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Comvita limited and Group Annual Report

For the year ended 31 March 2011

j THE NATURE i OF NEW ZEALANOru

Contents Page

Directors' declaration 2

Income statement 3

Statement of comprehensive income 3

Statement of changes in equity 4-5

Statement of financial position 6

Statement of cash flows 7

Notes to the financial statements 8 - 39

Audit report 40 -41

Statutory information 42-45

Company directory 46

kwatson

Text Box

2

Income statement Group Company

For the year ended 31 March 2011 2010 2011 2010 In thou$ands of New Zealand dollars Note

Revenue 6 82,009 84,934 3,996 2,448

Cost of sales (36,086) (41,355)

Gross profit 45,923 43,579 3,996 2,448

Other income 6 1,073 573 792 Selling and marketing expenses (21,930) (18,933) (359) (366) Distribution expenses (4,231) (3,201)

Research and development expenses (2,563) (1,751) (243) (293)

Administrative expenses 9 (9,758) (9,666) (2,049) (2,355) Litigation expenses 9 (3,547) (1,007) (186) (208) Intangibles impairment and amortisation 13 (2,070) (885) (1,356) (254)

Operating profit/(lass) before financing costs 2,897 8,709 595 (1,028)

Finance income 7 1,105 318 4,419 3,047 Finance expenses 7 (1,502) (1,811) (1,502) (1,687)

Net finance costs (397) (1,493) 2,917 1,360

Share of (loss}/profit of equity accounted associates 15 (17) 16 (17) 16 Profit before income tax 2,483 7,232 3,495 348

Income tax eXpense 10 (1,980) (2,220) (987) (319)

Profit for the year 503 5,012 2,508 29

Attributable to: Equity holders of the Company 503 4,959 2,508 29 Minority interest 53

Earnings per share: Basic earnings per share (NZ cents) 28 1.82 18.09 Diluted earnings per share (NZ cents) 28 1.78 17.25

Statement of comprehensive income

For the year ended 31 March II! thousands oj New Zealand dollars

Foreign currency translation differences for foreign 1,155 (29)

operations Effective portion of changes in fair value of cash (168) 564 156 270 flow hedges Net change in fair value of available-foHale 4,507 391 4,507 391 financial assets Income tax on income and expense recognised (142) (354) (273) (101) directly in other comprehensive income Income and expense recognised directly in other 5,352 572 4,390 560 comprehensive income Profit for the year 503 5,012 2,508 29 TotaJ comprehensive income for the year 5,855 5,584 6,898 589

Attributable to: Equity holders of the Company 5,855 5,531 6,898 589 Minority interest 53

The notes on pages 7 to 39 are an integral part of these financial statements

3

Statement of changes in equity

Group Share Foreign Hedging Fair Retained Total Minority Total capital currency reserve value earnings interest equity

translation reserve reserve

In INousands of New Zealand dollars

Balance at 1 April 2009 56,831 2,740 (278) 1,076 60,369 47 60,416 Total comprehensive incomefor the year Profit for the year 4,959 4,959 53 5,012 Other comprehensive income Foreign currency translation differences (194) (194) (194) for foreign operations Effective portion of changes in fair value 395 395 395 of cash flow hedges Net change in fair value of available-for- 371 371 371 saJe financial assets Total other comprehensive income (194) 395 371 572 572

Total comprehensive income for the year (194) 395 371 4,959 5,531 53 5~84

Transactions with owners, recorded directly in equity Share based payment 466 466 466 Issue of ordinary shares

- dividend reinvestment plan 104 104 104

- employee share purchase scheme 71 71 71

Dividend paid (559) (559) (559)

Acquisition of minority interest (66) (66) (100) (166)

Total transactions with owners 175 (159) 16 (100) (84)

Balance at 31 March 2010 57,006 2,546 117 371 5,876 65,916 65,916

Total comprehensive income for the year Profit for the year 503 503 503 Other comprehensive income Foreign currency translation differences 1,191 1,191 1,191 for foreign operations Effective portion of changes in fair value (121) (121) (121) of cash flow hedges Net change in falr value of available-for- 4,282 4,282 4,282 sale financial assets Total other comprehensive income 1,191 (121) 4,282 5,352 5,352

Total comprehensive income for the year 1,191 (121) 4,282 503 5,855 5,855

Transactions with owners, recorded direct!.v ill equity Share based payment 149 149 149 Issue of ordinary shares

- private placement (note 19) 2,000 2,000 2,000

- employee share purchase scheme 12 12 12

Dividend paid (1,668) (1,668) (1,668)

Total transactions with owners 2,012 (1,519) 493 493

Balance at 31 March 2011 59,018 3,737 (4) 4,653 4,860 72,264 72,264

The notes on pages 7 to 39 are an integral pm1 of these financial statements

4

Statement of changes in equity

Company Note Share capital Hedging Fair value Retained Total reserve reserve earnings

In thousands of New ZMland dollars

Balance at 31 March 2009 56,885 (335) (1,293) 55,257 Total comprehensive income for the year Profit for the year 29 29 Other comprehensive income Effective portion of changes in fair value of cash flow hedges 189 189 Net change in fair value of available-for-sale financial assets 371 371 Total other comprehensive income 189 371 560 Total comprehensive income for the year 189 371 29 589

Transactions with owners, recorded directly in equity Share based payments 464 464 Issue of ordinary shares - dividend reinvestment plan 104 104 - employee share purchase scheme 71 71

Dividend paid (559) (559) Total transactions with owners 175 (95) 80 Balance at 31 March 2010 57,060 (146) 371 (1,359) 55,926

Total comprehensive income for the year Profit for the year 2,508 2,508 Total other comprehensive income for the year Effective portion of changes in fair value of cash flow hedges !O8 108 Net change in fair value of avaiJable~for-sale financial assets 4,282 4,282 Total other comprehensive income 108 4,282 4,390 Total comprehensive income for the year 108 4,282 2,508 6,898

Transactions with owners, recorded directly in equity Share based payments 149 149 Issue of ordinary shares

- private placement 19 2,000 2,000 - employee share purchase scheme 12 12

Dividend paid (1,668) (1,668) Total transactions with owners 2,012 (1,519) 493 Balance at 31 March 2011 59,072 (38) 4,653 (370) 63,317

The notes on pages 7 to 39 arc an integral part of these financial statcmcnts

5

Statement of financial position Group Company

As at 31 March 2011 2010 2011 2010 In thousands of New Zealand dollars Note

Assets Property, plant & equipment 12 12,993 11,618 Intangible assets 13 43,435 42,705 1,845 2,467 Biological assets 14 5,146 4,798 Investments in equity accounted investees 15 66 250 66 250 Investments in subsidiaries 15 19,015 18,955 Other investments 15 10,916 6,409 10,916 6,409 Defen-ed tax asset 11 770 1,717 201 Total nOD-current assets 73,326 67,497 31,842 28,282

Inventory 16 18,475 13,743 Tax receivable 495 190 16 2 Trade receivables 17 13,565 12,851 Sundry receivables, including derivatives 18 3,783 4,503 61,077 54,511 Cash and cash equivalents 2,450 8,459 64 3,537 Total current assets 38,768 39,746 61,157 58,050 Total assets 112,094 107,243 92,999 86,332

Equity Issued capital 19 59,018 57,006 59,072 57,060 Reserves 8,386 3,034 4,615 225 Retained earnings 4,860 5,876 (370) (1,359) Total equity 72,264 65,916 63,317 55,926

Liabilities Employee benefits 20 301 240 22 16 Deferred revenue 24 5,936 6,685 5,936 6,685 Loans and borrowings 21 15,260 18,450 15,260 18,450 Deferred tax liabilities 11 344 804 Total non-current liabilities 21,841 25,375 22,022 25,151

Loans and borrowings 21 6,125 1,553 6,125 1,553 Tax payable 125 121 Trade and other payables, including derivatives 23 8,937 11,287 537 2,500 Deferred revenue 24 750 750 750 750 Employee benefits 20 2,052 2,241 248 452 Total current liabilities 17,989 15,952 7,660 5,255 Total liabilities 39,830 41,327 29,682 30,406 Total equity and liabilities 112,094 107,243 92,999 86,332

The notes on pages 7 to 39 are an integral part of these financial statements.

6

Statement of cash flows

Group Company

For the year ended 31 March 2011 2010 2011 2010 in rhousands of New Zealand dollars Note

Receipts from customers 80,547 87,254 3,246 2,820 Payments to suppliers and employees (80,751) (64,328) (2,715) (2,627) Interest received 26 66 2,800 2,458 Interest paid (1,700) (1,824) (1,700) (1,691) Taxation received 179 320 53 Taxation paid (1,310) (1,398)

Net cash flows from operating activities 25 (3,009) 20,090 1,631 1,013

Payment for the purchase of property, plant & equipment (2,485) 11,172) Payment for the purchase of olive trees 14 (116) Payment for the purchase of intangibles (1,558) (1,642) (735) (514) Acquisition of subsidiaries, net of cash acquired (327) (22) (22) Investment in subsidiary (59) Capital distribution from equity accounted investee 15 167 167 Acquisition of minority interest (166) Cash from Denna Sciences Inc 24 3.254 3,254 Net cash flows from investing activities (4,319) 252 (627) 2,718

Proceeds from the issue of share capital 2,012 71 2,012 71 Proceeds from loans and borrowings 954 ( 10,370) 954 (4,822) Loans advanced to subsidiary companies (5,775) 5,959 Payment of dividends (1,668) (455) (1,668) (455) Net cash flows from financing activities 1,298 (10,754) (4,477) 753

Net (decrease)/increase in cash and cash (6,030) 9,588 (3,473) 4,484 equivalents Cash and cash equivalents at the beginning of the year 8,459 (756) 3,537 (947) Effect of exchange rate fluctuations on cash held 21 (373)

Cash and cash equivalents at the end of the year 2,450 8,459 64 3,537

Represented as: Cash and cash equivalents 2,450 8,459 64 3,537 Bank overdraft Total 2,450 8,459 64 3,537

Thc notes on pages 7 to 39 are an integral part of thesc financial statements.

7

Notes to the financial statements

1. Reporting entity Comvita Limited (the "Company") is a company domiciled in New Zealand, and registered under the Companies Act 1993 and listed on the New Zealand Stock Exchange ("NZX"). The Company is an issuer in tenns of the Financial Reporting Act 1993. The financial statements of the Group for the year ended 31 March 2011 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in associates.

The principal activity of the Group is that of manufacturing and marketing quality natural health products.

2. Basis of preparation

(a) Statement of compliance 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") as appropriate for profitoriented entities. These financial statements also comply with the International Financial Reporting Standards ("IFRS").

The financial statements were approved by the Board of Directors on 20 May 2011.

The accounting policies have been applied consistently throughout the Group for purposes of these financial statements.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis except that derivative financial instruments, financial instruments classified as available-for-sale and biological assets which are measured at fair value.

The methods used to measnre fair values are discussed further in note 4.

(c) Functional and presentation currency These financial statements are presented in New Zealand dollars ($), which is the Company's functional currency. Amounts have been rounded to the nearest thousand.

(d) Use of estimates and judgements The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any futnre periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:

• Note 4(f) & 14 - valnation of biological assets

• Note 11 - recoverability of deferred tax assets

• Note 13 - measurement of recoverability of cash generating units

• Note 24 - deferred revenue

• Note 26 - measnrement of share based payments

3. Significant acconnting policies

(a) Basis of consolidation 0) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

8


3. Significant accounting policies (continued)

(a) Basis of consolidation (continued) (ii) Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Associates are accounted for using the equity method (equity accounted investees). The consolidated financial statements include the Group's share of the income and expenses of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

(iii) Transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currency (i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the retransJation of available-for-sale equity instruments or a tinancial liability designated as a hedge of the net investment in a foreign operation (see (iii) below).

