunately, these are areas where we can
make a difference through effort and
determination.
Sanford has never been without its
challenges, and given our dependence on
Mother Nature, we probably never will be.
Having said that, I am confident we are
building a sustainably stronger and more
consistent company, which I believe has the
ability to grow beyond pre-Covid levels.
OUR RESULTS
Given the challenges we have had with
access to labour and the cost of fuel,
freight and feed we have delivered a
creditable result and are clearly on the
road to returning to pre-Covid
profitability and beyond.
• Adjusted EBIT has grown to
$40.2 million from $23.3 million in FY22
an increase of $16.9 million or 72.5%
• Reported profit (NPAT) benefiting
from our sales of crayfish quota is
$55.8 million, up $39.5 million or 244%
versus FY21
• Our net debt levels have reduced to
$145.5 million from $178.6 million,
while we were still able to invest
$53 million capital into the business
• Operating cashflow is also positive
at $44.9 million compared to
$32.2 million in FY21.
It is also pleasing to note the continued
growth in volume, sales and profitability in
Australia, where we acknowledge the hard
work of the Melbourne based team.
Another area of achievement has been
in our environmental and sustainability
delivery where, among other things, we
have brought our operational carbon
emissions down by 7.6% versus 2021,
thanks to reductions in our Scope 1 and 2
GHG (Greenhouse Gas) emissions.
SECTOR PERFORMANCE
Within our revised strategy we have set
ourselves four priorities:
• Grow Salmon
• Grow Mussels
• Sustain Deepwater (Wildcatch)
• Turnaround Inshore (Wildcatch)
We have delivered on these priorities and
we have a list of initiatives that we are
working our way through, to further
progress in these areas. I would like to
highlight what we have done in FY22 and
what we have on our agenda for FY23
against each of these priorities.
2022 has been a very tough year.
Our markets have returned, but we
have been increasingly challenged by our
ability to supply our seafood due to
labour availability and cost pressures,
particularly in fuel, freight and feed.
We could not have delivered a 73%
improvement in profitability without an
outstanding contribution from our people.
Our teams consistently stepped up in
times of need and looked after each
other. I acknowledge this and say thank
you to our people for the amazing effort
they have made. In this context, words
that describe FY22 include perseverance,
persistence, tenacity, endurance,
commitment and very hard work.
I recognise it hasn’t come easily.
Although Covid continued to affect us,
as travel opened up I had the opportunity
to get in front of our customers more this
year than I did in 2021. My belief in what
we do has been further reinforced – that
the products we catch and harvest from
throughout New Zealand’s territorial
waters are outstanding and what the
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
10
SANFORD INTEGRATED REPORT 2022
SALMON FINANCIAL OVERVIEW
% Versus Last Year
FY
2022
FY
2021
Sales volumes
0.5%40.6%
Revenue
17.9%32.0%
Profit contribution
20.6%8.5%
The strategic priority in this area has been
to “Grow Salmon.”
Given its reliance on fresh product, our
salmon business has been the first to
recover as the world (particularly
restaurants and foodservice) has re-
opened post-Covid lockdowns. In FY22 we
have maintained volume and continued to
improve pricing. Our production volume is
constrained by the limits of our resource
consent and growth can only occur
through longer term initiatives, such as the
planned new RAS Hatchery (Recirculating
Aquaculture System). The focus in this year
and FY23 is to ensure the sustainability of
what we have and deliver on revenue
enhancing opportunities such as the Big
Glory Bay brand and portion packaging.
What we have done – FY22
• Maintained volume despite higher-
than-average summer temperatures
affecting mortality rates. These stand at
8.2% for the year versus 3.4% in FY21
when measured on a like-for-like basis.
• Continued price improvement with
average price per kilo for the fourth
quarter being $22.33, up 17.8% versus
Q4 2021
• Continued growth of Big Glory Bay
Brand reaching 42.7% of our volume for
the year versus 25.1% in FY21
• Introduced water jet cutting packaging
equipment to deliver on portion control
packaging and more effective
utilisation of every fish
• Investment in additional equipment
with end-of-year addition of new feed
barge (leased), oxygenation system and
support vessels
What we are doing – FY23
• Split main growing farm in Big Glory
Bay to de-risk site
• Gain consent and start building of
RAS Hatchery
• Launch portion control pack into
Foodstuffs
• Explore further utilisation of salmon
by-product through our new Bioactives
plant (marine extracts) in Blenheim
• Continue growth of the Big Glory
Bay brand
GREENSHELL™ MUSSELS
FINANCIAL OVERVIEW
% Versus Last Year
FY
2022
FY
2021
Sales volumes
-4.4%4.1%
Revenue
6.3%-16.4%
Profit contribution
-49.0%-94.7%
The strategic priority in this area has been
to “Grow Mussels.”
Our mussel business essentially had the
opposite cycle to our salmon business.
There was a lag effect in our price recovery
due to the reduced demand caused by
Covid lockdowns in our major markets and
as we fulfilled existing contracts. This lag
meant we had an artificially better year in
FY20 and carryover of the negative
demand prices and volume has continued
into FY22, as we have had to honour
contracts from FY21 and market
bottoming prices from that time. The
impact of this has been exacerbated by our
challenge to attract people to our site at
Havelock and our joint venture operation,
NIML (North Island Mussels Limited) in
Tauranga. Lower output has meant we have
taken longer to clear these contracts than
we anticipated. The good news is market
price has recovered and our people
initiatives are beginning to bear fruit, with
the reinstatement of our night shift at
Havelock. September was the most
profitable month of the year for our
Mussels division.
What we have done – FY22
• Focused on getting people into our
plants through increasing frontline pay
rates and providing accommodation
(Havelock), plus streamlining, outsourcing
and using contract manufacturing
• Successfully made improvements in our
SPAT
nz production systems
• Completed the build of our Bioactives
Innovation Centre in Blenheim
What we are doing – FY23
• Diversify revenue sources through
continuing growth in mussel powders
and oils
• Design and implement packaging
automation
• Expand our SPAT
nz mussel hatchery
• Investment in on-water infrastructure
• Optimise margins based on improved
pricing and good crop availability.
• Build further channel diversification
through retail focused new product
development
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
11
SANFORD INTEGRATED REPORT 2022
WILDCATCH FINANCIAL OVERVIEW
% Versus Last Year
FY
2022
FY
2021
Sales volumes
-9.7%7.4%
Revenue
8.8%-0.6%
Profit contribution
62.3%14.6%
This business division has two strategic
priorities for FY22:
• Sustain Deepwater
• Turnaround Inshore
Deepwater has been our standout segment
in FY22. As the world has opened up,
post-Covid demand for seafood has
returned and the quality of our products
across deep sea species such as hoki, ling,
orange roughy, scampi, squid and toothfish
has been recognised and sought after. As in
all of our businesses, we have faced
difficulties recruiting staff in a tight labour
market. We recognise that being at sea
catching and processing fish for up to 45
days at a time is not for everyone. Our
crews are typically New Zealanders who put
their hearts and souls into fishing at sea. My
admiration and appreciation goes out to
these teams who have had to juggle
crewing between vessels to maintain safe
operating levels due to the shortage of
people dictated by Covid. The Timaru based
team responsible for getting our boats to
sea with safe crew levels every time have
done an amazing job ensuring we have
been able to catch our requirements.
What we have done – FY22
• Major surveys (inspections,
maintenance and upgrades) on five
wildcatch vessels
• Continued growth of retail pack white
fish in the USA
• Invested in development of skills and
capabilities for critical at sea positions
What we are doing – FY23
• Preparation for major surveys on four
wildcatch vessels (including new
propeller systems for two of those
which will reduce CO
2
emissions)
• Contract the building of one new
scampi vessel plus refurbish one inshore
vessel as an addition to the scampi fleet
• Continued evolution of USA market
model with continuation of move to more
direct customers versus wholesalers
• Development of Sanford Fishmongers
brand into retail formats in New
Zealand, USA and Australia
Our inshore business is the fresh
component of the wildcatch segment and
provides fresh fish to New Zealand
customers, the fish auction, our Sanford
& Sons retail outlet and fresh exports to
overseas, predominantly to Australia and
the USA. This business has not been
performing to expectations and as we
have prioritised and achieved recoveries in
Salmon, Mussels and Deepwater, our focus
has moved to the inshore business. We are
developing options and I am confident we
can get this business to a far better
performance in a relatively short time.
DEALING WITH COVID’S IMPACTS
When we published our 2021 Annual
Report, Auckland was in its fourth
lockdown, one which would last a total
of 107 days and not end till 3 December.
It is important to think about what has
happened and how much has changed in
the space of twelve months: vaccine
mandates and passes, New Zealand
emerging from lockdowns, discussions and
decisions about boosters, moving to the
traffic light system, the opening of borders
again with restrictions, then finally this year,
fully opening the country to the world.
We have worked through the physical
impact on our people of the spread of
Covid-19 through the New Zealand
community. With our 100% vaccination
rate in the business, we were pleased to
see most of our people avoided serious
illness. However not all did and the impact
of even a short bout of Covid should not
be underestimated.
We put in Herculean efforts to keep our
people safe. Sanford’s vaccinate mandate
was part of that, as was the thorough use
of PPE and Rapid Antigen Testing in our
workplaces.
We continue to use appropriate safety
measures, although we have relaxed our
vaccine mandate, now that Covid is firmly
established in the community and
Government measures have also softened.
LABOUR CHALLENGES
Labour challenges have had a significant
impact on our operating performance in
FY22 and we do not see them reducing.
This is an area of serious concern to us, as
it is to many other New Zealand
employers. We know there is no silver
bullet and we have to implement a number
of initiatives to ensure we are making
Sanford a very attractive place to work.
Our challenges are exacerbated by our
locations in more remote and less
populous areas. Our Havelock mussel
processing plant is one example. We do
not have enough people in New Zealand
willing and able to fill these roles in these
locations. We welcome recent changes to
New Zealand’s immigration settings and
believe more will be needed to meet the
needs of our sector and enable us to grow
our business. This is important if we are to
help meet the Government’s goals for a
stronger aquaculture industry, with their
aim of the sector tripling in value to be
worth $3 billion a year by 2035.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
12
SANFORD INTEGRATED REPORT 2022
SANCORE & STRUCTURE
In another year of challenges, we have
taken the time to refresh our strategy to
ensure we are prioritising in the right areas
to deliver the growth we want and which
our shareholders expect. Through our
SanCore programme, updating our
information systems across our business,
we are building the capability to access
greater knowledge more quickly, to
understand and respond to performance in
our business. Details of these programmes
are contained throughout this report.
We are also asking ourselves if we have
the right structure to support and
enhance the delivery of our strategy. As a
consequence, we are working through a
proposal to create an SBU (Separate
Business Unit) structure, whereby we
have P&L plus balance sheet ownership in
operating business units. This proposal is
subject to a consultation with our people.
CAPITAL
We have demonstrated prudent capital
management in FY22, and this will
continue. We are conscious that our
investments need to “earn the right”
before we move onto additional spending.
We are continuously working through the
fiscally responsible way to make the
investments we need to fund our growth
aspirations, while returning to delivering
an appropriate dividend. For example, we
have challenged ourselves on our
proposal to replace the scampi fleet with
three new vessels. We are now seeking to
commission an initial vessel in order to
prove capability and performance before
we take the next step. We are repurposing
one of our inshore vessels to de-risk the
existing scampi fleet. I am confident there
will be further examples of this approach
so we can continue to deliver good profit
outcomes, fund our investments for
growth and maintain a sound dividend.
FOCUS ON SUSTAINABILITY &
ENVIRONMENT
We understand we are privileged to
operate in the pristine waters of New
Zealand’s EEZ. This is a privilege we intend
to protect, so we are always mindful of
what, how and where we can do better.
Caring for the environment and
sustainable practices are part of
everything we do, and our teams are very
focused on doing what is right in this area.
Some of our achievements in the year
include:
• Operational carbon emissions reduced
by 7.6% (Scope 1 and 2 GHG
(Greenhouse Gas) emissions)
• Coal use down to zero (from 2,000kg
in FY21) with the introduction of
heatpump units in our Stewart Island
accommodation
The focus in this year and FY23 is
to ensure the sustainability of
what we have and deliver on
revenue enhancing opportunities
such as the Big Glory Bay brand
and portion packaging.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
2022 OVERVIEW
13
SANFORD INTEGRATED REPORT 2022
• Maintained multi-year reduction trends
(FY18-FY22) in harmful interactions
between our fishing activities and marine
mammals or seabirds (down to 27 in
FY22 from 77 in FY18, or 65% for marine
mammals and down to 227 in FY22 from
409 in FY18, or 45% for seabirds)
• Deployment of “Moana Project” ocean
temperature and climate sensors across
our fleet
• Seeking and obtaining approval for the
use of Precision Seafood Harvesting
technology on the west coast of the
North Island
• Transitioning to PHEV electric vehicles,
adding seven new PHEV vehicles to our
fleet across three sites
• Reduction of waste directed to landfill
of 2,821 tonnes (down 44% on FY21)
• Contributing just over $300, 000 to
New Zealand charities and donating
294,576 meal equivalents to charities
and community initiatives
We are very pleased with our overall
emissions reductions achieved in FY22.
A number of projects contributed to this,
including significant efficiency upgrades
of propellers on the San Discovery and
engine mode control on the San Aspiring.
The good news is we are planning similar
upgrades to two more vessels in FY23/24
(the San Waitaki and San Enterprise). Each
of these can potentially save between 700
and 1,000 tonnes of CO
2
a year.
Our waste diversion initiatives diverted a
total of 10,629 MT of waste from landfill in
FY22, avoiding Scope 3 landfill emissions
equivalent to 2,200 t CO
2
-e. The biggest
contributor to this was our mussel shell
waste reduction programme which has
seen the shells repurposed for landscaping
and farming use. More details on these
programmes and their achievements are
included throughout this report, but
particularly from pages 32 to 43.
SAFETY AND THE WELFARE
OF OUR TEAMS
From a health and safety metrics
perspective, we have had a good year. We
have also managed the challenges of Covid
very well. I am grateful for the efforts all
our teams make in terms of the focus on
health and safety and commitment to
looking after each other. It is an area
where you can never rest. We operate in a
complex and challenging environment
where Mother Nature can have a
significant influence on what we do and
how we do it – there is no room to rest on
our laurels. I do not see the team doing this
and I am confident we will continue to
remain vigilant on all things that affect the
health, safety and wellbeing of our people.
THANKS
The outcomes we have delivered in a
challenging year are due to the drive,
passion and energy of our people. Since the
lockdown lifted in December 2021, one of
my pleasures has been the ability to get out
amongst our teams and see the hard work
they do every day to deliver the outcomes
that we have all strived for in this year.
There are many great contributors to
Sanford – you will see some examples
throughout this report. I thank the Sanford
team for all they have done to make our
year as good as it could possibly be. During
these times our engagement has remained
strong which, once again, is a credit to all of
our teams and their leaders.
I want to acknowledge and say thank you
to our Board. Their advice, challenge,
ideas and counsel has been critical in
seeing Sanford come out of the year in a
significantly better position than when we
went into it.
This business operates in an environment
where we face new challenges almost
every single day. Our test has been
dealing with those daily realities while
continuing to deliver on our goals. The
Sanford team – Board, leaders and our
people – have adapted and changed to
ensure we could deliver. I know this is
what our shareholders expect of us. I
appreciate their commitment to Sanford,
and I look forward to rewarding them for
that commitment over the coming years.
Peter Reidie
CHIEF EXECUTIVE OFFICER
14 November 2022
ABOVE Sanford deepwater vessel San Enterprise berthed in Timaru.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
14
SANFORD INTEGRATED REPORT 2022
Highly Valued
Community
Partner
Enabling
Healthy
Oceans and
Ecosystems
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Excellence
Trusted
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Dierentiate through
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Thank you for reading our 2022 Integrated
Annual Report. The following pages describe
the structure of our report, how it integrates
the United Nations Sustainable Development
Goals plus our Business Excellence Framework
and our newly refreshed business strategy.
In 2022, Sanford’s leadership team refreshed
our strategic goals and focus. Our values
remain at the heart of what we do and are
unchanged. In the next layer out in the
diagram to the right, we have rearticulated
the outcomes in our Business Excellence
Framework, although the essence of these is
unchanged. We have developed a new vision
and purpose and set ourselves a mission: to
sustainably grow shareholder value. Beneath
this in the strategy wheel, we have laid out
our current strategic priorities: to grow
salmon, grow mussels, sustain deepwater
and turnaround our inshore operations.
Detail about how we have addressed these
is contained in our chapters and in the CEO
Review. Our shorter-term strategic initiatives
are placed around the outside of the wheel.
In the chapters of this Annual Report,
we provide examples of how we are realising
these initiatives.
U
D
S
E
C
P
—
REPORT
STRUCTURE
HOW TO READ THIS REPORT
—
OUR STRATEGY
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
15
SANFORD INTEGRATED REPORT 2022
THE UN SUSTAINABLE
DEVELOPMENT GOALS
The United Nation’s SDGs are an
urgent call for action to achieve
prosperity for people and planet.
The 17 goals were released in 2015
as part of the 2030 agenda for
sustainable development. Beneath
each goals sits 169 targets, which
guide our decisions about which of
the goals are most relevant to and
actionable by Sanford. We focus on
six of the 17, where we believe we can
make a contribution and a difference.
Goal 8 is Decent Work and
Economic growth which we
apply in chapters two, three,
four and five.
Goal 9 is Industry, Innovation
and Infrastructure which we
speak to in chapters three
and five.
Goal 12 is Responsible
Consumption and Production
which is addressed in chapter
one.
Goal 13 is Climate Action
which is covered in chapter
one.
Goal 14 is Life Below Water
which is a focus in chapter
one.
Goal 17 is Partnerships for
the Goals which we speak to
in chapters one and four.
The SDGs appear for your reference in
the dashboards at the start of each
chapter.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
16
SANFORD INTEGRATED REPORT 2022
VALUE CREATION – THE SIX CAPITALS
FINANCIAL INTELLECTUAL
HUMAN NATURAL
MANUFACTURED
SOCIAL AND
RELATIONSHIP
The inputs, or capitals are financial,
human, manufactured, intellectual,
natural and social and relationships.
The value creation process, which leads to
the outcomes, will typically draw on input
from more than one of the six capitals.
The disc-shaped infographics in the
dashboards at the start of each
chapter demonstrate to what degree
each input factors into that chapter’s
outcome. These are qualitative
assessments, as there is no standard
approach to putting numeric values
on each of these categories.
Examples of the contributions of these
capitals are demonstrated throughout our
chapters. Financial capital contributes to
our plans to develop new scampi vessels
(chapter one) and our investments in new
equipment and vessels for our salmon
farming and processing (chapter five).
Human capital is at work throughout our
business and there are examples of this in
the success of our team in Australia
(chapter three) and in our Covid-19
management (chapter two). Social capital
is essential to our community interactions
particularly with our partners at the
Graeme Dingle Foundation and New
Zealand Food Network (chapter four).
Intellectual capital is at play in our supply
chain management (chapter five) and the
development of our Bioactives centre
(chapter three). Manufactured capital
contributes to operational excellence via
the improvements to our processing
plants and on-water assets (chapter five).
Finally, natural capital is at the heart of
our business as we seek to sustainably fish
and farm beautiful New Zealand seafood.
Every one of our chapters includes stories
which reflect this.
REPORTING FRAMEWORKS
This Report has been developed in
accordance with the International
Integrated Reporting Council (IIRC)
Integrated Reporting Framework. This
enables us to explain how we create value
over time and provide transparency on
every aspect of our business activity.
We remain committed to integrated
reporting because it is the right thing to
do, and we know an increasing number of
stakeholders are interested in how we
create long term sustainable value.
WE WISH TO BE TRANSPARENT.
We also applied the Global Reporting
Initiative (GRI) Sustainability Reporting
Standard 2016 to a core level of
compliance, and report across a range of
best practice environmental, social and
governance (ESG) indicators. The GRI
index is included in Appendix E.
DISCLOSURES
Unless otherwise indicated, this Report
covers performance from all our
operations, including Joint Venture
operations (North Island Mussels Ltd and
SanWon Limited).
All financial data is presented in New
Zealand dollars, unless otherwise stated.
Any changes or restatements of
previously reported figures are identified
throughout the Report. KPMG has
provided independent assurance of this
Report, and this covers both statutory
financial and selected nonfinancial
information. The combined independent
auditors and limited assurance report is
on pages 176 to 182.
This Report, produced by Sanford’s
management team and reviewed by our
Executive Team, has been signed off by
Peter Reidie, our CEO and the Board as a
true and accurate picture of Sanford’s
performance during the year. The
Directors are pleased to present the
Integrated Annual Report of Sanford
Limited for the year ended 30 September
2022.
For and on behalf of the Board of
Directors:
Sir R A McLeod
CHAIRMAN
14 November 2022
F Mackenzie
CHAIR AUDIT FINANCE AND RISK
COMMITTEE
14 November 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
17
SANFORD INTEGRATED REPORT 2022
—
REPORTING
WHAT MATTERS
SANFORD’S MATERIAL TOPICS
—
OUR APPROACH
Sanford has evaluated, prioritised and
presented on material topics in its annual
report since 2014.
More recently, we’ve taken a dynamic
approach to materiality over time, rather
than the earlier rigid annual survey
process, which often showed little
difference in outcomes year-to-year. The
gap between assessments (2020-2022)
enabled us to review the approach to be
used in the future by conducting a fresh
round of desk research on industry best
practice and address feedback from an
assurance audit of our earlier process.
This has led to our topic definitions being
revised, while also being informed by
previous years’ work, which followed the
International Integrated Reporting
Council (IIRC) Framework and the Global
Reporting Initiative (GRI) Standards.
The 2022 assessment was undertaken
in partnership with AK Research &
Consulting and involved a combination
of interviews, workshops and surveys.
Looking forward, we anticipate
continuing our dynamic materiality
approach, anticipating a formal review
of our material topics over a 2-4 yearly
cycle or when there is a significant
shift within our external or internal
operating environment.
MATERIALITY ASSESSMENT PROCESS
1. Review of topics and processes
The review of the process and subsequent
approach adopted for 2022 was based on
feedback from an assurance audit and
insights from desk research. An internal
workshop concluded there should also be
a major revision of the material topics.
This resulted in an initial expanded list of
33 potential material topics developed as
part of the review with some topics
omitted and added from 2020.
2. Stakeholder identification and
participation
Internal stakeholders were chosen to
represent a range of views and parts
of the business, from the shop floor
to senior executives and Board members.
External stakeholders were selected to
include a range of people with diverse
perspectives, who have a connection to
or degree of familiarity with Sanford.
The assessment included 50 stakeholders
(38 internal and 12 external), with
participants taking part via a workshop
or in depth interview. Stakeholders were
identified following the principles of
the best practice AA1000 stakeholder
engagement standard to represent the
diverse views of interested and involved
groups (Appendix C).
3. Finalising the topic list
Information from the internal workshops
was collated and reviewed, resulting in a
final list of 19 material topics.
4. Data collection for ‘effect on the
business’, based on priority ratings from
the Executive Team and participating
Board members
A follow-up questionnaire was sent out to
staff that participated in the workshops.
The questionnaire asked respondents to
prioritise the 19 material topics according
to their effect on the business. The
questionnaire was answered by 17 staff,
seven members of the Executive Team,
and two Board members.
5. Data collection for ‘effect on the
economy, people, and the environment’,
based on priority ratings from external
stakeholders
A similar follow-up questionnaire was sent
to the stakeholders that participated in
the one-on-one interviews. In this
instance, each participant was asked to
prioritise the material topics according to
their effect on the economy, people, and
the environment. This questionnaire was
answered by 11 out of 12 stakeholders.
6. Developing the materiality matrix
The material topics were mapped
according to three categories – very high,
high and mid-level importance to produce
a simplified matrix (external stakeholders
on the y-axis versus internal stakeholders
on the x-axis) which was in line with many
peer companies reviewed in the desk
research.
MATERIALITY MATRIX
The materiality matrix (Figure 1) shows
Sanford’s 19 material topics mapped by
‘effect on the business’ and ‘effect on the
economy, people and environment’.
The ‘effect on business’ axis represents
the priority categories from the key
decision makers within the business (9).
The ‘effect on economy, people and
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
18
SANFORD INTEGRATED REPORT 2022
environment’ axis represents the
priority categories for the
participating external stakeholders
(11 of 12).
Comparing the ranking of material
topics across internal and external
stakeholders, five topics were ranked
in the ‘very high’ category by both –
‘sustainable management of fish
stocks’, ‘talent attraction,
development and retention’, ‘health,
safety and wellbeing of our people’,
‘maximising $/kg’, and ‘responsible
leadership’.
Some topics differed in their ranking
across groups, for example ‘adapting
business practices to changing
climate’ ranked as an issue of very high
importance for external stakeholders
but was only a mid-level issue for
internal stakeholders. This may be
because internal stakeholders saw
other needs as more urgent such the
post-pandemic recovery and the
impact of the war in Ukraine.
Internal stakeholders ranked
‘environmental protection and ocean
health’ and ‘food safety and quality’
higher than external stakeholders,
which may reflect a deeper
understanding of operational priorities
and needs within the business.
MID
HIGH
VERY HIGH
EFFECT ON ECONOMY, PEOPLE, ENVIRONMENT
– external stakeholders
EFFECT ON BUSINESS – internal stakeholders
MIDHIGHVERY HIGH
Sustainable management
of fish stocks
Talent attraction, development
and retention
Health, safety and wellbeing
of our people
Maximising $/kg of our harvest
(profitability and productivity)
Responsible leadership – ethical
conduct, transparency, governance
E ective innovation – products,
markets, technology
Adapting business practices
to the changing climate
Environmental protection and ocean
health – water quality, sensitive
habitats, and threatened species
Food safety and quality
Risk management – regulatory,
compliance, cyber-security,
biosecurity, reputation
Supply chain management
Reducing carbon footprint
Community relationships
(including Iwi), collaboration
and support
Ecient management of resources
– energy, water
E ective waste management
– general, plastic, food waste
E ective communication
(both internal and external)
Positive and meaningful
work experiences
Traceability and place of origin
Brand development and
responsible marketing
Enabling Healthy
Oceans and Ecosystems
Safe and High
Performing Workplace
Trusted Customer
Partner of Choice
Highly Valued
Community Partner
Operational
Excellence
FIGURE 1: MATERIALITY MATRIX
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
19
SANFORD INTEGRATED REPORT 2022
PRIORITY RANKINGS
The ranked material issues by their
potential ‘effect on the business’ is
outlined in Table 1 and are based on the
results from the questionnaire for key
decision makers within Sanford (9).
In the latest results, two out of three of
the top topics remained the same as in
2020 – ‘health, safety and wellbeing of
our people’ and ‘food safety and quality’,
reinforcing the view that the success of
our company is dependent on providing
safe, high-quality seafood while looking
out for the wellbeing of our staff and
contractors.
A new topic added (re-defined) this year,
rated in the top three ‘environmental
protection and ocean health’ which
acknowledges the need to minimise our
environmental impact to support the
future longevity of the industry. Linked to
this and ranking next, was the ‘sustainable
management of fish stocks’ which has
always ranked as a top issue.
Two other new topics added this year
came in next, which endorses their
inclusion, ‘responsible leadership’ and
‘talent attraction, development and
retention’.
TABLE 1: MATERIAL ISSUES RANKED BY THEIR
POTENTIAL EFFECT ON BUSINESS
1=Health, safety and wellbeing of our people
1=Food safety and quality
1=Environmental protection and ocean health – water quality,
sensitive habitats, and threatened species
2Sustainable management of fish stocks
3Responsible leadership – ethical conduct, transparency,
governance
4Talent attraction, development, and retention
5Maximising $/kg of our harvest (including profitability and
productivity)
6Risk management – regulatory, compliance, cyber-security,
biosecurity, reputation
7Efficient management of resources – energy, water
8Reducing carbon footprint/ emissions
9=Effective innovation – products, markets, technology
9=Supply chain management
9=Effective waste management – general, plastic,
and food waste
10Community and Iwi relationships, collaboration and support
11Adapting business practices to changing climate
12=Positive and meaningful work experiences
12=Effective communications (including internal and external
communication)
13Traceability and place of origin
14Brand development and responsible marketing
Mapping material issues against Sanford’s strategic pillars
(Figure 2), highlights the key focus areas for each area.
ABOVE Oysters Mignonette
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
20
SANFORD INTEGRATED REPORT 2022
FIGURE 2: MATERIAL TOPICS BY SANFORD STRATEGIC PILLARS –
POTENTIAL BUSINESS EFFECT (key decision makers within the business)
POTENTIAL BUSINESS EFFECT
VERY HIGHHIGHMID
Enabling Healthy
Oceans and Ecosystems
Reducing carbon footprint/emissions
Adapting business practices to changing climate
Efficient management of resources – energy, water
Effective waste management – general, plastic, and food waste
Environmental protection and ocean health – water quality, sensitive habitats, and threatened species
Sustainable management of fish stocks
Safe and High
Performing Workplace
Health, safety and wellbeing of our people
Talent attraction, development, and retention
Positive and meaningful work experiences
Trusted Customer
Partner of Choice
Food safety and quality
Traceability and place of origin
Effective innovation – products, markets, technology
Brand development and responsible marketing
Highly Valued
Community Partner
Community and Iwi relationships, collaboration and support
Operational
Excellence
Maximising $/kg of our harvest (including profitability and productivity)
Effective communications (including internal and external communication)
Risk management – regulatory, compliance, cyber-security, biosecurity, reputation
Supply chain management
Responsible leadership – ethical conduct, transparency, governance
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
REPORT STRUCTURE & MATERIALITY
21
SANFORD INTEGRATED REPORT 2022
ADDRESSING MATERIAL ISSUES
THROUGH OUR BUSINESS
EXCELLENCE FRAMEWORK
Addressing the most material topics is our
priority at Sanford. Its why we periodically
review our topic definitions and revisit our
materiality assessments. Based on what
our stakeholders have told us this year,
we’ve updated our material topics and
topic definitions. We measure
performance against material topics within
each of the five pillars of our Strategic
Business Excellence Framework, which is
described in the Performance Outcomes
section of this report (pages 30 to 88). To
maintain consistency, performance during
FY22 is measured against material topics
defined at the start of that year (progress
against targets for FY22), whilst our
performance targets for FY23 are aligned
with the material topics identified during
our most recent materiality assessment,
performed during July – September 2022.
In the diagrams below, we link our top
material issues, from the recent
stakeholder engagement to the five pillars
and outcomes of our Strategic Business
Excellence Framework, and associated
Sustainable Development Goal outcomes
(material topic ranking is shown alongside
in brackets).
• Environmental protection and ocean
health – water quality, sensitive
habitats, threatened species (1=)
• Sustainable management of fish
stocks (2)
• Efficient management of resources –
energy and water (7)
• Reducing carbon footprint (8)
• Effective waste management – general,
plastic, and food waste (9=)
• Adapting business to climate change (11)
• Health, safety and wellbeing of our
people (1=)
• Talent attraction, development, and
retention (4)
• Positive and meaningful work
experiences (12=)
• Food safety and quality (1=)
• Effective innovation – products,
markets, technology (9=)
• Traceability and place of origin (13)
• Brand development and responsible
marketing (14)
Enabling Healthy Oceans
and Ecosystems
Trusted Customer Partner
of Choice
Safe and High Performing
Workplace
Highly Valued
Community Partner
Operational
Excellence
• Community and iwi relationships,
collaboration, and support (10)
• Responsible leadership – ethical
conduct, transparency, governance (3)
• Maximising the $/kg of our harvest
(incl. profitability and productivity) (5)
• Risk management – regulatory,
compliance, cybersecurity, biosecurity,
reputation (6)
• Supply chain management (9=)
• Effective communications (internal and
external) (12=)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
22
SANFORD INTEGRATED REPORT 2022
FINANCIAL CAPITAL
Pool of necessary funds (equity, debt and grants) provided
by banks and shareholders, or generated through
operations or investments
HUMAN CAPITAL
Competencies, capabilities and experience of our
employees, our key asset, and the capacity to add value
through human capital development
MANUFACTURED CAPITAL
Tangible, production-orientated goods and infrastructure
owned, leased or controlled by Sanford that contributes to
the delivery of our products and services
INTELLECTUAL CAPITAL
Intellectual property, brand and reputation, a key element
of our future earning potential and competitive advantage
NATURAL CAPITAL
Stock of natural resources or environmental assets (water,
atmosphere, land, materials, biodiversity and ecosystem
health) that are fundamental to our future prosperity
SOCIAL & RELATIONSHIP CAPITAL
Relationships within Sanford, and between Sanford and its
external stakeholders, which are essential to retaining our
social licence to operate, including relationships to maintain
quotas and licences fundamental to our future prosperity
FARMING
OPERATIONS SITES
CUSTOMERS
FISHING
—
HOW WE CREATE VALUE
—
INPUTSOUR BUSINESS
225
AQUACULTURE FARMS
16
ACROSS NZ / AU
572
43
FISHING AND AQUACULTURE VESSELS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
23
SANFORD INTEGRATED REPORT 2022
OUR VISION
NEW ZEALAND’S
SEAFOOD LEADER FOR
QUALITY, VALUE
AND REPUTATION
Operational Excellence
We are New Zealand’s seafood leader
for quality, value and reputation.
We deliver consistent and sustainable,
profitable, and socially beneficial
outcomes to our shareholders and
stakeholders through our people, sector
leadership, approach to innovation,
and risk management strategies.
High Valued Community Partner
We are a valued and respected partner
both at a local community level and with
our national strategic partners. We are a
positive contributor to all our stakeholder
communities and are regarded as being
an integral part of the local and national
communities we participate in.
Trusted Customer Partner
of Choice
We will work with customers and
consumers to bring them the best of
our sustainably harvested seafood and
marine extracts, demonstrating great
care for our beautiful New Zealand
products and achieving the optimal
value for these precious resources.
Enabling Healthy Oceans
and Ecosystems
We will lead by example in ocean
management, so that future generations
can enjoy and benefit from our
biologically diverse, safe and healthy
oceans. We will work with our people,
customers and suppliers to lead the way
in maximising resource utilisation,
minimising our footprint and protecting
the environment wherever we operate.
Safe and High Performing
Workplace
We strive to become an employer of
choice by delivering industry leading
safety risk management, ensuring a
culture of high performance and
growth and by living our values.
REVENUE IN 2022
$531.9
M
704
M
MEALS PRODUCED
STANDARD MEALS BASED ON
A 100G PORTION OF SEAFOOD
109,412
TONNES OF SEAFOOD HARVESTED
OUTPUTSOUTCOMES
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
24
SANFORD INTEGRATED REPORT 2022
ENABLING HEALTHY
OCEANS AND
ECOSYSTEMS
HIGHSLOWS
VALUE CREATION OUTCOMES
SAFE AND HIGH
PERFORMING
WORKPLACE
▼
44%
REDUCTION IN WASTE
DIRECTED TO LANDFILL
FY22: 3,536 tonnes
FY21: 6,357 tonnes
FY20: 9,627 tonnes
INCREASE IN VOLUME
OF NOTIFIABLE SPILLS
FY22: 160 litres of liquids, 136kg of gases
FY21: 146 litres of liquids, 0kg of gases
▲
7%
PAY INCREASE
FOR ENTRY LEVEL
FRONTLINE POSITIONS
▲
18% YEAR ON YEAR
INCREASE IN VOLUNTARY TURNOVER
OF PERMANENT STAFF
FY22: 22.48% of permanent staff
FY21: 19% of permanent staff
CONSISTENT AND
SUSTAINED REDUCTION
IN FISHERIES
INTERACTIONS WITH
SEABIRDS AND MARINE
MAMMALS SINCE FY18
(down 45% for seabirds and
65% for marine mammals)
ENGAGEMENT SCORE
STEADY DESPITE
COVID IMPACTS
(overall engagement score of 7.4 in July
2022, a slight drop from 7.6 in June 2021)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
25
SANFORD INTEGRATED REPORT 2022
294,576
SEAFOOD MEALS DONATED
TO COMMUNITY GROUPS
▼
15%
REDUCTION IN
COMMUNITY SUPPORT VALUE
compared to 2021
HIGHSLOWS
VALUE CREATION OUTCOMES
DELAYED DELIVERY
OF NEW PRODUCT LINES
IN NEW ZEALAND
AND US MARKETS
COMPLETION
OF THE BUILD OF
SANFORD BIOACTIVES
our marine extracts centre in Blenheim
TRUSTED CUSTOMER
PARTNER OF CHOICE
HIGHLY VALUED
COMMUNITY
PARTNER
OPERATIONAL
EXCELLENCE
CUSTOMER
COMPLAINTS RECEIVED
REDUCED BY 42%
Number of validated complaints
per million kgs sold reduced by 20%
SUPPORTED
24 FOOD BANK
SERVICES
ACROSS NEW ZEALAND
MUSSEL HARVEST VOLUMES DOWN
▼
8%
due to labour shortages
and Covid-impacts
NPAT
$55.8
M
UP 244% ON FY21
(assisted by crayfish quota sales)
ADJUSTED EBIT
$40.2
M
UP 72.5% ON FY21
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
26
SANFORD INTEGRATED REPORT 2022
—
OUR
GLOBAL
SALES
FOOTPRINT
—
2022 has seen New Zealand go from
regional Covid-related lockdowns,
which dominated the beginning of our
financial year, to our reopening to the
world by the end of it. We have been able
to resume travel to visit key customers
and see first-hand how our products are
being received.
We continue to pursue a strategy of
market diversification, which has served
us well, as different markets have moved
through the pandemic at different speeds
and with different approaches. As a
general observation, market demand has
returned to pre-pandemic levels faster
than expected.
NORTH AMERICA
The North American market provided
17.1% of our total sales revenue in 2022,
down slightly on FY21 (17.4%). This drop
is attributable to a shift in our half-shell
mussels focus, with volume down,
despite strong demand. This is because
other markets increased demand for
our half-shell product, as they recovered
from Covid related challenges.
In this region we had an outstanding
year for salmon, driven by Big Glory
Bay brand growth and an increase in
our direct to customer business, as
opposed to exclusively using a traditional
wholesaler model. These changes saw
us achieve 63% revenue growth for
salmon in this region.
AUSTRALIA
Overall this market has continued to
perform well for Sanford, with Sanford
Australia having a very positive year
and contributing $3.8 million to the
Adjusted EBIT.
We were able to realise increased
margins into this market on all major
product categories.
We launched our Big Glory Bay brand
in Australia in the middle of our year,
across all channels, including creating
strong partnerships with the likes of
Fishbowl, a chain of high-end, wellness-
focused restaurants.
CHINA
China (including Hong Kong) represented
a higher proportion of our Sales revenues
in 2022 at 14.6% versus 11.1% in the prior
year. We saw significant salmon growth,
driven by a small volume increase and
significant growth in brand value. Mussel
revenue remained flat as we continued to
diversify our markets for this product
globally. Wildcatch saw significant
growth, driven by value growth for our
premium scampi offering.
EUROPE
The share of our sales revenue from
Europe was up slightly compared to the
prior year (10.9% in FY22 and 9.1% in
FY21). We sent less of our squid to this
market as we were able to achieve
stronger pricing in Asia. Our mussel
revenue increased as the European
market recovered from Covid-impacts
and foodservice went from strength to
strength in the region.
JAPAN
The Japanese market was largely flat
versus the prior year (2.6% in FY22
compared to 2.2% in FY21), however a
highlight was strong hoki sales, assisted
by favourable currency changes. The
mussel market in this country also saw
good recovery from the Covid-impacts
of the prior year.
OTHER ASIA
We saw growth in demand for salmon
in smaller markets like Singapore,
Taiwan and Thailand, however these same
markets saw lower mussel revenue, as
they were unable to meet the prices we
could achieve elsewhere. We have
positive expectations about continued
growth in demand for our salmon and
scampi across Asia.
CONCLUSIONS
The year saw rapid growth in demand,
as many of our key markets bounced
back from Covid-related impacts, and
we were able to realise the benefits of
key components of our market strategy
such as our more direct connections to
our customers. Supply chain pressures
continue to be challenging, both in
getting our goods out of New Zealand
and in managing port congestion and
transport-related issues when our
goods reach their intended markets.
However, the stabilising influence of
our relationship with supply chain
collaboration group Kotahi has been
beneficial. The latter part of our year
has seen consumers feeling the impacts
of inflation on their shopping baskets
which may constrain price growth in
the seafood category.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
27
SANFORD INTEGRATED REPORT 2022
Indian Ocean
South Pacific
North Atlantic
South Atlantic
Tropic of Capricorn
Equator
Tropic of Cancer
Arctic Ocean
North Pacific
Southern Ocean
Melbourne
AUSTRALIA
(INC. PACIFIC ISLANDS)*
11.9
%
SOUTH
KOREA*
1.2
%
2021: 1.0%
2021: 12.4%
MIDDLE EAST
1.3
%
2021: 0.8%
OTHER ASIA*
3.2
%
2021: 3.2%
JAPAN*
2.6
%
2021: 2.2%
*
EUROPE*
10.9
%
2021: 9.1%
NORTH AMERICA*
17.1
%
2021: 17.4%
14.6
%
2021: 11.1%
CHINA
(INC. HONG KONG)*
NEW ZEALAND
36.6
%
2021: 41.1%
KEY
Fishing AreaFish Market
Top Export Countries
* Percentage of operations revenue from top nine geographical
locations at point of sale
—
OUR GLOBAL SALES FOOTPRINT
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
28
SANFORD INTEGRATED REPORT 2022
—
OUR
NEW ZEALAND
FOOTPRINT
—
NEW ZEALAND
Sales volumes in our New Zealand
market have grown, despite the reduction
in the percentage of our total sales output
taken by domestic customers.
Our domestic salmon business has
performed well ahead of where it was
in FY21, despite lower volumes. Our
relationship with key domestic partner
Foodstuffs remains strong and our
seafood is available at its supermarkets
across the North Island and in some
South Island outlets.
Our Big Glory Bay premium salmon
is now offered in high end and iconic
restaurants from Stewart Island to
the top of the North Island.
Auckland
Tasman Bay
Havelock
Timaru
Bluff
Waitaki
Kaitangata
Stewart Island
Coromandel
Tauranga
Blenheim
NEW ZEALAND*
36.6
%
2021: 41.1%
ProcessingAquaculture
FishingFish Market
Processing
Joint Arrangements
Aquaculture
Joint Arrangements
Head Office
* Percentage of operations
revenue from top nine geographical
locations at point of sale
KEY
Nelson
Golden Bay
Christchurch
Great Barrier Island
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
SANFORD AND OUR OPERATIONS
29
Luke Jones on board PSH vessel, Tengawai.
30
SANFORD INTEGRATED REPORT 2022
CHAPTERS: OUR FIVE PERFORMANCE OUTCOMES
CAPITAL INPUTS
1. Financial
2. Human
3. Manufactured
STRATEGIC INITIATIVES
U Utilisation
D Differentiate
S Systems
UN SDG
United Nations Sustainable
Development Goals
Enabling Healthy
Oceans and
Ecosystems
Safe and
High Performing
Workplace
KEY
4. Intellectual
5. Natural
6. Social & Relationship
E Expertise
C Customers
P People
—
OUR
PERFORMANCE
OUTCOMES
—
In the following chapters you will find our
reporting on our performance in 2022.
The five chapters describe our progress across
the five outcomes or pillars of our Business
Excellence Framework.
These chapters can be cross referenced with
the Global Reporting Initiative (GRI) guidelines
(described and indexed in Appendix E).
Their content is selected with the International
Integrated Reporting Council frameworks as
our guide.
On the first page of each chapter you will find
a dashboard with three wheels. One shows which
of the UN Sustainable Development goals are
related to that content. Another wheel describes
which of our strategic initiatives are reflected in
the chapter’s content. The third links capital
inputs to the content of that chapter.
1
2
3
4
5
6
U
D
C
SE
P
U
D
C
SE
P
CAPITAL INPUTSSTRATEGIC INITIATIVES
UN SDG
CAPITAL INPUTSSTRATEGIC INITIATIVES
UN SDG
1
2
3
4
5
6
31
SANFORD INTEGRATED REPORT 2022
CHAPTERS: OUR FIVE PERFORMANCE OUTCOMES
Trusted Customer
Partner of Choice
Operational
Excellence
Highly Valued
Community Partner
U
D
C
SE
P
1
2
3
4
5
6
1
2
3
4
5
6
1
2
3
4
5
6
U
D
C
SE
P
U
D
C
SE
P
CAPITAL INPUTSCAPITAL INPUTSCAPITAL INPUTSSTRATEGIC INITIATIVESSTRATEGIC INITIATIVESSTRATEGIC INITIATIVES
UN SDGUN SDGUN SDG
32
SANFORD INTEGRATED REPORT 2022
32
Enabling Healthy
Oceans and
Ecosystems
CAPITAL INPUTSSTRATEGIC INITIATIVES
UN SDG
1. Financial
2. Human
3. Manufactured
4. Intellectual
5. Natural
6. Social & Relationship
United Nations Sustainable
Development Goals
KEY: DARKER SEGMENTS APPLY
TO THIS OUTCOME. SEE PAGE 14
KEY: COLOUR SEGMENTS
APPLY TO THIS OUTCOME.
OUR VISION: We will lead by example in ocean and
environmental management, so that future generations can
enjoy and benefit from our biologically diverse, safe and
healthy oceans. We will work with our people, customers
and suppliers to lead the way in maximising resource
utilisation, minimising our footprint and protecting the
environment wherever we operate.
1
2
3
4
5
6
U
D
C
SE
P
U Utilisation
D Differentiate
S Systems
E Expertise
C Customers
P People
Enabling Healthy Oceans and Ecosystems
33
SANFORD INTEGRATED REPORT 2022
Material issues and value creation – 2022
This table summarises Sanford’s actions relating to our desired business outcome of enabling healthy oceans and ecosystems. It includes the targets we set at the
commencement of year 2022, organised by the material topics defined in our 2021 Annual Report, and our progress against these targets. At the end of this section,
we use revised and refreshed material topics (the outcome from the materiality process) to define future targets for 2023 and beyond as well as our future vision.
PROGRESS AGAINST TARGETS FOR FINANCIAL YEAR 2022
MATERIAL TOPICS2022 TARGETSPROGRESS AGAINST TARGETS
Sustainable Fish Stocks, Marine
Farms and Marine Conservation
Expand the application of Precision Seafood
Harvesting (PSH) technology by gaining
regulatory approval of, constructing associated
equipment, and deploying PSH on Sanford vessels
within the West Coast North Island fishery,
thereby realising benefits from precision harvests,
environmental improvements, and catch quality
within this key fishery.
Ongoing. During FY22, applied for and obtained the regulatory approval for PSH use
within the West Coast North Island. Bespoke PSH construction for our vessels which
fish that area hampered by availability of the composite fabric material required for
construction. Construction and deployment now anticipated for FY23.
Continue to monitor and ensure full compliance to
catch reporting and fisheries regulation. Promote
and support active fisheries management decisions
to ensure the sustainability and resilience of fish
stocks, along with their sustainable utilisation for
the benefit of the whole community.
