BLT 2019 Annual Report
3493496
NZX APPENDIX 1 RELEASE
BLIS TECHNOLOGIES LIMITED
For the Year Ended 31 March 2019
The information contained in this release should be read in conjunction with the Annual Report of the
Company for the year ended 31 March 2019 (" 2019 Annual Report"), which has been released
together with this NZX Appendix 1 Release.
The information below relates to the preliminary announcement required under Listing Rule 10.3.2 and
Appendix 1 of the NZX Main Board Listing Rules:
1.1 Details of the reporting period and previous reporting period
Reporting Period 12 months to 31 March 2019
Previous Reporting Period 12 months to 31 March 2018
1.2 Information prescribed by NZX
RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the year ended 31 March 2019
Amount (000s) Percentage change
Revenue from ordinary
activities
$8,406 59% increase
Profit (loss) from ordinary
activities after tax attributable
to security holders
$381 137% increase
Net profit (loss) attributable to
security holders
$381 137% increase
Interim/Final Dividend: The Company does not propose to pay dividends to its shareholders.
1.3 The following information:
(a) Statement of Financial Performance
Refer to the 2019 Annual Report.
(b) Statement of Financial Position
Refer to the 2019 Annual Report.
(c) Statement of Cash Flows
Refer to the 2019 Annual Report.
(d) Details of dividends or distributions
The Company does not propose to pay dividends to shareholders.
(e) Details of any dividend or distribution reinvestment plans in operation
The Company has no dividend reinvestment plan.
(f) Statement of Movements in Equity
Refer to the 2019 Annual Report.
3493496
Page 2 of 2
(g) Net tangible assets per security
(h) Details of entities over which control has been gained or lost during the period
Nil
(i) Details of associates and joint venture entities
Nil
(j) Any other significant information
Nil
(k) Commentary on the results for the period
Refer to the commentary contained in the Chair and CEO reports in the 2019 Annual
Report.
(l) Audited Financial Statements
The Financial Statements for the year ended 31 March 2019 have been audited. The
auditor's report is included at the end of the 2019 Annual Report.
(m) Any major changes or trends in the Company's business
Accompanying this announcement are the Group’s audited consolidated financial statements
for the year ended 31 March 2019. These financial statements and the full year results
commentary dated 27 May 2019 provide the balance of information requirements in
accordance with NZX Listing Rule 10.3.2. and Appendix 1.
(n) Unrealised gains
There are no unrealised gains resulting from the revaluation of assets of the Company or
its subsidiaries, or any unrealised net changes in values or development margins of
investment assets included as separate items after profit before extraordinary items.
---
BlisTechnologies Ltd FY19 results summary
“The 2019 financial year was one that saw Blisachieve important
milestonesin the company’s journey. We achieved a maiden net profit,
our products saw a significant increase in consumer demand, and we have
made significant progress in developing a pipeline of new opportunities
that will build on this momentum. 2019 was a turning point for Blis”
FY19 highlights
Operational
•BLIS M18
®
Self affirmed GRAS
*
status. (April 2019 US FDA “No Objection” status)
•Launch of BLIS
®
branded products on Amazon US platform
•New distribution agreement with iNova Pharmaceuticals for markets across Asia Pacific and Africa
•Expanded launch into Australia Pharmacy channel with iNova Pharmaceuticals
•BLIS M18
®
Australia TGA approval as an ingredient for complementary medicines
•Callaghan Innovation growth grant –20% rebate on qualifying R & D spend
•New agency partner in India
Financial
•59% increase in total revenue drives 5 Year CAGR 45%
•EBITDA surplus of $0.9m
•Maiden profit of $0.4m
* GRAS is Generally Recognised As Safe
FY19 financial summary
FY18
$000
FY19
$000
Change
$000
Total Revenue*5,288
8,406
3,118
Net Surplus / (Deficit) before interest expense, tax,
depreciation and amortisation (EBITDA)
(422)8961,318
Net Surplus/ (Deficit)(1,042)3811,423
Key points:
•59% total revenue growth
•$0.9m EBITDA surplus
•$0.4m maiden profit
*Total revenue includes trading revenue of $8.3mplus interest income and Callaghan Growth Grant quarterly rebates
FY19 Regional sales performance
$3.0 M
+ 5%
Europe
$1.2 M
+60%
New
Zealand
$1.2 M
+ 45%
North America
$2.9 M
+ 237%
Asia Pacific
(excl NZ)
Revenue growth trend
0
2
4
6
8
10
FY15FY16FY17FY18FY19
NZ$ millions
FY19FY18
$000$000
Current assets3,9662,260
Current liabilities1,651712
Working capital2,3151,548
Non-current assets1,2351,628
Non-current liabilities129169
Net assets3,4213,007
Share capital37,38037,338
Share option equity reserve3746
Retained earnings / (deficits)(33,996)(34,377)
Total equity3,4213,007
Balance sheet & working capital position
•Increase in working capital to $2.3m (FY18 $1.5m)
•$924k cash and short term deposits at end of FY19
(FY18 $1.1m)
•Current/non-current borrowings of $829k (FY18
$290k)
•Accounts receivable of $2.4m (FY18 $0.7m)
BLIS® branded finished products –a
significant driver of growth
38%
62%
Branded goodsIngredients
19%
81%
Branded goodsIngredients
FY18
Product
Revenue $5.2m
FY19
Product
Revenue $8.1m
Product Revenue is revenue from domestic and export sales (Trading revenue less licence/evaluation revenue)
BLIS branded product range: NZ and Australia
Australia portfolio
NZ portfolio
Pharmacy promotion by our distribution partner iNova Pharmaceuticals
Plans underway for launch of
the dental range
Distribution partner
Distribution partner
Probiotics market growth
Blis well positioned to capitalise on this
Source: Euromonitor International
IPA Report
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
201320142015201620172018
US$ millions
Global Probiotic Supplements
Retail Value 2013-2018
0.2%
9.1%
8.9%
10.3%
4.5%
Outlook
“We are forecasting sustained profitable growth in FY20 and an EBITDA similar to FY19 as
we grow the investment in building a pipeline of new revenue opportunities for the
company and identify partners capable of bringing increased scale to the business"
New market focus and investment
•China cross border e-Commerce,
Daigou market
•AccelerateCanada marketevaluation
and planning
•Increase sales of dental products
•Progress plans with iNova for selected
new markets
•Leverage existing new market
opportunities including:
-iNova launch in Australia
-Amazon USA platform
Ongoing R & D investment
•New finished product innovation
•New probiotic strain development
Pipeline investment:
Disclaimer
Information
The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of
certain information relating to the performance of BlisTechnologies Limited ("Company" or "Blis"). The information in this presentation is of a general nature and does not
purport to be complete. This presentation should be read in conjunction with the Company's other periodic and continuous disclosure announcements, which are available at
nzx.com.
Not financial product advice
This presentation is for information purposes only and is not financial or investment advice or a recommendation to acquire Blissecurities, and has been prepared without
taking into account the objectives, financial situation or needs of individuals. The Company, its directors and employees do notgive or make any recommendation or opinion
in relation to acquiring or disposing of shares. In making an investment decision, investors must rely on their own examination of the Company, including the merits and risks
involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities.
Future performance
This presentation may contain certain 'forward-looking statements', for example statements concerning the development and commercialisation of new products, regulatory
approvals, customer adoption and results of future clinical studies. Forward-looking statements can generally be identified by the use of forward-looking words such as,
'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and other similar expressions.
The forward-looking statements contained in this presentation are not guarantees or predictions of future performance and involve known and unknown risks and
uncertainties and other factors, many of which are beyond the control of the Company and may involve significant elements of subjective judgement and assumptions as to
future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ fromthese forward-looking statements. A number
of important factors could cause actual results or performance to differ materially from the forward-looking statements. The forward-looking statements are based on
information available to the Company as at the date of this presentation. Except as required by law or regulation (including theNZX Main Board Listing Rules), the Company
undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.
No representation
This presentation may contain information from third-parties believed to be reliable, however, no representations or warranties are made as to the accuracy or
completeness of such information.
11
---
Blis Technologies Limited: 81 Glasgow Street, South Dunedin 9012, PO Box 5804, Dunedin 9058, New Zealand
T:+64 3 474 0988 E: info@blis.co.nz W: www.blis.co.nz
28 May 2019
BLIS ACHIEVES IMPORTANT MILESTONES IN 2019 FINANCIAL YEAR
FY19 Highlights:
• $0.4m maiden net profit
• $0.9m EBITDA
• 59% growth in total revenue drives 5-year CAGR
1
of + 45%
• Launch into the Australian pharmacy market
• Launch onto the Amazon US platform
• Key regulatory approvals:
BLIS M18™ Australia TGA approval
BLIS M18™ US “self-affirmed” GRAS (April 2019, US FDA “No Objection” status)
Blis Technologies Limited (NZX:BLT) (Blis, Company) has today reported its results for the 12 months
to 31 March 2019. In line with the market guidance provided on 1 April, the Company has delivered a
maiden net profit of $0.4m after reporting a loss of $1.0m for the prior year.
FY19 total revenue was $8.4m, an increase of 59% on the prior year. Earnings before interest, tax,
depreciation and amortisation (EBITDA
2
) was $0.9m, a slight increase on guidance provided to the
market in April 2019 and a turnaround from the $0.4m loss achieved in the prior year.
“This result represents a significant turning point for the Company in line with our goal of delivering
sustainable profitable growth” said Blis Chair, Tony Offen.
The result was driven by revenue growth across all territories, but in particular, Australia following the
signing of an exclusive distribution agreement with iNova Pharmaceuticals for the Company’s
expanded product range into the Australian pharmacy network with effect from 1 April 2019.
“While we are very pleased with the financial progress made to date and have been encouraged by
the early results from a number of new market launch initiatives, challenges in the 2019 year included
dealing with long lead times to progress new customer initiatives, overcoming delays in new
regulatory approvals and managing targeted accelerated growth opportunities on a limited budget.”
“The significant revenue growth recorded in the 2019 financial year has been achieved on the back of
securing strong partnerships with key market players. This approach is fundamental to supporting
profitable growth opportunities while operating with a modest capital base. The disciplined approach
to balancing business development investment levels with the need to achieve earnings growth will
continue.”
1
CAGR is Compound Annual Growth Rate
2
EBITDA is non-GAAP measure that is considered to be a useful indicator of cash profitability
Regional performance
FY19 FY18 Change
Revenue $m $m %
NZ 1.23 0.77 +60
Asia Pacific (excl. NZ) 2.87 0.85 +237
Europe 2.97 2.83 +5
North America 1.22 0.84 +45
In Australia, the BLIS® product range is now available in the "listed complementary medicines" throat
category across the network of over 5,000 pharmacies nationwide.
New Zealand revenues grew by 60% reflecting the first full year of a new distribution relationship with
Radiant Health which sees BLIS® branded products stocked across the NZ pharmacy network of around
900 stores and continued growth of the online business.
The next phase of expansion into select new markets across Asia and Africa will be led by distribution
partner, iNova Pharmaceuticals, with evaluation of priority markets underway.
During the 2019 financial year, the Company’s European distributor, Bluestone Pharma, reported
launches with new customers of BLIS K12™ products to health care professionals in Belgium, Denmark,
the Netherlands and Russia. There have also been launches by several of our existing customers in
Europe of BLIS K12
TM
based product targeting younger children.
The USA launch of BLIS® branded products on the Amazon platform in June 2018 has delivered steady
growth.
BLIS
®
branded finished goods and ingredient revenue
FY19 FY18 Change
Revenue $m $m %
BLIS
®
branded finished goods 3.12 0.99 +217
Ingredient revenue 4.99 4.26 +17
“We made significant progress during the year towards our strategic priority of growing the
contribution of our BLIS
®
branded finished goods. Over time, the focus on growing this sales channel
and going deeper within the value chain will increase our brand presence and future-proof the
business by enabling the Company to develop a closer relationship with our customers and
consumers”.
Regulatory approvals
“The granting of a “No objection” GRAS
3
status for BLIS M18™ in the USA in April 2019 has the
potential to open new opportunities with larger consumer food and supplement companies to include
BLIS M18™ in product formulations” said Brian Watson, Blis Chief Executive.
3
GRAS is an acronym for Generally Recognised As Safe, a United States Food and Drug Administration (FDA)
designation that an ingredient added to food is considered safe by experts.
Other key recent approvals have included BLIS M18 approval by the Australia TGA and BLIS K12™
regulatory approval in Russia and Belgium. In May 2019, BLIS M18™ was approved in Canada for use
in health products.
Research and development
“The receipt of a Callaghan Growth Grant in April 2018, which provides a 20% rebate on qualifying
research and development over a three-year period to March 2021, allows us to confidently continue
investing in the development of new product formats and formulations to expand the BLIS® range
while also progressing new probiotic strains with commercial potential” said Mr Watson.
Outlook
This year’s achievements - including the Company’s maiden profit - underpin a turning point for Blis.
The result is evidence of the increased resilience of the business due to broader revenue mix,
increasing revenue from BLIS® branded products, stronger regulatory positions, an improved working
capital base and development of robust internal capabilities.
“Key growth opportunities for the company in FY20 include Canada, China cross-border and Daigou
markets, market expansion in Asia and Africa with iNova Pharmaceuticals and expansion of our online
sales.”
We are forecasting sustained profitable growth in FY20 and an EBITDA similar to FY19 as we grow
investment in building a pipeline of new revenue opportunities for the Company and continue to
identify and build relationships with partners capable of bringing increased scale to the business.
For further information please contact:
Brian Watson
Chief Executive
027 705 9133
About Blis Technologies Ltd
Delivering proven health benefits through evidence-based, advanced probiotics
Blis is an NZX-listed manufacturer of advanced probiotic strains that go beyond the gut. Combining
innovation with evidence-based research and the highest quality production controls enables the
delivery of probiotic solutions for specific health targets including throat health, halitosis (bad breath),
immune support and teeth and gum health. BLIS products are sold throughout New Zealand and in
Australia, Asia, Europe and the USA. More information about Blis Technologies Ltd can be found at
www.blis.co.nz
---
Chair and CEO Report
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
2019
Annual
Report
BLIS TECHNOLOGIES LIMITED
Blis Technologies Limited 1
Contents
“The 2019 financial year was one
that saw Blis achieve important
milestones in the company’s journey.
We achieved a maiden net profit, our
products saw a significant increase in
consumer demand, people and growth
pipeline are well positioned to build on
this momentum. 2019 was a turning
point for Blis.”
Chair and CEO Report 6
Spotlight on Expanded Australian Launch 13
Spotlight on Product Development 14
Our Approach to Sustainability 16
Board of Directors 18
Executive Team 20
Statement of Corporate Governance 21
Directors’ Interests 32
Directors’ Responsibility Statement 35
Consolidated Statement of Comprehensive Income 36
Consolidated Statement of Changes in Equity 37
Consolidated Balance Sheet 38
Consolidated Statement of Cash Flows 39
Notes to and Forming Part of the Consolidated Financial Statements 40
Additional Stock Exchange Information 60
2 2019 Annual Report
Blis Technologies Limited 3
Value Proposition
Company vision
Delivering health benefits to global consumers by unlocking the potential of the microbiome.
Value proposition
Blis Technologies is a leader in the manufacture of advanced probiotic strains that
go beyond the gut. We combine innovation with a strong evidence base and the
highest quality controls to deliver probiotic solutions for specific health targets.
Our strategic priorities
$0.4m
Maiden net profitEBITDA
Launch onto the
Amazon US platform
FY19 Highlights
$0.9m
Growth in Total Revenue
(5 Year compound annual
growth rate CAGR 45%)
Increase in Asia Pacific Revenue
Growth in BLIS® branded
finished product Revenue
59% 217% 153%
Launch into the attractive
Australian Pharmacy market
BLIS M18™ Australia
TGA approval
A
P
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R
O
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S
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M
I
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I
S
T
R
A
T
I
O
N
–
BLIS M18™ US self-affirmed GRAS
(April 2019, US FDA “No Objection” status)
A
P
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–
U
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S
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–
Our objective
Blis Technologies will become an integrated company, controlling our intellectual
property and ensuring the highest quality standards throughout the supply chain.
Our current core internal functions include:
• Probiotic strain development (discovery work)
• Manufacturing of finished good solutions for selected markets
• Scientific and technical product support
• Marketing and sales channel development
Our addressable markets
Probiotics for human health beyond the gut, targeting a leadership position in:
• ENT (Ear, nose and throat)
• Oral (Teeth, gums, halitosis)
• Dermatology
Our focus is on human health supplements based on our strengths today. However,
we recognise the potential for licensing opportunities beyond this including:
• Realising untapped therapeutic potential
• BLIS®-containing functional food solutions
• BLIS®-containing pet applications and animal health solutions
Pipeline
People &
Performance
Positioning
Supply
Chain
4 2019 Annual Report
Blis Technologies Limited 5
O ur Year
Appointment
of new Agency
partner in India
Launch of BLIS branded
products on Amazon US
platform
BLIS M18™ Self affirmed
GRAS status. (April 2019
US FDA “No Objection”
status)
New distribution
agreement with iNova
Pharmaceuticals for
markets across Asia
Pacific and Africa
Expanded launch into
Australia Pharmacy
channel with iNova
Pharmaceuticals
Upgrade
to market
guidance
Launch of
HoneyBlis® Ginger
New board member:
Dr Barry Richardson
New board member:
Geoff Plunket
New board member:
Dr Alison Stewart
BLIS M18™ Australia TGA
approval as an ingredient for
complementary medicines
5th
April
11th
June
2nd
May
7th
September
27th
March
1st
April
24th
April
27th
July
4th
May
28th
September
29th
March
handshakecheckshopping-cartchart-networkplusdollar-sign
tint
usersusersuserscheck
20192018
6 2019 Annual Report
Blis Technologies Limited 7
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report
Welcome to Blis Technologies Group
1
Annual Report for
the financial year ended 31 March 2019 (FY19).
On behalf of the Board and Management team we are
pleased to update you on the significant progress that
has been achieved during FY19 and the momentum that
we are building moving forward.
Financial overview
This milestone year in the Company’s history saw Blis
Technologies’ reporting a maiden net profit of $0.4m
compared to a $1.0m loss in the previous financial year
ended 31 March 2018 (FY18). This result represents a
significant turning point for the company in line with
our goal of delivering sustainable profitable growth.
The result was driven by strong revenue growth across
all territories and early evaluation milestone payments
from potential commercial partners which resulted in a
57% increase in trading revenue to $8.3m. Total revenue,
which included increased interest income and Callaghan
Growth Grant quarterly rebates rose by 59% to $8.4m.
The benefits of increased scale combined with a continuing
tight focus on costs saw the Company’s operating earnings
before interest expense, tax, depreciation and amortisation
(EBITDA) rising to $0.9m compared to a loss of $0.4m in FY18.