(ii) Foreign operations The assets and liabilities of foreign operations with currencies different to the parent including goodwill and fair value adjustments arising on acquisition, are translated to New Zealand dollars at exchange rales at the reporting date. The income and expenses of such foreign operations are translated to New Zealand dollars at exchange rales at the dates of the transactions. Foreign currency differences are recognised in the foreign currency translation reserve (FCTR). When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to the income statement.

(iii) Hedge of" net investment in foreign operation Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in foreign operation are recognised in other comprehensive income to the extent that the hedge is effective and afe presented within equity in the FCTR. To the extent that the hedge is ineffective, such differences are recognised in the profit or loss. When the hedged net investment is disposed of, the cumulative amount in equity is transferred to profit or loss as an adjustment to the profit or loss on disposal.

(e) Financial instruments (i) Non~derivativefil1aJ1ciaI inSf}"wnents

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair vaJue plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group's obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and demand deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Accounting forfinance income and expense is discussed in note 3(0).

A vailable-for-salefin(1llcia! assets The Group's investments in equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impaimlent losses and foreign exchange gains and losses on available-for-sale monetary ilem~ are recognised in other comprehensive income, and presented in the fair value reserve within equity. Fair value is measured as the quoted bid price at the end of the reporting period. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.

9



(c) Financial instruments (continued) Instruments atfair value through profit or loss An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments afC designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value, Upon initial recognition, attributable transaction costs afC recognised in profit or loss when incurred. Subsequent to initial recognition, financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

Other Subsequent to initial recognition, other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment.

Trade and other receivables Trade and other receivables are stated at their cost less impairment losses.

Loans and borrowings Interest-bearing borrowings are classified as other non-derivative financial instruments.

Trade and other payables Trade and other payables are stated at cost.

(ii) Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks mising from operational, financing and investment activities. In accordance with ils treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship (see below).

Cash.flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised in other comprehensive income and presented in equity in the hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the income statement.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs. The amount recognised in equity is transferred to the income statement in the same period that the hedged item affects profit or loss.

(d) Share capital Ordinal)' shares Incremental costs directly attributable to the issue of ordinary shares and share entitlements are recognised as a deduction from equity.

Repurchase o/share capital When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity.

(e) Property, plant and equipment (i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and impainnent losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of propel1y, plant and equipment.

10



(e) Property, plant and equipment (continued) Oi) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day~ to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation Depreciation is recognised in the income statement on a straight-line basis over the estimated useful1ives of each part of an item of property, plant and equipment. Leased assets are depredated over the shorter of the lease term and their llsefullives. Land is not depreciated.

The estimated useful liYes for the current and comparative periods are as follows:

• Buildings up to 50 years

• Plant and machinery 5-15 years

• Vehicles 5-10 years

• Office equipment, furniture and fittings 3-10 years

• Bee Hives up to 20 years

Depreciation methods, useful lives and residual values are reassessed at the reporting date.

(f) Biological assets Biological assets are measured at fair value less point-of-sale costs, with any change therein recognised in the income statement. Point-ofsale costs include all costs that would be necessary to sell the assets. Biological assets are transferred to inventory at its fair value less estimated point-of-sale costs at the date of harvest.

(g) Intangible assets (i) Goodwill

Goodwill arises on the acquisition of subsidiaries.

Acquisitions prior to 1 January 2006 As part of its transition to NZ IFRS, the Group elected to restate only those business combinations that occurred on or after 1 January 2006. In respect of acquisitions prior to I January 2006, goodwill represents the carrying amount recognised under previous NZ GAAP as at J January 2006.

Acquisitions on or after I January 2006 For acquisitions on or after 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative (negative goodwill), it is recognised immediately in the income statement.

Acquisitions of minority interests Goodwill arising on the acquisition of a minority inlerest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange.

Subsequent measurement Goodwill is measured at cost less accumulated impairment losses.

(ii) Research and development Expenditure on research activities, undertaken with (he prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement when incuned.

Development activities involve a plan or de.sign for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the income statement when incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.

(iii) Other intangible assets Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impainncnt losses.

11



(g) Intangible assets (continued) (iv) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in the income statement when incurred.

(v) Amortisation Amortisation is recognised in profit or Joss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

• Brands, patents and trademarks 5 - 10 years

• CapitaJised development costs 2 - 5 years

• Software 5 years

(h) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and the leased assets are not recognised on the Group's statement of financial position.

(i) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of items transferred from biological assets is their fair value less point-of-sale costs at the date of transfer.

(j) Impairment The carrying amounts of the Group's assets are reviewed at each reporting date to determine whether there is any objective evidence of impairment.

An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the carrying amount of assets and are recognised in the income statement.

(i) Impailment of equity instrumentS Equity instruments are deemed to be impaired whenever there is a significant or prolonged decline in fair value below the original purchase price. For this purpose prolonged is regarded as any period nine months or longer and significant as more than 20 percent of the original purchase price of the equity instrument. Any impairment below cost value of the asset is recognised through the income statement.

Any subsequent recovery of an impairment loss in respect of an investment in an equity instrument classified as available-for-sale is not reversed through the income statement-

(ii) Impairment of receiyables The recoverable amount of the Group's investments in receivables carried at amortised cost is calculated as the present value of estimated future cash flows. Impairmenllosses on an individual basis are determined by an evaluation of the exposures on an instrument by instrument basis. All individual instruments that are considered significant are subject to this approach.

For trade receivables which are not significant on an individual basis, collective impairment is assessed on a portfolio basis based on numbers of days overdue, and taking into account the historical Joss experience in portfolios with a similar amount of days overdue.

(iii) Non-financial assets The carrying amounts of the Group's non-financial assets, other than inventories, biological assets and deferred tax assets, are reviewed at each repOiting date to detemline whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the canying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash~ generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated fir~t to reduce the carrying amount of any goodwill allocated to the units and then 10 reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.



G) Impairment (continued) The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reHeets current market assessments of the time value of money and the risks specific to the asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impainnent loss is reversed if there has been a change in the estimates used to detennine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been detennined, net of depreciation or amortisation, if no impairment loss had been recognised.

(k) Employee benefits (i) Other long-tenn employee benefits

The Group's net obligation in respect of long-term employee benefits is the amount of futUre benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to detennine its present value, and the fair value of any related assets is deducted.

(ii) Short-tenn employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-ternl cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably,

(iii) Share-based payment transactions The grant date fair value of entitlements granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the entitlements. The amount recognised as an expense is adjusted to reflect the actual number of share entitlements that vest.

(I) Revenue (i) Goods sold

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible retum of goods can be estimated reliably, and there is no continuing management involvement with the goods.

Transfers of risks and rewards vary depending on the individual tenns of the contract of sale. For domestic sales, transfer usually occurs \\hen the product is received at the customer's warehouse; however, for some international shipments transfer occurs upon loading the goods onto the relevant callier.

(ij) Royalties Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement Royalties determined on a time basis are recognised on a straight-line basis over the period of the agreement.

(iii) Management fee income Management fee income is recognised when the services have been performed.

(i\') Deferred revenue Deferred income is recognised as revenue over the term of the expected benefits.

(m) Government Grants Government grants are recognised initially as deferred income when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in the income statement on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in the income statement on a systematic basis over the useful life of the asset.

(n) Lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over tbe term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between tbe finance expense and the reduction of the olltslanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments oyer the remaining tenn of the lease v,hen the lease adjustment is confim1ed.

13



(0) Finance income and expenses Finance income comprises interest income on funds invested, dividend income and gains on the disposal of available-for-sale financial assets that afe recognised in profit or loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

FInance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, impainnent losses recognised on financial assets (except for trade receivables) and losses on the disposal of available-for-sale financial assets that are recognised in profit or loss. All borrowing costs are recognised in the income statement using the effective interest method.

(p) Income tax expense Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised in other comprehensive income, in which case it is recognised in equity.

CUrrent tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous periods.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporaty differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

(q) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is detennined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share entitlements granted to employees.

(r) New standards and interpretations not yet adopted A number of new standards and interpretations are not yet effective as at 3 J March 2011, and have not been applied in preparing these consolidated financial statements. The relevant standards include:

• NZ IFRS 9 - Financial Instruments: Classification and Measurement - Approl'ed ill November 2009 and effective for periods 011 or after J JanuQ/}' 20J 3. This is not expected to result in material changes to the financial statements.

14


4. Detennination of fair values Some of the Group's accounting policies and disclosures require the detennioation of fair value. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a) Investments in equity securities The fair value of available-for-sale financial assets is determined by reference to their quoted bid price at the reporting date.

(b) Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. Short term receivables are not discounted.

(c) Derivatives The fair value of forward exchange contracts is estimated using the currently quoted forward price for the residual maturity of the contract. The fair value of interest rate swaps is based on broker quotes.

(d) Non-derivativefinancial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements.

(e) Share based payment transactions The fair value of employee share entitlements is measured using a Monte Carlo simulation model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and nonmarket performance conditions attached to the transactions are not taken into account in determining fair value.

(f) Biological assets Olive trees are valued at fair value based on a combination of a replacement cost and a discounted cash flow model. Refer to note 14 for further details.

5. Segment reporting

Segment information is presented in the financial statements in respect of the Group's contJibution segments which are the primary basis of decision making. The contribution segment reporting format reflects the Group's management and internal reporting structure.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Performance is measured based on contribution which is a measure of profitability that the segment contributes to the Group. Contlibution is used to measure performance as management believes that such information is most relevant in evaluating the results of cenain segments. Inter-segment pricing is determined on an arms-length basis.

Each segment sells Com vita's range of products, except for the medical CGU, see below.

The Group hasfil'e reportable segments as described below:

New Zealand

Australia

Asia

Europe

Medica!

This segment captures both revenue and related costs for the New Zealand market, excluding exports.

This segment captures both revenue and related costs for the Australian domestic market and includes non-intercompany revenue and costs from Comvita Australia Pty Limited. This ~egment excludes all medical based revenue and costs as these are shown in their own segment.

This segment captures both revenue and related costs of our operations of Asian operations and customers. The Asian segment includes Hong Kong, Taiwan, Japan, China, Korea and Singapore.

This segment captures both revenue and related costs for the United Kingdom and European market. This segment excludes all medical based revenue and costs as these are shown in their own segment.