Achieved. Full compliance to catch reporting. Sanford was also actively involved in
submissions on sustainability rounds and fisheries management systems during FY22
– all positions taken support robust stock management to enable the sustainable
utilisation of fisheries resources.
Endangered, Threatened and
Protected Species
Maintain multi-year reduction trends (FY18: FY22)
in harmful interactions between our fisheries
activities with seabirds and marine mammals
through continuous improvements, trigger levels,
mitigations in operations, and targeted partnerships.
Achieved. Consistent and sustained reduction in fisheries interactions since FY18
with both seabirds (45% reduction in interactions) and marine mammals (65%
reduction in interactions).
IMAGE
(PAGE 32)
Henry Baine, a local Stewart Islander who works for New Zealand
Diving and Salvage (NZDS) and is part of the contracted dive team.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
34
SANFORD INTEGRATED REPORT 2022
MATERIAL TOPICS2022 TARGETSPROGRESS AGAINST TARGETS
Endangered, Threatened and
Protected Species – Cont
Complete our contribution toward the Māui63
drone partnership programme, supporting the field
surveys, and distribute outcomes to fishing vessels
to further reduce the already low interaction risks
with Māui dolphin.
Not Achieved. Support of the Māui63 drone program has continued throughout FY22.
The program is not yet complete, with further field testing and systems to support
data communications links remaining to be deployed.
Environmental Effects
Ensure no environmental abatement notices
across Sanford managed operations.
Review and further strengthen prevention and
mitigation controls for environmental spills and
discharges to further reduce environmental risk
associated with these unplanned events.
Achieved. No environmental abatement notices received.
Mitigation controls for spills and discharges were reviewed with systemic
improvement measures put in place such as scheduled hydraulic hose and fitting
audits –improving preventative maintenance regimes.
Resource Utilisation
and Efficiency
Reduce our water use intensity by a further three
percent (m
3
/GWkg).
Not Achieved. Marginal increase (1%) in water intensity (m
3
/GWkg), influenced by
a reduction in volumes (GWkg) processed onshore for whitefish and mussels.
Achieve 65% waste diversion from landfill,
including metals and marine.
Achieved. Waste diversion from landfill across operations was 75% as teams continued
a focus to reduce waste and identify alternative re-use opportunities across a range of
materials including mussel shell and end-of-life fishing nets.
Prepare and implement internal processes to
ensure the systematic consideration and evaluation
of waste, water, energy, carbon efficiency in capital
purchase decisions.
Achieved. Qualitative processes adopted to ensure environmental features are
considered for capital purchase decisions within both project evaluation and decision-
making stages. Further maturity planned to be developed during FY23 and beyond
through the deployment of quantitative environmental hurdles for new projects.
Prepare and implement a sustainable procurement
policy and procedures, using our influence with
suppliers to further our values, vision and goals.
Ongoing. A Supplier Code-of-Conduct has been prepared during FY22. Engagement
with select suppliers to test implementation has been initiated. Further testing and roll
out anticipated during FY23.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
35
SANFORD INTEGRATED REPORT 2022
MATERIAL TOPICS2022 TARGETSPROGRESS AGAINST TARGETS
Carbon Reduction
Implement progress along our long-term emissions
reduction pathway, targeting a 25% absolute
reduction of Scope 1 and 2 GHG emissions by 2030
from a 2020 base year. Projects for
implementation during FY22 include:
• Energy efficiency and refrigerant loss prevention
initiatives at processing sites
• Targeted EV/PHEV replacements for light
passenger vehicle fleet
• Establishing and embed internal processes, such
as internal carbon pricing, within our business
planning frameworks to promote project and
asset strategy and decisions in support of a
low-emissions future
Address indirect (Scope 3) emissions by working
with suppliers to embed emissions reductions
targets and initiatives. Target engagement and
target setting with top 20% of suppliers by value
during FY22.
Achieved. 7.6% reduction in Scope 1 and 2 GHG emissions. Significant efficiency
project implementation achieved during FY22 including:
• Vessel based efficiency projects – Modification of San Aspiring engine operational
mode control, updating of large vessel Ship Energy Efficiency Management Plans;
• Review of light vehicle operations to optimise use, and transition to PHEVs at
main sites.
Waste diversion initiatives diverted a total of 10,629 MT of waste from landfill in
FY22, thereby avoiding Scope 3 landfill emissions equivalent to 2,200 t CO
2
-e.
Top tier suppliers engaged and evaluated for emissions reductions targets.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
AREA: THE CENTRAL SOUTH
(CANTERBURY, SOUTH
CANTERBURY)
Enabling Healthy Oceans and Ecosystems
36
SANFORD INTEGRATED REPORT 2022
F
rom changing weather patterns to
warming waters, the increasing effects
of climate change are as evident at sea
as they are on land. As New Zealand’s
largest integrated fishing and aquaculture
business, operating 43 vessels and
225 aquaculture farms, we’re constantly
looking at what we can do to lighten
our impact on the oceans. Sustainability
is a focus across our strategy from
the long-established, shared value of
care to the current strategic initiative
to “differentiate through innovation,
quality, provenance, sustainability,
operational excellence and the application
of science.”
How does this play out in our deepwater
fishing fleet, which is based out of the
Port of Timaru in Canterbury? Our fishing
vessels account for the lion’s share of our
volumes and revenues, but they also
account for the largest share of our direct
emissions. They have long life spans and
are in a sector where alternative
technologies are lagging in development.
Nonetheless, in 2022 we continued to
make progress on reducing emissions by
focusing on fuel efficiency and projects
which have achieved operational
improvements.
Our 64m deepsea trawler San Discovery
delivered an annual emissions reduction
of an estimated 218 tonnes of CO
2
equivalent (CO
2
e) following work which
improved vessel efficiency. This included
a propeller upgrade, new underwater hull
coating to reduce friction and overhauled
steering controls. A new boiler is using
less fuel for the output of steam heat for
the upgraded meal plant, and for the
conversion of steam to water. This has
Greening the Fleet
PERSEVERANCE OF OUR REGIONS
TOTAL STAFF AND
SHAREFISHERS
– WHAT WE DO HERE –
552
PROCESSINGDEEPWATER
FISHING
MUSSEL
FARMING &
HARVESTING
OUR CONTRIBUTIONS
$25,027
IN DONATIONS AND SPONSORSHIPS
TO COMMUNITY ORGANISATIONS AND
PROGRAMMES SUCH AS GRAEME DINGLE.
PLUS
12,100
MEAL EQUIVALENTS
DONATED TO LOCAL FOODBANKS.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
37
SANFORD INTEGRATED REPORT 2022
achieved a further estimated annual
emissions reduction of 183 tonnes CO
2
e.
Adopting a system that allows for the
main engine to operate at lower
revolutions per minute also achieved
emissions reductions and fuel efficiency
gains on board our long liner San Aspiring.
This system is known as “propeller curve
mode” where the engine optimises its
output speed based on the demand of the
propeller. This provides significant benefit
when hauling lines (which it does for most
of the time) producing a 25% reduction in
diesel consumption.
Staying on top of energy consumption can
also contribute to lower emissions. Our
ship energy efficiency management plans
(SEEMPs) set out operational measures to
optimise fuel use when steaming and
trawling in our largest vessels.
Examples include measures to reduce
drag on nets under tow or controlling
the vessels to optimise efficiency through
the water. Regular dry dockings and
renewal of underwater paint remain
integral to vessels’ fuel efficiency
longevity, while thermal imaging of
cargo holds regularly verifies insulation
efficiency in our cold storage.
We also recover heat from the main
engine exhaust to supplement boilers
and the desalination plant. The SEEMPs
ensure energy efficiency remains a
priority on vessels, with documentation
of improvements enabling shared gains
across the fleet.
We are greening our fleet on land, as well
as at sea, progressively shifting to hybrid
vehicles where it’s practical. This year our
pool cars were replaced with seven
plug-in hybrids, four in Auckland, two in
Timaru and one in Havelock. The change is
forecasted to reduce emissions by
13.5 tonnes CO
2
e annually. While this
represents a small proportion of our
overall emissions, we’ve selected to
make the change, as passenger vehicles
is one area where renewable based
technologies are currently available and
practical, unlike large fishing vessels at
present. Making the PHEVs available to
our staff has also proven positive in that
some pre-conceived opinions on electric
vehicle technology have changed.
They are now championing it.
-401 tonnes
(ESTIMATED) – ANNUAL EMISSIONS REDUCTION – C0
2
E
FOR THE DEEPSEA TRAWLER, SAN DISCOVERY
FOLLOWING UPGRADES
ABOVE Sanford deepwater vessel the San Discovery, boiler replacement.
ABOVE A PHEV in Havelock, one of seven
added in 2022 across our light vehicle fleet.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
38
SANFORD INTEGRATED REPORT 2022
SUPPORTING SOUND
SCIENCE FOR
SUSTAINABILITY
SCIENCE HAS an invaluable role to
play in assessing the health and
abundance of the wildcatch species we
target and it supports proven tools like
Quota Management in protecting that
sustainability. The more we know,
the better.
So, when many of our vessels now
deploy their fishing gear, they are
trawling for more than fish. Smart
sensors, attached to the gear, are
quietly capturing real-time data on ocean
depths and temperatures for the Moana
Project, a five-year research initiative
by the oceanographic division of
MetService (Meteorological Service
of New Zealand Limited).
The project is building a picture of how
climate change is driving changes in
marine temperatures with the potential
to affect fish stocks. Sanford now has
sensors on eight deepwater and three
inshore vessels, and we’re part of a
200-strong network of vessels capturing
valuable data for the research as we go
about fishing.
The data is transmitted directly to the
MetService for inclusion in their ocean
forecasting models. The project will
improve understanding of coastal ocean
circulation, connectivity, and marine
heatwaves, supporting a sustainable
seafood industry and the management
of our marine environments.
Meanwhile, our skippers can access
detailed surface and underwater ocean
forecasting covering five-to-six-day
spans and use this data in their planning.
Longer term, the research will enable
us to better forecast and respond to
biological changes in the fisheries
because of climate change.
MPI SUMMARY OF SANFORD’S REPORTED INCIDENTAL CATCH DATA
1
SEABIRDSMARINE MAMMALS
2
20222021202020192022202120202019
Uninjured 10298140832035
Injured 25230000
Dead 12319122016425443346
Total 22729436225027443651
Mortality Rate (%)
3
54%65%61%66%93%100%92%90%
1. Vessels operating under Sanford fishing permit over the period July 2021 to June 2022, reflecting data availability
from MPI.
2. For context, since our records began, Sanford has never harmed a Māui dolphin.
3. Mortality rate calculated as the ratio between total species caught and those caught dead.
ABOVE Andrew “Lizard” Hetherington, skipper of the Tengawai in the wheelhouse.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
39
SANFORD INTEGRATED REPORT 2022
Our involvement with the Moana
Project is one example of how we
support sound marine science. Another
is providing vessels for scientific
surveys. It’s a very cost-effective
approach, as the survey work can often
be accommodated free of charge when
we are fishing, or at discounted rates
as the vessel is already ‘in-position’.
In January, the San Aotea extended its
routine 60-day Ross Sea voyage by
three weeks to support the annual
scientific survey of Antarctic toothfish.
Sanford has collaborated with scientists
This year we also supported Marine
Stewardship Council (MSC)
recertification of orange roughy stocks
on the Chatham Rise. MSC
Certification not only considers the
health and sustainability of specific fish
stocks, but also effective fisheries
management and how fishing activities
are managed to maintain the overall
health of the habitat and other species
within it. We harvest six species that are
MSC certified - orange roughy, hake,
hoki, ling and southern blue whiting,
which are certified in New Zealand, as
well as toothfish from the Ross Sea.
ABOVE San Aotea II in the Ross Sea while doing CCAMLR work.
* Based on Sanford’s total
wildcatch (by GWT). Deviations
reflect fluctuations with
seasonality, annual catch
entitlements, species
composition and climate events
such as El Niño/La Niña.
2021201820192020
WILD CAUGHT MSC CERTIFIED CATCH*
39%
45%
36%
44%
2022
39%
from the Ministry of Primary Industries,
NIWA (National Institute of Water and
Atmospheric Research) and the
Commission for the Conservation of
Antarctic Marine Living Resources
(CCAMLR) for 10 years.
The survey focuses on the number and
health of juvenile toothfish in parts of
the Ross Sea shelf, areas of shallower
water where the fish undergo an initial
growth spurt before migrating into the
wider Ross Sea.
DURING 2022 SANFORD
PEOPLE COMPLETED
209
SEPARATE SHORELINE
CLEAN-UP EVENTS
Comprising 687 PERSON HOURS and
155 VESSEL HOURS, resulting in the
removal of
1,408 KG OF WASTE from
shorelines in the Auckland, Marlborough,
and Southland/Stewart Island regions.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
40
SANFORD INTEGRATED REPORT 2022
IT’S NOT BUILT YET, but we know precisely
how our new scampi vessel will perform
on the Chatham Rise in the Southern
Ocean where we fish for this delicacy.
In September 2022, the Board took the
next step towards approving the $30
million capital investment for the new
vessel by proceeding to a formal tender
and contract stage. This will be in line with
a number of our strategic initiatives and
the priority to sustain our deepwater
operations. We expect to gain final
approval by the end of calendar year 2022.
The vessel design has come from Damen,
a family-owned Dutch shipbuilder which
also built our Ikawai and Tengawai inshore
vessels in 1980. The performance of the
new vessel in the scampi fishery will guide
decisions on a further two being bought.
We are confident about the new vessel’s
capability because the design phase has
included some of the most rigorous due
diligence Sanford has ever undertaken for
fleet investments. Undertaken by MARIN,
a globally recognised marine research
institute in The Netherlands, this work
determined how the hull design would
perform – right down to how the crew
may feel when the vessel pitches or rolls.
Elliot Kendrick, Group Manager,
Engineering & Infrastructure Assets,
says testing was undertaken in MARIN’s
170 metre long and five-metre-deep
seakeeping and manoeuvring basin.
“We had a wooden model of about three
metres, at a geometric scale of
approximately 1:11. It was fitted with a
propeller, propeller nozzle and rudder, and
sensors including accelerometers, motion
sensors, strain gauges and pressure
sensors to work out how the vessel would
react to various sea conditions.
This due diligence continued the care and
practical experience that has gone into
the scampi replacement vessel project.
Scampi skippers have fed into the project,
with its aim of a future-proofed fleet
which is a safer operating platform for
crews, the environment and marine birds
and mammals.
With sustainability at the heart of the
project, paints for the vessel have even
been evaluated by the volume of solvent
released as they dry.
The vessel will employ low emission diesel/
electric power and the refrigeration plant
will use environmentally friendly gas.
Sensors will control the speed of fans and
pumps so that they can be controlled by
demand – thus saving electrical power
and fuel.
SUSTAINABLE,
LOW CARBON
AND AS TOUGH
AS THE
SOUTHERN
OCEAN
“The tank testing data used environmental
data specific to where we fish in the
Southern Ocean and at the Chatham Rise.
Recognising the tough conditions our crew
operate in, we wanted to make the hull and
its movement as good as we could get.
The results of the tank testing determine
how the vessel pitches and rolls. This data
was used to calculate the likelihood of sea
sickness for the crew, whether the vessel
would take on water when sailing, and its
response in head, beam and quartering
seas. Shipping water is where waves break
over the bow or stern, which can then run
down the upperdeck, potentially causing
issues for equipment and crew. The data
from the tank testing is then put back into
the software model to ensure that the hull
and it’s seakeeping are as good as can be.”
BELOW Artists impression of
planned scampi vessel
ABOVE Scale model used for tank testing
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
41
SANFORD INTEGRATED REPORT 2022
SANFORD’S WHOLE VALUE CHAIN
EMISSIONS PROFILE – 2022
(SCOPE 1, 2 AND 3)
SANFORD’S OPERATIONAL
EMISSIONS PROFILE – 2022*
(SCOPE 1 AND 2)
S
C
O
P
E
1
A
N
D
2
S
C
O
P
E
3
* Operational emissions defined as Scope 1 and
2 emissions.
Latest emissions factors applied, 1% materiality
threshold applied for GHG Protocol Scope 3
categories. FY21 data categories updated to
ensure like-for-like comparison.
Sanford direct operations (incl fuel/energy use)20.5%
Creating and supplying our raw materials
(packaging, feed, PPE, contract fishers etc.) 43.9%
Customer and consumers’ use of products
(cooking, storage, waste)18.1%
Transport and freight by others12.0%
Energy production related
(e.g. fuel refining by others)4.7%
Waste 0.8%
Fishing operations
(on-water, wharf and support)84.3%
Aquaculture operations
(on-water, wharf and support)7.8%
Processing and storage sites
(coldstores, process heat,
processing energy etc.)5.9%
Supply Chain (owned fleet)0.62%
Other (Head office, etc.)1.23%
Our approach to emissions reductions
We’ve been measuring, reporting and working on reducing
our Greenhouse Gas (GHG) emissions since 2001. Over that
time we’ve developed our systems for GHG accounting.
We apply ISO 14064-1:2006 standards for the measurement
of our operational direct and indirect emissions (Scope 1
and 2). We apply firstly an operational control consolidation
methodology followed by an equity share basis for non-
operationally controlled joint ventures. We take guidance
from the GHG Protocol standards for Corporate Value
Chain emissions (those emissions that are the result of
activities not controlled by us, but that we indirectly impact
in our value chain (Scope 3)). Emissions factors are based on
the latest versions available from the Ministry for the
Environment, DEFRA, EORA, and in the absence of those,
relevant sector information.
In FY20 and 21, we conducted a full measurement of value
chain emissions, both upstream and downstream, across all
15 GHG Protocol Scope 3 categories. This financial year, we
applied a materiality threshold of 1% of total Scope 3
emissions, to ensure our measurement efforts are focused
on areas meaningful for our business operations. For
comparability, we have restated our FY20 and FY21 Scope 3
emissions to only include the identified material categories
(Appendix A) to allow like-for-like comparisons.
We are on track with our target of a 25% absolute reduction
in Scope 1 and 2 GHG emissions by 2030 from a 2020
baseline, with several emissions reduction projects
implemented during FY22. Our baseline year of 2020 was
selected as it was subjected to an independent assurance
process via Toitū, following ISO 14064-1 standards. For
further information refer to the Progress on Target
Statement for Carbon Reduction on page 35.
289,627 t CO
2
-e (2022)
▼ 2.5% on 2021
59,389 t CO
2
-e (2022)
▼ 7.6% on 2021
(64,283 t)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
42
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2023 TARGETS
Sustainable Fish Stocks and Marine Farms
Comply with all applicable laws, regulations, and
conventions governing our operations. Recognise
and prioritise the importance of a healthy ocean for
the sustainable utilisation of fisheries resources.
100% compliance to catch reporting and fisheries regulation.
Take an active role engaging in fisheries management forums and sustainability rounds, supporting science-based
decisions and management frameworks which prioritise sustainability and sustainable utilisation.
Manufacture and deployment of Precision Seafood Harvesting (PSH) units suitable for Sanford’s inshore West Coast
North Island vessels.
Protecting Environments and Ocean Health
Deliver best practice fishing, farming and
environmental operations to ensure and enable the
protection of water quality, habitats, and endangered,
threatened, and protected marine species.
Zero environmental abatement notices.
Support and implement continuous improvements in protected species avoidance and mitigation practices – including
for FY23:
• operational application of near-real time Maui dolphin observation data to vessels via the Maui63 platform; and
• practical development of technology facilitating detection and safe underwater release in the unlikely event
of containment.
OUR VISION:
We lead by example in ocean and environmental management,
so that future generations can enjoy and benefit from our
biologically diverse, safe, and healthy oceans. We work with our
people, customers, and suppliers to lead the way in maximising
resource utilisation, minimising our footprint and protecting the
environment wherever we operate.
LINKS TO RELEVANT STRATEGIC INITIATIVES:
U
Improve value utilisation and eliminate waste
D
Differentiate through innovation, quality,
provenance, sustainability, operational excellence and
application of science
S
Invest in systems to drive a high achieving
organisation
E
Develop expertise, knowledge and insights to drive
asset optimisation, profit, value, quality, and
sustainability
Our future focus – Targets for FY2023
VISION AND STRATEGIC LINKS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Enabling Healthy Oceans and Ecosystems
43
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2023 TARGETS
Efficient Management of Resources (Energy and Water)
Do more with less by maximising our efficient use of resources.
Implement process wastewater improvement projects at both Havelock and Timaru processing sites.
Deliver water and energy intensity use levels lower than, or equal to, FY20-22 averages, through a continued focus
on water and energy savings and loss detection projects.
Implement efficiency hurdle processes (water, energy, emissions etc.) for new business assets into planning and
decision-making processes.
Effective Waste Management
Reduce waste generation across our operations, with an
aspirational goal of elimination. Prioritise reductions in waste
generation, followed by re-use opportunities, and then re-cycling.
Embed waste avoidance and diversion initiatives to ensure waste to landfill volumes from Sanford operations remains
>40% below 2020 levels. (FY22: 3,536 t, FY21: 6,357 t, FY20: 9,627 t).
Perform a systematic review of single use plastics within our operations – identifying reduction opportunities and
using the outcome to set a reduction target during FY23.
Reducing Carbon Footprint
Demonstrate our commitment to climate change responses
by actively reducing our energy consumption and emission
of greenhouse gases and seeking to introduce low carbon
solutions into our value chain, where practicable.
Implement progress toward our long-term emissions reduction target of 25% absolute Scope 1 and 2 emissions
reduction by 2030 from a 2020 baseline.
For FY23, we aim to implement projects in support of that target, which include:
• Vessel efficiency improvement projects
• Investment in efficient diesel-electric technology for select replacement vessels
• Implement internal business planning process in support of the long-term goal
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
STRATEGIC INITIATIVES
UN SDG
U
D
C
SE
P
Safe and
High Performing
Workplace
OUR VISION: We are an employer of choice by
delivering industry leading safety risk management,
ensuring a culture of high performance and growth
and by living our values.
1
2
3
4
5
6
CAPITAL INPUTS
44
1. Financial
2. Human
3. Manufactured
4. Intellectual
5. Natural
6. Social & Relationship
United Nations Sustainable
Development Goals
KEY: DARKER SEGMENTS APPLY
TO THIS OUTCOME. SEE PAGE 14
KEY: COLOUR SEGMENTS
APPLY TO THIS OUTCOME.
U Utilisation
D Differentiate
S Systems
E Expertise
C Customers
P People
Safe and High Performing Workplace
45
SANFORD INTEGRATED REPORT 2022
Material issues and value creation – 2022
This table summarises Sanford’s actions relating to our desired business outcome of ensuring a safe and high performing workplace. It includes the targets
we set at the commencement of FY22, organised by the material topics defined in our 2021 Annual Report, and our progress against these targets. At the
end of this section, we use revised and refreshed material topics (the outcome from the materiality process) to define future targets for 2023 and beyond as
well as our future vision.
PROGRESS AGAINST TARGETS FOR FINANCIAL YEAR 2022
MATERIAL TOPICS2022 TARGETSPROGRESS AGAINST TARGETS
Health and Safety
Further reduce our Total Recordable Injury
Frequency Rate (TRIFR) by 5%.
Achieved. TRIFR reduction of 25% (FY21: 32.74, FY22: 24.53 #/mill.hours).
Further reduce Health and Safety risk profiles by
deploying critical risk teams across the business,
deployment of audit plan, and close out 100% of
high priority actions related to serious events and
critical risks within target date.
Achieved. Critical risk teams were identified and deployed, along with associated
monthly reviews by operations and audit plan. Close out of 100% of relevant high
priority actions within target date.
Achieve green status with successful audits of
control effectiveness across all 12 critical risks for
health and safety.
Achieved. Critical risk control effectiveness reviewed monthly with immediate
actions taken as required. Our Critical Risk Management Framework (incl. control
effectiveness) was reviewed by external experts as we focus on continuous
improvements.
IMAGE
(PAGE 44)
Rex Ryan, skipper of the San Hauraki.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
46
SANFORD INTEGRATED REPORT 2022
MATERIAL TOPICS2022 TARGETSPROGRESS AGAINST TARGETS
Developing our People,
and Workplace Wellbeing
and Culture
Ensure alignment of our people’s contributions
and delivery of business results through 100%
completion of core people processes (incl.
objective and KPI setting, development planning,
and performance reviews).
Not Achieved. 78% completion for objective setting, 91% for development planning,
and 81% for mid-year reviews across staff during FY22. These people processes
continue to be focused and will be supported by forthcoming deployment of
systems to assist these processes.
Achieve a 3% improvement in the goal setting
and management support categories (contributors
to overall staff engagement) of our staff survey
(June 2021 scores 8.4 & 7.9).
Not Achieved. Steady 1% growth in goal setting and management support categories
in the year. Both measures have had challenges during a difficult year with Covid
impacting our priorities.
Design and deploy a targeted learning program
to develop the skills, technical capabilities and
knowledge required for our people to excel in their
roles. Target to achieve a 3% improvement in the
personal growth category (contributor to overall
staff engagement) of our staff survey (June 2021
score: 7.2).
Achieved. Targeted learning programs (seafood processing, cleaning and sanitation,
logistics, fish and fish products) designed and deployed; Workplace assessors
certified and in-place.
Growth category improved by 4% (June 21-June 22). Further growth will be provided
for in learning and development via existing and future learning programs.
Develop and deploy a pilot organisational
excellence training program across Auckland
operations and deliver improved operational
targets.
Achieved. A technical unit standard based learning framework has been designed
and commenced deployment in our Auckland site as a pilot. Several internal
workplace assessors are currently obtaining certification. Further roll out to other
sites is planned.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
47
SANFORD INTEGRATED REPORT 2022
F
inding staff has been one of the most
significant challenges of 2022. Across
the country, we have sought to remove
obstacles for potential employees,
particularly in more remote areas such as
Havelock at the top of the South Island,
population approximately 590.
This is where our Greenshell
TM
mussels are
harvested and processed. Growing our
mussel business is a strategic priority for
us and this means we need good people.
On the processing side, we often have
more roles than we have local applicants.
In the past, these gaps have often been
filled by visitors on working holiday visas.
But with New Zealand’s borders closed
until July 2022, that solution was ruled
out. Add record low levels of
unemployment and the pool of work-
ready labour has dried up to a puddle.
In Havelock, that’s meant getting
creative to overcome the housing
shortages that act as a disincentive for
potential workers from other regions.
Leasing a motel in Havelock helped
us to attract families and workers into
the region and enabled us to restore
the night shift at our processing plant,
lifting production.
“Because of worker shortages we lost
our night shift for around 10 weeks,”
says Site Manager Matt Loose.
Across our sites, lifting our frontline
wages by 7% in June also helped
recruitment and retention in a
competitive market. The increase
recognised the rising costs faced
by our process workers.
TOTAL STAFF AND
SHAREFISHERS
– WHAT WE DO HERE –
347
MUSSEL
HARVESTING &
PROCESSING
MARINE
EXTRACTS
MUSSEL
BREEDING
When labour
pools become puddles
TOP OF THE SOUTH
(MARLBOROUGH, TASMAN
AND NELSON)
PERSEVERANCE OF OUR REGIONS
OUR CONTRIBUTIONS
$50,923
IN DONATIONS AND SPONSORSHIPS
TO COMMUNITY ORGANISATIONS AND
PROGRAMMES SUCH AS GRAEME DINGLE.
PLUS
17,000
MEAL EQUIVALENTS
DONATED TO LOCAL FOODBANKS.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
48
SANFORD INTEGRATED REPORT 2022
We’ve always welcomed new
generations of people from the same
family through the doors at Sanford.
That continues, but to fill all our roles,
we’re also paying bonuses to workers
whose referrals of candidates lead to a
confirmed hire in our fleet or on land.
Matt says the Havelock site will
continue to push hard in recruitment
and to retain our existing staff.
“All primary industry must offer more
than just a job and a wage, particularly
during a time of absolute staff
shortages.”
Sanford is doing its utmost to remove
obstacles to employment – including
successfully partnering with dedicated
recruitment contractors. Meanwhile,
our thanks go to all our workers for their
perseverance through a third year of
Covid-impacts and other adverse events
such as the August floods in
Marlborough and Nelson.
NUMBER OF WORKFORCE
<20D.O.B
Not stated
0
100
200
300
400
500
AGE GROUP
20-2930-3950-5960+40-49
16
17
290
310
297
304
296
299
166
168
10
3
271
289
OUR WORKFORCE IN AGE GROUPS*
* Annual quarterly averages.
NEW HIRES BY AGE GROUP
AGE GROUPNUMBER OF NEW HIRES 2022NUMBER OF NEW HIRES 2021
Under 2056
20 to 294742
30 to 395949
40 to 494222
50 to 592522
60+84
Total186145
OUR WORKFORCE IN ETHNIC GROUPS*
20222021
New Zealand European42.8%41.2%
Māori18.1%18.0%
Pasifika9.3%9.7%
Asian10.0%9.3%
European4.1%4.1%
Other4.2%4.4%
Not stated11.5%13.3%
* Based on annual quarterly averages.
2021
2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
49
SANFORD INTEGRATED REPORT 2022
PROUD PEOPLE with a passion for their
work and strong team spirit is just what
you need in a processing site. But not
when it means people push themselves
too hard.
That was the problem faced by Bluff
Site Manager, Sarah Bynevelt and Health
and Safety Advisor, Charlotte Melvin
12 months ago and it’s one they never
want to see again. Discomfort, pain and
injury is not uncommon in manual work,
but this had peaked. Something not in
line with our strategic initiative to
“ensure the welfare, growth and
fulfilment of our people – economic,
physical and emotional.”
“We had an average of 11 people in our
weekly physio programme – 20% of our
processing workforce – and 70% of these
were from our primary processing line.
It was taking an average of six physio
sessions to reach recovery, and we were
managing with four to six people on light
duties each week. We just cycled people
through injury-recovery-injury-recovery
which was so disheartening. It was
definitely impacting morale, with poor
attendance to our most physical roles
which were also some of our most skilled
and operationally critical.”
Sarah says there were many contributing
factors to the injury increase, including a
reluctance to report problems quickly, a
poor ergonomic programme, high manual
handling loads and a shortage of skilled
labour in key roles. There were also
echoes of an old culture where injuries
were almost expected to happen.
She and Charlotte implemented a
holistic and wide-ranging programme to
turn the tide. It worked. The site reported
just seven Lost Time Injuries in FY22, with
no LTIs recorded since May.
Replacement of the primary processing
line has made an impact, with new
equipment reducing manual handling
and physical loads associated with the
average 18 MT of salmon processed
each day.
“Before the primary line was replaced,
our salmon were handled five times
by five people, in the first part of our
process. Now that is down to two.
There’s been substantial decrease in
heavy lifting with our new equipment.
The team love the new work stands,
which are adjustable to suit their
individual heights, meaning they can
work both comfortably and safely.”
The primary line not only changed the
way the team worked, but also how, with
a full ergonomic programme deployed
as part of the change management
process to ensure the right techniques
are used by workers. The success with
the primary line saw the programme
rolled out right throughout the factory.
Micropauses were formalised, with
a bell sounding every 30 minutes,
reminding people to step back from
their tasks to do specialised exercises
to suit the work they are doing. The
pauses, plus rotating roles at the
30-minute mark, help people refocus
and provide a change of work and pace.
Training sessions are held with the
workplace physio ahead of new tasks,
such as feeding the filleting machine,
being introduced. Sarah explains that
“to support full rotation within any team,
everyone needs to understand that task
and have no pain performing it. Feeding
the filleting machine was previously one
person’s job, but with training and correct
technique, we now have the whole team
rotating through this key task.”
New starters now have a physio session
to learn specific exercises for their area,
discuss any pre-existing injuries, and
receive a comfort pack for home use,
which includes a hot/cold pack and a
massage ball. They are inducted into the
new way of working, including the
exercises and the disciplines of
micropauses and rotations.
ACHIEVING
TOGETHER PUTS
PAID TO PAIN
Before the primary line was
replaced, our salmon were handled
five times by five people, in the
first part of our process. Now that
is down to two. There’s been a
substantial decrease in heavy lifting
with our new equipment.
—
Sarah Bynevelt
BLUFF SITE MANAGER
ABOVE Team members in Bluff packing boxes
of Big Glory Bay salmon.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
50
SANFORD INTEGRATED REPORT 2022
Charlotte said breaking down scepticism
was part of the process, especially among
older hands who had heard promises of
change in the past but were still waiting
to see results.
“You can’t force people to change, but
they will come on board if you can
demonstrate there is something positive
in it for them. We took the time to build
up trust and work with many people
one-on-one. And while as an employer we
absolutely have responsibility to resolve
causes of injuries, we also took the
approach that every individual and team
needed to have accountability because
that’s key to getting results for
everyone. Attitudes have changed as
people have realised they feel better
and they are going home feeling good,
rather than in pain. They are also more
willing to say something if they are
uncomfortable and we can address
that before an injury sets in.”
TYPE OF INJURY BY SITE IN 2022
0
50
100
150
200
Melbourne
Stewart Island
Blu
Kaitangata
San Won Timaru
Timaru – Deepwater
Operations
Timaru – Processing
Blenheim
Havelock
Nelson
Golden Bay
Coromandel
Auckland
Sanford & Sons
Auckland
Head Oce
Vessels – Inshore
(Auckland)
Auckland
– Processing
3
2
6
9
14
4
99
22
98
92
1
1
6
183
18
95
INJURIES BY TYPE 2019-2022
Bodily function (discomfort, breathing,
physical or mental illness)
Crushing, bruising
Foreign body (in orifice or eye)
Sprains and strains
Skin irritation (chemicals, burns)
Cuts, laceration, puncture, sting
0
200
400
600
800
1,000
FY19FY20FY21FY22
766
823
653
745
ABOVE Bluff team members taking a break with micropauses.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
51
SANFORD INTEGRATED REPORT 2022
WE THOUGHT Covid-19 was tough in FY20.
We thought it tested our resilience in FY21.
As it turned out, both years were a dress
rehearsal.
The FY22 financial year started with
Auckland just over a month into a 107-day
lockdown. The first Omicron case was
detected at the border in December
1
.
By January 2022, the first community
transmission of the virulent Omicron
variation had occurred. By close to the end
of our financial year in September
2
, 1,915
deaths could be attributed to Covid-19.
Care is a core value for us at Sanford.
It defined our response this year to the
pandemic’s biggest impact yet on our
business. Chief People Officer, Karen
Duffy, says – with some pride – that this
response was “phenomenal”, and she has
the data to prove it.
One data point is 17 out of 1,400, a
measure of staffing losses after Sanford
extended a vaccine mandate to all
workers from 1 January, 2022, following
on from a previous early call to introduce
a vaccine mandate for offshore crews.
“Our key concern was providing a safe
place for people to work. Our crews live
and work in close proximity on board and
they are at sea for extended periods. On
shore, many of our people, especially in
processing, cannot work from home and
need to be safe. The majority understood
where we were coming from and
supported the vaccine mandate. We were
able to suspend the mandate across the
company when the risk reduced in June
2022,” says Karen.
“Taking care meant all our onshore
sites managed to continue operating.
Nobody had to be laid off. Our Auckland
processing plant was closed for just one
shift, although we did at times have
high absenteeism. We drew on all our
experience from the previous two years
to keep people safe.
“Shifts were changed to enable people
to work in the same bubble, rapid antigen
testing (RAT) was undertaken every day.
All the basic measures, from hand hygiene
to mask wearing were in place. People felt
safe and were proud to come to work.”
Care was also evident in the approach
taken when workers had to isolate, either
because of their own illness, or that of a
close contact or family member. Those in
mandatory isolation received full pay and
a special isolation code was established in
payroll so that days lost were not taken
from annual or sick leave.
Those in isolation and those who
contracted the virus also received
ongoing support from the HR team.
General Manager, HR, Rebecca Stewart,
says a dedicated team of four made daily
calls ensuring workers had sufficient help
or resources at home.
1. NZ Doctor timeline https://www.nzdoctor.co.nz/
timeline-coronavirus
2. MOH data at Sept 5, 2022, https://covid19.govt.
nz/?gclid=EAIaIQobChMI8v6y6s_--QIVe5lmAh26_
AS1EAAYAyAAEgJTJ_D_BwE
CARE AT THE
CORE OF COVID
ROUND THREE
ABOVE Mobile RAT testing for our Deepwater crew, used before they were allowed to board their vessel.
ABOVE RAT test used at Sanford.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
52
SANFORD INTEGRATED REPORT 2022
STAFF LEADERSHIP AND DEVELOPMENT TRAINING (INTERNAL)
PARTICIPANTS
TRAINING
HOURS
DELIVEREDFEMALE MALETOTAL
Leadership Programs217172389578.5
Finance and CAPEX 284573265.5
Licensed Fish Receiver Training6915112.5
High Performing Teams6101624.0
Soft Skills (Accountability, Leading Change,
Tough conversations, Safety conversations)
13093223227.5
Fisheries 1011592472.0
Workplace Assessor471182.5
Totals4063457511,362.5
NZQA CREDITS AND QUALIFICATIONS AWARDED THROUGH
PRIMARY INDUSTRY TRAINING OFFICE BY LEVEL AND GENDER – 2022
GENDER
LEVEL (NZ QUALIFICATIONS FRAMEWORK)FEMALE MALETOTAL
Level 2 (Primary Industry Skills - Seafood)000
Level 3 (Seafood Processing / Receiving
Commercial Fish)
172224396
Level 4 (Commercial Fishing – Marine Cranes,
Seafood Processing Level 4)
70785855
Level 6 (Seafood Vessel Operations)000
Total credits2421,0091,251
Total hours*2,42010,09012,510
* One credit is approximately 10 hours training.
NZQA CREDITS AND QUALIFICATIONS AWARDED THROUGH PRIMARY ITO*
20222021
Completed Primary ITO programmes 5247
Total credits awarded 1,2511,374
Formal qualifications received (national certificate)5247
Active enrolments at end of quarter 613
* Data received from Primary ITO and based on end date of training for completed courses, month of credit achieved for
credits, completion date for NZQA qualifications. Active enrolments includes grace period and on-hold training
programmes.
“It took the pressure off because we
could reassure them, they would be paid,
and it helped them navigate the minefield
of being caught up in Covid. We had
around 600 to 700 away in the year, and
when we made the calls, they were
appreciated.”
Sharefishers, who contract to Sanford
but are considered “family”, continued to
receive retainers when unable to fish and
where necessary, were also provided with
accommodation and meals if their vessels
were away from their home port.
“This is not a job where you can use
casual labour. All our crews have
qualifications, so there were times
when some vessels had to stay in port.
But the crews were flexible about
changing vessels or extending a voyage
so we could maintain operations,”
says Rebecca.
WATCH VIDEO
How to do a RAT test
https://youtu.be/1OdKd7DYwSM
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
53
SANFORD INTEGRATED REPORT 2022
COVID, YEAR THREE. The fishing
continued, the sites stayed open, cold
stores kept chilling, most of the fleet
sailed most of the time and crucial export
licences for China were maintained.
As Acting Chief Operating Officer,
Peter Young says, “it was much harder
than previous years, especially when
the Omicron and Delta variants hit the
regions. At times, it looked impossible,
especially trying to maintain the crew
numbers needed to legally sail, but we
made it and we’re now coming out the
other end. We were frequently short on
manpower, but not on willpower.”
He says all the crisis management
systems that stood up to cope with Covid
in 2020 continued to prove their worth
in identifying priorities and managing
impact. The difference this year was
adding rigorous testing regimes as cases
of the virus took hold across the country.
“We imported our own rapid antigen
tests (RATS) and had our own testing
processes on every boat and the gates
of all sites, depending on the prevailing
risk assessment for the region and the
business. On our vessels, testing was
especially important before departure,
immediately after sailing and over set
periods until we were happy we had a
safe bubble on board.”
Fishing crews are an area where labour
hire pools can’t be tapped to ensure
sufficient hands on deck. Regulations
specify both numbers and roles, such
as engineers, first mates and skippers,
and being one short in critical roles means
the vessel cannot leave port.
“The whole industry has the same
problem, all scrabbling for crew. Our
guys showed great flexibility in changing
vessels, or agreeing to work longer
periods at sea, to get the quota
caught and that’s something all of us
appreciated, because if we are not
fishing, that’s felt by our shore-based
workers and through our supply chain.
Having no closures was quite an
achievement.”
Peter says there was countless examples
of Sanford’s ‘achieving together’ value
at work as our mussel and salmon
farming teams also found ways to work
around manpower shortages.
SHORT ON
MANPOWER
BUT NOT ON
WILLPOWER
“There was plenty of support for those
who caught the virus and a real ‘can-do’
attitude in play when it came to harvesting.
A great example is our Havelock mussel
farm support services travelling up and
down to Stewart Island to help our salmon
farmers. That’s great teamwork.
He says the commitment to keep going
flowed directly into the year-end results
“and we appreciate everyone’s effort.
2022 has not been an easy year and people
are tired, but they can be proud of what’s
been achieved through their effort.”
ABOVE Jason Smith and Richard Stone, on board the Erin Mussel barge on Stewart Island, hanging
mussel stocking for harvest in three years’ time.
ABOVE San Won team member, Hazel Lecomte.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
54
SANFORD INTEGRATED REPORT 2022
BOW TIES have proved to be an excellent
tool in the ceaseless effort to keep our
people safe on land and sea. In this case
though, they are not a sartorial accessory,
they are a model to identify appropriate
safety controls for critical risks and to
manage the effectiveness of those
safety controls.
The bow tie model puts the risk event
in the middle. To the left, are the risk
mitigators or controls used to prevent
the event from occurring or to reduce its
likelihood. On the right are the processes
that can reduce the severity of the event
or assist with recovery.
By clearly identifying risks and controls
and then mitigation or recovery measures,
we are able to audit these and verify their
effectiveness.
Critical risk management teams were
established at Sanford in 2020 and are
responsible for the development of the
bow ties for the risks identified as critical
by the business. Examples of these critical
risks include machine safety, ammonia
management, traffic management and
suspended loads.
HAZARD IDENTIFICATION
Bow ties are just one tool used by these
teams. They also complete site assessments,
research global safety developments
and use operational expertise within the
business to identify hazards, both existing
and emerging, in a continuous process
of assessment and improvement.
All team leaders are encouraged to
complete regular safety walks. These
walks build a safety culture, helping to
normalise and embed ongoing hazard
identification and management, as well as
critical risk control assurance. Leaders are
trained to engage with team members
about hazards or risks they may be seeing
in their work and their understanding of
critical risks in the workplace. These walks
are recorded in our Intelex system to
build and share what has been learned and
constantly improve our safety results.
RISK ASSESSMENT AND
INCIDENT INVESTIGATION
Our Intelex software enables us to
capture, report and manage health and
safety data. At Sanford, anyone can
report any event such as an injury, a near
miss or a potential hazard, adding photos
or other evidence if they wish, either
via a laptop or on the app on their phone.
Reports may be negative or positive –
highlighting desirable safety behaviour.
These then go to management, health,
safety and environmental leads as well as
our Critical Risk Team sponsors. This
ensures all events are captured company-
wide, properly assessed, investigated and
relevant lessons learned can be applied
across other sites and vessels. Every
incident will be reviewed and lessons will
be shared. Hazards and risks are discussed
at team level across the business, at
toolbox meetings or similar.
We also assess risks using a standard
risk assessment matrix which examines
the likelihood of an incident and the
consequences of it. The objective is to
put controls in place which will reduce
risks associated with any given activity,
to as low as is reasonably practicable.
Near-miss information is also used to
understand risks and prevent future
incidents. The actual severity and the
BOW TIES
ENABLING A
SAFER
OPERATIONAL
CULTURE
ABOVE The ammonia compressor, located in
the refrigeration room, on board San Waitaki.
1
ABOVE Bow-tie model of hazardous event analysis,
modified from Markowski and Kotynia.
CAUSES
PREVENTION
CONTROLS
MITIGATION
RECOVERY
CONTROLS
CONSEQUENCES
SIGNIFICANT
EVENT
1. The ammonia compressor pressurises the ammonia gas,
which heats up as the pressure increases. As the
ammonia is pressurised, it travels up into the coils at the
back of the refrigeration unit, where the heat dissipates.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
55
SANFORD INTEGRATED REPORT 2022
STAFF MOVEMENTS
Voluntary turnover during 2022 was 22.48% across our permanent staff workforce
(FY21:19%); Involuntary turnover was 5% (FY21: 5%); and absenteeism reached
6.8% (FY21: 5.4%).
TURNOVER BY AGE GROUP – PERMANENT STAFF
2022
AGE
GROUPVOLUNTARY INVOLUNTARY TOTAL TURNOVER
Under 20437
20-29571168
30 to 39581169
40 to 4940747
50 to 5927330
60+14519
Total20040240
TURNOVER BY GENDER – PERMANENT STAFF
2022
GENDERVOLUNTARY INVOLUNTARY TOTAL TURNOVER
Female8615101
Male11324137
Other Gender–11
Prefer not to say1–1
Total20040240
potential severity of an event are
compared, to allow the teams to take
appropriate risk mitigation actions.
A hierarchy of controls is established. First,
we seek to eliminate the hazard. This is the
ideal. If it is not possible, then we seek to
replace the hazard via substitution, then
engineering controls may be adopted,
to isolate people from the hazard. Next
administrative controls can help change the
way people work to reduce a hazard and
finally, PPE is used to protect the worker.
Chief People Officer, Karen Duffy, says
the risk management approach gives a
holistic overview of risk in the business.
“Health and safety culture must be
companywide. This achieves that. In the
past, we may have had a site which was
especially good at managing a critical risk,
but this level of performance was not
consistent across all operations with the
same risk. This is what we are achieving now.”
This multidisciplinary approach is also
delivering some innovative risk mitigations.
Our leased forklifts, for example, are being
fitted with artificial intelligence sensors
which can identify human shapes in the
vicinity – especially those behind the units.
AI is also being adopted in the vehicle fleet
to monitor driver safety, especially for
longer-haul journeys.
Acting Chief Operating Officer Peter
Young says machine guarding remains a
priority with attention being shifted to our
mussel operations, with independent risk
assessments being carried out on barges.
This follows on from the intensive push on
our deepwater fleet in the past two years.
Other risks, such as ammonia and
refrigeration gases, remain under
constant scrutiny.
“Just as we do everything in our power to
prepare for a seismic event, we also do
everything possible to drive down the risk
of an ammonia incident, because of the
consequences. Fit and proper engineering
controls are key, supported by training
and inductions, as well as signage.
Independent audits are also undertaken,
and we use these as an opportunity to
learn and improve whenever possible.”
ABOVE Curtis Shields, Okiwi Spirit Skipper,
inspecting final seed mussels in Golden Bay.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
56
SANFORD INTEGRATED REPORT 2022
CONTRACT TYPE AND GENDER
CONTRACT TYPE
TOTAL
2022 (2021)
FEMALE
2022 (2021)
MALE
2022(2021)
GENDER
UNDECLARED
2022 (2021)
Permanent Full Time893
(849)
37%
(36%)
63%
(64%)–
Permanent Part Time33
(41)
88%
(88%)
12%
(12%)–
Fixed Term Full Time20
(41)
45%
(54%)
55%
(44%)
–
(2%)
Fixed Term Part Time10
(4)
67%
(50%)
33%
(50%)–
Casual and Seasonal43
(53)
44%
(47%)
56%
(53%)–
Independent Sharefishers*422
(421)
16%
(14%)
83%
(84%)
1%
(2%)
Total Workforce1,421
(1,409)
32%
(32%)
67%
(67%)
1%
(1%)
* Fishing boat worker for profit/share (supply of labour only).