Regional performance
The significant revenue growth recorded in the 2019 financial year
has been achieved on the back of securing strong partnerships
with key market players. This has been fundamental to supporting
continued profitable growth opportunities while operating with a
modest capital base. Additionally, we continue to take a disciplined
approach to balancing business development investment levels with
the need to achieve earnings growth. This approach has served us
well and it was particularly pleasing to see strong revenue growth
across all of the territories we operate in, including New Zealand,
Asia Pacific, Europe, Middle East and Africa, and North America,
delivering a broader revenue base. This is further evidence that
our focused efforts in these markets are beginning to bear fruit.
Asia Pacific
Revenue growth of 153% to $4.1m in FY19
Asia Pacific revenue grew significantly, driven by the extended
launch into the Australian market as well as continuing growth in
the New Zealand pharmacy channel, and ingredient sales in Japan.
The BLIS® product range is now available in the “listed
complementary medicines” throat category in Australian
pharmacies, representing a new approach to throat health
and immune defence for the Australian market.
There has been widespread acceptance of the BLIS K12™ range by
all key pharmacy banner groups in Australia and the more recent
approval of BLIS M18™ as an ingredient for “listed complementary
medicines” in April 2019 will open the way for launch planning of
our dental health range into Australia with iNova Pharmaceuticals.
More information on the Australia Launch is covered on page 13.
New Zealand revenues grew by 60% in the 2019 financial year to
$1.2m. Our New Zealand retail presence has continued to strengthen
through our relationship with Radiant Health which was launched
in March 2018. BLIS® branded products are stocked on the shelves
across the network of over 900 pharmacies with high levels of
support provided by our distribution partner, including promotional
activity that has extended our reach to medical professionals.
The sales growth evident in our Asian market was very pleasing. In
particular, strong sales growth into Japan has reinforced the potential
of that market with new opportunities now under development.
Our strategy for the China market has seen us broadening our
focus from establishing a China domestic presence, which
continues to be challenging, to also building support for “cross
boarder eCommerce” (CBEC) and Daigou channels and these
will be more actively targeted in the new financial year.
The relationship with iNova Pharmaceuticals will see the
next phase of our expansion into select new markets across
Asia and Africa. Early evaluation of priority markets within
the region has begun however timing will be dependent
on market factors including regulatory requirements.
Europe/Middle East/Africa
Revenue growth of 5% to $3.0m in FY19
Steady year on year growth in this important market continues
to deliver a solid return. Our distribution partner in Europe and
the Middle East, Bluestone Pharma, continues to successfully
implement a strategy focused on launching consistent
value propositions to health professionals ensuring a broad
acceptance and recognition within the medical community.
During the 2019 financial year our partner achieved new
approvals for Russia and Belgium and launched BLIS K12™
products to health care professionals in these markets
along with launches with new customers in Denmark,
The Netherlands and the United Arab Emirates.
Other launches in this region included a new powder
product targeting young children through existing
customers already marketing lozenge formats.
North America
Revenue growth of 45% to $1.2m in FY19
North American revenues benefited from the USA launch of
BLIS® branded products on the Amazon platform which has
delivered steady growth since the launch in June 2018.
Our partner Stratum Nutrition has continued to expand the
customer base through new customer launches and across a
range of channels including retail, direct selling and on-line.
Following the recent GRAS “No objection” status of
BLIS M18™ (achieved by BLIS K12™ in 2016) we have the
potential to open new opportunities with larger consumer
food and supplement companies in the US.
Europe
$3.0M / +5%
Asia Pacific
$4.1M / +1 5 3 %
North America
$1.2M / +45%
1 Blis Technologies Group consists of parent Blis Technologies Limited and wholly owned subsidiary
Blis Functional Foods Limited. Refer Note 13 of the attached financial statements.
BLIS
®
branded finished products
Revenue Growth Trend
10
8
6
4
2
0
NZ$ MILLIONS
F Y16FY15FY17FY18FY19
5 YEAR CAGR +45%
FY18
Product Revenue
$5.2M
FY19
Product Revenue
$8.1M
Ingredients
Product Revenue is revenue from domestic and export sales (Trading revenue less licence/
evaluation revenue).
19%
38%
81%
62%
Branded goods
8 2019 Annual Report
Blis Technologies Limited 9
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
Working Capital
The net operating cash deficit at balance date was
supported through drawings on our trade credit
facility to fund the investment in product for the
expanded Australian launch in April 2019. Collection
of the increased year end debtor balance in April
from these Australian sales has provided the means
to fully repay the trade credit facility and further
enhance cash balances for the year ahead.
While we are very pleased with the financial progress
made to date and have been encouraged by the
early results from a number of new market launch
initiatives, we need to remain cognisant of the ongoing
challenges within our industry. These challenges
include overcoming delays in new regulatory
approvals, dealing with long lead times to progress
new customer initiatives, and managing growth
opportunities on a limited budget. The hard work,
tenacity and dedication of our team and distribution
partners have enabled us to overcome many of these
obstacles and this will continue as we strive to build
on this momentum in the new financial year.
1. Positioning – consistency of value proposition
and development of the BLIS PROBIOTICS™ brand
We are focused on being a supplier of BLIS® branded finished goods (including prominent co-
branding) to ensure Blis Technologies is recognized as the source; this is a means of future-
proofing the business by developing a closer relationship with customers and consumers.
Launched BLIS K12™ range into Australian Pharmacy channel with partner iNova .................................✓
Launched full BLIS® Branded range on Amazon US platform .....................................................✓
Continued to grow NZ retail and medical professional market through Radiant Health partnership .................✓
Broadened our customer base internationally with new launches in Europe and North America ....................✓
2. Supply chain – ensuring quality, capacity
and IP protection within our supply chain
We are the core source of knowledge about our BLIS® products, so that we will have the internal
expertise and processes all through our supply chain (from the organism to fermentation to formulation
to end-products, including regulatory and clinical efficacy right through to the consumer).
Established new contract manufacturer relationship with GMP Pharmaceuticals .................................✓
Actioned continuous improvement initiatives within Blis manufacturing .........................................✓
Established new relationship for future offshore raw ingredient manufacture ..............................ongoing
3. Pipeline – optimising value from our IP
Our library of defined organisms provides the core resource that underpins the future of the Company.
Along with this we continue to progress new product and formulation initiatives to meet the needs of consumers.
Invested in scientific services to accelerate R&D activity ..................................................ongoing
IP portfolio investment – invested in broader trademark protection .......................................ongoing
Received a Callaghan Innovation Growth Grant ................................................................✓
Gained regulatory approvals BLIS K12™: Russia, Belgium .......................................................✓
Received regulatory approvals BLIS M18™: Australia TGA Listed complementary medicine, US FDA GRAS ...........✓
Developed BLIS Q24™ (Skin target) ......................................................................ongoing
Supported joint University research projects: Immunology, Food application ..............................ongoing
Launched: HoneyBlis® Ginger, Amazon USA portfolio, Australia BLIS K12™ portfolio ...............................✓
4. People and Performance – building internal
capability and a high-performance culture
We are building a high-performance culture, ensuring we maintain the right
internal capability and processes to support our growth goals.
Reviewed leadership team structure and objectives ............................................................✓
Improved performance management process ..................................................................✓
Established a staff values framework ..........................................................................✓
Recruited an e-Commerce specialist (start date April 2019) ......................................................✓
Further developed our ERP system– focus on reporting ...................................................ongoing
Director succession planning and recruitment .................................................................✓
Progress Against Our Strategic Priorities
At 31 March 2019, the Company
held an improved net working
capital position of $2.3m,
up $0.8m on FY18, greatly
increasing the Company’s
resilience to periodic fluctuations
in trading levels.
$2.3m
50%
Net working capital position
Increase on FY18
10 2019 Annual Report
Blis Technologies Limited 11
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report – Strategic Priorities Commentary (continued)
Positioning
We made significant progress during FY19 towards our strategic
priority of growing the contribution of our BLIS® branded finished
goods. Revenue increased by 217% in this category to $3.1m, up
from $1.0m in FY18. Over time, this focus will increase our brand
presence and future-proof the business by enabling the Company to
develop a closer relationship with our customers and consumers.
At the same time, we were able to continue the growth in
our ingredient revenue which increased by 17% to $5.0m,
up from $4.3m a year ago. Of note is the growth achieved in
ingredient sales to North America, Japan and Europe.
The quality of our ongoing distribution agreements combined
with a number of new agreements signed and implemented during
the year has been a key factor in delivering the record revenue
result and driving the growth in BLIS® branded products. These
agreements provide access and support for the BLIS® range,
extending our reach into our chosen markets. Of particular
note, an exclusive distribution agreement was signed with iNova
Pharmaceuticals in September 2018 covering selected markets
across Asia/Pacific and Africa. This agreement has already
delivered a positive financial impact through the expanded
launch into the Australian Pharmacy network which took place
in March 2019. Longer term we will be looking to expand into
select new markets across Asia and Africa. Early evaluation
of priority markets has commenced, however timing will be
dependent on market factors including regulatory requirements.
In the Europe/ Middle East/ Africa region managed by our
distribution partner Bluestone Pharma, we have been encouraged
by the success of new launches in Belgium, the Netherlands,
Denmark, Russia, and the United Arab Emirates which have
served to broaden our international customer base.
In our home market, New Zealand, our ongoing relationship
with Radiant Health continues to deliver positive results and has
maintained ThroatGuard Pro’s™ position as the No 1 selling product
by value in throat lozenge category for New Zealand pharmacy.
Our BLIS® online sales have continued to deliver solid growth
and in June 2018 we were pleased to successfully launch the full
BLIS® branded range on the Amazon e-commerce platform in the
US and we have seen consistent growth through this channel.
Supply Chain
Our continuous improvement initiatives within Blis manufacturing
are focused on quality and efficiency. At our own manufacturing
site in Dunedin we have delivered improvement initiatives focused
on reducing overall costs and waste. These initiatives include
improvements in our packaging, storage and tableting processes.
We have also progressed our assessment of the requirements to
upgrade our own manufacturing capability to achieve certified
“Good Manufacturing Practice’” (GMP) status, which will continue to
be assessed against the alternative of outsourcing manufacturing
for specific markets that require certified GMP manufacture.
To provide additional depth and in-market access to high
quality finished products, we have established a new contract
manufacturer relationship with GMP Pharmaceuticals to
support the expanded launch into the Australian market. GMP
Pharmaceuticals is a well-established Australian TGA certified
GMP manufacturer with a record for quality and reliability. This
complements relationships our distributors have established
with other contract manufacturers to service markets in Europe
and North America to meet capacity and logistical needs.
To future proof our ingredient supply to meet long term growth
we have made good progress with an offshore fermentation
supplier, transferring the technology and know-how for
future production of both BLIS K12™ and BLIS M18™.
Pipeline
Research & Development.
In April 2018 we were pleased to receive approval for a
Callaghan Growth Grant which provides a 20% rebate on
qualifying research and development over a three year period
to March 2021. The grant is allowing us to confidently continue
investing in the development of new product formats and
formulations to expand the BLIS® range while also progressing
new probiotic strains with commercial potential.
We are continuing to assess new products containing BLIS K12™
and during the 2019 financial year we successfully launched
a new flavour variant of our HoneyBlis® product. HoneyBlis®
with Ginger extract is a honey-based throat lozenge that
combines the benefits of kamahi and manuka honey with oral
probiotic BLIS K12™. In addition we continue to investigate
innovative formats to meet specific consumer needs and
this work will be built upon in the new financial year.
We are making good progress in the development of BLIS Q24™
for skin applications with core elements of our development work
completed including safety assessment, defining fermentation
parameters and early efficacy evaluations. Our focus at present
is on formulation optimisation as a finished product for cosmetic
application where there is considerable interest in the role of
probiotics in overall skin health and we see attractive market
potential for this unique patent protected probiotic strain in
the future. Beyond the cosmetic potential of BLIS Q24™ we
continue to evaluate therapeutic targets which will have longer
timelines given the more rigorous regulatory requirements.
We also continue to review our extensive library of strains collected
by John Tagg over his career for commercially viable candidates,
with a number progressing through the assessment pipeline.
Joint Blis-Callaghan Innovation supported research projects
are providing valuable insights that will contribute to future
development activities. A Master’s project to understand
immunological responses to BLIS® probiotics was completed in
September 2018 and a PhD project assessing food formats for
oral probiotics is ongoing. Both projects are being undertaken
at the University of Otago and we are very pleased to be
able to support and benefit from this important work.
During the year there were a number of publications on both BLIS
K12™ and BLIS M18™ further enhancing our evidence base2.
We continue to focus on protecting the Company’s intellectual
property rights through a strong emphasis on IP portfolio
management and protection. Our on-going investment in
research and development is supported by patent filings,
development and protection of trade secrets, regulatory
approvals and trademark registrations which are all contributing
towards building a stronger BLIS PROBIOTICS™ brand.
Regulatory Approvals
A number of regulatory approvals were achieved during 2019,
including Australian Therapeutic Goods Administration (TGA)
approval of BLIS M18™ as an ingredient for listed complementary
medicines. This approval provides the opportunity to further extend
the product range throughout the Australian pharmacy network.
BLIS K12™ and BLIS M18™ products received regulatory
approval in Russia and Belgium and in the first quarter of the
new financial year BLIS M18™ achieved a “No Objection GRAS”
from the US Food and Drug Administration in April 2019.
Good progress is being made on other approval applications,
with outcomes pending in India (BLIS K12™ and BLIS M18™)
and Canada (upgrade of BLIS K12™ approval and new
approval of BLIS M18™). While in Korea we have been working
with our distribution partner on capturing the appropriate
data to support a regulatory submission for BLIS K12™.
People and Performance
We are building a high-performance culture, ensuring we have the
right internal capability and processes to support our growth goals.
As a growing company we will continue to ensure we have access to
the right skills and these may be internally or externally sourced.
To build internal capability we have worked closely with NZTE
and external consultants to support us in our launch of BLIS®
branded products on the Amazon US platform and continue
to work with external experts to plan for greater penetration
of the China cross border and Daigou market opportunities. To
ensure we have sufficient internal resource to support these
important new markets we have employed an e-Commerce
lead who started with the company on 1 April 2019.
R&D capability has been enhanced during the year by hosting
internships from various international tertiary institutions,
adding value through new perspectives and expertise.
In line with our Company vision, value proposition and
strategy we have increased our focus on Company values
to ensure they are firmly embedded within our culture.
Along with strengthening our overall capability we have focused
on developing processes to support our growing business and the
complexity of our operations. To this end we continue to develop
our ERP system to improve the timeliness and accuracy of reports
to enable performance tracking and quality decision making.
Health and Safety
Our approach to health and safety has matured with well-
established process and procedures and good engagement across
the company. All staff have specific health and safety objectives
and our people managers have personalised health and safety
objectives relevant to their functional responsibility. Our Health
and Safety Committee regularly reviews performance against
annual objectives with an external H&S consultant. Staff wellness
has become a greater focus of the Health and Safety Committee.
2 Assessment of Efficacy of BLIS-Producing Probiotic K12 for the Prevention
of Group A Streptococcus Pharyngitis: a Short Communication. Di Pierro
F. Probiotics Antimicrob Proteins. 2019 Mar;11(1):332-334.
Use of Streptococcus salivarius K12 to reduce the incidence of pharyngo-tonsillitis
and acute otitis media in children: a retrospective analysis in not-recurrent
pediatric subjects.Di Pierro et al. Minerva Pediatr. 2018 Jun;70(3):240-245.
Effect of Oral Probiotic Streptococcus salivarius K12 on Group A Streptococcus Pharyngitis:
A Pragmatic Trial in Schools. Doyle et al. Pediatr Infect Dis J. 2018 Jul;37(7):619-623.
Clinical experience of Streptococcus salivarius K12 use for the prevention
of pharyngotonsillitis and respiratory infections in children. Kryuchko,
T.O. & Tkachenko, O.Ya. Childs Health (Ukraine) 2018 13. 629-634.
The effect of oral probiotic consumption on the caries risk factors among high-risk
caries population. Tandelilin et al. 2018, 10(3) 132-137. J. Int. Oral Health.
Book Chapter: Streptococcus- A Brief Update on the Current Taxonomic Status
of the Genus. In: Lactic Acid Bacteria: Microbiological and Functional Aspects.
John R. Tagg, Philip A. Wescombe, John D. F. Hale, and Jeremy P. Burton
Strategic Priorities Commentary
12 2019 Annual Report
Blis Technologies Limited 13
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
Our achievements during FY19 - including the
Company’s maiden profit - underpin a turning point
for Blis Technologies.
The result is evidence of the increased resilience of the business due to broader revenue
mix, increasing BLIS® branded product revenues, stronger regulatory positions, an
improved working capital base and development of robust internal capabilities.
Management and the Board continue to review the Company’s strategy and ensure
clarity regarding the commercial focus of the Company. We remain committed
to our stated purpose, our value proposition and our strategic priorities.
There remains significant international growth potential for our products and
we will continue to pursue the Company’s profitable growth objective through
developing our relationships with partners capable of resourcing international scale
for the business. Key growth opportunities for the company in FY20 include Canada,
China cross border e-commerce and Daigou markets, market expansion with iNova
Pharmaceuticals and expansion of our on-line sales. To facilitate this growth, we will be
working with our existing distribution partners as well as targeting new relationships
with partners with the right capability and resources to support our goals.
Thank You
The Board and Management would like to take this opportunity to thank all staff and
directors for their enthusiasm and commitment to continuous improvement.
On behalf of everyone at Blis we would also like to thank our investors for their
continued support and ongoing interest in the future of the Company.
Tony Offen
Chair
Brian Watson
Chief Executive
Outlook
Spotlight on Expanded
Australian Launch
Our products are hitting the Australian shelves with strong support from our
exclusive distribution partner in the Australian market. iNova Pharmaceuticals
(iNova) has exceptional reach into the Australian pharmacy channel and a proven
track record of establishing category leading brands in consumer health care.
iNova is launching BLIS® branded products from the BLIS K12™ based range: ThroatGuard™,
ImmuneDefence™, HoneyBlis™, DailyDefence Junior™, TravelProtect™ as well as a
Difflam® co-branded offer Difflam 1st Signs Defence™ into the Australian pharmacy
network. The launch is being supported through a comprehensive consumer and trade
marketing programme that coincides with the build-up towards the busy winter season.
The BLIS product range is helping to solidify iNova’s leadership within the throat category
in Pharmacy by extending its offering to include a full continuum of products that can, not
only manage sore throat pain, but also help prevent this issue occurring in the first place.
There has been widespread acceptance of the BLIS K12™ range by all key pharmacy
banner groups in Australia and the more recent approval of BLIS M18™ as an ingredient
for “listed complementary medicines” in April 2019 will open the way for launch planning
of our BLIS M18™ Oral product range into Australia with iNova Pharmaceuticals.