This segment is based over multiple geographical regions capturing both revenue and related costs for medical based product. The main contributors to this segment are Medihoney Australia Pty Limited, Medihoney (Europe) Limited, bulk medical sales, defen-ed revenue (note 24) and royalty payments received from Derma Sciences Inc.

b· Notes to the financial statements

5. Segment reporting (continued)

In lhou.<ands of New ZealJlld dollar, New Zealand Australia Asia Europe Medical Total reportable

Other Total segments

For the year ended 3 I March 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Contribution Segments

Sales 16,911 17,226 19,227 22,380 26,499 26,119 10,998 8,950 3,232 4,552 76,867 79,227 5,142 5,707 82,009 * 84,934

Contribution 7,993 6,579 7,154 9,351 5,205 5,977 798 99 1,242 287 22,392 22,293 1,557 43 23,949 22,336

Non attributable (other corporate expense~) (21,449) (15,120)

Share of (loss)/profit of equity accounted investees (17) 16

Net profit before tax 2,483 7.232

* Sales are net of inter-segment transactions. Inter-segment sales arc nil (2010: nil),

Geographical segments

In thousands or Nuw Zealand dollar, 2011 2010

For the year ended 31 March Revenue Non-current assets Revenue Non-current assets

New Zealand 17,588 16,651 17,226 15,750

Australia 21,122 35,049 25,013 33,710

Asia 26,718 8,168 26,911 8,210

United Kingdom \3,061 1,706 14,072 1.451

North America 3,520 - 1.712 -

Total 82,009 61,574 84,934 59,121 --- ~ Investment in equity accounted investees (\7) 66 16 250

Total 81,992 61,640 84,950 59,371 . . ~

16


6. Revenue

In thousand., of New Zealand dollar.! Note

Sales Royalties Management fee Deferred revenue released 24 Total revenue

Other income

WaikaloLink settlement (net of interest) 13 Change in fair value of biological assets 14 Government grants Net gain on disposal of property, plant & equipment Total other income

7. Financial income and expenses

In thOUMllds of New Zealand dol/ars

Interest income on bank deposits Interest income from subsidiaries Net foreign exchange gain Net gain in fair value of derivatives designated at fair value through profit and loss Finance income

Interest expense on financial liabilities measured at amortised cost Finance expense Net finance costs

8. Personnel expenses

In rhousand" of New Zealand doliars

Wages and salaries Kiwisaver - employer contribution Long-service leave Equity settled share based payment transactions Total personnel expenses

9. Expenses Administrative expenses

Group 2011

80,678 582

749 82,009

792 14

252 15

1,073

Group 2011

26

360 719

1,105

(1,502)

(1,502) (397)

Group 2011

18,264 104 75

149 18,592

The following items of expenditure are included in administrative expenses: Group

2010

84,448 424

62 84,934

172 401

573

2010

66

81 171

318

(1,811)

(1,811) (1,493)

2010

16,150 57

(18) 149

16,338

In rilm,sands of NewZe"land dollars Note 2011 2010 Auditors' remuneration: To KPMG for audit services 215 157

174 To KPMG for tax services 138 To KPMG for accounting advice To Day Smith Hunter (UK auditors)

Personnel expenses (in admin) Depreciation (in admin) Insurance Doubtful debts expense Bad debts written off Other legal & professional expenses Directors' fees Rental expense (in admin) Directors - other remuneration Donations Other impainnentlosses

Litigation expenses

8 12

30

17 39

3,900 1,050

630 405

23 390 267 288

33 28

23 33

3,846 733 605 (4) 68

504 224 447

9 73

120

Company 2011

3,247 749

3,996

792

792

Company 2011

2,800 916 703

4,419

(1,502)

(1,502) 2,917

Company 2011

1,687 17 6

149 1,859

Company 20U

112 174

17

879

286 267

33

Litigation expenses relates to the legaJ expenses incurred in respect of the WaikatoLink and Brightwake court cases for protection of various patents. Refer to notes 13 & 32, respectively, for further details. Note 6 details other income from WaikatoLink settlement.

2010

2,386 62

2,448

2010

4 2,452

435 156

3,047

(1,687)

(1,687) 1,360

2010

1,695 9 6

149 1,859

2010

156 138 23

848

433 221

9

17


10. Income tax expense in the income statement

1111housands of New Zealand dollars

Current tax expense Current year Research and development tax credit Adjustment for prior periods

Deferred tax expense Origination and reversal of temporary differences Tax rate change Effect of change in depreciation rate for buildings

Total income tax expensef(benefit)

Reconciliation of effective tax rate

In t/lI:msaJ1d., of New Zealand dollars

Profitl(Loss) for the year Total income tax expense/(benefit) Profit/(Loss) excluding income tax

Income tax using the Company's domestic tax rate Effect of tax rates in foreign jurisdictions" Non-deductible expenses Tax exempt income Research and development tax credit Non-deductible foreign tax credits Effect of cbange in depreciation rate for buildings ".,,Effect of change in tax rate *~ Under/(over) provided in prior periods

Group 2011 2010

831 1,117 (130)

103 831 1,090

23 1,130 32

1,094 1,149 1,130

1,980 2,220

Group 2011 2010

503 5,0]2 1,980 2,220 2,483 7,232

745 2,170 (23) (85) 193 191

(431) (19) (130)

253 1,094

32 117 93

1,980 2,220

Subsidiaries registered in Hong Kong have a tax rate of 16.5'], and United Kingdom have a tax rate of 28%

Company 2011

255

255

776 (44)

732

987

Company 2011

2,508 987

3,495

1,049

99 (431)

253

(44) 61

987

2010

(112)

112

(319)

(319)

(319)

2010

29 319 348

104

ll5 (19)

ll9 319

** On 20 May 2010 the New Zealand Government announced its 2010 budget. The company tax rate will reduce from 30% to 28'70 from 1 April 2011. The effect of this change has been reflected in these financial statements, being an increase in deferred tax expense and a corresponding movement in deferred tax of $32,000 for the group and a decrease in deferred tax expense of $44,000 for the company.

In addition, the ability to claim tax depreciation deductions on buildings with an estimated useful life of 50 years or more, will be removed from the start of the 2011/2012 income tax year. The impact of this change has resulted in an increase in deferred tax expense and a movement in defened tax of $1 ,094,000,

Income tax recognised directly in other comprehensive income

In Iho,""ands of New Zealand dolla,.,.

Derivatives Available-far-sale financial assets Other items Total income tax recognised directly in other comprehensive income

Group 2011

47 (225)

36 (142)

2010

(169) (20)

(165) (354)

Company 20ll

(48) (225)

(273)

2010

(82) (19)

(101)

18

b~ Notes to the financial statements

10.

11.

Income tax expense in the income statement (continued)

Imputation credits Group Company

In thousands of New Zealand dollars 2011 2010 2011 2010 Imputation credits at beginning of year 2,125 2,401 (140) 180 New Zealand tax payments, net of refunds (166) (9) 15 (53) Imputation credits attached to dividends paid (699) (267) (699) (267) Imputation credits at balance date 1,260 2,125 (824) (140)

The imputation credits are available to shareholders of the Company: Through the Company (824) (140)

Through subsidiaries 2,084 2,265

Deferred tax assets

Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following:

Group In thousands of New Zealand dol/ars Assets Liabilities Net

2011 2010 2011 2010 2011 2010 Property, plant & equipment (1,374) (64) (1,374) (64) WaikatoLink intangible assets 512 512 Biological assets (24) (24) (24) (24) Available-for-sale financial assets 27 (198) (198) 27 Derivatives (2) (49) (2) (49) Investments (735) (771 ) (735) (771) Inventories 928 243 928 243 Other items 273 (58) 273 (58) Tax loss carry-forwards 1,558 1,901 1,558 1,901 Tax assets/(liabilities) 2,759 2,683 (2,333) (966) 426 1,717 Set off of tax (1,989) (966) 1,989 966 Net tax assets/(liabilities) 770 1,717 344 426 1,717

Company In rhousands of New Zealand dol/w:1 Assets Liabilities Net

2011 2010 2011 2010 2011 2010 WaikatoLink intangible assets 512 512 Available-for-sale financial assets 27 (198) (198) 27 Derivatives 15 63 15 63 Investments (1,019) (771) (1,019) (771 ) Other items 36 21 36 21 Tax loss carry-forwards 362 349 362 349 Tax assets/(liabilities) 413 972 (1,217) (771) (804) 201

The utilisation of tax loss carry-forwards is dependent on expected future taxable profits in excess of the profits from the reversal of existing taxable temporary differences. This recognition is based on current budgets and financial modelling completed by management.

Movement in temporary differences during the year

Group 2011 In rnousand.1 of Ncov Zealand dol/an

Property, plant & equipment

WaikatoLink intangible assets

Biological assets

Available-far-sale financial assets

Derivatives

Investments

Inventories

Other items

Tax loss carry-forwards

Total

Balance I April 2010

(64)

512

(24)

27

(49) (771)

243

(58)

1,901

1,717

Recognised in profit or loss

(1,310)

(512)

685

331 (343)

(1,149)

Recognised in other comprehensive

income

(225)

47

36

(142)

Balance 31 March2011

(1,374)

(24)

(198)

(2)

(735)

928 273

1,558

426

19


11. Deferred tax assets (continued)

Movement in temporary differences during the year continued

Group 2010 In thousands of New Zealand do/lars

Property, plant & equipment WaikatoLink intangible assets

Biological assets Available-foHale financial assets

Derivatives Investments

Inventories Other items

Tax loss carry-forwards

Total

Company 2011 In rhousands of New Zeal<md dollars


Available-for-sale financial assets

Derivatives

Investments

Other items Tax loss carry-forwards

Total

Company 2010 In thousands of New Zealand doll"':I'


Available-far-sale financial assets

Den,-atives

Investments

Other items Tax loss carry-forwards

Total

Balance 1 April 2009

(80)

546

(20)

46

126

(593)

419

304 2,453

3,201


512

27

63 (771)

21

349

201


546

46 151

(593)

16

455

621

Recognised in Recognised in other profit or loss comprehensive

income

16 (34)

(4)

(20)

(6) (169) (13) (165)

(176)

(362)

(552)

(J,130) (354)

Recognised in Recognised in other profit or loss comprehensive

income

(512)

(225)

(48) (248)

15

13

(732) (273)

Recognised in Recognised in other profit or Joss comprehensive

income

(34)

(19) (6) (82)

(178)

5

(106)

(319) (101)

Movement in unrecognised deferred tax assets and liabilities during the year Group 2011

I" tlwl<,<olldJ of New Zealand dollars Balance Additions Recognition Exchange 1 April 2010 rate

Tax losses 916 (6)

Group 2010 In rho",'and, (}j'Nplt' Zealand dollar; Balance Additions Recognition Exchange

I April 2009 rate

Tax losses 1,095 (179)

There were no unrecognised amounts in the Parent in 2011 or 2010.

Balance 31 March 2010

(64)

512

(24)

27

(49)

(771)

243 (58)

1,901

1,717


(198)

15

(1,019)

36

362

(804)


512

27

63

(771)

21

349

201


910


916

20


11. Deferred tax assets (continued)

Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items:

In thousand .• of New Zealand dollars

Group 2011 2010

Company 2011 2010

12.

Tax loss carry-forwards 910 916

The tax loss carry-forwards do not expire under current tax legislation. This deferred tax asset mainly relates to Medihoney (Europe) Limited for pre-acquisition losses and is unrecognised as it is not probable that future taxable profit will be available in the short term against which the Group can utilise the benefit.

Property, plant & equipment

Group Land Building,~ Owned plant Vehicles Office Total

In thou,ymds of New Zealwld do//m:< & machinery equipment,

furniture &

fittings

Cost Balance at 1 April 2009 1,272 7,880 5,590 312 2,490 17,544 Other additions 19 30 396 36 725 1,206 Disposals (118) (28) (88) (234) Effect of movements in exchange rales 64 56 62 (6) (158) 18 Balance at 31 March 20 I 0 1,355 7,966 5,930 314 2,969 18,534

Other additions 7 1,040 488 67 1,071 2,673 Disposals (52) (80) (132) Effect of movements in exchange rales 44 39 30 26 (18) 121 BaJance at 31 March 2011 1,406 9,045 6,448 355 3,942 21,196

Depreciation Balance at 1 April 2009 (1,850) (2,136) (121 ) (1,675) (5,782) Depreciation for the year (231) (662) (82) (362) (1,337) Disposals 93 15 51 159 Effect of movements in exchange rates (6) (10) (10) 70 44 Balance at 31 March 2010 (2,087) (2,715) (198) (1,916) (6,916)

Depreciation for the year (170) (519) (61) (672) (1,422) Disposals 33 80 113 Effect of movements in exchange rates (6) (10) (I) 39 22 Balance at 31 March 2011 (2,263) (3,244) (227) (2,469) (8,203)

Carrying amounts At J April 2009 1,272 6,030 3,454 191 815 11,762 At 31 March 2010 1,355 5,879 3,215 116 1,053 11,618 At 31 March 2011 1,406 6,782 3,204 128 1.,473 12,993

Security Security anangements are detailed in note 21.