ABOVE Andy Walker, Stewart Island harvest team member, shovelling ice onto fish.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Safe and High Performing Workplace
57
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2023 TARGETS
Health and Safety
Through the way we work and behave and initiatives we
implement to continually enhance our work environments,
we take all practicable steps to protect our people
from the risk of harm and support their wellbeing.
Deliver planned health and safety management information system modules to support effective leadership,
management and reporting of HSW (Modules: observations; action plans; audit and risk management).
Embed quarterly reviews of critical risk controls across all operations as part of our assurance program, ensuring
100% achievement of those review processes during FY23.
Safety leadership and culture improvement is delivered through the completion of >500 safety walks/interactions by
the Senior Leadership Team (SLT).
Talent Attraction, Development, and Retention;
Positive and Meaningful Work Experiences
Workplace conditions and behaviours support staff
attraction, development, and retention. Our people’s
welfare, growth and fulfilment is demonstrated via values
based leadership actions delivering experiences which
engage and enable our people to be their best.
Implement planned learning and development programs to improve our people’s work experience as measured by a
3% improvement in engagement, employee Net Promotor Score (eNPS) and retention.
Our future focus – Targets for FY2023
OUR VISION:
We are an employer of choice, delivering industry leading safety
risk management, ensuring a culture of high performance and
growth and by living our values.
LINKS TO RELEVANT STRATEGIC INITIATIVES:
S
Invest in systems to drive a high achieving
organisation
E
Develop expertise, knowledge and insights to drive
asset optimisation, profit, value, quality, and
sustainability
P
Ensure the welfare, growth and fulfilment of our
people – economic, physical, emotional
VISION AND STRATEGIC LINKS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
STRATEGIC INITIATIVES
UN SDG
U
D
C
SE
P
Trusted Customer
Partner of Choice
OUR VISION: We work with customers and consumers to
bring them the best of our sustainably harvested
seafood and marine extracts, demonstrating great care
for our beautiful New Zealand products and achieving
the optimal value for these precious resources.
CAPITAL INPUTS
1
2
3
4
5
6
58
1. Financial
2. Human
3. Manufactured
4. Intellectual
5. Natural
6. Social & Relationship
United Nations Sustainable
Development Goals
KEY: DARKER SEGMENTS APPLY
TO THIS OUTCOME. SEE PAGE 14
KEY: COLOUR SEGMENTS
APPLY TO THIS OUTCOME.
U Utilisation
D Differentiate
S Systems
E Expertise
C Customers
P People
Trusted Customer Partner of Choice
59
SANFORD INTEGRATED REPORT 2022
Material issues and value creation – 2022
This table summarises Sanford’s actions relating to our desired business outcome of becoming a Trusted Customer Partner of Choice. It includes
the targets we set at the commencement of year 2022, organised by the material topics defined in our 2021 Annual Report, and our progress
against these targets. At the end of this section, we use revised and refreshed material topics (the outcome from the materiality process) to
define future targets for 2023 and beyond as well as our future vision.
PROGRESS AGAINST TARGETS FOR FINANCIAL YEAR 2022
MATERIAL TOPIC2022 TARGETSPROGRESS AGAINST TARGETS
Drive Value Growth Through
Brand Development and
Awareness
Increase the proportion of Big Glory Bay (BGB)
salmon sales such that 45% of Salmon Division
margin for common format product is derived from
BGB branded product (FY21: 33%).
Achieved. Successfully grown this brand through a range of markets. Leveraged the
product quality and brand position to create additional value. Finished the year with
51% of margin sourced from BGB branded product.
Successfully implement new product development
lines to market to achieve a successful launch of
four branded SKUs in the NZ market and ≥2 in the
USA market to diversify and build consumer ready
product portfolio.
Not Achieved. A robust plan and brand design strategy were developed; however
implementation was constrained by travel barriers and challenges faced when
looking to secure processing relationships during H1, along with freight cost barriers
associated with international processing.
Support and grow key customer partnerships
by preparing and implementing joint business
plans with 8 key customers to deliver growth in
volume, revenue, and margin aligned with our
product portfolio.
Achieved. Successfully developed existing relationships and built new ones with
customers, leading to the implementation of joint business plans in multiple markets
during FY22.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
60
SANFORD INTEGRATED REPORT 2022
MATERIAL TOPIC2022 TARGETSPROGRESS AGAINST TARGETS
Food Safety and Quality
Demonstrate our commitment to food safety by
ensuring no food safety product recalls.
Maintain independent food safety related
certifications including MPI certificates at
maximum frequency levels, and Food Safety
System Certification 22000 (FSSC 22000).
Achieved. No food safety product recalls, and all food safety certifications retained.
Reduce the number of justified food quality
related product complaints by 3% (total number
of complaints, and number of complaints per
million kg sold).
Achieved. 22% reduction in total number of substantiated food quality complaints
(FY21: 119, FY22: 93). 20% reduction in number of complaints per million kg sold
(FY21: 1.67, FY22: 1.34).
Innovation and Technology
Use the upcoming completion of the marine
extracts facility to scale and move in-house
production of high value products and extracts
including oil extraction and collagen
manufacturing.
Ongoing. Construction of the new marine extracts centre was completed in
September 2022 with operations including drying, supercritical fluid extraction, and
collagen production all underway from October 2022.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
61
SANFORD INTEGRATED REPORT 2022
TOTAL STAFF AND
SHAREFISHERS
– WHAT WE DO HERE –
11
SALES
AREA: AUSTRALIA
(MELBOURNE/VICTORIA)
T
he test of an acquisition is how well it
performs in the tough times. By that
measure, Australia has earned gold.
It’s a turnaround story, beginning with
losses prior to acquiring Saltwater, then
a $2.4 million contribution to Adjusted
EBIT in year one post-acquisition,
$3.8 million in FY22 and a target of
$4.5 million for the coming year.
General Manager Global Sales, Blair
Robinson says Nick Geralis and his
tight-knit team have performed well
despite all the uncertainties of the
pandemic and the impact that has had
on the market. This is an example of at
least four of our strategic initiatives in
action – growing our people, building
partnerships with customers,
developing expertise and knowledge
and differentiating through quality,
provenance and sustainability.
“We had a long-term relationship with
Saltwater Seafood. Post-acquisition
three years ago Nick has integrated
himself and his team into Sanford,
established our new Australian
headquarters in Melbourne and brought
together a well-performing business.
“Australia is a key market for us,
representing 11.9% of sales in FY22. It has
continued to grow returns and its profit
levels throughout the Covid-impacted
period. With the borders opening it has
been great to get over there to map out
the growth plan for the next couple of
years. We have appointed a head of sales,
Nick Stewart who will relocate from our
New Zealand business to improve our
route to market in frozen and we have big
growth ambitions for the business,
moving it up the value chain.”
Advancing in Australia
– and the world
PERSEVERANCE OF OUR REGIONS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
62
SANFORD INTEGRATED REPORT 2022
While Sanford had operated in Australia
for some years, the acquisition of
Saltwater Seafoods represented a step
change in our approach to the market.
We now service other wholesalers and
foodservice, as well as traditional
retailers like fish shops and the fish
counters at Melbourne’s thriving city
markets. We are also benefiting from
being able to offer customers a wider
range of New Zealand and Australian
fresh and frozen seafood with one point
of contact. Frozen is a large channel,
with the business working with key
distributors on the Eastern Seaboard.
“We’re very happy with Australia. Nick
and the team have also validated what we
think is a good approach to other markets
like the US. It shows the value of having a
presence on the ground, because you are
more alert to market opportunities,
relationships can be built, and we can
demonstrate the quality and sustainability
of our product.”
Blair says the Australian approach is
looking to be mirrored in the United
States, a key strategic growth market
where we want to sell more of everything,
from half-shell mussels to Big Glory Bay
salmon and scampi.
We have both an in-market presence with
Los Angeles-based Steve Mantville and a
market champion at the source with our
New Zealand-based market manager for
North America, Karyn Murray.
“Having Steve on the ground was
instrumental in our opening up the
supermarket channel last year to offset
the decline in foodservice demand.
This year, foodservice has rebounded
to pre-Covid levels and high demand
has lifted prices. But as inflationary
pressures are building, we are starting
to see that taking a bit of a toll on
discretionary spending.”
Our supermarket channel for salmon in
the US has grown to more than 150 stores
and the strategy is to grow our range to
complement salmon with wildcatch
species and mussels.
“We are putting a lot of energy into
premium natural retail chains that are
geographically diverse, such as Harmons
in Utah with their 21 stores. We are
finding the best version of these chains
in each of the states in the US. Similarly,
we are targeting larger scale restaurant
groups with hundreds of outlets and one
central buying point.”
Blair says the success of the supermarket
and restaurant group channels in the
US is being replicated in Asia where
Market Manager Emily Swan champions
our products.
“We are in these channels in Thailand,
Vietnam, Singapore, South Korea, Japan
and China. This is a work in progress.
Volumes will not grow overnight but we
can increase the value we achieve through
a significant focus on our customers and
through branding and premium products
like scampi and salmon. We are building a
diverse set of markets for both margin
growth and to manage risk.”
150+
STORES IN THE US
STOCKING SANFORD SEAFOOD
ABOVE Siam Makro store in Thailand with its “Taste New Zealand” retail promotion featuring
Sanford mussels.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
63
SANFORD INTEGRATED REPORT 2022
OUR NEW Sanford Bioactives site at
Blenheim is pivotal to our business
strategy in many ways. It helps deliver
on our strategic initiatives around
expertise, utilisation and differentiation
and demonstrates an alignment with
customer demands for health-
enhancing supplements.
The site specifically supports our
goal to grow mussel earnings in FY26
by 164%, compared to pre-Covid
averages. In dollar terms, that’s EBIT
of $32-$45 million compared to
$17 million, with our new centre
intended to achieve a significant
portion of that growth. That is second
only to price and efficiency gains
(at $13-$17 million).
The development, valued at around
$20 million, will be officially opened in
late November, but the team was on site
commissioning and beginning operations
from late September.
The Sanford Bioactives Centre will
generate immediate revenue through
the production of mussel powder and oil,
and marine collagen, while creating the
platform for new revenue streams.
It is opening with four mussel dryers,
increasing our powder processing
capacity – and there is scope to eventually
house eight dryers.
Also due for commissioning is the
supercritical CO
2
extraction system, which
will enable extraction of mussel oil from
powder for high value formats. The process
works like an espresso machine, using
supercritical fluids to extract the oil from
powder. Mussel oil delivers a concentrated
form of the anti-inflammatory benefits
found in mussels and mussel powder.
The innovation team has also been involved
in overseeing several clinical trials which
investigated Greenshell
TM
mussel benefits
to human health. The latest, which has
been supported by the High Value
Nutrition National Science Challenge, has
involved Massey University, Cawthron
Institute, and Plant & Food Research,
confirming the positive effects of
Greenshell™ mussels on early signs and
SANFORD BIOACTIVES
INNOVATION CENTRE
DEVELOPMENT
$20million
OFFICIAL OPENING – LATE NOVEMBER 2022
PRODUCTION OF MUSSEL POWDER AND OIL
AND MARINE COLLAGEN
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
64
SANFORD INTEGRATED REPORT 2022
symptoms of osteoarthritis and other
health outcomes, such as exercise-induced
joint and muscle pain and inflammation.
Collagen extraction has been moved to
Sanford Bioactives and scaled up from
October. Collagen extracted from hoki
skins for cosmeceuticals is already a high
value product used for beauty masks
where the retail value of the gram of
collagen exceeds that of a gram of gold.
Innovation General Manager, Andrew
Stanley says there’s more potential for
extracting similarly high valued bioactives
from our wildcatch and farmed resources.
“We see significant potential to develop
other mid and high value bioactives from
underused resources such as fish and
shellfish by-products and seaweeds from
our aquaculture farms. This is very much
in line with our strategy to improve the
value utilisation of fish and shellfish while
minimising waste.
“There is also a premium for New Zealand
marine products. The Sanford Bioactives
centre will enable us to develop an entire
portfolio of products under our own
Bioactive branding and support it with
science and innovation capabilities.
WATCH VIDEO
Spat to powder
https://youtu.be/bNITlWwIEF8
“There are opportunities for
collaboration with other parties
leveraging our knowledge, technology
and processing capacity. Our centre also
has the potential to support new areas of
learning and discovery, to play our part
in New Zealand's stated goal to grow
aquaculture into a $3 billion industry by
2035. The top-of-the-South region
houses a strong network of collaborators
including industry, Cawthron, Plant &
Food Research, and our own SPAT
nz
hatchery, with Sanford Bioactives
adding to this capability.
“We expect initiatives like these will
deliver returns which more than justify
the $20 million plus investment in the
centre, have clear links to our strategy
to build and sustain partnerships, and
contribute to the success and overall
economic growth of our company and
the seafood industry.”
There is also a premium for
New Zealand marine products.
The Sanford Bioactives centre will
enable us to develop an entire
portfolio of products under our
own Bioactive branding and
support it with science and
innovation capabilities
—
Andrew Stanley
SANFORD – INNOVATION GENERAL MANAGER
ABOVE Sanford CCO, Andrew Gargiulo (centre) and GM Innovation, Andrew Stanley (right) host PM Jacinda Ardern
at Sanford’s new home of Innovation, Bioactives.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
65
SANFORD INTEGRATED REPORT 2022
THE VINTAGE hand painted window sign
says “Pass the rest, get the best” and
customers of Marsic Fish Shop in the
Auckland suburb of Glen Innes have been
doing that since 1967. They turn up in
their upmarket cars and suits, their people
movers and high-vis, and sometimes their
pyjamas from the 6am opening to the
6.30pm close.
Started by Croatian brothers, Wally and
Ivan Marsic, it’s a community hub in more
ways than one. As well as selling fresh
seafood, the menu includes house
specialities like shucked mussels, raw fish
salad, and smoked fish and roe. They will
also happily fillet and smoke a local’s own
catch “because it’s great to provide that
kind of service.”
So, it’s likely our Big Glory Bay salmon will
be hanging out with orange roughy,
kingfish and a few sides of hand-caught
kahawai, with all of them getting the “all
natural” treatment from the Manuka-fired
smoker which is in action out the back of
the shop twice a week.
Daniel, who operates the family business
with his father Wally and sister Stephanie,
says he’s proud they consistently aim to
live up to the “get the best” claim – a
“bit of cheeky Croat boast” from his uncle
and father.
The Marsics hit the Sanford fish auctions
daily because being the best means
offering fresh.
“We make it a priority and the Sanford
market is very good at helping us provide
that. We only buy what we think is best
and at the price that’s affordable for our
customers,” says Daniel.
Customers are also encouraged to try
alternative species, like lookdown dory
which has similar properties to the better
known oreo dory, or turbot instead
of flounder.
GLEN INNES
AUCKLAND
MARSIC
FISH SHOP
We make it a priority and the
Sanford market is very good at
helping us provide that. We only
buy what we think is best and at
the price that’s affordable for our
customers.
—
Daniel Marsic
MARSIC FISH SHOP
“People have confidence in what we put
out and it’s easy to sell fish when it’s fresh
and treated with care. Customers eat
more varieties at a good price and they
come back for more. We now have lists of
people to call when we have turbot or
lookdown dory available.”
ABOVE Johnny M, long-time friend of the Marsic
family, serving Sanford fish to Glen Innes locals.
Three Meals,
Three Places
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
66
SANFORD INTEGRATED REPORT 2022
THE BIG GLORY BAY miso-glazed salmon
bowl has best-seller rating on Goop
Kitchen’s menu across California.
The salmon joins roasted Japanese purple
sweet potatoes, avocado, a seven-minute
egg, house made furikake, snow peas,
watermelon radish, pickled shishitos, gem
lettuce and ‘Goop certified clean’ miso
vinaigrette in the bowl created for diners
who embrace the Goop clean living and
eating philosophy.
The food delivery service, launched in
2021, is an extension of the Goop
lifestyle brand founded by actress and
businesswoman Gwyneth Paltrow as
a newsletter in 2008 and grown into
a $250 million business.
1
We were invited to bring our Big Glory
Bay salmon to a tasting line-up, as part of
their search for a supplier. Having a good
story to tell about our fish and our farm
helped break the ice.
At latitude 47 degrees south, the
Big Glory Bay farm is in a pristine and
remote environment, certified for Best
Aquaculture Practices (BAP). Our product
is also the first ocean-farmed salmon to
achieve the ‘best choice’ rating from the
Monterey Bay Aquarium’s Seafood
Watch® programme.
GM Global Sales, Blair Robinson, says
the sustainability story strongly resonated
with the Goop team, whose clients follow
the brand’s clean-living lifestyle and are
well educated about nutrition and
sustainability.
“We were certainly not the cheapest
salmon at the tasting, but our product
won the hearts of the selection team.
Having a high quality, sustainable offering
with strong environmental credentials
helped us secure the partnership.”
It also helps that the Goop Kitchen
Executive Chef is a Big Glory Bay fan.
Kim Floresca, whose resume includes the
legendary El Bulli restaurant in Spain and
the Michelin starred The Restaurant at
Meadowbank in Napa, describes it as the
“Ferrari of salmon.”
“The Goop team is such a pleasure to
work with because we have shared values
about sustainable food,” says Blair. Goop
Kitchen is also in growth mode, with plans
to expand beyond its current Californian
operations, so the prospects for a
continued and growing partnership are
very positive.
1. https://www.nytimes.com/2018/07/25/magazine/
big-business-gwyneth-paltrow-wellness.html
CALIFORNIA
U.S.A
GOOP
KITCHEN
We were certainly not the cheapest
salmon at the tasting, but our
product won the hearts of the
selection team. Having a high
quality, sustainable offering with
strong environmental credentials
helped us secure the partnership.
—
Blair Robinson
GM GLOBAL SALES
ABOVE Cristal Osborne and Morgan Ramsey
in Bluff.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
67
SANFORD INTEGRATED REPORT 2022
WITH THE borders reopening, and air
schedules improving, intrepid Kiwi
travellers soaking up the best of London
won’t have to travel far for a briny taste
of home.
Perna canaliculus, better known as the
native Greenshell
TM
Mussel, is infiltrating
the menus of gastropubs, Chinese
restaurants, tapas bars and casual cafes
across the city – and indeed the country.
Sanford Market Manager Europe, Daniel
Alfano, says the New Zealand seafood
staple is also popular with local diners,
despite competition from local varieties.
Billed on the restaurant guru gastronomic
guide as “unique New Zealand mussels
with very beautiful shells and a
remarkable taste”, they are also receiving
positive reviews from diners, whether
served with sauces, or simply steamed.
Daniel says Covid took its toll on
restaurants and foodservice generally in
the past two years, but the relaxation of
restrictions has brought diners back, as
well as orders for our products.
“We have a good story to tell with
Greenshell
TM
mussels and their
New Zealand origins, as well as their
taste. It’s good to know diners are
appreciating them.”
LONDON
ENGLAND
MUSSELS ON
THE MENU
1.34
CUSTOMER VALIDATED
FOOD QUALITY COMPLAINTS
PER MILLION KILOGRAMS
of seafood sold by Sanford
(down from 1.67 during 2021)
QUALITY COMPLAINTS
BREAKDOWN
20222021
Quality defects48%23%
Labelling error15%18%
Foreign material7%8%
Product grading error5%3%
Packaging4%5%
Other4%0%
Date coding error0%0%
Temperature abuse5%10%
Wrong product2%13%
Weight control3%5%
Under delivered5%11%
Bone0%1%
Product missing0%2%
Parasites2%1%
Total number of quality complaints121209
Justified complaints per million kg sold1.341.67
Sanford had no food safety product recalls in 2022.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Trusted Customer Partner of Choice
68
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2023 TARGETS
Food Safety and Quality
Be recognised as a leader in providing safe, high quality marine
sourced products that deliver on customers' expectations on a
consistent basis.
Zero food safety recalls.
Maintain FSSC 22000 and PBV (Performance Based Verification, MPI) certifications.
Ensure our processes deliver quality products for our customers, measured by customer complaints being at the very
low level of ≤ 1.34 complaints per million kg sold (FY22: 1.34).
Value Growth Through Brand Development, Awareness,
and Responsible Marketing
Unlock value generating opportunities by developing diverse
markets, growing our brands and margin enhancing product
formats that meet customer’s and consumers’ expectations and
contribute to improved returns.
Develop in diversified markets, to deliver an ‘all division’ year-on-year revenue growth of 11%, thereby increasing
resilience in markets and mitigating risks.
Build on salmon offerings, including the existing premium Big Glory Bay brand, to deliver salmon division year-on-year
revenue growth of 7%.
Build relationships with key customers to increase ‘foundation customer’ margin by 3% (per kg basis), whilst building
the ‘growth customer’ base to $160m (or 30%) of total revenue.
Effective Innovation – Products, Markets, Technology
Use and apply innovation alongside the provenance, quality, and
sustainability context for our products to develop new products,
markets, and technologies to drive value and business outcomes.
Realise gains from investments in facilities and ability to diversify product portfolios by growing marine extracts
revenue by >50% during FY23;
Support initiatives include new processing technology and projects to improve fish utilisation projects.
Supply Chain Management
Deliver sustainable performance across our supply and value
chain by optimising our processes and relationships to maximise
the value we extract from the natural resources we utilise.
Deliver further improvements for customers by continuing our partnership approach with freight providers to achieve
a 5% year-on-year improvement in our “Dispatched and Shipped on Schedule” score (per-shipment measurement
basis).
Our future focus – Targets for FY23
OUR VISION:
We work with customers and consumers to bring
them the best of our sustainably harvested seafood
and marine extracts, demonstrating great care for
our beautiful New Zealand products and achieving
the optimal value for these precious resources.
LINKS TO RELEVANT STRATEGIC INITIATIVES:
U
Improve value utilisation of entire fish and eliminate waste
D
Differentiate through innovation, quality, provenance,
sustainability, operational excellence, and application
of science
S
Invest in systems to drive a high achieving organisation
E
Develop expertise, knowledge, and insights to drive asset
optimisation, profit, value, quality, and sustainability
C
Build and sustain partnerships with customers aligned to
our purpose
VISION AND STRATEGIC LINKS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
69
STRATEGIC INITIATIVES
UN SDG
U
D
C
SE
P
Highly Valued
Community Partner
OUR VISION: We are a valued and respected partner
both at a local community level and with our national
strategic partners. We are a positive contributor to
all our stakeholder communities and are regarded as
being an integral part of the local and national
communities we participate in.
CAPITAL INPUTS
1
2
3
4
5
6
1. Financial
2. Human
3. Manufactured
4. Intellectual
5. Natural
6. Social & Relationship
United Nations Sustainable
Development Goals
KEY: DARKER SEGMENTS APPLY
TO THIS OUTCOME. SEE PAGE 14
KEY: COLOUR SEGMENTS
APPLY TO THIS OUTCOME.
U Utilisation
D Differentiate
S Systems
E Expertise
C Customers
P People
Highly Valued Community Partner
70
SANFORD INTEGRATED REPORT 2022
Material issues and value creation –2022
This table summarises Sanford’s actions relating to our desired business outcome of being a highly valued community partner. It includes the targets we set
at the commencement of year 2022, organised by the material topics defined in our 2021 Annual Report, and our progress against these targets. At the end
of this section, we use revised and refreshed material topics (the outcome from the materiality process) to define future targets for 2023 and beyond as well
as our future vision.
PROGRESS AGAINST TARGETS FOR FINANCIAL YEAR 2022
MATERIAL TOPICS 2022 TARGETSPROGRESS AGAINST TARGETS
Community Engagement and
Strategic Partnerships
Maintain tangible and meaningful support of
regional communities close to Sanford’s operations,
including the Graeme Dingle Foundation, local
events, and the 10c per Salmon community
wellbeing program in Bluff and Stewart Island.
Achieved. Continued support of the Graeme Dingle Foundation and their work to
build resilience within children and young adults within New Zealand. Successful 3rd
year of the 10c per salmon community fund, and continued funding of local events
including the NZME special children’s Christmas event, the Red Cross Tongan tsunami
relief fund, the Timaru science fair, Dazzle Marlborough, the Coromandel bike park,
and the seabird smart awards.
Support communities and build a ‘whole of fish’
consumption approach by increasing provision of
fresh production fish heads and frames to
community programs by >50% (FY21: 6,760kg),
whilst continuing to explore further value creation
opportunities for these resources.
Achieved. Over 100% increase in the donation of fish heads and frames to
community programs for direct human consumptions (FY22: 13,791kg) assisting to
build a nose-to-tail eating philosophy. Food assistance to community programs during
FY22 also involved fillets, whole fish, and mussels (total food bank donations,
FY22: 57,674kg of seafood, equivalent to 294,576 meals).
Create, and further strengthen, relationships with
willing Non-Governmental Organisations (NGO’s)
and community groups, finding common ground,
focus where there is alignment of values and
outcomes.
Achieved. Maintained and strengthened working relationships and partnerships with
groups during FY22, for example Kai Ika the community group focused on building a
whole of fish consumption approach to fisheries, as well as the Mussel Reef
Restoration Trust and their supporting partners whom are focused on restoring natural
Greenshell
TM
mussel reefs within the Hauraki Gulf and beyond.
IMAGE
(PAGE 69)
Seafood supplied by Sanford at a community kitchen
at Papatūānuku Kōkiri marae in Auckland.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
71
SANFORD INTEGRATED REPORT 2022
AREA: THE NORTH
(COROMANDEL/AUCKLAND/
TAURANGA)
TOTAL STAFF AND
SHAREFISHERS
– WHAT WE DO HERE –
364
PROCESSINGINSHORE
FISHING
MUSSEL
FARMING,
HARVESTING
AND
PROCESSING
Mussels Doing the Mahi
in The Gulf
A
single mussel can do a lot of heavy
lifting when it comes to restoring
biodiversity.
A mussel can filter around 150 litres of
seawater a day, removing sediments and
improving water quality and clarity. When
growing in numbers, the mussels provide
a habitat for small fish as well as food for
bigger fish, all the while stabilising the
seabed and coastline.
Sanford is supplying mussels from our
North Island Mussels (NIML) joint
venture to the Revive our Gulf project
which is gradually restoring mussel reefs
in the Hauraki Gulf in a collaborative
effort with Iwi, Nature Conservancy NZ,
the University of Auckland Institute of
Marine Science and the Mussel Reef
Restoration Trust.
Natural mussel reefs were once common
in the Hauraki Gulf, but a combination of
pollution and dredging seriously depleted
them. The seabed, muddied over time
by runoff due to land-use change,
became unattractive to those that
remained, contributing to the decline.
Now substantial numbers of green-lipped
mussels are nestling into areas carefully
prepared with a shell base as work goes
on to reverse the decline.
GM Sustainability, Dr Peter Longdill, says
the mussels are usually brought to the
sites on our own barges with teams from
NIML and Sanford helping with the drops.
But in June, during Matariki, poor weather
conditions prevented the barges from
making a journey to Warkworth, but not
the precious cargo.
Mike Moy, Operations Manager for NIML,
put the live mussels into sacks by hand
and drove them north through the night
to Auckland, ensuring that the first
ceremonial drop of mussels at a new reef
site by Ngāti Manuhiri could go ahead to
PERSEVERANCE OF OUR REGIONS
OUR CONTRIBUTIONS
$71,864
IN DONATIONS AND SPONSORSHIPS
TO COMMUNITY ORGANISATIONS AND
PROGRAMMES SUCH AS GRAEME DINGLE.
PLUS
231,676
MEAL EQUIVALENTS
DONATED TO LOCAL FOODBANKS.
(Includes Auckland, Northland, Waikato,
Bay of Plenty and Central North Island.)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
72
SANFORD INTEGRATED REPORT 2022
mark the Māori new year. Subsequent
deployments totalling 150 MT followed.
Closer to Auckland city, Sanford and
NIML are also the mussel source for Ngāti
Whātua Ōrākei’s reef restoration project
at Okahu Bay which began in 2021. This is
another long-term project which has the
aim of restoring biodiversity and the
mauri (life force or essence) of the Bay.
Some 60 tonnes of live mussels were
barged across the Firth of Thames in
three trips to begin the project. Mussels
have been deposited across six different
beds, all of which are being monitored by
the University of Auckland’s Dr Jenny
Hillman to understand how they are
performing. Lessons learnt can be applied
to other restoration projects.
60 tonnes
OF LIVE MUSSELS VIA BARGE, FOR
NGĀTI WHĀTUA ŌRĀKEI’S REEF
RESTORATION PROJECT AT OKAHU BAY.
Restore
BIODIVERSITY AND THE MAURI
(LIFE FORCE OR ESSENCE) OF THE BAY
WITH NGĀTI WHĀTUA ŌRĀKEI.
ABOVE Waikawau en route to Okahu Bay to redeploy 60 tonnes of mussels.ABOVE Robust triplefin on a 24 hour old mussel
bed in Okahu Bay.
Supporting
NGĀTI WHĀTUA ORAKEI’S
REEF RESTORATION PROJECT
AND REVIVE OUR GULF.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
73
SANFORD INTEGRATED REPORT 2022
NO WASTE,
NO FUSS,
NO PROBLEM
IT’S A GREAT FEELING when a problem
becomes a solution – or in this case,
138,900 of them.
That’s the number of servings of our
export-quality green-lipped mussels that
went out to families in need this year,
thanks to the New Zealand Food Network.
They receive, manage and redistribute
some 8,612 MT of food to charities,
foodbanks and iwi to help vulnerable
communities.
It’s quality kai, where something such as
labelling, packaging, surplus production, a
cancelled export order or a reduced shelf
life means it cannot be sold at retail.
Rather than see it sent to landfill, NZFN
enables companies, both big and small to
donate this food to their distribution
centres which have the shelving, chillers,
forklifts and technology to manage
everything from fresh vegetables to
frozen ice-cream in bulk.
In our case, 27,780 kg of green-lipped
mussels, all pre-packaged for an export
customer, became surplus when the order
was cancelled. With the product frozen
and packaged in the customer’s format
and branding, it was not practical to
reprocess. Seafood can sometimes be a
difficult product to donate, even when
frozen, given the need for constant
chilling in the supply chain. But NZFN’s
response to our call was “no problem”,
and the mussels were soon on the menu
for families in 18 communities from
Whangarei in the North to Invercargill
in the south.
NZFN’s CEO, Gavin Findlay, said the
donation, worth an estimated $284,850
in retail value, was a huge treat for
everyone who received them.
“We were thrilled to be able to make
this donation work enabling Sanford to
have this fabulous kai moana eaten by
very appreciative Kiwis rather than being
wasted. Together we’re getting food to
where it’s needed most.”
Sanford donated seafood for more than
294,500 meals this year across all
foodbank charities, including NZFN.
*assumes:
100g standard portion for fish fillet or mussel meat
200g standard portion for ½ or whole shell mussel product
and whole fish
300g standard portion for heads/frames
CANTERBURY
WAIKATO, BOP & HAWKES BAY
59,540
MARLBOROUGH TASMAN
17,000
AUCKLAND & NORTHLAND
172,136
12,100
16,200
OTAGO AND SOUTHLAND
GREATER WELLINGTON
15,600
Total
294,576
SANFORD FOODBANK PRODUCT DONATIONS BY REGION
Meal equivalents donated to foodbanks FY22*
(Meal total includes 2,000 not allocated to a region
on the map below.)
LOCATIONS
REGIONS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
74
SANFORD INTEGRATED REPORT 2022
2022
294,576
COMMUNITY FOODBANK SUPPORT
During FY22 Sanford continued its support
of community foodbanks through both
fillet products as well as diversion of fish
heads and frames (13,791kg) for select
species for direct human consumption.
NO. OF MEALS* DONATED
TO FOODBANKS
* 100g portion for fillet donations, 200g portion for half
or whole shell mussels and whole fish, 300g portion
for head/frame donations.
2020
76,173
2021
132,535
IMPROVING value utilisation of the entire
fish and eliminating waste is a key
strategic initiative set by us in 2022.
Our partnership with the Kai Ika Project in
Auckland is the very definition of waste
not, want not.
This year we donated a total of 21,835kg
of fish to the project, inclusive of 13,791kg
of fish heads and frames, and not a
skerrick was wasted. Through LegaSea and
Papatuanuku Kokiri Marae, South
Auckland families were able to add fresh
kai moana to their menu. Any scraps from
processing are turned into fertiliser for
the marae’s thriving vegetable garden
– itself a social enterprise with produce
often available from the Grey Lynn
Farmers Market.
Kai Ika was created to ensure recreational
fishers did not waste prized heads and
frames by dumping them after filleting.
Unlike commercial fishers, they do not
have access to plants to produce fishmeal
and oils from fish offal. Kai Ika not only
WATCH VIDEO
Kai Ika project
https://youtu.be/9nwvpVDrsC0
FEEDING
THE PEOPLE
AND THE LAND
prevents a valuable resource from going
to landfill, but also addresses the growing
problem of food insecurity by making the
most of every fish.
When recreational fishing virtually ceased
under Covid-19 lockdowns, the charity
turned to commercial fishers, like us, to
maintain supplies. Recreational fishing has
returned, but demand has risen as higher
living costs hit family budgets and we are
happy to continue to contribute. Like Kai
Ika, we want to get the maximum
nutritional and economic value from every
fish harvested and eliminate waste.
ABOVE Carlos Hotene from Papatūānuku Kōkiri Marae collecting a donation of fish heads and
frames from Sanford’s Auckland processing site as part of the Kai Ika Project.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
75
SANFORD INTEGRATED REPORT 2022
IT’S NOT easy keeping a thirst for learning
alive when students and schools are
navigating lockdowns, but the Graeme
Dingle Foundation (GDF) has persevered,
knowing the importance of education and
motivation in the lives of young Kiwis.
Sanford supports the Foundation in six
regions across the country, helping their
teams have an impact on the lives of more
than 20,000 young people. For almost
30 years, the Foundation has taken a
special interest in those who may be at
risk. Sanford has been a partner with GDF
for over 20 years and as the pandemic
disrupted learning routines, the
Foundation’s work proved even more vital.
From the Kiwi Can programme teaching
self-belief and confidence in primary
schools, to the MYND programme helping
high risk youth turn their lives around, the
Foundation’s work is invaluable, given its
immediate and long-term impacts.
PERSEVERING FOR POTENTIAL
GRAEME DINGLE
FOUNDATION
AND SANFORD
We support the Foundation financially,
in kind and in person, including having
the Marlborough region’s longest
standing mentor in the Sanford family -
Floating and Farm Development
Manager, Grant Boyd.
An Infometrics report says every
$1 invested in the Graeme Dingle
Foundation gives a return of $7.80 to
New Zealand’s economy
1
. On that basis,
our support this year of over $140,000
has achieved over $1,000,000 of
impact. But the gains are far more than
financial. Our people who are hands-on
in New Zealand’s regions, working with
our rangatahi, can see what a difference
that self-belief, values and a compass
set on the right course can make for
a lifetime.
1. https://dinglefoundation.org.nz/
DONATIONS THIS YEAR TO THE
GRAEME DINGLE FOUNDATION
$140,146
WILL GENERATE LONG TERM GAINS
FOR NEW ZEALAND OF OVER
1
$1,000,000
COMMUNITY COMMITMENT
GRAEME DINGLE FOUNDATION AND SANFORD
FROM 2014 TO TODAY
2022
Community Programmes
(incl. Salmon Fund)$102,737
Graeme Dingle Foundation$140,146
Other Charities$9,453
Industry Sponsorship$49,454
* Exclusive of foodbank donations product costs. The
number of meal equivalents donated being reported
elsewhere.
2022 TOTAL
$301,790
2021 value: $353,909*
20192021
20182020
20152017
20162014
OUR JOURNEY
WITH GRAEME DINGLE FOUNDATION
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Highly Valued Community Partner
76
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES AND GOALS2023 TARGETS
Community Relationships, Collaboration, and Support
Respect and support our local communities, leveraging
our strengths and in line with our social licence to
operate. Establish strategic partnerships that create
value for the community, our partners and Sanford.
Continue assisting communities where we operate in meaningful ways, including:
• Support to community initiatives in Bluff and Stewart Island via the 10c/salmon fund and local community
funding decisions;
• Strengthen youth resilience through partnerships with GDF, particularly in the regions where we operate; and
• Support of local events in all main sites (e.g. science fairs, beach clean-ups).
Support the wider uptake of a ‘whole-of-fish’ consumption approach in New Zealand, target >10,000 kg of fish heads
and frames donated for direct consumption (FY22: 13,791kg).
Use our position as a major food supplier to assist local communities by working with local foodbank distributors
where inventory or products are appropriate.
Through our business operations and decisions, support local and regional economies in New Zealand by
focusing >70% of FY23 non-capital expenditure to domestic suppliers (FY21: $397.7M paid to domestic suppliers;
FY22: $488.3m).
Our future focus – Targets for FY23
OUR VISION:
We are a valued and respected partner both at a local
community level and with our national strategic partners.
We are a positive contributor to all our stakeholder communities
and are regarded as being an integral part of the local and
national communities we participate in.
LINKS TO RELEVANT STRATEGIC INITIATIVES:
S
Invest in systems to drive a high achieving
organisation
E
Develop expertise, knowledge, and insights to drive
asset optimisation, profit, value, quality, and
sustainability
P
Ensure the welfare, growth, and fulfilment of our
people – economic, physical, emotional
VISION AND STRATEGIC LINKS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
STRATEGIC INITIATIVES
UN SDG
U
D
C
SE
P
77
Operational
Excellence
CAPITAL INPUTS
OUR VISION: We are New Zealand’s seafood leader for
quality, value and reputation. We deliver consistent and
sustainable, profitable, and socially beneficial outcomes to
our shareholders and stakeholders through our people,
sector leadership, approach to innovation, and risk
management strategies.
1
2
3
4
5
6
1. Financial
2. Human
3. Manufactured
4. Intellectual
5. Natural
6. Social & Relationship
United Nations Sustainable
Development Goals
KEY: DARKER SEGMENTS APPLY
TO THIS OUTCOME. SEE PAGE 14
KEY: COLOUR SEGMENTS
APPLY TO THIS OUTCOME.
U Utilisation
D Differentiate
S Systems
E Expertise
C Customers
P People
Operational Excellence
78
SANFORD INTEGRATED REPORT 2022
Material issues and value creation – 2022
This table summarises Sanford’s actions relating to our desired business outcome of achieving operational excellence. It includes the targets we set at the
commencement of year 2022, organised by the material topics defined in our 2021 Annual Report, and our progress against these targets. At the end of this section,
we use revised and refreshed material topics (the outcome from the materiality process) to define future targets for 2023 and beyond as well as our future vision.
PROGRESS AGAINST TARGETS FOR FINANCIAL YEAR 2022
MATERIAL ISSUES & STRATEGIC GOALS2022 TARGETSPROGRESS AGAINST TARGETS
Shareholder Value
Deliver improvements in company economic
performance represented by year-on-year
increases in revenue, EBIT, and NPAT, building
shareholder value and returns.
Achieved. Improved results for each of revenue (+8.6%:$531.9m, FY21:$489.6m),
EBIT (+72.5%: FY22:$40.2m, FY21:$23.3m), and NPAT (+244%: FY22:$55.8m,
FY21:$16.2m) as we implement strategy to sustainably grow shareholder value.
Operational Excellence
FY22 Business Priorities:
1. Rebuild mussel profitability, increasing profit
contributions by >100%.
2. Deliver on developing opportunities in
wildcatch, resulting in improved profit
contributions.
3. Retain salmon profitability whilst preparing for
future growth by investing in farming
infrastructure.
Ongoing.
1. Mussel division has not delivered to anticipated result for FY22, impacted by
lower harvest volumes as labour conditions constrained processing capacity.
2. Strong pricing in many wildcatch segments contributed to improved
contributions, despite volume being flat.
3. Strong sales performance in Salmon during FY22 retained profitability despite
upward pressure on key inputs such as feed and challenging environmental
conditions. Infrastructure investment continued with several vessel/barge
purchases to support future volume growth.
Review and refine our business strategy to define
pathway for excellence and growth in a post-Covid
context.
Achieved. Strategy refresh and five-year strategic direction defined and cascaded
successfully within the business, and to investors via an interactive presentation held
on 21 June 2022.
Successfully complete the SanCore Anchor project
rollout for processing, supply chain, and financial
systems before the end of FY22.
Not Achieved. Substantial progress made during FY22 including the successful
deployment of Innova systems (used by logistics, planning, production, processing,
and quality) in Havelock, Timaru, Bluff, and on six of our deepwater factory vessels.
Rollouts still pending at the close of FY22 include Auckland and one further vessel,
which are scheduled for early FY23.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
79
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2022 TARGETSPROGRESS AGAINST TARGETS
Operational Excellence - Cont
Complete construction of, install equipment
within, and commission the new marine extracts
facility in Blenheim.
Achieved. Construction completed during September 2022, along with
installation of initial equipment. Facility commissioning will be completed and
production underway by end of October. Official opening event scheduled for
Thursday 24 November.
Mussel spat production during FY22 via SPAT
nz to
achieve production equivalent to deliver, at harvest,
>40% of FY22 GWT plan.
Not Achieved. Process improvements were implemented during FY22 and brought
to commercial scales toward year end, the timing though limiting their ability to
contribute to overall results. Tough winter conditions affected mussel condition and
environmental challenges (Nelson flooding) also negatively affected production.
Value Chain
Implement practices and collaboration
arrangements throughout the supply chain to limit
supply chain costs ($/GW kg) to budgeted levels or
below as well as improve service reliability.
Not Achieved. During FY22, supply chain costs increased above budgeted levels
(cost/tonne basis), primarily attributable to the flow through of higher than planned
fuel pricing following the Ukrainian invasion during the year and associated effect on
global fuel costs. Effects have been felt on all of bunker fuel for shipping, aviation
fuel and domestic diesel pricing.
Harness sales and operational planning (S&OP)
process optimisation and partnerships with
freight providers to improve our ‘Dispatched and
Shipped On Schedule’ score (per shipment) by
greater than 10 percentage points, improving
customer satisfaction.
Not Achieved. S&OP processes worked well during the year, reflected by supply
volumes aligning to strong demand for key species. Ability to deliver export sales
orders on time in some segments has, however, been impacted by labour shortages
particularly in mussels. Kotahi seafreight collaboration successful in its ability to
confirm bookings and equipment, however, with a continuation of shipping line
schedules being ‘off schedule’, it has not delivered an improvement in the
‘dispatched and shipped on schedule’ score.
Risk
Complete ongoing ERM process, implement
framework, communicate understanding and
awareness of key risks and mitigations internally,
and regularly assess and report on risks to
the Board.
During FY22, perform a gap analysis, maturity
assessment, and plan toward readiness for
disclosures in accordance with the
recommendations of the Task force on Climate
Related Financial Disclosures (TCFD) by 2023.
Ongoing. ERM process improvements implemented including development of a
residual risk radar along with a group risk management policy and framework.
Establishment of these across the business remains ongoing, building towards an
embedded risk consideration and management culture.
Not Achieved. During FY22 we’ve continued to participate in the XRB’s process
to consult on their Climate Related Disclosures (CRD) standards – with the XRB set
to first issue those standards in December 2022. During FY22 Sanford have
disclosed climate related information again via the TCFD aligned CDP framework.
Specialists are engaged to assist with gap analysis and formal CRD assessment from
November 2022.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
80
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES & STRATEGIC GOALS2022 TARGETSPROGRESS AGAINST TARGETS
Governance
Full compliance with all NZX governance
requirements and consistently adopt best practice
governance practices.
Achieved. Full compliance with NZX corporate governance code requirements in
all material aspects.
In September 2022, Sanford adopted the ESG World (Environmental, Social, and
Governance) platform to allow interested persons to readily view our ESG practices
and status in relation to many common ESG frameworks operating across the world.
A link to that profile can be found under the “Investors” tab of our website.
Communication
Deliver quarterly updates for the Investor
community, inclusive of full and half-year result
announcements.
Promote open and transparent communications
with stakeholders and communities to build
relationships and share factual fisheries
information.
Provide meaningful responses to media enquires in
a timely manner, promoting transparency as far as
commercial considerations allow.
Achieved. Investor updates provided on a quarterly basis during the year. Investor
morning held on 21 June 2022 communicated strategic refresh as well as in-depth
business updates. During the year our team engaged regularly and successfully with
a variety of stakeholders and media to provide factual information, respond to
enquiries and to communicate business opinion.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
81
SANFORD INTEGRATED REPORT 2022
TOTAL STAFF AND
SHAREFISHERS
– WHAT WE DO HERE –
147
AREA: THE SOUTH
PROCESSINGSALMON
FARMING
I
t takes three years and a lot of care to
grow our Big Glory Bay salmon. That
meant the stakes were high when our
Bluff site adopted and adapted to three
waves of change in processing our
precious fish – new processing, new
portioning and a technology rollout. This
work is part of our strategic priority to
grow our salmon business and is in line
with our strategic initiatives around
developing expertise, improving the
utilisation of our fish, differentiating
through innovation and investing in
systems and processes to drive a high
achieving organisation.
As Bluff Site Manager Sarah Bynevelt
puts it “there was significant pressure to
get this right because we are processing
a fresh and premium product. One that is
not only premium in terms of the salmon
but also our service delivery. There is very
little room for error.”
The site’s new primary line, delayed
from 2021 by Covid, was commissioned in
January, achieving a 40% lift in processing
capacity through a combination of
technology and skilled workers. This
improves the site’s ability to meet peak
harvest volumes without requiring a
second primary processing line.
As they tackled this change, alongside
managing a wave of Covid, the Bluff
implementation team adopted the old
motto “make haste slowly.”
“We recognised some people would
adapt quickly; others would take time.
We made a real effort not to rush things.
We ran the old line alongside the new line,
bringing people over in small numbers
and supporting them in the adjustment.
A high-quality product demands quality
processing. We have skilled people, and
they were all committed to the change
High Stakes Met
with High Engagement
PERSEVERANCE OF OUR REGIONS
OUR CONTRIBUTIONS
$145,772
IN DONATIONS AND SPONSORSHIPS
TO COMMUNITY ORGANISATIONS
AND PROGRAMMES SUCH
AS OUR
COMMUNITY SALMON FUND.
PLUS
16,200
MEAL EQUIVALENTS
DONATED TO LOCAL FOODBANKS.
(Includes Otago and Southland.)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
82
SANFORD INTEGRATED REPORT 2022
and engaged, but it was important we
gave them time to adapt.”
The new line introduced a chain-style
process where fish is conveyed past
workstations, reducing manual handling.
The steps in processing are now broken
down, providing opportunities to
introduce microbreaks and to rotate
roles regularly to mitigate the risk of
strain on workers. This has supported
a reduction in total recordable injury
frequency rate (TRIFR).
Sarah says the measured pace of
the changeover gave everybody an
opportunity to learn, including supervisors,
the engineering team and cleaning crews.