The launch of the
Company’s expanded
product range
into the Australian
pharmacy network
took place from 1st
of April 2019.
14 2019 Annual Report
Blis Technologies Limited 15
Spotlight on
Product Development
Pipeline
New Product
Development
New Regulatory
Approvals
Trademark
Investment
Ongoing investment to protect: BLIS®, BLIS K12™,
BLIS M18™ across international markets.
• BLIS Q24™ for skin application
• Screening of strain library
collected by Prof John Tagg
• Launch of HoneyBlis™ Ginger
• Upgrade of Fresh Breath Kit – new
packaging and mouthwash
• Australia range launch
(Including co branded Difflam)
• Amazon USA range launch
Australia
• BLIS K12™
• BLIS M18™
US FDA GRAS “No Objection”
• BLIS M18™ (BLIS K12™ previously approved)
Russia and Belgium
• BLIS K12™
Spotlight on Product Development (continued)
NEW REGULATORY
APPROVALS
16 2019 Annual Report
Blis Technologies Limited 17
Chair and CEO Report
A YEAR OF SIGNIFICANT ACHIEVEMENT
Chair and CEO Report (continued)
Our Approach to Sustainability (continued)
Our Approach to Sustainability
Our purpose
“Develop and commercialise unique
probiotics for health and wellbeing”
Our value proposition
Blis Technologies is a leader in the manufacture of advanced
probiotic strains that go beyond the gut. We combine innovation
with a strong evidence base and the highest quality controls
to deliver probiotic solutions for specific health targets.
Our objective
Blis Technologies will become an integrated company,
controlling our intellectual property and ensuring the
highest quality standards throughout the supply chain.
We have a clear sense of what Blis
Technologies has been established to
do. Our purpose, value proposition and
objective set out our direction of travel to
achieve this.
We recognise that long-term, sustainable business success
requires an understanding of the interconnectedness of
all of the moving parts of our business and the impact we
have on our stakeholders. For Blis this includes our people,
customers, community, environment and our shareholders.
We understand that our success will be measured in more than
purely financial terms, and while our sustainability journey
is in its early days, we are committed to delivering long-term
positive outcomes for all of the stakeholders of our business.
This is the first year that we have documented our approach
the environmental, social and governance (ESG) practices.
Our early work in this area has involved reviewing the United
Nations (UN) Sustainable Development Goals which provide
a framework from which we will formalise our approach.
The UN Sustainable Development Goals present a way for us to see and think about
our business beyond a traditional set of measures that are based on our financial and
manufacturing performance. The UN Sustainable Development Goals that are relevant
to Blis are:
Our research has and will be responsible
for uncovering new strains of good
bacteria to ward off pathogens and
promote positive health outcomes.
The efficacy of our probiotic therapies leads
to improved health for our customers.
Within our business, the health, safety and
well-being of our people is paramount and
will continue to be an important focus.
Our remuneration policies and practices are
based on sound principles and contribute
to our ability to attract and retain a
team of appropriately skilled people.
Our financial performance will allow us
to provide sustainable returns to our
shareholders, the owners of our business.
Our contribution to the local economy
through employment and supplier
arrangements and to the wider New
Zealand economy through payment of tax
and generation of export revenues provides
an economic benefit for New Zealand.
The quality of our research will
add to the bank of knowledge on
the health effects of good bacteria
strains on oral and throat health.
Our support and joint funding of
ongoing research at the University
of Otago will provide meaningful
academic opportunities.
We will continue to provide training and
development opportunities to our staff.
We regularly provide intern and post
graduate opportunities for local
and international students.
Our research is world-leading and provides
research-backed health solutions.
We continue to look for ways to
further improve societal health.
The efficacy of our probiotic therapies
reduces pathogens (disease-causing
bacteria) and promotes good health.
Our people practices recognise
the value of diversity and this is
also reflected in the makeup of our
Board and Management team.
Our organisational style supports a vibrant
and productive work environment that
encourages inclusion and engagement.
As a business we will explore ways
to reduce and recycle waste while
maintaing the quality standards of
our products and packaging.
Consumption instructions are
shown on all product packaging and
product information sheets.
Our manufacturing operates under
the principles of “Good Manufacturing
Practice”, and we are moving
toward full accreditation of our
internal manufacturing facility.
Our ESG framework is at an early stage and will continue to evolve over time. We look
forward to updating you on our progress and the positive ways in which our business is
contributing to a better future for our people, our society and our planet.
18 2019 Annual Report
Blis Technologies Limited 19
Board of Directors
Anthony (Tony) Offen
Chair, independent non-executive director
Tony is Dunedin based and has been
a Director and shareholder of Blis
Technologies Limited since May 2009.
Tony was appointed Board Chair in August
2017 and has previously served as Deputy
Chair and Chair of the Audit Committee.
Through his Dunedin-based investment
company, Tony has been a director and
shareholder of private companies involved
in commercial property, FMCG business
sectors nationally and internationally
and with investment interests requiring
venture and start-up capital.
Tony holds professional memberships with
the Chartered Accountants Australia and
New Zealand and is a Chartered Member
of the Institute of Directors. He is an
elected member of the National Council
for the Neurological Foundation of NZ
and has served as the Council Deputy
Chair and Chair of its Audit and Risk
Management Committee. Tony is also an
independent member of the Governance
Board of Brain Research New Zealand,
Centre of Research Excellence (CoRE)
and holds a B.Com. (Accounting) and B.A.
(Philosophy) from University of Otago.
Graeme Boyd
Deputy Chair, independent
non-executive director
Graeme is based in Tauranga and has
been a director of Blis Technologies
Limited since July 2014. He was appointed
Deputy Chair in August 2018.
Graeme joined ICI New Zealand Limited in
1971 and for over 26 years held a variety
of positions across the business, including
management of the Pharmaceuticals
Division, culminating in the role of NZ
General Manager from 1990 to 1997.
He was appointed CEO of Comvita in
1998 and developed the company from
a small privately-owned company to
a publicly-listed company centred on
marketing natural health products
internationally. Graeme left Comvita
in 2005 and formed a management
consulting business specialising in
company turnarounds, growth strategies
and international marketing.
Graeme is a professional director, a
Chartered Member of the Institute of
Directors and holds an MSc (Chemistry)
from University of Canterbury.
Geoffrey Plunket
Chair of audit committee, independent
non-executive director
Geoff is currently a Dunedin based
Professional Director and Consultant and
has been a director of Blis Technologies
Limited since May 2018 and was appointed
Audit Committee Chair in August 2018.
Geoff worked for Coopers & Lybrand
(now PWC) and KPMG, in Dunedin and
Birmingham, UK through the 1980’s before
joining Port Otago Limited in 1988, as
Chief Financial Officer. Geoff spent the
following 29 years with the Port Otago
Group, before retiring in 2017. Geoff worked
across the business in a variety of roles,
culminating in appointment as CEO in
2004, a position he held until retirement.
Geoff brings significant experience in
leading a large successful organisation
with expertise in logistics, managing
international trading relationships,
supply chain, human resource, health
and safety and risk management.
Geoff is a Fellow of Chartered Accountants
Australia and New Zealand, and a
Member of the Institute of Directors.
Dr Barry Richardson
Independent non-executive director
Barry is Dunedin based and has
been a director of Blis Technologies
Limited since July 2018.
Barry began his career as a scientist at the
NZ Dairy Research Institute before joining
the NZ Dairy Board in 1985 as a Business
Development Manager, undertaking roles in
several biotechnology and nutritional Dairy
Board joint venture companies. Barry joined
the Tatua Co-Operative Dairy Company
Limited in 1991 as General Manager,
Tatua Biologics and was later appointed
General Manager, International and
Strategic Development commercialising
value added dairy ingredients. He was
appointed CEO of Westland Milk Products
when that company elected to be an
independent exporter of dairy products
in late 2001. From 2006 to 2016 Barry
was CEO of Blis Technologies Limited,
through the period when the Company
transitioned from a research company into
a commercial entity. His other professional
roles include a Director of CertusBio
and a Director of CNS Biotechnology.
Dr Alison Stewart
Independent non-executive director
Alison is Christchurch based and was
appointed to the Board in August 2018.
Alison brings to the board governance
and commercial research and
development experience within the
international biotechnology industry.
Alison has held key executive leadership
roles in New Zealand and US corporates
and understands the drivers for successful
commercialisation of research. Alison is
an experienced research and innovation
leader with expertise in microbe-based
product development, patents, IP
protection, new product pipeline and
development of strategic partnerships
with large international corporations.
Alison is a Distinguished Emeritus Professor
at Lincoln University, NZ and was elected
a Companion of the NZ Order of Merit in
2011 for her contributions to biology.
Veronica Aris
Chair of remuneration committee,
independent non-executive director
Veronica is Auckland based and
was appointed to the Board in July
2014 and appointed Chair of the
Remuneration Committee in April 2017.
Veronica has over 20 years in senior
marketing and sales roles that span the
innovation, primary care consumables,
pharmaceuticals, natural health care,
consumer and safety product markets.
She is currently the Head of Sales and
Marketing for the Icehouse where she
leads a team of eight, delivering innovative
strategy and digital transformation to more
than 5,000 ambitious owner-managers
and entrepreneurs. Veronica is also
currently a board member of both Altus
and Clinical Advisory Services Aotearoa
(CASA) and has previously been on Boards
for the North Auckland Kindergarten
Association and the Torbay Sailing Club.
Veronica is a Chartered Member of
the Institute of Directors, holds a
Chartered Marketer status from the
Chartered Institute of Marketers,
Bachelor of Science in Chemistry and
French and a Diploma in Marketing.
20 2019 Annual Report
Blis Technologies Limited 21
Executive TeamStatement of
Corporate Governance
The Board and Management of Blis Technologies are committed
to ensuring that the Company maintains corporate governance
structures which ensure that the Company operates efficiently
and effectively and maintains the highest ethical standards.
This statement of Corporate Governance provides a summary
of the Company’s governance processes and practices.
The Company’s Corporate Governance policies are
based on the principles set out in the NZX Corporate
Governance Code (NZX Code). This statement is structured
to follow the recommendations of the NZX Code.
The Board’s view is that Blis complies with the corporate
governance principles and recommendations set out in the
NZX Code but measurable objectives for diversity are still
being developed and will be reported on next year. The
Board believes its governance structures are appropriate
and meet the Company’s strategic objectives.
The Company also complies with the corporate governance
requirements of the NZX Main Board Listing Rules
(NZX Listing Rules). The Board regularly reviews and
assesses Blis’ governance structures and processes to
ensure that they are consistent with best practice.
Blis will transition to the new NZX Listing Rules with
effect from 1 July 2019. Accordingly, this Corporate
Governance Statement has been prepared in accordance
with the NZX Code that was published in 2017.
Blis’ key corporate governance documents referred to in this
statement, including charters and policies, can be found at
www.blis.co.nz/investor-centre/charters-policies (the Investor
Centre). The Board operates under a set of guidelines set out
in its Directors’ Operations Manual to assist Directors and
Management in carrying out their duties and responsibilities.
The Directors’ Operations Manual covers such matters as:
• Corporate governance matters;
• Role of the Board and composition of the Board;
• Director responsibilities;
• Appointment of, responsibilities of and
remuneration of a Chief Executive Officer;
• Confidentiality and the safeguarding of company information;
• Compliance with laws and regulations;
• Shareholder participation; and
• Code of conduct.
This Corporate Governance Statement was
approved by the Board on 27 May 2019.
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.”
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).
Code of Ethics
As part of the Board’s commitment to the highest standard of
conduct, the Company has adopted a Code of Ethics (“Code”).
Every new Director and employee is provided with a copy of the
Code and must confirm that they have read and understand the
document. The Code is also available at the Investor Centre.
Each Director, and employee is asked to annually confirm
that they continue to comply with the Code of Ethics.
The procedure for advising the Company of a suspected
breach is set out in the Code of Ethics. Blis also has a
Protected Disclosures (Whistleblower) Policy that sets out
the process that serves to protect employees who raise
allegations of serious wrongdoing by the Company.
Conflicts of interest
The Code of Ethics sets out the procedure to be followed where
Directors are faced with a conflict of interest. At all times, a
Director must be able to act in the interests of the organisation as
a whole and in accordance with all relevant laws and regulations
including the NZX Listing Rules (“NZX Rules”). The personal
interests of the Director and their family must not be allowed to
prevail over those of the Company and its shareholders generally.
No breaches of the Code of Ethics were identified
during FY19 and no matters were raised under the
Protected Disclosures (Whistleblower) Policy.
The Code of Ethics is subject to annual review by the Board.
RECOMMENDATION 1.2
An issuer should have a financial product dealing
policy which applies to employees and directors.
Julie Curphey
Chief Marketing Officer (CMO)
MBA, BCApSc (Food Science)
Julie joined Blis Technologies
in September 2016 as Chief
Marketing Officer. Prior to this
she spent 18 years working
internationally in the FMCG
and pharmaceutical industries
in various leadership roles
including market research,
marketing, operations and
change management.
Julie returned to NZ in
2014 to take up the CMO
role at Dunedin company
ADInstruments.
Dr John Hale
Chief Technology Officer (CTO)
PhD
John did his PhD studying
bacteriocins (BLIS) under
the supervision of Professor
John Tagg at the Department
of Microbiology, University
of Otago. He carried out
post-doctoral research at the
University of British Columbia
(Vancouver, Canada) and
Monash University School
of Pharmacy (Melbourne,
Australia) investigating
the modes of action of
antimicrobial peptides.
Dr Hale joined Blis
Technologies in 2011 and leads
the Scientific Services team.
Richard Wingham
Chief Financial Officer (CFO)
CA, BCom (Accounting)
Richard was appointed
to the role of CFO for Blis
Technologies in November
2017. Richard is a Chartered
Accountant with over 20 years
experience, including various
senior finance roles across
the dairy FMCG, construction
and health sectors.
His skills cross over
manufacturing,
project management,
information technology
and strategic planning.
Brian Watson
Chief Executive Officer (CEO)
BCom (Marketing), BPhEd
Brian was appointed CEO of
Blis Technologies in February
2016. He joined Blis following
senior management roles
with Fonterra and within the
pharmaceutical industry in
New Zealand and overseas.
Brian’s career has focused
on general management,
marketing and sales across
healthcare, nutraceutical
and nutrition industries.
Brian has a track record
of successfully launching
global brands into new
markets and leading change
within organisations.
22 2019 Annual Report
Blis Technologies Limited 23
Statement of Corporate Governance (continued)
Share trading by Company Directors and Employees
The Board has implemented formal procedures to handle trading
in the Company’s securities by Directors, employees and advisers
of the Company. The full procedures are outlined in its Securities
Trading Policy which is available at the Investor Centre. Before any
trading can occur approval is required to be obtained from the Chair
of the Board, Chief Executive Officer (CEO) or the Chief Financial
Officer (CFO). The policy provides that shares may not be traded
at any time by any individual holding material information. The
fundamental rule in the policy is that insider trading is prohibited at
all times. The requirements of the policy are separate from, and in
addition to, the legal prohibitions on insider trading in New Zealand.
Principle 2 – Board Composition & Performance
“To ensure an effective board, there should be a balance of
independence, skills, knowledge, experience and perspectives.”
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.
Responsibilities of the Board
The role of the Board is to act in the best interests of the
Company and to promote the interests of the Company and
its stakeholders. Directors are elected by the shareholders to
govern the Company. The Board is the overall and final body of
responsibility for all decision making within the Company.
The Directors have a diverse range of expertise and experience,
and are committed to using this to benefit the Company. The
Board is responsible to shareholders for charting the direction
of the Company by participating in the setting of objectives,
strategy and key policy areas. The Board is then responsible
for monitoring Management’s running of the business to
ensure implementation is in accordance with the agreed
framework. The Board delegates the conduct of the day-to-day
affairs of the Company to the CEO within this framework.
The primary responsibilities of the Board include:
• Ensuring that the Company purpose and goals are
clearly established, and that appropriate strategies;
• Establishing policies for strengthening the performance
of the Company including ensuring that Management
is pro-actively seeking to build the business through
innovation, initiative, technology, new products
and the development of its business capital;
• Monitoring the performance of Management, including
the review and monitoring of compliance with delegated
authorities, and of regulatory compliance;
• Monitoring strategic, financial, social and
environmental performance;
• Appointing the CEO, setting the terms of the CEO’s
employment contract, including position description,
reviewing succession planning and where necessary,
terminating the CEO’s employment with the Company;
• Deciding on whatever steps are necessary to protect
the Company’s financial position and the ability to
meet its debts and other obligations when they fall
due, and ensuring that such steps are taken;
• Ensuring that the Company’s financial statements are
true and fair and otherwise conform with law;
• Ensuring that information of sufficient content, quality and
timeliness, as the Board considers necessary to enable it
to discharge its duties, is provided by Management;
• Ensuring that the Company adheres to high
standards of ethical and corporate behaviour;
• Ensuring that the Company has appropriate management
processes for defining risks and analysing options
to minimise, mitigate and manage risks;
• Ensuring an appropriate capital structure such
that it supports the business strategy; and
• Ensuring that the Company communicates with its
shareholders and stakeholders in a timely manner.
The Board uses committees to address certain issues
that require detailed consideration by members of the
Board who have specialist knowledge and experience. The
Board retains ultimate responsibility for the functions of
its committees and determines their responsibilities.
The Board has a statutory obligation to reserve
responsibility for certain matters. It deals directly with
issues relating to the Company’s mission, appointments
to the Board, strategy, business and financial plans.
The Directors appoint a Chair and Deputy Chair from amongst the
non-executive members. The Board supports the separation of the
role of Chair and CEO. The Chair’s role is to provide leadership and
to manage the Board effectively. The Chair has responsibility for:
• Ensuring the integrity and effectiveness of
the governance process of the Board;
• Representing the Board to the shareholders;
• Maintaining regular dialogue with the CEO
over all operational matters; and
• For overseeing the annual work programme
The Chief Executive Officer is not a Director
The Board regularly meet without the CEO being present
and has a practice of holding Director-only meetings
either prior to or following each Board meeting.
The Board receives reports from Management and has access to all
of the information necessary for it to effectively discharge its duties.
RECOMMENDATION 2.2
Every issuer should have a procedure for the nomination
and appointment of Directors to the board.
Director nomination and appointment
The Board as a whole is involved with recommending candidates
to act as Directors to shareholders. When considering candidates
for nomination, the Board will consider, amongst other things, the
individual’s experience, qualifications and skills in comparison to
the experience, qualifications and skills of other Directors, whether
that individual is “independent” and whether that individual would
be able to work effectively with other Directors. A thorough check
of the candidate and his or her background is undertaken and
shareholders are provided with all material information that is
relevant to the decision on whether to elect or re-elect a Director.