21


13. Intangible assets

Group Note Goodwill Brands, Product Software Total

In Ihol<sands of New Zealand dollars patents, development trademarks ,,>,~

Cost Balance at 1 April 2009 36,751 6,213 230 2,042 45,236 Other additions 1,271 399 1,670 Effect of movements in exchange rates 1,257 74 (39) 1,292 Balance at 31 March 2010 38,008 7,558 230 2,402 48,198

Other additions 67 798 810 1,675 Written-off during the year (83) (83) Effect of movements in exchange rates 1,112 51 (7) 1,157 Balance at 31 March 2011 39,187 8,325 230 3,205 50,947

Amortisation and impairment losses Balance at 1 April 2009 (677) (2,945) (99) (882) (4,603) Amortisation for the year (502) (37) (346) (885) Effect of movements in exchange rates (17) 12 (5) Balance at 31 March 2010 (677) (3,464) (136) (1,216) (5,493)

Amortisation for the year (460) (36) (444) (940) Impainnent for the year 13, (1,130) (1,130) Written-off during the year 83 83 Effect of movements in exchange rates (36) 4 (32)

Balance at 31 March 2011 (677) (5,007) (172) (1,656) (7,512)

Carrying amounts At 1 April 2009 36,074 3,268 131 1,160 40,633 At 31 March 2010 37,331 4,094 94 1,186 42,705 At 31 March 2011 38,510 3,318 58 1,549 43,435

Company

Cost Balance at 1 April 2009 51 4,831 43 4,925 Acquisitions 513 513 Balance at 31 March 2010 51 5,344 43 5,438

Acquisitions 734 734 Balance at 31 March 2011 51 6,078 43 6,172

Amortisation and impairment losses Balance at I April 2009 (51) (2,623) (43) (2,717) Amortisation for the year (254) (254)

Balance at 31 March 2010 (51) (2,8771 (43) (2,971)

Amortisation for the year (226) (226) Impainnent for the year 13a (1,130) (1,130)

Balance at 31 March 2011 (51) (4,233) (43) (4,327)

Canyillg amounts At 1 April 2009 2,208 2,208 At 31 March 2010 2,467 2,467 At 31 March 2011 1,845 1,845

Security Security arrangements are detailed in Note 21,

22


13. Intangible assets (continued)

(a) Impairment loss - WaikawLink patents In December 2006, Comvita entered into an agreement with WaikatoLink, the commercialisation ann of the University of Waikato, to acquire Intellectual Property (IP) and rights for future IF at the University of Waikato over an eight year period. An initial payment of $1.5 million (comprising cash $750,000 and shares $750,000) was paid in December 2006 upon signing and subsequent payments of $1.25 million and $750,000 were due on the first and second anniversaries respectively. Comvita did not accept that it had any legal liability for the second and third instalments as it believed WaikatoLink misrepresented what it had to sell and was in breach of the Fair Trading Act

Comvita Limited took a $2 million impairment loss against the WaikatoLink intangible asset in the year ended 31 March 2008 and a further $1.1 million impairment loss this year. The net book value of the asset at 31 March 2011 is nil (2010: $1,130,000).

In April 2010 WaikatoLink initiated proceedings in the High Court for the $2 million outstanding. The Court ruled that on an objective analysis WaikatoLink's conduct was misleading, deceptive or false in three material respects. The court found Comvita was entitled to setoff $1 million as compensation for its loss or damage against the $2 million owing to WaikatoLink.

Comvita Limited has released $1 million of the $2 million liability (first recognised in the 2008 financial year) to other income (refer note 6) in the current period and paid WaikatoLink $1 million of the balance owing along wilh interest payments due.

(b) Impainncnt testing for cash-generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group's operating divisions which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.

The aggregate carrying amounts of goodwill allocated to each COU are as follows:

In thousands of New Zealand dollars

Medical Olive Products "' Hong Kong ';.~.

United Kingdom Other Total goodwill

,j' this CGU is within the Australia segment (refer note 5) *"- this CGU is within the Asia segment (refer note 5)

Group 2011

8,666 19,794 7,837 2,146

67 38,510

2010

8,362 18,922 7,893 2,154

37,331

The recoverable amounts of each of the above CGU's are the greater of their values in use and their fair values Jess costs to sell. In assessing the values 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 assets.

Value in use v.as determined by discounting the future cash flows generated from the continuing use of the unit and were based on the following key assumptions:

• Cash flows were projected on actual operating results and the 5-year business plan. • The anticipated annual revenue growth included in the cash flow projections for the combined four CGU's ranged from 4% to

15% (normalised) for the years 2011 to 2016. A pre-tax discount rate range of 14.5%· to 16.7% between the four CGU's was applied in determining the recoverable amount of the units. The discount rate was based on the average weighted cost of capital which was based on debt leveraging of 25~b at a cost of debt rate of 8.QQ,. A conservative tenninal growth rate of 2.590 was applied beyond March 2016.

23


14. Biological assets

/nthousands oj New Zealand dollar.,

Balance at beginning of the year Decrease due to removal of trees Increase due to new plantings Change in fair value less estimated point-of-sale costs Effect of movements in exchange rates Balance at the end of the year

Note

6

Group 2011

4,798

116 14

218 5,146

2010

4,506 (188)

172 308

4,798

At 31 March 2011 biological assets consists of approximately 561,000 hedge row olive trees and 8,200 grove olive trees (2010: 521,000 & 8,200).

The grove trees are valued on a fair value basis using a discounted cash flow approach. The hedge row trees are valued on a fair value basis considering the cost of replicating the assets along with a discounted cash flow.

The Group is exposed to a number of risks related to olive trees, primarily the risk of damage from climatic changes, diseases, fire, other natural forces and lack afwater. The Group has processes in place aimed at monitoring and mitigating those risks.

15. Investments


Investment in subsidiaries Investment in equity accounted investees Available-for-sale financial assets Total investments

Note

IS, 15b

a) Investment in equity accounted investees (associates)

Group 2011

66 10,916 10,982

2010

250 6,409 6,659

Company 2011

19,015 66

10,916 29,997

The Group's share of profit in its equity accounted investees for the year was a loss of $17,000 (2010: gain of$16,000).

2010

18,955 250

6,409 25,614

Extracts NZ Limited was previously a herb and propolis extracting operation, they sold their business operations to Kiwi Extracts Limited (a subsidiary of Comyita Limited) during the year. Extracts NZ Limited's principal business activity is now that of a landlord, whereby it leases the land and buildings to Kiwi Extracts Limited at market rates.

The earnings for 201 J are based on management accounts.

Summary financial information for equity accounted investees, not adjusted for the percentage ownership held by the Group:

Group & Parent In rllOu.,wld" of New Zealand dollw:1 2011 2010

Extracts NZ Limited

Ownership 3370 33~;b

Cun-ent assets 82 420 Non- cunent asset 510 800 Total assets 592 1,220

Cun-ent liabilities (69) (109) Non- current liabilities (31) Total liabilities (69) (140)

Equity 523 1,080

Revenues 839 1,131 Expenses (896) (1,083) Profit (57) 48

24


15. Investments (continued)

Movements in canying value of equity accounted investees:


Balance at 1 April Share of (loss)/profit Capital distribution Balance at 31 March

There is no goodwill in the carrying value of equity accounted investees.

b) Available·for-sale financial assets

Group & Parent 2011 2010 250 234 (17) 16

(167) 66 250

Comvita Limited holds 858,333 (2010: 858,333) shares in Derma Sciences Inc. Derma Sciences Inc is listed on the NASDAQ stock exchange. The market value of the shareholding is $]0,916,000 (2010: $6,409,000).

Sensitivity A 10% percent increase in the share price at the reporting date would have impacted the carrying value of the investment by $1 ,092,000 (2010: $641,000), an equal change in the opposite direction would have caused an equivalent decrease. The analysis was perfonned on the same basis for 2010.

The Comvita shareholding in Denna Sciences, Inc is 13.67% (2010: 13.33o/d including 'warrants. This shareholding may reduce to approximately 11.7290 (2010: 11.74%) if all third party exercisable warrants and options are included.

Summary afwarrants held Exercise date Exercise price No of warrants

30 April 2011 24 February 2015 24 February 2015 Total

US$8.00 US$6.25 US$5.50

2011 52,083

100,000 133,333 285,416

2010 52.083

100,000 133,333 285,416

The warrants with an exercise date of 30 April 2011 were exercised and on-sold subsequent to year-end, the proceeds from this sale were then used to purchase a further 6,547 shares in Denna Sciences Inc.

16. Inventory

In thousand,. of Nell' Zealalld dollw:,

Raw materials Work in progress Finished goods Total inventory

Group 2011

8,576 307

9.592 18,475

2010

6,282 801

6,660 13,743

Company 2011

At 31 March 2011 {he provision of inventories to net realisable value amounted to $451,000 (2010: $412,000). The movement in the provision is included in cost of sales.

17. Trade receivables

In tIWI<.<I1I1d.< of Nell' Zealm,d dulla!'.'

Trade receivables Total trade receivables

Group 2011

13,565 13,565

2010

12,851 12,851

Company 2011

2010

2010

An impainnent provision of $486,000 (2010: $8 J ,000) is included in trade receivables, the movement in the provision was recognised in administrative expenses.

25


18. Sundry receivables, including derivatives

In Ilwusands of Nell' Zealand dollars

Prepayments Derivatives - Denna warrants Derivatives - other Intercompany advances Other receivables Total sundry receivables

2011

820 2,331

41

591 3,783

Group 2010

714 1,628

514

1,647 4,503

Company 2011 2010

101 3 2,331 1,628

58,592 52,817 53 63

61,077 54,511

19. Capital and reserves Share capital

20.

In thousands of shares 2011 2010

On issue at beginning of the year 27,167 28,077 76 Issued under dividend reinvestment plan

Shares cancelled - Olive Products Australia New shares issued

(1,058) 1,000

7 72 Issued to staff share scheme On issue at end of the year 28,174 27,167

All shares issued are fully paid and have no par value. The number of shares on issue excludes the shares held by the Comvita Limited Partly Paid Share scheme (note 26),

On 7 October 2010 the company issued 1 million shares at $2.00 per share by way of a private placement, of 500,000 shares each to two key strategic Asian partners in China and Korea,

As part of the Olive Products Australia (OPA) acquisition 1,057,962 shares, at an issue price of $3.37, were issued to a Australian Executors Trustees Limited. These shares were to be transferred to the OPA vendors on certain performance targets being met. These targets were not met and the shares were cancelled during the year ended 31 March 2010.

The holders of ordinary shares arc entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company, All shares rank equally with regard to the Company's residual assets.

Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statemems of foreign operations.