“The line is a far more advanced piece
of equipment, so while many aspects of
processing are easier, many are more
complex. We have technology that’s new
for our engineers, such as vacuum waste
extraction system. There’s also the simple,
but vital business of cleaning this new
equipment, which was also a very big part
of the learning curve.”
A new portioning line also became fully
operational at the Bluff site with the
commissioning of the FleXicut, supporting
our capacity to supply bone-free fillets
and portions to supermarket customers in
New Zealand, Southeast Asia and the US.
The portioning line delivered far more
than processing efficiency in salmon
portions. It significantly reduced manual
pin boning of salmon fillets, a task which
requires fine motor skills and
consequently poses the risk of repetitive
strain injuries. Fillets fed into the
portioning machine are x-rayed to find
the bones and water jet cutters precisely
remove them before portioning the fillet.
Sarah says portioning and pin boning
absorbed 18-20 people in the past, while
the FleXicut technology allows the same
throughput with half the staff. Demand
for portioned salmon is increasing from
supermarkets, especially as more
The line is a far more advanced
piece of equipment, so while many
aspects of processing are easier,
many are more complex. We have
technology that’s new for our
engineers, such a vacuum waste
extraction system. There’s also the
simple, but vital business of
cleaning this new equipment, which
was also a very big part of the
learning curve.
—
Sarah Bynevelt
BLUFF SITE MANAGER
shoppers buy online. Portioned fillets can
be supplied in sealed tray packs, or in bulk
for sale at seafood counters.
The third wave of change rolled through
the site in July with the introduction
of Innova. This is the system being
introduced Sanford-wide to record and
track product as it moves through the
production process. It has provided new
reports and dashboards to allow a much
better view of throughput rates and
quality, including allowing the Quality
Control team to use tablets rather
than paper.
Innova is enabling a data-driven picture
of the site’s salmon quality and processing
practices that can be used to support
strategic priorities like improving the
value utilisation of entire fish and waste
minimisation.
ABOVE Lana Wast and Lucas Ramsey on the portioning line at the Bluff processing site.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
83
SANFORD INTEGRATED REPORT 2022
INVESTING
FOR SALMON
GROWTH
WITH GROWTH in our salmon division a
priority in our strategy, we are into stage
two of our three-year programme
focused on breeding generations of
resilient and high-quality fish. The
programme supports our goal to increase
returns by growing production to 6,000
MT over five years.
In stage one we transitioned our breeding
programme from Big Glory Bay to our
freshwater hatchery site at Kaitangata in
the South Island. The new brood stock
tank development was completed this
year with six tanks commissioned.
This reduced our risk exposure for our
most important breeding fish, providing
additional backup stocks and continuing
the focus on fish resilience. The second
stage of this transition to the hatchery is
now underway and will be completed in
early FY23.
The hatchery tanks enable most of our
breeding fish to be reared in a controlled
environment away from environmental
risks such as algal blooms, jelly fish and
marine predators. While we do maintain
some brood stocks at sea, having the
majority protected from risks supports
our ability to consistently produce high
quality salmon.
GM Salmon Operations, Richard Miller
says the breeding programme has three
generations of breeding stock developing
simultaneously, with each generation in
its own tank.
Given our focus on managing climate
change risks and impacts, the breeding
programme is drawing on observations
made during previous marine heatwaves
when some families of fish had greater
survivability rates.
“That’s a trait we want to encourage
along with the others such as fat and
colour, growth, maturation and resilience.
Selective breeding takes time, but we
expect to produce a line of faster-growing
fish which efficiently convert feed and
produce more weight for less intake.
“We know that climate change will always
be a factor and we are trying to get a step
ahead, ensuring the wellbeing of our fish
in higher risk times.”
A Recirculating Aquaculture System
(RAS) will be an important addition to
our breeding technology, enabling us to
transfer bigger smolt to sea. The RAS will
provide a fully controlled environment for
the smolt, enabling better control of
timing, size and counts to sea. In turn this
leads to more consistent and targeted
harvest size year-round.
While the RAS was originally due for
commissioning in mid-2023, seismic and
geotechnical concerns around the original
site meant an alternative was needed.
Subject to consenting, the RAS is
expected to be commissioned at the
new site in FY24.
Further investments to support our
growth goals include world-leading
Canadian oxygenation enhancements
across the farm’s pens extending
coverage from 15% to 50%. This is
consistent with our strategy to reduce
environmental risks with the equipment
enabling a further level of water quality
control during times when conditions
are challenging. This will optimise
performance and fish wellbeing.
ABOVE Baby salmon, known as smolt.
LEFT Lily Heidmann checking salmon eggs at
the Kaitangata hatchery.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
84
SANFORD INTEGRATED REPORT 2022
A second feed barge has been leased for
the year ahead, enabling fish stocks to be
split across two separate areas to
mitigate risks. Funding for a new barge,
to be built in 2023, has been approved.
Two work vessels will also come into
service in FY23. Little Glory Bay will
manage heavy lifting duties for moorings
while the other, named San Storm will
streamline the net cleaning undertaken
every 10 days to provide the best
conditions for the fish.
EXTERNAL COMPLIANCE AUDIT
NUMBER OF
AUDITS COMPLETED
20222021*
MPI Food Safety Performance Based Verification Audits
(PBV)4042
MPI National Shellfish Sanitation Programme (NSSP)44
Marine Stewardship Council (MSC) Chain of Custody11
FSSC 22000 Food Safety Management Systems45
Best Aquaculture Practices (BAP) Audits44
Organic Certification Audits01
Environmental Management Systems (EMS) ISO 14001 Audits11
Accident Compensation Corporation, Accredited Employer
(ACC AEP)11
Maritime New Zealand Marine Operator Safety System
(MOSS)**04
Fleet Governance and Due Diligence Audit (HSENZ)44
Financial Statement Audits11
MPI Licensed Fish Receiver Audits1***0****
TOTAL EXTERNAL AUDITS CONDUCTED6168
* Due to Covid-19 restrictions several audit authorities either extended validations, or permitted self-assessment in lieu of
external audits.
** Audit frequency varies based on risk profile and performance.
*** Audits conducted on annual calendar year basis – scheduled audit did not fall within financial year.
**** FY22 audit underway at time of reporting.
To further support growth, we are
preparing to seek an increase in the
nitrogen cap covering the farm. Our
ability to operate within 95% of our
existing cap of 583MT, which has been
in place for three years, has been
consistently confirmed by independent
audits which assess environmental
factors including water quality and the
health of the seabed. If consented, the
higher cap of 659 MT per year – a 13%
increase - will enable us to extend the
farm from 24 pens to 32.
ABOVE Bevan Ferguson, Assistant Salmon Farm Manager, cutting salmon sashimi.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
85
SANFORD INTEGRATED REPORT 2022
EASIER,
BUT NOT
PLAIN SAILING
IN 2021, Chief Supply Chain Officer,
Louise Wood, described moving product
to market as “a relay with hurdles,” as
supply chains struggled with container
shortages, shipping delays and massive
bottlenecks at key ports.
This year, the running has been smoother,
thanks to our partnership with Kotahi for
all our export frozen product, but it still
hasn’t been plain sailing.
“The Kotahi partnership has certainly
been a benefit in terms of our access to
containers and booking space on the
export vessels,” says Louise.
“What remains frustrating is the last
step of the process which is getting your
freight on a vessel and for it to leave on
time. Shipping schedules have remained
poor, partly because of capacity
constraints and partly because of our
location, because New Zealand is more
remote and less attractive to the major
carriers than many of the more
convenient global trade routes.
“We do well at securing customer orders,
but until a shipment goes on the vessel,
we cannot invoice that product. We have
had months when we could not meet
internal sales plans, not through lack of
product or demand but because of timing
issues with vessels. Nonetheless, supply
chain access and capacity issues are
better than twelve months ago. Access to
ports is improving although bottlenecks
remain,” says Louise.
“Demand has lifted as markets have
opened and volumes have been short
because we have been affected by labour
shortages and the impacts of absenteeism
as our people caught the virus or had to
isolate. Our volumes have moved quickly
through the supply chain, and we have
had minimal inventory build,” says Louise.
Network disruptions are expected to
cause ongoing constraints within the
global supply chain, with Sanford’s
logistics partner Kotahi forecasting in
September that schedule reliability and
available capacity are likely to remain
restricted for some time. Sea Intelligence
reports global schedule reliability
continues to improve but only gradually.
On time performance has improved
versus the same time last year by over
10 percentage points but is still low
compared with pre-Covid levels and has
contributed in part to higher seafreight
costs over the FY22 period.
SHIPPING LINE SCHEDULE RELIABILITY
Source: Sea-Intelligence, Global Liner Performance report issue 133
OUR ACTIVITIES
SUPPORT THE LOCAL AND
REGIONAL ECONOMIES
IN NEW ZEALAND WITH
$488.3m
in payments made by Sanford to domestic
suppliers during 2022 and $1.62 billion
over the past four years.
20%
30%
40%
50%
60%
70%
80%
90%
DecNovOctSepAugJulJunMayAprMarFebJan
2019202020212022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
86
SANFORD INTEGRATED REPORT 2022
FULL STEAM
AHEAD WITH
SANCORE
ONE OF the six strategic initiatives in
our strategy is to “invest in systems
and processes to drive a high achieving
organisation.” The SanCore programme
is a vital part of delivering on that aim.
Good systems and processes will help us
improve the value we achieve with every
fish and allow us to optimise the use of
our assets. Quality systems also support
quality results, both in terms of our
financial performance, and the products
we sell, their traceability and sustainability.
Our investment in the SanCore
programme is achieving this level of
transformational change across the
business. Despite Covid, significant
progress has been made this year.
Innova is the newly adopted system
which tracks product as it moves through
the production process, whether the
work is being done at sea or on land. It
begins with the caught or farmed fish or
mussels and ends with the processed and
packaged product.
Innova has now been rolled out to our
land-based processing sites at Havelock,
Timaru and Bluff and six deepwater
vessels (excluding the scampi fleet).
The Auckland land-based site will follow.
At sea, for example, it records all species
caught, while standardised processes
support the maximum value being
achieved from every kilo of greenweight.
Real time yields and inventory are
recorded, and the system supports
the statutory reporting requirements
for species caught under quota
management rules.
At sea and on land, Innova also enables
quality control data to be captured
via a tablet, replacing a manual paper-
based system.
SanCore Project Manager, Adrian Grey,
says Innova allows real time reporting and
traceability, which can lead to improved
yields, plus Innova’s greater visibility of
inputs and outputs can enable further
gains in value and efficiency.
“In processing, the benefits include
consistency in the way we record
information about our fish when it enters
our systems and the ability to provide
meaningful reporting in real time. That
reporting helps eliminate delays,
inaccuracies, duplication and repetition.
At sea, the data we receive not only
improves the value returned as we
process each tow of fish caught, but also
enables us to get a clearer picture of
available inventory for our sales team.”
Rolling out technology at sea is markedly
different to getting the job done on land
and the logistics are crucial to getting
the job done.
“Usually there are two or three stages
of development for SanCore integration
each time a vessel is in port. In the first,
we upgrade infrastructure on board
getting the racking and wiring in place.
In the second we install and test and
then the training begins.”
The training is primarily delivered by
former skipper, Steve Collier, who was
recruited into the SanCore programme
for his on-board experience. Adrian says
having someone who “speaks the
language” with deepwater crews is an
asset, with 120 crew members to be
trained across the fleet.
SanCore has already delivered new
quality, safety, health and environmental
software across the business.
Cornerstone finance, supply chain, quota
management systems and payment
systems under Microsoft D365 are now
being introduced through FY23.
At sea, the data we receive not only
improves the value returned as we
process each tow of fish caught,
but also enables us to get a clearer
picture of available inventory for
our sales team.
—
Adrian Grey
SANCORE PROJECT MANAGER
WATCH VIDEO
Innova on board Granit
https://youtu.be/oSqm4c2yllU
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
87
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES AND GOALS2023 TARGETS
Shareholder Value; Profitability and Productivity
Improve business margins and financial performance, using
that as a platform to sustainably grow shareholder value.
Deliver Year-on-Year improvements in revenue, profitability and EBIT as we track a return to pre-Covid financial
performance over a realistic 2-3 year time frame, with a goal to reach a normalised EBIT by 2026 of between
$85-$105M.
Operational Excellence
Execution of business strategy, growth, and value
improvements within existing operations to drive
efficiency improvements and value outcomes.
FY23+ Business Priorities:
1. Grow salmon profitability whilst continuing to invest to support capacity and capability for 6.1k GWT harvest
volume in 2026-2027;
2. Sustain performance in deep-water wild catch whist improving value utilisation from harvest and building
capability;
3. Implement inshore wild catch turnaround strategy; and
4. Grow mussel profitability; invest in farming infrastructure to support mussel strategy and volume growth;
increase profit contributions >100 %.
Initiate, during FY23, the build process for a King Salmon land based Recirculating Aquaculture System (RAS)
hatchery to support our salmon growth strategy.
Initiate, during FY23, construction for the expansion of the SPAT
nz facilities at Nelson, which aims to provide a 30%
increase in hatchery spat production capacity.
Successfully complete the SanCore Anchor project rollout for processing, supply chain, and financial systems.
Initiate, during FY23, physical ship-yard build process for Scampi vessel build program - ultimately leading to
improved efficiencies and fleet reliability.
Our future focus – Targets for FY23
OUR VISION:
We are New Zealand’s seafood leader for quality, value and
reputation. We deliver consistent and sustainable, profitable,
and socially beneficial outcomes to our shareholders and
stakeholders through our people, sector leadership, approach
to innovation, and risk management strategies.
LINKS TO RELEVANT STRATEGIC INITIATIVES:
U
Improve value utilisation of entire fish and eliminate
waste
D
Differentiate through innovation, quality,
provenance, sustainability, operational excellence,
and application of science
S
Invest in systems to drive a high achieving
organisation
E
Develop expertise, knowledge, and insights to drive
asset optimisation, profit, value, quality, and
sustainability
C
Build and sustain partnerships with customers aligned
to our purpose
VISION AND STRATEGIC LINKS
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
88
SANFORD INTEGRATED REPORT 2022
MATERIAL ISSUES AND GOALS2023 TARGETS
Risk Management
The business clearly identifies and understands the
prioritisation of risks and the required mitigation
actions to actively manage the risk to acceptable
levels, thereby preserving the value of Sanford.
Build on the risk identification processes undertaken during FY22, ensuring by the end of FY23, that 100% of key
risks have appropriate mitigation strategies and acceptable residual risk levels.
Cyber Risks: Further mature our defences to cyber risks by modernising our technology platforms, deploying
technology upgrades, and implementing a program to develop cyber-awareness across the organisation.
Adapting business practices to changing climate
Potential risks and opportunities arising from the direct
and indirect effects of climate change are understood,
along with their associated uncertainty, and appropriate
responses are built into strategy and investment plans.
Contribute towards and progress the implementation phase of the New Zealand Seafood Sector Climate
Adaptation Strategy.
Complete our assessments (risks, opportunities, governance, strategy, and metrics) in accordance with the ‘soon to
be released’ XRB climate related disclose standards, over 12 months ahead of the mandatory timeline.
Responsible Leadership - Ethical Conduct,
Transparency, Governance
Be recognised as a company which governs with
clearly defined values for the greater good of all
stakeholders. Clear demonstration of an ethical approach
across all areas of corporate responsibility.
100% compliance with NZX governance requirements.
Effective Communications
Produce proactive, clear and transparent communications which
enhance and protect the reputation and performance of the
business, by assisting all our teams to operate at their best and
by improving public and stakeholder perceptions of what we do.
Provide meaningful and timely responses to media enquiries, promoting transparency as far as commercial
considerations allow and proactively sharing stories which are aligned with our wider goals around transparency,
innovation and sustainability.
Respond to the needs of our investor community and other stakeholders with clear and regular communications
that are highly rated by them.
Assist our teams to operate at their best by delivering timely, reliable communications which serve our people and
strategic goals and are highly rated by staff and sharefishers in our feedback processes.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Operational Excellence
89
SANFORD INTEGRATED REPORT 2022
Luke Jones, crew member on Sanford vessel the Tengawai.
GOVERNANCE AND FINANCIALS
90
SANFORD INTEGRATED REPORT 2022
GOVERNANCE AND LEADERSHIP
FOR VALUE CREATION
The Board of Directors of Sanford Limited
(the Board) and management are committed
to building long-term value for shareholders
and employees. We are honouring this
commitment by maintaining the highest
standards of governance, supported by best
practice structures, people, practices and
policies. This includes maintaining high
standards of business integrity and ethics
in all our activities.
The extent to which Sanford has followed
the recommendations of the NZX Corporate
Governance Code dated 10 December 2020
(NZX Code) for the financial year ended
30 September 2022 is detailed below.
Consistent with its commitment to best
practice corporate governance, Sanford has
achieved full compliance with the
recommendations of the NZX Code in all
material aspects for the financial year ending
30 September 2022.
The Board regularly reviews and assesses
Sanford’s governance policies, procedures,
and practices to ensure they are appropriate
and effective. This Corporate Governance
Statement provides a snapshot of these
practices, processes and policies following
the recommendations of the NZX Code.
Sanford’s key corporate governance
documents referred to in this statement,
including charters and policies, can be found
here www.sanford.co.nz/investors/
governance. This statement was approved by
the Board on 14 November 2022 and was
accurate as at that date.
GOVERNANCE FRAMEWORK
The Board, supported by the Audit, Finance
and Risk Committee, People, Health and
Safety Committee, and Nominations
Committee regularly reviews and benchmarks
our structure and processes to ensure they
support effective and ethical leadership,
good corporate citizenship, and sustainability.
This oversight also ensures that these
principles are applied in the best interests of
Sanford and our diverse range of
stakeholders. As a listed company on the
NZX, our governance practices and policies
reflect, and are consistent with, the Listing
Rules. The Company considers that the
governance practices we have adopted
follow these principles and policies for the
year ended 30 September 2022.
The Board provides effective leadership in
the best interest of Sanford and is
responsible for the strategic direction and
control of the Company. The Board exercises
this control through a governance
framework, which includes detailed
reporting to the Board and its Committees,
effective delegation, risk management and a
system of assurances regarding financial
reporting and internal controls.
Sanford’s constitution, and each of the
charters, codes and policies can be found
here www.sanford.co.nz/investors/
governance. The Board’s Charter recognises
the respective roles of the Board and
management and the sound base the Board
has developed for providing strategic
guidance and management oversight.
JOINT SUBSIDIARIES/BUSINESSES, ARRANGEMENTS,
OPERATIONS AND FUNCTIONS
EXECUTIVE TEAM (collectively and individually)
Operational
Integration
Business &
Functional
Integration
Sustainability &
Environment
Food
Safety &
Quality
Accounting
& Tax
Practices
Sales &
Marketing
Supply
Chain
Safety,
Health &
Wellbeing
People
& Culture
GOVERNANCE OF RISK
COMPLIANCE
INFORMATION TECHNOLOGY
INTERNAL
AND EXTERNAL AUDIT
FINANCIAL, NONFINANCIAL ASSURANCE
INTEGRATED REPORTING AND DISCLOSURE
CORPORATE GOVERNANCE
CREATING VALUE THROUGH SOUND CORPORATE GOVERNANCE
ETHICAL FOUNDATIONS
CARE PASSION INTEGRITY
ACHIEVING TOGETHER
SHAREHOLDERS
STAKEHOLDERS
BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER
Innovation
BOARD COMMITTEES
Audit, Finance
& Risk Committee
People,
Health and Safety
Committee
Board Nomination
Committee
CORPORATE GOVERNANCE STATEMENT
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
91
SANFORD INTEGRATED REPORT 2022
OUR DIRECTORS AND BOARD COMPOSITION
Sanford’s Directors bring a diverse wealth of experience, acting on
behalf of our shareholders and other stakeholders.
Directors are chosen for their corporate leadership skills,
professional backgrounds, experience and expertise. The right blend
of skills and experience, combined with the diversity of Directors’
perspectives, is crucial to ensuring the attainment of long-term
value for Sanford’s shareholders.
At 30 September 2022, the Board comprised seven Directors:
Sir Robert McLeod, Mark Cairns, Peter Cullinane, Craig Ellison,
Abigail (Abby) Foote, Peter Kean and Fiona Mackenzie.
Mr Ellison was appointed in December 2021 as a non-independent
non-executive director. Mr Ellison is the Chief Executive Officer for
Ngāi Tahu Holdings. He has extensive experience in governance
across a wide range of sectors. He is the Chair of Wellington Zoo.
Mr Goodfellow retired at the conclusion of the 2021 Annual Meeting.
Under the NZX Listing Rules, a Director must not hold office
(without re-election) past the third annual meeting following that
Director’s appointment or three years, whichever is longer.
Accordingly, Peter Cullinane is required to retire (having held office
since 2019 as an independent director of the Company). Being
eligible, Peter Cullinane has offered himself for re-election at the
Annual Meeting in December 2022.
Peter Kean, who was appointed to the Board in 2014, has previously
indicated his intention to retire at the conclusion of the 2022
Annual Meeting.
David Mair was appointed by the Board on 7 November 2022 as an
independent Director, to replace Peter Kean. Under the NZX Listing
Rules, a Director appointed by the Board must not hold office
(without election) past the next annual meeting following that
Director’s appointment. Accordingly David Mair is required to retire.
Being eligible, David Mair has offered himself for election at the
Annual Meeting in December 2022.
For more information about our Board, please visit https://www.
sanford.co.nz/investors/governance/board-of-directors/.
LEFT TO RIGHT: Peter Kean, Craig Ellison, Abby Foote, Sir Robert McLeod,
Peter Cullinane, Fiona Mackenzie and Mark Cairns.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
92
SANFORD INTEGRATED REPORT 2022
Our strong Executive Team, all experts in
their respective fields, is implementing our
strategy aligned to our vision of leadership
in New Zealand seafood.
For FY22 the Executive Team comprised
Chief Executive Officer Peter Reidie, Chief
Financial Officer Paul Alston, Chief People
Officer Karen Duffy, Chief Customer
Officer Andre Gargiulo, Acting Chief
Operations Officer Peter Young (from
January 2022), General Manager Fishing
Colin Williams (from January 2022),
Chief Supply Chain Officer Louise Wood
(from January 2022). In January 2022
Clement Chia, the Chief Operating
Officer departed.
For more information about our Executive
Team, please visit http://www.sanford.co.
nz/about-sanford/executive-team.
OUR EXECUTIVE TEAM
Peter Reidie
Karen Duffy
Colin Williams
Paul Alston
Peter Young
Andre Gargiulo
Louise Wood
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
93
SANFORD INTEGRATED REPORT 2022
EXECUTIVE AND CEO DIRECT REPORT ORGANISATION CHART
The chart below shows the Executive CEO and Direct Report organisational structure.
Board Of
Directors
Chief Executive
Officer
Executive
Assistant
General Manager
Food Safety
and Quality
General Manager
Corporate
Communications
General Manager
Sustainability
Chief Financial
Officer
General Manager
Fishing
Acting Chief
Operations
Officer
Chief People
Officer
Chief Customer
Officer
Chief Supply
Chain Officer
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
94
SANFORD INTEGRATED REPORT 2022
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.
Sanford’s Board is committed to maintaining the highest standards of corporate
governance, ensuring transparency, business integrity and ethics, and
recognising the interests of its shareholders and other stakeholders.
Recommendation 1.1: The Board should document minimum standards of
ethical behaviour to which the issuer’s Directors and employees are expected to
adhere (a code of ethics) and comply with the other requirements of
Recommendation 1.1 of the NZX Code.
Sanford has prepared a Code of Ethical Behaviour consistent with our core values
of Care, Passion, Integrity and Achieving Together. Sanford also has a Code of
Conduct in place, which is made available to all employees, and sets out the
standards expected from Sanford’s Directors, officers, employees, and anyone
acting on their behalf. Sanford monitors compliance with the Code through
established performance management processes and adherence to the Protected
Disclosures (Whistleblowing) Policy. Disclosure of serious wrongdoing is strongly
encouraged by Sanford as a means of managing risk, promoting openness and
transparency, and protecting the reputation of the Company. This Policy
recognises Sanford’s commitment to encouraging, supporting and protecting
those employees who, in good faith, disclose such wrongdoing, detailing the
procedure and protection offered, when this occurs. There were no reported
breaches during the period of 1 October 2021 to 30 September 2022.
Copies of both Sanford’s Code of Ethical Behaviour and its Protected
Disclosures (Whistleblowing) Policy are available on the Sanford website at:
https://www.sanford.co.nz/investors/governance/policies/.
TRADING IN COMPANY SECURITIES POLICY
Recommendation 1.2: An issuer should have a financial product dealing policy,
which applies to employees and Directors.
Sanford has a Securities Trading Policy that details the Company’s position on,
and rules that apply to, all Directors, officers and employees of Sanford and its
subsidiaries in New Zealand who intend to trade in Sanford’s listed securities in
New Zealand. The requirements imposed by the Policy are separate from, and in
addition to, the legal prohibitions on insider trading that apply.
A copy of Sanford’s Securities Trading Policy is available on the Sanford website
at: https://www.sanford.co.nz/investors/governance/policies/
Principle 2: Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills,
knowledge, experience and perspectives.
BOARD CHARTER
Recommendation 2.1: The Board of an issuer should operate under a written
charter, which sets out the roles and responsibilities of the Board. The Board
charter should clearly distinguish and disclose the respective roles and
responsibilities of the Board and management.
The Board has adopted a formal Board Charter, which distinguishes and
discloses the respective roles and responsibilities of the Board and
management. The Board Charter is available on the Sanford website at: https://
www.sanford.co.nz/investors/governance/board-and-committees/.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
95
SANFORD INTEGRATED REPORT 2022
NOMINATION AND APPOINTMENT OF DIRECTORS
Recommendation 2.2 and 2.3: Every issuer should have a procedure for the
nomination and appointment of Directors to the Board. An issuer should enter
into written agreements with each newly appointed Director establishing the
terms of their appointment.
Sanford has developed and adopted a Nomination Committee Charter, which
outlines the procedure for the nomination and appointment of Directors to the
Board. The Nomination Committee Charter is available on the Sanford website
at: https://www.sanford.co.nz/investors/governance/board-and-committees/.
The Nomination Committee Charter provides that each Director shall be
appointed by a letter of appointment and outlines the matters that are included
in the letter of appointment for each Director.
DIRECTOR PARTICULARS
Recommendation 2.4: Every issuer should disclose information about each
Director in its annual report or on its website, including a profile of experience,
length of service, independence and ownership interests and Director
attendance at Board meetings.
The Board is committed to ensuring a range of experiences and perspectives
among its Directors. This is highlighted in the Directors’ biographies on the
Sanford website at www.sanford.co.nz/investors/governance/board-of-directors/.
For more information, refer to ‘Adoption of a Skills Matrix’ disclosed below in
this statement. Details of independence and ownership interests are set out
below. Director attendance at Board and Board Committee meetings is set out
under Recommendation 3.5 below.
TENURE OF DIRECTORS
>10 years 0
5-10 years2
3-5 years2
Less than 3 years3
INDEPENDENCE
As at 30 September 2022, six Directors
are considered by the Board to be
“independent” directors. Those six
Directors are considered to be
independent, having regard to (amongst
other things) the following factors:
• They are non-executive Directors who
are free of any interest, business or
other relationship that could reasonably
influence, or could reasonably be
perceived to influence, in a material way,
their capacity to bring an independent
judgment to bear on issues before the
Board, and to act in the best interests of
the issuer and to represent the interests
of the Company’s financial product
holders generally.
• They have not been employed or
retained, within the last three years, to
provide material professional services to
the Company.
• Within the last 12 months they were not
a partner, director, senior executive or
material shareholder of a firm that
provided material professional services
to the Company or any of its subsidiaries.
• None of those directors:
»Have been, within the last three years,
a material supplier to the Company or
have any other material contractual
relationship with the Company or
another group member other than as
a Director of the Company;
»Receive performance-based
remuneration from, or participates in,
an employee share scheme of the
Company;
»Is a substantial product holder in the
Company nor do they control, or are
they an executive or other
representative of (or otherwise
associated with) an entity which
controls, 5% or more of the
Company’s voting securities in any
role that might interfere, or might
reasonably be seen to interfere, with
their capacity to bring an independent
judgment to bear on issues before the
Board, and to act in the best interests
of the Company and to represent the
interests of the Company’s financial
product holders generally.
Craig Ellison is not considered to be
independent as he is associated with a
significant shareholder of the Company
(Ngāi Tahu Holdings Limited).
For more information about each Director,
please visit: http://www.sanford.co.nz/
investors/governance/board-of-directors
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
96
SANFORD INTEGRATED REPORT 2022
SANFORD STRATEGIC CONTEXT ALIGNED TO DIRECTOR CAPABILITY AND SKILL ATTRIBUTE
NUMBER OF DIRECTORS
WITH STRONG AND
MODERATE CAPABILITY
Enabling Healthy Oceans
and Ecosystems
Seafood Industry – Depth of senior experience in the seafood industry – long term governance or C-suite large-scale
experience across fishing and aquaculture.
Sustainability – Experience embedding economic, social, and environmental sustainability into business strategy and
operations. Experience in monitoring/measuring ecosystems and sustainability performance.
Safe and High
Performing Workplace
Health and Safety – Experience in the design and implementation of leading HSE practices and culture development at a
governance and / or senior executive level.
People and Culture – Experience leading cultural transformation. Understanding of C-suite performance management and
remuneration.
Trusted Partner
of Choice
Supply chain and infrastructure – Depth of experience in shipping and logistics, supply networks, distribution, and inventory
management – extensive governance background or C-suite experience in these fields.
Go-to-market and consumers – Experience in international export market development and development of sales channels.
Understanding of building insight into key customer groups, brand development and marketing programmes.
Highly Valued
Community Partner
Stakeholder engagement and connection – Stakeholder consultation, advocacy and empathy (especially tangata whenua
perspective). Government connection and standing. Managing regulation including legal experience.
Operational ExcellenceFinancial expertise – Deep understanding of financial risk. Prior CFO / Chartered accountant.
Commercial – Depth of governance and / or executive experience with business operations at scale.
Technology and digital innovation – Experience in data analytics, disruptive technologies, automation, application of digital
platforms.
Governance – NZX / ASX governance experience. Background of multiple governance roles in similarly-sized organisations.
Investment, markets, and corporate finance – Broad corporate finance and markets expertise, national and international
including significant M&A.
Key: Strong capability/expert Moderate capability
ADOPTION OF A SKILLS MATRIX
The Sanford board takes a structured approach towards performance evaluation and
reviewing the effectiveness of its processes. A full review of the board was undertaken in
August 2022 by an external consultant and was supplemented by surveys, self-evaluation
and board discussion. The table below highlights those skills and capabilities that the
review process identified to enable balanced governance. These capabilities are aligned
with Sanford’s business excellence framework pillars and strategy to create long-term
value for our shareholders and stakeholders.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
97
SANFORD INTEGRATED REPORT 2022
DISCLOSURE OF DIRECTORS’ INTERESTS
Interests Register
Sanford maintains an Interests Register in which relevant transactions and matters
involving the Directors are recorded. Details of disclosures made in the Company’s
Interests Register during the year ended 30 September 2022 are set out below.
DIRECTORS’ INTERESTS
The following are particulars of general interests included in the Company’s Interests
Register which were added during the year ended 30 September 2022.
DIRECTORENTITYPOSITION
M C CairnsFreightways LimitedChair
Auckland International Airport LimitedDirector
P D CullinaneFounders Advisory LimitedDirector
C R Ellison
1
Ngāi Tahu Holdings Corporation LimitedChief Executive
Hōaka LimitedDirector
Hobsonville Development GP LimitedDirector
New Ground Living (Hobsonville Point) LimitedDirector
Ngāi Tahu Capital (Australia) LimitedDirector
Ngāi Tahu Fisheries Settlement LimitedDirector
Ngāi Tahu Investments LimitedDirector
Ngāi Tahu New Economy LimitedDirector
Oha Honey GP LimitedDirector
Ngāi Tahu Seafood LimitedDirector
Ngāi Tahu Seafood Products LimitedDirector
Ngāi Tahu Seafood Resources LimitedDirector
Wellington Zoo TrustChair
A K FooteKMD Brands LimitedDirector
P N KeanHighlanders GP LimitedShareholder & Chair
F N MackenzieANZ Bank New Zealand LimitedExecutive
ANZ New Zealand Investments LimitedDirector
Oneanswer Nominees LimitedDirector
DIRECTORENTITYPOSITION
ANZ New Zealand Investments
Holdings LimitedDirector
ANZ New Zealand Investments Nominees
LimitedDirector
R A McLeodChina Construction Bank (New Zealand) LimitedDirector
1. Appointed 20 December 2021
There were no specific disclosures of interests in transactions entered into by the
Company during the year ended 30 September 2022.
SHARE TRADING
Sanford’s Constitution directs that each Director holds a minimum of 500 shares in the
Company. Directors and Executives are required to seek approval in advance of share
trading and certify to the Board that they are not in possession of inside information, in
accordance with the Securities Trading Policy and Guidelines.
The Board has determined that share trading may only occur during two trading window
periods in each year. The periods commence just after the interim and annual results are
announced and end on 30 August, after the end of the half-year and on 28 February, after
the end of the financial year.
Directors acquired ordinary shares during the year as follows:
NATURE OF
RELEVANT
INTEREST
NUMBER OF
SHARES
ACQUIRED
CONSIDERATION
PAID DATE
M C CairnsBeneficial Interest30,000$146,700
19 November
2021
C R Ellison
1
Beneficial Interest &
Registered Holder
1,000$4,100
13 June
2022
F N MackenzieBeneficial Interest1,000$4,890
19 November
2021
1. Appointed 20 December 2021
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
98
SANFORD INTEGRATED REPORT 2022
DIVERSITY
Recommendation 2.5: An issuer should have a written diversity policy, which
includes requirements for the Board or a relevant committee of the Board to set
measurable objectives for achieving diversity (which, at a minimum, should address
gender diversity) and to assess annually both the objectives and the entity’s
progress in achieving them. The issuer should disclose the policy or a summary of it.
Sanford has a Diversity and Inclusion Policy in place. The policy sets out
behavioural and process expectations and standards to deliver practices which
increase diversity and reduce bias. Measurable targets are identified for gender
makeup of the governance body. Requirements are identified therein for
the relevant Board committee to assess the effectiveness of strategies
implemented in support of the policy. The Board acknowledges that
representation of females on the Board did not achieve the target of at least
33%, but is pleased to have improved its diversity with the appointment of
Ngāi Tahu iwi representation, and achievement of other target measures.
GENDER DIVERSITY
As at 30 September 2022, the Board comprised seven members (2021: seven),
made up of five male (2021: five) and two female (2021: two) members.
The Chief Executive Officer and his direct reports comprise a team of 10
members (2021: eight) of which six are male (2021: five) and four are female
(2021: three).
Board gender diversityCEO and direct reports gender diversity
29
40
71
60
Female
Male
A copy of Sanford’s Diversity and Inclusion Policy is available on Sanford’s website at:
https://www.sanford.co.nz/investors/governance/policies/.
INDEMNITY AND INSURANCE
In accordance with section 162 of the Companies Act 1993 and the constitution of the
Company, Sanford has given indemnities to, and has effected insurance for, the directors
and executives of the Company and its related companies. Except for some specific
matters that are expressly excluded, the indemnities (updated in 2022) and insurance
indemnify and insure directors and executives against monetary losses as a result of
actions undertaken by them in the course of their duties.
Specifically excluded are certain matters, such as the incurring of penalties and fines,
which may be imposed for breaches of law.
DIRECTORS’ INTERESTS IN SHARES
The Directors disclosed the following relevant interests in shares as at 30 September 2022:
BENEFICIAL
INTEREST
NON-BENEFICIAL
INTEREST
ASSOCIATED
PERSONS
202220212022202120222021
M C Cairns50,00020,000––––
P D Cullinane12,00012,000––––
C R Ellison
1
1,000n/a–n/a–n/a
A K Foote12,00012,000––––
P N Kean25,00025,000––––
F N Mackenzie2,0001,000––––
R A McLeod28,50028,500––––
1. Appointed 20 December 2021
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
99
SANFORD INTEGRATED REPORT 2022
DIRECTOR TRAINING
Recommendation 2.6: Directors should undertake appropriate training to
remain current on how to best perform their duties as Directors of an issuer.
Sanford’s Directors are expected to understand the Company’s operations and
undertake any necessary continued professional development to enable them
to discharge their duties.
This includes:
• Attending Director training sessions on specific aspects, such as health and
safety governance
• Attending management presentations and tutorial sessions, as appropriate, to
gain a broader understanding and knowledge of Sanford
• Attending briefings on relevant changes in legislation, regulatory and industry
frameworks
• Attending technical and professional development courses, as appropriate, to
keep up to date on relevant issues
• Undertaking scheduled visits to key Sanford sites and operations, to
familiarise themselves with key operational activities and business practices.
EVALUATION OF PERFORMANCE OF DIRECTORS
Recommendation 2.7: The Board should have a procedure to regularly assess
Director, Board and Committee performance.
The Sanford Board takes a structured approach toward performance evaluation
and reviewing the effectiveness of its processes. On an annual basis, the Board
critically evaluates its own performance, and its own processes and procedures,
including those of its Board Committees, to ensure that they are not unduly
complex and are designed to assist the Board in effectively fulfilling its role.
The performance of individual Directors is evaluated, each year, by a process
which includes:
• Each Director discussing with the Chair that Director’s contribution to the
proceedings of the Board and the performance of the Board and its Board
Committees generally; and
• The Chair’s own contribution being discussed by the rest of the Board.
An independent review of the performance of individual Directors and the
Board is undertaken biannually.
The last full review, supported by external consultants, was completed in August
2022, and was supplemented by surveys, self-evaluation, and Board discussion.
The timing of the evaluation enabled the capturing of the challenges that the
Covid-19 pandemic has placed on the business and supported the Board’s focus
toward ensuring that an appropriate strategy is in place to navigate that period
and beyond.
DIRECTOR INDEPENDENCE
Recommendation 2.8: A majority of the Board should be independent
Directors.
As at 30 September 2022, the Board comprised seven Directors. The Board has
considered which of those Directors are independent Directors for the
purposes of the NZX Listing Rules and has determined that, as at 30 September
2022, six Directors are independent Directors, including the Chair and the
Chair of the Audit, Finance and Risk Committee. The independent Directors are
Sir Robert McLeod, Mark Cairns, Peter Cullinane, Abby Foote, Peter Kean and
Fiona Mackenzie. Craig Ellison is not considered to be independent, due to his
association with a substantial product holder of Sanford.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
100
SANFORD INTEGRATED REPORT 2022
Principle 3: Board Committees
The Board should use committees where this will enhance its effectiveness in
key areas, while still retaining Board responsibility.
The Board recognises the essential role of Committees in guiding the Company
on specific issues where specialist knowledge and experience is required. Board
Committees assist, advise and make recommendations to the Board on matters
falling within their areas of responsibility, as set out below.
Recommendation 3.5 (part): All committees should operate under written
charters. An issuer should identify the members of each of its committees, and
periodically report member attendance.
Each Committee is governed by a formal charter, setting out its objectives,
roles and responsibilities, composition, structure, membership requirements
and operation. Members’ attendance is reported annually, and the table of
attendances is included below:
BOARD AND BOARD COMMITTEE MEETING ATTENDANCE
IN THE YEAR ENDED 30 SEPTEMBER 2022
BOARD COMMITTEE MEETINGS
BOARD MEMBER
FULL BOARD
MEETINGS
AUDIT
FINANCE
& RISK
PEOPLE,
HEALTH &
SAFETYNOMINATION
M C Cairns9/9–4/41/1
P D Cullinane9/9–4/41/1
C R Ellison
1
6/64/4–1/1
A K Foote9/96/64/41/1
P J Goodfellow
2
3/32/2–1/1
P N Kean9/9–4/41/1
F N Mackenzie8/96/6–1/1
R A McLeod9/95/64/41/1
1. Appointed 20 December 2021
2. Retired 20 December 2021
The above table reflects attendances at scheduled Board and Audit, Finance and
Risk Committee and People, Health and Safety Committee meetings.
Additional ad hoc meetings were also held.
Copies of the Board and Committee charters are available at: www.sanford.
co.nz/investors/governance/board-and-committees. Each Committee other
than the Nomination Committee meets on at least a quarterly basis, or more
often throughout the year, as required. Senior management representatives
attend Committee meetings by invitation only. The three Board Committees
are described below:
INDEPENDENCE OF CHAIR AND CHIEF EXECUTIVE OFFICER (CEO)
Recommendation 2.9: An issuer should have an independent Chair of the
Board. If the Chair is not independent, the Chair and the CEO should be
different people.
Sir Robert McLeod, the Chair of the Board, is an independent Director. The
positions of Chair and CEO of Sanford are held by different people.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
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SANFORD INTEGRATED REPORT 2022
AUDIT, FINANCE AND RISK COMMITTEE
Recommendation 3.1: An issuer’s Audit Committee should operate under a
written charter. Membership on the Audit Committee should be majority
independent and comprise solely of non-executive Directors of the issuer. The
chair of the Audit Committee should be an independent Director and not the
Chair of the Board.
The Audit, Finance and Risk Committee assists the Board in fulfilling its
responsibilities to protect the interests of shareholders, customers, employees
and the communities in which Sanford operates through analysis and
monitoring of financial and capital allocation matters, establishing a sound risk
management framework and ensuring rigorous processes for internal control
across financial management, financial accounting, corporate regulatory
compliance, audit and related reporting processes.
The purpose, constitution, membership, responsibilities and accountabilities of
Sanford’s Audit, Finance and Risk Committee complies with this recommendation
and the NZX Listing Rules.
A copy of the Audit, Finance and Risk Committee Charter is available on
Sanford’s website at: https://www.sanford.co.nz/investors/governance/
board-and-committees/.
Recommendation 3.2: Employees should only attend Audit Committee
meetings at the invitation of the Audit Committee.
Senior management representatives attend the Audit Finance and Risk
Committee meetings by invitation only.
REMUNERATION (PEOPLE) COMMITTEE
Recommendation 3.3: An issuer should have a Remuneration Committee,
which operates under a written charter (unless this is carried out by the whole
Board). At least a majority of the Remuneration Committee should be
independent Directors. Management should only attend Remuneration
Committee meetings at the invitation of the Remuneration Committee.
The People, Health and Safety Committee assists the Board in establishing and
overseeing appropriate policies and strategies for all aspects of human resources
management and remuneration, including corporate culture and ethics. This
includes regulatory compliance matters relating to people, and the attraction,
retention and development of people. The Committee’s agenda reflects the
importance of human capital to Sanford’s strategic and business planning.
The purpose, constitution, membership, responsibilities and accountabilities of
Sanford’s People, Health and Safety Committee complies with this
recommendation. Senior management representatives attend the People,
Health and Safety meetings by invitation only.
A copy of the People, Health and Safety Committee Charter is available on
Sanford’s website at https://www.sanford.co.nz/investors/governance/
board-and-committees/.
NOMINATION COMMITTEE
Recommendation 3.4: An issuer should establish a Nomination Committee to
recommend Director appointments to the Board (unless this is carried out by
the whole Board), which should operate under a written charter. At least a
majority of the Nomination Committee should be independent Directors.
The Nomination Committee assists the Board by considering nominations to
ensure an appropriate mix of expertise, skills, experience, and diversity are on
the Board. The full Board meets once a year, or as required, to determine the
most appropriate makeup of the Board and to nominate any changes.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
102
SANFORD INTEGRATED REPORT 2022
The purpose, constitution, membership, responsibilities, and accountabilities of
Sanford’s Nomination Committee complies with this recommendation.
A copy of the Nomination Committee Charter is available on Sanford’s website
at: https://www.sanford.co.nz/investors/governance/board-and-committees
OTHER BOARD COMMITTEES
Recommendation 3.5 (part): An issuer should consider whether it is appropriate
to have any other Board committees as standing Board committees.
The Board has determined that the committees, described above, provide
appropriate governance of Sanford, and ensure compliance with the NZX Code.
TAKEOVER PROTOCOLS
Recommendation 3.6: The Board should establish appropriate protocols that
set out the procedure to be followed if there is a takeover offer for the issuer
including any communication between insiders and the bidder. The Board should
disclose the scope of independent advisory reports to shareholders. These
protocols should include the option of establishing an independent takeover
committee, and the likely composition and implementation of an independent
takeover committee.
A takeover response protocol, which has been approved by the Board, is in place
for dealing with a takeover offer. The protocol complies with this
recommendation.
Principle 4: Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting,
and in the timeliness and balance of corporate disclosures.
CONTINUOUS DISCLOSURE
Recommendation 4.1: An issuer’s Board should have a written Continuous
Disclosure Policy.
Sanford has a Continuous Disclosure Policy, and is committed to providing
accurate, timely and consistent disclosures that comply with its continuous
disclosure regime, in accordance with the NZX Listing Rules. This includes the
establishment of a “disclosure committee” which is primarily responsible for
ensuring that Sanford complies with its disclosure obligations.
The Continuous Disclosure Policy is available on the Sanford website at: https://
www.sanford.co.nz/investors/governance/policies/.
CHARTERS AND POLICIES
Recommendation 4.2: An issuer should make its code of ethics, Board and
Committee charters, and the policies recommended in the NZX Code, together
with any other key governance documents, available on its website.
Key governance documents are available to investors and stakeholders on
Sanford’s website. They include the Board and Committee Charters, Code of
Ethical Behaviour, Continuous Disclosure Policy, Privacy Policy, Securities
Trading Policy and Guidelines, Protected Disclosures (Whistleblowing) Policy,
Fisheries Compliance Policy, Diversity and Inclusion Policy, Sustainability Policy,
Independence of External Auditors Policy and the Director and Executive
Remuneration Policy.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
103
SANFORD INTEGRATED REPORT 2022
FINANCIAL REPORTING
Recommendation 4.3 (part): Financial reporting should be balanced, clear and
objective.
Sanford publishes its interim and audited full-year financial statements that are
prepared in accordance with relevant financial reporting standards. The full-year
financial statements for the year ended 30 September 2022 are included in the
Sanford 2022 Annual Report, an integrated report which reviews Sanford’s
financial, economic and environmental performance.
NON-FINANCIAL REPORTING – SUSTAINABILITY
Recommendation 4.3 (part): An issuer should provide non-financial disclosure
at least annually, including considering environmental, economic and social
sustainability factors and practices. It should explain how operational or
non-financial targets are measured. Non-financial reporting should be
informative, include forward looking assessments, and align with key strategies
and metrics monitored by the Board.
Each year, non-financial information is disclosed by Sanford in the Annual
Report. Material topics and risks are discussed (including how those risks are
managed and how non-financial targets are measured) and risks are also
covered in this Corporate Governance Statement (see Principle 6).
This year’s Annual Report is Sanford’s ninth Integrated Annual Report, as
defined by the International Integrated Reporting Council (IIRC). This Report
has been developed in accordance with both the IIRC Integrated Report <IR>
Framework and the Global Reporting Initiative Sustainability Reporting
Standards (GRI) (applied to a core level of compliance) as detailed in the
Sanford Annual Report 2022, Appendix E.