The Board has the ability to appoint an individual to fill a
casual vacancy on the Board until the Company’s next
Annual Shareholder Meeting.
The procedures for the appointment and removal of Directors are
governed by the Company’s constitution and the NZX Listing Rules.
The Board has determined that based on the Company’s current
size and stage of development that an optimal number of directors
is five. Each year as part of the Board’s annual review process the
capability mix is assessed to evolve in line with Company’s future
development and international growth plan requirements.
The Board has determined that to operate effectively and to
meet its responsibilities it requires competencies in disciplines
including executive leadership and strategy, governance,
biotechnology IP development and protection, international
sales and marketing, international supply chain and quality
control, risk and compliance, finance and capital markets.
The current mix of skills and experience is considered
appropriate for the responsibilities and requirements of
governing Blis. The Board looks to strengthen its oversight
of issues in all disciplines, as required, via expert advice.
As at 31 March 2019 the Board has a majority of independent
directors. Director independence is considered on a
case-by-case basis (in accordance with the NZX Listing
Rules) and is monitored on an ongoing basis.
RECOMMENDATION 2.3
An issuer should enter into written agreements with each newly
appointed director establishing the terms of their appointment.
Letter of appointment
All new Directors enter into a written agreement with Blis
setting out the terms of their appointment. A copy of the
appointment letter is available at the Investor Centre.
RECOMMENDATION 2.4 AND 2.8
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.
The Chair and the CEO should be different people.
Board of Directors
Director profiles are shown at pages 18–19 of this report.
The profiles include information on the year of appointment,
skills, experience and background of each Director.
All six Directors are non-executive and independent members of
the Board. Tony Offen is the Chair of Blis. Graeme Boyd is Deputy
Chair. Geoff Plunket is the Chair of the Audit and Risk Committee.
Veronica Aris is the Chair of the Remuneration Committee. Dr
Barry Richardson and Dr Alison Stewart are also Directors.
The roles of Board Chair, Audit and Risk Committee Chair and CEO
are not held by the same person.
The Board determines annually on a case-by-case basis who, in
its view, are Independent Directors. The Board will consider all
relevant circumstances when determining independence. Under
the NZX Listing Rules, a Director is “Independent” when they
are not an executive officer of the Company and do not have a
‘Disqualifying Relationship’ (as defined in the NZX Listing Rules).
The Company does not require Directors to hold shares
in the Company but actively encourages them to do so.
Directors’ share interests are disclosed at page 32.
The Board does not have a tenure policy however it recognises
that a regular refreshment programme leads to the introduction
of new perspectives, skills, attributes and experience. Directors
retire by rotation in accordance with the NZX Listing Rules
but are eligible for re-election on retirement by rotation.
Director period of appointment
0-3 years3 – 9 years 9 years +
Number of Directors321
Interests Register
The Board maintains an Interests Register. Any Director who is
interested in a transaction with the Company must immediately
disclose to the Board the nature, monetary value and extent
of the interest. A Director who is interested in a transaction
may attend and participate at a Board meeting at which
the transaction is discussed but may not be counted in the
quorum for that meeting or vote in respect of the transaction,
unless it is one in respect of which Directors are expressly
required by the Companies Act 1993 to sign a certificate.
Statement of Corporate Governance (continued)
24 2019 Annual Report
Blis Technologies Limited 25
Entries made in the Interests Register for the year ended 31 March
2019 are included in the Director Disclosures section on page 33.
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.
Diversity
Blis Technologies is committed to achieving a diverse workforce
and inclusive workplace practices in order to harness the
business benefits of diversity, further social justice and comply
with legislation. A Diversity and Inclusion Policy has been
adopted by the Board and is available at the Investor Centre.
Responsibility for workplace diversity and the setting of measurable
objectives is held by the Board. Appropriate measurable diversity
objectives for a company our size is currently under development.
The gender composition of Blis’ directors, senior
managers and workforce was as follows:
31 March 201931 March 2018
PositionFemaleMaleFemaleMale
Director2 (33%)4 (67%)1 (20%)4 (80%)
Executives^1 (25%)3 (75%)1 (25%)3 (75%)
All employees11 (52%)10 (48%)11 (55%)9 (45%)
^ CEO and direct reports to the CEO
RECOMMENDATION 2.6
Directors should undertake appropriate training to remain current
on how to best perform their duties as directors of an issuer.
Director Training
The Board ensures that there is appropriate training available to all
Directors to enable them to remain current on how best to discharge
their responsibilities and keep up to date on changes and trends
in areas relevant to their work. Directors are regularly provided
with industry information and receive copies of appropriate
Company documents to enable them to perform their role.
The Board also ensures that new Directors are appropriately
introduced to management and the business.
RECOMMENDATION 2.7
The Board should have a procedure to regularly assess
director, board and committee performance.
Board Performance Evaluation
The Board annually assesses its effectiveness in carrying
out its functions and responsibilities. The Chair of the
Board leads the review which considers the performance
of the Board as a whole, and of each of the Board
Committees, against their respective charters.
The Chair, on behalf of the Board, is responsible for
assessing the performance and contribution of individual
Directors. The assessment is undertaken annually.
Principle 3 – Board Committees
“The board should use committees where this will enhance its
effectiveness in key areas, while still retaining board responsibility.”
Board Committees
The Board has two formally constituted committees – the
Audit and Risk Committee and the Remuneration Committee.
Committee membership is reviewed annually.
Each Committee has a written charter that is approved by the Board
and sets out its mandate. The charters are reviewed annually with
any proposed changes recommended to the Board for approval.
Each Committee has an agreed annual work programme that
sets out matters to be addressed over the following twelve
month period. The Committees each review their performance
on an annual basis against the Committee charter and work
programme and report their findings to the Board.
Blis also has a Scientific Advisory Group (“SAG”) that provides
an independent source of advice to the Board and Management.
SAG members have been selected based on significant
contribution to their chosen field and have complementary
skillsets to those involved in the Company’s research and
development endeavours. A charter sets out the SAG purpose
and mandate. The SAG did not meet during the year.
Attendance at Meetings
The table below sets out Director attendance at Board and
Committee meetings during the year ended 31 March 2019.
Board
Audit
and Risk
Committee
Remuneration
Committee
Veronica Aris94
Graeme Boyd1024
Anthony Offen1074
Geoff Plunket*106
Barry Richardson*85
Dr Alison Stewart*6
Peter Fennessy*2
Alan McKenzie*22
* Geoff Plunket was appointed on 4 May 2018
Barry Richardson was appointed on 27 July 2018
Dr Stewart was appointed on 28 September 2018
Peter Fennessy retired on 27 July 2018
Alan McKenzie retired on 27 July 2018
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 not also be the Chair of the Board.
Audit and Risk Committee
The Board has overall responsibility for the Company’s system
of internal financial control, risk management, for liaising
with the Company’s external auditors, and for ensuring the
integrity of the Company’s financial reporting. The Board
constantly monitors the operational and financial aspects of
the Company’s activities and has established procedures and
policies that are designed to provide effective internal financial
control. Annual budgets and business plans are prepared
and agreed by the Board. Monthly management accounts
are prepared by Management and reviewed by the Board
throughout the year to monitor performance against budget.
The Board has established an Audit and Risk Committee to assist
the Board in discharging its responsibilities relative to financial
reporting, related regulatory conformance and liaising with the
external auditors. The terms of reference for the Audit and Risk
Committee are set out in the Audit and Risk Committee charter.
The Audit and Risk Committee is appointed by the Board
and must comprise three Directors, the majority of whom
are to be independent. The Chair of the Board must not
be the Chair of the Audit and Risk Committee. The current
members of the Audit and Risk Committee are Geoffrey Plunket
(Chair), Tony Offen (Board Chair) and Barry Richardson. All
members are independent directors. Geoffrey Plunket
is a Fellow of Chartered Accountants Australia and New
Zealand and a Member of the Institute of Directors
The Board considers the recommendations of the Audit and Risk
Committee and advice of external auditors and other external
advisors on the operational and financial risks that face the
Company. The Board ensures that recommendations made by the
Audit and Risk Committee, external auditors and other external
advisers are investigated and, where considered necessary, action
is taken to ensure that the Company has an appropriate internal
control environment in place to manage the key risks identified.
In addition, the Board investigates ways of enhancing
existing risk management strategies, including appropriate
segregation of duties and the employment and training
of suitably qualified and experienced personnel.
Given the size of the Company, an internal audit
function is not considered necessary.
The Audit and Risk Committee met on seven occasions during
FY19. The agenda items for each meeting generally relate to
financial governance, external financial reporting, external audit,
internal audit, risk management, compliance and insurance.
RECOMMENDATION 3.2
Employees should only attend Audit and Risk Committee
meetings at the invitation of the Audit and Risk Committee.
Meeting Attendance
The CEO and CFO are regularly invited to attend Audit and
Risk Committee meetings as observers, when appropriate.
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.
Remuneration Committee
The Board has established a Remuneration Committee which has
responsibility for, amongst other things, setting the remuneration
policy for the CEO, CFO, Chief Marketing Officer, Chief Scientific/
Technical Officer (“Executive”), and recommending and monitoring
the level and structure of remuneration for senior management.
The terms of reference for this committee are set out in
its charter which is available in the Investor Centre.
The Remuneration Committee is appointed by the Board and
must comprise three Directors, the majority of whom shall
be independent. The Chair of the Board may serve on the
committee. Members of the Remuneration Committee are
Veronica Aris (Chair), Graeme Boyd and Tony Offen (Board
Chair). All committee members are independent Directors.
Statement of Corporate Governance (continued)Statement of Corporate Governance (continued)
26 2019 Annual Report
Blis Technologies Limited 27
The Board ensures that the recommendations made by the
Remuneration Committee are considered and acted on accordingly.
The Remuneration Committee met four times during the year.
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.
Nomination Committee
Given the size and composition of the Board, Directors
believe that there are no significant benefits in delegating
matters in relation to Board nominations and all
appointments are managed by the whole Board.
RECOMMENDATION 3.5
An issuer should consider whether it is appropriate to have
any other board committees as standing board committees.
All committees should operate under written charters.
An issuer should identify the members of each of its
committees, and periodically report member attendance.
Committees
The Board has no Committees other than an Audit and Risk
Committee and Remuneration Committee. The Scientific
Advisory Group is not a Board committee. The members and
attendance of the Audit and Risk Committee and Remuneration
Committee are set out earlier under Principle 3.
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 communications between
insiders and the bidder. It 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.
Takeover Protocols
The Board has adopted a set of protocols to be followed
in the event of a takeover offer being made.
In the event of a takeover offer, a committee of Independent
Directors would be formed and would have responsibility for
managing the takeover in accordance with the Board protocols
and applicable laws, including the New Zealand Takeovers Code.
Principle 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-financial
reporting, and in the timeliness and balance of
corporate disclosure.”
RECOMMENDATION 4.1
An issuer’s board should have a written continuous disclosure policy.
Shareholder Communications and Market Disclosure
The Board is committed to keeping the securities markets informed
of material information relating to the Company and its shares and
promoting investor confidence by ensuring that trading of
its securities takes place in an efficient, well-informed market
at all times.
The Company has in place a Continuous Disclosure Policy
and a Communications Policy designed to ensure this occurs.
The policies include procedures intended to ensure that:
• the Company complies with its continuous
disclosure obligations; and
• timely, accurate and complete information is provided
to all shareholders and other market participants.
The policies also outline mandatory requirements and
responsibilities in relation to the identification, reporting, review
and disclosure of material information relevant to the Company.
Accountability for compliance with disclosure obligations is the
responsibility of the CEO and CFO. The CFO has been designated as
the Disclosure Officer and has overall management responsibility
for ensuring all material information is lodged with NZX.
All non-promotional information intended to be made public,
whether or not it is believed to be material information, must
be reviewed by the CEO and Chair prior to release. In the
case of financial information, the Audit and Risk Committee
Chair, must also review the information prior to issue.
Directors consider at each Board meeting whether there is any
material information which should be disclosed to the market.
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.
Governance Policies and Charters
Key corporate governance documents, including charters
and policies, can be found at:
www.blis.co.nz/investor-centre/charters-policies.
RECOMMENDATION 4.3
Financial reporting should be balanced, clear and objective. An
issuer should provide non-financial disclosure at least annually,
including considering material exposure to environmental,
economic and social sustainability risks and other key risks.
It should explain how it plans to manage those risks and
how operational or non financial targets are measured.
Financial and Non-Financial Reporting
Blis is committed to ensuring integrity and timeliness in
its financial reporting and in providing information to
the market and shareholders which reflects a considered
view on its present and future prospects.
The Audit and Risk Committee oversees the quality and integrity of
external financial reporting, including the accuracy, completeness,
balance and timeliness of financial statements. It reviews the
Company’s full and half-year financial statements and makes
recommendations to the Board concerning accounting policies,
areas of judgement, compliance with accounting standards, NZX
and legal requirements, and the results of the external audit. All
matters required to be addressed and for which the Audit and
Risk Committee has responsibility were addressed during FY19.
Blis has published its full and half-year financial statements that
were prepared in accordance with relevant financial standards. The
full year financial statements are set out on pages 36 to 59. The CEO
and CFO have confirmed in writing to the Board that the Company’s
external financial reports present a true and fair view in all material
aspects. These representations are given on the basis that a sound
system of internal controls and risk management is operating
effectively in all material respects in relation to financial reporting.
In addition to releasing the full and half-year results Blis
provides an update on financial and non-financial performance
for the first and third quarters. Revenue and EBITDA for
the quarter and year to date, general commentary on
market conditions and an update on guidance is given.
The Board does not believe that the Company has any material
exposure to economic, environmental or social sustainability
risks that are not appropriately managed. The material
risks which may impact the Company’s ability to achieve its
strategic objectives and secure its future financial prospects,
are managed through the strategic planning process.
Work has commenced on consideration of a suitable sustainability-
reporting framework. The project is in its early stages and will
involve preparing a series of financial and non-financial targets
for reporting on an ongoing basis. An overview of the Company’s
sustainability programme is set out at pages 16 to 17.
Principle 5 - Remuneration
“The remuneration of directors and executives should be
transparent, fair and reasonable.”
Remuneration Report
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies
and packages for Directors as well as the Executives.
The Company’s remuneration philosophy is aimed at attracting,
retaining and motivating employees of the highest quality at
all levels of the organisation. It is based on practical, guiding
principles and a framework that provides consistency, fairness
and transparency while having regard to the risk appetite of
the Company and alignment to its long-term strategic goals.
All remuneration packages are reviewed annually in
the context of individual and Company performance,
market movements and expert advice.
Non-executive Directors
The structure of non-executive Director remuneration is separate
and distinct from the remuneration of the CEO and other executives.
The Board seeks to set aggregate remuneration for non-
executive Directors at a level which provides the Company with
the ability to attract and retain Directors of the highest calibre,
whilst incurring a cost which is acceptable to shareholders. No
remuneration is payable to Directors unless it is approved by the
Company’s shareholders, or permitted under the NZX Listing
Statement of Corporate Governance (continued)Statement of Corporate Governance (continued)
28 2019 Annual Report
Blis Technologies Limited 29
Rules in the event of an increase in the total number of Directors.
The NZX Listing Rules specify that shareholders can approve a
per Director remuneration amount or an aggregate Directors’
fee pool. The Board has adopted a remuneration pool
approach, as referred to in NZX Guidance Note - Governance.
Shareholders approved an aggregate remuneration pool for
non-executive Directors of $265,000 per annum in 2017. Subject
to external review, an increase of the director fee pool will
likely be proposed at the 2020 Annual Shareholders Meeting.
Within the fee pool available, the Board reviews its fees annually
to ensure the Company’s non-executive Directors are fairly
remunerated for their services, recognising the level of skill and
experience required to fulfil the role, and to enable the Company
to attract and retain talented non-executive Directors. The process
involves benchmarking against a group of peer companies.
In addition, the Board reviews the Remuneration
Committee structure and appropriate level of resourcing
required to make an on-going contribution to long
term value creation. Non-executive Directors have no
entitlement to any performance-based remuneration or
participation in any share-based incentive schemes.
Each non-executive Director receives a fee for services as
a Director of the Company and an additional fee is also
paid to the Chair, and each Chair of the Board Committees
to recognise the additional time commitment required for
that role. All Directors are entitled to be reimbursed for
reasonable costs associated with carrying out their duties.
For the period 1 April 2018 to 31 March 2019 the
allocation of the fee pool was as follows:
Board
Audit
Committee
Remuneration
Committee
Chair$66,000N/AN/A
Deputy Chair$45,000N/AN/A
Member$35,000$10,000$4,000
Non-executive Directors are encouraged to be shareholders,
but are not required to hold shares in the Company.
Fees payable to the non-executive Directors of the Company
for the period 1 April 2018 to 31 March 2019 were as follows:
Director
Board
Audit
Committee
Remuneration
Committee
Total
Remuneration
V Aris$35,000$4,000$39,000
G Boyd
(Deputy Chair)
$41,667$41,667
A Offen
(Chair)
$66,000$66,000
G Plunket$32,083$6,667$38,750
B Richardson$23,333$23,333
A Stewart$20,419$20,419
A McKenzie
(retired 27/7/18)
$11,667$3,333$15,000
P Fennessy
(retired 27/7/18)
$15,000$15,000
Remuneration of the CEO and Employees
The Company is committed to providing a remuneration
framework that promotes a high-performance culture and aligns
rewards to the creation of sustainable value for shareholders. The
underlying principle is to reward employees for Company and
business unit performance against targets set by reference to
appropriate benchmarks and key performance indicators and to:
• Align their interests with those of shareholders; and
• Ensure total remuneration is competitive by market standards.
Total remuneration is made up of fixed remuneration and a short
term incentive (STI). The STI performance incentive is “at-risk” and
is directly linked to both the performance of the Company and to
each individual’s performance while promoting the Company’s
long-term success.
Fixed remuneration includes all benefits, allowances
and deductions.
(i) Fixed annual remuneration
Remuneration levels are reviewed annually to ensure that they are
appropriate for the responsibility, qualifications and experience of
the Executives and are competitive with the market. The Executives
receive their fixed annual remuneration in cash and a limited
range of prescribed fringe benefits such as superannuation, motor
vehicle and health insurance. The total employment cost of any
remuneration package, including fringe benefit tax, is taken into
account in determining an employee’s fixed annual remuneration.
For the financial year ended 31 March 2019, the CEO received
$286,007 (2018: $278,100) in fixed annual remuneration.
(ii) Variable remuneration – STI Scheme
The objective of the STI Scheme is to link the achievement of the
annual financial and operational targets with the remuneration
received by the Executives charged with meeting those targets.