Hedging reserve The fair value reserve comprises the cumulative change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred,

Fair value reserve The fair value reserve compriHes the cumulative net change in the faif value of available-for-sale financial assets until the investment is derecognised or impaired.

Dividends The following dividend was declared and paid by the Group in June 2010 (2010: December 2009):

In Ihousalld,< of New Lea/alld do//ar.' 2011 2010 $0.06 (2010: $0.02) per ordinary share 1,668 559

Employee benefits Group Company

In tbousands of New Lea/alld dollars 2011 2010 2011 2010

Accfued wages and salaries 1,281 1,784 142 365 Annual leave 771 457 106 87 Long service leave 301 240 22 16 Total employee benefit 2,353 2,481 270 468

Classified as Cunent liabilities 2,052 2,241 248 452 Non-culTent liabilities 301 240 22 16 Total employee benefits 2,353 2,481 270 468

26


21. Loans and borrowings

This note provides information about the contractual terms of the Group's interest-bearing loans and borrowings. For more infonnation about the Group's exposure to interest rate and foreign currency risk see note 30.

tn thousands of New Zealand dollar.,

Current liabilities Secured bank loans Total current liabilities

Non·current liabilities Secured bank loans Total nOll-current liabilities

Terms and debt repayment schedule

In thousand,- of New Zealand dollan

Group

Secured bank loan ~ Westpac Secured bank loan - Westpac Multi option credit line - Westpac Total borrowings Less current portion of borrowings Borrowings - Non current

Parent

Secured bank loan - Westpac Secured bank loan - Westpac Multi option credit line - Westpac Total borrowings Less current portion of borrowings Borrowings - Non current

Facility

7,500 9,100

7,500 9,100

Group 2011

6,125 6,125

15,260 15,260

Currency Nominal interest

<ate

NZD 5.55% AVO 7.1F·b NZD 4.25%

NZD 5,55'70 AVO 7.110::+' NZD 4.2590

Company 2010 2011

1,553 6,125 1,553 6,125

18,450 15,260 18,450 15,260

Year of Carrying maturity Amount

2011

May 2013 7,000 May 2013 9,885

At call 4,500 21,385 (6,125) 15,260

May 2013 7,000 May 2013 9,885

At call 4,500 21,385 (6,1251 15,260

The group has a trade finance facility with a limit of $3,500,000 (2010: $3,500,000) with nil drawn at 31 March 2011 (2010: nil).

The group was in compliance with all banking covenants during the year and as at 31 March 201 J.

Security

2010

1,553 1,553

18,450 18,450

Carrying Amount

2010

9,000 11,003

20,003 (1,553) 18,450

9,000 11,003

20,003 (1,553) 18,450

All debt with Westpac is secured by way of registered first and exclusive Composite Debentures and a General Security Agreement, cross collateralised, over an the assets, undertakings and uncalled capital of the group and an interlocking supported guarantee between all group companies. Additionally there are regisLered first m011gages over property situated in Paengaroa, New Zealand and Queensland, Australia, The carrying value of the property is $7,023,000 (2010: $6,835,000),

22, Bank overdraft

The Company and Com vita New Zealand Limited have an overdraft facility of $750,000 with Westpac, of which $nil i~ drawn at 31 March 2011 (2010: facility $3,750,000, drawn $nil), The interest rate as at 31 March 2011 was 9.45"0 (2010: 9,10%).

In addition, there is a GBPI ,650,000 overdraft on the GBP foreign currency bank account and a Yen500,000 overdraft on the Yen foreign currency bank account, of which $nil is drawn at 31 r.,-larch 2011 (2010: $1,650,000, $500,000, drawn $nil).

27


23. Trade and other payables

In thousands of Nel> Zealand dol/au'

Trade creditors Accruals Derivatives Due to directors Amounts due to related parties WaikatoLink Total trade and other payables

13

2011

4,652 4,]59

54 72

8,937

Group 2010

5,605 3,367

209 69 41

1,996 11,287

Company 2011 2010

128 1 283 185

54 209 72 68

41 1,996

537 2,500

24. Deferred revenue

25.

In rhousand\' a/New Zealand dollars

Opening balance Revenue received Released to the income statement Closing balance

Classified as Current liabilities Non-current liabilities Total deferred revenue

2011

7.435

(749) 6,686

750 5,936 6,686

Group 2010

7,497 (62)

7.435

750 6,685 7,435

Company 2011 2010

7,435 7,497

(749) (62) 6,686 7,435

750 750 5,936 6,685 6,686 7,435

Deferred revenue resulted from the cash, shares and warrants received from Denna Sciences Inc in February 2010 for the exclusive worldwide rights to manufacture and sell Medihoney woundcare and skincare products to the professional and medical (ethical) market

The initial payment received for restraint of trade was $7.S million, being $3.3 million cash, $2.9 million shares and $1.3 million warrants. The total value is being amortised over 10 years, based on expected remaining useful life of patents.

Reconciliation of the profit for the year with the net cash from operating activities

Note Group Company /n Ihou.IGnds of New Zealand dollar., 2011 2010 2011 2010

Profit for the year 503 5,012 2,508 29 Adjustments for: Depreciation 12 1.422 1,337 Gain on disposal of property, plant & equipment 6 (15) Amortisation and impairment of intangibles 13 2,070 885 1,356 254 Share based payments 8 149 137 149 137 Release of deferred revenue 24 (749) (62) (749) (62) Fair value adjustment in biological assets 14 (14) (172) Non-cash cost of sales on biological assets 14 (188) Share of profit of equity accounted investees 15a 17 (16) 17 (16) FX loss related to financing activities 428

3,383 6,933 3,709 342

Change in inventories (4,595) 7,627 Change in trade receivables (713) 2,241 Change in sundry debtors and prepayments 720 908 (791) (67) Change in trade and other payables (2,493) 2,659 (1,781) 78 Change in employee benefits (160) 755 (199) 299 Tax paYdble (301) (9) (15) 52 Deferred tax 1,150 (1,024) 708 309 Net cash from operating activities (3,009) 20,090 1,631 1,013

28


26. Executive share scheme

Comvita Limited has established an Executive Employee Share Scheme called the Comvita Limited Partly Paid Share Scheme ("The Scheme"). The Scheme is designed to provide key employees with an opportunity to benefit from share price growth. A summary of the key points of the Scheme are as follows:

• Comvita will periodicalJy offer the rights to acquire a certain number of ordinary shares to key employees. The issue price of the shares will be at fair value.

• When the offer is accepted Comvita will issue the shares to the Scheme Trustee (Comvita Share Scheme Trustee Limited, which is a subsidiary company) who will hold the shares on the employees behalf.

• The employee will pay 1 cent for each share at issue date. The partly paid shares will carry entitlements to voting rights, dividend rights and rights to share in surplus assets of Com vita to the extent that they are paid up.

• Shares that were issued prior to 1 st September 2009 are released from transfer restrictions in the following manner:

• On the 3rd anniversary of the issue date ~ 60% will be released

• On the 4th anniversary of the issue date ~ 20"k will be released

• On the 5th anniversary of the issue date ~ 20% will be released

• Shares that were issued from the 1st September 2009 are released from transfer restrictions in the following manner:

• On the 2nd anniversary of the issue date - 50% will be released

• On the 3rd anniversary of the issue date - 25% will be released

• On the 4th anniversary of the issue date - 25% will be released

• The release of shares are subject to a share price hurdle threshold being met as described in the Scheme and certain vesting conditions, primarily ongoing service to the Group, and insider trading legislation and other applicable laws.

• On transfer the employee has to pay up the balance of the released shares. If the share price hurdle applicable to any shares is not met on or before each of their respective anniversary dates, the employee will not be able to pay up the balance of the released shares and they will receive back the initial payment for those shares not released.

Entitlements on issue at 31 March

Entitlements outstanding at beginning of year Entitlements granted during the year Entitlements expired during the year Entitlements forfeited during the year Entitlements outstanding at end of year

2011

Number of entitlements

1,412,000 160,000

(105,000)

1,467,000

Weighted average

exercise price 1.87 1.53 2.87

1.83

2010

Number of Weighted average entitlements exercise price

1,260,000 2.43 547,000 U8

(315,000) 2.87 (80,000) 2.12

1,412,000 1.87

There are 23 (2010: 22) employees in the scheme. The number of entitlements at3! March 2011 is 4.9 1.v (2010: 4.9%) oflotal shares.

29


26. Executive share scheme (continued)

Movement of entitlements on issue Movements in the number of shares outstanding under the scheme are as below:

Year ended 31 March 2011

Exercise Grant date Expiry date price

31/05/2006 3010912010 2.87 31105/2006 3010912011 2.87 4/07/2008 4/07/2011 2.12 4/07/2008 4/0712012 2.12 4/07/2008 4/07/2013 2.12 1I0812008 1/0812011 2.12 1I0S/2008 1108/2012 2.12 1I0S/2008 1/08/2013 2.12

1/9/2009 119/20!1 1.18 1/912009 11912012 US 1/9/2009 11912013 1.18 3/312011 3/312013 1.53 3/3/2011 3/3/2014 1.53 3/312011 3/3/2015 1.53

Total

Year ended 31 March 2010

Exercise Grant date Expiry date price

31105/2006 30/0912009 2.87 3110512006 30/0912010 2.87 3110512006 3010912011 2.87 410712008 4/07120!1 2.12 4/07/2008 4/0712012 2.12 4107/200S 4/07/2013 2.12 110812008 110812011 2.12 1108/2008 110812012 2.12 1I0S/2008 1/08/2013 2.12 119/2009 119/2011 1.18 11912009 119/2012 1.18 1/912009 1(9/2013 1.18

Total

Fair Value (~f Share rights granted

Forecast share price Balance at

hurdle start of (3113111) year

nl, 105,000 5.24 105,000 3.03 60,000 3.41 20.000 3.84 20,000 3.03 333,000 3.41 111,000 3.84 111,000 1.49 273,000 1.68 137,000 1.89 137,000 1.94 2.1S 2045

1,412,000

Forecast share price Balance at

hurdle start of (31/3/10) year

n/a 315,000 4.66 105,000 5.24 105,000 3.03 60,000 3.41 20,000 3.84 20,000 3.03 381,000 3.41 127,000 3.S4 127,000 1.49 1.68 1.89

1,260,000

Granted Expired or during forfeited during

year year

80,000 40,000 40,000

160,000

Granted during

year

273,000 137,000 137,000 547,000

(105,000)

(105,000)

Expired or forfeited during

year (315,000)

(48,000) (16,000) (16,000)

(395,000)

Balance at end of the

year (number)

105,000 60,000 20,000 20,000

333,000 111,000 111,000 273,000 137,000 137,000 80,000 40,000 40,000

1,467,000

Balance at end of the

ye" (number)

105,000 105,000 60,000 20,000 20,000

333,000 111,000 1 J 1,000 273,000 137,000 137,000

1,412,000

Exercisable at end of the

year (number)

Exercisable at end of the

year (number)

The fair value of services received in return for share entitlements granted to employees is measured by reference to the fair value of shares. The estimate of the fair value of the services received is measured based on a Monte Carlo simulation model.