Sanford has also considered its role in contributing to the United Nations
Sustainable Development Goals (SDGs). Sanford has focused on six SDGs to
which it can contribute the most and has the most impact upon.
Principle 5: Remuneration
The remuneration of Directors and Executives should be transparent, fair and
reasonable.
DIRECTORS’ REMUNERATION
Recommendation 5.1: An issuer should recommend Director remuneration to
shareholders for approval in a transparent manner. Actual Director
remuneration should be clearly disclosed in the issuer’s annual report.
Information on Sanford’s Director remuneration is shown below. This includes a
breakdown of remuneration for Board fees and Committee roles. No other
payments were made to Directors.
The GRI standards require Sanford to answer the question: ‘What are relevant
and material topics which reflect the organisation’s significant economic,
environmental, and social impacts which are important to its stakeholders, and
how is the organisation dealing with them?’ This includes value creation across
the dimensions of time, financial and non-financial resources for both Sanford
and other stakeholders. Material topics and how they are treated are reported
within Sanford’s Integrated Annual Report 2022.
A combined Independent Auditor’s and Limited Assurance Report is issued by
Sanford’s external auditor KPMG, in relation to Sanford’s Integrated Annual
Report 2022.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
104
SANFORD INTEGRATED REPORT 2022
REMUNERATION
The following tables provide a breakdown of remuneration for Board fees and committee roles. No other payments were made to Directors.
DIRECTORS’ REMUNERATION 2022
The following tables provide a breakdown of remuneration for board fees and committee roles. No other payments were made to Directors.
NAME OF DIRECTORBOARD FEES
AUDIT, FINANCE
& RISK COMMITTEE
PEOPLE, HEALTH AND
SAFETY COMMITTEE
1
TOTAL
REMUNERATION
Sir Robert McLeod (Chair)
170,000
(Chair)
10,000 8,000 188,000
Mark Cairns
90,000 8,000 98,000
Peter Cullinane
90,000 8,000 98,000
Craig Ellison
1
70,000 8,000 78,000
Abigail (Abby) Foote
90,000 10,000 16,000
(Chair)
116,000
Peter Goodfellow
2
20,000 2,000 22,000
Peter Kean
90,000 8,000 98,000
Fiona Mackenzie
90,000 20,000
(Chair)
110,000
Total
710,000 50,000 48,000 808,000
1. Appointed 20 December 2021.
2. Retired 20 December 2021.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
105
SANFORD INTEGRATED REPORT 2022
DIRECTORS’ REMUNERATION 2021
NAME OF DIRECTORBOARD FEES
AUDIT,
FINANCE & RISK
COMMITTEE
SAFETY, HEALTH AND
ENVIRONMENT
COMMITTEE
1
PEOPLE, HEALTH AND
SAFETY COMMITTEE
1
SALES, MARKETING,
INNOVATION AND
FOOD SAFETY
COMMITTEE
2
TOTAL
REMUNERATION
Sir Robert McLeod (Chair)
170,000
(Chair)
10,000 4,0007,750 4,000 195,750
Mark Cairns
3
22,500 2,000 24,500
Peter Cullinane
90,000 4,000 4,000 4,000 102,000
Abigail (Abby) Foote
4
90,000 10,000 8,000
(Chair)
8,000
(Chair)
116,000
Peter Goodfellow
5
90,000 5,000 7,500
(Chair)
102,500
Peter Kean
90,000 7,750 8,000
(Chair)
105,750
Fiona Mackenzie
90,000 20,000
(Chair)
110,000
Total
642,500 45,000 16,000 37,000 16,000 756,500
1. People Committee and Safety Health and Environment Committees were combined on 1 April 2021 into the People, Health and Safety Committee.
2. Sales, Marketing, Innovation and Food Safety Committee was disestablished on 31 March 2021. Agenda items moved to Board meetings.
3. Appointed 1 July 2021; fees do not represent a full year.
4. People, Health and Safety Committee Chair from 1 April 2021.
5. People, Health and Safety Committee Chair until 31 March 2021.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
106
SANFORD INTEGRATED REPORT 2022
REMUNERATION POLICY
Recommendation 5.2: An issuer should have a Remuneration Policy for
remuneration of Directors and officers, which outlines the relative weightings
of remuneration components and relevant performance criteria.
Sanford has a Director and Executive Remuneration Policy in place, consistent
with the principles of the People, Health, and Safety Committee Charter. The
guiding principles of the policy are for the remuneration of Directors and
Executives to be transparent and reasonable, and to support the Company in
attracting, retaining, and motivating high-calibre people to achieve its business
objectives and create shareholder value. The Director and Executive
Remuneration Policy complies with this recommendation.
A copy of the Director and Executive Remuneration Policy is available on
Sanford’s website at: https://www.sanford.co.nz/investors/governance/
policies/.
EMPLOYEES’ REMUNERATION
The table below shows the number of employees and former employees who received
remuneration and other benefits in excess of $100,000 during the year ended 30
September 2022. The table does not include amounts paid after 30 September 2022 that
relate to the year ended 30 September 2022.
REMUNERATION
RANGE $000
NUMBER OF
EMPLOYEES
REMUNERATION
RANGE $000
NUMBER OF
EMPLOYEES
100 – 11057250 – 2602
110 – 12031270 – 2802
120 – 130 30280 – 2901
130 – 14022290 – 3003
140 – 15018300 – 3101
150 – 16010310 – 3201
160 – 1709320 – 3301
170 – 1807330 – 3402
180 – 1904340 – 3501
190 – 2003380 – 3901
200 – 2103390 – 4001
210 – 2203510 – 5201
220 – 2302520 – 5301
230 – 2401660 – 6701
1000 – 10101
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
107
SANFORD INTEGRATED REPORT 2022
CEO REMUNERATION
Recommendation 5.3: An issuer should disclose the remuneration
arrangements in place for the CEO in its annual report. This should include
disclosure of the base salary, short term incentives and long-term incentives
and the performance criteria used to determine performance based payments.
CHIEF EXECUTIVE OFFICER (CEO) REMUNERATION
The CEO’s remuneration consists of fixed remuneration inclusive of KiwiSaver, a
short-term incentive (STI) and a long-term incentive (LTI). This is reviewed
annually by the People, Health and Safety Committee and the Board after
reviewing the Company’s performance, the CEO’s individual performance and
advice from external remuneration specialists.
Short Term Incentive (STI)
The aim of the STI is to reward the CEO for achieving strategic objectives,
which will result in strong financial returns for our shareholders. Participation in
the plan is by annual invitation at the discretion of the Company at which time
financial targets and key performance indicators are established. If minimum
financial thresholds are not met, no incentive will be paid. The STI value is set at
30% of the CEO’s total fixed remuneration. The STI has two components,
individual performance and financial performance. Individual performance
accounts for 30% and is based on achieving health and safety performance
goals and certain personal performance goals. Financial performance accounts
for 70% and is based on achieving budgeted NEBIT.
Achievement of the financial targets result in a payment of 100% of the
financial performance component. Payment outside these parameters is at the
sole discretion of the Board. The STI payments are shown in the financial year
that they are paid, which may not be the same year that they are earnt.
Long Term Incentive (LTI)
In September 2021 the Company announced a new LTI plan as part of its
retention and incentive arrangements for the CEO. The LTI plan also has
flexibility to be extended to other employees in the future, to align the interests
of employees with the interests of Sanford’s shareholders and to encourage
share ownership. The Board retains absolute discretion as to whether any future
offers will be made and to review the terms.
The benefits provided to the CEO under the plan are capped at 30% of the
CEO’s total fixed remuneration. This is then translated to the equivalent number
of rights to acquire Sanford ordinary shares (Share Rights) based on the
weighted average share price over the 10 trading days up to and including the
commencement date for the grant.
The Share Rights in a grant are issued in a single tranche with the same
performance hurdle, commencement date, and vesting date.
The CEO was granted Share Rights as follows:
• 58,230 Share Rights with a commencement date of 1 October 2021 and a
vesting date of 30 September 2024; the “FY22 Grant”.
• 31,825 Share Rights with a commencement date of 6 April 2021 and a vesting
date of 30 September 2023; the “FY21 Grant”.
A Share Right represents a conditional right to, upon vesting, acquire one
Sanford Limited ordinary share at a nil exercise price. If the CEO departs the
Company’s employment for any reason prior to vesting (other than in certain
exceptional circumstances), all Share Rights will lapse.
The Share Rights are subject to a performance hurdle. Share Rights will vest
where Sanford’s total shareholder return (TSR) from the commencement date
to the vesting date is at least a positive amount and greater than the 50th
percentile of a comparative group of NZX50 companies (excluding banking
groups). The percentage of Share Rights that vests will increase on a straight-line
basis from 50% where TSR is equal to the 50th percentile of the NZX50 group to
100% where the TSR is equal to the 75th percentile of the NZX50 group.
Income from Share Rights is recorded in the financial year that vesting occurs.
The CEO is not a member of the Board.
YEAR
BASE
SALARY
$
VEHICLE
ALLOWANCE
$
FIXED
REMUNERATION
$
PAY FOR PERFORMANCE $
TOTAL
REMUNERATION
$STILTI
FY22950,00050,0001,000,000--1,000,000
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
108
SANFORD INTEGRATED REPORT 2022
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
Recommendation 6.1: An issuer should have a risk management framework for
its business and the issuer’s Board should receive and review regular reports. An
issuer should report the material risks facing the business and how these are
being managed.
The identification and mitigation, where possible, of business risks, along with
the integrity of management systems and the quality and relevance of reporting
to shareholders are a critical oversight responsibility of the Board. The Board is
satisfied that there are sufficient written procedures, policies, guidelines, and
organisational structures in place to ensure an appropriate division of
responsibility, as well as programmes to identify, assess and manage areas of
significant risk.
Sanford uses an Enterprise Risk Management approach to identify, evaluate,
address, monitor, quantify and report material business risks to the Audit,
Finance and Risk and People, Health, and Safety Board Committees, including
assessing the implementation and/or effectiveness of mitigation measures. The
objective of this approach is to enhance stakeholder value through continuous
improvement in the Company’s management of risk. Further details relating to
the specific risks identified are set out in the Sanford Annual Report 2022
Appendix B (page 192).
A key control is Sanford’s annual business plan and operating budget, which is
prepared by management and approved by the Board. This document, combined
with the preparation and presentation of monthly financial statements, allows
the Board to review management performance against the annual plan and
previous year. The Board has an ongoing focus on strategic direction, as well as
both global and local trends impacting the Company and industry overall. In
addition to internal mechanisms, the Board engages external advisors to carry
out internal audit functions on various parts of the business on a rotational basis
each year, as set out under Principle 7 ‘Auditors’.
HEALTH AND SAFETY
Recommendation 6.2: An issuer should disclose how it manages its health and
safety risks and should report on their health and safety risks, performance and
management.
Health and safety risks are reported to the Board and to the People, Health and
Safety Committee on a monthly basis, so that Directors are able to ensure that
Sanford has available for use, and uses, appropriate resources and processes to
eliminate or minimise risks to health and safety. Health and safety indicators
that comply with GRI standards, such as the lost time injury frequency rate
(LTIFR), are disclosed at page 187 in this Annual Report, and Sanford Key
Performance Indicators table, Appendix A (pages 184-189). By understanding
and discussing Sanford’s critical and high probability risks, their risk profile, and
related controls effectiveness, Directors can ensure that they allocate
appropriate resources to the organisation. This considered allocation can
eliminate or minimise the risks, so far as reasonably practicable.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
109
SANFORD INTEGRATED REPORT 2022
Principle 7: Auditors
The Board should ensure the quality and independence of the external audit
process.
AUDIT
The Board ensures the quality and independence of the external audit process,
which culminates in the audit report being issued in relation to the annual
financial statements. The significant issues and judgements considered by the
Audit, Finance and Risk Committee are disclosed in the Sanford Annual Report
2022 (Note 2 on pages 125-126 of the financial statements).
EXTERNAL AUDITOR
KPMG were commissioned as Sanford’s external auditors for the year ending
30 September 2022. The Board, after considering the recommendation of the
Audit, Finance and Risk Committee, considered and reviewed the appointment
of the external auditors. It is proposed that the current Auditor should continue
in office, in accordance with Section 207T of the Companies Act 1993.
The Audit, Finance and Risk Committee provides a formal forum for
communication between the Board and the external auditors, ensures the
independence of the external auditors, has oversight of audit planning, reviews
and recommends audit fees, considers audit opinions and evaluates the
performance of the external auditors. The audit partner responsible for the
Sanford audit has been the lead auditor for the past one year, having rotated
in 2020.
No issues relating to the external auditors’ independence have been identified
to the year ending 30 September 2022.
RELATIONSHIP WITH AUDITOR
Recommendation 7.1 and 7.2: The Board should establish a framework for the
issuer’s relationship with its external auditor. This should include the procedures
prescribed by the NZX Code. The external auditor should attend the issuer’s
Annual Meeting to answer questions from shareholders in relation to the audit.
INDEPENDENCE OF EXTERNAL AUDITORS
The External Auditor Independence Policy sets out the procedures required to
obtain Audit Finance and Risk Committee approval for the use of Sanford’s
appointed external audit firm for non-audit services. The use of the external
audit firm may be permitted to provide non-audit services that are not
perceived to be materially in conflict with the role of the auditor, subject to the
approval of the Audit, Finance and Risk Committee.
Sanford’s external auditor is expected to attend Sanford’s annual meeting each
year, and shareholders can ask questions of them, should they wish.
A copy of the External Auditor Independence Policy is available on Sanford’s
website at: https://www.sanford.co.nz/investors/governance/policies/.
INTERNAL AUDIT FUNCTION
Recommendation 7.3: Internal audit functions should be disclosed.
Ernst and Young (EY) were commissioned for the year ending 30 September
2022, to conduct a number of internal audit functions on behalf of Sanford.
These included workforce attraction and retention, cyber security and new IT
systems design functionality. These audits were carried out in accordance with
the Sanford internal audit plan and approved by the Audit, Finance and Risk
Committee.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
110
SANFORD INTEGRATED REPORT 2022
Principle 8: Shareholder Rights and Relations
The Board should respect the rights of shareholders and foster constructive
relationships with shareholders that encourage them to engage with the issuer.
INFORMATION FOR SHAREHOLDERS
Recommendation 8.1: An issuer should have a website where investors and
interested stakeholders can access financial and operational information and
key corporate governance information about the issuer.
Sanford provides shareholders with information through our Annual Reports
and half-year results announcements, our Annual Meeting and announcements
of material or other relevant information, including results. These documents
are lodged with the Stock Exchange operated by NZX Limited (NZX) and are
publicly available on the Company website at www.sanford.co.nz.
Over the past nine years, Sanford has sought to enhance its financial accounts
through integrated reporting, ensuring greater transparency to stakeholders on
their strategic direction, business model, value creation and environmental and
social performance. Sanford keeps its shareholders informed of major
developments and business events likely to affect the Company’s operations,
financial standing and share price.
COMMUNICATING WITH SHAREHOLDERS
Recommendation 8.2: An issuer should allow investors the ability to easily
communicate with the issuer, including providing the option to receive
communications from the issuer electronically.
Shareholders are encouraged to engage with senior management and the
Sanford Board of Directors at the Annual Meeting. Copies of addresses made
by the Chairman and CEO at the Annual Meeting are lodged with NZX and
made publicly available on the Company website. Sanford also communicates
with the investment community via regular group presentations by senior
management, and the Chairman undertakes engagement with major investors
and advisors to Sanford. This provides a useful forum for both the Board and
Sanford investors and advisors to stay abreast of current market views,
commercial developments and industry trends.
Sanford provides options for shareholders to receive and send communications
electronically, to and from both Sanford and its share registrar.
SHAREHOLDER VOTING RIGHTS
Recommendation 8.3: Quoted equity security holders should have the right to
vote on major decisions, which may change the nature of the issuer in which
they are invested in.
Sanford is committed to timely and balanced disclosure, which includes advising
shareholders on any major decisions. Sanford has processes to ensure it follows
the mandatory listing rule requirements relating to a change in the essential
nature of the business, including major transactions under the Companies Act
1993.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
111
SANFORD INTEGRATED REPORT 2022
Recommendation 8.4: If seeking additional equity capital, issuers of quoted
equity securities should offer further equity securities to existing equity
security holders of the same class on a pro rata basis, and on no less favourable
terms, before further equity securities are offered to other investors.
Sanford has not sought additional equity capital for the year ending
30 September 2022.
NOTICE OF ANNUAL MEETING
Recommendation 8.5: The Board should ensure that the notices of annual or
special meetings of quoted equity security holders is posted on the issuer’s
website as soon as possible, and at least 20 working days prior to the meeting.
Sanford’s 2022 Annual Meeting will be held at 2.00pm on Thursday 15
December 2022 at Eden Park, Reimers Avenue, Mt Eden, Auckland in the
World Cup Lounge West, South Stand and virtually.
Sanford targets having its notices of the annual meeting available on Sanford’s
website at least 20 working days prior to the meeting.
STATUTORY INFORMATION
SHAREHOLDING ANALYSIS
AS AT 10 OCTOBER 2022
SIZE OF HOLDING
NUMBER OF
SHAREHOLDERS%
NUMBER OF
SHARES%
1 to 99970024.66309,6880.33
1,000 to 4,9991,37348.362,925,7043.12
5,000 to 9,99935312.432,247,0052.4
10,000 to 49,99932911.596,089,7326.5
50,000 to 99,999301.062,102,2262.25
100,000 and above541.979,952,38085.39
2,83910093,626,735100
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
112
SANFORD INTEGRATED REPORT 2022
TWENTY LARGEST SHAREHOLDERS
AS AT 10 OCTOBER 2022
NUMBER OF
SHARES%
Ngāi Tahu Investments Limited 18,607,72119.87
Forsyth Barr Custodians Limited <1-CUSTODY>8,326,7738.89
Masfen Securities Limited 7,066,7307.54
ASB Nominees Limited <173944 A/C>5,000,0005.34
Maruha Nichiro Corporation 4,534,2314.84
Citibank Nominees (New Zealand) Limited - NZCSD
<CNOM90>
4,187,4544.47
Tasman Equity Holdings Limited 3,423,0993.65
Sterling Nominees Limited <18 A/C>2,179,0372.32
BNP Paribas Nominees (NZ) Limited - NZCSD <BPSS40>2,118,4892.26
Custodial Services Limited <A/C 4>1,915,4632.04
ANZ Wholesale Australasian Share Fund - NZCSD
<PNAS90>
1,727,0071.84
Accident Compensation Corporation - NZCSD <ACCI40>1,706,0131.82
New Zealand Depository Nominee Limited <A/C 1 CASH
ACCOUNT>
1,644,4361.75
JBWere (NZ) Nominees Limited <NZ RESIDENT A/C>1,558,5741.66
Rural Equities Limited 1,550,0001.65
HSBC Nominees (New Zealand) Limited - NZCSD
<HKBN90>
1,431,8521.52
FNZ Custodians Limited 1,335,3491.42
Arden Capital Limited 1,141,0321.21
MMZ Trustee Company Limited <M & M A/C>927,4490.99
HSBC Nominees A/C NZ Superannuation Fund Nominees
Limited - NZCSD <SUPR40>
833,8030.89
As required by the NZX Listing Rules, New Zealand Central Securities Depository Limited
(NZCSD) holdings are now included in the table and are not detailed separately.
SUBSTANTIAL PRODUCT HOLDERS
According to the Company’s records and substantial product holder notices given to the
Company under the Financial Markets Conduct Act 2013, as at 30 September 2022, the
following were substantial product holders in the Company through having a relevant
interest in the Company’s ordinary shares:
SUBSTANTIAL PRODUCT HOLDER
NUMBER OF
VOTING
SECURITIES
% OF
ORDINARY
SHARES HELD
DATE OF LAST
SUBSTANTIAL
PRODUCT
HOLDER
NOTICE
Ngāi Tahu Holdings Corporation Limited
and Ngāi Tahu Investments Limited*
18,607,72119.87%1-Sept-21
Tasman Equity Holdings Limited, Ardern
Capital Limited and Past Limited Partnership
9,564,13110.22%13-Jun-22
Masfen Securities Limited7,046,2017.53%14-Mar-22
Amalgamated Dairies Limited5,621,5676.00%1-Sept-21
* Ngāi Tahu Holdings Corporation Limited has disclosed that is has a relevant interest in the shares held by Ngāi Tahu
Investments Limited.
The total number of quoted voting products of Sanford Limited on issue as at
30 September 2022 was 93,626,735 (which includes Treasury stock of 120,598 shares).
WAIVERS AND EXEMPTIONS FROM THE NZ STOCK EXCHANGE AND THE
OVERSEAS INVESTMENT OFFICE
NZX Waiver – Overseas Ownership
In November 2016, NZX granted the Company a waiver from the previous NZX Main
Board Listing Rule 11.1.6 (now NZX Listing Rule 8.1.5) which allows the Company to
suspend the voting rights of any of the Company’s shares which are “Affected Shares”
(Waiver).
“Affected Shares” are those shares which the Board determines have caused the
Company to be in breach of the “Overseas Ownership Threshold” (currently set at 90%
of the maximum aggregate percentage of the Company’s shares that can be owned or
controlled by overseas persons without the Company itself being an overseas person) and
in respect of which the Board can exercise its powers to require (or effect) a sale of the
“Affected Shares” to a “Non-Overseas Person”.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
113
SANFORD INTEGRATED REPORT 2022
Following the implementation of the new NZX Listing Rules dated 1 January 2019, NZX
re-documented the Waiver under the new NZX Listing Rules and that waiver was released
on 22 May 2019 (Re-issued Waiver). The full text of the Re-issued Waiver can be found
here: https://www.nzx.com/companies/SAN/documents
NZX also granted approval for the Company to include provisions in its Constitution
which allow the Board to restrict the transfer of the Company’s shares to “Overseas
Persons” and which allow the Board to require certain documentation and/or information
in relation to a proposed transfer or transferee of the Company’s shares. The full text of
NZX’s approval can be found here: https://www.nzx.com/announcements/293474
A more detailed outline and explanation of the effects of the powers that the Board has to
restrict the transfer and in certain circumstances suspend voting rights of securities can
be found on our website www.sanford.co.nz/investors/governance/companyconstitution,
and the provisions which enable the Board to exercise those powers are set out in the
Company’s Constitution.
As a condition of the waiver, Sanford is listed on the NZX Main Board with a Non Standard
designation.
OIO Exemption – Overseas Ownership
In September 2018, the Overseas Investment Office granted the Company an exemption
from the requirement under the Overseas Investment Act 2005 to obtain consent prior
to acquiring “fishing quota” in certain limited circumstances.
The exemption, which is subject to conditions, means that the Company will not breach
the Overseas Investment Act if it acquires “fishing quota” at a time when the Company
has a level of overseas ownership of 25% or more, provided that the Company did not
know (or could not reasonably have known) that its level of overseas ownership was 25%
or more at the time of the acquisition. If Sanford acquires fishing quota under such
circumstances, the exemption allows the Company a period of time to either (i) lower its
overseas ownership to a level below 25%; or (ii) dispose of the fishing quota it acquired
when the Company was 25% or more overseas owned. Sanford is obliged to undertake a
quarterly analysis of its share register in order to determine its level of overseas
ownership.
The Company sought this exemption to complement the provisions introduced to its
constitution in 2016 which enable the Board to require (or effect) a sale of the “Affected
Shares” to a “Non-Overseas Person” (as discussed above).
The exemption currently runs until 31 August 2023, and the Company must comply with
certain conditions in order to have the continued benefit of the exemption.
For the avoidance of doubt, this exemption does not exempt any overseas person from
any requirement to obtain consent under the Overseas Investment Act before giving
effect to an acquisition of rights or interests in the Company’s securities.
Current level of overseas ownership
The Company estimates Overseas Person ownership to be 12.5% based on NASDAQ most
recent reporting, as at 31 August 2022 (13.2% as at 3 September 2021). Sanford’s level of
overseas ownership may have changed since this estimate was prepared. Overseas
persons intending to trade in Sanford shares should seek legal advice regarding their
obligations under the Overseas Investment Act 2005.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
114
SANFORD INTEGRATED REPORT 2022
Sanford’s standard profit measure prepared under New Zealand GAAP is net profit.
Sanford have used non-GAAP measures when discussing financial performance in this
document. The Directors and management believe that these measures provide useful
information as they are used internally to evaluate divisional and total Group performance
and to establish operating and capital budgets. Non-GAAP profit measures are not
prepared in accordance with NZ IFRS (New Zealand equivalents to International Financial
Reporting Standards) and are not uniformly defined, therefore the non-GAAP profit
measures included in this report are not comparable with those used by other companies.
They should not be viewed in isolation or as a substitute for GAAP profit measures as
reported by Sanford in accordance with NZ IFRS.
DEFINITIONS
Reported EBIT: Earnings before interest, taxation, net gain on sale of investments,
long-term assets and intangibles.
Adjusted EBIT: Reported EBIT adjusted for impairment, restructuring costs, other one-off
items and software as a service (SaaS) expenditure.
Adjusted EBITDA: Earnings before interest, taxation, depreciation, amortisation, net gain
on sale of investments, long-term assets and intangibles, impairment, restructuring costs,
other one-off items and software as a service (SaaS) expenditure.
GAAP TO NON-GAAP RECONCILIATION
Audited
12 Months
ended
30 September
2022
Audited
12 Months
ended
30 September
2021
$000$000
Reported net profit for the period (GAAP)55,77216,235
Add back:
Income tax expense
6,6923,800
Net interest expense8,7319,011
Deduct:
Net gain on sale of investments, property, plant and
equipment and intangibles
(43,616)(12,935)
Reported EBIT27,57916,111
Adjustments:
Impairment of assets
1,301–
Restructuring costs345288
Software as a Service (SaaS) expenditure10,3126,183
Other one-off items639711
Adjusted EBIT40,17623,293
Add back:
Depreciation and amortisation
28,08629,310
Adjusted EBITDA68,26252,603
GAAP TO NON-GAAP RECONCILIATION
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
115
SANFORD INTEGRATED REPORT 2022
20222021
Restated 2020
(iii)20192018
$000$000$000$000$000
Revenue
(i)
531,887489,625468,849545,121514,976
Adjusted EBITDA*68,26252,60366,29485,72984,402
Depreciation and amortisation(28,086)(29,310)(28,016)(20,884)(19,731)
Adjusted EBIT**40,17623,29338,27864,84564,671
Restructuring costs(345)(288)(3,452)(1,609)(377)
Havelock earthquake insurance settlement, net of repair cost––––6,835
Impairment of assets(1,301)–(1,193)(635)(3,387)
Software as a service (SaaS) expenditure
(iii)
(10,312)(6,183)(4,187)––
Other one-off items(639)(711)2,082–(60)
Reported EBIT27,57916,11131,52862,60167,682
Net interest expense(8,731)(9,011)(8,995)(7,866)(8,065)
Non-trading currency exchange losses–––(26)(116)
Net gain on sale of investments, property, plant and equipment and intangible assets43,61612,9354,0374,614463
Profit before income tax62,46420,03526,57059,32359,964
Income tax expense(6,692)(3,800)(7,151)(17,631)(17,664)
Profit for the year55,77216,23519,41941,69242,300
Non controlling interest122281143
Profit attributable to equity holders of the Company55,89416,26319,43041,69642,303
Equity
Paid in capital
94,69094,69094,69094,69094,690
Reserves569,795538,702512,266492,817486,659
Non controlling interest388702665675585
Total equity664,873634,094607,621588,182581,934
FIVE YEAR FINANCIAL REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
116
SANFORD INTEGRATED REPORT 2022
20222021
Restated 2020
(iii)20192018
$000$000$000$000$000
Represented by:
Current assets
224,096208,477193,677164,412155,095
Less current liabilities139,888118,549120,808114,38099,495
Working capital84,20889,92872,86950,03255,600
Property, plant and equipment
193,032167,660157,143141,774130,787
Right-of-use assets
(ii)
37,57435,65540,381––
Investments3,9384,0964,0501,8311,494
Biological assets19,01918,28625,80620,07415,077
Intangible assets493,096497,132494,973493,111506,249
Derivative financial instruments6,9259,05110,30611669
837,792821,808805,528706,833709,876
Less non-current liabilities172,919187,714197,908118,651127,942
Total net assets664,873634,094607,620588,182581,934
Dividend per share (cents)10†–5†23†23†
Dividend cover (times)6.0†–1.0†1.9†2.0†
Return on average total equity8.6%2.6%3.2%7.1%7.3%
Earnings per share (cents)59.817.420.844.645.2
Net asset backing per share$7.10$6.77$6.49$6.28$6.22
* Adjusted EBITDA: Earnings before interest, taxation, depreciation, amortisation, one-off adjusting items, impairment and
net gain on sale of investments, intangible and long-term assets.
** Adjusted EBIT: Reported EBIT adjusted for impairment, restructuring and other one-off items.
† Includes the dividends proposed after balance date.
(i) The Group, on adoption of NZ IFRS 15 Revenue from Contracts with Customers at 1 October 2018 has adjusted the
recognition of revenue from contracts with export customers. This has resulted in revenue for arranging the freight
service being recognised net of the associated cost. As such, the revenue values from 2019 onwards are not consistent
with 2018.
(ii) The Group, on adoption of NZ IFRS 16 Leases at 1 October 2019 has recognised right-of-use assets and liabilities with
associated changes in depreciation, interest and EBITDA. As such, values in 2020 to 2022 are not consistent with 2019
and 2018.
(iii) The Group has adopted a new interpretation issued in April 2021 by the IFRS Interpretations Committee (IFRIC) on the
International Accounting Standard IAS 38 Intangible Assets. The interpretation has resulted in the recognition of
Software-as-a-Service (SaaS) expenditure as an expense in the income statement rather than a capitalised asset and a
restatement has occurred through retained earnings in the 2020 financial year. Refer to the Sanford 2021 integrated
report for details.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
117117
CONTENTS
INCOME STATEMENT118
STATEMENT OF COMPREHENSIVE INCOME119
STATEMENT OF FINANCIAL POSITION120
STATEMENT OF CASH FLOWS121
STATEMENT OF CHANGES IN EQUITY124
NOTES TO THE FINANCIAL STATEMENTS125
COMBINED INDEPENDENT AUDITOR’S
AND LIMITED ASSURANCE REPORT176
FINANCIAL STATEMENTS 2022
The Directors are pleased to present the Financial Statements of the Group
for the year ended 30 September 2022.
For and on behalf of the Board of Directors:
Sir Robert A McLeod Fiona Mackenzie
Chairman Director
14 November 2022 14 November 2022
GOVERNANCE AND FINANCIALS
118
SANFORD INTEGRATED REPORT 2022
20222021
Note$000$000
Revenue4531,887489,625
Cost of sales(435,033)(417,991)
Gross profit96,85471,634
Other income14,1248,26718,092
Distribution expenses(12,326)(10,464)
Administrative expenses5(36,877)(31,490)
Other expenses5(24,923)(18,787)
Operating profit70,99528,985
Finance income6402266
Finance expense6(9,133)(9,224)
Net finance expense(8,731)(8,958)
Share of profit of equity accounted investees132008
Profit before income tax62,46420,035
Income tax expense7(6,692)(3,800)
Profit for the year55,77216,235
INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
20222021
Note$000$000
Profit attributable to:
Equity holders of the Company
55,89416,263
Non controlling interest(122)(28)
55,77216,235
Earnings per share, net of tax attributable to equity
holders of the Company during the year (expressed
in cents per share)
Basic and diluted earnings per share (cents)
From profit for the year16
59.817.4
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
119
SANFORD INTEGRATED REPORT 2022
20222021
$000$000
Profit for the year (after tax)55,77216,235
Other comprehensive income
Items that may be reclassified to the income statement
Foreign currency translation differences
573(240)
Change in fair value of cash flow hedges recognised in other comprehensive income(34,972)15,302
Deferred tax on cash flow hedges9,792(4,284)
Cost of hedging losses recognised in other comprehensive income(425)(882)
Deferred tax on cost of hedging119247
Items that may not be reclassified to the income statement
Amount of treasury share cost expensed in relation to share-based payment
12122
Other comprehensive (loss)/income for the year(24,792)10,165
Total comprehensive income for the year30,98026,400
Total comprehensive income for the year is attributable to:
Equity holders of the Company
31,09326,436
Non controlling interest(113)(36)
Total comprehensive income for the year30,98026,400
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
120
SANFORD INTEGRATED REPORT 2022
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
20222021
Note$000$000
Current assets
Cash on hand and at bank8
9,5343,926
Trade receivables988,20670,551
Derivative financial instruments183,90110,234
Other receivables and prepayments11,0737,529
Biological assets1044,21140,240
Inventories1167,17175,499
Taxation receivable–498
Total current assets224,096208,477
Non-current assets
Property, plant and equipment12
193,032167,660
Right-of-use assets1937,57435,655
Investments133,9384,096
Derivative financial instruments186,9259,051
Biological assets1019,01918,286
Intangible assets14493,096497,132
Total non-current assets753,584731,880
Total assets977,680940,357
20222021
Note$000$000
Current liabilities
Bank overdraft and borrowings (secured)8
45,00055,000
Derivative financial instruments1823,8723,321
Trade and other payables1554,58549,108
Taxation payable4,766–
Lease obligation1911,66511,120
Total current liabilities 139,888118,549
Non-current liabilities
Bank loans (secured)18
110,000 127,500
Contributions received in advance 2,219 2,576
Employee entitlements15 1,244 1,149
Derivative financial instruments18 14,642 3,181
Deferred taxation7 17,96828,019
Lease obligation19 26,846 25,289
Total non-current liabilities 172,919187,714
Total liabilities312,807306,263
Equity
Paid in capital
94,690 94,690
Retained earnings 585,961 530,067
Other reserves (16,166)8,635
Shareholder funds 664,485633,392
Non controlling interest 388 702
Total equity16 664,873634,094
Total equity and liabilities 977,680 940,357
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
121
SANFORD INTEGRATED REPORT 2022
20222021
Note$000$000
Cash flows from operating activities
Receipts from customers
549,168 493,500
Interest received 402 220
Payments to suppliers and employees (493,670)(451,165)
Income tax paid (1,619)(1,191)
Interest paid (9,377)(9,131)
Net cash flows from operating activities 44,904 32,233
Cash flows from investing activities
Sale of property, plant and equipment12
11 23,419
Sale of intangible asset – crayfish quota14 52,739 –
Sale of investments13 115 –
Dividends received from investments13 250 177
Purchase of property, plant and equipment
and intangible assets
(53,442)(39,079)
Acquisition of shares in other companies13 (12)–
Net cash flows used in investing activities (339)(15,483)
20222021
Note$000$000
Cash flows from financing activities
Proceeds from borrowings
67,500 50,000
Repayment of term loans (85,000)(52,500)
Dividends paid to non controlling
interest shareholders17
(201)–
Lease payments (11,359)(11,017)
Net cash flows used in financing activities (29,060)(13,517)
Net increase in cash and cash equivalents 15,505 3,233
Effect of exchange rate fluctuations on cash held 103 (54)
Cash and cash equivalents at beginning of year (51,074)(54,253)
Cash and cash equivalents at 30 September (35,466)(51,074)
Represented by:
Bank overdraft and borrowings (secured)
(45,000)(55,000)
Cash on hand and at bank 9,534 3,926
8 (35,466)(51,074)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
122
SANFORD INTEGRATED REPORT 2022
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Reconciliation of Profit for the Period with Net Cash Flows from Operating Activities
20222021
Note$000$000
Profit for the year (after tax) 55,772 16,235
Adjustments for non-cash items:
Depreciation and amortisation
28,086 29,310
Depreciation – Annual Catching Entitlements (ACE)19 6,805 6,805
Impairment of goodwill14 974 –
Impairment of property, plant and equipment12 327 –
Share-based payment expense16 121 22
Share of loss (profit) of equity accounted investees13 (200)(8)
Change in fair value of biological assets10 (4,704)(4,593)
Change in fair value of forward exchange contracts
and foreign currency options
5,074 (1,367)
Decrease in deferred tax7 (140)(893)
Decrease in contributions received in advance (357)(375)
Unrealised foreign exchange gains/(loss) (5,814)1,471
30,172 30,372
20222021
Note$000$000
Movement in working capital
Decrease in trade and other receivables and
prepayments
(14,810)(16,779)
Decrease in inventories 8,380 10,159
Increase in trade and other payables and other
liabilities
3,883 1,670
Increase in taxation payable 5,123 3,504
2,576 (1,446)
Items classified as investing activities
Loss/(gain) on sale of property, plant and equipment12
38 (12,928)
Gain on sale of intangible asset – crayfish quota14 (43,654)–
(43,616)(12,928)
Net cash flows from operating activities 44,904 32,233
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
123
SANFORD INTEGRATED REPORT 2022
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Reconciliation of movement of liabilities to cash flows arising from financing activities
Lease
Obligation
Bank Loans
(secured)
Derivative
Financial
LiabilitiesTotal
$000$000$000$000
As at 1 October 2021 36,409 127,500 (12,783) 151,126
Lease payments19 (11,359)–– (11,359)
Proceeds from bank loans– 67,500 – 67,500
Repayment of bank loans– (85,000)– (85,000)
Financing cash flows (11,359) (17,500) – (28,859)
Net changes in lease liabilities19 13,461–– 13,461
Change in fair value of derivative financial instruments–– 40,471 40,471
As at 30 September 2022 38,511 110,000 27,688 176,199
As at 1 October 2020 40,458 130,000 3,005 173,463
Lease payments19 (11,017) – – (11,017)
Proceeds from bank loans – 50,000 – 50,000
Repayment of bank loans – (52,500) – (52,500)
Financing cash flows (11,017) (2,500) – (13,517)
Net changes in lease liabilities19 6,968 – – 6,968
Change in fair value of derivative financial instruments– – (15,788) (15,788)
As at 30 September 2021 36,409 127,500 (12,783) 151,126
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
124
SANFORD INTEGRATED REPORT 2022
Share
Capital
Share
Based
Payment
Reserve
Translation
Reserve
Cash Flow
Hedge
Reserve
Cost of
Hedging
Reserve
Retained
EarningsTotal
Non
Controlling
InterestTotal Equity
Note$000$000$000$000$000$000$000$000$000
Restated Balance at 1 October 202194,690223388,075200530,067633,392702634,094
Profit for the year (after tax)––––– 55,894 55,894 (122) 55,772
Other comprehensive income
Foreign currency translation differences
––564––– 564 9 573
Hedging losses recognised in other comprehensive income–––(34,972)(425)– (35,397)– (35,397)
Deferred tax on change in reserves–––9,792119– 9,911 – 9,911
Amount of treasury share cost expensed in relation to share-based
payment
–121–––– 121 – 121
Total comprehensive income–121564(25,180)(306) 55,894 31,093(113) 30,980
Distributions to non controlling shareholders17–––––––(201)(201)
Balance at 30 September 202294,690143902(17,105)(106)585,961664,485388664,873
Restated Balance at 1 October 2020*94,690–570(2,943)835513,804606,956665607,621
Profit for the year (after tax)–––––16,26316,263(28)16,235
Other comprehensive income
Foreign currency translation differences
––(232)–––(232)(8)(240)
Hedging gains/(losses) recognised in other comprehensive income–––15,302(882)–14,420–14,420
Deferred tax on change in reserves–––(4,284)247–(4,037)–(4,037)
Amount of treasury share cost expensed in relation to share-based
payment
–22––––22–22
Total comprehensive income–22(232)11,018(635)16,26326,436(36)26,400
Shares issued to non controlling shareholders in subsidiaries–––––––100100
Distributions to non controlling shareholders17–––––––(27)(27)
Balance at 30 September 202194,690223388,075200530,067633,392702634,094
* Refer to the Sanford 2021 integrated report for details on restatement as at 1 October 2020.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
125
SANFORD INTEGRATED REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
NOTE 1 – GENERAL INFORMATION
(a) Reporting entity
Sanford Limited (‘the parent’ or ‘the
Company’) is a profit-orientated company
that is domiciled and incorporated in
New Zealand. The Company is registered
under the Companies Act 1993 and listed
on the New Zealand Stock Exchange (NZX).
The Company is an FMC entity for the
purposes of Part 7 of the Financial Markets
Conduct Act 2013.
The financial statements presented are for
Sanford Limited (‘Sanford’ or ‘the Group’)
as at, and for the year ended 30 September
2022. The Group comprises the Company,
its subsidiaries, and its investments in joint
arrangements and associates.
In accordance with the Financial Markets
Conduct Act 2013, where a reporting
entity prepares consolidated financial
statements, parent disclosures are
not required.
The Group is a large and long-established
fishing and aquaculture farming business
devoted entirely to the farming,
harvesting, processing, storage and
marketing of quality seafood products and
investments in related activities.
NOTE 2 – BASIS OF PREPARATION
(a) Statement of compliance
The financial statements comply with
New Zealand equivalents to International
Financial Reporting Standards (NZ IFRS),
and other applicable Financial Reporting
Standards as appropriate for Tier 1
for-profit entities. They also comply
with International Financial
Reporting Standards.
(b) Basis of measurement
The financial statements have been
prepared on the historical cost basis except
for the following which are measured on
the bases set out below:
• Derivative financial instruments: interest
rate and fuel swaps, forward exchange
contracts and foreign currency options
are measured at fair value
• Biological assets: in water salmon and
mussel assets are measured at fair value
less costs to sell
• Inventories are measured at lower of net
realisable value and cost.
(c) Foreign currency
Functional and presentation currency
These financial statements are presented in
New Zealand dollars (NZD), the Company’s
functional currency. All financial
information presented in NZD has been
rounded to the nearest thousand dollars
(unless described as millions within the
notes to these financial statements).
Foreign currency transactions
Foreign currency transactions are
translated to NZD at the exchange rates
ruling at the dates of the transactions. At
balance date foreign currency monetary
assets and liabilities are translated at the
closing rate. The exchange variations
arising from these translations are
recognised in the income statement.
Foreign operations
Foreign operations are entities within the
Group, the activities of which are based in
a country other than New Zealand, or are
conducted in a currency other than NZD.
The assets and liabilities of foreign
operations are translated into NZD at the
closing rate, while revenues and expenses
are translated at rates approximating the
exchange rate ruling at the date of the
transaction. Exchange variations are taken
directly to the foreign currency
translation reserve.
(d) Use of estimates and judgements
The preparation of financial statements
requires the Board of Directors to make
judgements, estimates and assumptions
that affect the application of accounting
policies and the reported amounts in the
financial statements. Actual results may
differ from these estimates.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimate is revised and
in any future periods affected.
Accounting policies, and information about
judgements, estimates and assumptions
that have had a significant impact on the
amounts recognised in the financial
statements are disclosed in the relevant
notes as follows:
• Impairment testing of intangible assets
(refer note 14)
• Valuation of inventories (refer note 11)
• Valuation of deferred tax assets and
liabilities (refer note 7)
• Valuation of biological assets
(refer note 10)
• Valuation of financial instruments
(refer note 18)
• Determination of lease term and
incremental borrowing rates
(refer note 19)
Estimates are designated by a
symbol in
the notes to the financial statements.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
126
SANFORD INTEGRATED REPORT 2022
(e) Significant accounting policies
Accounting policies are disclosed within
each of the applicable notes to the
financial statements and are designated
with a
symbol.
The Group’s accounting policies have been
applied consistently to all periods
presented in these financial statements,
and have been applied consistently by
Group entities.
To ensure consistency with the current
period, comparative figures have been
amended to conform with current period
presentation where appropriate.
(f) New and amended accounting
standards and interpretations adopted
No new or amended standards and
interpretations that became effective for
the year ended 30 September 2022 have a
material impact on the group.
All new or amended standards that are
issued but not yet effective have not been
early adopted by the group.
(g) Impact of Covid-19
The Covid-19 global pandemic has
significantly impacted the group’s financial
performances and positions in the 2020
and 2021 financial years. Sanford was
deemed an essential service and therefore
was able to continue trading throughout
all alert levels over the 2020 and 2021
financial years. Sanford’s result for this
financial year are still negatively impacted
by Covid and other related events such
as labour shortages within New Zealand.
Previously commented assessments of
the impact of Covid on trade and other
receivables, inventories and borrowings
were not evidenced to the same extent
in 2022, with seafood inventory and
group borrowing levels falling towards
pre-Covid levels.
NOTE 3 – SEGMENT REPORTING
Executive management of the Group
monitors the operating results of the
wildcatch and aquaculture (mussels and
salmon) divisions. Divisional performance is
evaluated based on operating profit or loss.
Capital expenditure consists of additions of
property, plant and equipment and
intangible assets.
The Group’s key operating divisions are:
• wildcatch – responsible for catching and
processing inshore and deepwater fish
species; and
• aquaculture – responsible for farming,
harvesting and processing mussels
and salmon
The Group has determined that the
divisions above should be aggregated to
form one reportable segment to reflect
the farming, harvesting, processing and
selling of seafood products.
The criteria as set out in paragraph 12 of
NZ IFRS8 Operating Segments was
considered in determining the aggregation
of the operating divisions. In aggregating
these operating divisions into one
reportable segment, the Group identified
similarities in the following:
Similar economic characteristics
The Group considered and identified
similarities in economic characteristics in
the wildcatch and aquaculture divisions.
The Group concluded, having considered
several factors, that the operating
segments exhibited similar long term
economic characteristics because the
impact of these factors is expected to be
similar across all operating divisions. This is
supported by the following observations:
Foreign exchange
A large proportion of the Group’s sales are
derived from exporting seafood products.
Movements in foreign exchange rates have
a significant influence on the degree of
profitability of the Group.
Competitive and operating risks
The operating risks are similar for all of the
seafood products in which the Group
trades, due to the vagaries of nature and
its impact in respect of weather patterns,
nutrients in the oceans, parasites
and disease.
The global growth in seafood product
demand and rising commodity prices has
led to a heightened competitive
environment in which the Group trades,
this applies in a similar manner across all of
the operating divisions.
Economic and political risk
Economic prosperity and political stability
for countries in which Sanford’s customers
are based, have a direct impact across the
Group in its ability to derive increasing
positive returns to shareholders.
NOTE 2 – BASIS OF PREPARATION
(continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
127
SANFORD INTEGRATED REPORT 2022
Other variables impacting profit
There are many other variables that
directly or indirectly impact the
profitability of the operating divisions
such as international trade rules and tariffs
and climate change. The Group has
assessed that the operating divisions are
similarly impacted by these variables.
Nature of the products
All of the seafood products have similar
nutritional factors, principally they are a
good source of protein and relatively
low in fat.
Similar nature of production processes
The Group has determined that all of the
seafood products produced for its
customers are harvested from the sea.
Additionally, certain fish species and
mussels have hand opening or machine
opening processes involved in the final
completion of the production chain.
The type or class of customer for
the product
The Group sells products derived from all
of its operating divisions to six (2021:
seven) of its top ten customers.
The Group’s customers are largely of
a wholesale nature.
The methods used to distribute
the product
The Group’s sales and marketing team is
structured geographically and not by
product type or by operating division.
The nature of the regulatory environment
Both aquaculture and fish products are
governed by the quality control regulations
set by the Ministry for Primary Industries in
New Zealand and those countries to which
the Group exports. In respect of vessels
these must meet Maritime New Zealand
regulations; this requirement is similar for
all operating divisions.