The total potential remuneration under the STI Scheme is set
at a level so as to provide sufficient incentive to the executive
to achieve the targets such that the cost to the Company is
flexible and in-line with the trading outcome for the year.
Actual STI Scheme payments granted to the CEO and
each nominated Executive depend on the extent to which
specific targets, set at the beginning of each year, are
met. The targets may include a weighted combination of
Company, Departmental, Financial and Non-Financial.
In determining the amount to be allocated, the Remuneration
Committee considers the performance against the targets.
For the financial year ended 31 March 2019 there was one nominated
Executive in the STI scheme, the CEO, the same as in the prior year.
STI Scheme payments relating to the financial year ended
31 March 2019 are delivered as a taxable cash bonus and
are payable on completion of the annual audited financial
statements. The total accrual for FY19 for all nominated
executives in the STI Scheme is $85,605 being 100% of the total
pool for the year. The actual amount paid for FY18 was $nil.
In addition to the STI Scheme, the Board reserves the
ability to pay ad hoc bonus payments to any employee,
again directly related with the trading outcome.
Total remuneration paid is fixed remuneration and any
STI Scheme payment physically received during the year.
Performance based payments are paid in the following year.
The CEO’s STI scheme payment for FY19 comprises several
financial and non-financial performance measures.
Overall, the STI is set at 30% of fixed remuneration.
A breakdown of the STI components follows:
Performance MeasuresPercent Achieved
50% based on financial revenue
and profitability targets
100%
50% based on non-financial targets 100%
Employee remuneration
The number of employees of the Company (including former
employees) who received remuneration and other benefits in excess
of $100,000 in the period 1 April 2018 to 31 March 2019 are
shown below:
Amount of Remuneration Employees
$150,001 - $160,000 1
$180,001 - $190,0002
$280,001 - $290,000 1
Principle 6 – Risk Management
“Directors should have a sound understanding of the material
risks faced by the issuer and how to manage them. The board
should regularly verify that the issuer has appropriate processes
that identify and manage potential and material risks.”
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. A framework should also be put in place to
manage any existing risks and to report the material risks
facing the business and how these are being managed.
Risk Management Framework
Blis operates in an environment that contains operational and
strategic risks. Risks are actively managed to ensure Blis operates a
safe workplace and is able to sustain the achievement of its business
objectives while at the same time accepting an appropriate level
of commercial risk that is consistent with desired profitability.
The Board is responsible for ensuring that key business and
financial risks are identified, and that appropriate controls and
procedures are in place to effectively manage those risks.
The Audit and Risk Committee has overall responsibility for ensuring
that the Company’s risk management framework is appropriate and
that risks are identified, considered and managed. Risk management
is a standing item on the agenda for Audit and Risk Committee
meetings, with detailed reports provided by Management.
A Risk Management Policy provides guidance on the Board’s
approach to risk management. The objectives of the Risk
Management Policy are:
*Includes the value of benefits including health care,
superannuation, vehicle and low interest loan.
Salary and fees
Taxable
benefits*Subtotal
STI paid FY19
for FY18
performance
Total
remuneration
$286,008$6,864$292,872$0292,872
Salary and fees
Taxable
benefits*Subtotal
STI paid FY18
for FY17
performance
Total
remuneration
$278,100$8,731$286,831$0$286,831
FY19
FY18
CEO remuneration
Statement of Corporate Governance (continued)Statement of Corporate Governance (continued)
30 2019 Annual Report
Blis Technologies Limited 31
• To allow Blis to pursue opportunities that
involve risk in an informed manner, so as to
meet the expectations of stakeholders;
• To enable full and due consideration to be given
to the balance of risk and reward in pursuing the
achievement of Blis’ business objectives;
• To apply risk management practices to enhance strategic,
tactical and operational decision making; and
• To ensure that Blis operates in a sustainable manner.
The policy is available at the Investor Centre.
Insurance
In managing the Company’s business risks, the Board
approves and monitors policy and procedures in areas
such as treasury management, financial performance,
taxation and delegated authorities. Blis has insurance
policies in place covering most areas where risk to its assets
and business can be insured at a reasonable cost.
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
Overall responsibility for health and safety - and specifically
for setting of high-level strategy and policy – resides with
the Board which is committed to continuous improvement
and progressively higher standards of work health and
safety for the benefit of all employees and others who
work in, use or visit the Company’s workplace.
The principles of the health and safety framework are to:
• Understand and comply with all applicable health
and safety legislation and regulations;
• Establish objectives and management systems
consistent with health and safety best practice; and
• Ensure all officers and workers engage in creating a positive
workplace culture to support health and safety.
The Executive are responsible for implementation
of the health and safety framework and will:
• Determine and implement business and action
plans to give effect to Board strategy;
• Acquire and maintain good understating
of health and safety matters;
• Be responsible and accountable for
health and safety compliance;
• Promote and role-model high workplace
health and safety standards; and
• Ensure business objectives are complementary
to health and safety objectives.
Management reports on a monthly basis to the Board
which consists of the following lead and lag indicators;
H&S Committee minutes, monthly hazard assessment,
incidents & accidents (including near miss incidents), good
news stories, achievements and training activities.
Principle 7 – Auditors
“The board should ensure the quality and independence of the
external audit process.”
RECOMMENDATION 7.1 AND 7.2
The board should establish a framework for the issuer’s relationship
with its external auditors.
The external auditor should attend the issuer’s annual meeting
to answer questions from shareholders in relation to the audit.
External Auditor
Oversight of the Company’s external audit arrangements
to safeguard the integrity of financial reporting is the
responsibility of the Audit and Risk Committee.
Blis maintains an Auditor Independence Policy to ensure
that audit independence is maintained, both in fact and
appearance. The quality of the audit opinion is considered
to be paramount. Accordingly, any compromises to
auditor objectivity and independence that are considered
to exist require appropriate safeguards to eliminate or
reduce the risk of compromise to an acceptable level.
Blis has adopted the following requirements
in relation to auditor independence:
• The Blis auditor is required to comply with relevant
independence requirements promulgated by the Financial
Markets Authority and other governing bodies;
• The Audit and Risk Committee must approve the
appointment of the auditor to provide any non-audit
services to the company or its subsidiaries;
• The auditor is required to report to the Audit and Risk Committee
annually on matters pertaining to their independence; and
• The Blis auditor will be required to rotate the lead audit
partner in accordance with accepted governance standards.
The Auditor Independence Policy is available in the Investor Centre.
The effectiveness, performance and independence of
the external auditors is reviewed by the Audit and Risk
Committee. The auditor is regularly invited to meet with
the Committee including without Management present.
Deloitte Limited is the Company’s current external auditor. Heidi
Rautjoki has been the audit engagement partner since 2018.
Fees paid to Deloitte Limited are included in Note 4 of the
Notes to the financial statements. A total of $65,000 was paid
to Deloitte Limited for audit-related services. All non-audit
services require approval by the Audit and Risk Committee.
The auditor has been invited to attend the Annual Shareholders’
Meeting and will be available to answer shareholder questions.
RECOMMENDATION 7.3
Internal audit functions should be disclosed.
Internal audit
Given the size of the Company, an internal audit function is not
considered necessary.
Principle 8 – Shareholder Relations
“The board should respect the rights of shareholders
and foster constructive relationship with shareholders
that encourage them to engage with the issuer.”
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.
Shareholder Relations
The Company is committed to regularly communicating
with shareholders and other stakeholders in a timely,
accurate and clear manner with respect to both procedural
matters and major issues affecting the Company.
To achieve this, the Company communicates through a range
of forums and publications. Annual and interim reports, NZX
releases, governance policies and charters and a variety of
corporate information is posted onto the Company’s website.
Each shareholder is entitled to receive a hard copy of
each annual and interim report (on request).
The Company has a Shareholder Meetings page in the Investor
Centre on its website. Documents relating to meetings are available.
Shareholder meetings will be held at a time and location to
encourage participation in person by shareholders. Annual meetings
to date have been held at a venue in Dunedin, reflecting the head
office location for the Company. The speeches and slides are lodged
with NZX prior to the start of the meeting. Shareholders may raise
matters for discussion at the Annual Shareholders’ Meeting either
in person or by emailing the Company with a question to be asked.
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.
Electronic Communications
Shareholders have the option of receiving their
communications electronically. Contact details for the
Company’s head office are available on the website.
RECOMMENDATION 8.3
Shareholders should have the right to vote on major decisions which
may change the nature of the company in which they are invested in.
Major Decisions
The Directors’ commitment to timely and balanced
disclosure is set out in its Continuous Disclosure Policy
and Communications Policy. The commitments include
advising shareholders on any major decisions. Where voting
on a matter is required, the Board encourages investors
to attend the meeting or to send in a proxy vote.
RECOMMENDATION 8.4
Each person who invests money in a company should have one vote
per share of the company they own equally with other shareholders.
Voting
Blis conducts voting at its Annual Shareholder Meetings
by way of poll. Each share carries one vote.
RECOMMENDATION 8.5
The board should ensure that the annual shareholders
notice of meeting is posted on the issuer’s website as soon
as possible and at least 28 days prior to the meeting.
Notice of Meeting
The Notice of Meeting will be lodged with NZX at least
28 days prior to the meeting and will be available on the
Shareholder Meetings page in the Investor Centre.
Statement of Corporate Governance (continued)Statement of Corporate Governance (continued)
32 2019 Annual Report
Blis Technologies Limited 33
Directors’ Interests
Directors’ Shareholdings
The following table sets out, for the purposes of the disclosures
required under Listing Rule 10.4.5 (c) of the NZX Main Board Listing
Rules, the relevant interests of Directors and associated persons of
the Directors in equity securities of the Company as at
31 March 2019:
Name of Director
Number of Equity Securities
in which a relevant interest
is held by the Director
A P OffenOrdinary31,157,388 (a)
G S BoydOrdinary800,000(b)
B RichardsonOrdinary17,903,624(c)
Note that particular shareholdings can appear under more than
one director.
(a) The number of equity securities in which Mr A P Offen holds
a relevant interest includes 31,157,388 ordinary shares, held by
Edinburgh Equity Limited. Mr Offen is a director and beneficial
shareholder of Edinburgh Equity Limited.
(b) The number of equity securities in which Mr G S Boyd holds a
relevant interest includes 800,000 ordinary shares held by
Mr Boyd personally.
(c) The number of equity securities in which Mr B C Richardson
holds a relevant interest includes 17,903,624 ordinary shares held
by Custodial Services Limited.
Directors’ Share Dealings
During the year, no Directors (or associated entities in which the
Directors have relevant interests) aquired/(disposed) of equity
securities in the Group.
PersonOrganisationActive Interests
Dr. Alison StewartArable Food
Industry Council
Executive committee
member
Foundation for
Arable Research
Chief Executive
Foundation for Arable
Research Australia
Director
Good Farming PracticeGovernance
Group Member
MBIE Maximizing the
value of irrigation
Industry Advisory
Group Chair
MfE Measure and Manage
diffused nutrient losses
from arable crops
Governance
Council Chair
MPI Pea Weevil
Management
Governance
Council member
Pastoral Industry
Forage Strategy
Implementation
Group member
Seed Industry
Research Centre
Advisory Board
member
Dr. Barry RichardsonBarry Richardson
Enterprises Limited
Director
CertusBio LimitedDirector
CNS Biotechnology LimitedDirector
Zircon Services LimitedDirector
Geoffrey PlunketNorth Otago Irrigation
Company Limited
Director
Orokonui Ecosanctuary LtdDirector
Graeme BoydBoyd Insight LimitedDirector
Disclosures of Interest by Directors
No disclosures were made of interests in transactions under s140(1) of the Companies Act 1993.
Directors have made general disclosures of interests in accordance with s140(2) of the Companies Act 1993.
PersonOrganisationActive Interests
Tony OffenBarrio Developments
Limited
Director
Brain Research
New Zealand
Director
Capital Apartment
Holdings Limited
Director
Closing Capital LimitedDirector
Edinburgh Equity LimitedDirector
Edinburgh Nominee LimitedDirector
Edinburgh Securities
Limited
Director
Kawarau Holdings LimitedDirector
Maidstone Land &
Buildings Limited
Director
Mill Park Estate LimitedDirector
Neurological FoundationCouncil Member
Offen Nominee LimitedDirector
Plaza Funds
Management Limited
Director
Taieri Investments LimitedDirector
Taieri Property LimitedDirector
Veronica ArisClinical Advisory
Services Aotearoa
Director
Elevator GroupDirector
Directors’ Interests (continued)
34 2019 Annual Report
Blis Technologies Limited 35
The Directors of Blis Technologies Limited are pleased to
present to shareholders the financial statements for the
Group for the year ended 31 March 2019.
The Directors are responsible for presenting financial statements in accordance
with New Zealand law and generally accepted accounting practice, which
fairly presents the financial position of the Group as at 31 March 2019 and the
results of its operations and cash flows for the year ended on that date
The Directors consider the financial statements of the Group have been
prepared using accounting policies which have been consistently applied
and supported by reasonable judgements and estimates and that all relevant
financial reporting and accounting standards have been followed.
The Directors believe that proper accounting records have been kept which
enable with reasonable accuracy, the determination of the financial position
of the Group and facilitate compliance of the financial statements with the
Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets
of the Group, and to prevent and detect fraud and other irregularities. Internal
control procedures are also considered to be sufficient to provide a reasonable
assurance as to the integrity and reliability of the financial statements.
The Financial Statements are signed on behalf of the Board by:
Tony Offen
Chairman
27th of May 2019
Graeme Boyd
Director
27th of May 2019
Directors’ Responsibility
Statement
Use of Company Information
There were no notices from Directors regarding
the use of Company information.
Indemnities and Insurance
Pursuant to section 162 of the Companies Act 1993 and its
Constitution the Company has entered into deeds of indemnity,
with the Directors of the Group to indemnify them to the maximum
extent permitted by law, against all liabilities which they may
incur in the performance of their duties as Directors of any
company within the Group. Insurance cover extends to Directors
and officers for the expenses of defending legal proceedings
and the cost of damages incurred. Specifically excluded are
proven criminal liability and fines and penalties other than those
pecuniary penalties which are legally insurable. In accordance
with commercial practice, the insurance contract prohibits
further disclosure of the terms of the policy. All Directors who
voted in favour of authorising the insurance certified that in
their opinion, the cost of the insurance is fair to the Company.
Donations
There were no donations made by the Company
during the year ended 31 March 2019 (2018: Nil)
Directors’ Interests (continued)
36 2019 Annual Report
Blis Technologies Limited 37
Consolidated Statement of
Comprehensive Income
For the year ended 31 March 2019
Notes20192018
$’000$’000
REVENUES
Revenue2a8,4005,285
Interest received63
8,4065,288
LESS
Distribution expenses12087
Marketing expenses787402
Occupancy expenses164156
Employee benefits2,0742,251
Raw materials and consumables2,3051,354
Operating expenses2,5532,072
Finance expenses228
2b8,0256,330
SURPLUS / (DEFICIT) BEFORE TAX2b, 4, 5381(1,042)
Income tax expense3--
SURPLUS / (DEFICIT) FOR THE YEAR381(1,042)
Other comprehensive income--
TOTAL COMPREHENSIVE INCOME/ (DEFICIT) FOR THE YEAR381(1,042)
Surplus / (deficit) for the year is attributable to:
Equity holders of the parent381(1,042)
381(1,042)
Comprehensive income for the year is attributable to:
Equity holders of the parent381(1,042)
381(1,042)
Earnings / (Deficit) per Share:
Basic (cents per share)140.03(0.09)
Diluted (cents per share)140.03(0.09)
Net tangible assets per Share:
Basic (cents per share)140.260.20
Diluted (cents per share)140.260.20
Consolidated Statement
of Changes in Equity
For The Year Ended 31 March 2019
NotesShare capital
Retained earnings/
(Deficit)
Share Option
Equity Reserve
Total attributable
to Group
$’000$’000$’000 $’000
OPENING EQUITY - 1 APRIL 2017
37,298 (33,335) 54 4,017
Surplus/ (deficit) for the year
- ( 1 , 0 4 2 ) - ( 1 , 0 4 2 )
Other comprehensive income
- - - -
Total comprehensive income
- ( 1 , 0 4 2 ) - ( 1 , 0 4 2 )
Equity contributions
and distributions
Share Option Equity Reserve
1440-(8)32
CLOSING EQUITY - 31 MARCH 2018
3 7, 3 3 8 ( 3 4 , 3 7 7 ) 4 6 3 , 0 0 7
Surplus/ (deficit) for the year
- 3 8 1 - 3 8 1
Other comprehensive income
- - - -
Total comprehensive income
- 3 8 1 - 3 8 1
Equity contributions
and distributions
Share Option Equity Reserve
1442-(9)33
CLOSING EQUITY - 31 MARCH 2019
3 7, 3 8 0 ( 3 3 , 9 9 6 ) 3 7 3 , 4 2 1
38 2019 Annual Report
Blis Technologies Limited 39
Consolidated Balance Sheet
For the Year Ended 31 March 2019
Notes20192018
$’000$’000
ASSETS
CURRENT ASSETS
Cash and short term deposits69241,059
Trade and other receivables72,372694
Prepayments22089
Inventory8371343
NZX Bond67575
Foreign exchange contracts20(e)4-
3,9662,260
LESS CURRENT LIABILITIES
Trade and other payables 11929581
Contract liability22-
Current borrowings12700121
Foreign exchange contracts20(e)-10
1,651712
WORKING CAPITAL2,3151,548
NON CURRENT ASSETS
Property, plant and equipment9669785
Finite life intangible assets10566 843
1,2351,628
NON CURRENT LIABILITIES
Non-current borrowings12129169
NET ASSETS3,4213,007
OWNERS EQUITY
Share capital1437,38037,338
Share option equity reserve153746
Retained earnings/ (deficits)(33,996)(34,377)
TOTAL EQUITY 3,4213,007
Consolidated Statement
of Cash Flows
For the Year Ended 31 March 2019
Notes20192018
$’000$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from/ (applied to):
Receipts from customers6,7715,734
Interest received63
Payments to suppliers and employees(7,338)(5,611)
Finance costs(22)(8)
Net cash inflow/ (outflow) from operating activities19(583)118
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from /(applied to):
Capitalised Intangible costs10(55)(121)
Purchase of property, plant and equipment9(75)(355)
Net cash inflow (outflow) from investing
activities(130)(476)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from/ (applied to):
Drawdown of borrowings579290
Repayment of borrowings(40)0
Repayment of share option3332
Net cash inflow/ (outflow) from financing activities572322
Net increase/(decrease) in cash held(141)(36)
Add cash and short term deposits at start of year1,0591,065
Foreign exchange differences630
Balance at end of year9241,059
COMPRISED OF:
Cash and short term deposits9241,059
9241,059
40 2019 Annual Report
Blis Technologies Limited 41
Notes to and Forming Part of the Consolidated Financial Statements (continued)
Notes to and Forming
Part of the Consolidated
Financial Statements
For the Year Ended 31 March 2019
1. BASIS OF REPORTING
Reporting Entity
The consolidated financial statements presented are
those of Blis Technologies Limited (the “Company”) and its
subsidiary Blis Functional Foods Limited (the “Group”).