Fair value of share entitlements and assumptions Issue Date Issue Date Issue Date Issue Date Issue Date 31/512006 41712008 118/2008 1(912009 31312011

Fair value at measurement date $0.59 $0.45 $0.60 $0.37 $0.23 Share price at grant date $3.00 $1.67 $2.00 $1.J9 $1040 Grant date 31 May 2006 4 July 2008 1 Aug 2008 I Sept 2009 3Mar2011 Exercise price $2.87 $2.12 $2.12 $1.18 $1.53 Expected price volatility 25.9~,v 45.6% 45.8% 47.1% 39.NI Share life (weighted average life of each tranche) 3-5 years 3-5 years 3-5 years 2-4 years 2-4 years Expected dividend yield 2.17~0 2.50% 2.50/fo 2.5~;o 5.71% Risk-free interest rate 5,8% 6.24% 6.24S:" 6.0090 5.43%

The expected volatility is based on analysing the historic volatility (calculated based on the weighted average remaining life of the share entitlements), adjusted for any expected changes to future volatility due to publicly available information. Share entitlements are granted under a service condition. Such conditions are not taken into account in the grant date fair value measurement of the services received. The grants in relation to key management personnel also contain a market condition relating to a share price hurdle. This condition has been taken into account in the grant date fair value measurement of the services received.

30


27. Employee share purchase scheme

In September 2001 the Company established a share purchase scheme to assist employees to become equity holders in the Company. A trust deed dated September 2001, amended April 2005, governs the operation of the scheme. Employees who have sen:ed continuously with the Company for a period of at least 12 months, are given the opportunity to subscribe for ordinary shares in the company from time to time. The scheme is governed by section DC 12 of the Income Tax Act 2007, and received IRD approval.

Employees who subscribe for shares pay for them over a three year period. An interest free loan is advanced by the Company. The issue price is the lesser of the market value on the dale of the offer as quoted on the NZX website or the weighted average of the prices at which equivalent shares have been sold on an arms length basis bet\veen unrelated parties during the 20 business days immediately preceding the date at which such price is to be detetmined.

There is a restrictive period of three years in respect of all shares purchased under the scheme. During the three year restrictive period, the shares are held by the trustees of the scheme on behalf of the participant.

Employees that leave the Company within three years of issue of the shares are required to sell the shares back to the Company. The maximum value of any advance cannot exceed $2,340.

Shares issued under the scheme have voting rights in proportion to the amount paid up, and entitlement to dividends.

The Trustees of the scheme are appointed by the Board of Directors of the Company and remain in office until termination or resignation. At the reporting date the Trustees were Jeffrey Williams (Director) and Timothy McManaway.

There are 40 (2010: 43) employees in the scheme. The number of shares held by the Trust at the reporting date is 84,781 (2010: 83,768) representing 0.2990 (2010: 0.29'70) of the share capital. Of this number nil (20 I 0: nil) shares remain unallocated at the reporting date. The market value of shares at the reporting date is $122,932 (2010: $154,133).

28. Earnings per share

Basic earnings per share The calculation of basic earnings per share at 31 March 2011 ",·as based on the profit attributable to ordinary shareholders of $503,000 (2010: profit of $5,012,000) and a weighted average number of ordinary shares outstanding of 27,668,000 (2010: 27,712,000), calculated as follows:

Weighted average number of ordinary shares In thousand., of shores

Issued ordinary shares at beginning of year Effect of shares issued in October 2009 Effect of shares cancelled in November 2009 Effect of share issued in December 2009 Effect of shares issued in February 201 0 Effect of shares issued in October 2010 Effect of shares issued in March 2011 Weighted average number of ordinary shares at the end of the year

Basic earnings per share (NZ cents)

Diluted earnings per share

2011

27.167

500

27,668

1.82

2010

28.093 29

(433) 22

27,712

18.09

The calculation of diluted eamings per share at 31 March 2011 was based on profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding after adjustment for the effects of all dihHed ordinary shares (refer note 26 for entitlements on issue) calculated as follows:

Weighted average IlIImber of ordinary shares (diluted) inlhousands o/,lIa)",.,,.

Weighted average number of ordinary shares (basic) Effect of stock entitlements issued in May 2006 Effect of stock entitlements issued in July & August 2008 Effect of stock entitlements issued in September 2009 Effect of stock entitlements issued in March 2011 Vr'eighted average number of diluted shares at end of the year

Diluted earnings per share (NZ cents)

2011

27.668

547 13

28,228

1.78

2010

27,712 341 688 319

29.060

17.25

The effect of stock entitlements is nil where the exercise price is higher than the average share price for the year, in accordance with NZ lAS 33 Earnings per share.

31


29. Related parties

Group Investments

Subsidiaries

Comvita New Zealand Limited

Medibee Limited (previously Comvita Asia Limited)

COffivita Taiwan Limited

Bee & Herbal New Zealand Limited

Apimed Medical Honey Limited

Comvita Landowner Share Scheme Trustee Limited (previously Apimed Honey Research Limited)

Kiwi Extracts Limited (previously Apimed Limited)

Kiwi Bee Medical Limited

Jonno Developments Limited

Kyoto Forests of New Zealand Limited

Comvita Share Scheme Trustee Limited

Comvita Japan Co Limited

Comvita Korea Co Limited"

Com vita Holdings HK Limited

Greenlife (New Zealand) Product Limited

Comvita HK Limited

Better Healthy Hong Kong Limited

Better Healthy North Point Limited

Com vita Holdings Pty Limited

Comvita Australia Pty Limited (previously Olive Products Australia Pty Limited)

Olive Leaf Australia Pty Limited

Olive Products Australia Pty Limited (previously Comvila Properties Pty Limited)

Com vita IF Ply Limited

Com vila Health Pty Limited

Medihoney Pty Limited

!\Iedihoney (Europe) Limited

Comvita Holdings UK Limited

Comvita UK Limited

New Zealand Natural Foods Limited

Associates

Extracts NZ Limited

Country of Incorporation

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

New Zealand

Japan

Korea

Hong Kong

Hong Kong

Hong Kong

Hong Kong

Hong Kong

Australia

Australia

Australia

Australia

Australia

Australia

Australia

United Kingdom

United Kingdom

United Kingdom

United Kingdom

New Zealand

,\' Company was incorporated during the 2011 year

Ownership Balance Principal Activity Interest Held Date

100% 31 March Manufacturing and marketing

100% 31 March Not trading

100% 31 March Sales activities

100% 31 March IP ownership


100% 31 March Apiculturalland owner share scheme

100% 31 March Raw material extraction

100% 31 March Apiary and medical honey extraction

100% 31 March Research and development


Management control 31 March Executive employee share scheme

100% 31 March Selling and distribution


100% 31 March Holding company



100'70 31 March Not trading

100(,'0 3] March Not trading

100% 31 March Holding company

100% 31 March Manufacturing, selling & distribution


1000'0 31 March Property ownership



100~ 31 March Manufacturing and marketing

100":"0 31 March Selling and distribution

100(.10 31 March Holding company



33.3(;;) 31 March Landlord

32


29. Related parties (continued)

Transactions with key management personnel

Key management compensation comprised:

In thousands of New Zea/t111d dollor"

Short term employee benefits Share based payments Total

Other transactions with key management personnel

Notes

8&26

Directors of the Company control 18.77% (2010: 18.73%) of the voting shares of the Company.

Note 9 details director fees paid during the year.

Other related party transactions

2011

1,332 84

1,416

2010

1.334 78

1 ,412

Up until! October 2010 the Group sold raw materials to Extracts NZ Limited, an equity accounted investee of the Group. Those raw materials were processed by Extracts NZ Limited and then repurchased by the Group.

From 1 October 2010 Kiwi Extracts Limited (a subsidiary of Comvita Limited) acquired the operating business of Extracts NZ Limited. The company continues to own the land and building which it leases to the group.

The terms and conditions of these transactions are determined on an ann's length basis.

Transactions and balances with related parties comprised: In Ihousand$ rl New Zealand dollars

Extracts NZ Limited (associate)

Sale of goods and services Transaction value Balance due from

Purchases (Jfgoods and services Transaction value Balance owing to

Rental expenditure Transaction "'alue Balance owing

2011

261

521

25

2010

306 73

671 41

Craigs Investment Partners Limited are considered to be a related patty as Neil Craig is Chairman of both entities. During the year fees paid to Craigs Investment Partners Limited in relation to other expenses of $15,000 (2010: $15,000).

Brett Hewlett (CEO of Comvita Limited) is a director of Derma Sciences Inc, appointed in February 2010.

33


30. Financial instruments

Overview Exposure to credit, liquidity and market risks arises in the normal course of the Company's business.

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk and the Group's management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Audit Committee is designated to develop and monitor the Group's risk management policies. The committee reports regularly to the Board of Directors on its activities.

The Group's risk management polices are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group through its training and management standards and processes aims to develop a disciplined and constructive control environment in which all empJoyees understand their roles and obligations.

Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers. As the counterparty of financial instruments is Westpac Bank Limited, it is considered there is minimal credit risk.

The majority of revenue is generated from distributors rather than individual customers and there is no geographical concentration of credit risk. In order to determine which customers are classified as having payment difficulties, the Group applies a mix of duration and frequency of default. Trade receivables aging are monitored on a monthly basis and the Company does not require collateral in respect of trade and other receivables however Personal Guarantees afC obtained where the Company considers it is appropriate.

The Board has approved a credit policy under which new customers are analysed individually for credit worthiness before the Group's standard payment terms and conditions are offered. The Group's review includes reviewing references. Customers that fail to meet the Group's benchmark creditworthiness may transact with the Group only on a prepayment basis.

Goods are sold subject to retention of title clauses and Personal Propelty Securities Register (PPSR), so that in the event of non-payment the.Group may have a secured claim.

The Group's policy is to provide financial guarantees only to subsidiaries. At 31 March 2011 no guarantees were issued (2010: nil).

Liquidity risk Liquidity risk represents the Group's abiHty to meet its financial obligations as they faJl due. The Group's approach to managing liquidity is to ensure, that it will have sufficient liquidity to meet its liabilities when due, under both nonnal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

Due to the seasonal nature of raw materials supply the Group has credit lines in place to cover timing differences to offset the mismatch of receipts and payments. The borrowings are by way of overdraft and revolving credit facilities.

Market risk Market risk is the risk that changes in market prices. snch as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising return on risk. The Group buys and sells derivatives, and also incurs financial liabilities in order to manage market risks. All transactions are carried out within the guidelines set by the Board of Directors. Generally the Group seeks to apply hedge accounting in order to manage volatility in the income statement.

Currency risk The Group is exposed to cunency lisk on sales that are denominated in a currency other than its functional currency, the NZ Dollar. The currencies in which transactions are primaJily denominated are United States Dollars, Japanese Yen, Australian Dollars, Hong Kong Dollars and British Pounds.

The Group hedges arc based on net foreign cUlTency receipts. At any point in time the Group hedges approximately 50% to 100'10 of its estimated foreign currency exposure in respect of net cash receipts expected to be received over the folfowing 12 months. The Group uses a mixture of forward exchange contracts, collars and options to hedge its currency risk, most with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity.

34


30. Financial instruments (continued)

Currency risk and equity price risk impact the value of available-for-sale assets held in the United Stales,

Loans are taken out in NZ Dollars and Australian Dollars. As at 31 March 2011, AUD foreign currency loans were held as a designated hedge of the net investment in foreign subsidiaries in Australia.

Interest risk The Group has a policy of ensuring that its exposure to interest rates for borrowings is fixed for at least two years. Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposure with the Group's policy.

Capital management The Group's capital includes share capital, reserves, retained earnings and minority interests.

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors both the demographic spread of shareholders, as well as the return on capital.

Note 19 details public share offerings, where applicable. This and acquisitions are key to ensuring the future development of the business.

The Board has an employee share purchase scheme and an executive employee share scheme to ensure the employees hold an investment in the Group.