NOTE 3 – SEGMENT REPORTING
(continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
128
SANFORD INTEGRATED REPORT 2022
NOTE 3 – SEGMENT REPORTING (continued)
(a) Revenue by geographical location of customers
20222021
$000$000
New Zealand 194,625 201,415
North America 91,081 85,293
China 75,530 49,777
Australia 63,218 60,265
Europe 59,772 51,653
Other Asia 17,176 15,628
Japan 13,875 11,004
Middle East 6,895 3,757
South Korea 6,357 4,730
Hong Kong 2,291 4,569
Central and South America 604 336
Africa 420 693
Pacific 43 505
Revenue 531,887 489,625
The revenue information above is based on the delivery destination of sales.
The Group has two customers accounting for more than 10% of total sales for the year
across both wildcatch and aquaculture (2021: one customer).
(b) Assets and liabilities
New ZealandAustraliaTotal
202220212022202120222021
Note$000$000$000$000$000$000
Segment assets
Current
221,800206,9531,6801,524223,480208,477
Non current743,012720,8417,3547,040750,366727,881
964,812 927,794 9,034 8,564 973,846 936,358
Investment in
equity accounted
investees13
3,834 3,999 – – 3,834 3,999
Total assets 968,646 931,793 9,034 8,564 977,680 940,357
Segment liabilities 310,403 305,263 2,404 1,000 312,807 306,263
Total liabilities 310,403 305,263 2,404 1,000 312,807 306,263
Capital expenditure12, 14 53,549 39,074 246 5 53,795 39,079
Depreciation and
amortisation
27,758 29,048 328 262 28,086 29,310
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
129
SANFORD INTEGRATED REPORT 2022
NOTE 4 – REVENUE
Revenue is recognised to the extent that it is probable that the economic benefits
will flow to the Group, the performance obligations are satisfied and the revenue
can be reliably measured, regardless of when payment is made. Revenue is
measured at the fair value of the consideration received or receivable.
Domestic sales
The performance obligation for domestic sales is satisfied upon delivery of the
products to the customer or collection of the goods by the customer. Payment
terms generally range between seven days and 20th of the month following
invoice date.
Export Sales
The performance obligation is satisfied upon transfer of legal title in line with the
relevant incoterms. The Group typically acts as agent in arranging transport and
insurance under such arrangements. Revenue is recognised net of the associated
costs of these arrangements. Payment terms vary between customers and
export destinations.
NOTE 5 – EXPENSES
20222021
Note$000$000
(a) Administrative and other expenses includes
Audit fees – KPMG
307318
Audit fees – other auditors (for audit of
Group companies)
6689
KPMG fees for other services
†
5854
Impairment of goodwill14974–
Impairment of property, plant and equipment12327–
Restructuring costs345288
Research and development1,1091,191
(b) Personnel expenses included in cost of sales,
administrative and distribution expenses
Wages and salaries (including short-term
employee benefits)
128,128124,834
† KPMG fees of $58k for other services are in respect of a limited assurance engagement relating to selected
sustainability information included in the Sanford annual report (2021: $54k).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
130
SANFORD INTEGRATED REPORT 2022
NOTE 6 – FINANCE INCOME AND EXPENSE
Finance income comprises interest income on funds invested and dividend
income. Interest income is recognised as it accrues, using the effective interest
method. Dividend income is recognised on the date that the Group’s right to
receive payment is established, which in the case of quoted securities is the
ex-dividend date.
Finance expenses comprise interest expense on borrowings, leases and
impairment losses recognised on financial assets (except for trade receivables),
as well as non-trading currency exchange losses.
20222021
$000$000
Finance income
Interest income
402213
Dividends received–53
402266
Finance expense
Interest expense on bank loans and bank overdraft
8,0727,943
Interest expense on leases1,0611,281
9,1339,224
Net finance expense8,7318,958
NOTE 7 – TAXATION
Income tax expense comprises current and deferred tax. Income tax expense is
recognised in the income statement except to the extent that it relates to items
recognised in other comprehensive income (OCI) in which case it is recognised
in OCI.
Current tax is the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is:
• Recognised in respect of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes.
• Not recognised for the initial recognition of goodwill, the initial recognition of
assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit, and differences relating to
investments in subsidiaries and jointly controlled entities to the extent that they
probably will not reverse in the foreseeable future.
• Measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or
substantively enacted at balance date.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
131
SANFORD INTEGRATED REPORT 2022
NOTE 7 – TAXATION (continued)
7.1 Income tax expense
20222021
$000$000
Current period 7,5363,486
Adjustments for prior periods (704)1,207
6,8324,693
Deferred tax expense
Origination and reversal of temporary differences
(960)(681)
Adjustments for prior periods 820 (212)
(140)(893)
Income tax expense 6,692 3,800
Reconciliation of effective tax rate
Profit for the year
55,772 16,235
Income tax expense 6,692 3,800
Profit before income tax 62,464 20,035
Tax at current rate of 28% 17,490 5,610
Non-deductible expenses 430435
Impairment of goodwill 273 –
Adjustments for prior periods 116 995
Different foreign tax rate 75 50
Unutilised and unrecognised tax losses 1,376 458
Utilisation of tax losses previously unrecognised – (724)
Gain from sale of intangible assets – quota (12,979) –
Capitalised asset timing differences (34)(2,999)
Non-taxable income (55) 19
Other – (44)
(10,798)(1,810)
Income tax expense 6,692 3,800
7.1 Income tax expense (continued)
20222021
$000$000
Imputation credit account
Imputation credits available for use in
subsequent reporting periods
54,886 53,345
The Group imputation credits are available to be attached to dividends paid by
Sanford Limited.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
132
SANFORD INTEGRATED REPORT 2022
NOTE 7 – TAXATION (continued)
7.2 – Deferred Tax
2022
Balance
30 September
2021
Recognised in
Income Statement
Recognised in
Other Comprehensive
Income
Balance
30 September
2022
$000$000$000$000
Movement in temporary differences during the year
Property, plant and equipment5,576321– 5,897
Intangible assets15,539(1,518)– 14,021
Trade receivables(137)106– (31)
Derivative financial instruments3,217–(9,911) (6,694)
Biological assets6,1751,658– 7,833
Other liabilities(2,351)(707)– (3,058)
Net deferred tax liability28,019 (140)(9,911) 17,968
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
133
SANFORD INTEGRATED REPORT 2022
NOTE 7 – TAXATION (continued)
7.2 – Deferred Tax (continued)
2021
Restated
Balance
1 October
2020*
Recognised in
Income
Statement
Recognised in
Other
Comprehensive
Income
Balance
30 September
2021
$000$000$000$000
Movement in temporary differences during the year
Property, plant and equipment5,796(220)–5,576
Intangible assets15,811(272)–15,539
Trade receivables(28)(109)–(137)
Derivative financial instruments(820)–4,0373,217
Biological assets6,09976–6,175
Other liabilities(1,983)(368)–(2,351)
Net deferred tax liability24,875(893)4,03728,019
* Refer to the Sanford 2021 integrated report for details on restatement as at 1 October 2020.
Deferred tax recognised in OCI relates to tax on the effective portion of the change in fair value of cash flow hedges, and on cost of hedging gains or losses.
A deferred tax asset has not been recognised in the following item because, in respect to the joint operations that holds that deferral, it is not probable that a future taxable
profit will be available to be utilised in the foreseeable future. There is no expiry time for the use of these tax losses.
20222021
$000$000
Unrecognised deferred tax asset
Net tax losses – Australia
–1,642
Net tax losses – New Zealand13,9189,004
13,91810,646
A portion of net tax losses in New Zealand is attributable to the joint operation.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
134
SANFORD INTEGRATED REPORT 2022
NOTE 8 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes deposits that are subject to insignificant risk of
changes in their fair value. Cash and cash equivalents are classified and measured
at amortised cost in the statement of financial position. These financial
instruments are short term in nature and the carrying amount is considered to be
a reasonable approximation of fair value.
Bank overdraft and borrowings are classified and measured at amortised cost.
These financial instruments are short term in nature and the carrying amount is
considered to be a reasonable approximation of fair value.
20222021
$000$000
Cash on hand and at bank9,5343,926
Bank overdraft and borrowings (secured)(45,000)(55,000)
(35,466)(51,074)
Borrowings are all denominated in NZD and expire in April 2023 (2021: April 2022).
NOTE 9 – TRADE RECEIVABLES
Trade and other receivables are financial assets classified and measured at
amortised cost less allowance for doubtful debts. Short term trade receivables are
not discounted. These financial instruments are short term in nature and the
carrying amounts are considered to be a reasonable approximation of fair values.
20222021
$000$000
Gross trade receivables 88,367 71,083
Less: Allowance for doubtful debts (refer to note 18(a)) (161)(532)
88,206 70,551
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
135
SANFORD INTEGRATED REPORT 2022
NOTE 10 – BIOLOGICAL ASSETS
Biological assets include pre-harvest salmon and mussel stocks, and are measured at fair value less costs to sell, with any change therein recognised in the income statement.
This method of valuation falls into Level 3 on the fair value hierarchy (refer to note 18). Biological assets are transferred to inventories at the date of harvest.
2022
MusselsSalmonTotal
$000$000$000
Balance at beginning of year25,72932,79758,526
Changes due to biological transformation and movement in fair value less estimated costs to sell19,9238,37928,302
Harvested produce transferred to inventories(18,730)(4,868)(23,598)
Balance at 30 September 202226,92236,30863,230
Current15,48628,72544,211
Non-current11,4367,58319,019
26,92236,30863,230
2021
MusselsSalmonTotal
$000$000$000
Balance at beginning of year25,03528,89853,933
Changes due to biological transformation and movement in fair value less estimated costs to sell17,7469,96427,710
Harvested produce transferred to inventories(17,052)(6,065)(23,117)
Balance at 30 September 202125,72932,79758,526
Current13,67326,56740,240
Non-current12,0566,23018,286
25,72932,79758,526
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
136
SANFORD INTEGRATED REPORT 2022
NOTE 10 – BIOLOGICAL ASSETS (continued)
Risk factors
The Group is exposed to a number of risks relating to its growing of salmon and
mussel stocks. These include storms, marine predators, biosecurity incursions and
other contamination of the water space. The Group has extensive processes in place
to monitor and mitigate these risks including insurance of salmon and mussels,
regular inspection of the growing areas and contingency plans in the event of an
adverse climatic event.
Fair value risk and sensitivity
The estimation of the fair value of in-water mussels and salmon is based on several
assumptions. Changes in these assumptions will impact the fair value calculation. The
profit which is achieved on the sale of inventory will differ from the calculations of
fair value of biological assets because of changes in key factors such as the final
sales destinations of inventory sold, changes in selling prices, foreign exchange
rates, harvest weight, growth rates, mortality, input costs and costs to sell, and
differences in quality of harvested salmon and mussels.
With all other variables remaining constant, a 10% increase/decrease in average
future sales prices would increase/ decrease the fair value of biological assets and
profit before tax by $6.2m (2021: 10% increase/decrease $5.5m). A 10% increase/
decrease in biomass (future harvest volumes) would increase/decrease the fair value
of biological assets on hand and profit before tax by $5.4m (2021: 10% increase/
decrease $5.5m).
Determining fair value
Salmon
The pre-harvest salmon stock has been valued with reference to their stage of
development, the length of the growth cycle, number in the water, assumptions in
respect of biomass and feed conversion rates, and the fair value per kg at the point
of harvest. The fair value per kg at the point of harvest is determined with reference
to expected market prices for the first half of the next financial year, net of
estimated cost up to the date of harvest. The fair value measurement commences at
the date of transfer to sea water as this is considered the point at which the fish
commence their growth cycle.
Mussels
The pre-harvest mussel stock has been valued with reference to their stage of
development, the length of the growth cycle for the mussels in the regions being
farmed, the fair value per kg at point of harvest, and the physical quantity in the
water at balance date. The fair value per kg at the point of harvest is determined
with reference to expected market prices for the first half of the next financial year,
net of estimated cost up to the date of harvest. The fair value measurement
commences at the date of seeding as this is considered the point at which the
mussel commence their growth cycle.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
137
SANFORD INTEGRATED REPORT 2022
NOTE 11 – INVENTORIES
Inventories are measured at the lower of cost and net realisable value. The estimated costs of marketing, selling and distribution are deducted in calculating net realisable value.
Cost is based on the weighted average cost principle and includes expenditure incurred in acquiring the inventory and bringing it to its existing condition and location. In the
case of processed inventories and work in progress, cost includes an appropriate share of overheads. Fixed overheads are allocated on the basis of normal operating capacity.
The cost of items transferred from biological assets is their fair value less costs to sell at the date of transfer.
20222021
$000$000
Seafood – at cost51,23060,692
Net realisable value provision(3,071)(1,809)
48,15958,883
Packaging, fishing gear, fuel and stores – at cost19,01216,616
67,17175,499
The cost of inventories recognised as an expense for the year ended 30 September 2022 is $300.5m (2021: $325.0m).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
138
SANFORD INTEGRATED REPORT 2022
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is measured at cost less accumulated depreciation and
impairment losses.
Cost may include:
• the consideration paid on acquisition of the asset;
• the cost of materials and direct labour and any other costs directly attributable to
bringing the asset to a working condition for its intended use;
• the costs of dismantling and removing the items and restoring the site on which
they are located; and
• borrowing costs directly attributable to the acquisition, construction or production
of a qualifying asset.
The capitalisation of expenditure ceases when the asset is ready for use, at which point
depreciation commences. Capital work in progress of $47.1m is included within the
relevant category of property, plant and equipment below (2021: $30.3m).
When parts of an item of property, plant and equipment have different useful lives,
they are accounted for as separate items (major components) of property, plant
and equipment.
Subsequent expenditure that increases the economic benefits derived from an asset
is capitalised.
Depreciation of property, plant and equipment, other than land, is calculated using
straight-line basis and is expensed over the useful life of the asset. Depreciation
methods, useful lives and residual values are reassessed at least annually. Leased
assets are depreciated over the shorter of the lease term and their estimated useful
lives. Estimated useful lives (years) are as follows:
20222021
Buildings (freehold and leasehold)20–2520–25
Fishing vessels:
Hulls
20–3020–30
Engines12–1512–15
Electronic equipment3–43–4
Included in Plant and Equipment
Machinery and plant
1–101–10
Office fixtures and fittings3–73–7
Marine farm assets5–155–15
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
139
SANFORD INTEGRATED REPORT 2022
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT (continued)
2022
Land
Freehold
Buildings
Leasehold
BuildingsFishing Vessels
Plant and
EquipmentTotal
$000$000$000$000$000$000
Cost
Balance at beginning of year
2,25221,84151,010235,473 137,557 448,133
Additions–26715,85618,977 12,919 48,019
Disposals––(45)(551) (435) (1,031)
Effect of movements in exchange rates–––– 276 276
Balance at end of year2,25222,10866,821253,899 150,317 495,397
Accumulated depreciation and impairment
Balance at beginning of year
–(7,058)(31,431)(142,958) (99,026)(280,473)
Depreciation–(296)(2,174)(14,254) (5,817) (22,541)
Disposals––25550 401 976
Impairment–––– (327)(327)
Balance at end of year–(7,354)(33,580)(156,662) (104,769) (302,365)
Net book value at 30 September 20222,25214,75433,24197,237 45,548 193,032
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
140
SANFORD INTEGRATED REPORT 2022
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT (continued)
2021
Land
Freehold
Buildings
Leasehold
BuildingsFishing Vessels
Plant and
EquipmentTotal
$000$000$000$000$000$000
Cost
Balance at beginning of year – restated*
2,57222,54855,426212,309148,820441,675
Additions–3,23812225,1957,56736,122
Disposals(320)(3,945)(4,538)(2,031)(18,787)(29,621)
Effect of movements in exchange rates––––(43)(43)
Balance at end of year2,25221,84151,010235,473137,557448,133
Accumulated depreciation and impairment
Balance at beginning of year
–(9,981)(34,019)(129,288)(111,244)(284,532)
Depreciation–(290)(2,170)(15,431)(5,736)(23,627)
Disposals–3,2134,7581,76117,95427,686
Balance at end of year–(7,058)(31,431)(142,958)(99,026)(280,473)
Net book value at 30 September 20212,25214,78319,57992,51538,531167,660
* Refer to the Sanford 2021 integrated report for details on restatement as at 1 October 2020.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
141
SANFORD INTEGRATED REPORT 2022
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT (continued)
Sale of Mt Maunganui cold store – FY21
On 17 December 2020, the Group disposed of it’s Mt Maunganui cold store for a
total consideration of $16.1m. The net gain of $12.9m on this disposal is recognised
within other income.
Commitments
The estimated capital expenditure for property, plant and equipment contracted
for at reporting date but not provided is $5m for the Group (2021: $12.5m).
NOTE 13 – INVESTMENTS
The Group’s interest in equity accounted investees comprises interests in those
associates and joint ventures disclosed in note 21.
Associates are those entities in which the Group has significant influence, but not
control or joint control over the financial and operating policies. A joint venture is
an arrangement in which the Group has joint control, whereby the Group has rights
to the net assets of the arrangement rather than the rights to its assets and
obligations for its liabilities.
Interests in associates and joint ventures are accounted for using the equity
method. They are initially recognised at cost, which includes transaction costs.
Subsequent to initial recognition, the financial statements include the Group’s
share of the profit or loss and OCI of equity accounted investees, until the date on
which significant influence or joint control ceases.
Unrealised gains arising from transactions with equity accounted investees are
eliminated against the investment to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent there is no evidence of impairment.
The Group’s other investments comprise shareholdings in other companies which
do not constitute controlling interests, nor does the Group have significant
influence over the investees. As these are not held for trading, the Group has
elected these equity instruments to be classified and measured at fair value
through OCI.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
142
SANFORD INTEGRATED REPORT 2022
NOTE 13 – INVESTMENTS (continued)
20222021
$000$000
Equity Accounted Investees
(a) Summary financial information for equity accounted investees, not adjusted for the percentage ownership held by the Group:
Current assets
3,683 3,563
Non-current assets 5,400 5,738
Total assets 9,083 9,301
Current liabilities 802823
Non-current liabilities 2,009 2,084
Total liabilities 2,8112,907
Revenue 5,866 6,533
Expenses (5,481)(6,548)
(Loss)/Profit 385 (15)
(b) Movements in carrying value of equity accounted investees:
Balance at beginning of year
3,999 3,953
Sale of investment (115)–
Share of profit 200 8
Dividends received from associates (250)(130)
Conversion of advance to equity – 168
Balance at 30 September 3,834 3,999
Other Investments
Shares in other companies
104 97
3,938 4,096
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
143
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS
Purchased fishing quota is carried at cost less impairment losses. Quota and
licences which are initially recognised on the basis of previous permits, catch
history or when purchased through business combinations are initially valued at
fair value on acquisition. Fair value is determined by reference to Crown tender
prices and market prices available close to the time of the acquisition. This became
the deemed cost upon the adoption of NZ IFRS.
Marine farm licences are recorded at cost, or when purchased through business
combinations, are initially measured at fair value.
Marine farm licences and fishing quota have indefinite useful lives and are not
amortised but are tested annually for impairment at reporting date.
Fishing quota has no expiry date and is therefore deemed to have an indefinite
useful life. Marine farm licences are deemed by the Directors to have indefinite
useful lives as it is highly probable that they are renewed, and the costs of renewal
are expected to be minimal.
Expenditure on research activities, undertaken with the prospect of gaining new
scientific or technical knowledge, is expensed as incurred. Expenditure on
development activities, whereby research findings are applied to a plan or a design
for the production of new or substantially improved products or processed, is
capitalised if the product of process is commercially and technically feasible, and
the Group has sufficient resources to complete development. Other development
expenditure is expensed as incurred.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
144
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS (continued)
2022
Fishing
Quota
Marine Farm
LicencesGoodwill
Intellectual
Property
Computer
SoftwareTotal
$000$000$000$000$000$000
Cost
Balance at beginning of year
395,364 102,554 4,323 3,660 3,211 509,112
Additions–100–– 5,676 5,776
Disposals (8,280)–––– (8,280)
Effect of movements in exchange rates 16 – 158–– 174
Balance at end of year 387,100 102,654 4,481 3,660 8,887 506,782
Accumulated amortisation and impairment
Balance at beginning and end of year
(9,333) (1,244)– (1,403)– (11,980)
Impairment–– (974)–– (974)
Amortisation––– (732)– (732)
Balance at end of year (9,333) (1,244) (974) (2,135)– (13,686)
Carrying amount at 30 September 2022 377,767 101,410 3,507 1,525 8,887 493,096
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
145
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS (continued)
2021
Fishing
Quota
Marine Farm
LicencesGoodwill
Intellectual
Property
Computer
SoftwareTotal
$000$000$000$000$000$000
Cost
Balance at beginning of year
395,284 102,554 4,383 3,660 340 506,221
Additions 86 ––– 2,871 2,957
Effect of movements in exchange rates (6)– (60)–– (66)
Balance at end of year 395,364 102,554 4,323 3,660 3,211 509,112
Accumulated amortisation and impairment
Balance at beginning and end of year
(9,333) (1,244)– (671)– (11,248)
Amortisation––– (732)– (732)
Balance at end of year (9,333) (1,244)– (1,403)– (11,980)
Carrying amount at 30 September 2021 386,031 101,310 4,323 2,257 3,211 497,132
Sale of crayfish quota in areas CRA2, CRA7 and CRA8
On 29th April 2022 Sanford completed the unconditional sale of its spiny (red) rock lobster quota in Fisheries Management Areas CRA7 and CRA8 to Deltop Holdings Limited, a
subsidiary of Fiordland Lobster Company Limited. On 9 May 2022, the unconditional sale of the CRA2 quota to Southern Ocean Seafoods Limited was also completed. The sales of the
three quotas, which included some annual catch entitlement (ACE), were for a total consideration of $52.7m, giving rise to a gain on sale of $43.7m (net of transaction costs). The gain
on sale is included in other income in the income statement.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
146
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS (continued)
14.1 Market capitalisation
The group’s market capitalisation has been below the carrying amount of net assets
from September 2020 onwards with an increasing gap over this time. At 30
September 2022 the group’s market capitalisation was $391m (2021: $474m) and
the carrying value of its net assets was $665m (2021: $634m). Accounting
standards consider this to be an indicator of impairment. The group does not
believe the current share price provides an accurate reflection of the fair value of
the net assets, due to factors such as:
• The financial impact of Covid on the business, which resulted in a significant fall
in earnings and cessation of dividend payments. Management do not consider
that the share price factors in rising global seafood prices and recent strong
demand, and the likelihood of profitability improving to pre-Covid levels.
• The likelihood that the market value of the group’s New Zealand fishing quota
materially exceeds its carrying value. The CRA2, CRA7 and CRA8 quota sale
realised consideration of $52.7m whereas the carrying value was $8.3m.
Management have also obtained an independent valuation of the group’s
remaining New Zealand fishing quota which shows headroom over the $378m
carrying value recorded in the financial statements which is in excess of the
market capitalisation shortfall.
Management also obtained an independent valuation of Sanford as a whole, with
the carrying amount of the group’s net assets value falling within this range of
the valuation.
Management undertakes impairment testing in respect of the cash generating
units which contain the New Zealand fishing quota and marine farm licences using
the value in use methodology. This testing results in positive headroom between
the value of these cash generating units and the carrying amount of their net
assets, indicating that there is no impairment at the cash generating unit level.
14.2 Cash Generating Units
An impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount, which is the greater of its value in use and its fair
value less costs to sell. If it is not possible to estimate the recoverable amount of
the individual asset, the Group determines the recoverable amount of the cash
generating unit (CGU) to which the asset belongs.
Impairment losses directly reduce the carrying amount of assets and are
recognised in the income statement. For goodwill and intangible assets that have
indefinite lives, recoverable amount is estimated at each reporting date.
The table below outlines the allocations of intangible assets with indefinite useful lives
to CGUs:
2022
Fishing
Quota
Marine Farm
LicencesGoodwillTotal
$000$000$000$000
New Zealand Wildcatch 377,564 –– 377,564
New Zealand Aquaculture– 101,410 1,458 102,868
Australian Seafood 203 – 2,049 2,252
377,767 101,410 3,507 482,684
2021
Fishing
Quota
Marine Farm
LicencesGoodwillTotal
$000$000$000$000
New Zealand Wildcatch 385,844 –– 385,844
New Zealand Aquaculture– 101,310 1,458 102,768
Australian Seafood 187 – 1,891 2,078
Other–– 974 974
386,031 101,310 4,323 491,664
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
147
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS (continued)
14.2 Cash Generating Units (continued)
Wildcatch and Aquaculture - impairment testing and assumptions
Based on impairment testing undertaken in the current year, no impairment is
required for fishing quota or marine farm licences given the recoverable amount of
both the New Zealand wildcatch and aquaculture CGUs exceed the carrying value
of their net assets.
Impairment testing was performed on the applicable CGUs to determine whether
fishing quota and marine farm licences were impaired using a discounted cash flow
model based on value-in-use. Post-tax discount rates of between 6.8% and 7.6%
(2021: 5.7% and 6.6%) were applied; the midpoint being 7.2% (2021: 6.2%). Future
cash flows were projected for 5 years and a terminal growth rate of 2% (2021: 2%)
was applied. A key assumption in the projections is the growth in earnings. The
CAGR of earnings over the modelled period for New Zealand wildcatch is 3.1% and
aquaculture 19.3%. These assumptions are largely based on earnings returning to
pre Covid-19 levels, as well as aquaculture growth from strategic initiatives.
Assumptions for earnings and capital expenditure are based on actual results, the
2023 budget approved by the Board, and the Sanford Strategy Refresh as
published in June 2022. Growth from expansionary capital items is excluded from
the assessment as required by NZ IAS 36.
The recoverable amount of New Zealand wildcatch exceeds its carrying amount by
$129m and aquaculture by $125m.
Sensitivity analysis - impairment testing
The Group has conducted an analysis of the sensitivity of the impairment test to
changes in key assumptions used to determine the recoverable amounts for the
applicable CGUs. The recoverable amounts are sensitive to reasonably possible
changes in assumptions of the group’s growth expectations in its New Zealand
wildcatch and aquaculture cash generating units.
The following table shows the amount by which these assumptions would
need to change individually for the carrying amount to exceed the estimated
recoverable amount.
WildcatchAquaculture
AssumptionBase BreakevenBase Breakeven
Earnings growth3.1%-3.5%19.3%6.4%
Discount rate7.2% 8.5% 7.2%9.5%
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
148
SANFORD INTEGRATED REPORT 2022
NOTE 14 – INTANGIBLE ASSETS (continued)
14.3 Goodwill
Goodwill represents the excess of the consideration transferred over the fair value
of the net identifiable assets of the acquired business. Goodwill is carried at cost
less accumulated impairment losses.
The consideration transferred in the acquisition is measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is tested annually for
impairment. Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to the
issue of debt or equity securities. The consideration transferred does not include
amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in the income statement.
The Group impaired $1.0m of goodwill associated with the acquisition of a retail
space lease acquired in 2015 (2021: nil).
Sanford’s goodwill balance of $3.5m (post the impairment noted above), is largely
made up of $2.0m arising from the acquisition of Saltwater Seafoods in 2020, an
Australian seafood trading business, and $1.4m for a mussel powder business,
Enzaq, acquired in 2017 (which is included in the New Zealand aquaculture CGU).
Analysis in respect of the future earnings of these businesses supports the carrying
value of the goodwill.
14.4 Computer Software
Software-as-a-service (SaaS) arrangements are service contracts providing the
Group with the right to access the cloud provider’s application software over the
contract period. As such the Group does not receive a software intangible asset at
the contract commencement date. For SaaS arrangements, the Group assesses if
the contract will provide a resource that it can ‘control’ to determine whether an
intangible asset is present. If the Group cannot determine control of the software,
the arrangement is deemed a service contract and any implementation costs,
including costs to configure or customise the cloud provider’s application
software, are recognised as operating expenses when incurred.
Where the SaaS arrangement supplier provides both configuration and
customisation services, judgement has been applied to determine whether each
of these services are distinct or not from the underlying use of the SaaS
application software. If distinct, such costs are expensed as incurred when the
service is provided. If not distinct, such costs are expensed over the SaaS contract
term.
In implementing SaaS arrangements, the Group has incurred customisation costs
which creates additional functionality to a cloud based software. Management has
determined that it has rights to the intellectual property and has owned the
developed software which meets the definition and recognition criteria for an
intangible asset.
Cost incurred for the development of software that enhances or modifies, or
creates additional functionality to an on-premise software, that meets the
definition and recognition criteria of intangible assets are recognised as intangible
assets. These costs are recognised as intangible software assets when they are
available for use, and subsequently amortised over the useful life of the software
on a straight-line basis.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
149
SANFORD INTEGRATED REPORT 2022
NOTE 15 – TRADE AND OTHER PAYABLES
Trade and other payables
Trade and other payables are financial liabilities, classified and measured at
amortised cost. As these are short term in nature the carrying amount is
considered to be a reasonable approximation of fair value.
Employee entitlements
(i) Long service leave
The Group’s net obligation in respect of long service leave is the amount of future
benefit that employees have earned in return for their service in the current and
prior periods. The obligation is calculated using an actuarial technique. Changes in
long service leave provision are recognised in the income statement.
(ii) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided.
20222021
$000$000
Current liabilities
Trade payables
15,41310,554
Other payables and accruals 28,270 30,221
Employee entitlements 10,902 8,333
54,585 49,108
Non current liabilities
Employee entitlements
1,244 1,149
1,244 1,149
NOTE 16 – CAPITAL/RESERVES AND EARNINGS PER SHARE
(a) Translation reserve
This reserve comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations as well as from the translation of liabilities that
hedge the Group’s net investment in a foreign subsidiary.
(b) Share-based payments reserve
This reserve comprises the fair value of equity instruments granted under the long-term
incentive plan.
(c) Cash flow hedge and cost of hedging reserve
The cash flow hedge reserve comprises the effective portion of changes in the fair value
of derivative contracts for highly probably forecast transactions.
The cost of hedging reserve reflects gain or loss on the portion excluded from the
designated hedging instrument that relates to the time element of foreign currency
options.
Refer to 18(c).
(d) Share capital and earnings per share
Ordinary Shares
20222021
No. of SharesNo. of Shares
On issue at beginning and end of year93,626,73593,626,735
All issued shares are fully paid. The holders of ordinary shares are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings
of the Company. All shares rank equally with regard to Sanford’s residual assets. In respect
of the Company’s shares that are held by the Group, all rights are suspended until those
shares are reissued.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
150
SANFORD INTEGRATED REPORT 2022
NOTE 16 – CAPITAL/RESERVES AND EARNINGS PER SHARE (continued)
The calculation of basic earnings per share at 30 September 2022 was based on the profit
attributable to ordinary shareholders of $55.9m (2021: $16.3m) and a weighted average
number of ordinary shares outstanding of 93,506,137 (2021: 93,506,137).
(e) Treasury shares
In 2014, Sanford established a long-term incentive plan (the LTI plan) for the CEO. The
LTI plan is designed to improve the performance of the Group by incentivising and
motivating the CEO. The LTI was awarded to the new CEO in April 2021.
The Group has not acquired any Sanford Limited shares in 2022 for the purposes of the
LTI plan (2021: no shares acquired).
Total treasury shares held at 30 September 2022 was 120,598 shares (2021: 120,598 shares).
The Group issued 58,320 unquoted share rights to the CEO for nil consideration in the
current financial year, vesting in September 2024, subject to performance hurdles.
NOTE 17 – DIVIDENDS
On 14 November 2022, the Board declared a final dividend for the year ended
30 September 2022 of 10 cents per share (2021: $nil).
Interim dividend in respect of the half year ended 31 March 2022 was $nil (2021 half
year: $nil).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
151
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS
Classification and measurement
Classification and measurement of financial assets
Financial assets are classified into three categories depending on their contractual
cash flow characteristics and the Group’s business model for managing the
financial assets. These categories are:
• Amortised cost;
• Fair value through profit or loss; and
• Fair value through OCI.
A financial asset which is a debt instrument is measured at amortised cost only if
both the following conditions are met:
• it is held within a business model whose objective is to hold assets in order to
collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest.
However, the Group may choose at initial recognition to designate a debt
instrument that meets the amortised cost criteria as at fair value through profit or
loss if doing so eliminates or significantly reduces an accounting mismatch.
For investments in equity instruments that are not held for trading nor managed on
a fair value basis, the Group has elected to measure these at fair value through OCI.
Derivative financial instruments which are not designated in an effective hedge
relationship are classified as fair value through profit or loss.
Classification and measurement of financial liabilities
Financial liabilities are classified as either amortised cost or fair value through profit or
loss. The Group may choose at initial recognition to designate a financial liability as at fair
value through profit or loss if doing so eliminates or significantly reduces an accounting
mismatch. All financial liabilities of the Group are measured at amortised cost except for
derivative financial instruments which are measured at fair value. Changes in the fair
value of derivative financial liabilities are recognised in profit or loss except when the
derivative instrument is designated in an effective hedge relationship.
Specific accounting policies for the Group’s financial assets and liabilities are
described below.
Exposure to credit, interest rate, foreign currency, fuel price and liquidity risks arise in the
normal course of the Group’s business. Derivatives may be used as a means of reducing
exposure to fluctuations in foreign exchange rates, interest rates and fuel prices.
While these instruments are subject to the risk of subsequent changes to market rates,
such changes would generally be offset by opposite effects on the items being hedged.
The Group is not exposed to substantial other market price risk arising from
financial instruments.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
152
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
Fair value measurement
The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows using market interest rates. The fair value of forward
foreign exchange contracts is estimated by discounting the difference between
the contractual forward price and the current forward price for the residual
maturity of the contract using market interest rates. The fair value of foreign
currency options is estimated using option valuation methods with reference to
current spot rates and market volatility. The fair value of fuel swaps is estimated
using forward fuel prices at reporting date.
Fair value hierarchy
When measuring the fair value of an asset or a liability, the Group uses observable
market data as far as possible. Fair values are categorised into different levels in
a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
Level 3: inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into
different levels of the fair value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
(a) Credit risk
Policies
Credit risk, the risk of financial loss to the Group if a customer or counterparty to
a financial instrument fails to meet its contractual obligations, arises principally
from the Group’s receivables from customers.
The Group does not generally require collateral in respect of trade and other
receivables. Management has a credit policy in place and the exposure to credit
risk is monitored on an ongoing basis. Credit evaluations are performed on all
customers requiring credit over a certain amount. Reputable financial institutions
(defined as having a minimum Standard & Poor’s long term credit rating of A-) are
used for investing and cash handling purposes.
Maximum exposure to credit risk
The carrying amount of financial assets represents the Group’s maximum credit exposure.
The Group has not renegotiated the terms of any financial assets which would result in the
carrying amount no longer being past due or avoid a possible past due status.
The Group’s maximum exposure to credit risk for trade and other receivables by
geographic regions is as follows:
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
20222021
$000$000
New Zealand40,44829,404
North America20,76318,565
Europe14,56211,578
Australia3,2034,991
Japan3,329913
Other9,7108,445
Trade and other receivables 92,015 73,896
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
153
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(a) Credit risk (continued)
Concentration of credit risk
The Group has credit insurance in respect of one (2021: one) of its largest customers for
USD $10m (2021: USD 10.0m). At reporting date the Group’s exposure in respect of these
debts is USD $5.5m (2021: USD 11.4m) which comprised 15.7% (2021: 23%) of trade
receivables. Since reporting date and in accordance with agreed credit terms these
customers have subsequently paid 20.2% (2021: 71%) of the outstanding balance. There are
no concerns with the collectability of these debts.
The status of trade receivables at the reporting date is as follows:
Gross
Receivables
Allowance for
doubtful debts
Gross
Receivables
Allowance for
doubtful debts
2022202220212021
$000$000$000$000
Not past due 75,843 –61,975(3)
Past due 0 – 30 days 11,737 –7,332(15)
Past due 31 – 120 days 222 (111)1,028(48)
Past due 121 – 365 days 494 (50)551(303)
Past due more than 1 year 71 –197(163)
88,367(161)71,083(532)
Impairment assessment – Expected credit losses
Policies
The Group applies the simplified approach to providing for expected credit losses
prescribed by NZ IFRS 9, which permits the use of the lifetime expected loss
provision for all trade receivables. The loss allowance provision on trade
receivables that are individually significant are determined by an evaluation of the
exposures on a line by line basis. For trade receivables which are not significant on
an individual basis, collective impairment is assessed on a portfolio basis based on
number of days overdue, and taking into account the historical loss experience in
portfolios with a similar number of days overdue. The expected credit losses
incorporate forward looking information and relevant macroeconomic factors.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
154
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(b) Liquidity risk
Policies
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on a daily basis.
The Group has secured bank loans which contain debt covenants. A breach of covenant may require accelerated repayment of the loans earlier than indicated in the
loan contract.
The following table sets out the contractual and expected cash flows for all financial liabilities and derivatives.
2022
Statement of
Financial Position
Contractual Cash
Out/(In) Flows6 months or less6-12 months1-2 years2-5 yearsMore than 5 years
$000$000$000$000$000$000$000
Bank loans 110,000 120,703 2,556 7,504 4,880 105,763 –
Trade payables 15,413 15,413 15,413 – – – –
Other payables 28,270 28,270 28,270 – – – –
Bank overdraft and borrowings 45,000 46,216 1,044 45,172 – – –
Total non-derivative liabilities 198,683 210,602 47,283 52,676 4,880 105,763 –
Foreign currency options2,6705,6781,5531,6782,447––
Forward exchange contracts30,10431,9209,5238,9317,6735,793–
Interest rate swaps(5,496)(6,131)(255)(969)(1,838)(2,711)(358)
Fuel swaps410467(835)1,302–––
Total derivative liabilities (assets)27,68831,9349,98610,9428,2823,082(358)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
155
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(b) Liquidity risk (continued)
2021
Statement of
Financial Position
Contractual Cash
Flows6 months or less6-12 months1-2 years2-5 yearsMore than 5 years
$000$000$000$000$000$000$000
Bank loans127,500132,62893293726,703104,056–
Trade payables10,55410,55410,554––––
Other payables30,22130,22130,221––––
Bank overdraft and borrowings55,00056,29330655,987–––
Total non-derivative liabilities223,275229,69642,01356,92426,703104,056–
Foreign currency options(3,588)(3,349)(688)(931)(1,589)(141)–
Forward exchange contracts(11,554)(12,110)(2,865)(2,977)(4,143)(2,125)–
Interest rate swaps4,1364,3351,3151,0001,0001,137(117)
Fuel swaps(1,777)(1,715)(1,579)(136)–––
Total derivative liabilities (assets)(12,783)(12,839)(3,817)(3,044)(4,732)(1,129)(117)
Facilities
The Group generates sufficient cash flows from its operating activities to meet its obligations arising from its financial liabilities and has credit lines in place to cover potential shortfalls.
At year end the Group had available approximately $115m of headroom funding to meet any unforeseen liability obligations (2021: $88m).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
156
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(b) Liquidity risk (continued)
Bank loans and borrowings
Policies
Bank loans and borrowings are recognised initially at fair value, net of attributable
transaction costs. Subsequent to initial recognition bank loans and borrowings are
measured at amortised cost, applying the effective interest method.
Facilities, interest rate ranges, expiry dates and balances of bank loans for the Group are
as follows:
2022
FacilityExpiry DateBalance
$000$000
Current liabilities
Borrowings (secured)
110,000April 202345,000
Non-current liabilities
Bank loans (secured)
5 year facility
65,000October 202460,000
4.5 year facility40,000November 202430,000
3 year facilities20,000April 202520,000
4 year facility35,000April 2026–
270,000155,000
2021
FacilityExpiry DateBalance
$000$000
Current liabilities
Borrowings (secured)
130,000Apr-2255,000
Non-current liabilities
Bank loans (secured)
5 year facility
35,000April 202325,000
5 year facility65,000October 202465,000
5 year facilities40,000November 202437,500
270,000182,500
Interest rates
Interest rates on the above loans ranged from 3.65% – 5.08% (2021: 0.98% – 1.72%).
Security and covenants
Bank loans are secured by a general security interest over property and a mortgage over
quota shares. All borrowings are subject to borrowing covenant arrangements. The Group
has complied with all covenants during the period (September 2021: all covenants were
complied with).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
157
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk
Financial risk management and hedge accounting
Market risk is the risk that arises from changes in foreign exchange rates, interest
rates and commodity (specifically fuel) prices. Such changes will affect the Group’s
earnings and/or the value of its holdings of financial instruments. These risks arise due
to the Group having financial instruments that would be impacted by changes in these
market factors.
The Group enters into derivative contracts, being forward exchange contracts, foreign
currency options and interest rate swaps to manage exposure to foreign currency and
interest rate risks. The Group also enters into commodity swaps to manage fuel price
risk. Senior management are involved in the operation and oversight of risk
management and derivative activities. Regular reporting of activities is provided to the
Board of Directors which provides the policy for the use of derivative instruments. In
accordance with its Treasury Policy, the Group does not hold or issue derivative
financial instruments for trading purposes. However, derivatives that do not qualify for
hedge accounting are accounted for as held for trading and classified at fair value
through profit or loss.
The Group initially recognises derivatives at fair value when the Group becomes a
party to the contractual provisions of the instrument, and subsequently re-measures
these at fair value at each balance date. All derivatives are classified as level 2 on the
fair value hierarchy explained below. The resulting fair value gain or loss on re-
measurement is recognised in profit or loss immediately, unless the derivative is
designated and effective as a hedging instrument, in which case the timing of
recognition in profit or loss depends on the nature of the designated
hedge relationship.
Changes in the fair value of the derivative hedging instrument designated as a cash
flow hedge are recognised directly in other comprehensive income to the extent that
the hedge is effective. To the extent that the hedge is ineffective, changes in fair value
are recognised in the income statement. For cash flow hedges of financial items, (for
example forecast sales), the changes in fair value deferred in other comprehensive
income are transferred to the profit or loss when the hedged item affects the profit
or loss.
The Group designates only the intrinsic value of options into hedging relationships.
The time value of the options is treated as a cost of hedging. Changes in fair value of
the time value component of the option contract are deferred in other
comprehensive income over the term of the hedge. For transaction related hedged
items the cumulative change in fair value deferred in other comprehensive income is
recognised in profit or loss at the same time as the hedged item. If the hedged item
first gives rise to the recognition of a non-financial asset or a non-financial liability, the
amount in equity is removed and recorded as part of the initial carrying amount of the
hedged item. If the hedged item gives rise to the recognition of a financial asset or
liability, then the amount in equity is recognised in profit or loss at the same time as
the hedged item is recognised in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires
or is sold, terminated or exercised, then hedge accounting is discontinued
prospectively. The cumulative gain or loss previously recognised in other
comprehensive income remains there until the forecast transaction occurs, or is
immediately recognised in profit or loss if the transaction is no longer expected
to occur.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
158
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Interest rate risk
The Group is exposed to interest rate risk through its cash balances, short term
and long term borrowings. The Group adopts a risk management strategy of
managing the exposure to interest rate risk through a proportion of fixed and
floating rate borrowings. In order to meet this strategy the Group uses interest
rate swaps to fix between 25% and 75% of the floating rate exposure on long term
borrowings in line with its Board approved Treasury Policy. In the current period,
the Group designated the highly probable forecast transactions and the interest
rate swap contracts into cash flow hedge relationships.
Interest rate swap contracts are recognised within Derivative Financial
Instruments on the statement of financial position as at reporting date. The fair
value gains and losses on these derivatives were recognised in other
comprehensive income and transferred to profit or loss when the underlying
transactions affected the profit or loss within finance expenses in the income
statement. The amounts designated as the hedged item in qualifying cash flow
hedges mirror the amounts designated as hedging instruments as set out below,
therefore the Group has established a 1:1 hedge ratio.
Hedge ineffectiveness can arise from difference sources:
• Different interest rate curves applied to discount the hedged item and hedging
instrument;
• Differences in timing of cash flows of the hedged item and hedging instrument;
• The counterparties’ credit risk impacting the fair value movements of the
hedging instrument and hedged item differently.
No hedge ineffectiveness arose during the year (2021: none).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
159
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Interest-bearing variable rate instruments and related derivatives reprice as follows:
2022
Total6 months or less6-12 months1-3 years3-5 yearsMore than 5 years
$000$000$000$000$000$000
Cash and cash equivalents9,5349,534––––
Bank overdraft and borrowings(45,000)(45,000)––––
Bank loans(110,000)(110,000)––––
Interest rate swaps
Notional cash inflows
122,000122,000––––
Notional cash outflows(122,000)(10,000)–(5,000)(57,000)(50,000)
Total variable rate(145,466)(33,466)–(5,000)(57,000)(50,000)
2021
Total6 months or less6-12 months1-3 years3-5 yearsMore than 5 years
$000$000$000$000$000$000
Cash and cash equivalents3,9263,926––––
Bank overdraft and borrowings(55,000)(55,000)––––
Bank loans(127,500)(127,500)––––
Interest rate swaps––––
Notional cash inflows114,000114,000––––
Notional cash outflows(114,000)(3,000)(20,000)(45,000)(26,000)(20,000)
Total variable rate(178,574)(67,574)(20,000)(45,000)(26,000)(20,000)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
160
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Effects of hedge accounting on the financial position and performance
The tables below demonstrate the impact of hedged items and the hedging instruments designated in hedging relationships.
2022
Nominal
Weighted
Average Rate
Carrying AmountsChange in Fair Value
Used to Measure
Ineffectiveness
Cash Flow
Hedge ReserveAssetsLiabilities
Cash flow hedges$000$000$000$000$000
Interest rate risk
Hedged item: NZD floating rate exposure
on borrowings
(155,000)4.76%n/an/a(5,551)n/a
Hedging instrument: Interest rate swaps(122,000)3.35%5,496–5,496(5,496)
2021
Nominal
Weighted
Average Rate
Carrying AmountsChange in Fair Value
Used to Measure
Ineffectiveness
Cash Flow
Hedge ReserveAssetsLiabilities
Cash flow hedges$000$000$000$000$000
Interest rate risk
Hedged item: NZD floating rate exposure
on borrowings
(182,500)1.36%n/an/a4,155n/a
Hedging instrument: Interest rate swaps(114,000)3.25%470(4,606)(4,136)4,136
The interest rate swaps include $10.0 million of forward starting swaps (2021: $20.0 million).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
161
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Foreign currency risk
The Group is exposed to foreign currency risk as a result of sales and investments
denominated in foreign currencies, as well as the foreign currency exposure
arising from USD denominated fuel purchases. The Group has entered into
forward exchange contracts and foreign currency options (hedging instruments)
to hedge the variability in cash flows arising from foreign exchange rate
movements in relation to foreign currency sales (hedged item) up to two years
forward. Minimum and maximum hedging levels for the next two years expected
sales volumes are stipulated by its Board approved Treasury Policy. In the current
period, the Group designated the highly probable forecast transactions and the
forward exchange contracts and options into cash flow hedge relationships.