The Group’s principal activity is developing healthcare
products based on strains of bacteria that produce
bacteriocin activity for sale in New Zealand and overseas.
Statutory Base
The Company is a profit-oriented entity, domiciled in New
Zealand, registered under the Companies Act 1993 and listed
on the New Zealand Stock Exchange. The Company is an FMC
reporting entity under the Financial Markets Conduct Act 2013.
The financial statements have been prepared in line with the
requirements of these Acts and the Financial Reporting Act 2013.
Basis of Preparation
The financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice
(“NZ GAAP”). They comply with the New Zealand Equivalents
to International Financial Reporting Standards (“NZ IFRS”) and
other applicable financial reporting standards as appropriate
for profit-oriented entities. The financial statements comply
with International Financial Reporting Standards (“IFRS”).
The Financial Statements were authorised for issue
by the Board of Directors on 27th May 2019.
Basis of Measurement
The financial statements have been prepared on the historical
cost basis, except for the derivative financial instruments
that are measured at fair value at the end of each reporting
period as explained in the relevant accounting policies.
Historical cost is based on the fair values of the
consideration given in exchange for assets.
Accounting policies are selected and applied in a manner which
ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that the
substance of the underlying transactions or other events is reported.
The accounting policies set out below have been
applied in preparing the consolidated financial
statements for the year ended 31 March 2019.
The financial statements are presented in thousands of New Zealand
dollars. The New Zealand dollar is the Group’s functional currency.
Critical Judgements, Estimates and Assumptions
In the application of NZ IFRS, the Directors are required
to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and various
other factors that are believed to be reasonable under the
circumstance, the results of which form the basis of making the
judgements. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Judgements made by the Directors in the application
of NZ IFRS that have significant effects on the financial
statements and estimates with a significant risk of
material adjustments in the next year include:
• If the product groupings to which the development
expenditure relate are not economically viable in the future
the development expenditure asset could be overstated.
• The Group determines whether finite life intangibles are
impaired at least on an annual basis. Where there is an
indication of impairment then an estimation of the recoverable
amount of the finite life intangible assets is required.
Determining the recoverable amounts of intangible assets
requires judgement in relation to the effects of uncertain
future events at balance date. Assumptions are required
with respect to future cash flows and discount rates used.
Refer Note 10 for sensitivities and assumptions used.
• The determination of separate performance obligations for the
recognition of revenue. Refer to Note 2 for further information
• Tax Losses - The recognition of a deferred tax asset arising
from prior year’s tax losses is dependent on generating
future taxable profits. No deferred tax asset has been
recognised as at 31 March 2019 but this position will be
reviewed in future periods as the Group demonstrates a
consistent track record of profitable Group results. The
Group’s ability to utilise tax losses is explained in Note 3.
• The Directors have considered the validity of the going
concern assumption. Refer to “Going Concern” at the end
of Note 1 for judgements relating to this assessment.
Significant Accounting Policies
The principal accounting policies applied in the preparation
and presentation of the financial statements are set out
below or in the notes with the item to which they relate, where
policies are specific to certain transactions or balances.
These policies have been consistently applied unless
otherwise stated.
Basis of Consolidation
The Group financial statements incorporate the financial
statements of the Company and all entities controlled by the
Company (its subsidiaries) that comprise the Group, being Blis
Technologies Limited (the parent entity) and its subsidiary Blis
Functional Foods Limited. Control is obtained when the Company
has power over the investee, is exposed to or has rights to variable
returns from its investment, and has the ability to use its power to
affect returns. Consistent accounting policies are employed in the
preparation and presentation of the group financial statements.
The results of subsidiaries acquired or disposed of during
the year are included in the Consolidated Statement of
Comprehensive Income from the effective date of acquisition
or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with those used by the Group.
All intra-group transactions, balances, income and
expenses are eliminated in full on consolidation.
Foreign Exchange
In the course of normal trading activities, the Group undertakes
transactions denominated in foreign currencies, hence exposures
to exchange rate fluctuations arise. Transactions in currencies
other than the New Zealand dollar are recognised at the rate of
exchange prevailing on the dates of the transactions. Trade and
other receivables, trade and other payables, the Euro denominated
bank account and the United States Dollar (USD) denominated
bank account balances are translated at the exchange rates
prevailing at the end of each reporting period as sourced from the
Reserve Bank of New Zealand. Exchange differences are recognised
in the income statement in the period in which they occur.
Goods and Services Tax (GST)
All items in the balance sheet are stated exclusive of GST, with
the exception of receivables and payables, which include GST.
All items in the income statement are stated exclusive of GST.
The GST component of cash flows arising from investing and
financing activities which is recoverable from, or payable to,
the taxation authority is classified as operating cash flows.
New NZ IFRS Standards effective in the
reporting period
All mandatory new or amended accounting standards
were adopted in the current year. These include: NZ IFRS
9 Financial Instruments and NZ IFRS 15 Revenue from
Contracts with Customers and related amendments. None
had a material impact on these financial statements.
All other accounting policies adopted are consistent
with those of the previous financial year.
Impact of initial application of NZ IFRS 9 Financial
Instruments
In the current year, the Group has applied NZ IFRS 9 Financial
Instruments and the related consequential amendments to other
NZ IFRS Standards that are effective for an annual period that
begins on or after 1 January 2018. In accordance with the transition
provisions of NZ IFRS 9 the Group has not restated comparatives.
All recognised financial assets that are within the scope of
NZ IFRS 9 are required to be measured at amortised cost
or fair value on the basis of the entity’s business model
for managing the financial assets and the contractual
cash flow characteristics of the financial assets.
Cash, short term deposits and trade and other receivables
were previously classified as ‘loans and receivables’
and measured at amortised cost. In accordance with
NZ IFRS 9, these are initially recognised at fair value
and subsequently measured at amortised cost.
Foreign exchange contracts continue to be recognised
as fair value through the profit and loss.
Adoption of NZ IFRS 9 Financial Instruments from 1 April
2018 has not resulted in material adjustments to the amount
recognised in the financial statements. There was no change
to the measurement basis of financial assets other than the
introduction of an expected credit loss model for determining
the loss allowance on trade and other receivables.
42 2019 Annual Report
Blis Technologies Limited 43
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
In relation to the impairment of financial assets, NZ IFRS 9 requires
an expected credit loss model as opposed to an incurred credit
loss model under NZ IAS 39. The expected credit loss model
requires the Group to account for expected credit losses and
changes in those expected credit losses at each reporting date
to reflect changes in credit risk since initial recognition of the
financial assets. In other words, it is no longer necessary for a
credit event to have occurred before credit losses are recognised.
NZ IFRS 9 requires a simplified approach for measuring the loss
allowance at an amount equal to lifetime expected credit loss (ECL)
for trade and other receivables that do not contain a significant
financing component. The Group has applied the simplified model.
No adjustment to the loss allowance was
recognised on application of NZ IFRS 9.
Financial liabilities continue to be measured at
amortised cost using the effective interest rate.
Impact of initial application of NZ IFRS 15 Revenue
from contracts with customers
In the current year, the Group has applied NZ IFRS 15 Revenue from
Contracts with Customers which is effective for an annual period
that begins on or after 1 January 2018. NZ IFRS 15 introduced a
5 step approach to revenue recognition. Far more prescriptive
guidance has been added in NZ IFRS 15 to deal with specific
scenarios. Details of the new requirements as well as their impact on
the Group’s consolidated financial statements are described below.
In accordance with the transition provisions of NZ
IFRS 15 adopting the modified retrospective approach
the Group has not restated comparatives.
NZ IFRS 15 uses the terms ‘contract asset’ and ‘contract liability’
to describe what might more commonly be known as ‘accrued
revenue’ and ‘deferred revenue’, however the Standard does
not prohibit an entity from using alternative descriptions in
the statement of financial position. The Group has adopted the
terminology used in NZ IFRS 15 to describe such balances.
The Group’s accounting policies for its revenue streams are
disclosed in detail in note 2 below. Apart from providing more
extensive disclosures for the Group’s revenue transactions,
the application of NZ IFRS 15 has had minimal impact on the
net financial position and/or net financial performance of the
Group. The adoption of NZ IFRS 15 has however impacted the
presentation of certain line items. Below is a comparison of
the financial statement line items that are presented differently
under the current and previous accounting standards:
2019
NZ IAS 18
$’000
2019
NZ IFRS 15
Adjustments
$’000
2019
NZ IFRS 15
$’000
Sale of goods – domestic sales
Finished Goods1,230(43)*1,187
Ingredients39-39
Sale of goods – export sales
Finished Goods1,943(9)*1,934
Ingredients 4,953-4,953
Right to access148(22)**126
Grant Revenue115-115
Other Revenue46-46
8,474(74)8,400
Cost of goods sold
Rebates52(52)*-
Trade payable and other929(31)*898
Rebate liabilities-31*31
Contract liabilities-22**22
92922951
*Rebates are now offset against revenue, where these were
treated as a cost of goods sold under NZ IAS 18, the consequential
liability at year end is separately disclosed from Trade payables.
**NZ IFRS 15 requires a material right to be recognised as a separate
performance obligation where the customer has the right to
extend the access period at a discounted price. The material right
is estimated based on the likelihood of the customer exercising
the option. The material right is recognised as a contract liability.
New NZ IFRS Standards and Interpretations Issued but
not yet adopted
At the date of authorisation of these financial statements,
certain new standards and interpretations to existing
standards have been published but are not yet effective,
and have not been adopted early by the Group.
Management anticipates that all pronouncements will be
adopted in the first accounting period beginning on or after
the effective date of the new standard. Information on new
standards, amendments and interpretations that are expected
to be relevant to the Group financial statements is provided
below. Other new standards and interpretations issued but not
yet effective, that are not expected to have a material impact
on the Group’s financial statements have not been disclosed.
NZ IFRS 16 – Leases (effective for annual reporting
periods beginning on or after 1 January 2019)
NZ IFRS 16: Leases removes the distinction between
operating and finance leases for lessees and requires a
lessee to recognise all leases on balance sheet through:
• an asset representing its right to use the
leased item for the lease term;
• a liability for its obligation to pay rentals.
NZ IFRS 16 contains guidance on identification,
recognition, measurement, presentation, and
disclosure of leases by lessees and lessors.
Management has completed an initial high-level impact
assessment of NZ IFRS 16 on the Group. The new standard
will result in recognition of right-of-use assets and lease
liabilities for those leases disclosed in note 16 (b).
The lease payments are currently recognised in operating expenses.
In future the expense will be recorded as amortisation on the right
to use asset and interest cost on the lease liability. The net impact
on surplus / (deficit) before tax is expected to be immaterial.
Going Concern
The financial statements have been prepared
based on an assumption of going concern.
The Group has recorded a net surplus of $381k (2018:
deficit $1,042k) for the year ended 31 March 2019.
The Directors believe the going concern assumption is
valid, reaching such a conclusion after having regard to
the circumstances which they consider reasonably likely
to affect the Group during the period of one year from
the date these financials statements are approved.
Specifically, the Group held cash reserves of $924k and working
capital of $2,315k as at 31 March 2019 which is considered
sufficient to meet its working capital requirements for at
least 12 months from the date these financial statements
are approved. The Group continues to invest in regulatory
approvals, new product launches and assess the upgrading
of plant to a fully accredited “Good Manufacturing Practice”
(GMP) status as part of the Group’s growth strategy.
Based on management budgets and plans, the Group will
be able to meet financial obligations for at least 12 months
from the date of approval of the financial statements.
The Directors believe that there is no material uncertainty in
respect of the Group ability to continue as a going concern
for the period assessed above due to the level of its current
cash holdings and ability to generate operating cash flows.
Nevertheless, in the event it fails to achieve planned profitability
the Group may not be able to continue as a going concern.
If the Group were unable to continue as a going concern, and pay
debts as, and when, they become due and payable, adjustments to
the carrying value of assets would have to be made to reflect the
situation. In such circumstances, assets may need to be realised
and liabilities extinguished, other than in the normal course of
business and at amounts which could differ significantly from
the amounts at which they are currently recorded in the balance
sheet. This situation would likely impact, in particular, on the
carrying value of plant and equipment and Intangible assets.
These financial statements do not include any adjustments relating
to the classification and recoverability of recorded asset amounts or
to the amounts and classification of liabilities that may be necessary
should the Group be unable to continue as a going concern.
2. SURPLUS / (DEFICIT) FROM OPERATIONS
Policy
Revenue is recognised from the following major sources:
• Sale of goods;
• Right to access; and
• Grants.
Revenue is measured at the fair value of the consideration the Group
expects to be entitled to in accordance with customer contracts
and excludes amounts collected on behalf of third parties.
Sale of Goods
The Group sells ingredients and finished goods to manufacturer
and wholesale customers. In addition to product sales, the
Group provides sales training and support to its customers.
The Group has determined that the sales training and
support is not a distinct performance obligation.
In addition to selling products to customers, the Group also
arranges delivery of the products to its customers. Where
control of the product passes to the customer on departure the
delivery services represent a separate performance obligation.
The Group is an agent in the performance of the delivery
service and the allocated revenue is recognised net of costs.
Revenue from the sale of goods is recognised when the
Group has transferred control of the goods to the customer,
which is typically at the point goods are dispatched. For
44 2019 Annual Report
some customers, the customer does not obtain control until
the goods have been delivered to their premises. For these
customers, revenue is recognised at the date the goods are
delivered. One of the Group’s major customers has entered
into a consignment arrangement. Sales to this customer, are
not recognised until the sale is made to the end customer.
Rebates
The Group provides rebates to certain customers based on the
quantity of products purchased during the period. Rebates are
offset against revenue. To estimate the variable consideration for
the expected rebates, the Group applies the expected value method.
The Group recognises a refund liability for the expected rebates.
Right to access
Right to access agreements with customers provide exclusive
rights to the customer for specified products throughout the
contract period. Revenue from right to access agreements is
recognised over time, on a straight-line basis over the contract term
as this depicts the period of exclusive supply to the customer.
A material right is recognised as a separate performance
obligation where the customer has the right to extend the
access period at a discounted price. In such instances, the
Group recognises revenue when the rights are exercised
or expired. The material right is estimated based on the
likelihood of the customer exercising the option.
Contract liabilities
Revenue is recognised when all associated obligations
have been met. Where consideration has been received
but the associated obligations have not been met, for
instance goods have not yet been provided, it will be
recognised as a contract liability on the balance sheet.
Grant Revenue
Grant revenue is recognised when the Group has met all of the
requirements established by the grant. Grant revenue that
is receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support
to the entity with no future required costs are recognised as
revenue of the period in which it becomes receivable.
Interest Revenue
Interest revenue is accrued on a time basis, by reference
to the principal outstanding and the effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount.
2019
$’000
2018
$’000
(a) Revenue
Revenue consists of the following items:
Point in time recognition:
Sale of goods – domestic sales
Finished Goods1,187765
Ingredients39-
Sale of goods – export sales
Finished Goods1,934221
Ingredients4,9534,256
Grant revenue115-
Other revenue4643
Over time recognition:
Right to access126-
8,4005,285
The transaction price at 31 March 2019 allocated to unsatisfied (or
partially unsatisfied) performance obligations related to contracts
with a duration beyond one year is set out below:
2019
$’000
2018
$’000
Right to access
(contract liability)
22-
The Group expects to satisfy the above performance obligations
during the year ending 31 March 2020.
For other revenue streams the original expected duration of the
contract is less than one year and therefore the Group has elected
not to disclose the transaction price allocated to unsatisfied
performance obligations.
(b) Expenses
2019
$’000
2018
$’000
Directors’ fees259135
Other operating expenses1,6731,218
Amortisation of finite life
intangible assets (Note 10)333395
Operating leases - minimum
lease payments (i)86109
Depreciation of property,
plant and equipment (Note 9)192215
(i) Operating lease rentals include rental streams associated with the
laboratory utilised by the development team and administration and buildings
leased at Glasgow Street and the Birch Street production facility.
3. INCOME TAXES
Policy
Current Tax
Current tax is calculated by reference to the amount of income
taxes payable or recoverable in respect of the taxable profit or tax
loss for the period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting
date. Current tax for current and prior periods is recognised as
a liability (or asset) to the extent it is unpaid (or refundable).
Deferred Tax
Deferred tax is accounted for using the comprehensive
balance sheet liability method in respect of temporary
differences arising from differences between the carrying
amount of assets and liabilities in the financial statements
and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the
extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused
tax losses and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary differences
giving rise to them arise from the initial recognition of assets
and liabilities (other than as a result of a business combination)
which affects neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the period when the liability is
settled or the asset is realised based on tax rates that have been
enacted or substantively enacted at reporting date. Deferred
tax is charged or credited in the Income Statement, except
when it relates to items charged or credited directly to equity,
in which case the deferred tax is also dealt with in equity.
(a) Income tax recognised in profit or loss
The prima facie income tax expense on pre-tax accounting
profit reconciles to the income tax expense in the
financial statements as follows:
2019
$’000
2018
$’000
Net surplus before tax381(1,042)
Income tax expense
calculated at 28%107(292)
Non-deductible items7374
Temporary differences
excluding tax losses
not recognised(42)(36)
Tax losses (recognised)/
not recognised(138)254
Income Tax Expense- -
(b) Income Tax Recognised Directly In Equity
There was no current or deferred tax charged/ (credited) directly to
equity during the period.
(c) Deferred tax balances
The Group has an unrecognised deferred tax asset of $5,183,474
(2018: $5,508,274). The unrecognised deferred tax asset arises in
relation to temporary differences of $336,836 (2018: $359,593)
and gross tax losses of $17,309,415 (2018: $17,802,431) with a
tax effect of $4,846,638 (2018: $4,984,681). The tax losses may
be able to be carried forward and offset against future taxable
income (subject to meeting the requirements of the Income Tax
Act 2007). The availability of these tax losses to apply against
future income is contingent upon maintaining a minimum level
of shareholder continuity and is therefore highly uncertain.
4. REMUNERATION OF AUDITORS
2019
$’000
2018
$’000
Audit of the financial
statements 6560
Additional fees relating
to 2017 audit-20
6580
The auditor of Blis Technologies Limited is Deloitte Limited.