Other than the banking requirements, neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

Quantitative disclosures Credit risk The carrying amount of financial assets represents the maximum credit exposure.

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

In thousands of Ne,,' ZealaJ1d dollar.'

Domestic Australia United Kingdom Hong Kong Other regions Total

The status of trade receivables at the reporting date is as follows:

In thousaJ1ds '~f Ne'" Zealand dollar., Gross receivable 2011

Not past due 13,012 Past due 0-30 days 193 Past due 31-90 days 240 Past due 91-365 days 606 Past due more than 1 year Total 14,051

2011

2,353 3,905 4,068 1,281 1,958

13,565

Impainnent Gross 2011 receivable 2010

10,697 978 608

(486) 649

(486) 12,932

2010

3,170 4,352 2,669

979 1,681

12,851

lmpaimlent 2010

(81)

(8 ()

The company has not renegotiated the terms of any financial assets which would result in the carrying amount no longer being past due or avoid a possible past due status.

The movement in the allowance for impainnent in respect of trade receivables during the year was as follows:

II! Ih"uS(/l1d.> of Nn.· Zealwuj dullar;

Balance at the beginning of the year Impairment loss/(gain) recognised Balance at thc end of the year

Of the balance of the trade receivables impainnent $388,000 relates to one Australian based customer.

2011

81 405 486

2010

85 (4)

81

35



Liquidity risk

The following table sets out the contractual maturities of financial liabilities including interest payments;

In thousands of New Zealand dollars Stmt of Contractual 6 months 6-12 1-2 years 2-5 years financial cash flows or less months position

Non-derivative financial liabilities

2011 Secured bank loans (21,385) (24,719) (5,858) (1,329) (3,897) (13,635) Trade and other payables (8,883) (8,883) (8,883) Total non-derivative liabilities (30,268) (33,602) (14,741) (1,329) (3,897) (13,635)

Derivative financial liabilities Inflow 23,759 10,041 8,624 3,220 1,874 Outflow (54) (23,745) (12,017) (8,605) (3,327) (1,962)

(54) 14 (1,976) 19 (107) (88)

2010 Secured bank loans (20,003) (21,679) (1,336) 0,336) (19,007) Trade and other payables (11,150) (11,150) (9.154) 0,996) Total non-derivative liabilities (31,153) (32,829) (10,490) 0,336) (21,003)

Derivative financial liabilities Inflow 16,286 9,141 7,145 Outflow (200) (16,271) (10,542 ) (7,045) (59)

(200) 15 (1,401) 100 (59)

Currency risk

2011 AUD GBP HKD USD Other

Trade receivables 3,905 4,068 1,281 1,224 733 Secured bank loans (9,885) Trade and other payables (2,995) (1,539) (97) (174) Gross balance sheet exposure (8,975) 2,529 1,184 1,224 559

Forward exchange contracts (local currency) 10,910 950 30,000 3,010

2010

Trade receivables 4,269 2,669 979 955 726 Secured bank loans (11,003) 0 0 0 0 Trade and other payables (1,276) (292) (60) 0 (630) Gross balance sheet exposure (8,010) 2,377 919 955 96

Forward exchange contracts (local cUlTcncy) 4,300 1,150 13,850 2,650

36



The following significant exchange rates applied during the year: Average rate * Reporting date mid-

spot rate 2011 2010 2011 2010

AUD 0.7770 0.7948 0.7385 0.7725 GBP 0.4730 0.4267 0.4744 0.4713 USD 0.7358 0.6808 0.7627 0.7098 HKD 5.7231 5.2793 5.9366 5.5118

* The average rate is calculated as the average monthly rate used in translating the monthly results during the year.

Sensitivity analysis A 20 percent strengthening of the NZD against the following cunencies at 31 March would have changed the asset or liability values in the statement of financial position at 31 March through a change in equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis for 2011 assumes a 20 percent (2010: 20 percent) strengthening of the NZD.

AUD GBP USD HKD

Interest rate risk

2011 Equity

+20% -20%

1,884 (2.805) 334 (503) 664 (1,001) 858 11.296)

2011 2010 Profit or loss Equity

+20% -20% +20% -2m;o

6 (15) 982 (1,469) 377 (576) 699 (1.053) 472 (713)

At reporting date the interest rate profile of the Group's interest-bearing financial instruments was:

Variable rate instruments Financial liabilities (note 21) Total

Sensitivity analysis

2010 Profit or loss

+20% -20%

16 (17)

Carrying amount 2011 2010

(21.385) (20.003) (21.385) (20,003)

In managing interest rate risks the Group aims to reduce the impact ofshorHerm fluctuations on the Group's earnings. Over the Jongerterm, however, permanent changes in interest rates will have an impact on profit. At 31 March 2011 it is estimated that a general increase of one percentage point in interest rates would decrea~e the Group's profit before income tax by approximately $214,000 (2010: $200.000).

Fair value hierarchy The table below analyseH financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: '

Level 1: quoted prices (unadjusted) in active marketH for identical assets or liabilitieH LeveJ 2: inputs other than quoted prices included within Levell that are observable for the asset or liability, either directly

(i.e., as prices) or indirectly (i.e .. derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

In Ne'" Zealond dollo,..\"

Group 31 March 2011 Derivatiyes designated at fair value through profit or loss - Derma warrants

Derivatives designated <It fair value through profit or loss

Derivatives - assets (hedged)

Derivatives - available-for-sale financial assets - Derma shares

Derivatives -liabilities (hedged)

31 March 2010 Derivatives designated at fair value through profit or loss - Derma warrants

Derivatives - asselH (hedged)

Derivatives - available-far-sale financial assets - Denna shares

Derivatives -liabilities (hedged)

There have been no transfers between levels in either direction during the year.

Levell

10,916

6.409

Level 2

2.331

14

27

(54)

1,628

514

(209)

Level 3 Total

2,331

14

27

10.916 (54)

1,628

514

6.409 (209)

37



Fair Values Classification and fair values

Group In New Zealand dollors Note Designated A,ailable- Loans & Other Total Fair value

at fair value for-sale receil'Jbles amortised carrying cost amount

2011 Assets Other investments 15 10,916 10,916 10,916 Total non-current assets 10,916 10,916 10,916

Trade receivables 17 13,565 13,565 13,565 Derivatives ~ Deana warrants 18 2,331 2,331 2,331 Derivatives - other 18 41 41 41 Cash and cash equivalents 2,450 2,450 2,450 Total current assets 2,372 13,565 2,450 18,259 18,387

Total assets 2,372 10,916 13,565 2,450 29,175 29,303

Liabilities Loans and borrowings 21 (15,260) (15,260) (15,260)

Total non-current liabilities (15,260) (15,260) (15,260)

Loans and borrowings 21 (6,125) (6,125) (6,125) Trade and other payables, including 23 (54) (8,883) (8,937) (8,937) derivatives Total current liabilities (54) (15,008) (15,062) (15,062)

Total liabilities (54) (30,268) (30,322) (30,322)

2010 Assets Other investments 15 6,409 6,409 6,409 Total non-current assets 6,409 6,409 6,409

Trade receivables 17 12,851 12,851 12,851 Derivatives ~ Derma ",arrants 18 1,628 1,628 1,628 Derivatives - other 18 514 514 514 Cash and cash equivalents 8,459 8,459 8,459 Total ctlITcnt assets 2,142 12,851 8,459 23,452 23,452

Total assets 2,142 6,409 12,851 8,459 29,861 29,861

Liabilities Loans and borrowings 21 08,450) 08,450) 08,450) Total nOll-current liabilities (18,450) (18,450) (18,450)

Loans and borrowings 21 (1,553) (1,553) (1,553) Trade and other payables, including 23 (209) (10,941) (11,150) (11,150) derivatives Total CUlTent liabilities (209) (12,494) (12,703) (12,703)

Total liabilities (209) (30,944) (31,153) (31,153)

38


31. Commitments

Operating leases as lessee Non-cancellable operating lease rentals are payable as follows:

In NelV Zealand dollars

Group 2011 2010

Company 2011 2010

Less than 1 year Between one and five years Total Operating lease expense

1.543 1.839 3.382 1.661

1,145 776

1,921 1,120

The increase in operating lease expense is due to the increase in number of retail outlets opened during the year,

Finance leases as lessee Finance leases are repayable as follows: Less than 1 year Between one and five years Total

Capital commitments

20

20

11 12

On the II March 2011, the Group entered into an agreement to purchase land adjacent to the existing site at Paengaroa. The purchase price for the land is $1,000,050. An initial deposit of$100,005 was paid to the vendor on the date on executing this agreement. The balance is not payable until the later of June 2012 or 10 working days after harvest of the 2012 kiwifruit crop. This purchase is very important for the development of the Paengaroa site which will future proof expansion plans which are currently being worked on. There are no other significant capital commitments.

32. Contingent liabilities

During the year the Group continued its legal dispute with Brightwake Limited over Comvita's view that Brightwake had infringed one of the Group's key wound care patents. This dispute was heard before the UK Patents County Court in July 2010 and a decision was given in December 2010 which ruled the patent was invalid and Brightwake had not infringed the patent. This court judgement has no material impact on Comvita's commercial activities in the market for the short to medium term. Comvita has been granted leave to appeal this decision in the UK Court of Appeal and a hearing date has been set down for 12 December 2011.

Comvita's costs incurred to date have been fully provided for in the financial statements along with a share of Brightwake's legal costs, which Comvita has been ordered to pay by the UK Patents County Court. There will be fmther legal costs associated with the appeal next year and Comvita's share of these is anticipated to be no more than $300,000.

There are no other significant contingent liabilities.

33. Subsequent events

On 20 May 2011, the directors approved the payment of a fully imputed final dividend of $846,000 (3.0 cents per share) to be paid on 24 June 2011. As the dividend was declared after balance date it has not been recognised as a liability in these financial statements. There have been no other significant subsequent events after the end of the repOiting period.

39

Independent Auditor's Report To the Shareholders of Comvita Limited

Report on the Company and Group Financial Statements

We have audited the accompanying financial statements of Comvita Limited ("the company") and the group, comprising the company and its subsidiaries, on pages 3 to 39. The financial statements comprise the statement of financial position of the company and the consolidated statement of financial position of the group as at 31 March 20 II, the income statement and statements of comprehensive income, changes in equity and cash flows of the company and the consolidated income statement and consolidated statements of comprehensive income, changes in equity and cash flows of the group for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors' Responsibility for the Company and Group Financial Statements

The directors are responsible for the preparation of company and group financial statements in accordance with generally accepted accounting practice in New Zealand and International Financial Reporting Standards that give a true and fair view of the matters to which they relate, and for such internal control as the directors determine is necessary to enable the preparation of company and group financial statements that are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these company and group financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the company and group financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the company and group financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company and group's preparation of the financial statements that give a true and fair view of the matters to which they relate in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company and group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Our firm has also provided other services to the company and group in relation to taxation and general accounting services. Partners and employees of our firm may also deal with the company and group on normal terms within the ordinary course of trading activities of the business of the company and group. These matters have not impaired our independence as auditors of the company and group. The firm has no other relationship with, or interest in, the company and group.

40

Opinion

In our opinion the financial statements of Comvita Limited and its subsidiaries ("the company and group") on pages 3 to 39:

• comply with generally accepted accounting practice in New Zealand;

• comply with International Financial Reporting Standards;

• give a true and fair view of the financial position of the company and the consolidated financial position of the group as at 31 March 2011 and of the financial performance and cash flows of the company and the consolidated financial performance and consolidated cash flows of the group for the year ended on that date.