Forward exchange contracts and foreign currency options are recognised within
the Derivative Financial Instruments on the statement of financial position as at
reporting date. The fair value gains and losses on these derivatives were
recognised in other comprehensive income and transferred to profit or loss when
the underlying transactions affected the profit or loss within revenue and cost of
sales in the income statement. The amounts designated as the hedged item in
qualifying cash flow hedges mirror the amounts designated as hedging
instruments as set out below, therefore the Group has established a 1:1
hedge ratio.
Hedge ineffectiveness is only recognised for accounting purposes if it results in
movements in the value of the hedge instrument in excess of those on the hedged
item. The source of any ineffectiveness would be largely due to credit risk
adjustments on the derivatives and timing of cash flows. No ineffectiveness arose
on cash flow hedges of foreign currency transactions during the year
(2021: None).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
162
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
As at 30 September 2022, the Group’s exposure to foreign currency risk for the next
12 months can be summarised as follows:
2022
USDAUDJPYEURGBP
(figures are NZD)$000$000$000$000$000
Cash (overdraft)1,103(867)5159
Trade receivables48,7938763,3291,081201
Trade payables(4,876)(3,140)–(22)(6)
Net statement of financial position
exposure before hedging activity
45,020(3,131)3,3341,074204
Forecast net receipts179,211 11,905 8,451 ––
Net cash flow exposure before
hedging activity
224,231 8,774 11,785 1,074204
Forward exchange contracts and
options(156,548)
(8,616)(8,890)––
Net un-hedged exposure67,6831582,8951,074204
Forecast net receipts for USD and AUD comprise sales net of purchases in the respective
currencies.
2021
USDAUDJPYEURGBP
(figures are NZD)$000$000$000$000$000
Cash (overdraft)1,0497442141
Trade receivables34,1861,520366540–
Trade payables(2,441)(98)–(53)(56)
Net statement of financial position
exposure before hedging activity
32,7941,496408501(55)
Forecast net receipts146,1997,09211,561––
Net cash flow exposure before
hedging activity
178,9938,58811,969501(55)
Forward exchange contracts and
options
(140,155)(7,549)(11,366)––
Net un-hedged exposure38,8381,039603501(55)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
163
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Effects of hedge accounting on the financial position and performance
The tables below demonstrate the impact of hedged items and the hedging instruments designated in hedging relationships.
2022
Nominal
Carrying Amounts
Assets
Carrying Amounts
Liabilities
Change in Fair Value
Used to Measure
Ineffectiveness
Cash Flow
Hedge Reserve
Cash flow hedges*$000$000$000$000$000
Foreign currency risk
Hedged item: Forecast transactions denominated in foreign currencies
(436,685)n/an/a26,682n/a
Hedging instruments: Forward exchange contracts(399,952)2,981(29,458)(26,468)26,468
Hedging instruments: Foreign currency options(36,733)–(2,813)(2,813)2,813
2021
Nominal
Carrying Amounts
Assets
Carrying Amounts
Liabilities
Change in Fair Value
Used to Measure
Ineffectiveness
Cash Flow
Hedge Reserve
Cash flow hedges*$000$000$000$000$000
Foreign currency risk
Hedged item: Forecast transactions denominated in foreign currencies
239,327n/an/a(8,873)n/a
Hedging instruments: Forward exchange contracts(195,735)12,033(1,718)10,316(10,316)
Hedging instruments: Foreign currency options(43,592)3,292(276)3,016(3,016)
* Includes all hedges of forecast future transactions.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
164
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (continued)
(c) Market risk (continued)
Fuel price risk
The Group is exposed to fuel price risk through its purchases of fuel for its
fishing fleet.
Fuel price risk is the risk of loss to the Group due to adverse fluctuations in fuel
prices in USD terms. The currency exposure arising from USD fuel costs is
managed separately (see foreign currency risk management). The Group’s fuel
price risk has the following contractually specified components: gas oil and
shipping costs.
The Group enters into gas oil commodity swaps to reduce the variability in those
components of fuel costs, which historically have comprised approximately 75%
(2021: 80%) of total fuel cost. Minimum and maximum hedging levels for the next
two years expected purchase volumes are stipulated by its Board approved
Treasury Policy. A 1:1 hedge ratio is used, reflecting the match of the hedging
instruments and the component exposures in the fuel costs.
Fuel swaps are recognised within the Derivative Financial Instruments on the
statement of financial position as at reporting date and were designated as the
hedging instruments in qualifying cash flow hedges. The fair value gains and losses
on these derivatives were recognised in other comprehensive income and
transferred from other comprehensive income and included in the initial carrying
amount of inventory. When the fuel is consumed it is expensed to the profit or
loss within cost of sales in the income statement.
Hedge ineffectiveness is only expected to result from credit valuation
adjustments and any shortfalls in the amounts of the expected exposures.
Hedge ineffectiveness is only recognised for accounting purposes if it results in
movements in the value of the hedge instrument in excess of those on the
hedged item. Any ineffectiveness is recognised within cost of sales in the
income statement.
All fuel derivative contracts mature within 12 months of reporting date
(2021: 12 months).
Reconciliation of changes in hedge reserves
The movement in the fair value of hedging instruments which are deferred to the cash
flow hedge reserve during the year are set out below, together with changes in the cost of
hedging reserve, and the tax thereon:
2022
Hedging Instruments Used to Hedge
Interest
Rate Risk
Currency
Risk
Fuel Price
RiskTotal
Recognised in Statement of Changes
in Equity Hedge reserves
$000$000$000$000
Balance at the beginning of the year(2,978)9,9741,2798,275
Changes in cash flow hedge reserve9,632(42,413)(2,191)(34,972)
Changes in cost of hedging reserve–(425)–(425)
Taxation on reserve movements(2,697)11,9956139,911
Balance at the end of the year3,957(20,869)(299)(17,211)
2021
Hedging Instruments Used to Hedge
Interest
Rate Risk
Currency
Risk
Fuel Price
RiskTotal
Recognised in statement of changes
in equity hedge reserves
$000$000$000$000
Balance at the beginning of the year(8,920)7,452(640)(2,108)
Changes in cash flow hedge reserve8,2534,3842,66515,302
Changes in cost of hedging reserve–(882)–(882)
Taxation on reserve movements(2,311)(980)(746)(4,037)
Balance at the end of the year(2,978)9,9741,2798,275
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
165
SANFORD INTEGRATED REPORT 2022
NOTE 18 – FINANCIAL INSTRUMENTS (CONTINUED)
(c) Market risk (continued)
Sensitivity to changes in market prices or rates
All derivatives are measured at fair value and changes in market inputs used to
determine these fair values would have an impact on Sanford’s financial
statements. For each type of market risk that the entity is exposed to at the end of
the reporting period, the below sensitivity analysis shows the impacts of reasonably
plausible changes in the relevant market variables on the profit or loss and other
comprehensive income for the period. The effects of a variation in a particular
assumption is calculated independently of any changes in another assumption. As
this sensitivity analysis is only on financial instruments (derivative and non-
derivative), these ignore the offsetting impacts of future forecast transactions
designated as hedged items to the derivatives held.
20222021
$000$000$000$000
Impact on other comprehensive income
(net of tax):
IncreaseDecreaseIncreaseDecrease
Sensitivity to changes in interest rates
100 bp change in interest rates
3,308(3,106)1,954(2,075)
Sensitivity to changes in foreign exchange rates
10% change in foreign exchange rates
27,218(31,386)15,010(20,743)
Sensitivity to changes in fuel prices
10% change in fuel prices
2,736(1,906)543(542)
Impact on profit after tax:
Sensitivity to changes in interest rates
100 bp change in interest rates
119(128)(53)86
Sensitivity to changes in foreign exchange rates
10% change in foreign exchange rates
745(468)(646)730
(d) Capital management
The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor
and market confidence and to sustain future development of the business. The impact of
capital structure on shareholders’ return is also recognised and the Group acknowledges
the need to maintain a balance between the higher returns that might be possible with
greater gearing and the advantages and security afforded by a sound capital position.
The allocation of capital between its specific business operations and activities is, to a
large extent, driven by optimisation of the return achieved on the capital allocated.
The process of allocating capital to specific business segment operations and activities is
undertaken independently of those responsible for the operation.
The Group’s policies in respect of capital management and allocation are reviewed
regularly by the Board of Directors.
There have been no material changes in the Group’s management of capital during
the period.
(e) Master netting arrangements
Sanford enters into derivative transactions under the International Swaps and Derivatives
Association (ISDA) master agreements. The ISDA agreements do not meet the criteria for
offsetting in the statement of financial position. This is because the Group does not
currently have any legally enforceable right to offset recognised amounts. Under the ISDA
agreements the right to offset is enforceable only on the occurrence of future events
such as a default on the bank loans or other credit events. The potential net impact of this
offsetting is shown below. Sanford does not hold and is not required to post collateral
against its derivative positions.
Net derivatives after applying rights of offset under ISDA agreements
20222021
$000$000
Derivative assets10,82619,285
Derivative liabilities(38,514)(6,502)
Net amount(27,688)12,783
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
166
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES
(a) Right of use assets
Right of use assets are initially measured at cost, which comprises the initial
amount of the lease liability, adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred, less any lease
incentives received and an estimate of costs to dismantle and remove the
underlying asset. The right of use asset is subsequently carried at cost less any
accumulated depreciation and impairment losses, and adjusted for certain
remeasurements of the lease liability. These assets are depreciated over the
expected lease term. The expected lease term may include the taking-up of lease
extension options, if the Group is reasonably certain of exercising such options.
The depreciation of leased assets of annual catch entitlement (ACE) is recognised
as part of operating expenses, and not within the depreciation line in the
income statement.
2022
Land and
Buildings
Plant and
Equipment
Annual
Catch
Entitlement
(ACE)
Marine
Farm
LicencesTotal
$000$000$000$000$000
Cost
Balance at beginning of year
24,833 5,239 20,801 7,712 58,585
Additions 803 5,778 6,895 98 13,574
Disposals(171)(2,280) – – (2,451)
Effect of movement in
exchange rates
30 – – – 30
Balance at end of year 25,495 8,737 27,696 7,810 69,738
Accumulated depreciation
and impairment
Balance at beginning of year
(3,856)(2,735)(13,693)(2,646)(22,930)
Depreciation(1,901)(1,576) – (1,336)(4,813)
Depreciation – ACE – – (6,805) – (6,805)
Disposals260 2,140 – – 2,400
Effect of movement in
exchange rates
(16) – – – (16)
Balance at end of year(5,513)(2,171)(20,498)(3,982)(32,164)
Net book value at
30 September 2022
19,982 6,566 7,198 3,828 37,574
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
167
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES (Continued)
(a) Right of use assets (continued)
2021
Land and
Buildings
Plant and
Equipment
Annual
Catch
Entitlement
(ACE)
Marine
Farm
LicencesTotal
$000$000$000$000$000
Cost
Balance at beginning of year
24,8125,08614,3777,70151,976
Additions805206,424757,099
Disposals(48)(367)–(64)(479)
Effect of movement in
exchange rates
(11)–––(11)
Balance at end of year24,8335,23920,8017,71258,585
Accumulated depreciation
and impairment
Balance at beginning of year
(1,922)(1,427)(6,888)(1,358)(11,595)
Depreciation(1,978)(1,621)–(1,352)(4,951)
Depreciation – ACE––(6,805)–(6,805)
Disposals48313–64425
Effect of movement in
exchange rates
(4)–––(4)
Balance at end of year(3,856)(2,735)(13,693)(2,646)(22,930)
Net book value at
30 September 2021
20,9772,5047,1085,06635,655
Impairment testing
All right of use assets were assessed for impairment within the relevant cash
generating unit. The discounted cash flow model confirmed that there was no
impairment of the right of use assets included within the cash generating units
(2021: none).
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
168
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES (Continued)
(b) Lease liabilities
At inception of the lease contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for
consideration. Control is conveyed where the Group has both the right to direct the
use of the identified asset and to obtain substantially all of the economic benefits
from the use of the asset throughout the term. The Group recognises a right of use
asset and a lease liability at the lease commencement date.
At commencement or on modification of a contract that contains a lease component,
the Group allocates the consideration in the contract to each lease component on the
basis of its relative standalone prices.
The lease liability is initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses the incremental borrowing rate as the
discount rate.
Lease payments included in the measurement of the lease liability comprise the
following:
• fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using
the index or rates as at the commencement date; and
• the exercise price under a purchase option that the Group is reasonably certain to
exercise, lease payments in an optional renewal period if the Group is reasonably
certain to exercise an extension option, and penalties for early termination of a
lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest rate
method. The liability is remeasured when there is a change in future lease payments
arising from a change in an index or a rate and if the Group revises its assessment as to
whether it will exercise a purchase, extension or termination option. A corresponding
adjustment is made to the carrying amount of the right of use asset, or is recognised
in the income statement if the carrying amount of the right of use asset has been
reduced to zero.
Leases are classified as current liabilities unless the Group has an unconditional right
to defer settlement of the liability for more than 12 months after the balance date.
Short-term leases
The Group has elected not to recognise right of use assets and lease liabilities for
short-term leases. The Group recognises the lease payments associated with the
leases as an expense on a straight-line basis over the lease term.
Variable lease payments not included in the measurement of the lease liability
Variable lease payments which do not depend on an index or a rate are excluded from
the measurement of the lease liability and recognised as an expense in the period in
which the event or condition that triggers those payments occurs.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
169
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES (Continued)
(b) Lease liabilities (continued)
Leasing activities
The Group leases mainly land and buildings, plant and equipment, annual catch entitlement
(ACE) and marine farm licences. Land and building and plant and equipment leases are
typically for periods of between 1 and 20 years with a number of extension options. Rent is
either fixed or reset periodically based on an index or rate. The lease of ACE for use on the
Company’s fishing vessels is for periods of between 1 and 4 years, and is renegotiated
periodically based on commercial rates. Marine farm licence leases are for periods of
between 1 and 16 years and are typically linked to the period of the licence or consent.
Rent may be adjusted on the basis of annual fixed percentage increases, CPI movements,
rent negotiations or market reviews.
Determination of lease term
The lease term is the non-cancellable period of a lease, together with periods
covered by an option (available to the lessee only) to extend or terminate the
lease if the lessee is reasonably certain to exercise/not to exercise that option. In
determining the lease term, the Group considers all facts and circumstances that
create an economic incentive to exercise/not exercise an option. This may include
the existence of large penalties for early termination, the incurrence of significant
maintenance costs in meeting early return obligations, the uniqueness of the
underlying asset being leased or consideration as to whether leasehold
improvements still carry significant value. Such assessment is reviewed if a
significant event or change in circumstances occurs which affects this assessment
and is within the control of the Group. Certain property leases, for which there is
no readily identifiable alternative property available, include an additional renewal
period where one is available under the lease contract or where the Group
considers the exercise of renewal options highly likely.
Determination of incremental borrowing rate
The Group determines the incremental borrowing rate by obtaining the rates
from various external financing sources and makes certain adjustments to reflect
the term and currency of the lease and the type of asset being leased.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
170
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES (Continued)
(b) Lease liabilities (continued)
Amounts recognised as lease liabilities are presented below.
2022
Land and
Buildings
Plant and
Equipment
Annual
Catch
Entitlement
(ACE)
Marine
Farm
LicencesTotal
$000$000$000$000$000
Balance at beginning of year 21,745 2,510 7,277 4,877 36,409
Additions 803 5,776 6,807 97 13,483
Interest cost 818 91 7 145 1,061
Repayments of principal
and interest
(2,428)(1,661)(6,883)(1,448)(12,420)
Terminations–(125)– – (125)
Effect of movement in
exchange rates
8 95– – 103
Balance at end of year 20,945 6,686 7,209 3,671 38,511
Represented by:
Current
1,705 1,634 7,209 1,117 11,665
Non-current 19,240 5,052 – 2,554 26,846
20,945 6,686 7,209 3,671 38,511
2021
Land and
Buildings
Plant and
Equipment
Annual
Catch
Entitlement
(ACE)
Marine
Farm
LicencesTotal
$000$000$000$000$000
Balance at beginning of year23,3433,4577,5666,09240,458
Additions505216,424(16)6,979
Interest cost884741491741,281
Repayments of principal and
interest
(2,521)(1,542)(6,862)(1,373)(12,298)
Terminations–––––
Effect of movement in
exchange rates
(11)–––(11)
Balance at end of year21,7452,5107,2774,87736,409
Represented by:
Current
1,6531,2016,9631,30311,120
Non-current20,0921,3093143,57425,289
21,7452,5107,2774,87736,409
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
171
SANFORD INTEGRATED REPORT 2022
NOTE 19 – RIGHT OF USE ASSETS AND LEASE LIABILITIES (Continued)
(b) Lease liabilities (continued)
Present value of future rentals payable
20222021
PrincipalInterestGrossPrincipalInterestGross
$000$000$000$000$000$000
Less than one year 11,666 985 12,651 11,120 1,020 12,140
Between one and five years 11,747 3,135 14,882 9,965 3,084 13,049
More than five years 15,098 1,749 16,847 15,324 3,071 18,395
Total 38,511 5,869 44,380 36,409 7,175 43,584
Lease expenses included in profit or loss
20222021
$000$000
Short-term leases 3,438 3,309
Short-term leases of Annual Catch Entitlement (ACE)3,830 5,178
7,268 8,487
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
172
SANFORD INTEGRATED REPORT 2022
NOTE 20 – CONTINGENT LIABILITIES
20222021
$000$000
Guarantees801797
The Group has guarantees with its commercial banking partners. In this respect the Group
treats the guarantee contracts as contingent liabilities until such times as it becomes
probable that the Group will be required to make payments under the guarantees.
NOTE 21 – GROUP ENTITIES
Basis of consolidation
Business combinations
The Group accounts for business combinations using the acquisition method when
control is transferred to the Group. The consideration transferred in the
acquisition is generally measured at fair value (excluding transaction costs), as are
the identifiable net assets acquired. Any goodwill that arises is tested annually
for impairment.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity
when it is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the
entity. The financial statements of subsidiaries are included in the financial
statements from the date on which control commences until the date on which
control ceases.
Intra-group balances and transactions, and any unrealised income and expense
arising from intra group transactions, are eliminated on consolidation.
Joint arrangements
A joint arrangement is an arrangement where two or more parties have joint
control. The Group classifies its joint arrangements as either joint operations or
joint ventures depending on the legal, contractual or other rights and obligations.
Where the interest in the joint arrangement is in the net residual of the business,
the arrangement is a joint venture. Joint ventures are accounted for using the
equity method; which is detailed in note 13. Where the Group has rights to the
assets, and obligations for liabilities of the joint arrangement, this is a joint
operation. The Group recognises its share of assets, liabilities, revenues and
expenses of each joint operation.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
173
SANFORD INTEGRATED REPORT 2022
NOTE 21 – GROUP ENTITIES (continued)
Basis of consolidation (continued)
The Group comprises the Company and the following principal entities:
20222021
Name
Interest
Held (%)
Interest
Held (%)Balance DatePrincipal Activity
Subsidiaries:
New Zealand
Auckland Fish Market Limited10010030 SeptemberAuction
Sanford Fish Market Limited10010030 SeptemberRetail
Sanford Investments Limited10010030 SeptemberInvestment
company
Sanford LTI Limited10010030 SeptemberHolding company
Shellfish Production & Technology
NZ Limited
10010030 SeptemberResearch company
BreedCo Limited808030 SeptemberResearch company
Auckland Fishing Port Limited676731 MarchWharf company
Australia
Sanford Australia Pty Limited10010030 SeptemberAuction
Sanford Seafoods (Australia) Pty
Limited
10010030 SeptemberHolding company
Primestone Nominees Pty Limited757530 SeptemberSeafood wholesaler
20222021
Name
Interest
Held (%)
Interest
Held (%)Balance DatePrincipal Activity
Joint Operation:
New Zealand
North Island Mussels Limited505030 SeptemberMussel farming and
seafood processing
Joint Ventures and Associates:
New Zealand
San Won Limited505030 SeptemberCold storage
New Zealand Japan Tuna
Company Limited
46.7446.7430 SeptemberFish catching and
processing
Trident Systems General
Partner Limited
42.3542.3530 SeptemberResearch company
Precision Seafood Harvesting
General Partner Limited
33.3333.3330 SeptemberResearch company
Two Islands Co NZ Limited505031 MarchDietary
Supplements
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
174
SANFORD INTEGRATED REPORT 2022
NOTE 22 – RELATED PARTY TRANSACTION
(a) Basis of transactions
Related parties of the Group include the joint ventures, associates and joint operation disclosed in note 21.
Transactions with related parties have been entered into in the ordinary course of business and undertaken on normal commercial terms.
(b) Material transactions with related parties
Transaction Value Related Parties associated
with Directors of the Group
Transaction Value Joint Ventures
and AssociatesTransaction Value Joint Operation
202220212022202120222021
$000$000$000$000$000$000
Income (Expenses)
Management fees
––223216––
Sales––206214,0482,513
Interest received–––1826500
Dividends received––250130––
Processing, storage and harvesting services–––(1,762)––
Purchases(25,810)(26,390)(391)(170) (23,443)(19,624)
(25,810)(26,390)288(1,564) (18,569)(16,611)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GOVERNANCE AND FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
175
SANFORD INTEGRATED REPORT 2022
NOTE 22 – RELATED PARTY TRANSACTION (continued)
(c) Material balances with related parties
Amounts Owing
from Related Parties
2022 2021
$000$000
Associates297457
Joint Operation26,09422,069
26,39122,526
Transactions with related parties associated with directors of the Group are with Z Energy
Limited (between October 2021 and May 2022) and Ports of Tauranga Limited. These
transactions arise in the normal operations of the Group. Z Energy Limited ceased to be a
related party in May 2022.
In respect of the joint operation the transaction values and amounts owing are eliminated
on consolidation and are therefore for information purposes.
Interest is charged on balances between New Zealand related parties at rates linked to the
market. All related party balances are repayable on demand.
NOTE 23 – KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel compensation comprised:
20222021
$000$000
Salary and short-term employee benefits 10,901 9,782
Directors’ fees 808 756
11,709 10,538
Key management personnel is defined as the executive and their direct reports.
NOTE 24 – SUBSEQUENT EVENTS
Except for the Board’s approval of final dividend for the year ended 30 September 2022
on 14 November 2022, as disclosed in note 17, there are no subsequent events to note.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
GENERAL
Our assurance procedures consisted of the audit of the Consolidated Financial Statements of Sanford Limited and limited assurance procedures on Selected Non-Financial Information
in Sanford Limited’s Annual Report.
Our scope can be summarised as follows:
Consolidated Financial Statements
Audit Scope
Reasonable assurance
Selected Non-Financial Information
Assurance Scope
Limited assurance
Other Information in Sanford Limited’s Annual Report
Consider consistency with Financial Statements
No assurance
INDEPENDENT AUDITOR’S REPORT
To the shareholders of Sanford Limited.
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated financial statements of Sanford Limited
(the ‘company’) and its subsidiaries (the ‘group’) on pages 118 to 175 present fairly in all
material respects the group’s financial position as at 30 September 2022 and its financial
performance and cash flows for the year ended on that date in accordance with
New Zealand Equivalents to International Financial Reporting Standards and International
Financial Reporting Standards.
We have audited the accompanying consolidated financial statements which comprise:
• the consolidated statement of financial position as at 30 September 2022;
• the consolidated income statement, statement of comprehensive income, changes in
equity and cash flows for the year then ended; and
• notes, including a summary of significant accounting policies and other explanatory
information.
GOVERNANCE AND FINANCIALS
176
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (Including International
Independence Standards) (New Zealand) issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International
Independence Standards) (‘IESBA Code’), and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities
for the audit of the consolidated financial statements section of our report.
Our firm has also provided other services to the group in relation to assurance over
Selected Non-Financial Information. Subject to certain restrictions, partners and
employees of our firm may also deal with the group on normal terms within the ordinary
course of trading activities of the business of the group. These matters have not impaired
our independence as auditor of the group. The firm has no other relationship with, or
interest in, the group.
MATERIALITY
The scope of our audit was influenced by our application of materiality. Materiality helped
us to determine the nature, timing and extent of our audit procedures and to evaluate the
effect of misstatements, both individually and on the consolidated financial statements as
a whole. The materiality for the consolidated financial statements as a whole was set at
$2 million determined with reference to a benchmark of group profit before tax. We
chose the benchmark because, in our view, this is the key measure of the group’s
performance.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements in the current period. We
summarise below those matters and our key audit procedures to address those matters in
order that the shareholders as a body may better understand the process by which we
arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as
a whole and we do not express discrete opinions on separate elements of the consolidated
financial statements.
GOVERNANCE AND FINANCIALS
177
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
Key audit matterHow the matter was addressed in our audit
Valuation of Quota and Marine Farm Licenses
Refer to Note 14 to the Financial Statements.
The Group holds Quota and Marine Farm Licenses in New Zealand and Australia,
recognised as indefinite life intangible assets, across three cash generating units of
$479.2m (2021: $487.3m). The accounting standards require assets with an indefinite
useful life are tested for impairment annually.
Impairment of these assets is considered to be a key audit matter due to the uncertainty
inherent in the growth and discount rates used in the cash flow forecasts that support the
carrying value.
In addition to the above, the carrying amount of the Group’s net assets as at
30 September 2022 was $664.9m while the market capitalisation of Sanford Limited was
$390.9m.
In relation to the Marine Farm Licenses we also note the uncertainty surrounding
whether these licenses will be renewed upon expiry in 2024. This required assessment of
the continual recognition of the licenses as indefinite life assets.
The procedures we performed to evaluate the impairment assessments included:
• assessing whether the methodology adopted was consistent with accepted valuation
approaches of IAS 36 Impairment of Assets;
• evaluating the key assumptions by comparing to historical trends, approved budgets,
business plans and external market data;
• comparing the discount rates and terminal growth rates applied to the estimated
future cash flows to relevant benchmarks using KPMG valuation specialists;
• challenging the above assumptions and judgements by performing sensitivity analysis,
considering a range of outcomes based on various scenarios;
• evaluating the estimate of the recoverable amount of the Group as a whole, including
evaluating the work performed by the Group’s external valuation specialist; and
• considering the appropriateness of the disclosures in the financial statements.
In relation to the 2024 expiration of the Marine Farm Licenses, we performed our own
independent research into the status of the Marine Farm License renewal process,
including the likelihood of renewal and costs expected to be incurred upon renewal.
GOVERNANCE AND FINANCIALS
178
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
OTHER INFORMATION
The Directors, on behalf of the group, are responsible for the Other Information included
in the entity’s Annual Report (specifically the areas entitled Introducing our 2022 report
(page 2), Sanford in numbers (page 4), Chairman review (pages 5-7), CEO review (pages
9-13), Report Structure (pages 14-16), How we create value (pages 22–23), Highs and lows
(pages 24-25), Our global sales footprint (pages 26-27), Our New Zealand footprint
(page 28), Corporate Governance (pages 90-113), and Appendices (pages 190-197) titled
Appendix B: Aligning Material Issues with Business Risks, Appendix C: Industry
Memberships and Stakeholders and Appendix D: Key Initiatives Contributing to the UN
Sustainable Development Goals. Our opinion on the financial statements does not cover
any other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit or otherwise appears materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
USE OF THIS INDEPENDENT AUDITOR’S REPORT
This independent auditor’s report is made solely to the shareholders as a body. Our audit
work has been undertaken so that we might state to the shareholders those matters we
are required to state to them in the independent auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the shareholders as a body for our audit work, this independent audit
report, or any of the opinions we have formed.
RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
The Directors, on behalf of the group, are responsible for:
• the preparation and fair presentation of the consolidated financial statements in
accordance with generally accepted accounting practice in New Zealand (being
New Zealand Equivalents to International Financial Reporting Standards) and
International Financial Reporting Standards;
• implementing necessary internal control to enable the preparation of a consolidated set
of financial statements that is fairly presented and free from material misstatement,
whether due to fraud or error; and
• assessing the ability to continue as a going concern. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless they either intend to liquidate or to cease operations, or have no
realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
Our objective is:
• to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error; and
• to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (NZ) will always detect a material misstatement when
it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial
statements is located at the External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/
audit-report-1/
This description forms part of our independent auditor’s report.
GOVERNANCE AND FINANCIALS
179
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
LIMITED ASSURANCE REPORT ON SELECTED NON-FINANCIAL INFORMATION INCLUDED IN THE ANNUAL REPORT
To the Directors of Sanford Limited
Conclusion
Our limited assurance conclusion has been formed on the basis of the matters outlined in
this report.
Based on our limited assurance engagement, which is not a reasonable assurance
engagement or an audit, nothing has come to our attention that would lead us to believe
that the Selected Non-Financial Information has not been prepared, in all material
respects, in accordance with the GRI Standards as at 30 September 2022.
The Selected Non-Financial Information on which we have concluded comprises:
• Reporting what matters most (pages 17 -21)
• The five performance outcomes (pages 30-88):
• Enabling Healthy Oceans and Ecosystems
• Safe and High Performing Workplace
• Trusted Customer Partner of Choice
• Highly Valued Community Partner
• Operational Excellence
• Key performance indicators table (pages 184-189)
GOVERNANCE AND FINANCIALS
180
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
BASIS FOR CONCLUSION
We have performed an engagement to provide limited assurance in relation to whether
anything has come to our attention to indicate the Selected Non-Financial Information has
not been prepared in all material respects in accordance with the GRI Standards as at
30 September 2022.
We conducted our limited assurance engagement in accordance with International
Standard on Assurance Engagements (New Zealand) 3000 (Revised) Assurance
Engagements other than audits or reviews of historical financial information (‘ISAE (NZ)
3000 (Revised)’) and Standard on Assurance Engagements 3100 (Revised) Assurance
Engagements on Compliance (‘SAE 3100 (Revised)’). We believe that the evidence we
have obtained is sufficient and appropriate to provide a basis for our conclusion. In
accordance with those standards we have:
• used our professional judgement to plan and perform the engagement to obtain limited
assurance that the Selected Non-Financial Information is free from material
misstatement and non-compliance, whether due to fraud or error;
• considered relevant internal controls when designing our assurance procedures,
however we do not express a conclusion on the effectiveness of these controls; and
• ensured that the engagement team possess the appropriate knowledge, skills and
professional competencies.
• Made enquiries of Sanford personnel to understand the process for deriving the
Selected Non-Financial Information;
• Performed analytical reviews and other testing to assess the reasonableness of the
information presented;
• Checked whether the appropriate indicators have been reported in accordance with the
GRI Standards in accordance with the core level; and,
• Performed an overall sense check of the Report against our findings and understanding
of Sanford.
In a limited assurance engagement, the assurance practitioner performs procedures,
primarily consisting of discussion and enquiries of management and others within the
entity, as appropriate, and observation and walk-throughs, and evaluates the evidence
obtained. The procedures selected depend on our judgement, including identifying areas
where the risk of material misstatement and non-compliance with the GRI Standards is
likely to arise.
The procedures performed in a limited assurance engagement vary in nature and timing
from, and are less in extent than for a reasonable assurance engagement. Consequently,
the level of assurance obtained in a limited assurance engagement is substantially lower
than the assurance that would have been obtained had a reasonable assurance
engagement been performed.
Misstatements, including omissions, within the information subject to assurance and
non-compliance is considered material if, individually or in the aggregate, it could
reasonably be expected to influence the relevant decisions of the intended users taken
on the basis of the Selected Non-Financial Information.
USE OF THIS LIMITED ASSURANCE REPORT
Our report should not be regarded as suitable to be used or relied on by any party’s other
than Sanford Limited for any purpose or in any context. Any party other than Sanford
Limited who obtains access to our report or a copy thereof and chooses to rely on our
report (or any part thereof) will do so at its own risk. To the fullest extent permitted by
law, we accept or assume no responsibility and deny any liability to any party other than
the Directors of Sanford for our work, for this independent limited assurance report, or
for the conclusions we have reached.
Our report is released to Sanford Limited on the basis that it shall not be copied, referred
to or disclosed, in whole (save for Sanford Limited’s own internal purposes) or in part,
without our prior written consent. We acknowledge a copy of our limited assurance report
will be included in Sanford Limited’s Annual Report for information purposes only.
GOVERNANCE AND FINANCIALS
181
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
RESPONSIBILITIES OF MANAGEMENT FOR THE SELECTED NON-FINANCIAL
INFORMATION
Management, on behalf of Sanford Limited, are responsible for:
• the preparation and fair presentation of the Selected Non-Financial Information in
accordance with the criteria set out in the GRI Standards, for each of the principles of
materiality, stakeholder inclusiveness, sustainability context and completeness; and
• determining Sanford’s objectives in respect of sustainability reporting and for
establishing and maintaining appropriate performance management and internal control
systems from which the information is derived.
These responsibilities includes such internal control as the directors determine is
necessary to enable the preparation of the Selected Non-Financial Information that is
free from material misstatement and non-compliance whether due to fraud or error.
AUDITOR’S RESPONSIBILITIES FOR THE ASSURANCE OF THE SELECTED NON-
FINANCIAL INFORMATION
Our responsibility is to express a conclusion to the Directors on whether anything has
come to our attention that the Selected Non-Financial Information has not been prepared
in all material respects in accordance with the GRI Standards.
OUR INDEPENDENCE AND QUALITY CONTROL
We have complied with the independence and other ethical requirements of 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, which is founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality and professional
behaviour.
The firm applies Professional and Ethical Standard 3 (Amended) and accordingly maintains
a comprehensive system of quality control including documented policies and procedures
regarding compliance with ethical requirements, professional standards and applicable
legal and regulatory requirements.
Our firm has also provided other services to the group in relation to statutory audit.
Subject to certain restrictions, partners and employees of our firm may also deal with the
group on normal terms within the ordinary course of trading activities of the business of
the group. These matters have not impaired our independence as auditor of the group. The
firm has no other relationship with, or interest in, the group.
The partner on the engagement resulting in this Combined Independent Auditor’s and
Limited Assurance Report is Jason Doherty.
For and on behalf of
KPMG
Auckland
14 November 2022
GOVERNANCE AND FINANCIALS
182
SANFORD INTEGRATED REPORT 2022
COMBINED INDEPENDENT AUDITOR’S AND LIMITED ASSURANCE REPORT
(Continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
183183
APPENDICES AND REFERENCE
CONTENTS
APPENDIX A
SANFORD KEY PERFORMANCE INDICATORS184
APPENDIX B
ALIGNING MATERIAL ISSUES WITH BUSINESS RISK190
APPENDIX C
INDUSTRY MEMBERSHIP AND STAKEHOLDERS192
APPENDIX D
KEY INITIATIVES CONTRIBUTING TO THE UNITED
NATIONS SUSTAINABLE DEVELOPMENT GOALS195
APPENDIX E
GRI CONTENT INDEX197
APPENDIX F
ABBREVIATIONS204
APPENDICES
APPENDICES AND REFERENCE
184
SANFORD INTEGRATED REPORT 2022
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS
YEAR ENDING 30 SEPTEMBER 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
OUTCOME 1 – ENABLING HEALTHY OCEANS AND ECOSYSTEMS
304-2NZ Quota Owned Based on ACE Equivalent%19.819.819.719.4
102-7Total Wildcatch Landed (GWT)
1, 2
tonnes78,46278,70084,37390,351
102-7Greenweight Wild Caught Landed - Deepwater Fleet tonnes68,11868,34173,33569,377
102-7Greenweight Wild Caught Landed - Inshore Fleettonnes10,34410,35911,03720,974
102-7Greenweight King Salmon Harvested
2, 3
tonnes5,0014,9354,2924,028
102-7Greenweight Mussels Harvested
2
tonnes25,94928,20933,91829,419
102-7Fishmeal and Fish Oil Produced (product weight)tonnes4,7805,5365,591210,084
304-3Marine Stewardship Council Deepwater Species (NZ certifications)# 5556
304-3Wildcatch Sourced from MSC Designated Fisheries%39394536
304-2Fishing - Seabird Mortality Rate
4
%54656166
304-2Fishing - Total Number of Seabirds Caught Dead
4
#123191220164
304-2Fishing - Marine Mammal Mortality Rate
4
%931009290
304-2Fishing Total Number of Marine Mammals Caught Dead
4
#25443346
304-2Fishing – Coral by-Catch (Returned To Sea)
4
tonnes3.670.760.470.98
304-2Salmon Aquaculture – Fish In: Fish Out Ratio (BAP std. Formulation)
5
ratio0.720.870.870.85
N/ASalmon Aquaculture – Antibiotic Use (Active Pharmaceutical Ingredients (API)
5
grammes
API/GW
tonne
0000
304-2Salmon Aquaculture – Finfish Escapes (Net, Post Recapture Efforts)
5
#0000
304-2Salmon Aquaculture – Mortality Rate (Total Mortality/Count of Fish at End Sept, Adj.
For Harvest/Culling)
5
%8.23.43.1not
reported
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
185
SANFORD INTEGRATED REPORT 2022
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS (continued)
YEAR ENDING 30 SEPTEMBER 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
PROTECTING AND ENHANCING THE ENVIRONMENT
306-3Number of Notifiable Spills
6
#51232
306-3Total Volume of Notifiable Spills (Liquids)litres1601464510
306-3Total Volume of Notifiable Spills (Gases)kg136000
302-1Total Liquid Fossil Fuel Consumed
7
litres20,818,77222,131,47922,971,93521,953,479
302-1Total Vessel Liquid Fossil Fuel Consumed
7
litres19,936,82320,928,46321,935,65920,910,356
302-3Wildcatch Vessel Fuel Efficiency
8
L/GWkg0.5080.4490.4550.377
302-3Aquaculture Vessel Fuel Efficiency
8
L/GWkg0.0560.0530.0460.044
302-1Electricity Consumed
7
kWh19,907,21221,807,31423,085,66224,780,103
302-3Electricity Efficiency by Production (Land Based Processing Sites
9
)
7
kWh/GWkg0.3220.2950.3220.355
302-3Electricity Efficiency by Total Sales (Land Based Processing Sites
9
)
7
kWh/$0.0700.0770.0910.082
302-1Coal Consumed
7
kg02,0002,1003,650
302-1Wood Chip Consumed
7
kg521,084514,396500,690576,712
302-1Natural Gas Consumed
7
kWh2,481,3942,838,1452,881,3172,348,994
302-1Liquified Petroleum Gas Consumed
27
MJ3,545,7476,182,0597,824,465not
reported
302-1Total Energy ConsumptionMJ892,965,085944,942,138992,540,741
302-1Renewable Energy Consumption
26
MJ68,217,26873,764,36276,472,940
302-1Renewable Energy Use (as % of Total Energy Consumption)
26
%7.64%7.78%7.84%
N/ATotal Greenhouse Gas Emissions (CO₂-e)
10
tonnes289,627297,107282,00774,153
305-1Direct Emissions (CO₂-e) – Scope 1
10
tonnes57,07662,13065,06963,480
305-2Purchased Electricity (CO₂-e) – Scope 2
10
tonnes2,3132,1532,4232,247
305-3Indirect Emissions (CO₂-e) – Scope 3
10
tonnes230,238232,825214,5158,426
306-5Waste Directed to Landfill
11
tonnes3,5366,3579,627not
reported
306-4Waste Diverted from Landfill
11
tonnes10,6298,5346,446
306-4Waste Diversion Rate Across Operations
11
%755740
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
186
SANFORD INTEGRATED REPORT 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
OUTCOME 2 – SAFE AND HIGH PERFORMING WORKPLACE
102-7Total Workforce (at 30 Sept)
11
#1,4211,4091,3871,453
102-8Independent Sharefishers (at 30 Sept)
11
#422421444451
102-41Employees Covered by Collective Agreements/Union Membership
11
%18202020
404-1Training Credits Achieved by Females
11, 12
#242252431948
404-1Training Credits Achieved by Males
11, 12
#1,0091,1221,5671,273
404-1Internal Staff Training and Upskilling
11, 13
hours1,3631,469554not
reported
404-1Staff Training (Total, Internal & External)
11, 12
hours13,872not reported
401-1Average Length of Service (Permanent Staff)
11
years7.147.187.747.95
401-1Average Length of Service (Sharefishers)
11
years5.835.815.905.68
401-1Involuntary Turnover of Permanent Employees
11
%55119
401-1Voluntary Turnover of Permanent Employees
11
%22191319
AGE OF WORKFORCE
11
405-1Average Age of Employees on Landyears44444344
405-1Average Age of Employees at Seayears37373636
WOMEN IN THE WORKFORCE
11
405-1Directors%29293317
405-1Executive (at 30 Sept)
14
%29405040
405-1Senior Leadership Team (at 30 Sept)
14
%32333537
405-2Average Base Remuneration Women:Men (at 30 Sept)
25
ratio0.87:10.87:1not reported
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS (continued)
YEAR ENDING 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
187
SANFORD INTEGRATED REPORT 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
EMPLOYEE BENEFITS
11
401-2Health Insurance Planmembers118134151157
401-2Health Insurance Plan Membership%12141616
201-3 Employees in Super Scheme Onlymembers66758998
201-3 Super Scheme Membership (Excludes Sharefishers)%17.5212424
201-3 Employees in Kiwi Saver Onlymembers671634651645
201-3 Employees in Both Schemesmembers107126137150
201-3 Kiwi Saver Membership (Excludes Sharefishers)%78778478
HEALTH AND SAFETY
403-9Absenteeism Rate
17
%7566
403-9Number of Near Misses Reported
15
#1,076833559433
403-9Number of Reported Injuries
15
#653823766745
N/ANumber of Notifiable Events
15, 16
#15101017
403-9Number of Lost Time Injuries
17
#81625164
403-9Lost Time Injury Frequency Rate (LTIFR)
17
#/mil.hrs48.0534.3624.1232.92
403-9Total Recordable Injury Frequency Rate (TRIFR)
15
#/mil.hrs24.5332.7435.69not
reported
403-10Total Number of Hours Worked
15
mil.hrs3.3863.6053.3613.656
NZ/ACCNumber of Accepted ACC Claims
17
#12412111496
NZ/ACCNumber of Accepted ACC Claims per Employee
17
#0.1260.1200.110.09
NZ/ACCAverage Cost per Claim (Including Outstanding Estimates)
17
$5,9073,298 2,0772,685
403-9Total Number of Days Off Work
17
#2,4841,430774693
419-1Safety-related Prosecutions
17
#0100
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS (continued)
YEAR ENDING 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
188
SANFORD INTEGRATED REPORT 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
OUTCOME 3 – TRUSTED CUSTOMER PARTNER OF CHOICE
416-2Number of Food Safety Recalls#0100
416-2Total Number of Food Quality Complaints Received#121209154162
416-2Total % of Food Quality Complaints Received That are Validated%77576562
416-2Total Validated Food Quality Complaints per Million kg Sold#/mil.kg sold1.341.671.43not
reported
N/ASocial Media Followers Across Sanford Brands
18
#56,36653,74351,19741,091
N/ASocial Media Reach (Views of Posts via Facebook and Instagram)#3,752,4411,191,435not reported
OUTCOME 4 - HIGHLY VALUED COMMUNITY PARTNER
201-1Total Community and Charitable Investments - Sponsorships and Donations
19
$000s302354389365
413-1Meal Equivalents Donated to Charities and Communities
20
#294,576132,53576,173not
reported
OUTCOME 5 – OPERATIONAL EXCELLENCE
ECONOMIC PERFORMANCE
201-1Revenue$m531.9489.6468.8545.1
201-1Profit for the Year
21
$m55.816.219.441.7
102-7Total Assets
21
$m977.7940.4926.3821.2
102-7Total Equity
21
$m664.9634.1607.6588.2
201-1Return on Average Equity
21
%8.62.63.27.1
201-1Dividend per Share Attributed to the Periodcents10.00.05.023.0
201-1Earnings per Share
21
cents59.817.420.844.6
201-1Wages and Salaries
22
$m128125125120
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS (continued)
YEAR ENDING 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
189
SANFORD INTEGRATED REPORT 2022
GRI
STANDARD
REFKPI METRICUNITS2022202120202019
201-1Payments to New Zealand Income Tax$m1.61.210.114.2
204-1Payments to Domestic Suppliers$m488.3397.7359.8370.0
OPERATIONAL CAPABILITY AND CAPACITY
102-7Number of Vessels
23
#43413737
102-7Number of Aquaculture Farms
24
#225225225219
GLOBAL PRESENCE
102-7Total Sales Domestic %36.641.443.943.9
102-7Total Sales Export %63.458.656.156.1
1. Total wildcatch reflects total catch landed including
Sanford, 3rd party fleets landing to Sanford facilities,
deepwater, inshore, and fishing partners.
2. GWT – Greenweight, weight of seafood before
processing, measured in tonnes.
3. Salmon GWT calculated from factory incoming whole
fish weight corrected for blood losses experienced
between farm and factory.
4. Raw data supplied by MPI for vessels fishing under
Sanford’s Permit. Data period from July– June of each
year due to data available at the time of report
production. Mortality Rate is the ratio between total
species caught and species caught dead.
5. FIFO in accordance with Best Aquaculture Practices
(BAP) Salmon farm standards, covers BAP annual
audit performed during the year period, grower farm
only (https://www.bapcertification.org/Standards).
Mortality rate per Global Salmon Initiative
formulation, covers all salmon year classes over the
reporting period across smolt, grower, and brood
farms. FY21 mortality rate restated to align with
updated data boundary definition.
6. Notifiable spills (significant as defined by GRI) are
discharges into the environment that, if uncontained,
are notifiable to a regulatory authority. Includes any
discharge of hazardous substances, regardless of the
amount. Sanford operational control boundary scope.
7. Scope boundary includes Sanford, 50% equity share
for JV NIML, excludes tenants, contract harvesters.
8. Scope boundary is Sanford owned/operated vessels,
excludes 3rd party/contract fishers, fishing partners.
JV NIML included in aquaculture at 50% equity share.
9. Land Based Processing Sites include processing
factories at Timaru incl meal plant, Auckland incl. DFS,
Bluff, Havelock, and JV NIML at 50% equity share.
Tauranga factory included as a processing site for
FY20 and earlier.
10. Scope boundary is ISO 14064 operational control
basis, includes all GHG categories. All gases included,
as defined by Kyoto Protocol. Scope 1 includes all
Sanford & 50% equity share for JV NIML. Tenants and
contract harvesters included as Scope 3. Scope 3
measurement boundary increased in 2020. Scope 3
categories subject to a 1% materiality threshold by
GHG Protocol Value Chain category – FY20 and FY21
Scope 3 emissions restated with same categories as
for FY22 to ensure like-for-like comparisons. Latest
emissions factors applied with significant updates in
FY22 following external consultation, updates not
applied retrospectively to prior years.
11. Scope boundary is Sanford direct operations.
12. Technical training provided by Primary ITO. Report
training credits as a proxy for hours – one credit
equates to approximately 10 hours of learning.
13. Dedicated internal training, excludes inductions.
14. From FY20 on, scope definition transitioned from
annual quarterly average percentage, to percentage
at 30 Sept.
15. Operational control basis for scope boundary,
includes Sanford, SanWon, and Sanford sharefishers,
excludes NIML and contractors. Hours worked are
based on actual hours worked on land, or total time
spent on board vessels for multi-day voyages.
16. Includes near misses, injuries, illnesses and incidents
as defined under the Maritime Transport Act 1994 and
Health and Safety at Work Act 2015.