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
46 2019 Annual Report
Blis Technologies Limited 47
5. KEY MANAGEMENT PERSONNEL
COMPENSATION
The compensation of the Chief Executive Officer and
other senior management, being the key management
personnel of the entity, is set out below:
2019
$’000
2018
$’000
Short-term employee and
contractor benefits
9021,228
9021,228
6. CASH AND SHORT TERM DEPOSITS
Policy
Cash & Short Term Deposits
Cash and short term deposits comprise cash on hand, demand
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value. Cash and short term
deposits are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method.
2019
$’000
2018
$’000
Cash
9241,059
9241,059
NZX Bond
A short term deposit is held at Bank of New Zealand as security for
a bond issued to the NZX. These funds do not represent operating
cash reserves.
2019
$’000
2018
$’000
NZX Bond
7575
7575
7. TRADE AND OTHER RECEIVABLES
Policy
Trade and other receivables
Trade and other receivables are initially recognised at fair value
and subsequently measured at amortised cost using the effective
interest method, less any provision for expected credit losses.
The Group applies the simplified approach to measuring expected
credit losses which uses a lifetime expected credit loss allowance.
The measurement of expected credit losses is a function of the
probability of default, loss given default and the exposure at default.
The expected credit losses on trade receivables are estimated
using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor’s current financial
position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the
debtors operate and an assessment of both the current as well
as the forecast direction of conditions at the reporting date.
The allowance recognised is measured as the difference
between the asset’s carrying amount and the present
value of estimated future cash flows discounted at the
effective interest rate computed at initial recognition.
2019
$’000
2018
$’000
Trade receivables 2,303678
Allowance for expected
credit losses (note 20g)(8)-
Goods and services tax
(GST) receivable7716
2,372694
Trade receivables and other receivables are non-interest bearing
and receipt is normally on 30 to 60 day terms. Therefore, the
carrying value of trade and other receivables approximates its fair
value.
8. INVENTORIES
Policy
Inventories are stated at the lower of cost and net
realisable value. Cost is determined using average cost.
Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to
be incurred in marketing, selling and distribution.
Inventories
2019
$’000
2018
$’000
Raw Materials277283
Finished Goods9460
371343
9. PROPERTY, PLANT AND EQUIPMENT
Policy
All items of Property, Plant and Equipment are stated at
cost less accumulated depreciation, and impairment. Cost
includes expenditure that is directly attributable to the
acquisition of the item. In the event that settlement of
all or part of a purchase consideration is deferred, cost is
determined by discounting the amounts payable in the
future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment.
Depreciation is calculated on a straight line basis so as to
write off the net cost of the asset over its expected useful life
to its estimated residual value. The following estimates of
useful lives are used in the calculation of depreciation:
Leasehold improvements 1 - 10 years
Furniture and fittings 2 - 15 years
Plant and equipment 3 - 12 years
Cost
1 April 2018
Additions/
TransfersDisposals
Cost
31 March 2019
Accumulated
depreciation
1 April 2018
Depreciation
expense
Accumulated
depreciation
reversed on
disposalTransfer
Accumulated
depreciation
31 March 2019
Book Value
31 March 2019
$’000$’000$’000$’000$’000$’000$’000$000$’000$’000
Leasehold
Improvements 34324-367(304)(10)--(314)53
Furniture and Fittings 926-98(73)(23)--(96)2
Plant and Equipment 1,62245-1,667(894)(159)--(1,053)614
Total Property, Plant
and Equipment 2,05775-2,132(1,271)(192)--(1,463)669
Cost
1 April 2017
Additions/
TransfersDisposals
Cost
31 March 2018
Accumulated
depreciation
1 April 2017
Depreciation
expense
Accumulated
depreciation
reversed on
disposalTransfer
Accumulated
depreciation
31 March 2018
Book Value
31 March 2018
$’000$’000$’000$’000$’000$’000$’000$000$’000$’000
Leasehold
Improvements 3421-343(244)(60)--(304)38
Furniture and Fittings 902-92(70)(3)--(73)19
Plant and Equipment 1,270352-1,622(742)(152)--(894)728
Total Property, Plant
and Equipment 1,702355-2,057(1,056)(215)--(1,271)785
Property, Plant and Equipment
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
48 2019 Annual Report
Blis Technologies Limited 49
10. FINITE LIFE INTANGIBLE ASSETS
Policy
Intangible assets acquired separately are reported at cost
less accumulated amortisation and accumulated impairment
losses. Amortisations are charged on a straight-line basis
over their estimated useful lives. The estimated useful lives,
residual values and amortisation method are reviewed at the
end of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.
Intellectual Property
The cost of intellectual property is written off until such
time as it becomes clear that future economic benefits
attributable to that expenditure will flow to the Group and
there is sufficient evidence to support the probability of the
expenditure generating sufficient future economic benefits.
Intellectual property including patents, trademarks and
licenses are considered finite life intangibles and are recorded
at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight line basis over the
estimated useful life of the intangible asset being 8 to 20
years. The estimated useful life and amortisation method
is reviewed at the end of each annual reporting period.
Website
Following the initial investment, which is recorded at
cost and amortised over 3 years, the cost of further
website development is expensed as incurred.
Internally-generated Intangible Assets – Capitalised
Product Development Expenditure
Expenditure on research activities is recognised as
an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development
(or from the development phase of an internal project) is recognised
if, and only if, all of the following have been demonstrated:
• the technical feasibility of completing the intangible
asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate
probable future economic benefits
• the availability of adequate technical, financial
and other resources to complete the development
and to use or sell the intangible asset; and
• the ability to measure reliably the expenditure attributable
to the intangible asset during its development.
The amount initially recognised for internally-generated
intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition
criteria listed above. Where no internally-generated intangible
asset can be recognised, development expenditure is charged
to profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same
basis as intangible assets acquired separately. The useful
life of internally-generated intangible assets is 8 years.
Impairment of Assets
At each balance sheet date, the Group reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where
the asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (cash-generating
unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit)
is reduced to its recoverable amount. An impairment
loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years.
The Group has determined that it is inappropriate to capitalise
any further development costs on products that are now in
commercial production or website development costs.
Trademarks
$’000
Patents
$’000
Capitalised
Development
$’000
IT, Website
Development
and Software
$’000
Total
$’000
Gross Carrying Amount
Balance at 1 April 2018- 1 , 0 6 4 3,1151824,361
Additions478--55
Balance at 31 March 2019471,0723,1151824,416
Accumulated amortisation and impairment
Balance at 1 April 2018- 5 5 3 2,8491153,519
Amortisation expense313614945333
Balance at 31 March 201936892,9981603,850
Net Book Value at 31 March 20194438311722566
Gross Carrying Amount
Balance at 1 April 2017- 9 6 6 3,1151594,240
Additions-98-23121
Balance at 31 March 2018-1,0643,1151824,361
Accumulated amortisation and impairment
Balance at 1 April 2017- 4 4 4 2,607703,123
Amortisation expense-10924245395
Balance at 31 March 2018-5532,8491153,519
Net Book Value at 31 March 2018-51126667843
No impairment losses have been recorded in the current year (2018:Nil).
Capitalised product development expenditure relates to costs incurred in relation to the development of
ingredient, intermediate and food products containing BLIS, and the associated regulatory approval processes.
For the purposes of preparing these accounts, the Board reviewed the intangible assets
and have determined that there is no impairment of any intangible assets.
The calculation of the recoverable amounts has been determined based on a value in use calculation that uses
cash flow projections based on the financial forecasts prepared by management covering a five year period.
The recoverable amount calculations are most sensitive to assumptions regarding growth rate, contribution
margins and the required rate of return. Annual sales growth rate of between 0% - 6% (2018: 0% - 31%), and
contribution margins pre-personnel costs of 73% (2018: 77%) and a pre-tax discount rate of 17.4% (2018:
12.5% post tax) have been applied in these projections. Cash flows beyond the five year period have been
extrapolated using a steady 2.5% (2018: 2.5%) growth rate. The recoverable amount is sensitive to each of these
assumptions. If sales growth and/or contribution margins fall short of projections, the recoverable amount
of the capitalised product development and patent expenditure may be less than the carrying value.
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
50 2019 Annual Report
Blis Technologies Limited 51
11. TRADE AND OTHER PAYABLES
Policy
Trade Payables
Trade payable are initially measured at fair value and subsequently
measured at amortised cost using the effective interest rate method.
Employee Benefits
Provision is made for benefits accruing to employees in
respects of wages and salaries and annual leave when it
is probable that settlement will be required and they are
capable of being measured reliably. Provisions are initially
measured at fair value and subsequently measured at
amortised cost using the effective interest rate method.
Provisions made in respect of employee benefits expected to
be settled within 12 months, are measured at their nominal
values using the remuneration rate expected to apply at the
time of settlement. Provisions made in respect of employee
benefits which are not expected to be settled within 12
months are measured at the present value of the estimated
future cash outflows to be made by the Group in respect of
services provided by employees up to reporting date.
Refund Liabilities
Refund liabilities are initially measured at fair value
and subsequently measured at amortised cost
using the effective interest rate method.
2019
$’000
2018
$’000
Trade payables674429
Employee entitlements224152
Refund liabilities31-
929581
12. BORROWINGS
Policy
Borrowings are recognised initially at fair value less directly
attributable transaction costs and subsequently measured
at amortised cost using the effective interest method.
2019
$’000
2018
$’000
Asset Finance171161
Insurance Premium Funding8581
Trade Credit Loan573-
Total Borrowings829290
Current Borrowings700121
Non-Current Borrowings129169
Total Borrowings829290
Facilities
Current borrowings include a trade credit loan facility with the
Bank of New Zealand that has a base limit of $550,000. A temporary
limit increase of the facility to $900,000 was in place at balance
date to assist with the Australian finished goods launch and the
limit reduces to the base approved limit on 30 April 2019 to align
with the receipt of the trade receivable. The effective interest rate
of the trade credit loans is between 6.4% - 7.48% (2018: nil).
Asset Finance loan with the Bank of New Zealand was utilised to
finance the purchase of the Natoli tablet press. The loan has an
effective interest rate of 6.04% (2018: 5.96%). The term of this loan
is over 60 months with the final payment due December 2022. The
loan is secured over the Natoli tablet press, purchased for $293,479.
Security
The banking facilities from Bank of New Zealand are secured
by general security agreement over all present and after
acquired property of Blis Technologies Limited. There
is assignment of Trade Credit Insurance Policy covering
export receivables and specific security (set off and
charge) over Term Deposit funds to secure NZX Bond.
13. INVESTMENT IN SUBSIDIARY
SubsidiaryPercentage HeldBalance DatePrincipal Activity
20192018
Blis Functional Foods Limited100%100%31 MarchNon-trading
14. SHARE CAPITAL
2019201920182018
No. of Shares$’000No. of Shares$’000
Balance at the beginning
of the year (fully paid)
1,107,653,56537,3381,107,653,56537,298
Shares issued pursuant
to CEO Share plan
-42-40
Balance at the end of the year 1,107,653,56537,3801,107,653,56537,338
All 1,107,653,565 ordinary shares are issued and carry equal voting rights. All issued shares
participate equally in any dividend distribution or any surplus on winding up of the Company.
On 2 June 2016, 5,500,000 shares were issued to Mr Brian Watson, Chief Executive of the Company. The
shares were issued at a price of $0.0299 per share. Details of this transaction is shown in note 15.
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
52 2019 Annual Report
Blis Technologies Limited 53
Policy
Equity Instruments
Equity instruments issued by the Group are recorded at the
proceeds received other than in respect to the CEO share plan refer
Note 15.
2019
Cents per
Share
2018
Cents per
Share
Basic earnings (deficit) per share 0.03(0.09)
The earnings and weighted average number of ordinary outstanding
shares used in the calculation of basic earnings per share are
as follows:
$’000$’000
Net earnings (deficit)381(1,042)
No.No.
Weighted average number
of ordinary shares for the
purpose of basic earnings per
share 1 , 1 0 7, 6 5 3 , 5 6 5 1,107,653,565
2019
Cents per
Share
2018
Cents per
Share
Diluted earnings (deficit) per share0.03(0.09)
The earnings and weighted average number of outstanding ordinary
shares used in the calculation of diluted earnings per share are
as follows:
$’000$’000
Net earnings (deficit)381(1,042)
No.No.
Weighted average number of
ordinary shares for the purpose
of diluted earnings per share1 , 1 0 7, 6 5 3 , 5 6 5 1,107,653,565
2019
Cents per
Share
2018
Cents per
Share
Net tangible assets/(liabilities)
per share at year end0.260.20
The net tangible assets and number of outstanding
ordinary shares used in the calculation of net
tangible assets per share are as follows:
$’000$’000
Net tangible assets
2,8552,164
No.No.
Number of ordinary shares
held at 31 March 20191 , 1 0 7, 6 5 3 , 5 6 5 1,107,653,565
Net tangible assets
As at 31 March 2019 the net tangible asset per
share was 0.26 cents (2018: 0.20 cents).
2019
$’000
2018
$’000
To t a l a s s e t s5,2023,888
Less intangible assets(566)(843)
Less total liabilities(1,780)(881)
Net tangible assets2,8562,164
Number of shares
outstanding (‘000)1,107,6541,107,654
Net tangible assets
per share (cents)0.26 0.20
15. RELATED PARTY TRANSACTIONS
In the prior financial year consulting services were provided by
Mr P F Fennessy through AbacusBio Ltd with payments for these
services amounted to $5,500 and $Nil owing at 31 March. In the
current year no services were provided by AbacusBio Ltd.
Also in the prior year Mr T J Mepham, the Chief Financial
Officer of the Group until October 2017, provided professional
consulting services to the Group through Rautaki Advisory.
Payments for these services amounted to $28,624. In the
current year no services were provided by Rautaki Advisory.
During the year, BLIS products were sold to the following related
parties (excluding web sales):
Associated EntityDirector
20192018
P F FennessyP F Fennessy
$293$1,089
Edinburgh Securities Ltd A P Offen
$0$104
A J McKenzieA J McKenzie
$0$141
Product samples are also made available to the staff and Board
members for personal use.
CEO share option and Issue of Shares to the CEO
The Company entered into a Subscription Agreement and issued
5,500,000 new ordinary shares to Brian Watson, the Chief Executive
Officer (CEO) on 2 June 2016. The shares were issued for cash
consideration of 2.99 cents per share being an aggregate $164,500,
which was satisfied by way of a contemporaneous interest free
loan provided by the Company to the CEO for an aggregate
amount equivalent to the subscription price for the shares.
The loan is secured by a lien on the issued shares and repayable
in equal annual instalments commencing on the 1st of December
2017 with the final instalment due on 1 December 2021. The 1st
December 2017 and 1st December 2018 payments were made.
The shares were issued at 90% of the volume weighted average
share price for the 5 trading days prior to 1 June 2016. The issue
price was considered by the Directors of the Company to be
equivalent to the price that the tranche of shares would have
been issued to an independent third party at the time of issue.
The Subscription Agreement provides security against the loan
through a charge on the shares. For accounting treatment
only, the Directors have accepted that the appropriate
approach consistent with the relevant accounting standard
is to treat the entire arrangement as a share option.
Accordingly, the Company took independent professional advice
and received an opinion as to the quantum of the expense to bring
to bear. The Company was advised that using the Black Scholes
option pricing model for the CEO Share Plan at an implied volatility
of 32% and referenced to the prevailing share price of 3.32 cents
on 2 June 2016 yielded an aggregate option value of $54,517. This
amount was treated as an expense as required under NZ IFRS 2.
As a result of the charge to the Income Statement, a CEO Share
Option Reserve was created in the Consolidated Balance
Sheet. Accordingly there is no effect on total equity, in treating
the option value as an expense. Upon receipt of each of the
scheduled loan repayments the notional option value associated
with each tranche will be transferred from the CEO Share Plan
Reserve to Share Capital and the amount of each loan repayment
will be recorded to equity to represent the consideration
received for each tranche of shares issued to the CEO.
Consideration of $32,900 was received for the second tranche of
shares in November 2018 (1st instalment in November
2017: $32,900).
Fair Value of Share Options
The fair value of the share options granted during the 2017 financial
year was $54,517. Options were priced using the Black-Scholes
option pricing model. Expected volatility is based on the historical
share price over the past 5 years, consistent with the options lives,
factoring in a step change in the 9 months prior to grant date.
No allowance for early exercise was incorporated into the fair value
calculation as it was assumed that the CEO would exercise the
options at the latest exercise date.
There are no market or service conditions.
The fair value model is most susceptible to changes in the expected
volatility. Had an expected volatility of 45% been utilised, the
fair value of the share options would have been $69,000.
Inputs to the model
Options series
1 2 3 4 5
Grant Date
Weighted
Average
Share Price
$0.0322$0.0322$0.0322$0.0322$0.0322
Exercise Price$0.0299$0.0299$0.0299$0.0299$0.0299
Expected
Volatility
31.93%31.93%31.93%31.93%31.93%
Option life1.5 years2.5 years3.5 years4.5 years5.5 years
Dividend yield0%0%0%0%0%
Risk-free
interest rate
2.07%2.01%2.00%2.06%2.02%
Final exercise
date
1/12/171/12/181/12/191/12/201/12/21
16. COMMITMENTS FOR EXPENDITURE
(a) Capital Expenditure Commitments
As at 31 March 2019 there is no capital expenditure commitments
(2018: $39k).
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
54 2019 Annual Report
Blis Technologies Limited 55
(b) Lease Commitments
Non-cancellable operating lease commitments are as follows:
2019
$’000
2018
$’000
Less than 1 year
9089
1 - 5 years
229273
Longer than 5 years
157183
17. CONTINGENT ASSETS AND CONTINGENT
LIABILITIES
There were no material contingent assets or contingent
liabilities at 31 March 2019 (2018: $Nil).
18. SEGMENTAL REPORTING
18.1 Operating Segments
The Group is internally reported as a single operating
segment to the chief operating decision-maker.
18.2 Revenue from major products and services
2019
$’000
2018
$’000
The Group’s revenues from its major products
and services were as follows:
BLIS products8,2855,242
Non-core business12146
Total Revenue 8,4065,288
Non-core revenues include interest received, grant revenue and
contract manufacturing revenue of non BLIS branded products.
18.3 Information about geographical areas
The Group operates in 3 principal geographical areas; Asia
Pacific, Europe Middle East and Africa and North America.
The Group’s revenue from external customers and information
about its assets by geographical location (of the customer) are
detailed below:
Trading Revenue
2019201820192018
$’000$’000$’000$’000
Revenue from External
Customers
Non-current Assets
New Zealand1,2267651,2351,628
Asia Pacific (excl NZ)2,866851--
Europe, Middle
East & Africa
2,9712,828--
North America1,222841--
Tot a l Tr a ding R e ve n u e8,2855,2851,2351,628
Interest received63--
Grant revenue115-
Total Revenue8,4065,2881,2351,628
Included in revenue are revenues of $2,945k, $1,652k
and $991k (2018: $2,797k, $834k and $589k) which arose
from sales to the Group’s three largest customers.