Report on Other Legal and Regulatory Requiremeuts

In accordance with the requirements of sections 16(1 )(d) and 16(1 )(e) of the Financial Reporting Act 1993, we report that:

• we have obtained all the infonnation and explanations that we have required; and

• in our opinion, proper accounting records have been kept by Com vita Limited and its subsidiaries as far as appears from our examination of those records.

20 May 2011

Hamilton

41

Statutory information

Principal activity The principal activity of the company is that of manufacturing and marketing quality natural health products.

Dividend No interim dividend was paid during 2011.

Directors In accordance with the constitution, all directors will continue in office, until the 2011 Annual Meeting, when two directors will retire by rotation.

Directors' remuneration Fee Other Total

$'000 $'000 $'000

A.J Bougen 43 44 NJ Craig 69 69 T.D.C Cullwick 35 35 M Prendergast 35 35 R.B Tait 45 45 1.K Williams 40 40 Total 267 268

Interests register Directors have disclosed the following directorships held by them excluding family companies and companies with no association to their appointment as director of the Company or any companies in the Group:

AJBougen

Director - Comvita Limited

Director - Comvita New Zealand Limited

Director - Bee & Herbal New Zealand Limited

Director - Apimed Medical Honey Limited

Director - Kiwi Bee ~'ledicaJ Limited

Director - Medibee Limited

Director - Comvita Health Ply Limited

Director - Comvita Taiwan Limited

Director - Comvita Landowner Share Scheme Trustee Limited

Director - Kiwi Extracts Limited

Director - Apimed Medical Honey Limited

Director - Com vita Holdings Pty Limited

Director - Comvita lP Pty Limited

Director - Olive Products Australia Pty Limited

Director - Com vita Australia Ply Limited

Director - Medihoney Pty Limited

Director - True North Marketing Limited

J ,K Williams


Director - Comvita New Zealand Limited

Director - Comvita Share Scheme Trust Limited

Director - Waipa Networks Limited

Director - Ethic Consulting Limited

Deputy Chairman - Bay of Plenty District Health Board

T.D.C Cull wick

Director - Comviea Limited

Director - lnnomarc Consulting Limited

Director - PGDR ITO Limited

M. Prendergast


CEO & Director - Pumpkin Patch Limited

Director - Kezza Properties Limited

R.B Tait


Director - Com vita New Zealand Limited

Director - Tait 1-leming Consulting Limited

Director & Chairman - HOlizon Energy Distribution Limited

N.J Craig

Director & Chainnan - Craigs Investment Partners

Director & Chairman - Comvita Limited

Director - COll1vita New Zealand Limited

Director - Comvita Holdings UK Limited

Director - Comvita UK Limited

Director - Com vita Holdings HK Limited

Director - Comvita HK Limited

Director - Custodial Services Limited

Director - Hendry Nominees Limited

Director - Kyoto Forests of New Zealand Limited

Director - Pohutukawa Private Equity Limited

Director - NZ Social Infrastructure Fund Limited

42

b-Statutory information (continued)

Directors of Group Companies other than shown above

Apimed Medical Honey Limited B 0 Hewlett*, P N :r\'loran~

Bee & Herbal New Zealand Limited B D Hewlett*', P N Moran*

Better Healthy Limited S P Coulter\ Butt Kwong Hei*

Better Healthy (North Point) Limited S P Coulter*, Butt Kwong Hei*

Comvita Australia Pty Limited B D Hewlett*, A Hutton'"

Comvita Health Pty Limited B D Hewiett*, A Hutton"

Comvila HK Limited B D Hewlett*, S P Coultcr\ Butt Kwong Hei"

Comvita Holdings HK Limited B D Hewlett*, S P Coulter*, Butt Kwong Hei*

Comvila Holdings Pty Limited B D Hewleu'\ A Hutton*'

Comvita Holdings UK Limited B D Hewlett*, S P Coulter*, S Pothecary'1'

Comvita IP Ply Limited B D Hewletti', A Hutton'"

Comvita Japan Co Limited B D Hewlett"', S P Coulter", J Milne*

Comvita Korea Co Limited B D Hewlett\ S P Coulter"', James Park"

Comvita Share Scheme Trustee Limited T J McManaway"

Y denotes an executive of a Group Company

Comvita Taiwan Limited B D Hewlett"', S P Coulter*

Comvita UK Limited B D Hewlett *, S P Coulter*, S Pothecary*

Green Life (New Zealand) Product Limited B D Hewlett", S P Coulteroi", Butt Kwong Hei*

Jonno Developments Limited B D Hewlett*, PN Moran'!', N DAmas

Kiwi Bee Medical Limited B D Hewlett*, N D Amos*

Kiwi Extracts Limited B D Hewlett*, N D Amos'"

Kyoto Forests of New Zealand Limited B D Hewlett*, N D Amos*

Comvita Landowner Share Scheme Trustee Limited B D Hewlett*', P N Moran *

Medibee Limited B 0 Hewlett*, P N Moran"

Medihoney Pty Limited B D Hewlett \ A Hutton *

Medihoney Europe Limited B 0 Hewlett", S P Coulter", S Pothecary

New Zealand Natural Foods Limited B D Hewlett t, S P Coulter*, S Pothecary*

Olive Leaf Australia Ply Limited B D HewJett*, A Hutton*

Olive Products Australia Piy Limited B D Hewlett''', A Hutton~"

43

Statutory information (continued)

Directors of Group Companies Continued

Share Dealings of Directors

Director

A.J Bougen

N.] Craig

T.D.C Cullwick

M Prendergast

R.BTait J.K Williams

Directors Shareholding

Number of Shares Sold

25,000

Value of Shares Sold

$37,500

Number of Shares Purchased

35,208

44,130

Directors, or entities associated with directors, held the following shareholding in Comvita Limited at 31 March 2011:

Director Opening Balance Shares Sold Shares Purchased

AJ Bougen 3,057,149 25,000

NJ Craig 696,779 35,208

T.D.C Cullwick 50,498

M Prendergast 650,000

R.BTait 624,801 44,130

J,K Williams 22,866

Directors Indemnity and Insurance

Value of Shares Purchased

$66,895

$98,530

Closing Balance

3,032,149

731,987

50,498

650,000

668,931

22,866

The Company has insured all its Directors and the Directors of its wholly owned subsidiaries against liabilities to other parties (except the Company or a related party of the Company) that may arise from their positions as Directors. The insurance does not cover liabilities arising from criminal actions. The Company has not been required to indemnify its Directors for any liabilities during the year.

Employees' remuneration During the year the following numbers of employees received remuneration of at least $100,000.

$100,000 to $110,000 $110,000 to $120,000 $120,000 to $130,000 $130,000 to $140,000 $140,000 to $150,000 $150,000 to $160,000 $160,000 to $170,000 $170,000 to $180,000 $180,000 to $190,000 $190.000 to $200,000 $200,000 to $210,000 $210,000 to $220,000 $230,000 to $240,000 $270,000 to $280,000 $390,000 to $400,000

Number of employees 3 5 5 3 2 3 3 2 2 1 3 1 2

Note: these bands are New Zealand dollar equivalents and reflect the impact of fluctuations in the foreign exchange rates for remuneration of overseas based employees. The figures include bonus provisiom made during the year which may have not been paid at year end. It does not include any remuneration or benefit relating to the Executive Share Scheme.

Donations DUling the year the group made donations of $28,000 (2010: $73,000).

44

Statutory information (continued)

Shareholder Analysis

Analysis of shareholder by size as at 29 April 2011

Category

Up to 1,000 shares

1,001 - 5,000 shares

5,001 - 10,000 shares

10,001 - 100,000 shares

100,001 shares or more

Total

Top 20 shareholders as at 29 April 2011

Shareholder

A Bougen & L Bougen & GElvin New Zealand Central Secmities Depository Limited Custodia] Services Limited - Account 3 The Comvita Limited Partly Paid Share Scheme K C Butt Development Enterprises Limited Maori Investments Limited Kauri NZ Investments Limited Olives Australia Ply Limited Custodial Services Limited - Account 4 R Tait & J Tail & I Craig Kezza Properties Limited Stapway Nominees Limited Li Wang Asia Pharm Ind Company Limited Miu Ling Fung Custodial Services Limited - Account 2 Custodial Services Limited - Account 16 K H Butt Rotorua Trust Perpetual Capital Fund Limited Other Total

No of shareholders

289

772

232

231

37

1,561

Shares Percentage of held shareholders

178,254 18f:'h

2,038,963 50%

1,697,656 15%

6,029,776 15% 19,713,159 2%

29,657,808 100%

Shares held

3,032,J49 2,188,111 1,689,742 1,467,000 J,024,11O 1,001,780

938,414 809,439 755,993 703,233 678,931 650,000 570,289 500,000 500,000 377,226 365,067 319,053 256,027 250,000

11,581,244 29,657,808

includes 1,467,000 partly paid redeemable share entitlements as detailed in note 26 to the annual accounts.

Substantial security holders as at 29 April 2011

Shareholder

A Bougen & L Bougen & GElvin

K C Butt & F M Ling & K H Butt

Shares held

3,032,149

1,657,363

Percentage of shares

1%

7%

M~o

20S{?

66%

100%


10.22% 7.38% 5.70% 4,95% 3.45% 3.38S'O 3.16% 2.73% 2.55% 2.37% 2.29% 2.19% 1.92% 1.6970 1.69% 1.27'70 1.2390 1.08% 0.86% 0.84%

39,OSQ, 100.00%


10.22':'1;'

5.59%

45

Company Directory

Directors Alan John Bougen Neil John Craig Thomas (David) Cartwright Cullwick Maurice Prendergast Robert Bertram Tait Jeffrey Kinross Williams

Registered Office Comvita Limited Wilson Road South, Paengaroa Private Bag 1, Te Puke Bay of Plenty, New Zealand Phone +64 7 533 1426 Fax +64 7 5331118 Freephone 0800 504 959 Email [email protected] www.comvita.co.nz

Bankers Westpac Banking Corporation Tauranga Branch 2 Devonport Road PO Box 13 215 Tauranga

Solicitor Sharp Tudhope 35 Grey Street Private Bag TG 12020 Tauranga

Auditors KPMG 85 Alexandra Street PO Box 929 Hamilton 3240

Share Registry Link Market Services Limited PO Box 314 Ashburton

Australia Comvita Australia Pty Limited 10 Edmonstone Street South Brisbane Queensland 4101 Australia Phone +61738535300 Fax +61 7 3853 5305 Freephone 1800 466 392

Hong Kong Comvita Hong Kong Limited Rm 1307 Kodak House II 39 Healthy Street East North Point Hong Kong Phone +852 2562 2335 Fax +85228070749

Taiwan Com vita Taiwan Limited - Branch Office J F, No.9 Lane 100, Song Jaing Road Taipei City 10456 Taiwan Phone +886 2 2523 5545-6 Fax +886225317973 Freephone 0800 300 886

Japan Com vita Japan Co Limited Swans Building 3F-A 5-1-48 Utsukushiga-oka Yokohama-shi, Aoba-ku Kanagawa-ken 225-0002 Japan Phone +81459055125 Fax +81459055126

United Kingdom Comvita UK Limited Post Box 220 5 High Street Maidenhead United Kingdom SL6 UN Phone +44 1628 779 460 Fax +441628625487

Korea Comvita Korea Co Limited SF, 413-J3 Shindolim Dong Guro Gu Seoul Korea Phone +82 2 2631 0043 Fax +82 2 2631 0047

46

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