17. Scope boundary includes Sanford and SanWon
excludes sharefishers, NIML, contractors.
18. Sanford brands include: Auckland Fish Market, Big
Glory Bay, Sanford and Sons, Sanford, and for FY21
and earlier, Sea to Me.
19. Includes sponsorships and donations, excludes stock
costs of donated seafood.
20. Meal equivalent basis: 100g of fillet, 200g of whole fish,
200g of whole/half shell mussel, 300g for heads/frames.
21. FY20 data restatement, refer to Note 14 of FY20
Financial Statements.
22. Scope boundary includes all subsidiaries at 100%
(companies we own more than 50% shareholding in),
50% of NIML, excludes associates (SanWon) which are
not 100% consolidated into our Group accounts.
23. MTOP certified vessels and negotiable non-
operational registered vessels, excludes powered and
non-powered barges.
24. Aquaculture farm is defined as having a resource
consent regardless of the size of the farmed area for
that consent or # and length of lines.
25. Includes all permanent full time and part time staff as
base remuneration. Excludes overtime, bonuses,
allowances, and contractors. Excludes CEO (single
position, remuneration listed elsewhere). Sanford
applies an equal pay and pay equity approach aligned
with our Remuneration Policy and Diversity Policy.
Collective agreements are agnostic for gender, age,
and ethnicity. Pay gap calculations require the use of
organisational averages, which are susceptible to
differences in tenure/experience in role or
qualification across staff which can then manifest in a
statistical pay gap, despite a pay equity approach.
26. Renewable energy defined as energy from sources
that are replenished at rates higher than they are
consumed. For Sanford this category includes
woodchip and 82.1% of New Zealand’s grid electrical
supply (http://energydashboard.mbie.govt.nz/)
27. FY2022 data influenced by operational footprint
changes, LPG usage anticipated to rebound in FY23
as equipment becomes operational at new Sanford
Bioactives facility.
APPENDIX A – SANFORD KEY PERFORMANCE INDICATORS (continued)
YEAR ENDING 30 SEPTEMBER 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
190
SANFORD INTEGRATED REPORT 2022
APPENDIX B – ALIGNING MATERIAL ISSUES WITH BUSINESS RISK
Key business risks along with response plans are reported to the Board via the appropriate
sub-committee on an ongoing basis. The top ten risks informed the materiality process to
ensure that Sanford’s material issue consideration reflects both stakeholder concern as
well as operational and business risks (refer also to pages 17 to 21).
As part of Sanford’s strategy development and implementation business risks have been
identified with input from external experts. During FY22, Sanford continued the process
of review and identification of enterprise level risks, along with their mitigation. Risks are
being approached through both a bottom-up process at site and functional levels as well
as a top-down review of enterprise level risks, and the embedding of risk management
policies and approaches, engaging the Board and Executive Team with the assistance and
expertise of risk management specialists.
The table below highlights the current top 10 business risks, material issue alignment, and
key mitigation strategies in response to the risks.
RISK
PRIORITYORGANISATIONAL RISKRISK STATEMENT
MATERIAL ISSUE CONNECTION
(AND MATERIALITY RANKING)KEY MITIGATION STRATEGIES
1Climate changeClimate change effects
negatively impact ocean
conditions and seafood stocks.
Environmental protection and
ocean health – water quality,
sensitive habitats and threatened
species (1=)
Sustainable management of fish
stocks (2)
Reducing carbon footprint/
emissions (8)
Adapting business practice to
changing climate (11)
• Innovation pipeline
• Diversity of geography and species mix
• Monitoring of environmental conditions and changes to become
aware of factors which have potential to impact harvest/catch
performances and take mitigating actions
• Implement active mitigation strategies at specific sites (e.g. BGB)
• Seafood sector wide adaptation planning initiatives
2Environmental riskExecution of sustainability
practices and processes does not
protect the environment or
meet obligations outlined in the
Integrated Report.
Environmental protection and
ocean health – water quality,
sensitive habitats and threatened
species (1=)
Efficient management of resources
– energy, water (7)
Effective waste management –
general plastic and food waste (9=)
• Implement active mitigation strategies at specific sites (e.g. BGB)
• Monitoring of sustainability reporting requirements is constantly
being updated
• Further embedding of environmental framework within Sanford
• Resource Sanford’s sustainability function to monitor risks and
changes in those risks
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
191
SANFORD INTEGRATED REPORT 2022
RISK
PRIORITYORGANISATIONAL RISKRISK STATEMENT
MATERIAL ISSUE CONNECTION
(AND MATERIALITY RANKING)KEY MITIGATION STRATEGIES
3Health and safetyHealth and safety incident
causing serious injury and/or
fatality.
Health, safety, and wellbeing of our
people (1=)
Responsible leadership – ethical
conduct, transparency, governance
(3)
Risk management – regulatory,
compliance, cyber-security,
biosecurity, reputation (6)
• Health and Safety (H&S) policy, incident reporting policy, H&S
manuals and procedures, hazard register and work permit
systems
• Deploy and maintain software solutions to facilitate and
encourage incident reporting.
• SHEC board committee, H&S committees, GM H&S, H&S audits,
performance reporting, annual reviews of policy and procedures
• H&S plan in place and approved by the Board (achievement
incentives in place, and includes guidelines on incident and near
miss reporting)
• Staff training lead by experienced site dedicated safety managers
4
Cyber security riskOperations, commercially
sensitive data, privacy,
reputation or finances are
impacted by a cyber breach or
attack.
Health, safety, and wellbeing of our
people (1=)
Risk management – regulatory,
compliance, cyber-security,
biosecurity, reputation (6)
• Cybersecurity policy and monitoring mechanisms
• Resource use of external experts to carry out cyber security
testing
• Development and implementation of business continuity policy
based on ISO22301 framework
• Embedding of risk aware culture and risk management process
5
IT riskOperational ability and/or
efficiency compromised by lack
of uptake of operational
technology.
Maximising $/kg of our harvest
(including profitability and
productivity) (5)
Risk management – regulatory,
compliance, cyber-security,
biosecurity, reputation (6)
Effective innovation – products,
markets, technology (9=)
• Review, maintain, and when appropriate upgrade IT and software
solutions (e.g. SanCore)
• Maintain disaster recovery planning (IT)
• Cybersecurity policy and monitoring mechanisms
6
Key person riskInability to retain or implement
succession planning for the
departure of key employees.
Health, safety, and wellbeing of our
people (1=)
Talent attraction, development and
retention (4)
Positive and meaningful work
experiences (12=)
• Succession planning
• Talent mapping
• Role mapping and identification of back ups
• Position Sanford as an industry leader and responsible employer
APPENDIX B – ALIGNING MATERIAL ISSUES WITH BUSINESS RISK (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
192
SANFORD INTEGRATED REPORT 2022
APPENDIX B – ALIGNING MATERIAL ISSUES WITH BUSINESS RISK (continued)
RISK
PRIORITYORGANISATIONAL RISKRISK STATEMENT
MATERIAL ISSUE CONNECTION
(AND MATERIALITY RANKING)KEY MITIGATION STRATEGIES
7
Operations and
processes
Fleet or processing operations
compromised by deficiency in
maintenance, management, and
upgrades.
Health, safety, and wellbeing of our
people (1=)
Food safety and quality (1=)
Risk management – regulatory,
compliance, cyber-security,
biosecurity, reputation (6)
Maximising $/kg of our harvest
(including profitability and
productivity) (5)
• Investment in inshore fleet upgrades
• Investment in deepwater fleet upgrades
• Vessel management and maintenance plans
8
Strategy (execution)
management risks
Inability to execute against
strategy.
Maximising $/kg of our harvest
(including profitability and
productivity) (5)
Effective innovation – products,
market, technology (9=)
Adapting business practice to
changing climate (11)
Brand development and responsible
marketing (14)
• Measure and report progress against strategic metrics
• Board reporting
• Maintain internal accountabilities
9
Pandemic riskRisk of serious injury and/or
fatality to an employee,
contractor and/or member of
the public. Secondary impacts
include financial impacts from
slowdown in economic activity.
Health, safety, and wellbeing of our
people (1=)
Maximising $/kg of our harvest
(including profitability and
productivity) (5)
Supply chain management (9=)
• Regular testing of incident management planning
• Adoption of a standard policy into a single policy for use over all
business units (operational resilience) that includes business
continuity planning and disaster recovery, incident and crisis
management
10
WeatherSingle events of serious
magnitude such as a storm or
flood which impacts seafood
stocks.
Health, safety, and wellbeing of our
people (1=)
Food safety and quality (1=)
Maximising $/kg of our harvest
(including profitability and
productivity) (5)
Supply chain management (9=)
• Innovation to develop new technology or processes that will
reduce Sanford’s carbon footprint
• Increased monitoring of climate change impacts on water and
weather
• Further diversification of geographic and species mix
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
193
SANFORD INTEGRATED REPORT 2022
APPENDIX C – INDUSTRY MEMBERSHIP AND STAKEHOLDERS
INDUSTRY MEMBERSHIPS
We actively monitor legislative and regulatory change directly and via key industry and
sustainability bodies of which we are a member. Our principal memberships and the key
roles that Sanford representatives contribute to are set out below.
ORGANISATIONFUNCTIONOUR ROLE
The Aotearoa Circle
www.theaotearoacircle.nz
A partnership of public and private sector leaders committed to the pursuit of
sustainable prosperity and reversing the decline of New Zealand’s natural resources.
Member partner
Aquaculture New Zealand
www.aquaculture.org.nz
Industry body for aquaculture sector, focused on representing the current industry,
while enhancing profitability and providing leadership to facilitate transformational
growth
Board member
Active industry member
Industry stakeholder group
Business Leaders Health & Safety Forum
www.forum.org.nz
Coalition of business and government leaders committed to improving the
performance of workplace health and safety in New Zealand. Forum members are
CEOs, Managing Directors or Country Heads of New Zealand organisations.
Forum Member
Business New Zealand
www.businessnz.org.nz
Representative organisation for New Zealand businesses. Incorporating the Sustainable
Business Council, Major Companies Group and others.
Member
Coromandel Marine Farming Association
www.coromfa.co.nz
Representative organisation for mussel and oyster farmers of the Hauraki Gulf.Member
Deepwater Group
www.deepwatergroup.org
Industry body focused on the management of deepwater fisheries resources, within a
long-term sustainable framework
Directors
Active industry member
Industry stakeholder group
Fisheries Inshore New Zealand
www.inshore.co.nz
Commercial fisheries stakeholder organisation that represents collective interests as
an inshore quota owner, Annual Catch Entitlement (ACE) holder and commercial
fisher
Directors
Active industry member
Industry stakeholder group
Global Seafood Communicators GroupInternational industry body bringing together communications leaders from peak
bodies and some individual seafood companies around the globe.
Member
Groundfish Forum
www.groundfishforum.com
Meeting place for leading members of the global groundfish industry to increase
understanding about global supply and consumption trends and developments for
groundfish products
Executive committee member
Forum members
International Coalition of Legal Toothfish
Operators (COLTO)
www.colto.org
Industry group formed to eliminate Illegal, Unregulated and Unreported (IUU) fishing
of toothfish, and to ensure the long-term sustainability of toothfish resources, and the
rich and critical biodiversity of the southern oceans.
Founding member
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
194
SANFORD INTEGRATED REPORT 2022
ORGANISATIONFUNCTIONOUR ROLE
Marine Farming Association
www.marinefarming.co.nz
Subscription based organisation, representing the marine farmers in the top of the
South Island of New Zealand, set up with the objective to promote, foster, advance,
encourage, aid and develop the rights and interests of its members and the marine
farming industry in general.
Member
New Zealand Fishing Health and Safety ForumIndustry body aiming to share knowledge and information to help all participants
improve safety and wellbeing in their organisations and across the sector.
Founding member
NZFS (New Zealand Food Safety) National
Advisory Panel
www.mpi.govt.nz/food-business
New Zealand Food Safety is part of the Ministry for Primary Industries and supports
primary producers, exporters, importers, and consumers by implementing the full
range of MPI’s legislative and regulatory frameworks. Sanford provides an industry
representative on the EOC (Emerging Contaminates) NAP (National Advisory Panel).
Member of National Advisory
Panel
New Zealand Salmon Farmers Association
www.salmon.org.nz
An industry group representing the commercial salmon farming industry including
growers, suppliers of equipment and science providers.
Board member
New Zealand Seafood Standards CouncilIndustry council of experts that liaise with government on behalf of industry to align
fisheries requirements.
Member
Seafood New Zealand
www.seafoodnewzealand.org.nz
Industry peak body for the New Zealand seafood sector, with a strategy to support the
Government’s growth objective to double seafood export revenue by 2025
Directors
Active industry member
Southern Inshore Fisheries Management
Company Ltd (Southern Inshore)
www.inshore.co.nz/fisheries/southern-inshore
Commercial Stakeholder Organisation that has the mandate to represent a range of
stocks that occur primarily in the South Island
Board member
Southern Seabird Solutions Trust
www.southernseabirds.org
Group focused on the protection of seabirds, with initiatives across 24 target species
(from black petrel to Yellow-eyed penguins)
Trustee
Management board member
Southland Just TransitionA Government and rural leaders forum working for regional growth.Member
Sustainable Business Council (SBC)
www.sbc.org.nz
Executive-led advocacy body for sustainable business in New ZealandAdvisory board member
Active member
Sustainable Seas
www.sustainableseaschallenge.co.nz
Ecosystem-based management group set up to enhance and protect our marine resourcesBoard member
Trust Alliance
www.trustalliance.co.nz
A primary industry consortium supporting the development of technology for NZ
producers, growers, exporters, retailers and consumers to share trusted data along the
value chain.
Board member
APPENDIX C – INDUSTRY MEMBERSHIP AND STAKEHOLDERS (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
195
SANFORD INTEGRATED REPORT 2022
APPENDIX C – INDUSTRY MEMBERSHIP AND STAKEHOLDERS (continued)
STAKEHOLDER GROUPS AND THEIR ROLES
OUR STAKEHOLDERSROLE
Our People
Our 1,421 employees, including 422 sharefishers, are
the foundation of our business and our most valuable
asset. Through their commitment to living our values
of care, passion and integrity, our people ensure that
we continue to produce, deliver and succeed.
Shareholders
and Investors
As at 30 September 2022, 2,831 shareholders
provide the financial capital and stability required to
sustain, grow and diversify our business.
Government
and Regulators
These stakeholders provide our formal licence to
operate, including policy and regulatory frameworks
which define what, how, where and when we can
perform our activities.
Industry and
Business Associations
As a company committed to its own vision as well as a
vision for a sustainable future for New Zealand and
the world, we are members of a number of
organisations (refer above). They help us leverage our
impact and, in partnership, collectively find ways of
achieving a more sustainable future.
Suppliers
Share valued expertise, support and deliver products
and services that strengthen our business and
facilitate development and growth.
OUR STAKEHOLDERSROLE
Customers and
Consumers
Sustain our business, provide the basis for continued
growth, product development and innovation.
Communities, Scientific
Partners, NGOs
External partners help us to gain a deeper
understanding of social and environmental issues.
They also can unlock new opportunities, understand
industry best practice, scientific research and
development and alert us to potential challenges
which may need to be addressed.
Civil Society including
Recreational Fishers
The views and needs of civil society and recreational
fishers assist us to stay in-step with society, and
hence ensure our social licence to operate. We share
some fishing space with recreational fishers and it is
important to us that we collaborate with other users
of the ocean.
Iwi
Partnership with iwi represent a critical relationship
for us. As guardians of the land and ocean that we
operate on/in, we are pleased to work together to
ensure good outcomes for all. Ngāi Tahu is a 19.9%
shareholder in Sanford.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
196
SANFORD INTEGRATED REPORT 2022
SUSTAINABLE DEVELOPMENT GOAL
CASE STUDY
PAGE
REF
SANFORD
PERFORMANCE
OUTCOME
Our Global Sales Footprint26ALL
Greening the Fleet36
Supporting Sound Science for Sustainability38
Sustainable, Low Carbon and as Tough as the Southern Ocean40
When Labour Pools Become Puddles47
Achieving Together Puts Paid to Pain49
Care at the Core of Covid Round Three51
Short on Manpower But Not on Willpower53
Bow Ties Enabling a Safer Operational Culture54
Advancing in Australia and the World61
Sanford Bioactives Innovation Centre63
APPENDIX D – KEY INITIATIVES CONTRIBUTING TO THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
This table lays out some of the projects and initiatives underway at Sanford in 2022 which
contributed to the six key Sustainable Development Goals (SDGs) which Sanford can
contribute most towards. As a company committed to value creation for all stakeholders,
we use the international SDG Global Goal framework, inclusive of the several targets
which sit beneath the top line goals to guide and influence us in our strategy, goals,
and initiatives.
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
197
SANFORD INTEGRATED REPORT 2022
SUSTAINABLE DEVELOPMENT GOAL
CASE STUDY
PAGE
REF
SANFORD
PERFORMANCE
OUTCOME
Three Meals, Three Places65
Mussels Doing the Mahi in the Gulf71
No Waste, No Fuss, No Problem73
Feeding the People and the Land74
Graeme Dingle Foundation and Sanford75
High Stakes Met with High Engagement81
Investing for Salmon Growth83
Easier, But Not Plain Sailing85
Full Steam Ahead with SanCore86
APPENDIX D – KEY INITIATIVES CONTRIBUTING TO THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
198
SANFORD INTEGRATED REPORT 2022
APPENDIX E – GRI CONTENT INDEX
This Report has been developed in accordance with the International Integrated Reporting Council (IIRC) Integrated Report <IR> Framework.
The Report has been prepared in accordance with the GRI Sustainability Reporting Standards (GRI) 2016, and were applied to a core level of
compliance. Further references to GRI indicators are provided in Appendix A (Key Performance Indicators).
DISCLOSURESDESCRIPTIONSECTION DESCRIPTION AND PAGE NUMBER
GRI 102: GENERAL DISCLOSURES 2016
STRATEGY AND ANALYSIS
102-14Chairman, CEO statementPerseverance, pages 5-13
ORGANISATIONAL PROFILE
102-1NameSanford Limited
102-2OperationsAquaculture, fishing, fish processing, marine extracts, retail; refer Sanford and Our Operations, pages 22-28, 17-21
102-3Head office22 Jellicoe Street, Auckland, New Zealand
102-4LocationsSanford and Our Operations, pages 27-28
102-5Legal formNZX listed New Zealand limited liability company
102-6Markets and customersSanford and Our Operations, pages 27-28; Trusted Customer Partner of Choice pages 58-68
102-7Scale of organisationSanford and Our Operations; Financial Statements, pages 117-182; Key Performance Indicators (Appendix A)
102-8WorkforceSafe and High Performing Workplace, pages 44-57; Key Performance Indicators (Appendix A), Sharefisher definition, page 56
102-9Supply chainTrusted Customer Partner of Choice, pages 58-68, Operational Excellence pages 77-88
102-10Business changesChair’s Review, pages 5-7; Financial statements, pages 117-182
102-11Precautionary principleCorporate governance, pages 90-116; Enabling Healthy Oceans and Ecosystems, pages 32-43
102-12External initiatives & chartersReport Structure, Sustainable Development Goals, pages 14-16; Enabling Healthy Oceans and Ecosystems, pages 32-43; Highly
Valued Community Partner, pages 69-76; Industry Memberships (Appendix C)
102-13MembershipsIndustry memberships (Appendix C)
102-15RisksAligning Material Issues and Business Risks (Appendix B)
102-41Collective agreementsKey Performance Indicators (Appendix A)
ETHICS AND INTEGRITY
102-16Ethics and valuesWe Navigate Using Our Values, inside front cover; Corporate governance statement 2022; pages 90-116
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
199
SANFORD INTEGRATED REPORT 2022
DISCLOSURESDESCRIPTIONSECTION DESCRIPTION AND PAGE NUMBER
GRI 102: GENERAL DISCLOSURES 2016
102-17Ethics mechanisms (advice/
concern)
Protected Disclosures Policy (Whistleblowing) https://www.sanford.co.nz/investors/governance/policies/protected-disclosures-
policy/
IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES
102-45Organisation & entitiesReport Structure, pages 14-16; Financial Statements – Group Entities, pages 172-173
102-46Report contentReport Structure, pages 14-16; Reporting what Matters, pages 17-21
102-47Material issuesReporting what matters, pages 17-21
103-1Scope – Boundary inside
and outside
Material issues cover all Sanford entities unless otherwise stated, pages 17-21; Our Five Performance Outcomes pages 32-88;
Key Performance Indicators (Appendix A)
102-48RestatementsKey Performance Indicators (Appendix A)
102-49ChangesReporting what matters, pages 17-21
STAKEHOLDER ENGAGEMENT
102-40Stakeholders – GroupsReporting what matters, pages 17-21; Appendix C
102-42,
43, 44
Stakeholders – Basis, Approach,
Key Topics
Reporting what matters – Stakeholder Engagement Process, pages 17-18; Appendix C
REPORT PROFILE
102-50Report period1 October 2021 to 30 September 2022
102-51Last reportHorizons, Sanford Annual Report 2021
102-52Reporting cycleAnnual
102-53ContactContact info@sanford.co.nz for queries, or to provide feedback
102-54GRI complianceThis report has been prepared in accordance with the GRI Standards: Core option
102-55GRI content indexHeading in this Index
102-56AssuranceCombined (financial and non-financial), pages 176-182
GOVERNANCE
102-18GovernanceCorporate governance statement 2022, pages 90-116
APPENDIX E – GRI CONTENT INDEX (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
200
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPIC: HEALTH SAFETY AND WELLBEING OF OUR PEOPLE
GRI 403: OCCUPATIONAL HEALTH AND SAFETY
103-1,2,3Boundary and approachSanford and Our Operations
Safe and High Performing Workplace
Chairman Review, pages 5-7; CEO Review, pages 9-13; Sanford and our
Operations, pages 22-28; Safe and High Performing Workplace, Our Future
Focus page 57; Corporate governance statement, pages 90-116
403-1Health and safety management
system
Sanford Health, Safety and Wellbeing policy https://www.sanford.co.nz/
investors/governance/policies/safety-and-health-policy/
403-2Hazard identification, risk
assessments
Corporate governance statement, pages 90-116; Bowties enabling a safer
operational culture, pages 54-55
403-9Injury statisticsInjuries by Site and by Type graphs, page 50; Health and Safety, Key
Performance Indicators (Appendix A)
MATERIAL TOPIC: FOOD SAFETY AND QUALITY
GRI 416: CUSTOMER HEALTH AND SAFETY
103-1,2,3Boundary and approachSanford and Our Operations
Trusted Customer Partner of Choice
Sanford and our Operations, pages 22-28; Trusted Customer Partner of Choice
Our Future Focus, page 68
416-2Non-compliance (products) Number of Food Safety Recalls - Key Performance Indicators (Appendix A);
Customer complaints, Key Performance Indicators (Appendix A); Quality
complaints breakdown page 67
No non-compliances with food safety regulations identified during the period
APPENDIX E – GRI CONTENT INDEX (continued)
MATERIAL TOPICS AND RELATED INDICATORS (ORDERED BY MATERIAL TOPIC IMPORTANCE)
Including GRI 100, 200, 300, 400
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
201
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPICS: ENVIRONMENTAL PROTECTION AND OCEAN HEALTH – WATER QUALITY, SENSITIVE HABITATS, THREATENED SPECIES; SUSTAINABLE MANAGEMENT OF FISH STOCKS
GRI 304: BIODIVERSITY; GRI 307: ENVIRONMENTAL COMPLIANCE
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Protecting the
Ecosystems
Highly Valued Community Partner
CEO Review, pages 9-13; Sanford and our Operations, pages 22-28; Highs and
Lows, pages 24-25; Supporting sound science for sustainability, pages 38-39;
Enabling Healthy Oceans and Environments, Our future Focus pages 42-43;
Mussels doing the Mahi in the Gulf, pages 71-72
304-2ImpactIncidental Catch Data, page 38; Outcome 1, Enabling Healthy Oceans and
Ecosystems, Key Performance Indicators (Appendix A)
304-3Habitat restorationMussels doing the Mahi in the Gulf, pages 71-72
307-1Environmental ComplianceFull compliance to catch reporting and regulations, no environmental abatement
notices. Enabling healthy oceans and Ecosystems – Progress on Targets pages
33-35
MATERIAL TOPICS: RESPONSIBLE LEADERSHIP – ETHICAL CONDUCT, TRANSPARENCY, GOVERNANCE
GRI 102-16 VALUES, PRINCIPLES, NORMS, 102-17 ETHICS
Refer to General Disclosures for GRI 102-16, 102-17, 102-18
APPENDIX E – GRI CONTENT INDEX (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
202
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPICS: TALENT ATTRACTION, DEVELOPMENT, AND RETENTION
GRI 401: EMPLOYMENT; GRI 404: TRAINING AND EDUCATION; GRI405: DIVERSITY AND EQUAL OPPORTUNITY
103-1,2,3Boundary and approachSanford and Our Operations
Safe and High Performing Workplace
Sanford and our Operations, pages 22-28; Safe and High Performing Workplace,
pages 44-57
401-1New hires and turnoverNew hires and turnover graph data, pages 48 and 55; Safe and High Performing
Workplace, pages 44-57; Outcome 2, Safe and High Performing Workplace, Key
Performance Indicators (Appendix A)
401-2Employee benefitsEmployee Benefits, Key Performance Indicators (Appendix A)
404-1Employee trainingStaff leadership and development training (internal), page 52; NZQA Credits
and Qualifications tables, page 52
405-1Diversity (governance and
employees)
Corporate governance statement, pages 90-116; Women in the Workforce, Key
Performance Indicators (Appendix A)
405-2Gender Pay RatioAverage base remuneration women:men, Key Performance Indicators
(Appendix A)
MATERIAL TOPICS: MAXIMISING $/KG OF OUR HARVEST (PROFITABILITY AND PRODUCTIVITY); RISK MANAGEMENT
GRI 201: ECONOMIC PERFORMANCE
103-1,2,3Boundary and approachSanford and Our Operations
Operational Excellence
Chairman Review, pages 5-7; CEO Review, pages 9-13; Sanford and our
Operations, pages 22-28, Operational Excellence pages 77-88
102-15RisksAligning Material Issues with Business Risks (Appendix B)
201-1Economic valueChairman Review, pages 5-7; CEO Review, pages 9-13; Economic Performance,
Key Performance Indicators (Appendix A); Financial Statements, pages 117-182
201-2Adaptation to climate change/
Climate risks
Reporting what matters, pages 17-21; Operational Excellence, progress against
targets pages 78-80; Sanford’s public CDP disclosure available at https://www.
cdp.net/en ; Aligning Material Issues with Business Risks (Appendix B)
APPENDIX E – GRI CONTENT INDEX (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
203
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPICS: EFFICIENT MANAGEMENT OF RESOURCES: ENERGY
GRI 302: ENERGY
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Protecting
the Ecosystems
CEO Review, pages 9-13; Healthy Oceans Pages 32-43
302-1,3EnergyKey Performance Indicators, Protecting and Enhancing the Environment
(Appendix A); 302-1d (N/A none sold)
302-4Reduction of energy
consumption
CEO Review, pages 9-13; Outcome 1, Enabling Healthy Oceans and the
Ecosystems, Our Future Focus, page 42-43. Emission reduction calculations and
statements use defined base year (as stated) and the same emissions factors
used for 305-1,2,3 (page 41) relevant for the aspect considered (waste, fuel
burn). Forecast emission reductions informed by prior use on same asset, and
manufacturer estimates of efficiency improvements to be realised from the
implemented initiative
MATERIAL TOPICS: REDUCING CARBON FOOTPRINT - EMISSIONS
GRI 305: EMISSIONS
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Protecting
the Ecosystems
CEO Review, pages 9-13; Outcome 1, Enabling Healthy Oceans and Ecosystems,
pages 32-43
305-1,2,3GHG emissions (Scope 1,2,3)Greening the Fleet, pages 36-37; Our Approach to Carbon Emissions and
associated graphs, page 41; Key Performance Indicators, Protecting and
Enhancing the Environment (Appendix A)
Biogenic emissions not relevant/material for Sanford direct activities; where
relevant these are included in emissions factors applied for significant Scope 3
inputs
MATERIAL TOPICS: EFFECTIVE INNOVATION – PRODUCTS, MARKETS, TECHNOLOGY
N/A
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Protecting the
Ecosystems
Trusted Customer Partner of Choice
Chair’s Review, pages 5-7; CEO Review, pages 9-13; Our Strategy, pages 14-16;
Sanford and our Operations, pages 22-28; Sustainable, low carbon, and as tough
as the Southern Ocean page 40; Advancing in Australia – and the world, page
61-62; Sanford bioactives innovation centre, pages 63-64; Our future focus,
page 68
APPENDIX E – GRI CONTENT INDEX (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
204
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPICS: SUPPLY CHAIN MANAGEMENT
GRI 102 (GENERAL); GRI 204: PROCUREMENT PRACTICES
103-1,2,3Boundary and approachSanford and Our Operations
Operational Excellence
Safe and High Performing Workplace
Trusted Customer Partner of Choice
CEO Review, pages 9-13; Chairman Review, pages 5-7; Outcome 5, Operational
Excellence, pages 77-88
102-9, 102-16Supply chain, Values-ethics-
norms
Values, inside front cover; Sanford Code of Ethical Behaviour https://www.
sanford.co.nz/investors/governance/policies/code-of-ethical-behaviour/ ;
Outcome 2, Safe and High Performing Workplace, pages 44-57; Outcome 3,
Trusted Customer Partner of Choice, pages 58-68; Outcome 5, Operational
Excellence, pages 77-88
204-1Procurement practices – local
suppliers
Sanford and Our Operations - Our New Zealand Footprint, page 28; Our Global
Footprint, page 27; Key Performance indicators, Economic Performance
(Appendix A)
MATERIAL TOPICS: EFFECTIVE WASTE MANAGEMENT
GRI 306: WASTE (GRI 2020)
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Protecting
the Ecosystems
CEO Review, pages 9-13; Sanford and our Operations, pages 22-28
306-4,5Waste generated, diversion
rate
Waste directed to/from landfill and waste diversion rate, Key Performance
Indicators (Appendix A)
MATERIAL TOPICS: COMMUNITY AND IWI RELATIONSHIPS, COLLABORATION, AND SUPPORT
GRI 413: LOCAL COMMUNITIES; GRI204: PROCUREMENT PRACTICES
103-1,2,3Boundary and approachSanford and Our Operations
Highly Valued Community Partner
Sanford and Our Operations, pages 22-28; Highly Valued Community Partner
- Our Future Focus, page 76
204-1Procurement practices – local
suppliers
Highly Valued Community Partner – Our Future Focus, page 76; Spending on
domestic suppliers – Key Performance Indicators (Appendix A)
413-1Community programs and
engagement
Highly Valued Community Partner – Progress Against Targets, page 70; Feeding
the People and the Land, page 74; Mussels Doing the Mahi in the Gulf, page 71;
No Waste, No Fuss, No Problem, page 73; Community Foodbank Support pages
73-74; Community Commitment, page 75; Graeme Dingle Foundation and
Sanford, page 75
APPENDIX E – GRI CONTENT INDEX (continued)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
205
SANFORD INTEGRATED REPORT 2022
REFERENCE AND
INDEXDESCRIPTIONREPORT SECTION TITLESECTION DESCRIPTION AND PAGE NUMBER
MATERIAL TOPICS: ADAPTING BUSINESS PRACTICES TO CHANGING CLIMATE
GRI 102 (GENERAL); GRI 201 (ECONOMIC) – REFER TO MATERIAL TOPIC: MAXIMISING $/KG OF OUR HARVEST WHICH INCLUDES REQUIRED GRI DISCLOSURES (102-15 AND 201-2)
MATERIAL TOPICS: POSITIVE AND MEANINGFUL WORK EXPERIENCES
GRI 401 EMPLOYMENT – REFER TO MATERIAL TOPIC: TALENT ATTRACTION, DEVELOPMENT, AND RETENTION WHICH INCLUDES REQUIRED GRI DISCLOSURES (401-1)
MATERIAL TOPICS: EFFECTIVE COMMUNICATIONS (INCLUDING INTERNAL AND EXTERNAL)
N/A
103-1,2,3Boundary and approachSanford and Our Operations
Operational Excellence
Introducing our 2022 Report, page 2; Chair’s Review, pages 5-7; CEO Review,
pages 9-13; Report structure pages 14-16; Our Future Focus, pages 87-88.
MATERIAL TOPICS: TRACEABILITY AND PLACE OF ORIGIN; BRAND DEVELOPMENT AND RESPONSIBLE MARKETING
GRI 417: MARKETING AND LABELLING
103-1,2,3Boundary and approachSanford and Our Operations
Enabling Healthy Oceans and Ecosystems
Trusted Customer Partner of Choice
Sanford and our operations pages 22-28; Trusted Customer Partner of Choice
– Our Future Focus, page 68; Operational Excellence – Our Future Focus pages
87-88
417-1Product labellingMSC certified catch, page 39; Quality complaints breakdown: labelling error
page 67; Product certifications listed in Awards and Accreditations, page 210
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
206
SANFORD INTEGRATED REPORT 2022
ABBREVIATIONDESCRIPTION
ACCAccident Compensation Corporation
ACEAnnual Catch Entitlement
AEPAccredited Employer
AFRCAudit Finance and Risk Committee
AIArtificial Intelligence
ARAnnual Report
ARAAustralasian Reporting Awards
ATOAntarctic Toothfish
AUAustralia
BAPBest Aquaculture Practices
BGBBig Glory Bay
CAPEXCapital Expenditure
CCAMLRConvention for the Conservation of
Antarctic Marine Living Resources
CCOChief Customer Officer
CDPCarbon Disclosure Project
CEOChief Executive Officer
CFOChief Financial Officer
CO₂Carbon dioxide
COLTOCoalition of Legal Toothfish Operators
COOChief Operating Officer
CPOChief People Officer
CRDClimate Related Disclosures
CSRCorporate Social Responsibility
DEFRADepartment for Environment, Food and
Rural Affairs (UK Government)
DOBDate of Birth
DOCDepartment of Conservation
APPENDIX F – ABBREVIATIONS
ABBREVIATIONDESCRIPTION
DWGDeepwater Group
EBITEarnings Before Interest and Tax
EBITDAEarnings Before Interest, Tax,
Depreciation and Amortisation
EECAEnergy Efficiency and Conservation
Authority
EEZExclusive Economic Zone
EMSEnvironmental Management System
eNPSEmployee Net Promotor Score
EOCEmerging Contaminates
ERElectronic Reporting
ERMEnterprise Risk Management
ESGEnvironmental, Social and Governance
Indicators
EVElectric Vehicle
FAOFood and Agriculture Organisation (of
the UN)
FIFOFirst In, First Out
FMAFisheries Management Area
FNZFisheries New Zealand
FSQFood Safety and Quality
FSSCFood Safety System Certification
22000
FYFinancial Year
GDFGraeme Dingle Foundation
GHGGreenhouse gases
GMGeneral Manager
GRIGlobal Reporting Initiative
GW hoursGigawatt hours
ABBREVIATIONDESCRIPTION
GWKgGreenweight Kilogram
GWTGreenweight Tonne
HRHuman Resources
H&SHealth and Safety
HSE NZHealth Safety Environment
New Zealand
HSWHealth, Safety and Wellbeing
H1First half of the financial year
ICEInternal Combustion Engine
IIRCInternational Integrated Reporting
Council
IPIntellectual property
ISOInternational Organisation for
Standardisation
ITInformation Technology
ITOPrimary ITO is a business division of Te
Pukenga Work Based Learning Limited
(part of te Pukenga – New Zealand
Institute of Skills and Technology
IUUIllegal, Unregulated and Unreported
(fishing)
KgKilogram
KPIKey Performance Indicator
LTIFRLost Time Injury Frequency Rate
LTIsLost Time Injuries
MARINMaritime Research Institute
Netherlands
MFAMarine Farming Association
MJMega Joule
MOHMinistry of Health
MOSSMaritime Operator Safety System
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
207
SANFORD INTEGRATED REPORT 2022
APPENDIX F – ABBREVIATIONS (continued)
ABBREVIATIONDESCRIPTION
MotuMotu Research, a New Zealand policy
research institute
MPAsMarine Protected Areas
MPIMinistry for Primary Industries
MSCMarine Stewardship Council
MTMetric Tonne
MTOPMaritime Transport Operator Plan
MYNDA programme offered by the Graeme
Dingle Foundation
NAPNational Advisory Panel
NEBITNormalised Earnings Before Interest
and Tax
NGOsNon-Governmental Organisations
NIMLNorth Island Mussels Limited
NIWANational Institute of Water and
Atmospheric Research
NPATNet Profit After Tax
NSSPNational Shellfish Sanitation
Programme
NZDSNew Zealand Diving and Salvage
NZFNNew Zealand Food Network
NZFSNew Zealand Food Safety
NZHSENew Zealand Health and Safety in
Employment
NZMENew Zealand Media and Entertainment
NZQANew Zealand Qualifications Authority
NZQFNew Zealand Qualifications Framework
NZXNZ Stock Exchange
P&LProfit and Loss
ABBREVIATIONDESCRIPTION
PBVPerformance Based Verification
PPEPersonal Protective Equipment
PGPPrimary Growth Partnership
PHEVPlug-in Hybrid Electric Vehicle
PITOPrimary Industry Training Organisation
PPEPersonal Protective Equipment
PSHPrecision Seafood Harvesting
QMSQuota Management System
R&DResearch and Development
RASRecirculating Aquaculture System
RATRapid Antigen Test
ROCEReturn on Capital Employed
SANCOREProject name for Sanford’s information
system replacement and related
process change project
SBCSustainable Business Council
SBUSeparate Business Unit
SEEMPShip Energy Efficiency Management
Plans
S&OPSales and Operational Planning
SDGsSustainable Development Goals
SHECSafety, Health and Environment
Committee
SKUStock-keeping Unit
SLTSenior Leadership Team
SPAT
nzShellfish Production and Technology
New Zealand Ltd.
TACTotal Allowable Catch
ABBREVIATIONDESCRIPTION
TACCTotal Allowable Commercial Catch
TCFDTaskforce on Climate Related Financial
Disclosures
TRIFRTotal Recordable Injury Frequency Rate
UNUnited Nations
USAUnited States of America
WWFWorld Wide Fund for Nature
XRBExternal Reporting Board
(New Zealand)
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
208
SANFORD INTEGRATED REPORT 2022
—
OUR FLEET
—
San Rakaia
San Ikawai
San Granit
San Waitaki
No. In Fleet3
Built1990-1992 (Norway)
Length64m
No. In Fleet1
Built1989 (Denmark)
Length67.4 m
No. In Fleet2
Built1996–1997
Length32m
Gross Tonnage498
Main Engine HP1409
Accommodation5 crew
Use: Trawl targeting inshore species
such as snapper, gurnard, tarakihi.
No. In Fleet2
Built1979
Length26m
Gross Tonnage157
Main Engine HP850
Accommodation3 crew
Use: Trawl targeting inshore species
such as snapper, gurnard, tarakihi.
Gross Tonnage1899
Main Engine HP3342
Accommodation49 crew
Freezer Hold 940m
3
Gross Tonnage2487
Main Engine HP4530
Accommodation48 crew
Freezer Hold600m
3
Use: Trawl, targeting hoki, ling,
hake, orange roughy, warehou
and arrow squid.
Use: Single and Twin Trawl,
targeting hoki, arrow squid and
orange roughy
DEEPWATER – SAN GRANIT
DEEPWATER – STERKODER CLASS
VESSELS San Waitaki, San Enterprise, San Discovery
INSHORE VESSELS – 32M
VESSELS San Rakaia, San Tongariro
INSHORE VESSELS – 26M
VESSELS Ikawai, Tengawai
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
San Tangaroa
San Aotea ll
No. In Fleet2
Built1993 & 2001 (Norway)
Length46.35 – 52 m
No. In Fleet2
Built1995–2003
Length12–13.1m
Gross Tonnage10–10.5
No. In Fleet9
Built1970–2022
Length12–28m
Gross Tonnage5–83
No. In Fleet5
Built1984–2000
Length19.95–26m
Gross Tonnage129–222
Main Engine HP500–600
Accommodation6–8 crew
Product Capacity14–40m
3
Use: Twin or triple trawl targeting
scampi.
No. In Fleet13
Built1967–2009
Length21–28 m
Gross Tonnage10–51
Main Engine HP240–900
Crew Capacity2–30 crew
Use: Mussel farm operations – seeding, harvesting,
maintenance. Salmon operations support – transfer of
fish, materials, and equipment (Bluff – Big Glory Bay).
No. In Fleet1
Built2020
Length28 m
Gross Tonnage116
Generator HP725
Accommodation5 crew
Feed Storage200t
Use: Salmon farm operations base.
Gross Tonnage1079–1508
Main Engine HP 1075–2320
Accommodation25–32 crew
Freezer Hold 515–725m
3
Main Engine HP500–575
Crew Capacity2–18 crew
Use: Mussel farm support
operations.
Use: Operational
support, harvesting of
salmon, net cleaning,
feed transport etc.
Use: Automated bottom
longliner targeting toothfish and
ling.
DEEPWATER – LONGLINER
VESSELS San Aspiring, San Aotea II
DEEPWATER – SCAMPI VESSEL
VESSELS San Tangaroa, San Aramand, Venture K, Drysdale, Albatross II
AQUACULTURE – MULTI-PURPOSE
AQUACULTURE – SALMON BARGE
VESSELS San Hamana
AQUACULTURE –
MUSSEL SOURCING VESSELS
BARGES – AQUACULTURE
APPENDICES AND REFERENCE
209
SANFORD INTEGRATED REPORT 2022
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
210
SANFORD INTEGRATED REPORT 2022
AWARDS AND ACCREDITATIONS
AWARDS
Best Choice ‘Buy First’: Rating by Monterey Bay Aquarium’s highly
regarded Seafood Watch program for our Big Glory Bay produced King
Salmon farmed in marine net pens.
Best Choice ‘Buy First’: Rating by Monterey Bay Aquarium’s highly regarded Seafood
Watch program for all of our farmed mussels.
Platinum Level Environmental Performance award for Sanford within the Marine
Farming Association environmental program driving industry environmental initiatives
throughout the mussel farming industry at the top of the South Island.
Sanford Annual Report 2021 “Horizons”, Gold Award in the Australasian Reporting
Awards (ARA) General Award Category, Gold Award in the ARA Sustainability
Reporting Award Category, Finalist in the ARA Special Award for Integrated
Reporting and Communications, at the 2022 Australasian Reporting Awards.
Sanford Annual Report 2021 “Horizons”, Silver Award in Specialised Annual Report,
Integrated AR and CSR: Traditional Format at the ARC Awards International 2022
Carbon Disclosure 2021. Awareness level rating score ‘C’. Sanford disclosed its
climate change impact through the Climate Disclosure Project, CDP, the world’s
leading climate disclosure platform. The ratings score aligns with regional sector
benchmark. Within the same platform, Sanford was evaluated with a leadership band
score of “A-“ for supplier engagement on climate issues, which is above regional and
global sector benchmarks.
Finalist: Sanford Big Glory Bay Salmon in the Producer Award category, and for
Marie McDonald (Sanford Quality Assurance Manager) in the ‘Primary Industries
Champion’ category for the 2022 New Zealand Primary Industries Awards.
Recognised: By CSIRO (Commonwealth Scientific and Industrial Research
Organisation) for excellent support from the San Waitaki in support of acoustic and
biological surveys of Chatham Rise Orange Roughy fishery.
Winner: Grant Boyd, Sanford Havelock, of the “Outstanding Marine Farmer Award”
for 2022 from the Marine Farming Association to recognise the individual who has
made a significant contribution to the marine farming industry in the Top of the South
over the preceding 12 month period.
Seafood Star Awards: Longstanding service recognition award for Marie McDonald,
Sanford Bluff’s Quality Assurance Manager.
ACCREDITATIONS
Certified: 39% of Sanford’s wildcatch by greenweight during FY22 was
Marine Stewardship Council Certified.
Approved: Pest Free Warrant operator by the Department of
Conservation and Auckland Council for vessel operations to ensure integrity of pest
free island habitats.
Marine Stewardship Council Chain of Custody Certification: Maintained across all
relevant sites
Maintained: Licensed fish receiver status by the Ministry for Primary Industries (MPI).
A+ Sustainable Aquaculture Program: Maintained compliance and accreditation.
Best Aquaculture Practices (BAP) certification maintained for Sanford King Salmon
operations including the hatchery at Kaitangata, farms at Big Glory Bay, and
processing facility at Bluff. BAP certification also maintained for Big Glory Bay
Greenshell™ mussels.
Maintained: FSSC 22000 Food Safety Management System certification across 100%
of land based processing sites.
Maintained: Best rating available under Ministry for Primary Industries’ Performance
Based Verification (PBV) regulatory audit program for relevant Sanford sites and
vessels.
Re-Certified: ISO14001:2015 Environmental Management System certification.
Retained: Sanwell Gold Accreditation at Timaru site.
Maintained: Maritime Transport Operator’s Certification through the successful
completion of Maritime New Zealand’s Marine Operator Safety System (MOSS)
audits.
A
A
CONTENTS1. 2022 OVERVIEW2. REPORT STRUCTURE
& MATERIALITY
3. SANFORD AND
OUR OPERATIONS
4. CHAPTERS: OUR FIVE
PERFORMANCE OUTCOMES
5. GOVERNANCE
AND FINANCIALS
6. APPENDICES
AND REFERENCE
APPENDICES AND REFERENCE
211
SANFORD INTEGRATED REPORT 2022
DIRECTORY
AS AT 15 NOVEMBER 2022
BOARD OF DIRECTORS
Sir Robert McLeod, Chairman
Mark Cairns
Peter Cullinane
Craig Ellison
Abigail (Abby) Foote
Peter Kean
Fiona Mackenzie
EXECUTIVE TEAM
Peter Reidie, Chief Executive Officer
Paul Alston, Chief Financial Officer
Karen Duffy, Chief People Officer
Andre Gargiulo, Chief Customer Officer
Colin Williams, General Manager Fishing
Louise Wood, Chief Supply Chain Officer
Peter Young, Acting Chief Operations
Officer
REGISTERED OFFICE
22 Jellicoe Street
Freemans Bay
Auckland 1010
New Zealand
PO Box 443
Shortland Street
Auckland 1140
New Zealand
Telephone +64 9 379 4720
Email info@sanford.co.nz
Website www.sanford.co.nz
PRINCIPAL BANKERS
ANZ Bank New Zealand Limited
Bank of New Zealand
Rabobank New Zealand Limited
SOLICITORS
Chapman Tripp
Russell McVeagh
GROUP AUDITOR
KPMG, Auckland
STOCK EXCHANGE
The Company’s shares trade on the
New Zealand Stock Exchange (NZX).
NZX Trading Code: SAN
SHARE REGISTRAR
Computershare Investor Services Limited
Private Bag 92 119
Victoria Street West
Auckland 1142
New Zealand
159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
MANAGING YOUR
SHAREHOLDING ONLINE
To change your address, update your
payment instructions and to view your
investment portfolio including transactions
please visit:
www.inves
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