Web sales are allocated to the region where
the end consumer is based.
19. RECONCILIATION OF NET DEFICIT WITH
CASH FLOWS FROM OPERATING ACTIVITIES
Policy
For the purpose of the cash flow statement, cash and cash
equivalents includes cash on hand and in banks and investments
in money market instruments net of outstanding bank overdrafts.
The cash flow statement is prepared exclusive of GST, which is
consistent with the method used in the Consolidated Statement of
Comprehensive Income.
Definition of terms used in the cash flow statement:
Operating activities include all transactions and other events that
are not investing or financing activities.
Investing activities are those activities relating to the acquisition
and disposal of current and non-current investments and any other
non-current assets.
Financing activities are those activities relating to changes in
the equity and debt capital structure of the Group and those
activities relating to the cost of servicing the Group’s equity.
2019
$’000
2018
$’000
Net Surplus /(Deficit) for the year381(1,042)
Adjustments for non-cash items:
Amortisation of capitalised
product development costs149242
Amortisation of patents136109
Amortisation of trademarks3-
Amortisation of website
development4545
Depreciation192215
Foreign exchange loss/(gain)(5)(30)
Loss /(Gain) on fair value of
Foreign Exchange Contracts(4)-
897(461)
Movements in working capital
Trade and other receivables(1,682)456
Prepayments(132)8
Inventories (28)6
Trade payable and
contract liability362109
(1,480)579
Net cash inflow/ (outflow)
from operating activities(583)118
20. FINANCIAL INSTRUMENTS
Policy
Financial Instruments
Financial assets and financial liabilities are recognised on the
Group’s Balance Sheet when the Group becomes a party to the
contractual provisions of the instrument.
All of the Group’s financial assets (excluding derivative financial
assets) are measured at amortised cost. Foreign exchange
contracts are measured at fair value, all of the Group’s other
financial liabilities are measured at amortised cost.
(a) Financial Risk Management Objectives
Exposure to credit, interest rate, foreign currency and liquidity
risks arises in the normal course of the Group’s business.
The Group does not enter into derivative financial instruments
for speculative purposes. The Group utilises forward cover
on confirmed foreign currency transactions. Specific risk
management objectives and policies are set out below.
(b) Capital Risk Management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern while maximising the return
to stakeholders through the optimisation of debt and equity.
The capital structure of the Group comprises issued capital
reserves, share option equity reserve and retained earnings
as disclosed in the Statement of Changes in Equity.
The Group’s Board of Directors reviews the capital structure on a
regular basis.
The Group is not subject to externally imposed capital requirements.
The Group’s overall strategy remains unchanged from 2018.
(c) Market Risk
Market risk is the potential for change in the value of financial
instruments caused by a change in the value, volatility or
relationship between market risks and prices. Market risk arises
from the mismatch between assets and liabilities. The Group’s
activities expose it primarily to market risk associated with
changes in foreign currency rates and interest rates as set out
below. These risks are measured using sensitivity analysis. The
mechanisms for managing these risks are set out below. The
Group enters into foreign exchange contracts to manage its
exposure to foreign currency transactions, there have been no
changes during the year to the Group’s exposure to such risks
or the manner in which the risks are measured and managed.
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
56 2019 Annual Report
Blis Technologies Limited 57
(d) Interest Rate Risk
The Group is exposed to interest rate risk as from time to time it borrows funds at floating interest
rates and also invests cash in short term deposits at fixed interest rates. Fair value interest rate risk is
the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
Investments and borrowings at fixed interest rates expose the Group to fair value interest rate risk. The
Group does not hedge this risk. Cash flow interest rate risk is the risk that the cash flows from a financial
instrument will fluctuate because of changes in market interest rates. Borrowings issued at variable
interest rates expose the Group to cash flow interest rate risk. The Group does not hedge this risk.
(e) Foreign Exchange Risk
In the course of normal trading activities, the Group undertakes transactions denominated in foreign currencies;
hence exposures to exchange rate fluctuations arise. The Group enters into foreign exchange contacts on certain
sales denominated in foreign currencies to economically hedge the foreign exchange risk associated with the
timing between the date of sale and receipt of payment. The Group has not adopted hedge accounting.
The carrying amount of the Group’s foreign currency denominated monetary assets are as follows:
2019
$’000
2018
$’000
Euro
261
Australian Dollar
027
United States Dollar
2357
The table below details the notional principal amounts and remaining terms of foreign exchange contracts
outstanding at reporting date:
Average contract rateForeign CurrencyNominal contract value
Fair value Asset/
(Liability)
20192018201920182019201820192018
$’000$’000$’000$’000$’000$’000
Euro
Less than 1 year0.58480.5850351035120(2)
USD
Less than 1 year 0.6764 0.72035371,3815411,3894(8)
5401,8915441,9014(10)
The aforementioned tables express foreign currency amounts in New Zealand dollar equivalents using
the exchange rates at 31 March 2019 and 31 March 2018. The rates applied at 31 March 2019 were:
None AU$ (2018: AU$0.9409)
NZ$1:0.6073 EU$ (2018: EU$0.5850)
NZ$1:0.6817 US$ (2018: US$0.7203)
The fair value of the foreign exchange contracts is based on a discounted cash flow analysis using observable market
data and is a level 2 fair value measurement.
(f) Other Price Risk
The Group is not exposed to substantial other price risk arising from financial instruments.
(g) Credit Risk
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss
to the Group. Financial instruments which potentially
subject the Group to credit risk, principally consist of
bank balances and trade and other receivables.
In the normal course of business, the Group incurs credit risk from
trade receivables and transactions with financial institutions. The
Group requires payment of deposits prior to production by high
credit risk customers and carries trade credit insurance for its four
largest customers. The Group, as a result of the markets in which
they operate, can be exposed to significant concentrations of
credit risk from trade receivables and counterparty risk with the
bank in relation to the outstanding forward exchange contracts.
They do not require any collateral or security to support financial
instruments as these represent deposits with, or loans to, banks
and other financial institutions with high credit ratings.
The maximum exposures to credit risk at balance date are:
2019
$’000
2018
$’000
Cash and short term deposits
9241,059
NZX Bond
7575
Trade receivable
2,295678
GST Receivable
7716
3,3711,828
Ageing Receivables Breakdown
2019
Gross
amounts
receivable
Allowance
for Expected
Credit
Losses
Net
Balance
Ageing analysis of trade receivables$’000$’000$’000
Current2,007-2,007
0 - 30 days (past due)141-141
31 - 60 days (past due)73-73
Greater than 60 days (past due)82(8)74
Total past due296(8)288
Total of trade receivables2,303(8)2,295
2018
Gross
amounts
receivable
Allowance
for Expected
Credit
Losses
Net
Balance
Ageing analysis of trade receivables$’000$’000$’000
Current636-636
0 - 30 days (past due)28-28
31 - 60 days (past due)0-0
Greater than 60 days (past due)14-14
Total past due42-42
Total of trade receivables678-678
At 31 March 2019, trade receivables includes an amount of $1,047k
(2018: $238k) due from one customer and $276k from another
customer (2018: $151k from another customer). All of the Group’s
bank accounts are held with Bank of New Zealand. Otherwise the
Group does not have any other concentrations of credit risk. The
Group does not require any collateral or security to support financial
instruments.
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
58 2019 Annual Report
Blis Technologies Limited 59
2019
Weighted
Average
Effective
Interest
Rate %
Less than
1 year
$’000
1–2 years
$’000
2–3 years
$’000
3–4 years
$’000
4–5 years
$’000
5+ years
$’000
Interest
$’000
Total
$’000
Financial assets at amortised cost:
Cash and short term deposits0.489 2 4 ------924
NZX Bond2.15 75------75
Trade receivable- 2,295------2,295
GST receivable-77------77
To t a l3,371 - -----3,371
Financial liabilities at amortised cost:
Trade payable-929------929
Contract Liability-22------22
Borrowings6.91700444738--22851
To t a l 1,651444738--221,802
2018
Weighted
Average
Effective
Interest
Rate %
Less than
1 year
$’000
1–2 years
$’000
2–3 years
$’000
3–4 years
$’000
4–5 years
$’000
5+ years
$’000
Interest
$’000
Total
$’000
Financial assets at amortised cost:
Cash and short term deposits0.261,059------1,059
NZX Bond0.575------75
Trade receivable-678------678
GST receivable-16------16
To t a l1,828- -----1,828
Financial liabilities at amortised cost:
Trade payable-581------581
Borrowings7.1112142444737- 41322
To t a l70242444737-41913
(h) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests
with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of
the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk
by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group also has
approved trade funding facilities with a base limit of up to
$550k (temporary limit increased to 30 April 2019 to assist with
Australian finished goods launch of $900k) which are linked to
customer specific limits. As at 31 March 2019 the facility was
drawn down $573k, this is included in Current Borrowings.
The maturity profiles of the Group’s interest bearing
investments and borrowings are disclosed later in this note.
Liquidity and Interest Risk Tables
The following tables detail the Group’s remaining contractual
maturity for non-derivative financial assets and financial liabilities.
The tables have been drawn up based on the undiscounted
contractual maturities of the financial assets and financial liabilities
including interest that will accrue to those assets or liabilities.
(i) Sensitivity Analysis
The Group is exposed to foreign currency risk arising from
sales denominated in currencies other than the Group’s
functional currency, arising from normal trading activities.
The majority of foreign currency related exposures relate
to trade receivables. The Group is mainly exposed to the
Australian Dollar, the Euro and the United States Dollar.
Exposures to movements in these foreign currency rates are not
considered material at balance date. The year-end exposure (and
sensitivity to foreign currency rate movements at this time) does
not reflect the risk and exposure during the course of the year. The
Group’s sensitivity to foreign currency rate movements increased
during the year due to an increased proportion of export sales.
Exposure to movement in floating interest rates in respect of cash on
deposit and borrowings is not considered material at balance date.
(i) Fair Value of Financial Instruments
The fair values of financial assets and financial
liabilities are determined as follows:
• the fair value of financial assets and financial liabilities with
standard terms and conditions and traded on active liquid markets
are determined with reference to quoted market prices; and
• The fair value of other financial assets and financial liabilities
(excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted
cash flow analysis using prices from observable current market
transactions and dealer quotes for similar instruments.
The Directors consider that the carrying amount of financial
assets and financial liabilities recorded at amortised cost in
the financial statements approximates their fair values.
21. EVENTS AFTER BALANCE DATE
There were no significant events after balance date (2018: none).
Notes to and Forming Part of the Consolidated Financial Statements (continued)Notes to and Forming Part of the Consolidated Financial Statements (continued)
60 2019 Annual Report
Blis Technologies Limited 61
Additional Stock
Exchange Information
For the Year Ended 31 March 2019
The Company’s ordinary shares are listed on the NZX Limited Main Board (NZSX).
As at 31 March 2019 the total number of issued ordinary shares in the Company was 1,107,653,565.
1. Substantial Product Holders
The following substantial product holder information is given pursuant to section 293 of the Financial
Markets Conduct Act 2013. These substantial product holders are shareholders that have a relevant interest
in 5% or more of the ordinary shares in the Company. As at 31 March 2019 details of the substantial product
holders of the Company and their relevant interests in the ordinary shares of the Company are as follows:
Name of Substantial Product HoldeeShareholding As at 31 March 2019
% of Issued
Share Capital
Combes Investment Management Limited167,602,92615.131%
Sir Eion Sinclair Edgar79,570,8957.220%
Wen Yi (UOB Kay Hian Limited)75,670,1696.830%
Roger Norman Macassey & Murray Graham
Valentine as Trustees of E S Edgar Trust
65,103,4605.907%
2. Spread of Security Holders at 31 March 2019 - Ordinary Shares
Number of security
holders
Percentage of
security holders
Percentage of
shares held
1 - 50,000669 38.56%1.66%
50,001 - 100,00033919.54%2.40%
100,001 - 150,0001367.84%1.59%
150,001 - 200,0001086.22%1.82%
200,001 - 300,0001076.17%2.53%
300,001-500,0001337.67%4.91%
500,001 - 1,000,0001126.46%7.39%
1,000,001 - 5,000,0001056.05%20.17%
5,000,001 and above261.50%57.52%
1,735100%100%
3. Twenty Largest Equity Security Holders
The names of the 20 largest holders of each class of quoted equity security as at 31 March 2019 are listed below.
Top 20 Shareholders
Number of Issued
Ordinary SharesPercentage Issued
Leveraged Equities Finance Limited172,155,52915.54%
Wen Yi (UOB Kay Hian Limited)75,670,1696.83%
Xu Qi Wu & Yao Hong Shen46,370,6894.19%
Mingchun Qiu39,000,0003.52%
Edinburgh Equity Limited31,157,3882.81%
Hui Ai Adriana Tong & Morlan Tong28,966,0322.62%
Michael Herbert Bird28,000,0002.53%
Stephen Patrick Ward, Julie Patricia
Ward & James Michael Ward
25,174,6722.27%
New Zealand Central Securities
Depository Limited
24,167,6522.18%
Mark Alexander Stevens & Wendy Joanne Stevens24,094,5772.18%
Asia Pacific Partners Limited21,850,8781.97%
Custodial Services Limited22,338,5532.02%
Custodial Services Limited17,155,6891.55%
Richard Mark Keenan10,590,0000.96%
Lisa Cherie Van Kampen7,500,0000.68%
Graeme Alan Hoy6,698,1810.60%
Colin John Wilson & Glenys Ann Wilson6,400,0000.58%
Caroline Rose Allum6,042,2040.55%
Vivienne Louise Cowan6,000,2630.54%
Peter Francis Fennessy & Mary Elizabeth Fennessy5,798,1820.52%
TOTAL605,130,65854.60%
4. Credit Rating
The Company does not currently have a credit rating.
5. NZX matters
No waivers were granted by NZX (or relied upon) with respect to the Company during the period 1 April 2018 to
31 March 2019.
Additional Stock Exchange Information (continued)
62 2019 Annual Report
Blis Technologies Limited 63
1
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Blis Technologies Limited
Opinion We have audited the consolidated financial statements of Blis Technologies Limited (the
‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated balance sheet as
at 31 March 2019, and the consolidated statement of comprehensive income, statement of
changes in equity and statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 36 to 59, present
fairly, in all material respects, the consolidated financial position of the Group as at 31 March
2019, and its consolidated financial performance and cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (‘NZ
IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the Company
or any of its subsidiaries, except that partners and employees of our firm deal with the
Company and its subsidiaries on normal terms within the ordinary course of trading activities of
the business of the Company and its subsidiaries.
Audit materiality We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or influence the decisions of such a
person (the ‘qualitative’ materiality). We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $90,000
(2018:$80,000).
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
2
Key audit matter How our audit addressed the key audit matter
Impairment of intangible assets
The Group’s ability to generate revenue is linked to
capitalised development costs and patents in respect of
ingredients for the Group’s products. These are included in
the balance sheet as intangible assets.
The total carrying value of intangible assets at 31 March
2019 is $0.566m as shown in the Consolidated Balance
Sheet and note 10, of which $0.5m relates to capitalised
development costs and patents.
The carrying value of intangible assets is particularly
judgemental given its dependency on forecasts of revenue
growth, contribution margins and required rate of return.
We included impairment of intangible assets as a key audit
matter because if the Group is unable to generate revenue
growth and produce sustainable operating cashflows, this
affects the carrying value of its key intangible assets.
Our procedures focused on evaluating the appropriateness
of the revenue forecasts and operating cash flows included
in the impairment model.
Our procedures included, amongst others:
• Obtaining the Group’s impairment model and gaining
an understanding of key assumptions and judgements
underlying the model.
• Assessing the impairment model for consistency with
the prior year and determining whether any significant
changes to the model were appropriate.
• Challenging the reasonableness of
the key assumptions
including those driving the cash flows underpinning the
analysis, by:
o Comparing historical budget forecasts against
actual results.
o Comparing forecast growth to business plans
approved by the Board.
o Engaging an internal valuation expert to
benchmark the discount
rate against companies of
a similar nature.
• Performing sensitivity analysis on revenue growth
assumptions to assess the impact on forecasted
cashflows.
Going Concern
The financial statements have been prepared on a going
concern basis as discussed in note 1.
Historically, the Group has been loss making, and has raised
capital and taken out borrowings to fund costs during an
extended growth phase.
Accumulated losses shown in the Consolidated Balance
Sheet totalled $34m as at 31 March 2019.
We included the going concern assumption as a key audit
matter as it relies on existing cash reserves and revenue
growth generating sufficient cashflows to cover necessary
expenditure.
In assessing the appropriateness of the going concern
assumption used in preparing the financial statements,
our
procedures included, amongst others:
• Assessing
the cash flow requirements of the Group over
14 months from 31 March 2019 based on budgets and
forecasts.
• Understanding what forecast expenditure is committed
and what could be considered discretionary.
• Considering the liquidity of existing assets on the
balance sheet.
• Considering the terms of the bank loan and trade
finance facilities and the amount available for
drawdown.
• Considering potential downside scenarios and the
resultant impact on available funds.
64 2019 Annual Report
Blis Technologies Limited 65
Company Number 1042367
Issued Capital 1,107,653,565 Ordinary Shares
Registered Office Blis Technologies Limited
81 Glasgow Street, South Dunedin
Dunedin 9012
Shareholders Listed on the NZX Main Board
Share Registrar Link Market Services Limited
Deloitte Centre, 80 Queen Street
Auckland
Directors A P Offen
G S Boyd
V M Aris
G Plunket
B Richardson
A Stewart
Chief Executive B D Watson
Auditors Deloitte Limited
P O Box 1245
Dunedin
Bankers Bank of New Zealand
Dunedin
Solicitors Anderson Lloyd
Private Bag 1959
Dunedin 9054
Downie Stewart Lawyers
P O Box 1345
Dunedin 9054
Goldsmith Law
PO Box 40
Dunedin 9054
Website www.blis.co.nz
Facebook https://www.facebook.com/BLISTechnologiesLtd/
Company Directory
3
Other information
The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If so, we are required to report that fact. We have
nothing to report in this regard.
Directors’
responsibilities for the
consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the directors determine is necessary to enable the preparation of consolidated
financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s
responsibilities for the
audit of the
consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarant
ee that an audit conducted in accordance with ISAs and ISAs (NZ)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for -assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company’s
shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
Heidi Rautjoki, Partner
for Deloitte Limited
Dunedin, New Zealand
27 May 2019
Physical Address
Blis Technologies Limited
81 Glasgow Street
Dunedin 9012
Postal Address
PO Box 2208
Dunedin 9044
New Zealand
Email
info@blis.co.nz
Telephone
PO Box 2208www.blis.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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